N920

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

MUSSAU TIMBER DEVELOPMENT PTY LTD

V

SANTEE MANGIS, KALIP SALO, SAMUEL SMITH, SMITH PENNIE, LAISIES LAPAN, KENNETH TAVAU, 
RAGU SMITH, ALWIN PAOL, KAENTY KARATY, SIMEON MANSINI, AND ASSOCIATES

Rabaul
Jalina J

25 July 1990
24 August 1990

FORESTRY - Timber permit - Permit subject to conditions - Conditions not fulfilled - Interference with logging operations - Whether permit holder in lawful operation - Logging operations only become lawful upon compliance with conditions - Forestry Act Ch 216.

PRACTICE AND PROCEDURE - Notice of motion - Order for preservation of property - Order sought not in notice of motion - Relief claimed should be pleaded - No proper amendment - Prejudice to respondent - Application should be refused - National Court Rules O 14 rr 9 and 10.

PRACTICE AND PROCEDURE - Judgment and orders - Property seized in blatant disregard of the law - Continuous refusal to comply with police request - Whether order for return of property available - Order granted - A person should not be allowed to benefit from his criminal act.

Facts

The applicant, a timber company, was granted a timber permit to carry on logging operations on Mussau Island, New Ireland Province. On the expiration of the licence, the Minister for Forests granted an extension for nine months, subject to various conditions, including an undertaking to consider future extensions on compliance of those conditions. The applicant claimed that a number of villagers, including the respondents, trespassed on the campsite, threatened its workers, removed logging equipments and machinery to their village, and have refused to release the machinery. It was further claimed that as a result of the illegal acts of the respondents, cutting and export of timber had ceased and loss of earnings had been incurred. The respondents claimed that they were the landowners of the area of logging operation and were not getting any benefits from the exploitation of their resources.

The applicant sought a number of interlocutory orders, inter alia, to restrain the respondents from interfering with their operation and for the return of possession of their machinery, which the respondents forcibly seized. No substantial action was commenced or contemplated.

Held

On the preliminary issue of jurisdiction, the Court held that:

1. Under the National Court Rules, no substantial action was required in an application for the preservation of property. Where, however, the applicant is seeking an injunction to restrain the respondent from illegally or improperly interfering with its lawful operations or to recover property, the proceeding was not for the preservation of property and came within O 14 r 9 of the Rules, which enabled the Court to make interlocutory orders only where the applicant intends to commence proceedings.

2. A party cannot obtain relief which has not been requested or sought in the pleadings; More v University of Papua New Guinea [1985] PNGLR 401 applied.

Cases Cited

Papua New Guinea case cited

More v University of Papua New Guinea [1985] PNGLR 401.

Other cases cited

Crafter v Kelly [1941] SASR 237.
London Passenger Transport Board v Moscrop [1942] 1 All ER 97; [1942] AC 332.
Pride of Derby and Derbyshire Angling Association Ltd v British Celanese Ltd [1953] Ch 149; [1953] 2 WLR 58; [1953] 1 All ER 179.

Counsel

D Toll, for applicant.
S Tedor, for respondent.

24 August 1990

JALINA J: The applicant seeks orders by way of notice of motion in the following terms:

"1. The respondents be restrained from illegally or improperly interfering with the lawful operations of the applicant pursuant to Timber Permit No 16-29;

2. The respondents be ordered to return to the possession of the applicant, logging machinery seized forcefully by the respondents, their agents or assigns and presently held by the said respondents, their agents or assigns at Palakau village, Mussau Island;

3. The respondents be held jointly and severally liable for the costs of the proceedings;

4. Such further and other orders the court deems fit;

5. The time be abridged from the time of making these orders to the time of settlement by the registrar which shall take place forthwith."

The respondent has made a cross-claim, also by way of notice of motion, in the following terms:

"1. The cross-respondent and or its agents be restrained from carrying out any logging operations in the area covered by Timber Right permit No 16-29 until:

(a) full particulars showing compliance with the permit condition have been provided to this Court.

(b) Statement of account for the years 1985 to 1989 have been duly supplied to this Court.

2. That the cross-respondent provide to this Court details of the Agriculture Trust Fund.

3. That the cross-respondent provide to this Court details of royalty payments to landowners in the period 1985 - 1989.

4. That the General Manager, Mr Wilson Weight, be removed from the cross-respondent's employment pending proof of work permit to this Court.

5. That the cross-respondent convene an Annual General Meeting to elect a new Board of Directors within three (3) months at Palakau, Mussau Island, New Ireland Province.

6. That no machinery or logs be removed from the Mussau Island until orders (1), (2), (3) and (4) have been complied with.

