National Court of Papua New Guinea
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO 316 OF 2004
MARK EKEPA, PALA TEYA, YESU KULINA, ANGA ATALU AND THE OTHER 22 LANDOWNERS NEGOTIATING COMMITTEE (LNC) AGENTS
PORGERA LANDOWNERS ASSOCIATION
JOB MARK KUTATO, PEROK PULI, NELSON AKIKO AND KARAPUS YUWI
MT HAGEN : CANNINGS J
6, 7, 13 OCTOBER 2004
RULING ON MOTION
INJUNCTIONS – interim orders – application to set aside – National Court’s jurisdiction – inherent constitutional power of Court – National Court Rules, Order 12, Rule 8 – res judicata and issue estoppel – whether capable of providing complete defence to claim that interim injunction should be set aside – considerations to take into account when determining application to set aside interim orders – application of considerations – orders.
Employers Federation of PNG v PNG Waterside Workers and Seamen’s Union and Others (1982) N393
Bauf and Nodai v Poliamba Pty Ltd  PNGLR 278
Kaseng v Namaliu and the State  PNGLR 481
Titi Christian v Rabbie Namaliu unreported, OS No 2 of 1995, 18.07.96
Tulia and Others v Lama and Others (1998) N1824
Supreme Court Reference No 3 of 1999: Special Reference under Section 19 of the Constitution by the Ombudsman Commission re Sitting Days of the National Parliament (1999) SC628
Tan v Pelis and Pelton Investments Ltd (1999) N1804
Gobe Hongu Ltd v National Executive Council and Others (1999) N1920 National Housing Corporation v Yama Security Services Pty Ltd (2000) N1985
Porgera Landowners Association Inc and William Gaupe v Ekepa and Others and Porgera Development Authority unreported, OS No 431 of 2000, 07.11.00
Supreme Court Review No 13 of 2002: Application by Anderson Agiru (2002) SC686.
Supreme Court Reference No 3 of 2000: Special Reference under Section 19 of the Constitution by the Governor-General re Sitting Days of the National Parliament (2002) SC722
Golobadana No 35 Ltd v Bank South Pacific Ltd (2002) N2309
Supreme Court Review No 8 of 2003: Application by Anderson Agiru (2003) SC704
Mainland Holdings Ltd and Others v Stobbs and Others OS 418 of 2003, unreported, 29.10.03
American Cyanamid Company v Ethicon Ltd  UKHL 1; (1975) 1 All ER 504
Mr P Mawa for the plaintiffs
Mr A Manase for the defendants
This is an application to set aside two interim orders made by Acting Justice Manuhu in the National Court at Mt Hagen on 16 and 18 June 2004. The case is about management and control of the Porgera Landowners Association Incorporated (the Association). A power struggle has been continuing for several years.
Meeting of 8 June 2004
On 8 June 2004 a meeting of the Association was convened at Porgera station in Enga Province. The defendants were elected as office-bearers. Mr William Gaupe, who is the first defendant, was elected as chairman. The other defendants were elected to various other positions. Mr Mark Ekepa, who is the principal plaintiff, was deposed as the chairman. Other plaintiffs, including Messrs Pala Teya, Yesu Kulina and Anga Atalu, were also deposed as office-bearers of the Association.
The plaintiffs claim that that meeting was unlawful. They say it was not held in accordance with the constitution of the Association. They say that the defendants’ purported election should be declared null and void. The plaintiffs claim that they have been the lawful office-bearers of the Association since 1995. They say that they remain the lawful office-bearers. They were removed from office unlawfully.
The defendants, on the other hand, say that the meeting was conducted lawfully in accordance with the registered constitution of the Association. They claim that this was the first annual general meeting of the Association since the Association was incorporated in 1992. Their election was lawful. They say the election was conducted under the auspices of the Electoral Commission.
Originating summons filed: 16 June 2004
Eight days after the meeting, on 16 June 2004, the plaintiffs filed an originating summons in the National Court. They seek the following orders:
6. An Order that the Defendants pay the costs of the Plaintiffs.
Undertakings as to damages: 16 June 2004
On the same day that the originating summons was filed, 16 June 2004, three of the plaintiffs filed an undertaking as to damages, in the following terms:
In the event this Honourable Court finds for the defendants, the plaintiffs undertake to abide by any order this honourable Court makes or awards as to any proven damages the defendant shall have suffered by reason of any order of this Court.
The three plaintiffs who signed the undertaking were Mark Ekepa, Yesu Kulina and Anga Atalu.
Interim order: 16 June 2004
On the same day that the originating summons was filed, 16 June 2004, the plaintiffs filed a motion seeking interim orders to restrain the defendants from holding meetings of the Association and conducting the Association’s affairs, until their substantive claim was addressed.
On 16 June 2004 that motion was heard by Manuhu AJ. It was dealt with ex parte. That is Mr Gaupe and the other defendants (the office-bearers elected on 8 June 2004) were not present. A number of affidavits were filed in support of the motion. In those affidavits the plaintiffs deposed that the procedures for calling of meetings of the Association and election of office-bearers had not been followed.
