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Bauf v Poliamba Pty Ltd [1990] PGNC 84; [1990] PNGLR 278; N904 (21 June 1990)

N904

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

SIOTI BAUF AND LAVOI NODAI

V

POLIAMBA PTY LTD

Waigani
Sheehan J

7 June 1990
21 June 1990

INJUNCTIONS - Practice and procedure - Interim injunctions - Ex parte orders - Plaintiffs duties - Full and free disclosure - All material facts including those favourable to defendant - Dissolution for non-disclosure.

INJUNCTIONS - Interlocutory injunctions - Prima facie case - Reasonable cause of action - To be pleaded.

An interim injunction was granted, ex parte, restraining a company, its servants or agents, from entering, clearing and planting land. In the statement of claim in support of the injunction the plaintiff claimed no interest in the land which was, in fact, registered in the name of a third party. The defendant’s interest in the land as purchaser under a contract of sale was not revealed to the court on the ex parte application.

Held

(1) A party seeking to obtain an interim injunction, ex parte, is under an obligation to demonstrate utmost good faith and to bring to the attention of the court:

(a) all facts material to the applicant’s right to the injunction; and

(b) any material which could be put in favour of the defendant’s position.

(2) Failure to make full and proper disclosure of relevant material is sufficient to justify the court dissolving an interim injunction made ex parte.

(3) A statement of claim seeking an injunction must disclose a reasonable cause of action.

(4) The interim injunction should be dissolved for non-disclosure of relevant material.

(5) The originating summons should be dismissed for failure to disclose a cause of action.

Notice of Motion

This was an application on notice seeking to dismiss orders for injunctive relief granted ex parte.

Counsel

M J Sevua, for the plaintiffs.
P R Payne, for the defendant.

21 June 1990

SHEEHAN J: The plaintiffs’ village of Kenamana lies adjacent to the land owned by the defendant company. The plaintiffs assert that all of the land occupied by the defendant was formerly owned by clans of Kenamana village. It was acknowledged that a portion of that land was disposed of to the defendant company’s predecessors on the land but the plaintiffs claim that the company is now encroaching on and asserting title to land still belonging to the villagers. The plaintiffs’ claim has in fact led to confrontation such that in April of this year employees of the defendant company were assaulted when attempting to work the land.

On 31 May 1990, the plaintiffs by originating summons initiated proceedings in this Court to prevent the defendant carrying out further development of the land. The summons states [sic]:

"Originating Summons

The Plaintiff Claims:

1. An order restraining with defendant, its servants or agents from entering, clearing and planting oil palm seedlings on the land called Pangau also known as Maramakas.

2. An order restraining with defendant, its servants or agents from entering, clearing and planting oil palm seedlings on the land known as Panavatlas also known as Lakuramau.

3. An order that the defendant pay the cost of these proceedings.

4. Such further orders or orders as the court may deem meet."

The summons makes no claim to the land by the plaintiff, nor does it assert any right requiring the protection of the orders sought.

Pursuant to that summons, on 6 June 1990, the plaintiffs sought and obtained, ex parte, an injunction as follows.

"Order

The Court orders that:

1. The Defendant it’s servants or agents be forthwith restrained from entering, clearing and planting oil palm seedlings on the land called Panamana also known as Maramakas more particularly described as 925 in the Lands Department and marked as Annexura A to Sioti Baufs affidavit sworn on 21st May, 1990.

2. The Defendant it’s servants or agents be forthwith restrained from entering, clearing and planting oil palm seedlings on the land known as Panavatlas or Lakuramau more particularly described in the Lands Department map referred to above as Lot 3 and Lot 4.

3. The Plaintiff commences within twenty one (21) days correct procedures to have the subject dispute over the said land properly brought before the Land Title Commission or some other Tribunal that has Jurisdiction to determine the dispute between the parties over the land known as Pangau or Maramakae and the land known as Panavatlas.

4. The costs of these proceedings be met by the Defendant."

That order was served forthwith on the defendant company, though the originating summons and the affidavits in support of the motion for injunction were not. The defendant company was thus served with a court order without any indication as to how or why it had been made. The supporting documents were subsequently served, at the direction of the court some days later.

The plaintiffs’ affidavits, though not the originating summons, set out a claim to the land and refer to disputes and recent confrontations brought about because of the defendant continuing to develop the land contrary to the wishes of the plaintiffs. There was no evidence or statement offered indicating the basis of the defendant’s claim or right to possession of that land.

The defendant quickly asserted that claim with a motion to dismiss the orders of 6 June 1990.

