Home | Databases | WorldLII | Search | Feedback National Court of Papua New Guinea

Roniotis v Elomar [2023] PGNC 266; N10460 (28 August 2023)

N10460

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 144 OF 2019 (IECMS – COMM)

BETWEEN:
NICK RONIOTIS as DIRECTOR OF CLOUDY BAY SUSTAINABLE FORESTRY LIMITED
First Plaintiff

AND
CLOUDY BAY SUSTAINABLE FORESTRY LIMITED
Second Plaintiff

V

BILLAL ELOMAR
First Defendant

AND
LIFESE ENGINEERING (PNG) LIMITED
Second Defendant

AND
PNG SUSTAINABLE DEVELOPMENT PROGRAM LIMITED
Third Defendant

Waigani: Anis J
2023: 24^th March, 28^th August

INTERLOCUTORY APPLICATION – Application to set aside part of court order – Order 12 Rule 1, Order 12 Rule 8(4) and Order 12 Rule 8(5) – National Court Rules – Consideration – application of various criteria - ruling

Cases Cited:

Mainland Holdings and Ors v. Stobbs and Ors (2003) N2522
Mark Ekepa and Ors v William Gaupa and Ors (2004) N2694
National Council of Young Men’s Christian Association of PNG Inc. v. Firms Service Limited (2010) N4569
Ombudsman Commission v Gabriel Yer and Ors (2009) SC1041

Counsel:

C Zazeng, for the Plaintiff
R Mulina, for the First and Second Defendants
J Nigs, for the Third Defendant

RULING

28^th August 2023

1. ANIS J: On 24 March 2023, I heard and reserved on an application filed by the third defendant who had applied to set aside part of an order of this Court that was made on 15 March 2019.

2. This is my ruling.

BACKGROUND

3. The plaintiffs commenced this proceeding on 15 March 2019. They seek various declaratory orders that certain actions and or conduct (alleged conduct) of the first and second defendants amount to contempt of Court, that is, premised on Court Orders that were made in another proceeding MP No. 41 of 2017 – In the matter of the Companies Act 1997 and in the matter of Cloudy Bay Sustainable Forestry Limited (MP 41). The plaintiffs are alleging that the first and second defendants should be held liable in contempt of court for entering into an Acquisition Agreement dated 14 January 2019 (the A/Agreement). The A/Agreement was entered between the second defendant and a third party which is based in Thailand called August Storm Holding Limited.

4. The third defendant’s primary interest in this matter is unclear, which is why it has strenuously argued herein that no claim or relief is being sought or pursued against it by the plaintiffs in this proceeding. For clarity, let me refer to the Originating Summons filed 15 March 2019 (OS). The OS pleads the following relief:

(a) a declaration that the actions of the first and second defendants in executing the Acquisition Agreement on 14 January 2019 amounts to contempt of the orders of the court made on 9 October 2017 and the consent orders made on 23 October 2017 in proceedings styed MP 41 of 2017 re Cloudy Bay Sustainable Forestry Limited (MP 41 Matter).

(b) a declaration that the First and Second defendant should be charged accordingly with contempt pursuant to Order 14 Rule 42 and 49 of the National Court Rules.

(c) that an Acquisition Agreement entered into between the First Defendant and a Thailand company on 14 January 2019 (the Acquisition Agreement) amounts to contempt of court; and

(d) the Acquisition Agreement is illegal, null and void and thus unenforceable and is contrary to section 110 of the Companies Act.

5. On the same date of filing the OS on 15 March 2019, the plaintiffs sought and were granted various ex parte interim orders (15 March order). Term (vi) of the 15 March order reads:

(vi) The Third Defendant is restrained from instituting and or commencing any form of action be it legal proceedings or otherwise against the Plaintiffs and Oppa Limited including interfering in any manner or form with the management and or operations of Cloudy Bay Sustainable Forestry Limited pending determination of these proceedings.

6. The 15 March order was set aside exparte by the first and second defendants on 22 March 2019. But on 29 March 2019, the plaintiffs challenged the set-aside order. Their application was successful and on 29 March 2019 the Court reinstated the 15 March order.

7. The third defendant, with its present motion filed 6 March 2023 (Motion), intends to set-aside term 6 of the 15 March order.

MOTION

8. Term 1 of the Motion reads:

1. Pursuant to Order 12 Rule 1, Order 12 Rule 8 (4) and Order 12 Rule 8(5) of the National Court Rules, Order No. 6 of the Court orders of 15 March 2019 which was set aside on 22 March 2019 and re-instated on 29 March 2019 where it states that:
   

The Third Defendant is restrained from instituting and or commencing any form of action be it legal proceedings or otherwise against the Plaintiffs and Oppa Limited including interfering in any manner or form with the management and or operations of Cloudy Bay Sustainable Forestry Limited pending determination of these proceedings.

is set aside.

......

9. No issue was raised re: source of the Motion. I will proceed on that premise. I also note that parties have filed affidavits to support their contentions.

