N4047

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 577 OF 2010

BETWEEN:

AIRLINES OF PAPUA NEW GUINEA LIMITED
Plaintiff

AND:

AIR NIUGINI LIMITED
Defendant

Waigani: Hartshorn J.
2010: 4th & 9th June

Application for injunctive relief - obligation of applicant to disclose all material facts - failure to disclose material facts is fatal to an injunction application - consideration of whether serious question to be tried established

Facts:

Airlines PNG applied for an interim injunction to restrain Air Niugini from removing it from premises at the Mount Hagen Airport Terminal Building after Air Niugini had given notice to vacate.

Held: 

1. Airlines PNG has failed to disclose material facts in its application and has not established that it has a serious question to be tried. 

2. The application for interlocutory injunctive relief is refused.

Cases Cited:
Papua New Guinea cases

Robinson v. National Airlines Commission [1983] PNGLR 478 
Sioti Bauf and Lavoi Nodai v. Poliamba Pty Ltd [1990] PNGLR 278 
Markscal Ltd v. MRDC [1996] PNGLR 419
Craftworks Nuigini Pty Ltd v. Allan Mott (1997) SC525 
Eastern Highlands Provincial Government v. Aita Ivarato [1998] PNGLR 268 
Golobadana No 35 Ltd v. Bank of South Pacific Ltd (2002) N2309
Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853

Overseas Cases
American Cyanide Company v. Ethicon Limited (1975) 1 All ER 594

Counsel:

Mr. G. Geroro, for the Plaintiff
Mr. I. R. Shepherd, for the Defendant 

9th June, 2010

1. HARTSHORN J: Airlines of Papua New Guinea Limited (Airlines PNG) presently uses a portion of the Mount Hagen Airport Terminal for its lounge (premises). Air Niugini Ltd has given notice to Airlines PNG to vacate the premises. Airlines PNG has commenced this proceeding seeking amongst others, declaratory relief and specific performance in respect of its occupation of the premises.

2. Airlines PNG now applies for an interim injunction to restrain Air Niugini from removing Airlines PNG from the premises.

3. The principles upon which the court can grant an interlocutory injunction are well settled. The leading authority is a decision of the House of Lords in American Cyanide Company v. Ethicon Limited (1975) 1 All ER 594. This case has been followed on many occasions in this jurisdiction and cited with approval by the Supreme Court in Craftworks Nuigini Pty Ltd v. Allan Mott (1997) SC 525. These principles have been reaffirmed by the Supreme Court in Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853.

Non disclosure of material facts

4. Counsel for Air Niugini submitted that the court's power to grant an injunction is discretionary, that an injunction is an equitable remedy and that an applicant for an injunction must disclose all material facts. A failure to disclose material facts is fatal to an injunction application. Here, it is submitted, Airlines PNG has not disclosed material facts.

5. This principle was referred to in Golobadana No 35 Ltd v. Bank of South Pacific Ltd (2002) N2309, a decision of Kandakasi J. in which his Honour said that the duty to disclose all relevant and necessary information that might affect the grant of an interlocutory injunction, "is a requirement that must be met in equity given that the grant or not of an interlocutory injunction is an exercise of the Court’s power or discretion in equity."

6. Also in Eastern Highlands Provincial Government v. Aita Ivarato [1998] PNGLR 268, Kirriwom J. referred with approval to the decision of Sheehan J. (as he then was) in Sioti Bauf and Lavoi Nodai v. Poliamba Pty Ltd [1990] PNGLR 278 when he said that, " The court held that 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 all facts material to the applicant’s right to the injunction as well as any material which could be put in favour of the defendant. He had (sic) a duty to make full and proper disclosure."

7. I note in this instance that Airlines PNG in its notice of motion applied for service of the motion to be dispensed with and for it to proceed ex parte. Be that as it may, it is clear that an applicant for an injunction has a duty to place before the court all relevant and necessary information concerning the matter in respect of which the injunction is sought.

8. Air Niugini submits that Airlines PNG has failed in its duty to disclose all material facts to the court including:

a) the existence of the Agreement for Lease for the premises that expired in August 2006 and the option to renew therein which was not exercised by Airlines PNG,

b) that Air Niugini has occupied the Airport Terminal, part of which includes the premises, pursuant to a Head Lease from the State for 85 years which commenced in 1991,

c) that Airlines PNG occupies other premises close to the Air Niugini Terminal at Mount Hagen Airport.

9. It is apparent from the affidavits filed in support of the notice of motion before any affidavits were filed on behalf of Air Niugini that the matters listed above were not disclosed on behalf of Airlines PNG.

