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National Court of Papua New Guinea |
PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE
WS No. 121 of 2023
BETWEEN:
KAREN NUGI T/A PANG LEGAL SERVICES
Plaintiff
V
KOMAP MAPULGEI BUSINESS GROUP INC
First Defendant
AND
JEFFERY ABONE T/A PARKIL LAWYER
Second Defendant
AND
PETER KUI KUMI FOR HIMSELF AND AS REPRESENTATIVE OF THE BENEFICIARIES OF MAPULGEI TRP INVESTMENT
Third Defendant
Waigani: Anis J
2023: 11 & 26 May
SETTING-ASIDE INTERIM INJUNCTIONS – interim injunction granted exparte – whether the interim injunction should continue – preliminary issues – source of motion – Order 12 Rule 1 – National Court Rules – general source - whether sufficiently pleaded – no serious contest – business name – whether plaintiff should only plead her business name – business name deregistered – argument abandoned – whether there are meritorious issues for trial – whether damages will not be an adequate remedy – whether undertaking given is sufficient – balance of convenience – other matters – whether plaintiff failed disclosed all the material facts at the time when the court granted the exparte interim orders – whether plaintiff failed to inform the Court that she did not submit her bill of cost to her former clients as required under the Lawyers Act 1986 thus puts in doubt whether there may be a serious case - whether the claim is premised on or include disputes concerning customary land or interests thus delegitimizes the arguable case argument
Domestic Cases
IPBC v MVIL and Ors (2015) N5953
Kamali Renali v. Peter Loko (2012) SC1186
NKW Holdings Ltd v Paladin Solutions PNG Ltd (2019) N8135
Anthoney Hamaka & Ors v Martin Kombri & Ors (2021) N8959
Pius Nui v. Senior Sergeant Mas Tanda (2004) N2765
Re Peter Naroi [1983] PNGLR 176
Paul Torato v Sir Tei Abal [1987] PNGLR 403
Simon Mali v The State (2002) SC690
Talibe Hegele v. Tony Kila and Ors (2019) N8119
Counsel:
K Nugi, in person
J Abone, for the 1st & 3rd defendants
DECISION
26th May, 2023
1. ANIS J: The matter returned for inter-pates hearing on 11 May 2023 (in relation to the plaintiff’s notice of motion that was filed on 21 March 2023) (NoM). The NoM sought interim restraining orders against the defendants and third parties.
2. The NoM was heard earlier on 28 March 2023 and ex-parte and interim orders were granted. They included the following:
“2. Pursuant to Order 14 Rule 10, Order 12 Rule 1 of the National Court Rules and the inherent jurisdiction of the National Court, Interim Injunctive Orders are made in the following terms:-
......”
3. I heard arguments from the parties on 11 May 2023 before reserving my decision on whether I should set aside or extend the interim orders of 28 March 2023. Before proceeding with my ruling, I note from the defendants’ counsel’s submission that term 2(a) of the interim order may be inapplicable because the Certificate of Judgment for WS 1273 of 2012 had been signed prior to the grant of the interim orders on 28 March 2023.
4. I now give my ruling.
BACKGROUND
5. The plaintiff files this proceeding seeking to set aside a consent order that had been obtained in an earlier proceeding, namely, WS 1273 of 2012 (WS 1273 proceeding). The plaintiff was the counsel who had acted for a portion of the third defendants herein. The Court there awarded, amongst others, a sum of K19,298,262.63 (inclusive of interest at 8% per annum) to the Mapulgei TRP beneficiaries.
6. Distribution of the Court’s award became an issue. In January of 2022, a court annexed mediation which had been ordered was held in Mt Hagen. The mediation was conducted by Mediator Mark Pupaka (current Chief Magistrate of Papua New Guinea). What was resolved there included an agreement to pay the plaintiff’s legal fees at 5% of the awarded sum. Also agreed was 10% of the award to be paid to Mr Abone’s law firm. Mr Abone is named as the second defendant herein. But in response to the NoM, Mr Abone states that he acts for the 1st and 3rd defendants.
