SC1328

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 19 OF 2014

BETWEEN:

REI LOGONA
First Appellant

AND:

AIR NIUGINI LIMITED
Second Appellant

AND:

MEISSY ROAVENEO
First Respondent

AND:

NATIONAL FLIGHT ATTENDANT ASSOCIATION OF PAPUA NEW GUINEA
Second Respondent

Waigani: Kassman, J
2014: 10th, 12th & 13th March

SUPREME COURT – practice and procedure – application to stay interim orders of National Court pending appeal – principles of grant of stay pronounced in McHardy case considered - circumstances of case and interest of justice favours grant of stay of orders – National Court orders stayed pending appeal

Cases cited:

Aro Investments Pty Ltd v. Fly River Provincial Government and Andrew Temu (1997) N1519
Bougainville Copper Ltd v. Chief Collector of Taxes (2007) SC853
Bougainville Copper Ltd v Commissioner General of Internal Revenue (2009) SC1020
Leytrac Pty Ltd v. The State [1982] PNGLR 148
McHardy v. Prosec Security and Communications Ltd [2000] PNGLR 279 SC646
PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC 1126
Yama Group of Companies Ltd v. PNG Power Ltd (2005) N2831

Legislations cited:

Supreme Court Act Section 19, Section 5(1)(b), Section 14(3)(b)(ii)
Supreme Court Rules 2012 Order 1 Rule 7 
Criminal Code Re s 19(1)(f)
Associations Incorporation Act c.142
Industrial Organizations Act c.174

Counsel:

Mr Thomas Anis, for the Appellants
Mr Moses Murray, for the Respondents 

DECISION
(Application for Stay)
13th March, 2014 

1.	KASSMAN J: Air Niugini applies for a stay of injunctive orders of the National Court made on 26th February 2014 in proceedings OS No. 80 of 2014 and for a stay of those proceedings pending the determination of this appeal proceeding.

2.	Meissy Roaveneo ("the employee") was employed as a flight attendant with Air Niugini. The employee was suspended by Air Niugini on 2nd December 2013 on allegations she did not account for duty free takings on board a flight between Port Moresby and Cairns on 28-29 May 2013.

3.	Air Niugini cited 3 charges in the suspension notice to the employee namely stealing, fraud and personal gain from employment. The employee responded to the charges on 12th December 2013. On 12th February 2014, Air Niugini terminated the employee. 

4. On 21st February 2014, the employee filed proceedings in the National Court in OS No. 80 of 2014. On 26th February 2014, the National Court granted injunctive orders in the following terms:

"1.	An order restraining the Defendants from terminating (which has taken place) the First Plaintiff from employment with the Second Defendant until the final determination of this matter under clause 34 of (Grievance Board – Internal).

2.	An order restraining the Defendants from removing (which has taken place) the First Plaintiff from payroll by the Second Defendant until the final determination of this matter under clause 34 of (Grievance Board – Internal).

3.	An order re-instating the First Plaintiff to her former position of engagement as international flight attendant with the Second Defendant with full pay until final determination of clause 34 of (Grievance Board – Internal) of the Award/Agreement.

4.	An order restraining the Defendants from taking steps to evict the First Plaintiff from her company provided accommodation until such time this Honourable Court determines otherwise or a determination hearing under clause 34 of (Grievance Board – Internal)."

5. Air Niugini relies on the Affidavits of Rei Logona and Thomas Anis both filed on 3rd March 2014. The employee has not filed any affidavit in response to this application for stay.

6. The grounds for stay are stated in the application as:

"(i)	the Appellants will suffer hardship, inconvenience and prejudice if the orders of the National Court and the proceedings are not stayed;

(ii)	on the face of the record, the National Court orders of 26th February 2014 show apparent errors of law in that the orders are against settled principles of law for the grant of interim or interlocutory injunctions and also against the settled principles of law applicable to employer-employee relationship;

(iii)	the Appellants have good grounds of appeal;

(iv)	the balance of convenience favors the granting of stay orders;

(v)	damages will not be sufficient remedy for the Appellants."

7. The facts as presented, as they relate to the injunctive orders, are interesting. The employee does not dispute that her employment has been terminated by Air Niugini. The terms of the employee's notice of motion and the orders of 26 February 2014 confirm this. Further, the employee does not dispute that she has been removed from Air Niugini's payroll. The terms of the employee's notice of motion and the orders of 26 February 2014 confirm this.

8. Air Niugini says that soon after termination, the employee voluntarily vacated her company provided accommodation and relied on the affidavit of Mr Logona the General Manager – Human Resources sworn 25 February 2014. That was refuted by counsel for the employee who said, from the bar table, his instructions are that the employee moved most of her personal belongings from the accommodation and has physically moved to stay with her parents, in view of the circumstances, but has not vacated the accommodation. This was not confirmed in an affidavit from the employee. As the evidence stands, I will rely on the sworn evidence of Air Niugini which is that the employee vacated her accommodation on or before 25 February 2014.

Application for stay – principles applicable

9. The application for stay is made pursuant to Section 19 of the Supreme Court Act which provides "Unless otherwise ordered by the Supreme Court or a Judge, an appeal, or an application for leave to appeal, to the Supreme Court does not operate as a stay of proceedings."

