N3377

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 142 OF 2008 (JR)

BETWEEN:

PNG LOTTERIES ASSOCIATION INC & ANOR
First Plaintiff

AND:

PNG AMUSEMENT LTD, GOLD MERCHANTS LTD, NUMBERS LOTO LTD, PACIFIC LOTTO LTD AND FORTUNE (PNG) LTD.
Second Plaintiff

AND:

THE HON. ARTHUR SOMARE, MINISTER FOR PUBLIC SERVICE
First Respondent

AND:

NATIONAL GAMING CONTROL BOARD
Second Respondent

AND:

SIMON SANAKE, ACTING CHIEF EXECUTIVE OFFICER
Third Respondent

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINE
Fourth Respondent

Waigani: Injia, DCJ
2008: 19 May

JUDICIAL REVIEW – Practice and procedure- Interim injunctions- Application for interim injunctions following grant of leave to apply for judicial review- Relevant principles on grant of interim injunctions- Serious issues to be tried- Determination of arguable case at leave stage - Applicant must show more than an arguable case- Principles discussed – National Court Rules, O16 r 3(8).

Cases cited:

Ombudsman Commission of Papua New Guinea v The Hon. Justice Sakora & Others (1996) N 1720
Cornelius Ape v The State & Anor (1996) N 1498 
 Nakun Pipoi v Minister for Lands (N2001) N2120 
The State v National Land Commission (2004) N 2918
 Peter Tupa v Sam Inguba (2006) N 3171 
 Yama Group of Companies Ltd v PNG Power Ltd (2005) N 2831 
Employers Federation of Papua New Guinea v Papua New Guinea Waterside Workers' and Seamans' Union (1982) N 392
Craftworks Niugini Pty Ltd v Allan Mott [1998] PNGLR 572. 
AGC Pacific (NG) Ltd v Andersen (2000) N2062 
Golobadan No. 35 Ltd v Bank of South Pacific Ltd (2002) N 2309

Counsel:

 R Saulep, for the plaintiff
 C Raurela, for the second and third defendants
 T Tanuvasa, for the fourth defendant
 K Isari, for the Police Commissioner

19 May, 2008 

1. INJIA, DCJ: Following grant of leave to apply for judicial review on 18th April 2008, I granted interim orders ex parte under O 16 r 3 (8) of the National Court Rules. The defendants now apply to set aside those orders.

2. All parties filed affidavits which were relied upon and extensive submissions, both written and oral, were made by counsel representing the parties and I reserved my ruling. I have considered those submissions. The main issue is whether the interim orders should be set aside. 

3. The principles on grant of interim injunctions and extension of or discharge of interim injunctions are the same. The leading case is the decision of Kapi, Dep CJ (as he then was) in Employers Federation of Papua New Guinea v Papua New Guinea Waterside Workers' and Seamans' Union (1982) N 392. The principles set out in that case were approved by the Supreme Court in Craftworks Niugini Pty Ltd v Allan Mott [1998] PNGLR 572. The main conditions to be satisfied by an applicant are:

1.	There are serious issues to be tried.

2.	 The balance of convenience favours the granting or continuation of the interim injunctions.

3.	If damages is an appropriate remedy, the interim injunction should be refused or set aside.

See AGC Pacific (NG) Ltd v Andersen (2000) N2062 and Golobadan No. 35 Ltd v Bank of South Pacific Ltd (2002) N2309.

Serious issues to be tried

4. This condition is contested. In ordinary civil proceedings where interim injunction is sought, the seriousness of the issue to be tried is a separate issue to be determined. In judicial review proceedings however, where leave to apply for judicial review is granted under O 16 r 3, the arguable nature of the issues to be tried is determined at that stage, as it was done in this case. Does it follow that the plaintiff has serious issues to be tried on the substantive review for purpose of an application for interim orders under O 16 r 3 (8)? The case law shows that this issue has not been determined. Cases show however that the arguable nature of the case in fact involves consideration of the question of whether the applicant for leave to apply for judicial review has serious legal and other issues to be tried at the hearing of the substantive application: see Ombudsman Commission of Papua New Guinea v The Hon. Justice Sakora & Others (1996) N 1720 (per Amet CJ), Cornelius Ape v The State & Anor (1996) N 1498 (per Lenalia, AJ), Nakun Pipoi v Minister for Lands (N2001) N2120 (per Sawong J), The State v National Land Commission (2004) N 2918 (per Sawong J), Peter Tupa v Sam Inguba (2006) N 3171, per Davani J). 

5. I would think that although the two issues to some extent overlap in the sense that they both refer to the arguable nature of the issues to be tried at the hearing of the substantive matter, the seriousness of the issues to be tried is a much higher test than the arguable nature of the case. In other words, an applicant for judicial review who seeks a stay or interim injunction under O 16 r 3 (8) must show something more than an arguable case, a case which is serious enough, that the case stands a "high probability of success" at the trial: see Yama Group of Companies Ltd v PNG Power Ltd (2005) N 2831, per Lay J. 

