OS. No. 141 of 2008; Morobe Provincial Government v Tropical Charters Limited and Francis Tanga-Chairman of National Land Board and Raga Kavanar as Registrar of Lands Titles andDr. Puka Temu—Minister for Lands & Physical Planning andThe Independent State of Papua New Guinea (2011) N4240

• Jurisdiction: Papua New Guinea
• Judge: Gabi, J
• Judgment Date: 09 February 2011
• Court: National Court
• Citation: (2011) N4240
• Year: 2011
• Judgement Number: N4240

Full Title: OS. No. 141 of 2008; Morobe Provincial Government v Tropical Charters Limited and Francis Tanga-Chairman of National Land Board and Raga Kavanar as Registrar of Lands Titles andDr. Puka Temu—Minister for Lands & Physical Planning andThe Independent State of Papua New Guinea (2011) N4240

National Court: Gabi, J

Judgment Delivered: 9 February 2011

N4240

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS. No. 141 of 2008

BETWEEN

MOROBE PROVINCIAL GOVERNMENT

Plaintiff

AND

TROPICAL CHARTERS LIMITED

First Defendant

AND

FRANCIS TANGA-CHAIRMAN OF NATIONAL LAND BOARD

Second Defendant

AND

RAGA KAVANAR AS REGISTRAR OF LANDS TITLES

Third Defendant

AND

DR. PUKA TEMU – MINISTER FOR LANDS & PHYSICAL PLANNING

Fourth Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fifth Defendant

Lae : Gabi, J

2011 : 9th February

PRACTICE AND PROCEDURE - first defendant seeking damages from plaintiff pursuant to an undertaking given by plaintiff - distinction drawn between damage caused by grant of injunction and damage which arose from the litigation itself - only damages to which a defendant is entitled are those which he has sustained by reason of the grant of the injunction - burden of proof lie on defendant who asserts that he sustained damage by reason of the order – no evidence that the first defendant actually suffered the damages because of the injunctive order granted to the plaintiff – first defendant’s application for damages dismissed

Facts:

The first defendant made an application for damages pursuant to an undertaking given by the Plaintiff to the Court. After a couple of Notice of Motions filed before the Court for various orders, the Plaintiff eventually discontinued the action in May 2010. The first defendant applied to enforce the undertaking as to damages. Mr. Theo Pelgen, the Managing Director of the first defendant, filed an affidavit setting out the damage he claims the first defendant sustained. He lays his claims under eight different items.

Held:

1. An undertaking as to damages is given to the Court and not to the other parties to the proceedings.

2. There is a distinction between damage caused by the grant of injunction and damage which arose from the litigation itself. It is clear from the authorities that the only damages to which a defendant is entitled are those which he has sustained by reason of the grant of the injunction.

3. The first defendant’s claim for past loss, future loss, loss due to erosion, and loss due to an increase in construction costs is dismissed as it was in no position to construct the apartments. It had no approvals and no evidence of availability of funds to do so.

4. The first defendant’s claim for cost incurred in backfilling, land rentals, medical expenses and survey fees are also dismissed as those losses were not incurred as a consequence of the injunction.

Cases Cited

Papua New Guinea Cases Cited

Wei Xiang Cheng & Anor vs. Agmark Ltd & Anor (2008) N3338

White Corner Investments Ltd vs. Regina Waim Haro (2006) N3089

Overseas Cases Cited

Air Express Limited vs. Ansett Transport Industries (Operations) Proprietary Limited [1978-1981] 146 C.L.R 249

Baker v Willoughby [1970] A.C 467

Bingley v Marshall (1863) L. T. N. S 144

Douglas v Bullen (1913) 12 D.L.R 652

Newman Bros. Ltd v Allum, S.O.S Motors Ltd (In Liq.)[No. 2] [1935] N.Z.L.R 17

Smith v Day(1882) 21 Ch.D. 421

Counsel

J Haiara, for the plaintiff

E Manu, for the first defendant

DECISION

9th February, 2011

1.GABI, J:Introduction: Following the discontinuance of the proceeding on 27th May 2010, Tropical Charters Limited, the first defendant, sought damages pursuant to an undertaking given by the Morobe Provincial Government to the Court to “submit to such Order (if any) as the Court may consider to be for the just payment of damages and costs as assessed by the Court or as it may direct, to any person, whether or not a party, affected by the operation of the interlocutory Order made herein or any continuation thereto, with or without variation of the Order.”

