N2791

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE AT WAIGANI]

WS 1165 OF 2000

BETWEEN:

PUBLIC OFFICERS SUPERANNUATION FUND BOARD
Plaintiff

AND:

PAUL PARAKA trading as PAUL PARAKA LAWYERS
Defendant

AND:

PAUL PARAKA trading as PAUL PARAKA LAWYERS
Cross-Claimant

AND:

PUBLIC OFFICERS SUPERANNUATION FUND BOARD
Cross-Defendant

Waigani: Davani, .J
2004: 	25, 26 August
2005:	8 February

Practice and Procedure – summary judgment- Supreme Court Appeal filed – dismissal of Supreme Court Appeal – appeal process exhausted – application to set aside summary judgment – abuse of court process – National Court Rules O. 5 R. 8 (1) (b); O. 12 R..R (8) (5), 38, 39, 40 (1) (c); Constitution 
ss. 155 (4) and 185

Practice and Procedure – Retainer agreement – outstanding legal costs – cross-claim – bill of costs not taxed – no cause of action

Lawyers – Misconduct and discipline – "improper conduct as a lawyer" – Enquiry before Lawyers Statutory Committee – application to stay enquiry pending hearing of cross-claim – discussion whether enquiry before statutory committee sub-judice proceedings before National Court – Professional Conduct Rules

Texts and cases cited:
 re Swire, Mellor v. Swire (1885) 30 Ch.D.239
 Anlaby v Praetorius (1888) 20 QBD 764
 Samamoto Ltd v. Lim Ng Leong and Others N1966
 Bailey v Marinoff (1971) 125 CLR 529
 Attorney General v. The Times Newspapers Ltd [1973] 3 ALL ER 54
 Millangos v George Frank Textiles Ltd [1976] AC 443
 Evangelical Lutheran Church of New Guinea v Peninsula Hotels Pty Ltd [1977] PNGLR 147
 Public Prosecutor v. Nahau Rooney [1979] PNGLR 448, 
 Hugo Berghuser v Joseph Aoae [1982] PNGLR 379 
 Aundak Kupil & Kauke Kensi v. The Independent State of PNG [1983] PNGLR 350
  Supreme Court Ref No. 3 of 1984; Ex parte Rowan Sidney Callick & Joe Koroma [1985] PNGLR 67
 Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112, 
 Curtain Bros (Qld) Ltd & Kinhill Kramer Pty Ltd v the Independent State of PNG [1993] PNGLR 285
 In the matter of the Organic Law on National Elections and in the matter of Returns for the Southern Highlands Provincial Electorate: Dick Mune v Paul Poto SC508
 Hornibrooks NGI Pty Ltd v Lihir Management Company Pty Ltd and Waste Process
 Engineering Pty Ltd (Administrator appointed) N1735 
 Simon Ketan v. Lawyers Statutory Committee N2290
 Jack Livinai Patterson v National Capital District Commission N2145 
 Rimbink Pato v. Anthony Manjin, Abraham Huiapmuni aka Abraham Muni, Bruno (a male) & Masket Iangalio SC622
 Wilson Kamit v. Marshall Cooke N2369
 Sarea Soi trading as Soi and Associates Lawyers v Imawe Kewa Land Group Inc. N2560
 Edward Manu trading as Manu and Associates Lawyers v Honiri Timber Resources  Development Limited N2597
 Halsburys Laws of England 4th Edn. Vol. 9(1)

Counsel:
H. Nii and N. Tame for the Defendants/Applicants
T. Nongorr and R. Lindsay for the Plaintiffs/Respondents
C. Makail for the Lawyers Statutory Committee

DECISION
8 February 2005

Davani .J:	I heard applications filed by Paul Paraka Lawyers for the defendant and O’Briens Lawyers for the Lawyers Statutory Committee and reserved for ruling on these applications. Gadens Lawyers for the plaintiff, strenuously opposed the application filed by Paul Paraka Lawyers. They were supported by O’Briens Lawyers.

