N3753

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 644 OF 2007

BETWEEN

PETER PAGI
Plaintiff

AND

WILFRED MINDILI
Defendant

Mount Hagen: Makail J,
2009: 17th & 25th September

INJUNCTIONS - Interim mandatory injunction - Application to set aside - Interim mandatory injunction made inter-parties - Equitable relief - Principles of equity applied - Constitution - Schedule 2.2.

Cases Cited

Papua New Guinea cases

AGK Pacific (NG) Ltd -v- William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) Ltd (2000) N2062
Mainland Holdings Limited -v- Paul Robert Stobbs & 3 Ors (2003) N2522
East Arowe Timbers Resources Limited & Ors -v- Cakara Alam (PNG) Limited, Papua New Guinea Forest Authority & Martin Mato (2008) N3270
Thadeus Kambanei -v- The National Executive Counsel & 5 Ors (2006) N3064
Yama Group of Companies Ltd -v- PNG Power Ltd (2005) N2831

Overseas cases cited:

Jimi Co-op Daries Ltd -v- Capital Diary Products Ltd (1989) I PRNZ 622
Zockoll Group Ltd -v- Mercury Communications Ltd [1997] EWCA Civ 2317 
G & A Ltd. -v- HN Jewellery (Asia) Ltd [2004] EWCA Civ 674
Nottingham Building Society -v- Eurodynamics Systems [1993] FSR 468

Counsel:

Mr. P Kunai, for Plaintiff
Mr. T Dalid, for Defendant

RULING

25th September, 2009

1. MAKAIL J: There are two applications before me for determination. One by the plaintiff by his notice of motion filed on 18th May 2009 to have the defendant punished for contempt of court of an interim order of 13th March 2008 ("interim order") and the other by the defendant by his amended notice of motion filed on 21st August 2009, to set aside that same interim order.

2. The interim order, which was made inter-parties and subject of these two applications, reads as follows:

"1. An interim Order that the Defendant is to release to the Plaintiff the Toyota Coaster Bus bearing Registration No P 6104 forthwith.

2. The matter is to be placed on the call-over list.

3. The Defendant is to bear the Plaintiffs costs of the  motion.

4. Time is abridged."

3. It was decided that I hear the application to set aside the interim order before the application for contempt of court because its determination may decide whether it would be necessary at all to hear the plaintiffs application for contempt of court, notwithstanding that the plaintiffs application was filed first in time and should be heard first.

4. Briefly, from reading the affidavit of the defendant sworn on 28th May 2009 and filed on 29th May 2009, affidavit of Tony Ipinis sworn on 29th April 2009 and filed on 4th May 2009, affidavit of Councilor Simon Kapua sworn on 29th April 2009 and filed on 4th May 2009 and the opposing affidavit of the plaintiff sworn on 8th May 2009 and filed on 18th May 2009, it is not disputed that there was a motor vehicle accident involving the plaintiffs motor vehicle, a Toyota Coaster bus, bearing registration no P-6104 ("bus") and the defendant’s motor vehicle, a Mazda PMV truck, bearing registration no P-078A ("truck") at Lumbi village in Mendi on 23rd February 2007. 

5. Passengers in the bus and the truck were seriously injured. The plaintiffs bus was towed to the defendant’s village at Aisesa Papera village on the same day. The plaintiffs attempts to salvage it from the defendant’s village proved unsuccessful, even after obtaining the interim order. The defendant says that, first the bus was towed to his village for safe keeping upon instructions from the Mendi police. It was not him who directed his tribesmen to impound the bus, but a police man from Mendi Police Station by the name of Sergeant Lucas Lapan. 

6. Then, the bus was towed to the defendant’s village where the relatives of the injured passengers impounded it. Hence, it is incorrect for the plaintiff to accuse him as being the instigator of the dispute. However, the plaintiff says that he has every right to take possession of it and even obtaining the interim order and attending at the defendant’s village with Mt Hagen based Mobile Squad police, the defendant’s tribesmen over powered them and they returned empty handed.

7. Secondly, the bus is held by the relatives of the injured passengers until the plaintiff compensates the injured passengers. Once the plaintiff pays compensation to them, they will release it to him. As for the defendant, he has paid compensation of K21,542.50 comprising of cash and 14 live pigs to the injured passengers and their relatives.

