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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 2 of 2015
BETWEEN:
THE HONOURABLE SIR PUKA TEMU, Minister for Public Service and JOHN KALI, Secretary, Department of Personnel Management and Chairman
of Government Office Accommodation Committee
First Plaintiff
AND:
CENTRAL LAND LIMITED and NAIMA INVESTMENTS LIMITED
Second Plaintiff
AND:
RIGO A LUA, Chief Ombudsman and PHOEBE SANGETARI, Ombudsman, constituting the OMBUDSMAN COMMISSION OF PAPUA NEW GUINEA
Defendant
Waigani: Nablu, AJ
2015: 12 February
4 March
JUDICIAL REVIEW – Application to stay the directions of the Ombudsman Commission – Directions issued pursuant to Section 27(4) of the Constitution – What is the appropriate principles to be applied for the grant or refusal of a stay or interim injunction in judicial review proceedings – Order 16 Rule 3 (8) of the National Court Rules - Whether Ombudsman Commissions investigation will be affected if directions stayed – Application refused.
Cases cited:
Papua New Guinea Cases
NTN Pty Ltd v. Board of Post and Telecommunication Corporation and Post and Telecommunication Corporation and Media Niugini Pty Ltd [1987] PNGLR 70
Gary McHardy v. Prosec Security and Communication Ltd [2000] PNGLR 279
Chief Collector of Taxes v. Bougainville Copper Limited (2007) SC 853
Ombudsman Commission v. Yer (2009) SC 104
Yama Group of Companies Limited & 3 Others v. PNG Power Ltd (2005) N2831
Thaddeus Kambanei v The National Executive Council (2006) N3064
Peter Makeng v. Timbers (PNG) Limited (2008) N3317
Issac Lupari v. Sir Michael Somare (2008) N3476
Zachery Gelu v. Sir Michael Somare, MP (2008) N3526
Overseas Cases
Inland Revenue Commissioners v. National Federation of Self Employed and Small Business Ltd [1982] AC 671
Counsel
I Molloy, for the First Plaintiff
L Henao, for the Second Plaintiff
M Efi, for the Defendant
4rd March, 2015
1. NABLU, AJ: By way of an amended notice of motion filed on 23rd January 2015, the Plaintiffs seek the following orders:
a) A direction pursuant to Order 16 Rule 3(8) of the National Court Rules that until the determination of the application for Judicial Review or until further orders the grant of leave to apply for judicial review shall operate as a stay of the decision and direction of the Defendants constituting the Ombudsman Commission of Papua New Guinea contained in their Direction dated 28th March 2014 addressed to the Plaintiffs and others;
b) Alternatively, an injunction pursuant to section 12(1) of the Laws Adoption and Adaption Act, Order 16 Rule 3(8)(b), Order 12 Rule 1 of the National Court Rules or s.155(4) of the Constitution and the Courts inherent jurisdiction, that pending the determination of the application for judicial review herein or until further order the Defendants constituting the Ombudsman Commission of Papua New Guinea their officers servants and agents be restrained from taking any action, including signing any document or giving any notice, obstructing or in any way interfering with the progression, contractual, arrangements, obligations, plans or construction in respect of the proposed office complex referred to in the Defendant's said direction;
c) Costs;
d) An order that the time for entry of these orders be abridged to the time of settlement by the Registrar, which shall take place forthwith.
2. Leave to apply for Judicial Review was granted on 10th February 2015.
3. In the substantive Judicial Review application the Plaintiffs seek orders in the nature of certiorari to quash the decision of the Ombudsman Commission (also referred to as Commission) under Section 27(4) of the Constitution. The Plaintiffs also seek a declaration that the decision and direction are in excess of the jurisdiction of the Ombudsman Commission and therefore null and void.
4. The Plaintiffs relied on the affidavits of Honourable Sir Puka Temu filed on 8th and 28th of January 2015. They also relied on the affidavit of John Kali filed on 8th January 2015 and the affidavit of Filbert Gaerlan filed on 21st January 2015.
