N4097
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 202 OF 2010

EDDIE TARSIE FOR HIMSELF AND IN HIS CAPACITY AS
WARD COUNCILLOR OF WARD 3,
SAIDOR LOCAL-LEVEL GOVERNMENT
First Plaintiff

FARINA SIGA, FOR HIMSELF AND IN HIS CAPACITY AS
WARD SECRETARY OF WARD 3,
SAIDOR LOCAL-LEVEL GOVERNMENT
Second Plaintiff

PETER SEL
Third Plaintiff

POMMERN INCORPORATED LAND GROUP NO 12591
Fourth Plaintiff

SAMA MELAMBO FOR HIMSELF AND AS CHAIRMAN OF
POMMERN INCORPORATED LAND GROUP NO 12591
Fifth Plaintiff

V

RAMU NICO MANAGEMENT (MCC) LIMITED
First Defendant

MINERAL RESOURCES AUTHORITY
Second Defendant

DR WARI IAMO IN HIS CAPACITY AS
DIRECTOR OF ENVIRONMENT
Third Defendant

DEPARTMENT OF ENVIRONMENT AND CONSERVATION
Fourth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

Madang: Cannings J
2010: 20, 24 August

INJUNCTIONS – interim injunctions – application to discharge – whether change in circumstances and conduct of parties warrants discharge of injunction.

The first defendant applied to set aside an interim injunction previously granted by the National Court, their principal contention being that there has been a significant change in circumstances, which has completely altered the balance of convenience and that the conduct of the plaintiffs has led to an undue delay in starting the trial.

Held:

(1)	The question of whether to discharge an interim injunction is a matter of discretion, to be exercised after taking account of various considerations, including whether there has been a material change in circumstances and whether the subsequent conduct of the parties warrants the interim injunction being set aside.

(2)	There has been no material change in circumstances and the delay in commencement of the trial has not been proven to be the fault of the plaintiffs.

(3)	Insufficient reasons had been advanced to discharge the injunction so the application was refused.

Cases cited

The following cases are cited in the judgment:

Gobe Hongu Ltd v National Executive Council and Others (1999) N1920
Mainland Holdings Ltd v Stobbs (2003) N2522
Mark Ekepa v William Gaupe (2004) N2694
Ramu Nico (MCC) Ltd v Tarsie SCA 40/2010, 16.07.10
Tarsie v Ramu Nico (MCC) Ltd (2010) N3986
Tarsie v Ramu Nico (MCC) Ltd (2010) N3987

Counsel

R William, for the plaintiffs
C Scerri QC & G Gileng, for the first defendant
A Mana, for the second defendant
I M Molloy & T Tanuvasa, for the third, fourth & fifth defendants

24 August, 2010

1. CANNINGS J: This is a ruling on an application by the first defendant, Ramu Nico Management (MCC) Ltd ("MCC"), to discharge an interim injunction I granted in this court on 19 March 2010. The injunction states:

The defendants and their associates, agents and employees and persons for whom they are jointly or severally responsible shall cease all preparatory or construction work on the Ramu Nickel Mine deep sea tailings placement system that involves directly or indirectly damage or disturbance to the offshore environment – including, without limiting the generality of the foregoing, all coral blasting or popping of dead or live coral and laying of pipes – and shall not carry out directly or indirectly any such work, pending determination of the substantive proceedings.

2. The application is supported by the third, fourth and fifth defendants – the Director of Environment, the Department of Environment and Conservation and the State – and opposed by the plaintiffs. The second defendant, the MRA, neither supports nor opposes the application.

3. An interim injunction is a court order that by its nature can be discharged or varied at the discretion of the court that granted it. The question of whether to set aside an interim injunction is a matter of discretion, to be exercised after taking account of various considerations, in particular: whether there has been a material change in circumstances; whether the subsequent conduct of the parties warrants the interim injunction being set aside; whether there are any previously undisclosed material facts; whether the interim injunction was granted on an erroneous legal basis; whether the grounds being relied on to set aside the interim injunction were not relied on earlier as there was no opportunity to do so; and whether the court was misled when it granted the interim injunction (Mainland Holdings Ltd v Stobbs (2003) N2522; Mark Ekepa v William Gaupe (2004) N2694).