Manuhu AJ upheld the motion and made the following order:
Further order: 18 June 2004
Two days later, on 18 June 2004, the defendants filed a notice of motion seeking to vary the order of 16 June 2004. They wanted an order to stop Mr Ekepa and the other plaintiffs from running the Association. They also wanted a freeze put on two accounts at Bank South Pacific, Mt Hagen, that are operated by the Association.
That motion was heard by Manuhu AJ on the same day it was filed, 18 June 2004. It was dealt with inter partes. That is, all parties were represented. Mr Mawa, of Mawa Lawyers, who represent Mr Ekepa and the other plaintiffs, appeared and argued the plaintiffs’ case. Mr Gaupe and the other defendants (those who had been elected on 8 June 2004) were represented by Mr Sino of Paul Paraka Lawyers.
The defendants argued that Manuhu AJ had been misled on 16 June 2004. They argued that an incorrect and unregistered constitution had been referred to by the plaintiffs when they argued the matter two days previously. Therefore the Court should set aside the order it had made.
After considering submissions from the parties, Manuhu AJ dismissed the motion. A judgment was not published. But on the same day, 18 June 2004, his Honour made a formal order, which was entered on 21 June 2004. The order states:
4. That the time for entry of these Orders is abridged.
It is that order, together with the order of 16 June 2004, which the defendants are now applying to set aside.
Events from 18 June to 5 October 2004
In the period since 18 June 2004 Mr Ekepa and the other plaintiffs have continued to run the affairs of the Association.
On 21 June 2004 Paul Paraka Lawyers ceased to act for the defendants. On 5 July 2004 Pato Lawyers became the defendants’ lawyers.
On 5 August 2004 Naru Lawyers, representing Porgera Mt Kare Young Generations Association Incorporated, filed a notice of motion. They sought orders that that Association be joined as a third defendant in the substantive proceedings and that the defendants be permitted to perform their tasks. In the alternative, that all parties be restrained from having access to the accounts, offices and books of the Association until the substantive issues are resolved.
On 23 August 2004 that application was argued before Salika J. The plaintiffs opposed the application. On 25 August 2004 his Honour handed down a ruling, dismissing the application and awarding costs to the plaintiffs.
In September 2004 the Assistant Registrar of the National Court at Mt Hagen conducted a callover of pending civil cases. The substantive proceedings in the present case were set down for trial in Mt Hagen on 6 October 2004 at 1.30 pm. Mr Gaupe and the other defendants were represented at the callover. But Mr Ekepa and the other plaintiffs were not. There was evidently some confusion amongst the parties about whether the trial was actually going ahead on 6 October 2004. A notice of trial was not filed.
Further motion filed: 5 October 2004
On 5 October 2004 Mr Gaupe and the other defendants filed another motion, seeking, again, to set aside the order of 16 June 2004 – and also the order of 18 June 2004. The following orders are sought.
6. Such other or further orders the Court deems fit.
Start of case: 6 October 2004
On 6 October 2004 at 1.30 pm the case was called. Mr Mawa appeared for Mr Ekepa and the other plaintiffs. Mr Manase, of Pato Lawyers, appeared for Mr Gaupe and the other defendants.
I enquired whether the parties were expecting the Court to deal with the trial of the substantive proceedings. Or whether only the defendants’ motion of 5 October 2004 was to be determined. I asked how long the trial would take. The case had only been set down for a half-day hearing. The rest of the days in the Court circuit were almost fully occupied. So it would be difficult to complete the trial if it were to take more than one day. I noted that there was a substantial body of affidavit material already filed. If oral evidence were to be called it would seem that the trial might take several days. Both Mr Mawa and Mr Manase informed me that it was likely that the trial would take more than one day. Perhaps two or three.
In those circumstances I decided that it was not feasible to hold the trial. The Court would deal only with the motion of 5 October 2004. That meant it was unnecessary to call for oral evidence. There was substantial affidavit evidence. Mr Mawa asserted that much of the material in the defendants’ affidavits was irrelevant or oppressive and should be struck out. It was agreed, however, that rather than fully addressing those issues and asking the Court to make formal determinations on whether such material should be struck out, they could be dealt with in submissions.
Mr Mawa pointed out that the National Court Rules had been breached. Three days notice of a motion is required to be given, under Order 4, Rule 42. The plaintiffs had only been served earlier in the day. Nevertheless he was prepared to argue the motion. I accepted that the plaintiffs were short-served. I indicated that that was something to take into account in the event that the question of costs arose.
I then asked for submissions.
THE DEFENDANTS’ SUBMISSIONS
It was the defendants’ motion that was being considered by the Court. So Mr Manase went first.
Mr Manase said the case was about who was the duly elected chairman of the Porgera Landowners Association. There had been no annual general meeting since the Association was incorporated in 1992. The matter had been brought to the attention of the Registrar of Companies, Mr Teup Goledu, earlier this year. The Registrar was concerned sufficiently to issue a direction to hold an annual general meeting. But, for some reason, he later retracted his direction.
In any event the meeting went ahead on 8 June 2004 at Porgera. It was held in a public place. The Electoral Commission was engaged to preside. Mr Gaupe was duly elected as chairman. The other defendants were elected to other senior management positions.