7. That such other orders the court deems fit to impose.

8. That the time be abridged from the time of making these orders to the time of settlement by the registrar which shall take place forthwith."

The applicant is a timber company carrying on logging operations on Mussau Island, New Ireland Province, pursuant to Timber Permit 16-29. The permit was issued by the Minister for Forest for five years, commencing on 1 January 1985. That period expired on 1 January 1990. By letter dated 19 March 1990, the Minister for Forests granted an extension of the period of the permit for nine months. The letter is addressed to The General Manager, Mussau Timber Development Pty Ltd, PO Box 74, Rabaul, East New Britain Province. It says:

"RE: TIMBER PERMIT EXTENSION - MUSSAU TPP

This has reference to your discussion with the Secretary for Forests in his office on, 16 March 1990 on the above subject.

After considering all the information and advice available on the above, I have now decided that an extension of 9 months from the expiry of the previous TP be granted to your company on the following conditions:

1. That a new Forest Working Plan be submitted to this Department by the end of April, 1990.

2. That all the roading commitments be met by June, 1990.

3. That you meet the sawmilling requirement in the TP by June, 1990.

4. That henceforth all log returns be submitted and timber royalties paid on time.

5. That you provide a suitable ferrying system (a work boat) for the Mussau Islanders.

6. That the company submits for approval by the Department of a suitable logging and/or marketing contractor;

7. That the Company keeps a proper accounting of the Agriculture levy and utilises it for the good of the landowners.

8. That you establish suitable dialogue and maintain harmony with the landowners.

Any future extensions of the TP will depend on the compliance of the above conditions by the Company, resource availability and of course other TP conditions."

The letter was signed by the Forests Minister Hon K W Stack, CMG MP.

The applicant filed a number of affidavits in support of its application for interlocutory orders. From the affidavits, it says that at about 4 o'clock on 27 June 1990, a group of about ten men, including the respondents Kaenty Karaty, Smith Pennie, and Simeon Mansini, went to the applicant's bush camp approximately 5 km west of its base camp at Alumui, Mussau Island, and, after threatening Terry Girire, John Taili, Constable Salo, and three others, removed logging equipment and machinery to Palakau village. Palakau is some 15 km from the said bush camp. Constable Salo was nearly run over by vehicles as they were being driven by the respondents or their agents to Palakau village. The removal of the machinery was reported to Kavieng police, which went to Palakau village to repossess the machinery, but the respondents and others refused to release it.

The legal owner of the machinery at all material times has been, and is, Niugini International Bank Ltd, which leased it to the applicant. The taking into possession and detention of the machinery by the respondents were done forcibly and illegally. As a result of the illegal acts of the respondents and their continuing refusal to conduct themselves in accordance with law, the cutting and exporting of timber from Mussau Island by the applicant has not been possible.

Kavieng police arrested and charged the above named persons on 9 July 1990, when they refused the request by police to return the machinery to the applicant.

The respondents also filed a number of affidavits in reply. Their affidavits say that they are landowners of the area where the applicant has been carrying out logging operations. Some of them, particularly Samuel Smith, were involved in the establishment of the applicant as a landowner company in 1985. He said he resigned as a result of being "squeezed" by a lawyer, Mr Coady. The board of directors of the company at that time was dominated by Mussau Islanders.

Since about 1987, the applicant's entire operation has been run by Mr Weight, who is the manager; Mr Coady; and Mr Jack Namaliu, all of whom are not Mussau Islanders. From their knowledge of the timber business, every shipment of logs was worth an average of K500,000. From 1985 to the last shipment in 1989, there has been a total of 23 shipments out of Mussau Island. 

The respondents further say that the applicant had an arrangement with a logging contractor, itself a foreign company, under which income per shipment was shared 70% to the logging contractor and 30% to the applicant. This means that out of K500,000, K350,000 went to the logging contractor and K150,000 to the applicant. The arrangement was in force in the period 1985 to 1987. In the period 1988 to 1989, there was no such arrangement. All proceeds in each shipment were paid to the applicant. 

The respondents also say that since 1985 the applicant has not declared a dividend, except for royalty payments at an average of K45,000 per annum in the period 1985 - 1987. In the period from 1988 up to date, the applicant has not made any payments of any kind, royalties or otherwise. From the operations of the applicant since 1985, it has made K11.5 million, from which K7.3 million went to it and K135,000 went to the respondents. The respondents claim that the applicant has not produced any statement of account to date, even though it has made payment to accountants to produce such an account. The whole problem is caused not by the applicant, as such, but by Mr Weight, using some people from Mussau Island to exploit their resources, they say.