4. The application to discharge the injunction is based on two grounds. First, that there has been a significant change in circumstances, which has completely altered the balance of convenience. Secondly, that the conduct of the plaintiffs has led to an undue delay in starting the trial.

CHANGE IN CIRCUMSTANCES

5. MCC says that there are two material changes in circumstances: they are undertaking not to discharge tailings through the deep sea tailings placement system (DSTP) until determination of the proceedings or further order of the court and there is an increasingly urgent need to commence work on the DSTP before the onset of the wet season.

Undertaking not to discharge tailings

6. This undertaking was given in two ways. First, by MCC's counsel, Mr Scerri, from the bar table, during the hearing. Secondly it was given in writing by MCC under its company seal, signed by its Executive Director and Executive Vice-President, Mr Gu Yu Xiang, in a document tendered in court after the close of submissions, over the objections of the plaintiffs' counsel, Mr William.

7. Mr William submitted that neither undertaking should be acted on, the first because it was not given by the company and the second as it came too late.

8. I agree that an undertaking by counsel is not sufficient. The general practice in PNG for the purposes of applying for an injunction is that an undertaking as to damages must be given by the applicant, not by the applicant's counsel (Gobe Hongu Ltd v National Executive Council and Others (1999) N1920). The court should therefore insist that any undertaking given by a party for the purposes of supporting an application to discharge an injunction be in writing and be given by the applicant, not its lawyer. I consider that MCC has satisfied this requirement. It has remedied this defect in the undertaking by tendering the document signed by Mr Xiang, notwithstanding that it was not tendered until after the close of submissions.

9. I consider that the undertaking can be accepted at face value. I say that as there has been no suggestion that since the injunction was granted on 19 March 2010 MCC has disobeyed it. MCC properly approached this court for clarification of the effect of the injunction, a motion that I ruled on, on 2 April (Tarsie v Ramu Nico (MCC) Ltd (2010) N3986). MCC also properly applied to set aside the injunction, a motion that I ruled on, on 14 April (Tarsie v Ramu Nico (MCC) Ltd (2010) N3987). MCC appealed to the Supreme Court against the injunction, an appeal which was dismissed on 16 July (Ramu Nico (MCC) Ltd v Tarsie SCA 40/2010, 16.07.10). All of these steps to clarify or lessen the effect of the injunction have been lawfully taken, and have involved no abuse of process. So I will treat the undertaking as having been made in good faith.

10. MCC argues that the undertaking is a significant change in circumstances as the principal apprehended harm that the injunction is intended to prevent – and the purported unlawful harm that the plaintiffs rely on to support their cause of action – is the discharge of waste into the sea.

11. I accept that this is a change in circumstances. However, by itself, it does not justify a discharge of the injunction as the injunction on its terms was directed at preventing amongst other things environmental harm likely to be caused by coral blasting or popping of dead or live coral and laying of pipes. The undertaking is a change in circumstances to be weighed in the balance with the other matter relied on by MCC, the need to commence construction quickly.

Urgent need to commence work on the DSTP before onset of wet season

12. MCC argues that they need to commence construction of the DSTP immediately. If they cannot start immediately, the DSTP will not be able to be constructed until April next year, at the end of the next wet season. Their Design and Construction Manager, Dr George Shou, deposes in affidavits that the only significant construction work yet to be completed for the Ramu Nickel project is the DSTP. 

13. The construction of the offshore section entails three major operations: (1) pipeline route clearance, which would require small scale, precision blasting to flatten dead coral heads, (2) pipe welding and concrete weights attachment and (3) pipeline installation on the ocean floor. 

