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Mirupasi v Australia & New Zealand Banking Group [2019] PGNC 215; N7937 (11 June 2019)

N7937

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS 529 of 2019

BETWEEN:
VINCENT MIRUPASI
First Plaintiff

AND:
COURTABELLE INVESTMENT LIMITED
trading as HOTEL HODAVA
Second Plaintiff

AND:
AUSTRALIA & NEW ZEALAND
BANKING GROUP
Defendant

Waigani: Hartshorn J.
2019: 23^rd May
: 11^thJune

Application for an interim interlocutory injunction

Cases Cited:
Papua New Guinea Cases

Employers Federation of Papua New Guinea v. Papua New Guinea Waterside Workers and Seaman’s Union and Arbitration Tribunal (1982) N393
Craftworks Niugini Pty Ltd v. Allan Mott (1997) SC525
Ewasse Landowners Association Inc v. Hargy Oil Palms Ltd (2005) N2878
Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853
Airlines of PNG v. Air Niugini Ltd (2010) N4047
PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC1126
Ramu Nico Management (MCC) Ltd & Ors v. Tarsie & Ors [2010] SC1075
PNG Power Ltd v. Ralph Gura (2014) SC1402
PAC LNG International Ltd v. SPI (208) Ltd (2014) N5681

Overseas Cases

American Cyanamid Company v. Ethicon Limited [1975] UKHL 1; (1975) AC 396

Counsel:

Mr. M Pokia, for the Plaintiffs
Mr. E Andersen and Ms. M. Tusais, for the Defendant

Oral decision delivered on
11^th June 2019

1. HARTSHORN J: This is a decision on a contested application for an interim interlocutory injunction.

Background

2. The plaintiffs’ submit that the second plaintiff, Courtabelle Investment Limited trading as Hotel Hodava (Hodava) entered into a loan agreement with the defendant (ANZ) in 2014 for K11 million. Hodava provided security for the loan. One of those securities was a mortgage over three allotments of land. Hodava constructed and runs a hotel on that land (Property). Hodava defaulted in making the requisite monthly payments to ANZ. ANZ has given notices under the Land Registration Act for Hodava and the first plaintiff, Mr. Vincent Mirupasi, to vacate the Property. Further, ANZ has demanded that Hodava and Mr. Mirupasi as Guarantor, repay the entire loan.

3. Mr. Mirupasi and Hodava have commenced this proceeding by writ of summons and seek amongst others, a declaration that both plaintiffs are not intentionally, deliberately and/or willingly in default. Further, the plaintiffs’ appear to seek amongst others, orders that ANZ is guilty of clogging and fettering the plaintiffs’ right of redemption, that the loan be reviewed, that there be an accounting, and that the plaintiffs’ be given six months to explore selling options.

This application

4. Both plaintiffs now seek that amongst others, ANZ’s notice of demand dated 7^th February 2019 be stayed, that ANZ be restrained from acting upon the said notice of demand, that ANZ be restrained from issuing a demand under s. 67 Land Registration Act, that ANZ be restrained from taking any action to realise upon its securities and from calling in loans and that the interest rate on various loans remain at 9.5% per annum.

5. ANZ submits in regard to the plaintiffs’ substantive claim that amongst others, it is not arguable and has no merit. The plaintiffs’ have no arguable case for the relief that they seek, they have been in default for over two years, that all proper processes have been followed and that ANZ has been more than reasonable for more than two years of default. Further the plaintiffs’, in exchange for an earlier forbearance by ANZ, agreed in writing not to make a claim in court against ANZ and are bound by that agreement.

6. In regard to the application of the plaintiffs’ for injunctive relief, ANZ submits that the plaintiffs’ do not have an arguable case, that damages are an adequate remedy, that the balance of convenience does not favour the grant of an injunction, that the undertaking as to damages practically is limited as both plaintiffs’ are already liable to ANZ on Hodava’s borrowing and Mr. Mirupasi’s guarantee. The plaintiffs’ motion fails on each and every test for the granting of an interlocutory injunction, and should be refused with costs.

Law

7. The principles upon which the court can grant an interlocutory injunction are well settled. The leading authority is a decision of the House of Lords in American Cyanamid Company v. Ethicon Limited [1975] UKHL 1; (1975) AC 396. This case has been followed on many occasions in this jurisdiction and cited with approval by the Supreme Court in Craftworks Niugini Pty Ltd v. Allan Mott (1997) SC525. These principles have been reaffirmed by the Supreme Court in Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853.

8. In Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC 853, the Supreme Court said at 31:

“In our jurisdiction the principles relevant to injunctive reliefs (sic) are well settled. In Golobadana No. 35 v. Bank of South Pacific, Kandakasi J......concluded as follows:

“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”.”

9. The Bougainville Copper decision was relied upon by the plaintiffs. The plaintiffs’ also cite the following statement of Cannings J in Ewasse Landowners Association Inc v. Hargy Oil Palms Ltd (2005) N2878:

“The court should never lose sight of its duty to do justice. Although I have referred in this judgment to some rather technical legal principles, at the heart of my consideration of this application is the overriding duty of the court to do justice and to balance the conflicting interests of the parties, and also everybody who would be affected by the court’s orders.”

