An appellant who wants the world held still until the appeal is heard has two tools: a stay under section 19 and an interim order under section 5(1)(b). This case explains the second, and why it is different from the first.
Kawari Fortune Resources Ltd v Louis Limbo Apurel [2015] PGSC 90; SC1614
Supreme Court, Waigani — Injia CJ, Logan and Kangwia JJ, 23 February 2015. SCA 135 of 2014.
What happened
Kawari Fortune Resources held an exploration licence. A dispute arose between the people who had sold its shares and those who had bought them over who owned the shares and who was entitled to sit as a director. The Registrar of Companies registered documents reflecting one side’s position; the other side appealed to the National Court under section 408 of the Companies Act, and the National Court made orders about the register.
The losing side appealed to the Supreme Court and obtained, from a single judge on 14 November 2014, an interim order under section 5(1)(b) restraining the original vendors from acting as directors or shareholders and restraining the Registrar. The vendors applied under section 5(3) to discharge that order.
What was argued
The vendors did not say the Court lacked power. They said the order should never have been made, because even if the appeal succeeded the relief available under section 408 could not resolve who owned the shares. The purchasers said the order preserved the status quo and should stand until the appeal was heard.
What the Court decided
An interim order under section 5(1)(b) can, like a stay under section 19, preserve the status quo pending an appeal, but the two are conceptually different. An interim order is typically an injunction addressed to an opposing party to protect an interest of the applicant. A stay is not addressed to a party; it suspends the operation of the judgment under challenge.
The purpose of section 5(1)(b) is “to prevent prejudice to the claims of the parties”. That directs attention to three questions: what are the claims of the parties, what is the alleged prejudice, and what is necessary, pending the appeal, to prevent it. Nothing in the text requires special or exceptional circumstances, and reading in such a requirement would be an impermissible gloss.
Identifying the claims does not involve deciding the merits, only whether the applicant has an arguable case, found in the grounds of appeal and the bases on which they are contested. Where the applicant’s case is strongly arguable, comparatively minor prejudice may suffice.
The purchasers’ underlying claim rested on a fundamental misunderstanding of what a section 408 appeal or rectification of the register could achieve. A contested question of share ownership had to be resolved in properly constituted proceedings, not by the Registrar or on appeal from him. The interim order was discharged, each side bearing its own costs.
Did it make new law?
The stay-versus-interim-order distinction was drawn from a National Court decision: Peter Makeng v Timbers (PNG) Ltd (2008) N3317, Injia DCJ as he then was. In Makeng, landowners sought interim relief in a judicial review before leave had been granted. His Honour held that under Order 16 rule 3(8) of the National Court Rules the Court has no jurisdiction to grant a stay or other interim relief before leave, and that section 155(4) of the Constitution confers no primary jurisdiction to do so. In explaining the point he distinguished a stay, which suspends a decision, from an injunction, which restrains a party. Kawari Fortune adopted that distinction for the Supreme Court and, for the first time, stated the test for section 5(1)(b) in terms of the section’s own words.
Why it matters
Choose the right tool. If the problem is that a judgment will be enforced, seek a stay. If the problem is what a party will do in the meantime, seek an interim order. An interim order that leaves the judgment below in operation may achieve nothing.
Answer the three questions. The affidavit should identify the arguable grounds, the concrete prejudice, and the minimum order needed to prevent it.
What it does not decide
Kawari Fortune does not displace McHardy v Prosec for stays, though the two decisions share a rejection of the “exceptional circumstances” threshold. It also says nothing about interim relief under section 155(4) of the Constitution; later cases hold that provision is available only where no other law supplies the power.
Recent cases applying it
- Akiko v Ekepa [2023] PGSC 90; SC2442 — paragraphs 24 to 26 quoted as the criteria for interim orders under section 5(1)(b), as recently applied in Kiponge v Schnaubelt (2023) SC2360.
- Yai-Pupu v Yai-Pupu [2023] PGSC 16; SC2364 — the three questions applied, as adopted by the full Court in Amanab Forest Products Ltd v Sai’i (2021) SC2089.
- Uhadi Iarogaha Incorporated Land Group v Hari [2021] PGSC 113; SC2207 — paragraph 25 quoted; relief under section 155(4) refused because sections 5(1)(b) and 19 supplied the jurisdiction.
- Amanab Forest Products Ltd v Sai’i [2021] PGSC 70; SC2142 — the same approach on a contested application for injunctive relief.
Sources
- Kawari Fortune Resources Ltd v Apurel [2015] PGSC 90; SC1614 (Injia CJ, Logan and Kangwia JJ, 23 February 2015)
- Makeng v Timbers (PNG) Ltd [2008] PGNC 78; N3317 (Injia DCJ)
- Supreme Court Act (Chapter 37) — ss 5(1)(b), 5(3), 19; Companies Act 1997 — ss 67, 395, 408
- Akiko v Ekepa [2023] PGSC 90; SC2442; Yai-Pupu v Yai-Pupu [2023] PGSC 16; SC2364; Uhadi Iarogaha Incorporated Land Group v Hari [2021] PGSC 113; SC2207; Amanab Forest Products Ltd v Sai’i [2021] PGSC 70; SC2142
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