5. In response, the Defendant filed an affidavit of the Chief Ombudsman on 12 February 2015 on the day of the hearing of the motion. The Plaintiffs counsels objected to the use of the affidavit because they were served the affidavit over the bar table. Mr Molloy of counsel for the First Plaintiff submitted that according to Order 16 Rule 13(13)(1) and Order 4 Rule 49(12) (2) of the National Court Rules, any opposing affidavits must be filed before 2pm the day before, the day of the hearing of the motion. Service of the amended Notice of Motion was effected on 26th January 2015 as attested to by Brian Joseph in the affidavit of service. Counsels however, conceded that the affidavit contained statements of law, which could be adequately covered in submissions.
6. I considered both Plaintiffs and the Defendant counsels' arguments and decided to dispense with the strict requirements of the rules under Order 4 Rule 49(20) of the National Court Rules and permitted the use of the affidavit on the basis that the affidavit was not likely to prejudice the Plaintiffs.
7. As for the requirements of whether a stay under Order 16 Rule 3(8) of the National Court Rules should be granted or alternatively an interim injunction should be granted were fully argued by all parties. I have considered all of them.
8. The law in regard to the grant or refusal of interim injunctions in this jurisdiction is settled. Case law has established that the primary considerations to be taken into account when the Court decides, how to exercise its discretion whether to grant interim injunctions are:
See for instance Chief Collector of Taxes v. Bougainville Copper Limited (2007) SC 853.
9. The general principles applicable when a Court exercises its discretion whether to grant or refuse a stay pursuant to Section 19 of the Supreme Court Act have been determined by the Supreme Court in the often cited case of Gary McHardy v. Prosec Security and Communication Ltd [2000] PNGLR 279. The Supreme Court said at page 6 that the list of factors to be considered are not "exhaustive or hard and fast pre-conditions". As a starting point, the main principle is that the judgement creditor is entitled to the benefits of the judgment. The following other factors are:
" i.Whether leave to appeal is required and whether it has been obtained;
ii.Whether there has been any delay in making the application;
iii.Possible hardship, inconvenience or prejudice to either party;
iv.The nature of the judgment sought to be stayed;
v.The financial ability of the applicant;
vi.Preliminary assessment about whether the Applicant has an arguable case on the proposed appeal;
vii.Whether on the face of the record of the judgment there may be indicated apparent error of law or procedure;
viii.The overall interest of justice;
ix.Balance of convenience; and
x.Whether damages would be sufficient remedy."
10. Justice Lay in Yama Group of Companies Limited & 3 Others v. PNG Power Ltd (2005) N2831 canvassed the main principles on mandatory injunctions, interim or permanent. The principles were cited with approval in Thaddeus Kambanei v. The National Executive Council (2006) N3064. Injia, J (as he then was) succinctly set out the nine (9) principles at pages 5-7 of that judgment. The nine (9) principles were:
" 1. A mandatory injunction should normally only be granted where a strong case that serious damage will occur to the applicant is made out.
2. The general principles for negative injunctions apply, that is that there is a serious case to be tried, damages are not an adequate remedy and the balance of convenience favour the applicant, but the case should normally be one of giving an unusually strong and clear view that the applicant will be successful at trial.
3. The more likely it appears that the plaintiff will succeed at trial the less reluctant the court will be to interfere on an interim basis.
4. But if it is necessary to make some interim order the Court will do so whether or not the high standard of probability of success is made out.
5. The costs to the defendant of performing the mandatory acts should be weighed against the likely damage to the applicant.
6. If the relief sought is such as would normally only be granted after a trial, it should be refused on an interim application unless the prejudice or hardship to the applicant is disproportion to the prejudice and hardship to be caused to the defendant in performing the order.
7. If the mandatory injunction is simply to restore some activity which has been previously performed by the defendant, rather than to embark upon some new activity, it will be more readily granted.
8. Ultimately, in deciding whether or not to grant a mandatory injunction the overriding consideration is an exercise in deciding which course will do the least damage, or, to put it another way, the lower risk of injustice, if it turns out that the court has made the "wrong" decision.
9. If an injunction is granted the order should specify exactly what it is the defendant has to do, leaving the defendant in no doubt as to what is required to comply with the order."
11. The Court was of the view that the principles are generally worded, and were applicable in judicial review proceedings.
12. Following the grant of judicial review to apply for leave, the applicant is at liberty to seek a stay pursuant to Order 16 Rule 3(8) of the National Court Rules (Peter Makeng v. Timbers (PNG) Ltd (2008) N3317).
