Pacific Alliance Strategic Insurance Ltd v Philemon, Minister for Finance & Treasury [2003] PGNC 57; N2442 (23 June 2003)

N2442

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS 40 of 2003

BETWEEN

PACIFIC ALLIANCE STRATEGIC INSURANCE LIMITED
Plaintiff

AND

BART PHILEMON, MP
MINISTER FOR FINANCE & TREASURY
First Defendant

AND

SALAMO ELEMA
INSURANCE COMMISSIONER
Second Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Waigani : Sevua, J
2003 : 2nd April &
26th June

ADMINISTRATIVE LAW – Judicial review – Leave application – Time within which to apply – Delay – No satisfactory reason for delay.

PRACTICE & PROCEDURE – Prerogative writs – Centiorari – Time limit not complied with – Application out of time - Reason for delay unsatisfactory – Leave refused.

Cases cited:
Application of Gurupa (1990) unreported, N856.
NTN Pty Ltd v. PTC [1987] PNGLR 70
Application of Evangelical Lutheran Church of PNG [1995] PNGLR 276
Kekedo v. Burns Philp (PNG) Ltd & Ors [1988-89] PNGLR 122

Counsel:
A. Kwimberi for Plaintiff
T. Elemi for Second Defendant

26th June 2003

SEVUA, J: This is an application by the plaintiff for leave to review the decision of the first defendant made on 9th August 2002.

The facts which are not in dispute are these. On 23rd May 2001, the plaintiff applied for a general insurance license by way of a letter addressed to the second defendant. In the letter, the plaintiff anticipated that it would commence operation on 1st June 2001. On 30th October 2001, the second defendant advised the plaintiff that further information and clarifications were required on certain aspects of the application following meetings with the plaintiff and an analysis and evaluation of the application. The areas of concern which required further clarification were reinsurance, cash flow projections, shareholder information, capitalization and exposure, use of the term "insurance", other lines of business and clientele base.

The second defendant advised the plaintiff in the same letter that it wanted to meet with the plaintiff on 1st November 2001. The plaintiff did not meet the second defendant and it failed to attend subsequent meetings requested by the second defendant. Then on 18th January 2002, a little over two and a half months after the second defendant’s letter, the plaintiff responded to the second defendant’s letter. The plaintiff’s response addressed only three of the concerns raised by the second defendant, namely; reinsurance, cash flow projections and shareholding.

On 1st February 2002, the second defendant responded to the plaintiff’s letter of 18th January 2002 and requested the plaintiff to do a presentation of its response as substantive alterations had been made. The plaintiff refused, saying the changes were merely a continuation of its proposal. The second defendant had addressed those issues raised in its letter of 1st February 2002.

On 6th February 2002, the plaintiff wrote to the second defendant and requested that a decision be made. The second defendant responded on 15th February 2002 and advised that most of its concerns in its letters of 30th October 2001 and 1st February 2002 had not been addressed therefore requested the plaintiff to do that. On 26th February 2002, the plaintiff responded by facsimile and demanded that a decision be made on its application as soon as possible.

On 27th February 2002, the second defendant requested confirmation by the plaintiff to a meeting of 1st March 2002 as the plaintiff’s consultant, Dickson Popo, had confirmed that meeting. Nevertheless, the plaintiff responded again on 27th February 2002 reiterating its faxed letter of 26th February 2002. The plaintiff failed to attend the meeting on 1st March 2002. On 1st March 2002, the second defendant advised the plaintiff that it (second defendant) was not satisfied with the application as there were outstanding issues that remained unresolved.

The plaintiff’s proposal was therefore rejected and it was advised of its right to appeal within 30 days to the Minister under the Insurance Act. On 4th March 2002, the plaintiff exercised its right of appeal pursuant to s.19 (7) of the Act and appealed to the Minister for Finance.