In an affidavit made 7 June 1990 and filed in support of the motion, Martin Collins, Managing Director of Poliamba Pty Ltd, deposed that:

"2. Pursuant to a Master Agreement dated 21 September 1989 between the Independent State of Papua New Guinea, the Commonwealth Development Corporation, the New Ireland Development Corporation Pty Limited and Poliamba Pty Limited the parties agreed that Poliamba Pty Limited would establish and develop an oil palm and cocoa project in New Ireland Province including the construction and operation of a palm oil mill and associated infrastructure.

3. So as to establish the said project Poliamba Pty Limited has acquired or is in the course of acquiring various parcels of land including the land contained in Certificates of Title, Volume 6 Folio 34, known as Lakurumau South, Volume 6, Folio 35, known as Lakurumau North and Volume 10 Folio 24, known as Maramakas ...

4. I am also aware that Poliamba Pty Limited has entered into agreements with the registered proprietors of the land contained in Certificates of Title Volume 6 Folio 34, Volume 6 Folio 35 and Volume 10 Folio 24 for the purchase of the land contained in the said certificates of title. Annexed hereto and marked with the letters ‘A’, ‘B’ and ‘C’ respectively are copies of the said Certificates of Title. I note that the last title to issue in respect of the said lands is dated 28 August 1936.

5. In performance of obligations under the Master Agreement K14m has been spent by the parties in the purchase and development of the Poliamba Estate. The Defendant has been in occupation of the land the subject of the Orders of 6 June 1990 for in excess of 2 years."

In that affidavit Martin Collins goes on to say that the defendant’s water supply is on the land the subject of the injunction of 6 June and that some K200,000 worth of new palm plantings on that property require regular water and attention.

He states that the title to the land the subject of the plaintiffs’ claim is in fact registered under freehold certificates of title in the name of the vendors to the defendant company, but the contracts for the purchase of land contained in those titles have been stamped and approved under s 69 of the Land Act (Ch No 185). In fact State leases are to issue in lieu of the existing titles. The freehold certificates of title will be surrendered upon registration of the State leases.

The purpose of an interlocutory injunction is to preserve the status quo until the rights of the parties can be determined on the trial of the action filed.

But first the plaintiff must establish that he has a good arguable claim to the right that he seeks to protect. If he has, and the court is satisfied as to the urgency of the matter then it may grant an injunction. But the grant of injunction is discretionary and will not be granted if the loss that may be sustained by a plaintiff is one that can be satisfied by an appropriate award in damages. The court will also consider what harm may be occasioned the defendant by issuing the restraining order and whether the undertaking that is required of a plaintiff to meet an order of damages will be sufficient in the event that the plaintiffs fail in the substantive action.

In any ex parte application for an injunction the plaintiff is under a duty properly to inform the court of the time situation to the best of its ability. A plaintiff is:

"... under an obligation to bring to the court’s attention all facts which are material to the applicants to the right to the injunction. The entire facts of the case must be fairly and candidly stated. If this is not done, the injunction will be dissolved.

The plaintiff is obliged to demonstrate the utmost good faith. Great care should therefore be taken to ensure that the evidence fairly discloses any material which could be put in favour of the defendant’s position. This requirement means that care must be taken in taking instructions from the plaintiff to cover the whole ground. It is not an answer to an allegation of suppression of material facts for the plaintiff to say that the facts had been forgotten or that their significance was not appreciated at the time." [N R Burns, Injunctions, A Practical Handbook (1988) at p 21.]

The notice of motion by the defendant seeking that the interim injunction and other orders of 6 June 1990 be dissolved forthwith was lodged on 7 June. At that stage, having no knowledge of the plaintiffs’ claim or grounds for obtaining the injunction, the orders were only stayed till service of all documentation between the parties was effected. Opportunity for the matter to be argued at was set for 15 June 1990 at Waigani.

In the event it was adjourned by consent for today, and because of the unavailability of the plaintiffs’ counsel (due to personal reasons) the submissions on this matter have all been made in writing.

The plaintiffs argue for the continuance of the injunction until the resolution of their claim. The defendant seeks dissolution of the orders and has also filed a second motion seeking that the proceedings, that is, the originating summons, be dismissed for failing to disclose a reasonable cause of action or alternatively that it is an abuse of court process. The defendant submits that this second motion should be considered first since if it is successful then that would dispose of the whole action and the interim orders would be dissolved with it.

In fact I propose to deal with the interim orders first. It was for this reason that the background of this matter and manner in which it has been brought before the court has been detailed.

The plaintiffs made application for an interim injunction to prohibit the defendant, its servants or agents from entering onto the land which it claimed was customary land belonging to the plaintiffs. No information was offered to the court as to the nature of the defendant Company’s undertaking. The evidence tendered by the defendant shows it is a very substantial company carrying out a government-sponsored development programme. This was not made known to the court in either the originating summons or the affidavits filed in support of the motion for restraining orders. Nor was the fact that the land was held under freehold certificate of title, or that the defendant company itself had been in possession of the land for some two years.

