N6000

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS. NO. 123 OF 2015

BETWEEN

MAHARAGE INVESTMENT LIMITED
Plaintiff

AND

NATIONAL AIRPORTS CORPORATION (NAC)
First Defendant

AND

JOSEPH TUPIRI
Acting Managing Director - National Airport Corporation (NCA)
Second Defendant

AND

RICHARD YOPO
General Manager Commercial - National Airport Corporation (NAC)
Third Defendant

AND

WASMAN SECURITY SERVICES LIMITED
Fourth Defendant

Waigani: Ipang, J
2015: 26th & 29th May
24th June

CIVIL – Motion – Plaintiff seeks restraining orders against Defendants from carrying out any maintenance work or construction works on property known as Portion 2437 Part Portion of Section 30, Allotment 1, Port Moresby, National Capital District

Cases Cited:

Audak Kupil v The State (1983) Unreported N435
Employers Federation of PNG v PNG Waterside Workers and Seamen's Union & Ors (1982) N393
Mauga Logging Company Pty Ltd v South Pacific Oil Palm Pty Ltd (No. 1) [1987] PNGLR 80
Robinson v National Airlines Commission [1983] PNGLR 476
Markcal Limited & Robert Needham v Mineral Resources Development Company Pty Ltd and Ors [1996] PNGLR 419
AGK Pacific (NG) Ltd v William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) Ltd (2000) N2062
Ewasse Landowners Association Incorporated v Hargy Oil Palms Limted OS. No. 789 of 2005 (24 August 2005) N2878

Counsels:

P. Othas, for Plaintiff
D. Levy, for First, Second & Third Defendants
P. Mawa, for Fourth Defendant 

12th June, 2015
 
1.	IPANG, J: By its motion dated 2nd April 2015, the plaintiff pursuant to Order 12, Rule 1 of the National Court Rules (NCR) and section 155 (4) of the Constitution seeks the following orders:

(i)	The Fourth Defendants, its servants, agents, officers and employees be restrained from carrying out any maintenance and/or construction works, based its operations either temporary or permanently or deal with the subject property in Portion 2437, Part Portion of Section 30, Allotment 1, Port Moresby, National Capital District (NCD) in any manner or form pending hearing and determination of the substantive proceedings. 

(ii)	The Defendants either jointly or severally, their respective servants, agents, officers, employees and co-horts be restrained from dealing with the subject property in Portion 2437, Part Portion of Section 30, Allotment 1, Port Moresby, National Capital District (NCD) pending hearing and determination of the substantive proceedings.

(iii)	The First, Second and Third Defendants jointly or severally, their respective servants, agents and officers be restrained from dealing with the Lease Agreement entered into between the Plaintiff and the First Defendant on the 24th September 2012, in any manner or form pending hearing and determination of the substantive proceedings. 

(iv)	The Defendants shall pay the Plaintiff's costs.

2.	 The plaintiff's rely on the Affidavits in support filed by Peter Kumara sworn on the 27th March 2015 and filed on the 2nd April 2015. Also the supplementary Affidavit of Peter Kumara sworn and filed on the 8 May, 2015

BACKGROUND:

3.	On the 24th September 2012, the Plaintiff entered into a 40 years Lease Agreement with the First Defendant for the latter to lease to the former a parcel of land described as Portion 2437, Part Portion of Section 30, Allotment 1, Port Moresby, National Capital District containing an area of 0.6250 hectares.

4.	Following the execution of the Lease Agreement, the Plaintiff paid a sum of K1, 287,500.00 as a capitalized rental in accordance with clause (m) of the Lease Agreement and Development Fee.

5.	Plaintiff then paid a Stamp Duty to the Internal Revenue Commission (IRC) in the amount of K12, 507.60 and the Lease was duly registered with the Registrar of Titles. Plaintiff then engaged and paid for all architectural designs of the proposed building.

6.	Plaintiff then proceeded to seek approval from the National Capital District (NCD) Building Board for the Construction of the proposed building. The National Capital District Building Board advised Plaintiff to obtain a letter from the National Airport Corporation Management. Attempts by Plaintiff to get National Airport Corporation Management to send a letter to National Capital District Building Board failed. Plaintiff alleged the cause of the delay was due to the Third Defendant's failure to furnish a letter to the National Capital District Building Board.