7. The plaintiff claims that unbeknown to her and whilst she was on leave in December of 2022, the defendants and this law firm Jefferson Lawyers, purportedly facilitated and entered into a consent order between the parties in the WS 1273 proceeding. The consent order concerned is sealed and is dated 28 December 2022 (Consent Order). The plaintiff claims, which is not denied, that her mediated sanctioned legal fee of 5% was excluded in the Consent Order. Instead, she claims, which is also not denied, that this new law firm Jefferson Lawyers was purportedly appointed to replace her firm for the persons that she had acted for, and Jefferson Lawyers was included in the Consent Order to receive K45,000 for its services as a one-off payment. She alleges herein, amongst others, that she never ceased to act for the portion of the third defendants at the material time; that she never filed a notice ceasing to act nor did she receive any formal instructions from her clients to cease work in WS 1273; she also claims that Jefferson Lawyers never filed a formal notice of change of lawyers to act for her former clients before the parties entered into the alleged Consent Order.
8. The above material facts form the basis for the plaintiff’s claim herein. The plaintiff is alleging, amongst other things, that the Consent Order in WS 1273 was obtained irregularly, through deceit or that it was obtained premised on fraudulent conduct or actions of the defendants. The plaintiff seeks relief which includes orders (i) to set aside the Consent Order and (ii) to pay her 5% fee of K964,913.13.
PRELIMINARY ISSUES
9. The first and third defendants (defendants) raise 2 preliminary issues. The first is whether the exparte orders continued to exist after 5 May 2023 when the Court did not actually sit, and the second relates to the manner in which the plaintiff was named as a party to the proceeding, that is, whether the business name Pang Legal Services was deregistered thus it meant that the plaintiff had no legal standing to commence the proceeding.
10. I note that the 2 issues were determined and dismissed at the hearing on 11 May 2023. But for the record and for avoidance of doubt, I find both issues baseless. The exparte orders of 28 March 2023 were granted on an interim but with certain terms. They contain the express term “until further orders of the Court” which means that the orders shall remain in place until they are set aside. In relation to the second preliminary issue, counsel Mr Abone conceded in the end that the plaintiff was properly named in the manner as is pleaded.
11. I also find the source of the NoM to be in order. Order 12 Rule 1 as pleaded is sufficient, in my view, for seeking relief such as interim injunctions. This rule has been applied in many cases in the past and Courts have applied it. See cases: IPBC v MVIL and Ors (2015) N5953, Kamali Renali v. Peter Loko (2012) SC1186, and NKW Holdings Ltd v Paladin Solutions PNG Ltd (2019) N8135. In some cases, the Courts have stated that the source is too general, and that a more specific source should be pleaded in addition to that. The Court’s power is discretionary in this regard. In the present case, I see no serious error or reason why I should not permit the NoM to be heard on its merit. I also note that the argument was not seriously pursued by the defendants with any supportive case authorities. I therefore also dismiss the defendants’ argument in this regard.
ISSUES
12. The main issues are (i), whether there is a serious case to be tried, (ii), whether damages will not be adequate remedy, (iii), whether the plaintiff has given an undertaking as to damages and (iv) who does the balance of convenience favour?
13. The defendants also claim that the plaintiff failed to disclose all the material facts to the Court thus such failure means that the Court should set aside the interim orders. I note that this issue may be tied to the issue of an arguable or serious case to be tried. I will address that below together with the first issue.
CONTENTIONS
14. The defendants challenged the arguable case issue but towards the end of submissions, counsel appeared to concede that there may be serious issues to be tried.
