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Sinai v Kei Buseu Kampani Pty Ltd [1990] PGNC 55; N935 (26 September 1990)

Unreported National Court Decisions

N935

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

O.S. 202 OF 1990
BETWEEN
MARK HOSEA SINAI CUSTOMARY LEGAL REPRESENTATIVE OF BUEKAU CLAN
PLAINTIFF
AND
KEI BUSEU KAMPANI PTY LTD
FIRST DEFENDANT
AND
SEAL (PNG) PTY LTD
SECOND DEFENDANT
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
THIRD RESPONDENT

Waigani

Sheehan J
24-26 September 1990

Counsel:

Mr Sitapai for Plaintiff

DECISION

SHEEHAN J: The plaintiff has commenced an action against the defendant for damages sustained by the unauthorised logging of timber standing on customary land belonging to the Buekau clan. The plaintiff is the legal representative of that clan.

It is the plaintiffs contention that the Buekau clan has never ceded or transferred timber rights in respect of its land to any company or any person at all. Thus the recent logging of that timber by the second defendant on behalf of the first defendant is totally without authority or justification. The plaintiff seeks in fact the recovery of that timber or the total proceeds resulting from its disposal.

Because of the industry requirements that all logging carried out must be recorded and notified to the Forestry Department, full and exact details of the timber recovered from the plaintiffs land can readily be ascertained.

By ex parte motion the plaintiff has sought interlocutory restraints on the defendants from further dealing with the timber or alternatively orders to ensure that the proceeds of the sale of that timber remain within the jurisdiction of the Court.

For the injunctive relief to be accorded a plaintiff at this stage must show that he as a arguable claim to the rights that he seeks to protect by injunction. He must also show that the situation at this time is one where an injunction is imperative to protect his interests. In this case it is asserted that an order in damages in a successful suit would be insufficient or any judgment would be nugatory because it would be impossible to enforce either because of dissipation of assets or the parties not being amenable to the jurisdiction of the Court. The Court also must consider the effect that the orders sought may have on the defendant, the damage that may be sustained by such an order and what undertakings the plaintiffs has made in respect of damages to meet such an eventuality.

In this applications the Court has only the affidavit evidence of the plaintiff before it. There is of course a very real duty for full disclosure of all matters relevant to making of such an order so that the Court may make an informed assessment of the present situation. In the present case timber has been cut and the logs recorded and readied for export. There is a very precise record of the metric volume of the logs, the various gradings, and a unknown price for all. The logs are ready for export and are being loaded a board ship for sale overseas. In fact the recovery of their value can only be achieved by proper sale.

Under such circumstances it would seem that imposing restraints on the sale of this timber would not be appropriate as the plaintiff would be able to recover by an action in damages.

However the plaintiff contends the timber rights permit under which the defendants have purported to log the timber is in danger of being revoked for non-compliance with its terms. This TRP includes an obligation on the part of the second defendant to establish a Veneer mill within the twelve months of commencement of operations. The plaintiffs says that three years down the track this has still not been done. This breach of a term of the agreement the plaintiff contends, is likely to lead to the revocation of the timber permit. If this were done both defendants which have few realisable assets apart from the logging rights would be unable to meet a judgment against them.

The Plaintiff further contends that under the terms of the agreement between the defendants the first defendant (the land holders) are entitled to 30% of the proceeds of the sale of the timber and the 2nd defendant an overseas company, the balance. Upon realization of the timber overseas the payment to the local company of its share would quickly be dissipated in small amounts to the shareholder members. Again since payments comes from overseas the second defendant may except its share outside the jurisdiction of the Court and thereafter those funds would be no longer amenable to the jurisdiction of this Court.

The plaintiff further contended (and an affidavit is shown) that while there is an application for export made through the Westpac Bank, no letter of credit or other financial arrangement for payment in Papua New Guinea of the proceeds has yet been made. The end result, the plaintiff says is that there is no real certainty that a successful claim for damages can be enforced in Papua New Guinea. Therefore it seeks orders to ensure that the defendants make proper arrangement to ensure that sale proceeds of the timber that it claims are secured within Papua New Guinea.

On the affidavit evidence before me there is apparent acknowledgement by the defendants that the plaintiffs have a serious claim to the timber. That timber is being loaded for export without the claims of the plaintiff being accommodated or provided for. The defendants would appear to have no funds yet, within Papua New Guinea or any letter of credit or provisions for payment within the country that could be appropriately attached until settlement of the plaintiffs claim.

Delays in shipping or meeting of contract deadlines is a serious matter and can incur considerable financial penalties. However I am of the view that the undertaking by the plaintiff is genuine and not without substance. I therefore consider that an interim order should be made requiring the defendants to make no further disposition of the timber. Accordingly there will be orders as per the draft submitted.

Lawyer for the Plaintiff: Karingu Sitapai & Associates