N10086

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 310 OF 2022

BETWEEN:
JOE POKARUP
Plaintiff/Applicant

AND:
DAVID JAMES LESTER
First Defendant

AND:
MATTHEW STEVEN HINKLEY
Second Defendant

AND:
PHILIPNERI BALASINGAM
Third Defendant

Goroka: Mugugia, AJ 
2022: 14th December

PRACTICE AND PROCEDURE – Plaintiff’s motion for interim restraining order against the Defendants and an interim order – Considerations – Are there serious questions to be tried? – Has the Plaintiff given an undertaking as to damages? – If the interim orders are not granted, would damages be an inadequate remedy? - Does the balance of convenience favour the granting of the interim orders? – Exercise of discretion – Motion granted.  

Case Cited:

Mauga Logging Company Pty. Ltd. v. South Pacific Oil Palm Development Pty. Ltd. [1977] PNGLR 80

Counsel:

Mr N. Amoiha, for the Plaintiff/Applicant  
No appearance, for the Defendants 

RULING

14th December, 2022

1.	MUGUGIA, AJ: The Plaintiff is before this Court with an urgent interlocutory motion filed on 9th December 2022, seeking the following interim orders pursuant to Order 12, Rule 1 of the National Court Rules, and Section 155(4) of the Constitution:
  
1.	An interim restraining order to restrain the First, Second and Third Defendants from continuously performing their assumed roles as General Manager, Chief Financial Officer, and any other assumed capacity or position in Malan Limited or its named subsidiary companies, until final determination of the substantive issues.
     
2. An interim order allowing the Plaintiff to resume his operations as Sole Director and Chief Financial Officer of Malan Limited and its named subsidiary companies forthwith, and until the determination of the substantive issues.

DISPENSATION OF SERVICE 

2.     In his motion, the Plaintiff sought as his first order, an order for dispensation of service of the documents filed. I considered the urgency of the matter. The Plaintiff demonstrated the urgency of the matter. I was satisfied with the reasons given to dispense with the requirement for service. I therefore proceeded to hear the Plaintiff’s application for the interim restraining order and interim order. The hearing was ex parte. 

ISSUE  

3.      Whether the Plaintiff’s application satisfies all of the requirements for a grant of the interim restraining order and the interim order. 

PLAINTIFF’S EVIDENCE 

4.      In making the application for the interim orders, reliance was placed on the Affidavit of Joe Pokarup filed on 9th December 2022. Mr Pokarup deposes that on or about 20th of February 2022, he was appointed as the Sole Director and Chief Financial Officer of Malan Limited and its subsidiary companies. The subsidiary companies are owned by Malan Limited. The Plaintiff deposes that the only shareholder of Malan Limited is the late Malcolm Roy Smith who passed away in February 2020. In all the Company Extracts annexed to the Plaintiff’s affidavit (Annexure “A1” to Annexure “A13”), the Plaintiff’s name appear as Director.  
 
5.    In relation to his appointment as Sole Director and Chief Financial Officer, the Plaintiff deposes that he was formally appointed legally by the Executors of the Will of the late Malcolm Roy Smith on or about 20th February 2022, and his appointment was made by way of the Executors of the Estate of Late Malcolm Smith’s Resolution made on 20th February 2022. Annexure “E” is a copy of the Resolution. The Plaintiff says that he was legally appointed. 

6.     In relation to the termination of his employment, the Plaintiff deposes in his affidavit that he was verbally notified that his employment was terminated. Annexure “F” is the termination letter dated 11th November 2022. The author of the letter is the First Defendant. The letter was done on behalf of the Second Defendant.
 
7.      The Plaintiff further deposes that to date, there has been no appointment of the First and Second Defendants to whatever position they hold in Malan Limited. The Plaintiff says that they acted illegally or illegally assumed the subject capacities in Malan Limited, and also in terminating his employment. Further, the Third Defendant assumed the position of the Chief Financial Officer of Pacific Helicopters and took over his office. The First and Second Defendants’ were working without valid Work Permits. Their Work Permits have expired or were cancelled.  

PLAINTIFF’S SUBMISSIONS

8.    Mr Amoiha relied on his Submissions filed on 9th December 2022. These were his submissions:

Is there a serious question to be tried?

9.    Under this principle, what the Plaintiff must prove is that, he has a serious and not a speculative case which has a real possibility of ultimate success. There are two main legal issues. Firstly, whether the Plaintiff was legally terminated as Director and Chief Financial Officer of Malan Limited and its subsidiary companies. Secondly, whether the First, Second and Third Defendants legally assumed the respective capacities in Malan Limited and its subsidiary companies.  

Balance of convenience 

10.    The question here is whether the balance of convenience lies in favour of granting or refusing the interlocutory relief sought. As held in the case of Barava Ltd. v. Numapo (2011) N4943, an important factor in the balance should be to preserve the status quo. Ultimately, meaning, what is there to preserve if the Court was to grant the orders sought?