15. Regardless, and after having heard the full arguments, I uphold Ms Nugi closing submission where she submits that the defendants, in their submissions, ‘have admitted’ the relevant background facts where if accepted, means that there is a serious question to be tried by the Court in the substantive hearing of the matter. Mr Abone did not seriously dispute the following facts. First, the defendants do not dispute the mediation sanctioned agreement where the plaintiff’s 5% fee was included as part of the mediation order. I note that there is evidence of the mediation order which is contained at Annexure E to Ms Nugi’s affidavit of 21 March 2021. Mr Abone appears to concede in his submission that after the sanctioning of the mediation order, the defendants met again amongst themselves without the knowledge of the plaintiff and agreed amongst themselves to exclude Ms Nugi’s 5% fee award that had been sanctioned by the mediator. Mr Abone also appears to confirm that the defendants had, without formally informing the plaintiff, decided amongst themselves to engage Mr Lome; that Mr Lome was engaged to replace Ms Nugi whereby the parties then went ahead to settle the Consent Order. There is also no evidence adduced before me now or at this juncture to show that Mr Lome did file a formal notice of change of lawyers prior to him purporting to appear on behalf of the portion of the landowners that the plaintiff had acted for before he made his appearance in Court in WS 1273 and participated in the signing of the Consent Order.
16. In my view, the uncontested facts and evidence of the plaintiff shows that there is a serious issue to be tried in the matter. Let me remind myself that this is not a hearing. The evidence and implied admissions are premised on the present NoM. Parties will of course have their day in Court when the matter is trialed where they will be at liberty to call evidence to prove or disprove the claim. However, what the evidence and uncontested facts show at this juncture is that the Consent Order may have been entered into for example by misrepresentation, want of instruction, irregularly or through fraudulent conduct, on the part of the defendants. There is prima facie evidence in that regard.
17. I will also say and make a finding on the following. The contention by the plaintiff, premised on her pleadings, has nothing to do with ‘customary disputes’ as alleged by Mr Abone. Counsel’s submission in that regard is, with respect, misconceived and baseless. The plaintiff herein is challenging the validity of a signed and sealed consent order of a National Court which is the Consent Order. The allegations as pleaded is premised on various grounds including irregularity, misrepresentation, deceit or whether the Consent Order was obtained through fraudulent conduct or means by the defendants. Premised on these claims, the plaintiff is seeking to, amongst others, set aside the Consent Order.
18. I turn my attention to the second issue, and in so doing, I note the submissions of the parties.
19. I must say that I do find that damages will not be an adequate remedy, that is, if I am minded to lift the interim injunctive orders. If I lift the interim injunctive orders now and allow the payments to proceed, there is no guarantee that the plaintiff will ever be able to recover any monies from the defendants if she is successful. I note that I have already found that she has an arguable case thus I also take this into account herein. I uphold the submissions and evidence deposed to by the plaintiff on this issue. These are landowners, as submitted by the plaintiff, who do not have proper contacts, addresses, business operations or records or established financial capacities that the plaintiff can feel content that she will recover her claim from if she succeeds in the end. I do not have any valid information or evidence filed by the defendants that say otherwise; or evidence that says the defendants are capable of meeting the plaintiff’s claim with supportive evidence from each of them. Right now, and as evidence has shown, the defendants are after their monies, and it seems that that is all they are interested in at this present time. The plaintiff, on the other hand, appears to have a meritorious or serious claim against them as I have found above herein. As such and in my view, before the defendants may enjoy what they have signed for as per the Consent Order, they must first provide their answers to the serious allegations raised by the plaintiff against them.
20. In my view and for the above stated reasons, the balance of convenience also favours the granting of the restraining orders against the defendants.
21. The plaintiff has filed an undertaking as to damages. I am satisfied that she has met that requirement. The argument that the plaintiff may not be able to repay substantial monies to the defendants if her claim is unsuccessful may be a valid consideration had I not found that the plaintiff has an arguable case. Given my above findings, I reject the said argument by the defendants.