From my reading of the various affidavits filed by both parties, it appears that neither party has denied allegations by the other. In other words, the applicant does not specifically deny the above allegations by the respondents regarding its operations since 1985, and the respondents do not specifically deny the allegations of the applicant that they have forcibly and unlawfully taken possession of, and detained, logging equipment and machinery and refused to return them to the applicant. The respondents, however, deny that they were disrupting the applicant's lawful operations pursuant to Timber Permit 16-29. The respondents say that they are only doing that to ensure that they benefit from their resource.

INJUNCTION FOR PRESERVATION OF PROPERTY

At the commencement of the hearing, I asked whether the applicant was contemplating instituting proceedings later on, as the notice of motion did not seek an interlocutory injunction pending such proceedings. Mr Toll, for the applicant, said the application was made for the purposes of preservation of property, pursuant to O 14 rr 9 and 10 of the National Court Rules. He said that an action need not be commenced before an application for an injunction could be made pursuant to the Rules. He went on to submit that, if I did not grant the injunction sought by the applicant, I would be sanctioning the actions of the respondents, which were interfering with the lawful operations of the applicant, pursuant to the said timber permit. I will deal with his submission in relation to O 14 rr 9 and 10 before I consider his submission relating to the interference with the applicant's lawful operations.

Rules 9 and 10 provide:

"9. Order before commencement of proceedings (28/1)

In an urgent case, the Court may, on the application of a person who intends to commence proceedings:

(a) grant an injunction; or

(b) make any order which the Court might make in proceedings in the nature of an application for habeas corpus ad subjiciendum; or

(c) make orders for the custody of minors; or

(d) appoint a receiver,

to the same extent as if the applicant had commenced the proceedings and the application were made in the proceedings.

10. Preservation of property (28/2)

(1) In proceedings concerning any property, or in proceedings in which any question may arise as to any property, the Court may make orders for the detention, custody or preservation of the property.

(2) An order under sub-rule (1) may authorize any person to enter any land or to do any other thing for the purpose of giving effect to the order.

(3) In proceedings concerning the right of any party to a fund, the Court may order that the fund be paid into Court or otherwise secured."

I agree that an action is not required to be commenced before an application could be made for an injunction for preservation of property pursuant to O 14 r 10. But I do not agree that it could be done in the same way under r 9, because that rule specifically provides for "the application of a person who intends (my underlining) to commence proceedings" and, as such, does not apply to the present case.

From my reading of the notice of motion, it is clear that the applicant is not seeking an injunction to preserve property. It is seeking an injunction to restrain the respondents from illegally or improperly interfering with its lawful operations pursuant to Timber Permit 16-29. On record, in other words, the applicant is saying to the Court, "I have a valid Timber Permit 16-29 to carry out logging operations but, because the respondents have seized my machinery and may continue do so, I may not be able to continue my logging operations unless the Court grants me an injunction." It has not even sought leave to amend the notice of motion to include the new order it seeks. The applicant is, therefore, seeking an order it did not specify in the notice of motion and has, by doing so, not given the respondents an opportunity to prepare their defence. It has, in other words, sought a completely new order from this Court. A party cannot obtain relief which has not been requested or sought in the pleadings. In London Passenger Transport Board v Moscrop [1942] 1 All ER 97, Lord Russell of Killowen said at 105:

"This appears to me to have been a complete re-casting of the plaintiffs alleged cause of action, and the matter was unfortunately carried through without any amendment of the statement of claim. This should not be so. Any departure from the cause of action alleged or the relief claimed in the pleadings should be preceded, or, at all events, accompanied, by the relevant amendments, so that the exact cause of action alleged and relief claimed shall form part of the court's record, and be capable of being referred to thereafter should necessity arise. Pleadings should not be 'deemed to be amended' or 'treated as amended'. They should be amended in fact."

This was applied by the Supreme Court in More v University of Papua New Guinea [1985] PNGLR 401. I also so do in this case. Consequently, I refuse the application for an order for preservation of property.

Do the actions of the respondents amount to interference with the "lawful" operations of the applicant?

In Osborn's Concise Law Dictionary, 7th edn (1983), it is stated that "lawful ... in a statute is normally permissive, but may confer legal rights, the resistance to which, or the infringement of which by others would be wrongful". The word "lawful" was considered by Napier J in Crafter v Kelly [1941] SASR 237, where he said at 243:

"... I think that the natural meaning of 'lawful' depends on the context in which the word is used. It may mean, simply, 'permitted'. In this sense an act is lawful, when it can be done without any infraction of the law, and so of a lawful trade or purpose. Another use is in the sense of supported by the law, e.g. lawful authority, excuse, or impediment; but it seems to me that, in some connections, the word implies the quality of being 'legally enforceable'. A lawful owner or heir is one whose rights are recognized and enforceable by the law, and a claim or demand is 'lawful' in the sense that the law compels the debtor to satisfy it."