The Association has a membership of more than 10,000 people. It comprises the landowners of the special mining lease issued for the Porgera Gold Project in Enga Province.
The meeting on 8 June 2004 was the first proper meeting of the Association since its incorporation in 1992. The court orders of 16 and 18 June were improperly obtained and ought to be dissolved.
Mr Manase asserted that the Court had jurisdiction to dissolve Manuhu AJ’s orders. The source of that jurisdiction was twofold. First Order 12, Rule 8 of the National Court Rules allows the court to vary or set aside orders, in particular those made in the absence of a party. Secondly the Court has inherent powers as a superior court of record to vary or set aside interim or interlocutory orders. A party who is aggrieved by an interlocutory order does not have to appeal to the Supreme Court. The aggrieved party can ask the National Court to amend its previous decision, even when an interlocutory order has been confirmed by the National Court.
He referred extensively to the judgment of Injia DCJ in the National Court in the recent case of Mainland Holdings Ltd and Others v Stobbs and Others (OS 418 of 2003, unreported, 29 October 2003). That case demonstrates, he argued, that the National Court has a broad discretion to vary or dissolve orders it has previously made. This can be done by the same Judge who issued the first order. It can also be done by a different Judge.
One of the most common situations where it is appropriate for the National Court to exercise its discretion to vary or dissolve an interlocutory order is where there is a change in relevant circumstances since the original order was made, which render the continuation of the interlocutory order unnecessary or inappropriate. But the power of the Court is not confined to cases where there has been a change of circumstances.
Mr Manase asserted that the Mainland Holdings case confirms that the Court can dissolve an interlocutory injunction in other situations. In particular, if it is shown that the person who obtained the injunction did not put all relevant facts before the Court. Or misled the Court. Or failed to demonstrate absolute good faith in obtaining the injunction. To bolster that proposition he referred to the National Court judgments of Sheehan J in Bauf and Nodai v Poliamba Pty Ltd  PNGLR 278 and Kandakasi J in Golobadana No 35 Ltd v Bank South Pacific Ltd (2002) N2309.
Mr Manase also argued that the Court could discharge an earlier injunction if the person who benefited from it did not give an undertaking as to damages. To support that proposition he referred to the National Court judgments of Sevua J in Gobe Hongu Ltd v National Executive Council and Others (1999) N1920 and National Housing Corporation v Yama Security Services Pty Ltd (2000) N1985. In the Gobe Hongu case his Honour stated, at page 5:
The usual undertaking as to damages is a condition precedent to the granting of an interlocutory injunction. Such undertaking must therefore be given by the applicant at the time of making the application, ie. filed at the time of, or prior to the making of the application. The usual undertaking as to damages is given by a plaintiff who applies for an interlocutory injunction. It is a condition for obtaining the order to give the usual undertaking as to damages. Counsel have not referred me to any provision of the National Court Rules or any other statute, which provides for the undertaking, however it has become the practice in this jurisdiction, as in New South Wales and other jurisdictions that, an undertaking as to damages must be given.
Mr Manase also argued that the Court could discharge an earlier injunction if it had been granted contrary to the balance of convenience. He referred again to the Mainland Holdings case in support of that proposition.
After outlining the relevant law, Mr Manase submitted three grounds on which the Court should set aside Manuhu AJ’s orders. First the plaintiffs had misled the Court. Secondly they had not given a complete undertaking as to damages. Thirdly Manuhu AJ had made an error of law.
Misleading the Court
Mr Manase submitted that when the plaintiffs moved the Court to make the ex parte orders of 16 June 2004 they put incorrect and misleading facts to the Court. And they did this deliberately. The plaintiffs had told Manuhu AJ that the elections of 8 June 2004 were in breach of the constitution of the Association. In particular they told the Court that they had been elected in 2000 for five years and that elections were not due until 2005. But in support of that argument they referred his Honour to the wrong constitution. In effect they put a bogus document to the Court. This was done, Mr Manase argued, via the affidavit of the first plaintiff, Mr Ekepa, sworn on 15 June and filed on 16 June 2004. Annexure A of that affidavit was a document entitled "Constitution of the Porgera Special Mining Lease Landowners Association Incorporated". The import of Mr Ekepa’s affidavit was that the meeting and the elections of 8 June 2004 breached that constitution.
Mr Manase then referred me to an affidavit by the Registrar of Companies, Mr Goledu. It was sworn for the purpose of these proceedings on 25 August and filed on 20 September 2004. Mr Goledu deposes that the document annexed to Mr Ekepa’s affidavit is unregistered; that there is no registered association by the name of "Porgera Special Mining Lease Landowners Association Incorporated"; and that the only legally recognised constitution of the Porgera Landowners Association is the one registered on 25 July 1998.
Mr Manase pointed out that the plaintiffs now accept the correctness of Mr Goledu’s depositions. They do not take issue with what he says. They know what the right constitution is. They know all about the wrong constitution. Mr Manase asks me to find that the plaintiffs have been aware, all along, of the difference between the two constitutions. They are no strangers to the correct document. The misinformation given to the Court on 16 June 2004 was not the product of a genuine mistake.