OTHER MATTERS
22. I refer to the final issue which is whether the plaintiff has failed to disclose the material facts.
23. I note the submissions of the parties.
24. Mr Abone submits that the plaintiff had failed to inform the Court that she was supposed to forward her bill of cost to her client to settle pursuant to the Lawyers Act and the National Court Rule. Counsel submits that because the plaintiff failed in that regard, the interim injunctive orders should be set aside. With respect, I find the argument misconceived. The plaintiff is suing by this proceeding premised on what she claims were her fees which had been agreed to and fixed by a mediator who had been duly appointed by the National Court. Premised on that mediated order, she is claiming that the defendants changed the full terms of the mediated agreement thus leaving out her agreed or fixed legal fees. She is seeking to, amongst others, enforce the terms of the mediated agreement specifically in relation to her fees.
25. Mr Abone’s next submission under this heading is this. He submits that the National Court has no jurisdiction to deal with matters that involve customary land interests. Counsel also submits that Ms Nugi failed to bring that to the Court’s attention at the time when the Court heard and granted the exparte orders on 28 March 2023.
26. I note the submissions of the parties. I also note that I have rejected this argument above in my findings under the first issue, arguable case.
27. But let me elaborate with some clarity. As I had indicated to counsel for the defendants at the hearing, the substantive matter before this Court has nothing to do with this Court being asked to make a determination concerning landowners’ interest over customary land. Rather, the plaintiff is asking this Court to consider and decide on whether it should set aside the Consent Order that was granted in WS 1273. This Court has jurisdiction to hear this matter, that is, premised on the pleadings which are mainly aimed to set aside the Consent Order. The law on this is settled. In Anthoney Hamaka & Ors v Martin Kombri & Ors (2021) N8959, at [34] and [35], I said:
34. That said, I note that I had asked counsel for the plaintiffs whether such a consent order of a National Court may be challenged or set-aside by filing a separate proceeding in the National Court. Counsel assisted in that regard, and if I may, Justice Cannings in Pius Nui v. Senior Sergeant Mas Tanda (2004) N2765 stated:
Though it was a consent order, it could have been appealed against if exceptional circumstances were shown. But the defendants have sat on the matter for well over a year. If they were serious about setting aside the order, they should have filed fresh proceedings and relied on the grounds of fraud or mistake. (Re Peter Naroi [1983] PNGLR 176, National Court, Andrew J; Paul Torato v Sir Tei Abal [1987] PNGLR 403, National Court, Bredmeyer J; Simon Mali v The State (2002) SC690, Supreme Court, Hinchliffe J, Sakora J, Batari J.) The defendants did not appeal against the order and did not file fresh proceedings to quash it. Their application to set it aside should therefore be viewed with extreme caution and refused.
35. The present proceeding alleges, amongst others, fraud or fraudulent conduct by the first defendant in regarding to obtaining the consent order in proceeding OS 948 of 2018.
As such, I do not find it as abuse of the court process or that it discloses no reasonable cause of action.
28. Relevant case authorities referred to were Pius Nui v. Senior Sergeant Mas Tanda (2004)N2765, Re Peter Naroi [1983] PNGLR 176, Paul Torato v Sir Tei Abal [1987] PNGLR 403 and Simon Mali v The State (2002) SC690. The Supreme Court in Simon Mali v The State (supra) stated:
We agree with the learned judge below that he had jurisdiction to hear and determine on the State's application to set aside. And this jurisdiction is inherent by virtue of the National Court being a court of law as envisaged by or under s 155(4) Constitution which is in the following terms:
Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seen to them proper orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.