13. Order 16 Rule 3(8) of the National Court Rules states that:
"(8) Where leave to apply for judicial review is granted, then-
(a) if the relief sought is an order of prohibition or certiorari and the Court so directs, the grant shall operate as a stay of the proceedings to which the application relates until the determination of the application or until the Court otherwise orders; and
(b) if any other relief is sought, the Court may at any time grant in the proceedings such interim relief as could be granted in an action by writ."
14. The provision clearly provides that the grant of a stay or other interim application is discretionary. The nature of the stay under Order 16 Rule 3(8) is a prohibitive injunction. The provision is worded in general terms and is wide enough to permit an interim mandatory injunction to be granted.
15. In the reported cases for judicial review proceedings, different views have been expressed as to which principles are applicable in the grant or refusal of a stay or interim injunction. This Court has been encouraged to develop appropriate criteria for granting interim injunctive relief in different judicial review cases (see Ombudsman Commission v. Yer (2009) SC 1041).
16. The Court applied the principles in Yama Group of Companies Limited & 3 Others v. PNG Power Limited (supra) in the judicial review cases of Issac Lupari v. Sir Michael Somare (2008) N3476 and Thaddeus Kambanei v. National Executive Council (supra). His Honour Injia, J (as he then was) in Thaddeus Kambanei v. National Executive Council (supra) included an additional principle in regard to cases related to the suspension and removal of a public official. His Honour stated (at page 8), that the Court should be cautious and not readily grant a stay "except in very exceptional cases where the public interest of the public employer in maintaining continuity of good administration of the office".
17. However, in the case of Zachery Gelu v. Sir Michael Somare, MP (2008) N3526, Justice Cannings when determining whether to grant a stay, strictly applied the principles in the case of Chief Collector of Taxes v. Bougainville Copper Ltd (supra). In addition to the general principles His Honour, stated that for judicial review cases, despite the fact that leave has been granted, each case must be determined on its own merits. Special considerations are applicable when determining whether there is an arguable case. Firstly, the strength of the arguments must be considered. The other consideration is whether the applicant seeks to stay an ongoing investigation which is carried out by a public authority pursuant to the laws of Papua New Guinea.
18. I am of the view that, judicial review proceedings are different from actions like tort or contract or for enforcement of constitutional rights. The nature of judicial review, is that it challenges administrative decisions or actions. The aggrieved applicant from an administrative decision must seek and obtain leave first. The grant of leave does not necessarily mean that the relief sought will be granted. The granting of relief is also discretionary. It follows that the grant of an interim injunction or stay is a discretionary matter. On that basis, because statutory and public bodies or tribunals are vested with the power to make those decisions which are subject of judicial review, greater deference is normally paid to the judgement of the decision-maker.
19. His Honour Injia, J (as he then was) said in Thaddeus Kambanei v. The National Executive Council (supra) at page 8 that:
"The standard of scrutiny of an application for stay applying those nine (9) criteria or of any application for interim injunctive orders under O.16 r.3(8) should be much higher than in ordinary suits in law".
20. I agree with the views expressed by his Honour in that respect, that the standard of scrutiny is higher than ordinary suits in civil law.
21. With regard to which principles are applicable when determining whether to grant or refuse a stay or interim injunction pursuant to Order 16 Rule 3(8) of the National Court Rules. I am of the view, that with regard to judicial review cases, which principles are applicable will depend on the circumstances of each case. The principles are not mandatory, but provide guidance on how the Court should exercise their discretion. In the present case, I adopt and apply the principles in the case of Chief Collector of Taxes v. Bougainville Copper Limited (supra) and Zachary Gelu v. Sir Michael Somare (supra).
22. Turning to the present case, I have carefully considered all the submissions made by Counsels on behalf of the parties. I have reviewed the evidence and weighed all the different considerations.
23. I will briefly discuss the principles as stated in the case of Chief Collector of Taxes v. Bougainville Copper Limited (supra) when applying the principles to the present case.
Serious Issue to be tried. Does the applicant have a strongly arguable case?