If the Court does not find that the misinformation was deliberate, it should nonetheless find that the injunction of 16 June 2004,
and the order of 18 June 2004 to extend it, were based on a clearly incorrect premise.
Undertaking as to damages
An undertaking as to damages was given in this case. But it was only signed by three plaintiffs. There are at least 26 individuals described as "first plaintiffs". They should each have signed the undertaking, for it to be effective, Mr Manase argued. They each benefited from the orders of 16 and 18 June 2004. But only a small proportion gave the required undertaking.
Balance of convenience
Mr Manase pointed out that whenever the Court is faced with a motion for an interlocutory injunction it must weigh up a number of considerations. Kapi DCJ outlined them in Employers Federation of PNG v PNG Waterside Workers and Seamen’s Union and Others (1982) N393. His Honour adopted the criteria from the British case American Cyanide Company v Ethicon Ltd  UKHL 1; (1975) 1 All ER 504. Those criteria have since been applied in many National Court cases. They were succinctly summarised by Kandakasi J in the Golobadana No 35 Ltd case. His Honour stated, at page 12:
A reading of these authorities shows consistency or agreement in all of the authorities that the grant of an injunctive relief is an equitable remedy and it is a discretionary matter. The authorities also agree that before there can be a grant of such a relief, the Court must be satisfied that there is a serious question to be determined on the substantive proceedings. This is to ensure that such a relief is granted only in cases where the Court is satisfied that there is a serious question of law or fact raised in the substantive claim. The authorities also agree that the balance of convenience must favour a grant or continuity of such a relief to maintain the status quo. Further, the authorities agree that, if damages could adequately compensate the applicant, then an injunctive order should not be granted.
Mr Manase argued that Manuhu AJ had not properly considered the question of where the balance of convenience lay. His Honour failed to give proper weight to the fact that, by the time the motion of 16 June 2004 was heard, the defendants had been in office for eight days. Clearly the balance of convenience did not favour the granting of the injunction, Mr Manase argued. The defendants had been duly elected and assumed office and there was no good reason to prevent them doing what they had been elected to do, ie to run the affairs of the Association.
Operation of the Association
Mr Mawa began his submission by explaining how, in practice, the Association operates. It is not unlike the National Parliament, he argued. There are a number of electorates in the country. The constituents of each electorate elect a representative. Those representatives go into the chamber and vote. In the same way, the land occupied by the Porgera Gold Project is owned by seven clans. They consist of 23 or 24 sub-clans. Each sub-clan elects a landowners negotiating committee agent. Each agent represents the interests of their sub-clan. They each vote on behalf of the members of their sub-clan, in the same way that members of the National Parliament vote on behalf of the constituents of their electorates.
Meetings of the Association are attended only by the local negotiating committee agents. This has been the practice both before and after the incorporation of the Association. This is borne out by the affidavit evidence, Mr Mawa asserted.
Mr Mawa provided the Court with a brief history of the chairmanship of the Association. On its incorporation in 1992 the chairman was Nixon Mangape. He had taken over from Jolson Kutato. In 1995 there was a motion of no confidence in Mr Mangape. On 18 July 1995 a special meeting was held. The result of that meeting was that Mark Ekepa was elected chairman. Amongst those that he defeated was William Gaupe, the first defendant.
In 2000 Mr Gaupe gathered together 16 local negotiating committee agents and convened a meeting. He was voted in as chairman at a meeting on 20 July 2000. But Mr Ekepa challenged that election in the National Court.
On 7 November 2000 Hinchliffe J delivered judgment in Porgera Landowners Association Inc and William Gaupe v Ekepa and Others and Porgera Development Authority (unreported, OS No 431 of 2000, 07.11.00). His Honour held that Mr Gaupe had not complied with the procedures fixed by the Association’s constitution when he called the meeting of 20 July 2000. Mr Ekepa had not been given notice. Hinchliffe J ordered that Mr Gaupe’s election was null and void and of no effect.
On 25 January 2001 an annual general meeting was held. Mr Ekepa was re-elected as chairman. The meeting then resolved to amend the Association’s constitution to, amongst other things, extend the tenure of the chairman to five years.
Confusion about the constitution
The proposed amendments to the constitution were not registered. Mr Mawa pointed out that the defendants accept what the Registrar of Companies, Mr Goledu, says in his affidavit on the issue of registration. The amendments should have been registered. But they were not. This was due to an administrative oversight, Mr Mawa indicated.
In early 2004 the Registrar of Companies issued a direction to Mr Ekepa to hold a meeting. The Registrar relied on Section 38 of the Associations Incorporation Act. But he later withdrew the direction. Mr Mawa said it was apparent that the Registrar withdrew the direction when he realised that it had no legal basis.
Meeting of 8 June 2004
Mr Mawa asserted that the meeting and election of 8 June 2004 were a total departure from the procedures previously used by the Association to elect office-bearers. The involvement of the Electoral Commission was unprecedented and unnecessary. Just as in 2000, proper notice had not been given. The Electoral Commission officers went to Porgera without informing the executives of the Association. Nominations were not properly made.
