N3209

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 359 OF 2007

BETWEEN:

FULLEBORN PLANTATIONS LTD
Plaintiff

AND:

PEPI KIMAS as SECRETARY FOR
DEPARTMENT OF LANDS &
PHYSICAL PLANNING
First Defendant

AND:

THE INDEPENDENT STATE
OF PAPUA NEW GUINEA
Second Defendant

Waigani: Davani .J
2007:  31 July
3 August

INJUNCTIONS – must be specifically sought and pleaded.

INJUNCTIONS – Undertaking as to Damages by a Corporate Entity – sealed with company seal.

Cases cited:

Gobe Hongu Limited v the National Executive Council and the Independent  State of Papua New Guinea and Barclay Bros (PNG) Limited and  Southern Highlands Gulf Highway Limited (1999) N1920;
Golobadana No. 35 Ltd v Bank of South Pacific Limited (formerly Papua  New Guinea Banking Corporation) (2002) N2309;
Telikom PNG Limited v Independent Consumer and Competition Commission and Digicel (PNG) Limited WS 1599 of 2006, dated 22nd June, 2007;
Chief Collector of Taxes v Bougainville Copper Limited SC853

Counsel

J. Bokomi, for plaintiff/applicant
V. Mauta, for first and second defendant

DECISION

3 August, 2007

1. DAVANI .J:  Returnable before me are interim orders I made on 4 June, 2007 which were returnable on 6 June, 2007, 18 July, 2007 and finally today for hearing. The interim orders were made on 4 June, 2007, and were to the effect that an undertaking be given by lawyer Ms Tindiwi, that defendants will not in any manner, way or form deal with Portions 14 and 616 (Consolidated) Milinch Fulleborn Fourmil Gasmata West New Britain Province (the ‘property’) until the application or Notice of Motion filed by the Rageau Manua and Kikira Lawyers for and on behalf of the defendants on 16 April, 2007 is fully heard and determined. Also on 18 July, 2007, due to non- attendance by Ms Tindiwi of the Solicitor-General’s office, the court ordered that Ms Tindiwi personally pay the plaintiffs costs of 18 July, 2007, the sum of K200.00. Ms Mauta of the Solicitor-General’s office who appeared before me on 31 July, 2007 informed the court that Ms Tindiwi had paid the ordered costs. 

2. Notice of Motion filed by the defendants lawyer seek that the first and second defendants, together with their servants, agents and or officers including the Registrar of Titles at the Land Titles Registry Office of the Department of Lands and Physical Planning, be restrained from dealing with or registering any dealing in any manner whatsoever and howsoever at all with respect to the Agricultural Lease described and registered as Portions 14 and 616 (Consolidated) Milinch Fulleborn, Fourmil Gasmata West New Britain Province and contained in State Lease Vol. 58 Folio 147 (the ‘property’) pending the determination of these proceedings which involves the legality or otherwise of the revocation and forfeiture of the property.

3.     The writ of summons and statement of claim pleads amongst others, fraud and negligence by the defendants.

4.    On 31 July, 2007, I heard both counsel in relation to the Notice of Motion and dismissed the application. I informed counsel that I will give full written reasons. This I now do.

Background

5.     On 29 October, 1979 the plaintiff was granted an Agricultural Lease to the property for 59 years and 236 days for agricultural purposes. The lease would be held by the plaintiff until its expiration in the year 2035 unless forfeited, revoked or annulled in accordance with the laws of Papua New Guinea. In mid 2002, the plaintiff became aware that the lease was to be forfeited by the Department of Lands as it had failed to pay outstanding land rent. 

6.     The plaintiff alleges that the Notice to Show Cause issued by the Department of Lands advising that forfeiture action will be taken unless the plaintiff paid its outstanding rent, was addressed to the wrong postal address in Bulolo, Morobe Province. Notwithstanding, the plaintiff paid outstanding rent of K8185.00. However, despite its payment of land rent, the plaintiff later became aware that the lease was the subject of an advertisement for a grant of a lease in National Gazette G. E127 of the 25 August, 2005. On conduct of a title search at the Department of Lands on 11 January, 2007, the plaintiff noted that it was still registered as the Lease Holder. However, a later search conducted on the Land Titles file revealed that the land was forfeited and forfeiture was completed on 7 January, 2005, gazetted in National Gazette G12 dated 3 February, 2005. 

7.     The plaintiff’s allegations are that there was fraud involved in the forfeiture of the lease, fraud occasioned by servants and agents of the first defendant and further that the first defendants, servants and agents have breached a duty of care to the plaintiff by allowing forfeiture and revocation of the plaintiff’s lease. 

The application 

8.     The plaintiff relies on several affidavits. On 6 June, 2007, I had ordered that no further affidavit materials were to be filed and that was to be the final adjournment. However, on the morning of the hearing on 31 July, 2007, Mr Bokomi sought to file a further affidavit on which to rely. I refused that application. 

This application

9.     Mr Bokomi’s submissions on the facts are basically what I set out above under the part on background. But the plaintiff did not seek injunctive orders in its statement of claim. 