6. In this case, the primary basis of the challenge in these judicial review proceedings is the decision of the Minister for Public Service (the Minister) to advise the Head of State to declare the lottery game described as "High / Low Lottery" to be an unlawful game and the subsequent declaration to that effect by the Head of State made under s 5 (3) of the Gaming Control Act 2000. Subsequent actions taken by the National Gaming Control Board (the board) to enforce the declaration with the assistance of police is also challenged but that appears to be secondary or consequential to the primary basis of the challenge. Although s 5 (3) of the Act says the Head of State "may" declare a game to be unlawful, implying a discretion, it appears the Head of State acts in accordance with a recommendation of the Minister. The date on which the Minister advised the Head of State and the nature of the advise which was given, is not pleaded in the Court documents filed, in particular the Originating Summons and the Statement filed under O 16 r 3, and also in the affidavit material filed by the plaintiffs. Whilst it is often difficult for ordinary persons and private companies to have access to such information, the Minister's advice which is usually in document form, is a public document and if the plaintiffs were to have sought a copy of this document, it could be provided to him by the Minister's office, the National Gaming Board or even the office of the Head of State. The onus is on the plaintiffs to provide that information. This information will no doubt be discovered before trial and produced in evidence but that is another matter. For purpose of maintaining the interim orders in this case, that information would be relevant and critical in determining whether the plaintiff has serious issues to be tried at the substantive hearing. From that information, this court would asses the legality, validity or propriety of the recommendation made and determine whether the plaintiffs have serious issues to be tried such that there is a "high probability of success". The plaintiffs sought and obtained leave on the supposed existence of such advice, which in the circumstances of the case before me and the provisions of the Gaming Control Act that were cited to me, did raise an arguable case for purpose of grant of leave to apply for judicial review. The plaintiffs have failed to take the matter further to demonstrate that they have serious issues to be tried on the main issue which has a high probability of success at the hearing. 

7. The plaintiffs, in particular the first plaintiff, did have a valid licence to operate the game of "High-Low" lottery issued by the Commissioner of General Revenue under the Stamp Duties Act which was saved under the savings provisions of the new Gaming Control Act 2000 in s 272 (1)(a)&(b). But under s 272 (1) (c) & (d) those licences have now been effectively terminated by the declaration made by the Head of State under s 5 (3). The plaintiffs have not persuaded this Court that serious issues are raised as to the Head of State's declaration that it is flawed, both on the facts and the law, such that there is a high probability that the plaintiffs will succeed at the trial. I accept the respondent's submissions on this point. For this reason, I find in favour of the respondents on this issue. I would discharge the interim orders on this basis alone.

Balance of convenience and damages as an adequate remedy: 

8. These two conditions or considerations can be dealt with together because they are related. The plaintiffs' gaming operations no doubt is being targeted in special police operations conducted throughout the country at the request of the board. Their operating facilities, equipment and machines are under siege by police and some of the plaintiffs are closing down business and many more gaming operators face the risk of closing down business. Under the Gaming Control Act, not all lotteries are unlawful games. Some lottery games are authorized lotteries but it is this particular type of lottery called "High-Low lottery" which has been outlawed. 

9. But it appears from the evidence and submissions put by Mr Saulep for the plaintiffs that because the High-Low lottery is conducted on the same premises as other forms of authorized lottery or other forms of authorized games of chance, and in some cases the same equipment or machines are used, it is difficult to isolate the "High –Low lottery" facilities and equipment from other authorized games and those authorized games are being affected by police operations. To compound the problem, the gazette notice is broadly or vaguely worded to include "any other similar games in nature" and this has opened up room for abuse by police. Police are closing down the whole premises or removing everything and forcing gaming businesses to close. In the circumstances, Mr Saulep submits, the interim orders should be continued to protect the plaintiffs operations pending the hearing and determination of the substantive application.

10. In my view, the terms of the declaration published in the notice is specific about the type of game outlawed which is "High/Low lottery" and any such game which resembles or is similar in nature to such a game. If there is confusion or misunderstanding amongst the police as to what the outlawed game is or how it is played and separating its facilities, equipment and machines and dealing with them, is a matter for the National Gaming Board, Police and the High-low lottery operators affected by the police operations, to sit down together and share information to avoid such misunderstanding or confusion, so that those facilities, equipment and machines used for authorized lotteries are not affected by the police operations. On the face of the material before me, a valid declaration under s 5(3) of the Gaming Control Act 2000 has been made and as a result, the game of High-Low lottery" or any other games of a similar nature has been rendered an illegal game, and any person who is making available facilities or has in his/her or its possession of the outlawed games' equipment or machines and/or conducting the illegal game, are committing various criminal offences set out in Division 2 of Part VIII (ss 243-250 inclusive) of the Gaming Control Act 2000. They stand the risk of police criminal investigations, police actions of search and seizure of facilities and equipment used to conduct the illegal game, arrest and prosecution. Those are normal police functions under the law and they can take those actions with or without the invitation of the National Gaming Board. If police commit excesses and abuse their powers in the process, or if the National Gaming Board or the Minister responsible do likewise, the plaintiffs have a remedy in damages. If the plaintiffs are successful in the trial in quashing the declaration and restoring the game, they can be adequately compensated in damages. The defendants have filed an undertaking as to damages and I accept it is effective. The defendants no doubt would have the financial ability to meet the undertaking if they fail in the substantive application.

11. Having reached these conclusions, it is not necessary to determine the other related procedural and other issues raised in the argument. I do not consider those matters to be determinative of the substantive issues before me which I have addressed in my ruling this afternoon. For these reasons, I discharge the interim orders issued on 18th April 2008. The substantive matter is fixed for directions on 2nd June 2008 at 9:30 am. Cost of the proceedings shall be costs in the cause.

 __________________________________
Saulep Lawyers: Lawyer for plaintiff
Elemi Lawyers: Lawyer for second and third respondents
Solicitor-General: Lawyer for fourth respondent
Police Legal Services Branch: Lawyer for Police Department