10. In this regard, reference is made to the Supreme Court decision in PNG Power Ltd v. Ralph Gura (2014) SC1402 in which the Court comprising of Salika DCJ (as he then was), Gabi J and myself, said at [31]:

“The interests of justice apply to all parties. A party whether large, or corporation or government owned should receive the same consideration as any other party.”

Consideration

11. As I did in PAC LNG International Ltd v. SPI (208) Ltd (2014) N5681 at [23], as amongst others, because of the necessity to deliver a prompt ruling, I will not consider and determine whether the plaintiffs’ have established that they have a serious question to be tried. I will assume for present purposes only that they have. This is not in any way to be taken that I have formed a view either way on this issue.

12. On the assumption that the plaintiffs have established that they have a serious question to be tried, the next consideration is whether they would be adequately compensated in damages. If damages would be an adequate remedy then even if there is a serious question to be tried interlocutory injunctive relief should be refused: Airlines of PNG v. Air Niugini Ltd (2010) N4047 at 22 and 23 and PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC1126 at 30.

13. The rationale for the court considering whether damages would be an adequate remedy was explained by Lord Diplock in American Cyanamid (supra) at 408:

“[t]he court should go on to consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages....would be an adequate remedy and the defendant would be in a financial position to pay them, no interim injunction should normally be granted, however strong the claimant’s claim appeared to be at that stage.”

14. The consideration is whether damages would compensate the applicant should it be found that their legal rights have been infringed by the party they are seeking to enjoin: Employers Federation of Papua New Guinea v. Papua New Guinea Waterside Workers and Seaman’s Union and Arbitration Tribunal (1982) N393, 3-4.

15. In Airlines PNG v. Air Niugini (supra), I refused to grant injunctive relief as I was satisfied that any loss suffered by Airlines PNG would be able to be quantified and that it had not been shown that damages would not be an adequate remedy.

16. I also refer to Ramu Nico Management (MCC) Ltd & Ors v. Tarsie & Ors [2010] SC1075 in which I said at 53:

“The authorities also agree that once it has been determined that there is a serious question to be tried, if damages could adequately compensate the applicant, the injunction should not be granted: Golobadana No.35 Ltd v Bank of South Pacific Ltd (2002) N2309, Ewasse Landowners Association Incorporated v Hargy Oi Palms Limited (2005) N2878, Gobe Hongu Limited v The National Executive Council & Ors (1999) N1920.”

17. Counsel for the plaintiffs submitted that damages would not be an adequate remedy in this instance as the Hodava is a family business. It is an investment for the children of the first plaintiff who are the shareholders of the second Plaintiff. If it is sold, the shareholders once coming of age will not be able to participate in the business and obtain the necessary experience of running a profitable business to advance their lives and provide for their own welfare. Money cannot buy that, it is submitted.

18. If an injunction is not granted, the pieces of land will be lost forever, and if ANZ for some reason becomes liable to the plaintiffs, then there will be a real potential of long and expensive court battles. Thus the recouping of damages may become illusory, and expensive, it is submitted.

19. Counsel for the plaintiffs’ conceded however, that it is a company that owns the land and property. Further, any merit in the other submissions made concerning the retention of the business for the benefit of child shareholders once they become adults, and of them learning and benefiting from the business, is open to question when it was conceded that the plaintiffs in their substantive relief, claim amongst others, time to explore selling options.

20. ANZ submits that clearly damages are an adequate remedy. Mr. Mirupasi is not primarily an hotelier, but is the principal of a firm of lawyers with a long history of practice and a staff of nearly a dozen people. This is Mr. Mirupasi’s evidence.

21. Hodava is a commercial enterprise seeking to maximize the value of its assets by selling at a high price. If ANZ has committed some prior actionable wrong or ultimately breaches its duties to take reasonable steps to obtain a proper price then ANZ is able to be sued. It is a reputable commercial organisation capable of paying damages.

22. I am satisfied that it has not been shown by the plaintiffs that damages would not be an adequate remedy. To the contrary, any loss which may be suffered by the plaintiffs’ if they are successful substantively is quantifiable, given the nature of the dispute and claim. It has not been demonstrated otherwise, and there is no evidence to the effect that ANZ would not be able to pay damages. Further, any consideration to be given to the retention of the land and property for family considerations is negated by Hodava being a company, and by the plaintiffs seeking to sell the Property. Further, Mr. Mirupasi’s evidence confirms the desire and intention of the plaintiffs, to sell the Property.

23. As I have found that damages would be an adequate remedy, in accordance with the principles to which I have referred, the application of the plaintiffs’ should be refused. Given this, it is not necessary to consider the other submissions of counsel.

Orders

24. The court orders that:

a) The relief sought in the notice of motion of the plaintiffs filed 10^th May 2019 is refused;

b) The plaintiffs’ shall pay the costs of the defendant of and incidental to the said notice of motion;

c) Time is abridged.
_________________________________________________________________
Mirupasi Lawyers: Lawyers for the Plaintiffs
Dentons Lawyers: Lawyers for the Defendant