11.   In the present case, the status quo to be protected is the continuity of the Plaintiff/Applicant’s legal appointment as Director and Chief Financial Officer of Malan Limited and all its named subsidiaries. The First, Second and Third Defendants are illegal in the country. The banks will only recognize the legal director currently on the IPA records. The companies are now without management as per the IPA records. There is a vacuum in the companies’ operations. The continuity of administration and operations in the companies is the status quo to be protected. Therefore, it is in the interest of justice to maintain the status quo until the final determination of the substantive issues. 

Undertaking as to Damages

12.    The Plaintiff has filed an Undertaking as to Damages dated 9th December 2022. 

Damages as adequate remedy

13.   The substantive relief sought are declaratory orders. There is no current Director and Chief Financial Officer in place. The Plaintiff’s claim does not seek any form of payments of liquidated amounts. The Plaintiff/Applicant claims to protect the continuity of his employment and the operations of all the listed companies under his responsibility. As such, damages would not be an adequate remedy. 

Interest of justice

14.   There are severe breaches of the Companies Act. The interest of justice requires the maintenance of the status quo. The relevant principles to be met favour the granting of the interim orders sought. The Court is to exercise its discretion and grant the interim orders sought. 

DELIBERATION 

15.   Pursuant to Order 12, Rule 1 of the National Court Rules, the Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating summons.

16.    To determine the issue, the following questions should first be considered and determined:

•	Are there serious questions to be tried?
•	Has the Plaintiff given an undertaking as to damages?
•	If the interim orders are not granted, would damages be an inadequate remedy?
•	Does the balance of convenience favour the granting of the interim orders?

17.   In Mauga Logging Company Pty. Ltd. v. South Pacific Oil Palm Development Pty. Ltd. [1977] PNGLR 80, Frost CJ held that if an application for an interim injunction did not meet the conventional ‘tests’ in common law or equity which form part of the underlying law, recourse could be had to Section 155(4) of the Constitution which states:

“Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of the particular case.” 

18.    Injunctions are equitable remedies available at the discretion of the Court.
 
19.   The Plaintiff filed his Originating Summons on 9 December 2022, seeking the following declarations:

“1. A declaration that the First and Second Defendants’ actions in terminating the Plaintiff’s Employment Contract of 11th November 2022 is illegal and null and void.
 
2. A declaration that the appointment of the Plaintiff as Sole Director and Chief Financial Officer of Malan Limited and its subsidiary companies dated 20th February 2022 is legal and in force.
 
3. A declaration that the Plaintiff is still the legally appointed Director and Chief Financial Officer of Malan Limited and its subsidiary companies…

4. A declaration that the First, Second and Third Defendants are not duly or legally appointed as General Manager, Chief Financial Officer or any other position or capacity in Malan Limited or its subsidiary companies.”

20.   I have considered the originating process and the affidavit. The Plaintiff’s evidence clearly shows serious allegations against the Defendants. The First and Second Defendants’ Work Permit Status are questionable. The evidence is supported with documentations which support the Plaintiff’s claim. I find that the Plaintiff has established that there are serious questions to be tried concerning the validity of his termination, and the appointment of the Defendants.
  
Has the Plaintiff given an Undertaking as to Damages? YES

21.   The Plaintiff signed and filed an Undertaking as to Damages on 9th December 2022. 

If the interim orders are not granted, would damages be an inadequate remedy? YES

22.   The Plaintiff is seeking declarations. This is not a monetary claim. If the Plaintiff succeeds at the trial, damages would not be an adequate remedy. It is appropriate to grant the interim orders sought by the Plaintiff. 
Does the balance of convenience favour the granting of the interim orders? YES

23.    If the interim orders are not made, the Defendants who have questionable Work Permits in the country will continue to hold the positions. This is not good for management. On the other hand, if the interim orders are made, operations under the directorship of the Plaintiff will continue. The status quo will be maintained. 

24.   There is a need to preserve the assets and properties concerned, pending the final determination of the matter or until further orders of the Court. The best thing to do on an interim basis is to grant the interim orders sought by the Plaintiff. I find that the balance of convenience lies in favour of the Plaintiff. The interests of justice lie in in his favour. 

CONCLUSION

25.   The Plaintiff’s application has satisfied all of the requirements for a grant of the interim orders sought. I am convinced that I should exercise my discretion to grant the interim orders sought to maintain the status quo. The interests of justice require me to do so. In the exercise of my discretion, I will grant the Plaintiff’s application.

COURT ORDERS

26.   I make the following orders:

1. The orders sought in the Plaintiff’s Notice of Motion filed on 9th December 2022 are granted. 

2. This Order, the Originating Process, Motion, Supporting Affidavit, Undertaking as to Damages and other documents filed in the proceedings shall be served on all the named Defendants by 16th December 2022. 

3. An affidavit of service of the documents referred to above shall be filed. 

4. The interim orders are returnable on 20 December 2022 at 1:30pm for hearing inter-partes.   

5. Time for entry of these orders is abridged to the date and time of settlement of these 
orders by the Registrar which shall take place forthwith.

Ruling and Orders accordingly. 
_______________________________________________________________
Mr N. Amoiha: Lawyer for the Plaintiff/Applicant