On 28th March 2002, former Minister of Finance, Andrew Kumbakor, instructed the second defendant to sign, issue and gazette a license to the plaintiff, although the Minister was not authorized to do that pursuant to the Determination of Ministerial Responsibilities. On 2nd April 2002, the Minister for Finance referred this matter to the Minister for Treasury and former Prime Minister Morauta. On 4th April 2002, the former Prime Minister’s office requested a brief as, "The Prime Minister and Treasurer has received an appeal under s.19(7) of the Insurance Act 1999........". The second defendant did provide a brief as requested.

On 9th August 2002, the Minister for Finance and Treasury, Bart Philemon, upon considering matters from both the plaintiff and the second defendant, rejected the appeal by the plaintiff.

There is undisputed evidence that the plaintiff had written to the Prime Minister, Sir Michael Somare on 27th November 2002, Chief Secretary on 9th December 2002 and Acting Prime Minister and Minister for Trade and Industry, Dr. Marat, on 1st November 2002. There is also undisputed evidence that the Chief Secretary wrote to the first defendant on 9th December 2002 and the Acting Prime Minister and Minister for Trade and Industry wrote to the first defendant on 1st November 2002. The Minister for Justice also wrote a letter in support of the plaintiff to the first defendant on 23rd October 2002. I refer to the correspondences because I consider this aspect relevant when considering the issue of delay. By law, the plaintiff has four (4) months from 9th August 2002 to exercise its right to seek leave to review. However, as it transpired from the evidence, instead of considering its legal right the plaintiff decided to spend time seeking political support from political leaders.

The plaintiff’s originating summons and the notice of motion seeking leave were filed on 4th February 2003, almost six (6) months after the first defendant had rejected the plaintiffs appeal. Order 16 of the National Court Rules provides the Court the jurisdiction to deal with applications for judicial review and an application for leave is akin to a condition precedent to the right of review because an applicant is not entitled to a judicial review unless he is first granted leave.

Order 16 Rule 4 governs delay in applications for judicial review. Under this rule, the Court has a discretionary power to refuse leave to an applicant where there has been undue delay. As I alluded to above, the plaintiff’s originating process and application for leave were filed almost six (6) months after Ministerial refusal on 9th August 2002. Order No. 2 sought by the plaintiff in its originating summons is for certiorari to quash the first defendant’s decision of 9th August 2002. Order 16 Rule 4 (2) clearly states that the relevant period to apply for certiorari for the purpose of quashing a judgment or order etc, is four months after the date of that judgment, order etc.

Under Rule 3 (5), leave can be granted where the Court is satisfied that the applicant has sufficient interest. I have no doubt that the plaintiff in this case has sufficient interest in this matter. However, since it is seeking a certiorari to bring the Minister’s decision into this Court to be quashed, the plaintiff must satisfy the requirement of Rule 4 (2), and strictly speaking, the plaintiff has failed to satisfy that requirement.

There is a long line of authorities in this jurisdiction which deals with delay and Mr Elemi has referred to some of those cases. It is not necessary to cite all these cases however, the Application of Gurupa (1990) unreported N.856; NTN Pty Ltd v. PTC [1987] PNGLR 70 and the Application of Evangelical Lutheran Church of Papua New Guinea [1995] PNGLR 276 deal with the issue of delay. In all those cases, the Court had refused the applications because of delay.

In the present case, counsel for the plaintiff, Mr Kwimberi submitted that the plaintiff received the Minister’s decision on 27th September 2002, therefore the four months in Rule 4 (2) commenced from that date so that the plaintiff’s delay in applying for leave is only three days.

With respect that submission is misconceived for two reasons. Firstly, that submission is factually incorrect because the application was filed on 4th February 2003. Secondly, the four months time stipulated under Rule 4 (2) runs from the date in which a judgment, order, conviction or decision is made. The rule does not say anything about time running from the date of receipt by post of such judgment, order, conviction or decision.

Mr Kwimberi also submitted that when the plaintiff received the first defendant’s decision on 27th September 2002, it went through administrative processes as this matter had attracted a lot of interest from the Prime Minister, Minister for Justice and Attorney General and various departments. So the proceeding was filed at the time negotiations and discussions were still being pursued.