The meeting of 8 June 2004 was not actually a meeting of the Association. It was a public rally, in a market place. Many thousands of people were present. But there was no roll call. Serious allegations were levelled in public by Mr Gaupe against Mr Ekepa and the other plaintiffs. Proper procedures were not followed. The plaintiffs take issue with the affidavit of the Electoral Commission officer who conducted the election. There are serious factual discrepancies in it. Mr Mawa likened the events to a "coup". There was, in fact, no election. The defendants, in effect, declared themselves elected.
The Association’s registered constitution does not define the financial members of the Association. The defendants argue that is the 10,000 or so people who turned up at the market at Porgera on 16 June 2004. The plaintiffs say: No, it is the local negotiating committee agents, who represent the sub-clans who own the land occupied by the Porgera Gold Project.
The Court hearing of 16 June 2004
Mr Mawa said that when the ex parte hearing took place in the National Court at Mt Hagen on 16 June 2004 before Manuhu AJ, the plaintiffs honestly believed that the Association’s constitution had been amended. They were not aware of the Registrar’s position. On that basis, Manuhu AJ granted the interim restraining order, which was returnable within 14 days.
When the case came before Manuhu AJ again, on 18 June 2004, the defendants were represented by Paul Paraka Lawyers. They were asking his Honour to set aside the order of 16 June 2004. They clearly pointed out that two days previously, the plaintiffs had referred his Honour to an incorrect document. They relied on the affidavit of William Gaupe, sworn and filed on 18 June 2004. In paragraph 4 Mr Gaupe stated:
They are misleading the Court. The constitution that they rely on is not the constitution of the Porgera Landowners Association (second plaintiff) but it is the constitution of the Porgera Special Mining Lease Landowners Association Incorporated. Porgera Special Mining Lease Landowners Association Incorporated is not yet in existence, as it is not incorporated as yet.
Mr Mawa says that the plaintiffs conceded the facts as deposed by Mr Gaupe. They had on 16 June 2004 relied on the wrong document.
But even if the registered constitution is the one to be followed – and Mr Mawa concedes that it is – that does not assist the defendants, as it was not complied with. Just as the defendants breached the notice procedures in 2000, they did it again in 2004.
Manuhu AJ had the benefit of Mr Gaupe’s affidavit, plus the submissions of learned counsel for the defendants. Still, his Honour dismissed the motion to set aside his order of 16 June 2004.
The hearing of 25 August 2004
On 23 August 2004 Salika J heard and, then on 25 August 2004, dismissed a motion by the Mt Kare Young Generations Association. The motion was aimed at setting aside the orders made by Manuhu AJ. So the present proceedings were the "third bite at the cherry" by those opposed to the order of 16 June 2004. On each occasion (ie on 18 June, 23 August and 6 and 7 October 2004) the same facts and issues were argued extensively and exhaustively.
Response to the three grounds raised by the defendants
As to the three grounds highlighted by Mr Manase for the Court setting aside Manuhu AJ’s orders, Mr Mawa submitted:
Res judicata and issue estoppel
Mr Mawa then submitted that the plaintiffs have a complete defence to the motion to set aside Manuhu AJ’s orders. The principles of res judicata and issue estoppel apply. All the facts, issues and arguments that the defendants are relying on now, were dealt with by Manuhu AJ in the inter partes hearing of 18 June 2004. Salika J also dealt with the issues in August 2004. Because of these prior circumstances, the plaintiffs cannot come back to the same Court and argue the same issues again.
Their only recourse was to appeal to the Supreme Court under the Supreme Court Act. They should have appealed within 40 days after Manuhu AJ’s orders were made. But they did not appeal. It is now too late to do so. They have lost their right of appeal. Therefore, the current proceedings are an abuse of process. Mr Mawa relied on two National Court decisions in support of that submission: the judgment of Kapi DCJ in Tan v Pelis and Pelton Investments Ltd (1999) N1804 and that of Sawong J in Tulia and Others v Lama and Others (1998) N1824.
In his reply Mr Manase re-emphasised that the question of whether to continue, vary, or dissolve an interim injunction is always a discretionary matter. Whether the Court’s jurisdiction is founded on the National Court Rules or its inherent constitutional jurisdiction, it is clear that the Court can exercise considerable discretion regarding interim orders.
All substantial matters of evidence relied on by the parties in this case are in dispute. The present motion is concerned with the evidence that was before the Court on 16 and 18 June 2004. Wrong evidence was put before Manuhu AJ. A wrong constitution was adduced. That was done deliberately. Counsel for the plaintiffs failed to discharge his duty as an officer of the Court to bring all relevant matters to the attention of the Court and to act in absolute good faith. The issue of the wrong constitution was never properly argued and addressed. Furthermore the Court wrongly exercised its discretion.
Mr Mawa’s contention that the Association is intended to operate in the same way as the National Parliament – with local negotiating committee agents being equivalent to members of the Parliament – has no basis in law.
I have gone to some lengths to set out the submissions of both Mr Mawa and Mr Manase. Both were carefully and coherently expressed. But some parts of the submissions were not directly relevant to the issues before the Court.