10. Section 5(1)(b) provides "an interim order to prevent prejudice to the claims of the parties may be made by a judge." Order 1 Rule 7 of the Supreme Court Rules 2012 states "Judge" "means a judge of the Supreme Court of Justice".

11. The leading judgment of the Supreme Court in McHardy v. Prosec Security and Communications Ltd [2000] PNGLR 279 SC646 sets out the considerations to be applied in the Court's exercise of discretion on an application for stay. They are: 

a.	Start with the principal premise that the judgment creditor is entitled to the benefits of the judgment

b.	Whether leave to appeal is required and whether it has been obtained 

c.	Whether there has been any delay in making the application 

d.	Possible hardship, inconvenience or prejudice to either party 

e.	The nature of the judgment sought to be stayed 

f.	The financial ability of the applicant

g.	Preliminary assessment about whether the applicant has an arguable case on the proposed appeal 

h.	Whether on the face of the record of the judgment there may be indicated apparent error of law or procedure

i.	The overall interest of justice 

j.	Balance of convenience Whether damages would be sufficient remedy

12. The Chief Justice Sir Salamo Injia in the Supreme Court case of Bougainville Copper Ltd v Commissioner General of Internal Revenue (2009) SC1020 reaffirmed the above considerations. The Chief Justice said at paragraph 2 of his judgment:

"2. 	The principles on grant of stay are settled. The leading case is Gary McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279 (McHardy case). The grant or refusal of stay is discretionary and it is exercised on proper principles and on proper grounds. The Court must start from the basic premise that the judgment creditor is entitled to enjoy the benefit of the judgment. There are ten (10) other considerations which are enumerated in that case. In exercising its discretion, the Court must consider all relevant and appropriate circumstances in determining whether it is just and reasonable that the order ought to be stayed. In my view, it is not intended that the discretion should be exercised on all or selected considerations and factors enumerated in McHardy; rather the Court is required to consider the totality of those relevant factors and circumstances, in order to do justice in the circumstances of the case before it. The circumstances of a particular case may warrant greater or less or even no weight to a particular relevant factor(s) and then again, that is a matter of discretion. Also in exercising its discretion the Court is to have regard to the evidence or material placed before the Court by the parties: Post PNG Ltd v Westpac Bank Ltd (1999) SC 608; Niusik Holdings Ltd v Yapao Lawyers (2003) SC 703. The onus is on the applicant for stay to persuade the Court to exercise its discretion in his or her favor".

13. I will now apply the criteria to the facts and circumstances of this matter.

k.	Start with the principal premise that the judgment creditor is entitled to the benefits of the judgment - Apart from arguing there were strong grounds of appeal, there was no suggestion that this principle should not apply.

l.	Whether leave to appeal is required and whether it has been obtained – it is agreed this is an appeal from a judgment granting an injunction and, as such, the appeal lies without leave as provided by Section 14(3)(b)(ii) of the Supreme Court Act. 

m.	Whether there has been any delay in making the application – the decision appealed was made on 26 February 2014. The Notice of Appeal was filed on 13 March 2014. This application for stay was also filed on 13 March 2014. The relevant period is calculated from the date of the decision appealed to the date of filing of the application for stay. In this matter, that period was fifteen days. There has been no delay. 

n.	Possible hardship, inconvenience or prejudice to either party – The employee has an interim injunction along with an order for reinstatement. Against this, Air Niugini may argue should this appeal fail, the employee can claim damages. 

o.	The nature of the judgment sought to be stayed – it is an interim injunction. 

p.	The financial ability of the applicant – Air Niugini is the national airline of PNG. The Respondents did not raise issue on this aspect. 

q.	Preliminary assessment about whether the applicant has an arguable case on the proposed appeal – In my discussion whether on the face of the record of the judgment there may be indicated apparent error of law or procedure made, there appear to be arguable issues raised on the facts and the law. 

r.	Whether on the face of the record of the judgment there may be indicated apparent error of law or procedure – Air Niugini argues there is apparent error of law or procedure in a number of respects.

14. Firstly, as discussed above, the actions intended to be restrained had already occurred when the injunctive orders were made. Air Niugini had already terminated the employee and removed her from the payroll and the employee had vacated her accommodation. In Leytrac Pty Ltd v. The State [1982] PNGLR 148, Kapi J (as he then was) held:

 "Where the act intended to be restrained has already occurred an injunction to restrain is not available: an alternative remedy by way of declaration may be available." This was followed in Aro Investments Pty Ltd v. Fly River Provincial Governmet and Andrew Temu (1997) N1519, where Sevua J said "… to seek an order to restrain an act which has already occurred is inappropriate and contrary to the legal principle which is well established." Lay J differentiated a mandatory injunction from an ordinary negative injunction in the case Yama Group of Companies Ltd v. PNG Power Ltd (2005) N2831 saying "During argument I raised with counsel, that what was being sought here was a mandatory injunction, which is different in nature to an ordinary injunction. An ordinary negative injunction is one to prevent an event which is likely to cause damage to the applicant. When the event happens before the injunction is granted there is nothing to injunct and an ordinary negative injunction cannot be obtained. So that in this case where the electricity had been disconnected from the hotel premises before the orders were sought, the ordinary negative injunction would be of no avail." 

