Soltuna Limited v Paradise Supermarket Limited (2019) N8168

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 18 November 2019
• Court: National Court
• Citation: (2019) N8168
• Docket Number: WS 670 of 2018
• Year: 2019
• Judgement Number: N8168

Full Title: WS 670 of 2018; Soltuna Limited v Paradise Supermarket Limited (2019) N8168

National Court: Hartshorn J

Judgment Delivered: 18 November 2019

N8168

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 670 of 2018

BETWEEN:

SOLTUNA LIMITED

Plaintiff

AND:

PARADISE SUPERMARKET

LIMITED

Defendant

Waigani: Hartshorn J

2019: 18th November

Application for setting aside of interim orders and for security for costs

Cases Cited:

Papua New Guinean Cases

Yama Group of Companies Ltd v. PNG Power Ltd (2005) N2831

Canopus No. 16 Ltd v. Maisi Trust Co. (2008) N3401

National Council of Young Mens Christian Association of PNG Inc. v. Firms Service Limited (2010) N4569

Mobil Oil New Guinea Ltd v. Yakainga Business Group (Inc) (2014) N6851

Talisman Energy Niugini Ltd v. Bismark Maritime Ltd (2015) N6800

In re JCA Lumber Co (PNG) Ltd (2015) N6040

Behrouz Boochani v. State (2017) SC1566

Overseas Cases

Films Rover International Ltd v. Canon Films Sales Ltd [1987] 1 WLR 670

Counsel:

Mr. A. Edo, for the Plaintiff

Mr. J. Kola, for the Defendant

18th November, 2019

1. HARTSHORN J: This is a decision on a contested application to set aside ex parte interim orders and for amongst others, security for costs.

Background

2. The plaintiff (Soltuna) pleads that amongst others, that it is a company registered in the Solomon Islands, it is involved in the manufacturing and selling of tinned fish and is the registered proprietor of the registered trademark, “Solomon Blue” Registered no. A74739 Class no. 29 in respect of tinned fish registered under the Trade Marks Act Ch. 385 (Trade Mark).

3. Soltuna pleads that the defendant (Paradise) has infringed its Trade Mark by importing nine cans of canned fish from Singapore bearing the name of “Solemoon Bleu”. Further, Soltuna pleads that Paradise has been engaged in the tort of passing off by importing and intending to promote “Solemoon Bleu”.

4. Soltuna seeks declaratory relief to the effect that the cans of “Solemoon Bleu” infringe the Trade Mark. Ancillary orders including for a permanent injunction are also sought.

5. An ex parte interim injunction granting a provincial seizure order was granted to Papua New Guinea Customs to detain the nine cartons of canned fish (Interim Orders).

This application

6. Paradise submits that the Interim Orders should be set aside as amongst others:

a) Soltuna relied on irrelevant evidence in support of its application for the Interim Orders;

b) cans of Solemoon Bleu were imported irregularly and they are of a perishable nature;

c) the Interim Orders were granted on an erroneous legal basis;

d) the Interim Orders were granted in the absence of Paradise;

e) this court was misled as to the urgency and by reliance on the relevant evidence.

7. In regard to the application for security for costs, Paradise submits that Soltuna is a foreign entity with no known assets or business operations in Papua New Guinea.

8. Soltuna submits that the Interim Orders should not be set aside as amongst others:

a) it has a strong arguable case in both trademark infringement and passing off;

b) damages will not be an adequate remedy as the damage to the reputation or goodwill of its product is very difficult to ascertain;

c) the balance of convenience favours the continuation of the Interim Orders particularly given the small quantity of the goods being detained, whereas that same small quantity of goods may cause significant damage to Soltuna’s reputation and goodwill in the minds of consumers in Papua New Guinea;

d) it is in the interests of justice. Also an undertaking as to damages has been given.

9. In regard to the application for security for costs, Soltuna submits that amongst others, the application is being used oppressively.