7.	Plaintiff says on the 8th September 2014, the Third Defendant delivered a letter to Plaintiff's office advising that the Lease Agreement was terminated because the proposed Development Plan was found to impede on the access road network approved by GoPNG. The Lease was terminated pursuant to Clause (1) of the Agreement.

8.	On the 15th September 2014, Jeremiah Rau, a Commercial Officer with the First Defendant approached the Plaintiff and asked the Plaintiff to accept the termination and indemnify the Defendants from any loss of business. Plaintiff accepted the termination on the basis the proposed building will affect access road network and that National Airport Corporation (the First Defendant) refund full amount deposited including monies paid to Internal Revenue Commission (IRC), National Capital District Building Board and the Architectures.

9.	On the 11th March 2015, the Plaintiff filed an Originating Summons by which it seeks the following relief.

•	A declaration that the Third Defendant is not a lawfully authorized person to terminate the Lease Agreement entered into between the Plaintiff and the First Defendant on the 24th September 2012, over a property known as Portion 2437 Part Portion of Section 30, Allotment 1, National Capital District for a period of 40 years and he is not the person to whom the powers of the First Defendant are delegated under Clause 4.17 of the said Agreement.

•	 A declaration therefore that the purported termination of the said Lease Agreement by the Third Defendant by way of his two (2) respective letters of 8th September 2014 and 30th January 2015, is unlawful and of no effect (ab initio).

•	 A declaration that the said Lease Agreement entered into between the Plaintiff and the First Defendant as set out in paragraph one (1) is therefore valid and effective for all purposes and still binding on the parties

•	 A declaration that the present occupation and presence of the Fourth Defendant (a party not privy to the Lease Agreement) on the property is unlawful and it amounts to trespass.

•	 An order directing the Fourth Defendant to vacate the property forthwith, failing which the members of the Police Force based in National Capital District, shall carry out an eviction exercise within seven (7) days from the date of the order.

•	 An order that the Plaintiff shall proceed to develop the property unless a breach is occasioned and either party wishes to terminate the Lease Agreement in accordance with its terms and conditions.

•	 Costs arising out of and incidental to these proceedings be paid by the Defendants to be apportioned among them.

•	 Such other orders deems fit in the circumstances.

10.	On the 2nd April 2015, the Plaintiff filed a Notice of Motion seeking the reliefs alluded to in paragraph one (1) of this judgement.

RELEVANT LAWS AND PRINCIPLES

11.	The injunction is an equitable remedy. It is a matter for the discretion of the Court. The Plaintiff has no right to an injunction, rather it must convince the court to exercise its discretion to grant the remedy.

12.	In the case of AGK Pacific (NG) Lid v William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) (2000) N2062, His Honour Injia J [as he then was] stated: 

"The grant of injunctive relief, interim or permanent, mandatory or otherwise, is an equitable remedy and is discretionary. The principles governing the court's grant of interim injunctions are set out in various cases…but I consider the principles of equity developed by English equity courts in various cases and restated by Kapi DCJ in Employer's Federation of PNG v PNG Waterside Workers Union & Others N392 (1982) to be a comprehensive statement of the law. In essence, an applicant for interim injunction must satisfy two basic requirements;-

(1)	That there is a serious question to be determined; and

(2)	That the balance of convenience favours the grant of interim injunction in order to preserve the status quo. 

13.	I will answer the three (3) questions to determine; whether to grant the Plaintiff's application for an Interim Injunction.

1.	 Are there serious questions to be tried? Does the plaintiff have an arguable case?

2.	 Does the balance of convenience favour granting the injunction?

3.	 Is an injunction necessary to do justice in the circumstances of this case?

ARE THERE SERIOUS QUESTIONS TO BE TRIED? DOES THE PLAINTIFF HAVE AN ARGUABLE CASE?