15. Secondly, Air Niugini submits the employee cannot ask the Court to create a new cause of action or enforce her rights under Section 155(4) particularly when there are already existing provisions where she could have used but had failed to do so. Air Niugini submitted in the National Court that because she had failed to do so, there was no merit to the substantive proceedings which was flawed and bound to fail and as such interim injunctions should not be granted. In refusing the argument by the trial Court, the Appellants submit, was a clear error of law on the face of the record. In SCR No 2 of 1981; Re s 19(1)(f) Criminal Code, Chief Justice Sir Buri Kidu said about s 155(4) "It does not however, vest in the National Court or the Supreme Court, the power to make orders which confer rights or interests on people. Such rights or interests are determined by other constitutional laws, statutes and the underlying law." Kapi J, (as he then was) said "In my view the words "such other orders" are to be interpreted to relate to orders of a similar character as referred to in the first limb of s. 155(4) of the Constitution. The use of the word "such" in the provision compels me to come to such conclusion. As to what are these specific orders it is wise not to attempt an exhaustive list. However, these orders must have some resemblance in character or in nature to the prerogative writs. An essential character of prerogative writs in this context is that they are remedial in nature. That is to say they are processes by which the rights of parties are protected or enforced. The existence of a right is essential to the availability of a prerogative writ. The orders in the second limb must have these characteristics. That is the limitation to the types of orders that can be made under the second limb of s. 155(4). It cannot be read to mean any type of order whatsoever. This is a conclusion reached by a pure construction of the provision itself. The section does not set out such matters as persons who are entitled to apply for such orders (locus standi) and grounds upon which such orders may be given. These are matters which can be determined by reference to the principles of common law and equity under Sch. 2 of the Constitution. 

16. Thirdly, Air Niugini argues the undertaking as to damages relied on by the employee and the union was invalid because it was given by the union without its common seal affixed and it should have been given by the employee who has a direct interest in the matter. They argue the union has no direct interest in the matter. The Supreme Court in Bougainville Copper Ltd v. Chief Collector of Taxes (2007) SC853 and in PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC 1126, both held that "… before there can be any grant of an interim injunction, there must be an undertaking as to damages given by the applicant. Where it is a company that is undertaking must be given under seal of the company by the managing director." It is arguable the employee and union failed in that regard and the National Court, in granting the interim orders erred in law on the face of the record. There are two other aspects that arise which are relevant for comment. Counsel for the union confirms from his inquiries at the Registry of Companies that National Flight Attendant Association of PNG is not registered as an association pursuant to the Associations Incorporation Act c.142. It was suggested registration with the Industrial Registrar pursuant to the Industrial Organisations Act c.174 is sufficient. This is a misunderstanding. The union must first establish that it is a legal entity and that is possible only on registration pursuant to the Associations Incorporations Act. Registration with the Industrial Registrar only gives the union as a legal entity the standing or power to perform and function as an industrial organization pursuant to the Industrial Organisations Act c.174 and that does not give the union status as a legal entity. This is not the time and proceeding to make a determination on this but the union must quickly take appropriate steps to deal with this apparent issue. I also note the Award between Air Niugini and the union dated 20 October 2008 is also executed by the union by the signature of the president of the union with no common seal. Both parties have relied on this document in this and previous legal proceedings. It is therefore a contradiction for Air Niugini to now say the failure of the union to affix its common seal renders the undertaking void and of no effect. Interestingly counsel for the union also pointed out neither did Air Niugini affix its common seal to the award.
 
s.	The overall interest of justice – Following my preliminary assessment about whether the applicant has an arguable case on the proposed appeal, the interests of justice are best served by a stay of the judgment of the National Court. 

t.	Balance of convenience - Following my preliminary assessment whether the applicant has an arguable case on the appeal, the balance of convenience is best served by a stay of the judgment of the National Court. Further, one order issued was for reinstatement. My first concern is this is a substantive relief sought by the employee and was inappropriate as an interim order. 

u.	Whether damages would be sufficient remedy – I would say damages would not be an adequate remedy especially where the employee is reinstated and readmitted to the payroll and then only to be removed on this appeal being upheld. There is no guarantee the employee is in a position to repay her employer in the event the appeal is upheld. 

17. On the basis of my assessment made above, I grant the application for stay.

18. The costs of this application are in the appeal.

19. The formal Orders of the Court are:

1.		The Appellants' application for stay is granted.

2.	Pending the determination of this appeal;

a.	National Court proceedings OS No. 80 of 2014 are stayed 

b.	The Orders of 26 February 2014 in National Court proceedings OS No. 80 of 2014 are stayed.

3.	The Appellants' costs of this application are in the appeal.	

Judgment accordingly:

__________________________________________________________________
Bradshaw Lawyers: Lawyers for the Appellants
Murray & Company & Solicitors & Advocate: Lawyers for the Respondents