24. The Plaintiffs argued that they have raised serious questions to be tried in the course of their application for leave to apply for judicial review. Therefore, they have satisfied the requirement of a serious issue to be tried. They have also established that they have an arguable case.
25. I do not accept this submission on the basis, that in applications for leave, the Court does not determine the merits of the case.
26. It is trite law that at the leave stage, the Court does not have to hear and determine the substantive merits of the case, it need only quickly peruse the material before it and determine whether the plaintiff has an arguable case and whether there are serious issues to be tried that warrant a substantive hearing: Inland Revenue Commissioners vs. National Federation of Self Employed and Small Business Ltd [1982] AC 671 at 644 per Lord Diplock which was applied in NTN Pty vs. Board of Post and Telecommunication Corporation and Post and Telecommunication Corporation and Media Niugini Pty Ltd [1987] PNGLR 70.
27. The principles which apply when determining whether an applicant has an arguable case to warrant trial or judicial review are settled. In determining whether there is an arguable case, the Court is not concerned with determining the merits of the case.
28. The onus is on the applicant to establish that there is a strong arguable case. The degree of scrutiny is higher than in an application for leave. In determining the question of a serious issue and a strong arguable case, the Court should assess the strength of the arguments and if it's an application to stay an ongoing investigation by a lawful authority, the Court should not readily grant a stay, unless exceptional circumstances are established.
29. In the Statement pursuant to Order 16 Rule 3(2) of the National Court Rules, the Plaintiff argues that the Defendant exceeded their jurisdiction. That the decision and direction were not made in the attainment of the objects of Section 27 of the Constitution. The decision was improper and interferes with their contractual obligations. The decision of the Ombudsman Commission amounted to a stay of the procurement process while it undertakes its investigation. The decision was unreasonable and in breach of the rules of natural justice and contravenes Section 59 of the Constitution.
30. The Plaintiffs also argued that the stay or interim injunction is not intended to stay the investigation by the Commission. It is intended to stay the directions only.
31. I have weighed these grounds argued with the conflicting argument that the Commission is carrying out lawful investigations and should not be prevented from continuing their investigation. On the evidence before me, I am not satisfied that the Plaintiffs have a strongly arguable case or that there is a serious issue to be tried.
32. Firstly, the affidavit of John Kali deposes to the fact that he is the Chairman of the Office Allocation Committee responsible for the leasing of office space for occupation by Government offices. He states that the rental of office spaces from private landlords is expensive and a substantial amount of State funds is expended on office rentals. He annexes a copy of the Memorandum of Understanding (MoU) between the State and Naima Investments Limited (the Second Plaintiff) made on 25th September 2012. In that MoU, I find that the parties only agreed to work together to finalize the agreement for lease.
33. Also annexed to that affidavit is a copy of the letter from the Central Supply and Tenders Board (CSTB) and a copy of a Reservation of Land Instrument from the Lands Department. Upon reading of the material, they raise serious issues of whether the administrative process has been followed. One such issue is, even though public funds would not be utilised, the State's contribution appears to be the Land, on which this office complex will be built. So what is the correct process to follow in such circumstances where the State is providing the land for the development of the office complex?
34. I find that such allegations as to whether the correct administrative or procurement process was followed, prompted the Ombudsman Commission to issue directions and conduct an investigation. The allegations raised, are serious and concern the conduct of the First Plaintiff in particular. Whilst they remain mere allegations, a Court of equity and good conscience will not ignore those allegations and grant interim relief. Equity demands that the applicant substantiate their claim before any relief is granted. Therefore, equity militates against the grant of interim injunctive relief.
35. Secondly, the affidavit of Filbert Gaerlan does not provide any evidence of any serious damage that would occur to the Second Plaintiff if the stay or interim injunction is not granted.
36. There is no evidence of any state contracts executed apart from the MoU which only outlines the fact that the Plaintiffs would work together. I find that there is no evidence that serious damage will be occasioned by the Plaintiffs if the Commission's directions are not stayed.
37. In an application for stay or interim injunctions, when determining whether there is a serious question to be tried or whether the Plaintiff has an arguable case, the Court must entail a greater degree of scrutiny when determining this requirement.
38. Accordingly, on the evidence before me, I find that, there is no serious issue to be tried and that the Plaintiffs do not have a strong arguable case.
Undertaking as to damages.