In the context here, being "lawful" for a timber company to carry out logging operations pursuant to a timber permit means to me "permitted" to carry out logging operations subject to the terms of the permit, such that logging operations would be unlawful if they were to continue after the permit had expired. It would be tantamount to it removing or cutting timber and other forest produce without lawful authority and, as such, would amount to a criminal offence under the Forestry Act Ch 216 unless the timber permit is renewed or extended. If the renewal or extension of the timber permit is subject to compliance with certain terms and conditions before a permit holder can resume logging operations, then, in my view, the permit holder cannot be said to have lawful authority to carry out logging operations until it has complied with those terms and conditions.

In the present case, an extension of the applicant's timber permit 16-29 for nine months was granted through the Forest Minister's letter of 19 March 1990. As it is subject to the applicant fulfilling certain conditions specified therein, I am of the opinion that the permit has not become effective as a matter of law. It only becomes effective upon compliance with those conditions and, in this respect, it is incumbent on the applicant to show that it has complied with those conditions and was, in fact, carrying on logging operations which only ceased because of seizure of the machinery by the respondents in order for it to sustain an argument that its operation is lawful and that the respondents were interfering with such lawful operations. The applicant has not adduced any evidence, by affidavit or orally on oath, to prove that its logging operations was lawful by virtue of its having complied with the conditions imposed by the Minister under the Forestry Act. If the applicant cannot establish that, it does not have a legal right to carry on logging operations and, as such, I do not consider that it is open to the applicant to argue that its logging operations was lawful. I, therefore, refuse the first order sought by the applicant in the notice of motion. This is not to say that the seizure and detention of the machinery by the respondents were not improper or unlawful. I will consider this in respect of the order sought by the applicant for return of the property seized by the respondents.

ORDER FOR RETURN OF PROPERTY (MACHINERY) SEIZED BY THE RESPONDENTS

From the evidence before me, there is no doubt that the respondents had unlawfully and improperly seized and detained machinery which the applicant has a right to keep and protect, even though it is merely on lease. After all, the machinery was taken from the applicant's premises through the respondents taking the law into their own hands. If the respondents are not happy with the activity of the applicant, then there are legal avenues and remedies available under the law. They can go to the Department of Forests and point out the alleged breaches by the applicant and get the department to insist on the applicant complying with the conditions before it can resume operations. They can go to the National Court and seek an injunction to prevent the applicant continuing its operations. It would not be proper, in my view, for this Court to allow a person who has acted in blatant disregard of the law to continue to keep something seized through an illegal act (particularly bearing in mind that there is evidence of police actually requesting their return of the machinery). There is evidence of respondents Simeon Mansini, Smith Pennie, and Kaenty Karaty being charged, and it could be argued that, because of that, the property could be returned to the applicant upon an order of the District Court. But that is subject to them being convicted. If they are acquitted, there would be no means by which the applicant can get the machinery back. In any event, any court order can only bind the three defendants, and the consequences of any breaches of such order can only apply to the three defendants. It cannot apply and, consequently, bind the other respondents.

In Pride of Derby and Derbyshire Angling Association Ltd v British Celanese Ltd [1953] Ch 149 at 181, it was held:

"It is, I think, well settled that if A proves that his proprietary rights are being wrongfully interfered with by B, and that B intends to continue his wrong, then A is prima facie entitled to an injunction, and he will be deprived of that remedy only if special circumstances exist, including the circumstance that damages are an adequate remedy for the wrong that he has suffered."

In the present case, the respondents have stated that nothing will stop them; not even the police. I do not consider that damages would be an adequate remedy, because the applicants need the machinery to resume operations once the conditions in the extended timber permit have been complied with. The applicant cannot resume operations if damages are awarded, but the machinery is still with the respondents.

As injunctive relief is a discretionary remedy, I do not, in the exercise of my discrection, consider it appropriate to grant a perpetual injunction. I, however, order that the respondents return, or ensure that their principals, agents, or associates return, the machinery and other property to the applicant within seven days from the date hereof, without causing any damage to such machinery and other property.

As the cross-claim has not been properly commenced, I refuse such claim.

I order that the respondents pay the applicant's costs of these proceedings. I order that time for service of this order be abridged to the time of settlement by the Registrar, which shall take place forthwith.

____________________

Lawyer for the applicant: Namaliu and Company Lawyers.
Lawyer for the respondents: Sialis Tedor Lawyers.