14.	Mr P. Othas of Counsel for the Plaintiff submitted that the Third Defendant does not have the authority whatsoever, from the First Defendant to terminate a legally binding agreement between the First Defendant and the Plaintiff. Plaintiff argued that the Third Defendant is neither privy to the agreement nor an authorized delegate of the First Defendant to terminate the agreement on behalf of the First Defendant.

15.	The Fourth Defendant opposes the Plaintiff's application for the grant of interim injunctive orders. Fourth Defendant relies on the Affidavit of Petrus Thomas sworn and filed on the 22nd April 2015.

16.	Mr. P. Mawa of Counsel for the Fourth Defendant argued that interim orders in the nature of interlocutory injunctions are usually made by the Court pursuant to the second limb of section 155 (4) of the constitution "to protect one's primary rights".

17.	Mr Mawa quoted Bredmeyer, J in Aundak Kupil v The State (1983) Unreported N435 where His Honour stated:

"This Section is a grant of power or jurisdiction. It does not affect the primary rights of parties which are determination by substantive law….It enables the court to tailor its remedies to the circumstances of an individual case to ensure the primary rights of a party are protected. (Underlining mine)

18.	Thus, Mr Mawa for the Fourth Defendant questioned, "What is the primary right of the Plaintiff that needs to be protected by the grant of interim injunctive relief in favour of the Plaintiff?"

19.	The Fourth Defendant submitted that as far as Order 12 Rule 1 of the National Court Rules and Section 155 (4) of the Constitution are concerned, the Court should apply proper principles and one such proper principles is the protection of the primary right of a party to the proceedings.

20.	Fourth Defendant concluded that the Plaintiff has no primary right that needs to be protected by the grant of Interim Orders in its favour as the lease hold interest has been terminated.

(i)	The Plaintiff/Applicant has no proprietary interest in terms of ownership of the subject property described as Portion 2965 owned by the First Defendant at the Jacksons International Airport.

(ii)	The Plaintiff/Applicant only had a leasehold interest of 40 years direct end lease. It was only a tenant.

(iii)	On or about 01st September 2014, the Managing Director of the Plaintiff/Applicant and the First Defendant agreed for the termination of the lease and signed a minute accepting the termination of the lease over the whole of the aerodrome area known as Portion 2437.

(iv)	That land, the subject of the lease to the Plaintiff/Applicant, was required by the Government for the construction of the ring round to the Airport.

(v)	 On 04th of November 2014, the First Defendant offered just a portion of the land not required for the ring road to the Fourth Defendant for a 12 months license.

(vi)	The Plaintiff/Applicant also has a current lease on another portion of land with the First Defendant for another 36 months commencing on 01st of May 2015.

(vii)	The First Defendant gave the Plaintiff/Applicant the option to lease another land but it has refused this gesture of goodwill shown by the First Defendant in good faith.

21.	Plaintiff has on its free will agreed to terminate its leasehold interest over the subject land because the land was required by the Government for a public purpose i,e the construction of the ring road to the Airport.

SERIOUS ISSUES TO BE TRIED

22.	Fourth Defendant argued that there are no serious issues to be tried. The termination of the leasehold interest was necessitated by unforeseen circumstances in that the Government was requiring land for public purpose.

23.	Plaintiff has not demonstrated that there is a high degree of success. The issue is not simply whether the Plaintiff has raised serious issues to be tried. The test is to ask; what chance does the Plaintiff appear to have of succeeding in the substantive case? This requires the Court to identify with precision the cause of action that the Plaintiff is relying on and then to consider the evidence that appears to be available in support of the elements of that cause of action.

24.	It is not so much of the Third Defendant not duly authorized person to terminate the Lease Agreement. The Managing director of the Plaintiff consented to the termination of the leasehold interest in that the Government required the land to build a ring road around the airport area. However, now that the Government has not built a ring road around Portion 2437, Part Portion of Section 30, Allotment 1, Port Moresby, National Capital District and the cause of action could be found on misrepresentation.

25.	In Ewasse Landowners Association Incorporated v Hargy Oil Palms Limited OS. No. 789 of 2009 (24 August 2005) N2878 Cannings, J made this remark:

"The court should not have to speculate about this. It should be readily apparent from the originating process, the supporting affidavits and the submissions made in support of the application for interim relief. The fact that I have had to think hard about it means that it is difficult for the plaintiff to show that he has a serious case to be tried. 