29. A consent order may be compared or likened to an agreement. Parties to a proceeding would agree to the terms of their agreement which is then converted or endorsed by the Court. It then becomes a binding or a valid court order. Thus, setting it aside may require satisfying the Court similarly to or based on the grounds for invalidating an agreement. Bredmeyer J in Paul Torato v. Sir Tei Abal and Ors [supra] at [413], recited with approval, the following passage from the Supreme Court Practice (1979):
A consent order can be set aside in an action commenced for the purpose of any ground that would invalidate an agreement. If consent has been given by mistake, it may be withdrawn at any time before the judgment is passed and entered . . . But where a final judgment has been passed and entered the Court cannot set it aside unless a fresh action is brought for that purpose although it has been entered by mistake (Ainsworth v. Wilding [1896] UKLawRpCh 42; [1896] 1 Ch 673 and Wilding v. Sanderson [1897] UKLawRpCh 120; [1897] 2 Ch 534).
30. Kariko J in Talibe Hegele v. Tony Kila and Ors (2019) N8119, stated, which I adopt, at [20] and [21]:
20. The approach in England to setting aside a consent order is stated in Halsbury’s Laws of England4th Edition, Vol 3 [522]:
“[A] consent order or compromise may be set aside on a ground which would invalidate any other agreement between the parties including mistake, illegality, duress or misrepresentation”.
and later in Vol 26 [562]:
“A judgment given or an order made by consent may be set aside in a fresh action brought for the purpose on any ground which would invalidate a compromise not contained in a judgment or order. Compromises have been set aside on the ground that the agreement was illegal as against public policy, or was obtained by fraud or misrepresentation, or non-disclosure of a material fact where there was an obligation to disclose, or by duress, or was concluded under a mutual mistake of fact, ignorance of a material fact, or without authority” (My underlining)
21. That position is endorsed by Kandakasi J in Harry Tovon v Carl Malpo (2016) N6240 in his discussion of relevant case authorities including the Simon Mali case. At paragraph [36(a)], his Honour affirmed that a party affected by a consent order may apply to have the order set aside if it resulted from misrepresentation or fraud, as is the case with any other agreement.
31. The circumstances where a consent order may be set-aside by another National Court of Competent Jurisdiction include, (i), mistake, (ii), want of instruction, (iii), non-disclosure of relevant facts, (iv), fraud or fraudulent conduct, (v), misrepresentation, (vi), supervening events or significant change of circumstance, and (vii), undue influence. The list is not exhaustive. I would also add these 2 additional circumstances, (viii) breach of right to be heard of a non-party who would otherwise have been an essential party whose interest was or is directly affected by a term or terms of the consent order, and, (ix),where a party or a non-party having a direct interest in or who is directly affected by the consent order, establishes one or more irregularities in regard to the grant of the consent order by the court.
SUMMARY
32. In summary, I will order the continuation of the interim orders made on 28 March 2023 pending determination of this proceeding or until further orders of this Court.
33. The parties had attempted to discuss settlement thus the NoM had to be adjourned part-heard on 2 occasions. Unfortunately, no meaningful outcome had been reached. And I note that the plaintiff is adamant in pursuing the matter on its merit.
34. I also note that this is a case where any possible variation that may be attempted may essentially mean trying to vary or amend the Consent Order. The Consent Order I note, and as I had put to the parties at the hearing of the NoM, is presently binding as it is from the time it was made by another National Court of competent jurisdiction. At this juncture, I do not have any jurisdiction to vary or amend the Consent Order without first making a final determination on the issues that are before me. And only when I determine and grant the plaintiff’s claim on liability may I then set aside the Consent Order and consider what orders or relief I should make for the plaintiff. Without making that final determination, I do not have any jurisdiction to vary or amend the Consent Order of the National Court in WS 1273 which, to this day, remains binding.
35. I therefore decline to hear or consider submissions in that regard.
COST
36. I will order cost to follow the event, that is, cost of the NoM and its various hearings shall be paid by the defendants on a party/party basis to be taxed if not agreed.
ORDERS OF THE COURT
37. I make the following orders:
The Court orders accordingly
________________________________________________________________
Pang Legal Services: Lawyers for the Plaintiff
Parkil Lawyers: Lawyers for the 1st & 3rd Defendants
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