This was information which must have been within the knowledge of the plaintiffs or at the very least readily ascertainable by them. Counsel had an obligation to disclose these essentials to the court as part of the plaintiffs’ duty to make full and complete disclosure.

While everyone is presumed to know the Law, the court in fact would not expect villagers, without legal training, to be aware of the requirements for the obtaining of injunctions. However, counsel for the plaintiffs had had conduct of this matter for over a month prior to the application and these matters must have been known to him or have been ascertained in the normal course of clarifying instructions and searching title to the property. The need for these facts to have been disclosed to the court must be plain and failure to do so can only be seen as a serious breach.

The court should also have been told the nature of the defendant’s operations so that it could gauge what effect the injunction sought might have on the defendant’s interests. Such information was imperative — not because it was a government-sponsored development project, albeit a very large one — but because the orders sought were plainly going to have a marked and damaging effect on the defendant company’s operations both as to the water supply for the defendant’s staff as well as for the care and management of its crops.

The fact that the land had been in the possession of the defendant for some two years was also information which would be significant in the court’s assessment of the urgency of the claim for injunctive relief. But above all the failure to disclose that land was held under freehold certificate of title can only be taken as an indication of lack of good faith on the part of the plaintiffs.

The court was only told that there was dispute over land, that to avoid further trouble it was urgent that the defendant should be prevented from entering on that land. The court was not told the defendant had a claim to a freehold title to the land, that the injunction would have the effect of damaging crops and cutting staff off from their water supply. There was no undertaking whatsoever in respect to the damages that might ensue. I reject totally the submission that the plaintiff disclosed all relevant matters so that the court was able adequately to assess the situation. Had the court been aware of any of the facts I have outlined above I am sure that the injunction would not have been granted.

On the fact of non-disclosure alone the interim orders (the orders of 6 June 1990) should be dissolved. But as was said before, as a matter of law a plaintiff must have a good arguable claim to the right he seeks to protect and on the evidence now disclosed regarding freehold title to the property, the plaintiffs cannot show any arguable claim warranting the issue of an injunction in their favour.

I now turn to the defendant’s motion to have the summons struck out as failing to disclose a reasonable cause of action or alternatively that the proceedings are an abuse of court process. The following quotation from the submission of counsel for the defendant succinctly summarises its position:

"The defendant ... submits that in this case it is manifestly clear that the Plaintiffs’ Originating Summons does not disclose a reasonable cause of action as they do not seek to claim any interest in the subject land and therefore as a matter of law they cannot seek orders restraining the Defendant from entering upon the land unless they themselves claim to be entitled to an interest in the land. Further, the Defendant submits that it is manifestly clear that a freehold title currently exists in respect of the subject land that title has been in existence for in excess of fifty years and it is not appropriate for the Court to now even consider the Plaintiffs’ claim against the land, particularly when they do not seek to fall within any of the exceptions to indefeasibility."

As counsel for the plaintiff stated in his submissions, courts:

"[a]dhere to the view that the Plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings unless his lack of cause of action is clearly demonstrated."

But the claim as filed simply asks for an order restraining the defendant, its servants or agents from entering onto and developing the land. It does not give any reason why the court should make such orders. The originating summons makes no claim to title to the land or claim to possession of that land and it is no answer to say that the affidavits in support of the defendant make such a claim. The originating summons, the base statement of claim, simply does not disclose any cause of action.

The statement of claim cannot stand as it is. But neither can it be amended. Counsel for the defendant and counsel for the plaintiff themselves have noted that the National Court has no jurisdiction to entertain issues involving the claim of land by customary ownership including disputes as to whether any land is or is not native land. That is exclusively within the jurisdiction of the Land Titles Commission.

For the plaintiffs it may be said that, very properly, they wished to resolve a dispute that had deteriorated to a confrontation situation by bringing it before this Court. But Parliament has declared that disputes and claims regarding customary lands are to be dealt with in the Land Titles Commission, and it is there that the plaintiffs should pursue their claims.

Accordingly, there will be the following orders:

The Court Orders:

1. That the orders of 6 June 1990 made herein are dissolved.

2. That the originating summons herein is dismissed for failing to disclose a cause of action.

3. That the plaintiffs pay the defendant’s costs herein, such costs to be taxed if not agreed.

4. That the time for entry of these orders be abridged to the date of settlement by the Registrar which shall take place forthwith.

So ordered

______________

Lawyer for the plaintiffs: M J Sevua, Lawyer.
Lawyers for the defendant: Blake Dawson Waldron, Lawyers.