26.	Plaintiff is saying that the Third Defendant was not a duly authorized person to terminate the Lease Agreement and so the said Lease Agreement is still valid so the continued occupation of the Fourth Defendant on the property Portion 2437 Part Portion of Section 30, Allotment 1, Port Moresby, National Capital District amounts to trespass. This argument of course is now overridden by the fact that Mr Kumara, the Managing Director of the Plaintiff has agreed to the termination of the Lease Agreement and has in fact signed a minute accepting the termination.

27.	The Affidavit of Richard Yopo sworn on the 17 April 2015, and filed on the 21 April 2015 stated in paragraphs 8 and 9 told of the meeting he had with Peter Kumara. In one of the meetings it was explained to Kumara that the Government was insisting on freeing up the land for the ring road. It was during that meeting that Peter Kumara, as Managing Director of the Plaintiff signed a minute accepting the termination of the Lease Agreement.

28.	Yopo further deposed that on the 8th of September 2014, the letter of termination was sent to Peter Kumara. Yopo stated that the said letter was written under the authorization of National Airport Corporation (NAC) Executive Committee and its Acting Managing Director.

DOES THE BALANCE OF CONVENIENCE FAVOUR GRANTING THE INJUNCTION?

29.	What is the best thing to do on an interim basis taking into account the conflicting interests? Where do the interests of justice lie? What will happen if an injunction is not granted? What will happen if an injunction is granted? Who will suffer the greatest inconvenience?

30.	Plaintiff paid K1, 287,500.00 as capitalized rental following execution of the Lease Agreement. Plaintiff paid K12, 507.60 to the Internal Revenue Commission (IRC) as Stamp Duty. Plaintiff has also paid other necessary fees to the Department of Lands, National Capital District (NCD) and fees for all Architectural designs of the proposed buildings.

31.	On the 7th February 2014, the Fourth Defendant wrote to the First Defendant - National Airport Corporation (NAC) and requested for a vacant land to lease for the Fourth Defendant's office and training facilities. On the 4th November 2014, the First Defendant made an offer to the Fourth Defendant to occupy the land described as Part of Portion 2965 under license for operation of office and training facility. On the 7th November 2014, Fourth Defendant wrote an acceptance letter to the First Defendant to occupy the land on licence.

32.	The Fourth Defendant drew an ANZ Bank Cheque of K27, 200.00 made payable to National Airport Corporation (NAC) for Bond and Licence Fee on the 13th November 2014. Based upon these payments, a Licence Agreement was executed between the First and Fourth Defendant. Fourth Defendant completed the renovation of the buildings on the subject land in February 2015. A total of K163, 964.95 was spent by Fourth Defendant to complete the renovation and fencing of the property. The Fourth Defendant moved into the office and on the property on the 1st March 2015, and it is now carrying on business on the said property.

33.	In my view, the balance of convenience lies in letting the Fourth Defendant continue its operations, at least until the substantive proceedings is concluded.

IS AN INJUNCTION NECESSARY TO DO JUSTICE IN THE CIRCUMSTANCES OF THIS CASE?

34.	The Court's paramount duty is to do justice. The Lease Agreement between the Plaintiff and the First Defendant has been terminated and life has to move on. The Fourth Defendant through a License Agreement executed between itself and the First Defendant has put in substantial funds on the subject property. The Fourth Defendant has since moved into the property and is now carrying on its business operations employing more than Two Hundred (200) Papua New Guineans. If I grant the interim injunctions sought by the Plaintiff it will affect the Fourth Defendant's commercial interests and its Two Hundred (200) employees will also be affected. 

35.	The Plaintiff's motion dated 02nd April 2015, seeking interim injunctive orders against the Fourth Defendant and the Defendants pending determination of substantive trial is refused.

_____________________________________________________________ 
Paul Othas Lawyers: Lawyer for the plaintiff
Manase & Co Lawyers: Lawyer for the First, Second & Third Defendant
Mawa Lawyers: Lawyer for the Fourth Defendant