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Salngat v National Forest Board [2012] PGNC 259; N4927 (7 September 2012)

N4927

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 830 OF 2010

BETWEEN

LAMBERT SALNGAT & ORS
Plaintiffs
V

NATIONAL FOREST BOARD,
PNG NATIONAL FOREST AUTHORITY,
TIMOTHY BONGA-MINISTER OF FORESTS,
THE STATE AND PASSISMANUA BLOCK 1 LTD
Defendants

Waigani: Sawong, J.
2012: 10th May, 07th September

Case Cited:
Robinsons v. National Airline Commission [1983] PNGLR 476
Maskul Ltd v. MRDC [1996] PNGLR
Craft works Niugini Pty Ltd v. Allan Mott (1997) SC 525
Chief Collector Taxes v. Bougainville Copper Ltd (2007) SC 853

Counsel:
I R. Molloy with C. Copland, for the Plaintiff
Mr I. R Shepherd, for the First & Second Respondents

7th September, 2012

1. SAWONG, J.: This is an application by Notice of Motion filed on 26th April, 2012 for injunctive orders to restrain the defendants (except the third defendant) pending the determination of these proceedings from:
   
   1. Issuing a license to log from a customary area of land known as TP-14 situated in the West New Britain Province and
      
   2. Relying upon any license already issued in respect of TP14-11.
      
2. Application is made pursuant to Order 12 Rule 1 and Order 16 Rule 3 (8) of the National Court Rules after having obtained leave to apply for judicial review was granted on 10th February 2011.
   

3. Leave was granted to the plaintiff as representative of the shareholders of Passismanua Inland Resources Ltd to review a decision made by the Second Defendant on 13th July 2010 recommending to the Minister (Third Defendant) that TP14-11 be transferred to the fifth defendant and secondly to review the decision of the Third Defendant (Minister) dated 14th July 2010 to approve the said recommendation.

3. In support of his application, the applicant relies on four affidavits, the statement filed pursuant to Order 16(3)(2)(a) NCR and the order granting leave. From these the following background emerges.
   
4. Passismanua Inland Timber Resources Limited ("PITR") is a landowner company. The shareholders of PITR hold the shares in trust for the customary landowners (see Annexure "-"para 3).
   
5. PITR held two Timber Permits:
   
   • (a) TP14-14 and
   • (b) TP14-11
     
6. Before 6 March 2007 Lawrence Mango and John Kipong were directors of PITR (statement: 11)
   
7. Since at least March 2008 there have been disputes concerning the true directors of PITR leading to multiple proceedings in the National Court. On 3rd May 2010 all the proceedings were referred to mediation (statement: 22). However mediation was unsuccessful.
   
8. One of the persons claiming to be a director and to have authority to act on behalf of PITR is George Kirimly. He claims that the PITR board resolved to transfer TP14-11 to another company, the Fifth Respondent (Block 1). This is disputed.
   
9. On 13th July 2010, the NFA board resolved to transfer TP14-11 to Block 1 ("Recommendation"). And on 14th July 2010, the Minister approved the Recommendation ("Approval"). These are the decisions the subject of this proceedings.
   
10. I have read and considered carefully all the relevant affidavits relied on by the parties and their respective written submissions.
    
11. The principles upon which the Court may grant an interlocutory injunction are well settled in this jurisdiction. Those principles maybe found in many Supreme and National Court decisions such as Robinson v National Airline Commission [1983] PNGLR 476, Maskal Ltd v MRDC [1996] PNGLR, Craft works Niugini Pty Ltd v Allan Mott (1997) SC 525, Chief Collector Taxes v Bougainville Copper Ltd (2007) SC 853. The principle consideration involved is whether the plaintiff has serious issues to be tried and determined at the substantive trial, whether the balance of convenience favors the granting of interim injunctive relief, whether damages are an adequate remedy, and whether the plaintiff has given an undertaking as to damages.
    
12. It is contended that the PITR Board did not resolve to transfer TP14-11, the application was made without the authority of the PITR Board; and that PNGFA had notice of the defect in the authority of George Kirimly.
    
13. It is also contended that the transfer involves a major transaction on the part of PITR which requires shareholder approval under section 110 of the Companies Act 1997. Such approval has not been given.
    
14. As to whether there is serious issue to be tried, it was submitted that this issue has been largely determined by the grant of leave to apply for judicial review. It was submitted that at the hearing of the leave application, one of the matters considered was whether there was an arguable case, it being argued that if the plaintiff's claim is sustained, the recommendation to transfer the Timber Permit TP14-11 to the fifth Defendant and the subsequent decision of the Minister to approve the transfer are null and void.
    
15. The reasons for these are firstly that the PITR Board did not resolve to transfer TP14-11. The application to transfer was made without the authority of PITR Board. Secondly it was contended that the transfer involves a major transaction on the part of PITR which requires shareholder approval under section 110 of the Companies Act, and such has not been given or made by the shareholders of PITR.
    
16. Counsel for the respondents in his submissions does not take issue as to this aspect. He submitted that it is not necessary to deal with any of the other tests or considerations except as to the issue of whether damages would be an adequate remedy. It was submitted that if this question is answered in the affirmative, then the application should be refused.
    
17. I am of the view that, indeed there is an arguable case. The arguments raised by the plaintiff, namely that it's board had not authorized the transfer of the Timber Permit over TP14-11 and not passed any resolution pursuant to s.100 of the Companies Act demonstrate there the plaintiff's have an arguable case.
    
18. As to the issue of balance of convenience, or more particularly, whether damages would be an adequate remedy, counsel for the plaintiff submits, in summary that damages would not be an adequate remedy, and that the status quo should be maintained until after these and related proceedings are determined.
    
19. The respondents submit that this is really a dispute between different groups over the same area, over who should derive financial benefits from loggings. It has been submitted that damages is an adequate remedy, as any financial loss can easily be quantified by reference to the logging and marketing agreements. Accordingly, it was submitted that damages are capable of assessment.
    
20. I accept the submission of the respondent. It is clear to my mind that both sets of landowner groups want logging activities to be carried out within TP14-11. Neither group opposes any logging. The only issue is who should hold the permit and who should be contractor.
    
21. In my view damages are quite capable of being assessed and that damages are or would be quite an adequate remedy. These are capable of assessment by referring to the logging and marketing agreements.
    
22. Accordingly, I refuse to grant the reliefs sought in the Notice of Motion and order that costs must follow the event.

_____________________________---______________

Young & Williams Lawyers: Lawyer for the Plaintiff
Ashurst Lawyers: Lawyer for the Defendant