10. To my mind they are all material facts that should be considered in determining whether the interim relief sought should be granted and they are all facts that should be known to Airlines PNG and its officers. The non disclosure of these material facts is not a good reflection on Airlines PNG. I am satisfied that the non disclosure is such that the application of Airlines PNG should be refused. Notwithstanding this, I will proceed to consider whether Airlines PNG has a serious question to be tried.

Serious question to be tried

11. A serious question to be tried has been interpreted to mean:

What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success….; Robinson v. National Airlines Commission [1983] PNGLR 478 and

….. a strong case which, on the evidence presented would support a permanent injunction; Markscal Ltd v. MRDC [1996] PNGLR 419.

12. The parties have filed affidavits in support of their respective positions. As to the court's consideration of that evidence at this stage, I am mindful of the words of Lord Diplock in American Cyanide (supra):

It is not part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations.

13. Airlines PNG submits that it has a serious question to be tried as amongst others:

a) there is a dispute as to whether Air Niugini has the requisite title to the premises and whether it can evict Airlines PNG,

b) if Air Niugini has the requisite title, Airlines PNG has accepted its offer of a new lease of the premises at an increased rental and has paid the increased rental,

c) Air Niugini’s conduct in seeking to evict Airlines PNG is in breach of the Independent Consumer and Competition Commission Act (ICCC Act).

14. Air Niugini submits as to whether Airlines PNG has a serious question to be tried:

a) there is no evidence that Air Niugini’s action in taking possession of its own property is for a reason other than for its own expansion and the alleged breach of the ICCC Act has no merit,

b) Air Niugini has a statutory right to occupy the property including the premises and Airlines PNG is attempting to interfere with that statutory right,

c) as it is conceded that there was no renewal of the Agreement for Lease that expired in August 2006 and as there is no present Agreement for Lease in writing, there is no lease agreement to enforce,

d) there are discrepancies in the affidavits filed on behalf of Airlines PNG,

e) it is not pleaded in the statement of claim that the registered Head Lease that Air Niugini has is unenforceable.

15. In the course of submissions, counsel for Airlines PNG conceded that Airlines PNG did not exercise the option to renew the Agreement for Lease and since August 2006 has been occupying the premises on a month to month basis. Further, it was also conceded that the rental payments made for the period after 22nd January 2010 were made from 17th May onwards, after the purported notice to vacate was given in April 2010.

16. As to whether Airlines PNG has a serious question to be tried, in considering the evidence before the court, it is apparent that the Head Lease that Air Niugini has is registered and the issue as to the enforceability of the Head Lease is not pleaded in the statement of claim. 

17. Further, even if an offer of a new lease had been made, there is no evidence, apart from the unsupported assertion in the affidavit of Mr. Chapple, that the offer was accepted. In addition, no rental payments were made for the period after 22nd January 2010 until after the notice to vacate had been given. There is also no evidence that the reason that Air Niugini has given notice to vacate is to lessen competition or otherwise breach the ICCC Act.

18. Given the above, I am not satisfied that Airlines PNG has established that it has a serious and not a speculative case which has a real possibility of ultimate success, or a strong case which on the evidence presented, would support an order for specific performance or the other substantive relief sought.

19. Having so decided, it is not necessary to consider the next question which is whether the balance of convenience lies in favour of granting Airlines PNG the interlocutory relief sought.

Damages

20. If however, Airlines PNG does have a serious question to be tried, the first consideration in determining the balance of convenience is whether, if it were to succeed at trial in obtaining the relief sought, would Airlines PNG be adequately or appropriately compensated by an award of damages for any loss sustained between being refused the interlocutory relief sought and obtaining the substantive relief.

21. The evidence filed on behalf of Airlines PNG is that it would be greatly inconvenienced if the interlocutory relief sought was not granted. This is despite the concession that since August 2006 Airlines PNG has been occupying the premises on a month to month basis. There is no specific evidence that damages would not be an adequate remedy but counsel for Airlines PNG made submissions to this effect. 

22. Counsel for Air Niugini submitted that it is clear that damages would be an adequate remedy as any loss suffered by Airlines PNG would be able to be quantified.

23. I am satisfied that any loss suffered by Airlines PNG would be able to be quantified and that it has not been shown to the court’s satisfaction that damages would not be an adequate remedy. 

24. In any event however, as I have found that the interlocutory relief sought should be refused because of the non disclosure of material facts by Airlines PNG and as it has not been made out that Airlines PNG has a serious question to be tried, the interlocutory relief sought should be refused.

Orders 

25.	a) the relief sought in the notice of motion of the plaintiff filed 21st May 2010 is refused,

b) the costs of and incidental to the notice of motion are to be paid by the plaintiff to the defendant.
______________________________________________________
Peter Allan Lowing Lawyers: Lawyers for the Plaintiff
Blake Dawson: Lawyers for the Defendant