Applications

The Notice of Motion filed by Paul Paraka Lawyers on 28th April, 2004 reads as follows;

"1.	That the Lawyers Statutory Committee of the PNG Law Society comprising Royale Thompson, Margaret Parua, Fraser Pitpit, David Manoka, Melchoir Togolo and Henry Henry be restrained from sitting and conducting any enquiry and or determination of the allegation contained in the Notice of Enquiry dated 29th July, 2003, and scheduled for hearing on 29th April, 2004 or any other dates before or thereafter pending the determination of the cross-claim in these proceedings and proceedings in WS No. 79 of 2000;
2.	That orders of Justice Kandakasi in terms of paragraphs 2 and 3 granted on the 19th December, 2002, and entered on the 10th February, 2003 be set aside as being irregularly obtained pursuant to the second limb of ss. 155(4) and 185 of the Constitution, and O. 12 R. 8(5) of the National Court Rules;
3.	In addition to, or alternatively, the whole of the orders of Justice Kandakasi granted on the 19th December, 2002, and entered on the 10th February, 2003 be stayed pending the determination of the Applicant’s cross-claim by the Court pursuant to O. 12 R. 39(2) of the National Court Rules;
4.	Alternatively, that orders of Justice Kandakasi in terms of paragraphs 2 and 3 granted on the 19th December, 2002, and entered on the 10th February, 2003 be stayed pending the determination of the applicant’s cross-claim;
5.	That the cross-defendant or its lawyers (Gadens Lawyers) pay into Court the sum of K3,063,265.32 forthwith pending the determination of the cross-claim;
6.	Further or in addition, general directions for the manner, conduct and prosecution of the cross-claim and other orders as the court deems fit and appropriate pursuant to O. 8 R. 41 of the National Court Rules;
7.	Costs be in the cause;
8.	Time be abridged;
9.	Such further and other orders as the Court deems fit."

The orders sought by the applicant are set out in Mr Nii’s written submissions as;

"1.	That the court exercise its inherent powers and set aside Orders 2 and 3 of Justice Kandakasi’s orders as being irregularly entered and or mistakenly granted.

2.	That the court direct the cross-claimant and his lawyers to pay into court the sum of K3,063,865.32 to be kept in Trust until the conclusion of the cross-claim.

3.	That the whole of the orders of Justice Kandakasi granted on the 19th December 2002 be stayed pending the conclusion of the cross-claim.

4.	That the LSC be restrained from conducting the enquiry against the applicant until the conclusion of the cross-claim.

5.	Costs in the cause."

The defendant/applicant (‘applicant’) relies on the affidavits of Paul Paraka filed on 28th April, 2004 and 22nd July, 2004. Counsel also relies on his written submissions filed on 6th August, 2004. The plaintiff/respondent (‘respondent’) does not rely on any affidavit material.

The Notice of Motion filed on 7th May, 2004 by O’Briens Lawyers for the Lawyers’ Statutory Committee (‘LSC’) reads;

"1.	That the applicants (members of the Lawyers Statutory Committee) be granted leave to join in the proceeding, and be heard on the Defendant/Cross Claimant’s Notice of Motion filed on 28th April, 2004 pursuant to O. 5 R. 8(1) (b) of the National Court Rules as Second Plaintiff;
2.	That term 1 of the defendant/cross claimant’s Notice of Motion filed on 28th April, 2004 be dismissed as being an abuse of process pursuant to O. 12 R. 40(1) (c) of the National Court Rules;
3.	Costs of the application and whole proceeding to the Lawyers Statutory Committee;
4.	Time for entry of these orders be abridged to the date of settlement by the Registrar which shall take place forthwith;
5.	Any further orders this Honourable court deems fit."

The orders sought in paragraph one of this Motion, was endorsed by the court as consent orders, on 12th May, 2004, before the hearing of these applications. 

I should state at the onset that Mr Makail’s submissions were in support of the respondents submissions and which I have fully considered.