8. For these reasons, it is beyond his power and control to comply with the interim order and return the bus to the plaintiff. He therefore, asks that the Court set aside the interim order so he does not get into any trouble with it. His counsel relies on Order 12, rule 8 of the National Court Rules to set aside the interim order. That provision of the National Court Rules states:

"8. Setting aside or varying judgement or order. (40/9)

(1) The Court may, on terms, set aside or vary a direction for entry of judgement where notice of motion for the setting aside or variation is filed before entry of the judgement.

(2) The Court may, on terms, set aside or vary a judgement –

(a) where the judgement has been entered pursuant to Order 12 Division 3 (default judgement); or

(b) where the judgement has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or

(c) when the judgement has been entered in proceedings for possession of land pursuant to a direction given in the absence of a person and the Court decides to make an order that the person be added as a defendant.

(3) The Court may, on terms, set aside or vary an order -

(a) where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or

(b) where notice of motion for the setting aside or variation is filed before entry of the order.

(4) In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgement) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.

(5) This Rule does not affect any other power of the Court to set aside or vary a judgement or order."

9. In an application to set aside an order made inter-parties, what principles of law should the Court apply to decide the application? Neither counsel has referred me to any guiding principles of law or case authority in relation to this kind of application. Obviously, the interim order was made after the Court heard arguments for and against the plaintiffs application before it made the order but either parties have produced to the Court, a copy of the decision of the Court of 13th March 2008. 

10. This, places the Court in a difficult position to know exactly the reasons of the earlier Court to grant the interim order. Nonetheless, it is agreed and accepted by both parties that the interim order was made inter-parties. Therefore, the principles of law applicable in applications to set aside ex-parte orders under Order 12, rule 8 of the National Court Rules do not apply here. That is, orders made in the absence of a party or parties.

11. But I consider that the National Court exercising its equitable jurisdiction under Schedule 2.2 of the Constitution may set aside or vary the interim order in this case, as part of the Court’s application and enforcement of the underlying law, the principles and rules of common law and equity in England that were formed immediately before Independence day. This is where the equitable jurisdiction of the Court comes into play. In my view, term 1 of the interim order is indeed an interim mandatory injunction as it compels the defendant to release the bus to the plaintiff pending the determination of the dispute in relation to the defendant’s right of detention. It states, "[A]n interim Order that the Defendant is to release to the Plaintiff the Toyota Coaster Bus bearing Registration No P1604 forthwith." 

12. An injunction is an equitable relief. In AGK Pacific (NG) Ltd -v- William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) Ltd (2000) N2062, Injia J, (as he then was), stated that, "[T]he grant of injunctive relief, interim or permanent, mandatory or otherwise, is an equitable remedy and it is discretionary." (Emphasis is added).

13. In deciding whether to set aside an injunction, the National Court relies on the principles of equity that were adopted on Independence. Some of those principles were neatly summarized by Injia DCJ, (as he then was), in Mainland Holdings Limited -v- Paul Robert Stobbs & 3 Ors (2003) N2522 some of which I adopted and applied in East Arowe Timbers Resources Limited & Ors -v- Cakara Alam (PNG) Limited, Papua New Guinea Forest Authority & Martin Mato (2008) N3270. I list these principles hereunder:

1. There must be change of relevant circumstances.

2. The Court must look at the conduct of the parties at the time the order was made and after. That is, whether the party who has obtained the interim order has come to Court with clean hands.

3. Whether the party who has obtained an interim order has disclosed all relevant information including those that may operate against it to the Court at the hearing of the application.

4. Whether the interim order was made on an erroneous basis.

14. In Mainland Holdings Limited’s case (supra), his Honour referred to the New Zealand case of Jimi Co-op Daries Ltd -v- Capital Diary Products Ltd (1989) I PRNZ 622 and found it persuasive and applied it in that case. His Honour said that, the exercise of discretion should be limited to the change in relevant circumstances since the order, which would render the continuation of the interlocutory order, unnecessary or inappropriate in the circumstances. This is how his Honour puts it:

"In the exercise of its regulatory jurisdiction, the Court also has wide discretion to protect itself or its process from abuse by parties aggrieved by its earlier order, seeking to have a second opportunity to re-argue the case in order to reverse its earlier decision. In cases where the earlier interlocutory order is subject of an appeal, the Court should be reluctant to engage in any deliberations on the facts and law which would or is likely to interfere or usurp the review powers of the appellate Court to review findings of fact or law. This is particularly so when a second judge is invited to vary or discharge an interlocutory order of the first judge. In this context, I find the text from the New Zealand case of Jimi Co-op Daries Ltd v. Capital Diary Products Ltd (1989) I PRNZ 622, at 627 submitted to me by Mr. Wilson persuasive, and I quote:

"It is in principle wrong that a litigant should have second opportunity merely to re-argue or to reinforce his case with evidence which was already available but which was not called. There is a reluctance on the part of any Judge and some difficulty indeed for a Judge to rehear and reconsider his own decision particularly where that has been subject to an extended argument, with evidence, and an occasion to consider his decision even if that may be for a short period. There is a reluctance on a Judge of coordinate jurisdiction to review the decision on the facts or even the law of another Judge. There is the possibility that if the right of review was free and open-ended there could be a repeated application for reconsideration and review of any interlocutory application before all the Judges that might be available."

In the present case, it is these principles which compel me to qualify what I said earlier, as to the wide discretion I have to review an existing interlocutory order. For this reason, I accept Mr. Wilson’s submissions in part - that generally speaking, the exercise of my discretion should be limited to the change in relevant circumstances since the order, which render the continuation of the interlocutory order, unnecessary or inappropriate in the circumstances. However, this does not necessarily follow that I cannot in the exercise of my discretion, revert to relevant circumstances on which the existing order is based, and established principles in determining the appropriateness of any order I propose to make. I am entitled to do so, not with a view to reviewing the earlier court’s exercise of discretion, but to determine the continuance of the order in the light of all relevant circumstances and principles." (Emphasis is added).

15. In respect of mandatory injunctions, in Thaddeus Kambanei -v- The National Executive Counsel & 5 Ors (2006) N3064, Injia DCJ (as he then was) quoted with approval the principles listed by Lay J, in Yama Group of Companies Ltd -v- PNG Power Ltd (2005) N2831 following his comprehensive consideration of the English, Australian and Papua New Guinean authorities: 

"1. A mandatory injunction should normally only be granted where a strong case that serious damage will occur to the applicant is made out.

2. The general principles for negative injunctions apply, that is that there is a serious case to be tried, damages are not an adequate remedy and the balance of  convenience favours the applicant, but the case should normally be one giving an unusually strong and clear view that the applicant will be successful a trial.

3. The more likely it appears that the plaintiff will succeed at trial the less reluctant the court will be to interfere on an interim basis.

4. But if it is necessary to make some interim order the Court will do so whether or not the high standard of probability of success is made out.

5. The costs to the defendant of performing the mandatory acts should be weighed against the likely damage to the applicant.

6. If the relief sought is such as would normally only be granted after a trial, it should be refused on an interim application unless the prejudice or hardship to the applicant is disproportionate to the prejudice and hardship to be caused to the defendant in performing the order.

7. If the mandatory injunction is simply to restore some activity which has been previously performed by the defendant, rather than to embark upon some new activity, it will be more readily granted.

8. Ultimately, in deciding whether or not to grant a  mandatory injunction the overriding consideration is  an exercise in deciding which course will do the least  damage, or, to put it another way, the lower risk of  injustice, if it turns out that the court has made the "wrong" decision.

9. If an injunction is granted the order should specify exactly what it is the defendant has to do, leaving the defendant in no doubt as to what is required to comply  with the order."

16. The above principles are to my mind, concisely summarized by the English Court of Appeal in Zockoll Group Ltd -v- Mercury Communications Ltd [1997] EWCA Civ 2317 and subsequently approved in G & A Ltd. -v- HN Jewellery (Asia) Ltd [2004] EWCA Civ 674. In Zockoll’s case (supra), Phillips L.J, quoted the following passage from Nottingham Building Society -v- Aurodynamics Systems [1993] FSR 468:

"In my view the principles to be applied are these. First, this being an interlocutory matter, the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be ‘wrong’ in the sense described by Hoffman J.

Secondly, in considering whether to grant a mandatory injunction, the court must keep in mind that an order which requires a party to take some positive step at an interlocutory stage, may well carry a greater risk of injustice if it turns out to have been wrongly made than an order which merely prohibits action, thereby preserving the status quo.

Thirdly, it is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the plaintiff will be able to establish this right at a trial. That is because the greater the degree of assurance the plaintiff will ultimately establish his right, the less will be the risk of injustice if the injunction is granted.

But, finally, even where the court is unable to feel any high degree of assurance that the plaintiff will establish his right, there may still be circumstances in which it is appropriate to grant a mandatory injunction at an interlocutory state. Those circumstances will exist where the risk of injustice if this injunction is refused sufficiently outweigh the risk of injustice if it is granted." (Emphasis is added).