Facts

2. This proceeding concerns a piece of prime land along Butibum Road near Lae Yacht Club in the City of Lae. The property is described as Allotment 53 Section 27 Lae, Morobe Province. On 24th August 2006, the property was advertised as light industrial area in National Gazette No. G162. On 28th August 2006, Mr. Theo Pelgen applied for the land on behalf of the first defendant. On 10th November 2006, the names of the four applicants, including the first defendant, for the land were published in National Gazette No. G205. On 13th November 2006, the Department of Lands and Physical Planning acknowledge receipt of the application and advised that it would be considered when the National Land Board convened its hearing from 4th to 8th December 2006. On 27th November 2006, Lawrence Billy sent by facsimile to Theo Pelgen a copy of National Gazette No. G205. On 5th April 2007, the first defendant was published as the first choice in the bid over the property in the National Gazette No. G56. By a letter dated 12th April 2007, the Department of Lands and Physical Planning advised the first defendant that it was the successful applicant for the land and was advised to sign the terms and conditions of the notice and return it with a fee of K5, 779.86. On 13th April 2007, the first defendant accepted the terms and conditions of the notice of lease for the land and returned it with the required fee of K5, 779.86. On 17th May 2007, the first defendant applied to the Morobe Provinsel Fisikel Plening Bod for permission to erect a picket fence around the perimeter of the land. On 10th July 2007, the title deed was issued to the first defendant. By an undated letter, a Colin Loko advised that the land was an open space and must be rezoned before the application was considered. On 5th October 2007, the first defendant submitted the necessary documents. On 12th October 2007, the Morobe Provinsel Fisikel Plening Bod advised the first defendant that its application to rezone was rejected.

3. On 25th March 2008, the plaintiff commenced this action claiming that the land was a public park area and the rezoning to light industrial was illegal and consequently the grant of the title to the first defendant is void. The plaintiff also sought a declaratory order that it is the registered proprietor of the land in question and a permanent injunction against the first defendant from doing anything on the land.

4. In February 2010, by a motion of notice, the plaintiff applied to amend the originating summons. It sought a number of declaratory orders and wanted to delete the order that it is the registered proprietor of the land described as Volume 14, Folio 61, Allotment 53, Section 27, Lae. In March 2010, the application for amendment was dismissed with costs. In May 2010, the plaintiff discontinued the action and the first defendant applied to enforce the undertaking as to damages. Mr. Theo Pelgen, the Managing Director of the first defendant, filed an affidavit setting out the damage he claims the first defendant sustained.

The Law

5. In White Corner Investments Ltd v Regina Waim Haro (2006) N3089, after consideration of the authorities on the matter, I said:

“An undertaking as to damages is given to the Court, not to the other party to the proceedings. As such there is no contract between the parties and no right is conferred on a party to the proceedings to sue. However, it enables the other party to apply for compensation for loss suffered as a result of the injunction.”

6. In Air Express Limited v Ansett Transport Industries (Operations) Proprietary Limited [1978-1981] 146 C.L.R 249, Steven J said at pages 318 to 320:

“Perhaps the first point to be observed is that undertakings such as this are given to the Court and not to the party enjoined. Brett L.J made this point when, in Smith v. Day (1882) 21 Ch.D. 421, at p.428 he said: ‘Now in the present case there is no undertaking with the opposite party, but with the Court. There is no contract on which the opposite party could sue.’ A claimant under an undertaking cannot complain of any breach of contract nor of any breach of duty, tortious or otherwise, owed to him, nor, of course, of any breach of the undertaking. What occurs when such an undertaking is extracted from a plaintiff is that the Court, as a condition of its grant of interim or interlocutory injunctive relief, has ensured that, should it turn out that that relief should never have been granted, it will have the power, so far as monetary compensation allows, to make good the harm which the grant has done to the defendant…Damages awarded under such an undertaking are, therefore, of a rather different nature from those awarded at common law. Their special character appears from the fact that their source lies in the plaintiff’s own voluntary undertaking, given as the price of obtaining an injunction. It may also be seen in the words of the common form of the undertaking, they must not only be sustained by reason of the grant of the injunction but the court must form the opinion that...