39. In regard to the requirement for an undertaking as to damages. The Plaintiffs have filed Undertaking as to Damages. They have filed three (3) undertakings as to damages. The directors of the Second Plaintiff, Mr Filbert Gaerlan and Ms Elana Tjandranegara. The Honourable Minister Sir Puka Temu also filed an undertaking as to damages. With regard to the first two (2) undertakings, I am satisfied that they have the authority to make an undertaking as to damages. With regard to the undertaking by the First Plaintiff, I am not sure whether the Minister can make an undertaking on behalf of the State, since the State will end up paying for any damages which may be awarded. Nevertheless, the issue was not raised and argued before me, so I will not determine it. For the purpose of this application I accept the undertaking, as it is.
Would damages be an adequate remedy.
40. The Plaintiffs argue that damages would not be an adequate remedy. They argue that not every unlawful administrative act leads to a right to compensation. They also argued that the Commission is a State instrumentality and would not be able to meet an award for damages which would have to be paid for by the State.
41. I am of the view, that the First Plaintiff are also State entities and any counter claim for damages would revert to the State to pay as well. Therefore, I do not accept this submission.
42. The Second Plaintiff are corporate entities, if they are successful in the application for judicial review, they are entitled to be awarded damages for loss of business, provided their claim is pleaded in accordance with the National Court Rules. They can apply to the Court to amend their Statement pursuant to Order 16, in order to claim damages. I am of the view that they would have an option to make a claim for loss of business and damages. Weighing this argument against the conflicting argument that there is an ongoing investigation by a lawful authority, I can only conclude that damages would be an adequate remedy, in the circumstances.
Does the balance of convenience favour the granting of the injunction
43. The Plaintiffs claim that they have suffered and will continue to suffer, substantial loss, damage and inconvenience as a consequence of the Defendants' direction. The Plaintiffs contend that they are not seeking to stay or enjoin the Ombudsman Commission's investigation. The interlocutory injunction will not interfere at all with the investigation.
44. It is well settled law in this jurisdiction that the Commission is an independent investigative body (Ombudsman Commission v. Gabriel Yer (supra)). Section 27(4) of the Constitution, is generally worded and provides a wide power to give directions subject to Division 2 and any Organic Law. The power of the Commission to issue directions is vital to their constitutional function to conduct investigations. I am not persuaded that if a stay is granted, it will not interfere with the Ombudsman Commission's investigation.
45. Therefore, I am of the view that the balance of convenience favours the refusal of the application for stay and interim injunction.
Does the interest of justice require that an interim order is made.
46. The Plaintiffs argue that the interest of justice require that an interim order is made. The Plaintiffs, have been inconvenienced by the imposition of the directions.
47. I am of the view, that the public interest in the good administration of the Commission is the paramount consideration. If a stay is ordered on their power to give directions, they will be prejudiced, from carrying out their constitutional function.
48. There is no evidence by the Plaintiffs that they will suffer damage or prejudice if the Defendant's decision is not stayed.
49. I do not see that there will be any injustice to the Plaintiffs if the Commission's direction is not stayed.
50. I am not convinced that it is in the interest of justice that a stay and or an interim injunction should be granted.
Conclusion
51. The Commission's power to give directions is provided for in the Constitution by virtue of Section 27(4). The provision is worded generally and imposes a wide power of discretion. When exercising this power, the Commission should do so diligently. Accordingly, with the premise that the Court should pay greater deference to the decision maker in regard to administrative decisions like whether to impose directions to aid the investigation process. I am of the view that the application for stay should be refused.
52. Having satisfied only one of the requirements for a stay or interim injunction. That is the requirement for an undertaking. I am not satisfied that the Plaintiffs have made out a case for a stay or an interim injunction.
53. For these reasons, I exercise my discretion to refuse the stay and interim injunction sought pursuant to Order 16 Rule 3(8) of the National Court Rules. This means that the Ombudsman Commission's directions will remain in place.
Court Orders
Young & Williams: Lawyers for the First Plaintiff
Henao's Lawyers: Lawyers for the Second Plaintiff
Ombudsman Commission's Counsel: Lawyers for the Defendant
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URL: http://www.paclii.org/pg/cases/PGNC/2015/290.html