17. I apply these principles in this case below. First, is there a change in relevant circumstances since the interim order, which would render the continuation of the interim order unnecessary or inappropriate in the circumstances?

18. In this case, it is the defendant’s submission that since the Court made the interim order, it has prejudiced him because he is not in possession of the bus at this point in time in order to return it to the plaintiff. As a result, he is unable to comply with the interim order. Counsel for the defendant refers to the affidavit of the defendant sworn on 28th May 2009 and filed on 29th May 2009 to show that even though the bus is in his village at Aisesa Papera in Southern Highlands Province, he is unable to return it to the plaintiff because the relatives of the injured passengers of the motor vehicle accident have detained it and demanded compensation from the plaintiff before it could be released to him.

19. Although the defendant had participated in the peace mediation at his village on 23rd December 2008, the plaintiff has failed to attend and that is one of the reasons for the relatives of the injured passengers to be frustrated and have detained it. As a result, it is impossible for him to simply remove the bus from them and hand it over to the plaintiff.

20. I am not satisfied that the defendant has shown that, circumstances have changed to justify the setting aside of the interim order. I consider that, it is within the defendant’s power and control to release the bus to the plaintiff as ordered by the Court on 13th March 2008. I do not believe that because the relatives of the injured passengers have impounded the bus, it has made it difficult for him to return it to the plaintiff. There is a valid order of the Court which must be complied with by the defendant and anyone who is directly or indirectly affected by it. In my view, this includes the relatives of the injured passengers and the defendant’s tribesmen.

21. Further, if it is indeed the case that the relatives of the injured passengers have impounded the bus in order to coerce the plaintiff to settle their compensation demand, I find that there is no right under any law for the injured passengers’ relatives to do that. What they have done is simply extortion, which is a criminal offence under section 390A of the Criminal Code. It is "black mail" at its worst. They cannot hold the bus as leverage for their demand for compensation from the plaintiff. I will not allow that to happen, nor conduce it. This is the kind of mentality and practice that must be ridded with at all cost. I find there is nothing hindering all those affected by the interim order from complying with it and the reasons offered by the defendant, unsatisfactory and unacceptable.

22. This leads me to the next point and that is, the conduct of the parties at the time the interim order was made and after. That is, whether the party who has obtained the interim order has come to Court with clean hands. In this respect, it is clear to me that, the defendant has not come to Court with clean hands to seek the Court’s indulgence to do justice to him. 

23. There are two maxims of equity which are applicable to this case. The first one is, "He who seeks equity must do equity" and the second one is, "He who seeks equity must come with clean hands". In determining the application to set aside the interim order, I intend to apply these two maxims to determine the issue of whether in the light of changed circumstances, if any, the equitable relief granted by the Court should be allowed to continue or be dissolved.

24. As I have observed above, it was and is within the defendant’s power and control to release the bus and the defendant is duty bound to release it as ordered by the Court. That duty extends to any person directly or indirectly affected by that interim order. This includes the relatives of the injured passengers and the defendant’s tribesmen. The bus is still in the defendant’s village. 

25. The defendant has denied any collusion with the relatives of the injured passengers to impound the bus, but whether or not there is collusion amongst them is a matter for trial. I need not decide that issue now. What is relevant and concerns me is that the defendant did not give any evidence of his attempts to return the bus to the plaintiff and attempts to persuade the relatives of the injured passengers to release it to the plaintiff.

26. He, kind of played a passive role in the impounding of the bus by not doing anything except to complain that the plaintiff did not participate in the numerous mediations and also the compensation ceremony on 15th June 2007. And to make things worst for him, the peace mediators like, Tony Ipinis and Councilor Simon Kaupa encouraged him to bring the plaintiff to the mediations without advising him to release the bus first. To my mind, the defendant has not come to Court with clean hands. His hands are very dirty. This Court exercising its equitable jurisdiction will not exercise its discretion in favour of a party who is guilty of inequity. For this reason, I find that defendant is not entitled to the orders he seeks. 

27. Conversely, I find that, the plaintiff has done everything under the law to get his bus back from the defendant. First, he has organized insurance payment for the injured passengers with the Motor Vehicle Insurance Trust Limited since his bus is insured and secondly, he has come to Court and obtained an interim order for its release, instead of forcefully removing it from the defendants with the help of his tribesmen, which would lead to more chaos and misery. Thirdly, armed with the interim order, he attended the defendant’s village with Mt Hagen based Mobile Squad police on 28th March 2008 to take possession of the bus only to be overpowered by the defendant’s tribesmen. 