10. The first and second defendants support the Motion whilst the plaintiffs oppose it.

LAW ON SET-ASIDE

11. Case law has established that an interim injunction or order may be set aside under various circumstances or situations. The law concerning whether to discharge or vary interlocutory order was considered by Injia DCJ as he then was in Mainland Holdings and Ors v. Stobbs and Ors (2003) N2522, Cannings J in Mark Ekepa and Ors v William Gaupa and Ors (2004) N2694, and Gabi J in National Council of Young Men’s Christian Association of PNG Inc. v. Firms Service Limited (2010) N4569. Gabi J summarised the 6 criteria as follows:

“First, has there been any change in circumstances since the previous orders were made, which render their continuation unnecessary or inappropriate? Second, what has been the relative conduct of the parties since the earlier orders were made? Third, are there previously undisclosed relevant facts, which have been discovered since the interim orders were made? Fourth, has it subsequently been discovered that the order was granted on an erroneous legal basis? Fifth, where (sic) the grounds relied on to support the setting aside or variation of the interim order argued before the Court when it granted the earlier order? Or did the party wanting to discharge or vary the earlier order have the opportunity to raise those grounds? Finally, was the court misled when it issued the ... order? If yes, was that attributable to the conduct of the party which sought the ... order?”

[Underlining mine]

12. Injia DCJ, as he was then, in Mainland Holdings summarised, which I adopt herein, the Court’s discretionary power in these types of applications. His Honour stated:

In my view, the trial Court has wide discretionary powers to control the management of the case until its substantive disposition. In terms of its interlocutory proceedings, the Court has wide powers to grant or refuse to grant, vary or set aside, dissolve or discharge an interlocutory order either on application by an interested party or upon its own motion, in a wide range of situations including change in relevant circumstances which render the continuation of the order no longer necessary or appropriate. It is also in the Court’s discretion to vary or discharge an interlocutory order, where the conditions, if any, stipulated in the order have been met and it is no longer necessary or appropriate to sustain the order. Further, it is in the discretion of the Court to vary or discharge an interlocutory order if it is subsequently discovered by the Court that the interlocutory order was founded on wrong principle.

13. The above criteria have been applied by the Courts in the past by judges who have, in the exercise of their discretions, identified and considered the criteria that are relevant or appropriate. I also note that I need not be satisfied with every one of them. See case: Ombudsman Commission v Gabriel Yer and Ors (2009) SC1041. I may apply all, some, or none, or even consider and apply new criteria, depending on the circumstances of the case.

14. The burden of establishing the relevant criteria to the satisfaction of the Court is bestowed upon an applicant. In this case, the burden of proof rests with the third defendant.

CONSIDERATION

15. In considering the matter that is before me, let me begin with this observation. When I consider the primary relief that is being sought in the OS, I note that none of them concerns the third defendant. The alleged facts that support the relief do not concern or affect the third defendant at all in the matter. It is not disputed that the allegation of breach of the terms of the orders made in MP 41 only concerns the first and second defendants. And it is not disputed that the third defendant is not privy to the A/Agreement which is also the subject of the allegations made in this proceeding.

16. These facts, in my view, are a pivotal consideration herein and they favour the third defendant. It also, and in my view, raises the question or the motive as to why the third defendant was joined in this proceeding in the first place, and thus, why I should not grant the Motion and remove term 6 of the 15 March order.

17. My second observation is this. Given that no claim is made against the third defendant in this proceeding, I also query why the plaintiffs had to seek orders directly against the third defendant to restrain it from instituting and or commencing any form of action be it legal proceedings or otherwise against the Plaintiffs and Oppa Limited including interfering in any manner or form? The interim order, in my view, is open- ended and appears fundamentally flawed. Given the open-ended nature of the order, I note that it affects the general interests or rights of the third defendant as a legal person. And so, when I take into account the reasons or basis for filing this proceeding, which are pleaded in the OS and also alleged in the evidence (as summarised above under the sub-heading BACKGROUND), it makes no legal sense or serves no purpose, that is, for the plaintiffs to have sought and be granted term 6 of the 15 March order.

18. I am therefore of the view that, (i), term 6 of the 15 March order was granted on erroneous legal basis, and (ii), there are sufficient reasons and evidence adduced herein by the third defendant to assume that the Court had or may have been misled by the plaintiffs to allow term 6 of the said order.

19. I also take into account the delay aspect which I find is relevant. This matter has been delayed for about 4 years with no real progress. Meanwhile, the third defendant is being unfairly restrained without any proper legal basis with this open-ended Court Order. There is apparently no justice there for the third defendant by the delayed conduct and actions of the plaintiffs.

20. This Court therefore cannot continue to condone this unfair actions and conducts being displayed by the plaintiffs against the third defendant.

SUMMARY

21. I am therefore minded to exercise my discretion in favour of the third defendant in regard to its Motion. I am minded to grant relief 1 as pleaded therein.

COST

22. An order for cost is discretionary. I will order the plaintiffs to pay the third defendant’s cost of the Motion on a party/party basis to be taxed if not agreed.

ORDERS OF THE COURT

23. I make the following orders:

(1) Term 1 of the third defendant’s notice of motion filed 6 March 2023 is granted in that term (vi) of the Court’s Order of 15 March 2019 is set-aside.

(2) The plaintiffs shall pay the third defendant’s cost of the application on a party/party basis to be taxed if not agreed.

(3) Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.

The Court orders accordingly

________________________________________________________________
Lakakit & Associates: Lawyers for the Plaintiff
Raurela: Lawyers for the First and Second Defendants
Dentons PNG: Lawyers for the Third Defendant