Again, I must say with respect that the plaintiff had no good reason to delay making this application. There is no evidence before this Court that, the plaintiff was guaranteed the grant of the license if he proceeded with negotiations with Parliamentarians including the Prime Minister and Deputy Prime Minister. The fact is the Insurance Commissioner had refused the plaintiff’s application, therefore instead of the plaintiff doing the rounds with Parliamentarians to seek political support, it should have exercised its right to apply for leave to review within the time limit stipulated by law. This Court is not satisfied that the plaintiff can use its excuse for mustering political support as a valid reason to be granted leave.

The law is clear and I am not convinced that the plaintiff has satisfied this Court so to exercise the discretion in its favour. The plaintiff had the right to apply for leave to review, it chose instead not to pursue that course but seek political support. Whilst the plaintiff has sufficient interest in this mater, it has failed to exercise its right within the ambit of the law.

The issue of arguable case does not go in favour of the plaintiff either. The second defendant’s evidence is largely uncontradicted. The plaintiff was accorded plenty of time and opportunity to meet with the second defendant to iron out the various issues raised by the second defendant. Unfortunately, the plaintiff failed to attend meetings requested and arranged by the second defendant. It is not as if, the second defendant, without any proper consideration at all, just refused the plaintiff’s application.

By law, the duty to grant or refuse a general insurance license lies on the second defendant, the Insurance Commissioner, by virtue of s.18 of the Insurance Act 1995. The grant of a license is subject to the satisfactory compliance with the licensing requirements which have been formulated under the Act. The applicant must therefore satisfy the requirements before a license is granted. That is not only the lawful requirement but good commercial common sense since, after all, it is a very serious business to become an insurer, reinsurer, broker, underwriter or loss adjuster. It is a business which involves a lot of money therefore it is wise and prudent for an applicant to satisfy the necessary licensing requirements.

But most importantly is the procedure for judicial review. Having read the grounds of the relief sought by the plaintiff in its statement filed pursuant to Order 16 Rule 3 (2), I can’t help but wonder why the plaintiff is seeking a review when its ground is tantamount to grounds of an appeal. The grounds in support of the leave application are grounds that should have been raised in the appeal to the first defendant. They are not proper grounds for a review under Order 16.

I consider that the plaintiff and its lawyers have misconceived the purpose of review. A review is strictly speaking, not an appeal, therefore the usual grounds of appeal cannot be grounds of review. Judicial review is not concerned with a decision but with the process by which the decision is arrived at. That is trite law. The Supreme Court in Kekedo v. Burns Philp (PNG) Ltd & Ors [1988-89] PNGLR 122 highlighted that principle, which many lawyers and their clients do not seem to understand and appreciate.

It was said by that Court at p.124 that:

"The purpose of judicial review is not to examine the reasoning of the subordinate authority with the view to substituting its own opinion. Judicial review is concerned not with the decision but with the decision-making process."(my emphasis)

In my opinion, there is no arguable case for leave to be granted. The plaintiff’s grounds for relief obviously seeks to review reasons in the decision of the Minister, however, that is not the purpose of judicial review. I do not see how the plaintiff can say there is procedural irregularities or procedural unfairness. The plaintiff was accorded natural justice. It was given time and opportunity to attend several meetings at the request of the second defendant to resolve various issues yet it chose not to attend those meetings. The Court notes that those meetings were relevant to discuss and resolve the matters raised by the second defendant. In my view, the issues raised in the grounds on which leave is sought are the very matters that would have been discussed and settled in meetings arranged by the second defendant had the plaintiff cared enough to attend.

It is the opinion of this Court that the plaintiff has a sufficient interest in this matter, however, it’s delay in applying for leave within the time allowed by the National Court Rules was unreasonable and its attempt in securing political favours do not assist its application. Furthermore, there is no arguable case.

For these reasons, the application for leave is refused and the Court orders that the proceedings be dismissed with costs.
__________________________________________________________________________
Lawyer for Plaintiff : Goma & Kwimberi
Lawyer for First Defendant : Parua Lawyers
Lawyer for Second Defendant: Rageau Elemi & Kikira