10.     As to the form of its Undertaking as to Damages, this was signed by a Vijay Raghaven, Chief Financial and Group Secretary of the plaintiff. 

I asked Mr Bokomi for submissions on whether the plaintiff should have pleaded or made a claim for injunctive orders in its statement of claim and as to whether the Undertaking as to Damages before the court is in its proper form. Mr Bokomi conceded that there must be a claim for injunctive orders in its statement of claim. As to the form of the Undertaking as to Damages and the signatory thereon, Mr Bokomi submitted that the person to sign has the authority to sign as he is the Chief Financial Officer and Group Secretary of the plaintiffs group of companies. 

11.    Ms Mauta on the other hand, only made submissions in relation to the form of the undertaking as to damages, submitting that the court is not in a position to know whether the plaintiff is a properly registered company. 

Analysis of evidence and the law 

12.    First, in relation to the plaintiffs claim, it is trite law that a party is not entitled to a remedy he has not pleaded in his claim. In this case, the plaintiff did not claim an injunction in its statement of claim. This was the position taken by Sevua .J in Gobe Hongu Limited v the National Executive Council and the Independent State of Papua New Guinea and Barclay Bros (PNG) Limited and Southern Highlands Gulf Highway Limited N1920 dated 8 June, 1999. This is also the principle held in many other cases in this jurisdiction and is the position at common law. 

13.    As to Undertaking as to Damages, it is a condition precedent to the granting of an interlocutory injunction that it must be given by the applicant at the time of the making of the application. 

14.    In Golobadana No. 35 Ltd v Bank of South Pacific Limited (formerly Papua New Guinea Banking Corporation) N2309 dated 11 November, 2002, Kandakasi .J at pg. 12 of that decision said this after review of all authorities relating to the grant of interlocutory injunction;

"A reading of these authorities show consistency or agreement in all of the authorities that the grant of the injunctive relief is an equitable remedy and it is a discretionary matter. The authorities also agree that before there can be a grant of such a relief, the court must be satisfied that there is a serious question to be determined on the substantive proceedings. This is to ensure that such a relief is granted only in cases where the court is satisfied that there is a serious question of law or fact raised in the substantive claim. The authorities also agree that the balance of convenience must favour a grant or continuity of such a relief to maintain the status quo. Further, the authorities agree that, if damages could adequately compensate the applicant, then an injunctive order should not be granted."

15.    In addition to that, there is ample authority in our jurisdiction that before the court can grant an interim injunctive relief, the applicant must provide an Undertaking as to Damages. 

16.    As to the other principles on the grant of an interim injunction, i.e a serious question, balance of convenience and irreparable damage, I did not make a ruling on those points noting only that there are serious questions and that the balance of convenience may favour a grant or continuity of such a relief to maintain the status quo. However that can only be done if there is a proper Undertaking as to Damages. The decision of the Supreme Court in Chief Collector of Taxes v Bougainville Copper Limited SC853 makes it clear that there can no grant of an interim injunction unless there is an undertaking as to damages that might be occasioned by a grant of injunctive orders being applied for. Again in Kandakasi .J’s unnumbered decision Telikom PNG Limited v Independent Consumer and Competition Commission and Digicel (PNG) Limited WS 1599 of 2006, decided on 22 June, 2007, his Honour pointed out and that I agree with, that there is no authority that deals with the question of the form of an Undertaking and who must execute it. His Honour considered that issue in that case and held that in order for the Undertaking to be binding, that Undertaking must be given under seal of the company. This is because when the seal of a company is affixed, it signifies that the document is for or by the company with its due and proper authority. Thus, subject only to proof of fraud or serious misrepresentation, the affixing of a seal binds the company. Otherwise, there is always the potential for the argument that the company did not give the undertaking but an individual who did not necessarily have the authority to bind the company at the relevant time. So unless the company seal is affixed to an Undertaking as to Damages, there would be room for that argument. Furthermore, the reasoning behind this is that the court hearing an application for injunction will proceed knowing that in the event damages are occasioned by any injunctive order it may order that it will be made good by the party applying for the injunction and that it will not result in any further unnecessary litigation or arguments as to the authority and validity of the Undertaking as to Damages and just what the Undertaking covers. If a company seal is not there, it leaves the door open to suggestions that there is a lack of authority for its execution and that the company is not supporting the application, which in turn means there may be more litigation. 

17.     It was on that basis that I refused the application for interim injunctive orders. 

18. I also intimated to those in court that the plaintiff could apply to amend the pleadings after which it can proceed to apply for injunctive orders.

Court’s formal orders 

1.	The application for injunctive relief is refused; 

2.	The Notice of Motion filed on 16 April, 2007 by Rageau Manua and Kikira Lawyers is dismissed;

3.	The plaintiff shall pay the defendants costs of this application.

___________________________

Rageau Manua Kikira Lawyers: Lawyer for plaintiff/applicant
Office of the Solicitor-General: Lawyer for first and second defendant