28. To my mind, the above matters demonstrate that the plaintiff is prepared to abide by the laws of this country. He has done all the right things. He has come to Court with clean hands and this Court exercising its equitable jurisdiction must do justice to him.
Thirdly, I have to consider whether at the time the plaintiff had obtained the interim order, he has disclosed all the relevant information including those that may have operated against him at that time. As I alluded to earlier, both parties have not produced the decision of the Court of 13th March 2008 in order for me to work out whether the plaintiff has withheld any relevant information that may operate against him. I do not wish to speculate here but what I am able to say is that, it is common ground between the parties that, at the time the Court made the interim order, it was not brought to the attention of the Court by both parties that the defendant had a reason or reasons for not releasing the bus, and that is to do with the relatives of the injured passengers impounding it at that time.

29. I have already found that the reason given by the defendant for his failure to release the bus to the plaintiff because the relatives of the injured passengers have impounded it is not a valid ground for the Court to set aside the interim order. As such, that reason is irrelevant as far as this consideration is concern.

30. On the other hand, I am entitled to infer that the defendant’s application has been prompted by the impending application of the plaintiff to have him punished for contempt of Court of the interim order. In this respect, it surprises me and makes me skeptical that it has taken the defendant so long to come to Court to ask to set aside the interim order. It is exactly 1 year, 5 months and 8 days since the interim order was made on 13th March 2008 and the filing of the amended application on 21st August 2009. 

31. If indeed, the relatives of the injured passengers had impounded the bus, resulting in him been unable to release it to the plaintiff at that time, why didn’t he file the application to set aside the interim order there and then? To my mind, he has not given a satisfactory explanation for his failure to file the application promptly. That is why I say his application was filed merely to counter the plaintiffs application to have him punished for contempt of Court. It is a last minute bid to save himself from the looming storm so to speak.

32. The last consideration is whether the interim order was made on an erroneous basis. None of the counsel for the parties made submissions in respect of this consideration. Was the interim order made on an erroneous basis? It is common ground and no issue has been taken by the defendant that the plaintiff is the registered owner of the bus. What is in dispute is that, the defendant and the relatives of the injured passengers have a right to impound it because their demand for compensation has not been met by the plaintiff.

33. On this representation, first, it is clear to me that the plaintiff is entitled to his bus because he is the owner. In the Originating Summons, the plaintiff seeks inter-alia a declaration that he is the registered owner of the bus. To my mind, it is a foregone conclusion that the order will be granted in his favour unless the defendant changes his mind and disputes the ownership right of the plaintiff.

34. Secondly, the bus is held in the defendant’s village. It was impounded on 23rd February 2007. Today is 25th September 2009. It is exactly 2 years, 7 months and 2 days since it was impounded. Surely, it must have suffered wear and tear, due to the prolong dispute and lack of maintenance, not forgetting that it had already sustained damage during the accident on 23rd February 2007. The plaintiff says he is worried about the state of the bus and wants it returned so that he could have it repaired. I find that the interest of justice will not be served if the bus is continued to be detained at the defendant’s village and must be released immediately.

35. These two considerations persuade me to say that there is a high degree of assurance that the plaintiff will establish his right and if an interim mandatory injunction is not granted or allowed to continue, he will suffer substantial damage. In my view, the risk of injustice if the interim mandatory injunction is refused or set aside now far outweighs the risk of injustice if granted.

36. For these reasons, I am not satisfied that the defendant has demonstrated that circumstances have changed since the interim order. Secondly, I am not satisfied that the defendant has not come to Court with clean hands. Finally, I am also not satisfied that the defendant has demonstrated that the plaintiff has obtained the interim order on an erroneous basis.

37. I order that the defendant’s amended notice of motion filed on 21st August 2009 seeking an order to set aside the interim order of 13th March 2008 is refused forthwith. As I have refused the defendant’s application, it is now necessary to determine the plaintiffs application for contempt of Court in his notice of motion filed on 18th May 2009 which I shall order to be further adjourned to Friday 9th October 2009 at 9:30 am for hearing. The defendant shall also pay the cost of the application to be taxed if not agreed. Time shall also be abridged.

Ruling accordingly
_____________________________________

Kunai & Co Lawyers: Lawyers for the Plaintiff
Jerry Kiwai Lawyers: Lawyers for the Defendant