Consideration

10. The law concerning whether to discharge or vary an interlocutory order was applied by Gabi J in National Council of Young Mens Christian Association of PNG Inc. v. Firms Service Limited (2010) N4569. In that case his Honour said that there are six considerations to be taken into account in deciding whether to discharge or vary an interim injunctive order. The six considerations are:

“First, has there been any change in circumstances since the previous orders were made, which render their continuation unnecessary or inappropriate? Second, what has been the relative conduct of the parties since the earlier orders were made? Third, are there previously undisclosed relevant facts, which have been discovered since the interim orders were made? Fourth, has it subsequently been discovered that the order was granted on an erroneous legal basis? Fifth, where (sic) the grounds relied on to support the setting aside or variation of the interim order argued before the Court when it granted the earlier order? Or did the party wanting to discharge or vary the earlier order have the opportunity to raise those grounds? Finally, was the court misled when it issued the … order? If yes, was that attributable to the conduct of the party which sought the … order?”

11. Paradise submits that there has not been a material change of circumstances, that Soltuna’s conduct in using the evidence that it did was improper, there are undisclosed facts, the interim orders were granted on an erroneous legal basis, the orders were made ex parte and the court was misled.

12. Paradise also submits however, at [52] of its submissions and it is conceded in evidence filed on its behalf, that it accepts that there are serious questions to be tried. Given this acceptance, the question to be determined now in my view,following the established principles concerning the grant or otherwise of injunctive relief, see Behrouz Boochani v. State (2017) SC1566 at [30] – [33] and the cases referred to therein,is whether this court should set aside the Interim Orders on the ground either that damages are an adequate remedy or if they are not, then on the ground that the balance of convenience does not favour the interim orders continuing.

13. In regard to these grounds Paradise submits that damages are an adequate remedy and that the balance of convenience favours the Interim Orders being set aside given the likelihood that the goods will perish and the lack of material evidence about Soltuna’s reputation and goodwill.

14. In regard to whether damages would be an adequate remedy, Soltuna submits that they would not be as proof of diverted sales and the tarnish to a reputation or goodwill are difficult to demonstrate.

15. To my mind, a reduction in sales of Soltuna’s product may be capable of calculation, but as to whether it would have been as a direct result of Paradise’s product is not. Similarly, a calculation as to the effect and damage upon the reputation and/or goodwill of Soltuna and its product would very likely not be capable of accurate calculation. Consequently, I am not satisfied that damages would be an adequate remedy.

16. As to where the balance of convenience lies, for the reasons that I am satisfied that damages would not be an adequate remedy, I am also of the view that the balance of convenience lies in favour of continuing the Interim Orders.

17.In the circumstances, I am also mindful of the following passage of Hoffman J in Films Rover International Ltd v. Canon Films Sales Ltd [1987] 1 WLR 670 at 680:

“The principal dilemma about grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the Court may make the ‘wrong’ decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the Court should take whichever course appears to carry the lower risk of injustice if it turns out to have been ‘wrong’ in the sense I have described.”

18. The principles contained within this passage have been affirmed in Yama Group of Companies Ltd v. PNG Power Ltd (2005) N2831; Canopus No. 16 Ltd v. Maisi Trust Co. (2008) N3401; Talisman Energy Niugini Ltd v. Bismark Maritime Ltd (2015) N6800 and Mobil Oil New Guinea Ltd v. Yakainga Business Group (Inc) (2014) N6851.

19. After taking all factors into account I am satisfied that the lower risk of injustice if my decision turns out to be wrong, is to permit the continuation of the Interim Orders.

Security for costs

20. The next consideration is whether security for costs should be given by Soltuna.

21. Order 14 Rule 25 National Court Rules is as follows:

“25. Cases for security. (53/2)

(1) Where in any proceedings, it appears to the Court on the application of a defendant—

(a) that a plaintiff is ordinarily resident outside Papua New Guinea; or

(b) that a plaintiff is suing, not for his own benefit, but for the benefit of some other person and there is reason to believe that that plaintiff will be unable to pay the costs of the defendant if ordered to do so; or

(c) subject to Sub-rule (2), that the address of a plaintiff is not stated or is mis-stated in his...