It is important to remember that this is not the trial of the originating summons. It is a particular application to deal with two particular interim orders made by Manuhu AJ. The purpose of these proceedings is not to determine whether William Gaupe and the other defendants lawfully hold office as office-bearers of the Association. The purpose is only to determine whether Manuhu AJ’s interim orders should continue. That is: who should run the affairs of the Association between now and when the Court makes a final decision on the originating summons? Should it be Mr Ekepa and his team? Or Mr Gaupe and his team?
What the Court is dealing with now is something like a pre-season football competition. A few games have been played. The pre-season final is being decided. But the competition proper has not started. The final match – let alone the grand final – has not been played yet. And, as everyone knows, pre-season form is not always a good guide to what will happen in the competition proper.
It is important therefore to crystallise the very particular issues that must be decided in the current proceedings. They are as follows:
The National Court clearly has jurisdiction or power to set aside its earlier interim orders. This power exists irrespective of whether the previous orders were made by the same Judge who is dealing with the application to set aside the previous orders. I accept Mr Manase’s submission that the National Court’s power derives from both the National Court Rules and the Constitution.
National Court Rules
Order 12, Rule 8(3)(a) deals specifically with setting aside or varying ex parte orders.
The Court may, on terms, set aside or vary an order ... where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order;
Order 12, Rules 8(4) and 8(5) deal with setting aside or varying interim orders generally – not only those made ex parte.
Rule 8(4) states:
In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgment) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.
Rule 8(5) states:
This Rule does not affect any other power of the Court to set aside or vary a judgment or order.
The Constitution provides that the National Court is a superior court of record. Subject to the role of the Supreme Court, it has an inherent power to review the exercise of judicial authority. It has an inherent power to make, in such circumstances as seem to it proper, orders in the nature of prerogative writs or such other orders as are necessary to do justice in the circumstances of a particular case. It is obliged, generally, to apply and enforce, as part of the underlying law, the principles and rules that formed, immediately before Independence Day, the principles and rules of common law and equity in England. (See Constitution, Sections 163(2), 155(3)(a), 155(4) and Schedule 2.2.)
The orders of 16 and 18 June 2004 made by Manuhu AJ were interim orders or interlocutory injunctions. An injunction is an equitable remedy. In deciding whether to grant an injunction the National Court relies on the rules of equity that were adopted on Independence. Some of those rules were summarised by Injia DCJ in the Mainland Holdings case. For example: the Court’s decision whether to grant or vary or set aside an injunction is a matter of discretion; the Court must always consider the conduct of the parties; maxims such as ‘those who seek equity must do equity’ and ‘those who come to a court of equity must come with clean hands’ must be considered; a court of equity retains a discretion to set aside an interim injunction.
Conclusion as to jurisdiction
This Court clearly has jurisdiction to entertain the application to set aside Manuhu AJ’s orders of 16 and 18 June 2004. The purpose of such an application is described by Injia DCJ in the Mainland Holdings case, at page 2. It is not to directly review the earlier exercise of discretion. The purpose is "to determine the appropriateness of continuance of the [earlier] order in the light of all relevant circumstances and principles".
RES JUDICATA AND ISSUE ESTOPPEL
Mr Mawa strenuously asserted that all the facts, issues and arguments that the Court is asked to determine in the current proceedings have already been dealt with. The defendants therefore have a complete defence: res judicata and issue estoppel. Mr Manase submitted that those principles do not apply because the facts, issues and arguments were not fully canvassed in the earlier proceedings.
National Court cases
Mr Mawa referred to Tan v Pelis and Pelton and Tulia v Lama. I have considered those cases but found them of limited relevance. In Tan Kapi DCJ rejected a res judicata defence. The cause of action in the second proceedings was found not to have been the subject of previous proceedings. There was little discussion of the scope of the principle. In Tulia Sawong J upheld the defence. It was clear that an earlier final judgment of the National Court had already determined the claim against the defendant in the second proceedings. But the Court was not dealing with an earlier interlocutory order, which is what the Court is grappling with in the present case.
Supreme Court cases
The leading case on the application of the principle of res judicata in Papua New Guinea is Titi Christian v Rabbie Namaliu (unreported, OS No 2 of 1995, 18.07.96). That was the second of the major challenges to the amendments to the Constitutional Laws dealing with provincial governments, determined by the Supreme Court in the mid-1990s. The case was argued a year after the Court by a 3:2 majority ruled in Kaseng v Namaliu and the State  PNGLR 481 that the provincial government reforms were not unconstitutional. In Christian the Court decided 4:3 not to overturn its previous decision. There was considerable discussion by Amet CJ (who was in the majority in both cases) and Kapi DCJ (in the minority in both cases) about the defence of res judicata. Their Honours agreed on what the principle entailed, but disagreed on its application to the facts in Christian.
The defence of res judicata has recently been upheld in two decisions of the Supreme Court.
In Supreme Court Reference No 3 of 2000; Special Reference under Section 19 of the Constitution by the Governor-General re Sitting Days of the National Parliament (2002) SC722, it was held by a 5:2 majority that the Court had already authoritatively determined many of the issues involving the same parties, not long before. The previous case was Supreme Court Reference No 3 of 1999; Special Reference under Section 19 of the Constitution by the Ombudsman Commission re Sitting Days of the National Parliament (1999) SC628. The majority therefore declined to answer many of the questions raised on the ground of res judicata.