14. Dr Shou acknowledges that operation (2) was allowed by the court ruling of 2 April but says that it has become technically difficult to implement as it is uncertain how long the pipeline would remain floating on the surface before sinking. Operations (1) and (3) are sensitive to weather. From mid-June to the end of September the prevailing wind near Basamuk, where the pipeline enters the sea, is from the south and west and is of lower strength. During this period the seas near the coast are relatively flat and quiet. From October to about April the prevailing wind blows from the north-east and increases substantially in strength. These conditions increase the magnitude of the ocean surge especially near the shore where the pipeline will be constructed. Heavy rain from October to April washes more soil into the sea and causes low visibility in the water near shore. In his opinion underwater construction will be difficult with strong surge and low visibility. Dr Shou also deposes that the three operations will have negligible environmental impact.

15. MCC has also presented affidavits from professional blasters and divers it has engaged, who say that the construction of the DSTP can take place with minimal environmental impact. MCC presented further affidavits outlining the financial implications of further delays in the commissioning of the project. MCC's General Manager, Development and Planning, Mr Wang Hongxu, deposes that if the DSTP system cannot be constructed by October than even if MCC succeeds at the trial the crucial commissioning programs will still have to wait until April next year. The project timetable will again be hugely disrupted and the impact on its viability could be disastrous.

16. I have considered all of the evidence presented by MCC. However, I am not persuaded by that evidence to conclude that if the DSTP is not constructed immediately, construction cannot begin until April next year. That proposition of fact is based on the non-scientific opinion of Dr Shou and his assessment of when the wet season begins in Basamuk Bay, when the winds and ocean surges come and go and other meteorological and oceanographic assessments that I do not consider he is in a position to make. Mr Scerri asked me to take judicial notice of these things but I am in no position to do so. If I were inclined to take judicial notice of anything it would be that these days weather patterns seem difficult to predict and some people are saying that this is due to climate change. 

17. If I had been persuaded to make the finding of fact contended for by MCC, I would still have difficulty in regarding this as a material change in circumstances. It is something that should have been reasonably foreseeable to MCC when the plaintiffs commenced the court proceedings – something which should have been brought to the court's attention before. It cannot be properly regarded as something new. As to the cost of the delay, this is also not a change in circumstances. I have always been cognisant of the cost and inconvenience to MCC caused by the delay in commissioning the DSTP and the whole project. I have accepted and continue to accept that there is a flow-on effect to the local economy and the national economy. I remain of the view, however – a view that was endorsed by the Supreme Court – that the balance of convenience favours a safety first approach.

18. In summary, despite the undertaking given by MCC not to discharge tailings, there has not been a sufficient, significant or material change in circumstances to warrant discharging the injunction.

CONDUCT OF THE PARTIES

19. MCC argue that the plaintiffs have caused a material delay in the start of the trial. The trial was to have commenced on 18 August but the plaintiffs failed to comply with the directions of the court and this has led to the delay. The trial is now set to commence on 21 September 2010.

20. These issues were thrashed out at a hearing on 13 August when I dealt with a motion by the plaintiffs for variation of the pre-trial directions. Both sides were blaming each other for the delay. I formed the view then that neither side could be held to blame. Each side had to some extent not complied with the directions. The time of the National Court in Madang has been devoted to major criminal trials of late and it has been very difficult, as important as it is, to slot the trial of the present case into a very heavy court schedule. Even if both sides were ready and the process of discovery had been completed – which clearly it had not – it was not possible to start the trial on 18 August.

CONCLUSION

21. There has been no material change in circumstances since the interim injunction was granted. The subsequent conduct of the parties does not warrant the interim injunction being set aside. MCC's application will therefore be refused.

ORDER

(1)	The application to discharge the interim injunction of 19 March 2010, pursuant to a notice of motion filed by the first defendant on 12 August 2010, is refused.

(2)	The question of costs is reserved.

(3)	Time for entry of this order is abridged to the date of settlement by the Registrar which shall take place forthwith.

Ruling accordingly.
____________________________

Nonggorr William Lawyers: Lawyers for the Plaintiffs
Posman Kua Aisi lawyers: Lawyers for the First Defendant
Allens Arthur Robinson Lawyers: Lawyers for the Second Defendant
Solicitor General: Lawyer for the Second, Third, Fourth & Fifth Defendants