In Supreme Court Review No 8 of 2003; Application by Anderson Agiru (2003) SC704, the Court rejected an application under Section 155(2)(b) of the Constitution for the review of the decisions of a leadership tribunal. The Court upheld the Public Prosecutor’s defence that the same facts, issues and arguments had been authoritatively determined in a previous case, Supreme Court Review No 13 of 2002; Application by Anderson Agiru (2002) SC686.
Conditions precedent for res judicata
Res judicata is a common law principle or legal doctrine that has been adopted as part of the underlying law of Papua New Guinea. It is expressly recognised by Schedule 2.8(1)(d) of the Constitution. It is a defence to a claim, when the following conditions apply:
The principle of issue estoppel is closely related to res judicata. It is a sub-set of res judicata. To establish the defence of issue estoppel a party only has to show that an issue of fact or law or mixed fact and law has been authoritatively and finally determined in a previous case. The cause of action does not have to be the same. Nor do the parties.
Finality in litigation
Both the doctrines of res judicata and issue estoppel are a reflection of the general principle of finality in litigation. Parties who are not happy with a Court’s decision are not encouraged to go back to the same Court, except in limited circumstances. Aggrieved parties are sent "upstairs". That is why there is a hierarchy of courts.
If you are aggrieved by a decision of the District Court, you go upstairs to the National Court. If the National Court makes a decision that you are not happy with, you go upstairs to the Supreme Court. If you are not happy with the Supreme Court’s decision, well, there is no more upstairs. You cannot go any further, unless you bring yourself within the very tight constraints of the slip rule. Under that common law principle, you can go back to the Supreme Court if it has made a decision against you. But only if you can convince the court that it made a mistake or ‘slip’. And that the mistake was not of your own making. Put another way: you cannot have two or more bites at the cherry. Or to use a Pisin expression: Tok i dai!
Can res judicata and issue estoppel apply to interim orders?
None of the above cases has addressed the question of whether res judicata or issue estoppel apply when the earlier court proceedings do not involve a final determination of the dispute between the parties. I infer from that – and this is borne out by the emphasis on the finality of the court’s earlier order – that res judicata and issue estoppel have no direct application if all that the earlier court has done is make an interim order.
I therefore reject Mr Mawa’s submission that res judicata and issue estoppel can, or do, provide the defendants with a complete defence in the present case.
Having said that, however, I consider that his contention that all the relevant facts, issues and arguments were dealt with previously is one of the relevant considerations to take into account in determining whether the orders of Manuhu AJ should be set aside. I will address that issue in a moment.
WHAT ARE THE RELEVANT CONSIDERATIONS TO TAKE INTO ACCOUNT WHEN DECIDING WHETHER TO SET ASIDE OR VARY A PREVIOUS INTERIM ORDER?
In setting out the relevant considerations, I rely heavily on Injia DCJ’s judgment in the Mainland Holdings case. The considerations to weigh in the balance are these:
This is the most telling consideration, according to Injia DCJ. If there has been a material change in circumstances, that substantially increases the applicant’s chances of having the earlier order dissolved or varied. In Mainland Holdings Kirriwom J had granted an interim order allowing the contract of employment of the first defendant, Mr Stobbs, to be extended for 90 days. That was on the pretext that his continued presence in the company as group general manager was necessary to help save a grain crisis affecting the operations of the Niugini Tablebirds business. After he obtained the injunction, Mr Stobbs went on two weeks holiday. The grain crisis was solved. So the plaintiffs went back before the National Court and argued, successfully, that there had been a material change in circumstances. The interim orders of Kirriwom J were dissolved.
Have they been behaving themselves? Are the hands of the person who is benefiting from the earlier order, still clean? (Bearing in mind the maxim that those who come to a court of equity must have ‘clean hands’.) If the party who obtained the interim injunction behaves badly, this is something that weighs in favour of dissolving the earlier order.
In Mainland Holdings Injia DCJ concluded that the beneficiary of Kirriwom J’s order – Mr Stobbs – had behaved irresponsibly. Having got the order he wanted, he went on a holiday spree to New Zealand. He deserted the company at a time of deepening crisis. His hands were no longer clean. That made it clear that the interim injunction should be dissolved.
If there are, those facts can be taken into account. But they do not deserve the same weight, as where there is a material change in circumstances after the interim order was made.
Injia DCJ explained the reason for previously undisclosed facts not deserving too much weight, in Mainland Holdings, at pages 3-4. If the Court allows its discretion to be too broad, it will encourage unsuccessful parties to go back to the Court with new arguments or facts that should have been aired the first time around. It can also encourage "Judge-shopping". Injia DCJ stated:
In the exercise of its regulatory jurisdiction, the Court also has wide discretion to protect itself or its process from abuse by parties aggrieved by its earlier order, to have a second opportunity to re-argue the case in order to reverse its earlier decision. In cases where the earlier interlocutory order is subject of an appeal, the court should be reluctant to engage in any deliberations on the facts and law, which would or is likely to interfere or usurp the review powers of the appellate court to review the findings of fact or law. This is particularly so when a second judge is invited to vary or discharge an interlocutory order of the first judge.
In Mainland Holdings Injia DCJ indicated that this is something that might be taken into account. But it is not a very weighty consideration.
I infer from what his Honour said that it should only be where the Court has made a clear error of law in the course of making its earlier interim order, that the exercise of discretion entailed in the granting of the earlier order should be interfered with.
The above four considerations are the principles emerging from Mainland Holdings. To those I would add the following two considerations. They were not an issue in Mainland Holdings. But they deserve illumination in view of Mr Mawa’s submission on res judicata and issue estoppel, and Mr Manase’s submission on breach of good faith.
If yes is the answer to either of these queries, the Court should be reluctant to set aside or vary the earlier order. In this way the Court will give effect to the principles underlying the doctrines of res judicata and issue estoppel.
This is a very important consideration, which focuses on the conduct of the party which obtained the original interim injunction. If it deliberately misled the Court, this will be a factor weighing heavily in favour of setting aside the interim injunction.
APPLICATION OF RELEVANT CONSIDERATIONS
I now apply the above considerations to the present case.
Unlike the Mainland Holdings case, where the basis of the interim orders (the grain crisis) completely changed, in the present case, little has changed since 18 June 2004. This is a significant fact, which weighs heavily against setting aside or variation of Manuhu AJ’s orders.
William Gaupe swore an affidavit on 4 October, which was filed on 5 October 2004. He states in paragraph 21 that the interim orders are being used by the plaintiffs to further misuse and deplete the funds of the financial members. That is being done, it is alleged, by engaging lawyers on lucrative and unethical terms, bribing of witnesses, public servants and company employees "to further their egocentrism". These are bare and vague allegations. They fall well short of being regarded as evidence of improper conduct by the plaintiffs. Furthermore, Mr Mawa wished to object to this material as it was opinionated, not factual, oppressive and scandalous and ought to be struck out. I declined to entertain the objection for the purpose of dealing with the motion before the Court. The objection may, however, be raised again and determined at the trial.
For present purposes, I refer to this statement as, in the absence of evidence of such serious allegations, it is indicative of the fact that the defendants have not established that the conduct of the plaintiffs, since the interim orders were granted, has been bad. I might have been persuaded that the conduct of the plaintiffs was bad if, for example, there was evidence that they had engaged in violent acts towards the defendants or were guilty of intimidating or threatening conduct. But there is no evidence of that. The Court also has no evidence that the defendants have been guilty of bad conduct. So this second consideration – the relative conduct of the parties – is a neutral factor. It does not support the setting aside or variation of the orders of 16 and 18 June 2004.
The issue of the wrong constitution was a fact brought to Manuhu AJ’s attention on 18 June 2004, via an affidavit of William Gaupe. Mr Manase was at pains to assert that this was a critical fact – and it may well be so at the trial of the originating summons. But for present purposes, it cannot be regarded as a previously undisclosed fact, which has since been discovered and is only now being brought to the Court’s attention.
Mr Manase argued that his Honour did not give weight to the balance of convenience. But I presume that his Honour did give due regard to his assessment of that factor. I cannot detect any clear legal error in the exercise of his Honour’s discretion.
There are three principal grounds now being relied on: (1) the issue of the wrong constitution; (2) the failure to take full account of the balance of convenience; and (3) the inadequate undertaking as to damages. The defendants had the opportunity to raise these issues before Manuhu AJ. Ground No (1) was raised in the affidavit of William Gaupe. It was a significant issue and I presume that it was considered by Manuhu AJ. As to grounds (2) and (3), the Court’s records do not make it clear whether they were considered. But I conclude that there was the opportunity to raise them.
In any event, I do not consider that either ground is decisive of the question of whether the order of 16 June 2004 should have been continued.
The question of the balance of convenience is a matter of discretion.
As to the issue of the undertaking as to damages, although it is not necessary to decide this issue, I accept Mr Manase’s submission that the existence of an appropriate undertaking is important in deciding whether an interim injunction should be granted. But I also accept Mr Mawa’s submission that, in the circumstances of this case, an undertaking signed by three of the principal plaintiffs was sufficient.
I infer from the affidavit of the Registrar of Companies, Mr Goledu, that Mr Mawa was unaware of the failure to register the amendments to the affidavits. There may be further evidence on this issue at the trial of the originating summons. But for present purposes I cannot conclude that the plaintiffs or its lawyers were guilty of deliberately misleading the Court.
None of the six considerations I have identified as relevant, support the exercise of the Court’s discretion to vary or set aside the orders of 16 or 18 June 2004.
The defendants’ motion filed on 5 October 2004 is therefore refused.
I reiterate that this judgment is only about the particular application that was before the Court. It is not the trial. The question of whether Mr Gaupe and the other defendants were properly elected is still to be decided.
This is clearly a case in which there is a great deal of public interest, particularly in Enga Province. It is important that all those involved continue to conduct themselves in a peaceful and orderly way, so that all these issues can be resolved by the Court according to law.
Lawyers for the plaintiffs : Mawa Lawyers
Lawyers for the defendants : Pato Lawyers