Facts and background

The applicant is a former lawyer for the respondent. Both parties had entered into a Retainer Agreement for the applicant to provide legal services to the respondent for a period of thirty months commencing 1st January 1999 and expiring 30th June 2001. (‘the Retainer’). The Retainer was terminated in December 1999. After termination of the Retainer by the respondent, the applicant collected judgment sums of K2,248,620.00 owed to the respondent from the State arising from a judgment in favour of the respondent against the State. The applicant claimed it had authority to collect the monies from the State because these monies were for outstanding legal fees owed to it by the respondent. However, the respondent submits that it does not owe any monies to the applicant but that the applicant owes it money. The respondent then filed these proceedings for recovery of those monies on which proceedings the applicant filed a Defence and Cross-Claim against the respondent for unpaid legal fees owing to it from the respondent for the sum of K3,127,435.48. The respondent also lodged a complaint with the Lawyers Statutory Committee citing Paul Paraka for breach of the Lawyers Professional Conduct Rules.

The gist of the applicants Defence and Cross-Claim was that the money was lawfully transferred to the applicant’s operating account from its trust account on account of outstanding legal fees which were in excess of K5,376,055.48 based on the Retainer and letter of authority from the respondent to the applicant dated 31st August 1999. The Cross-Claim was for the balance of K3,127,435.48 to be paid to the applicant by the respondent.

Thereafter, the respondent filed an application for summary judgment made pursuant to O. 12 R. 38 of the National Court Rules (‘NCR’) supported by the affidavits of Patricia Taureka sworn on 27th February, 2002 and Ces Iewago, respondent’s then Managing Director, sworn on 13th March, 2002.

The applicant also filed a Notice of Motion on 13th March, 2002, seeking to dismiss the whole proceedings as an abuse of process and failing to disclose any reasonable cause of action. The applicant relied on the affidavits of Paul Paraka and Diu Yamai, both sworn on 13th March, 2002.

On 13th and 20th March, 2002, the applicant filed and served on the respondent Notices to Cross-Examine Mr Ces Iewago and Ms Patricia Taureka on their respective affidavits, notices given pursuant to s. 36 of the Evidence Act.

On Tuesday, 10th December, 2002, both motions came before His Honour Justice Kandakasi. When the matter was called, counsel for the applicant submitted that he wished to cross-examine Ms Taureka and Mr Iewago on their respective affidavits filed in support of the respondent’s application for summary judgment. The court refused the application and set the motions down for hearing on Friday, 20th December, 2002, at 9.30am. 

The applicant then filed an appeal in the Supreme Court against that interlocutory decision of Justice Kandakasi in proceedings SCA No. 122 of 2002. At the same time, the applicant also filed an application for stay of the substantive National Court proceedings including the hearing of the motion for summary judgment pending determination of the appeal.

On 19th December, 2002, the two motions before the National Court were listed for hearing. Before the hearing of the motions, counsel for the applicant informed the learned judge of the existence of the appeal and the application for stay, and asked the Court not to hear the applications but for the stay application in the Supreme Court to be heard before the applications and that a Judge was being arranged to hear the stay application in the Supreme Court. However, the Judge proceeded to hear the applications.

In summary, the respondent’s submissions inter alia, in that application, were that those orders for taxation and audit were entirely sensible. It submitted the taxation of contested bills is the only logical and sensible way for the contest on those bills to move forward, and to move toward resolution of the applicant’s cross-claim.

The respondent also submitted that in fact, monies are owing from the applicant to it for outstanding legal fees, which were wrongfully withheld by the applicant after the applicant collected the judgment sums of K2,248,620.00 referred to earlier.

The same day, 19th December, 2002, His Honour Kandakasi .J gave judgment in favour of the respondent on the respondent’s claim and ordered the applicant to pay K2,248,620.00 to the respondent. The terms of these orders are;

"(1)	That summary judgment pursuant to O. 12 R. 38 of the National Court Rules is entered for the plaintiff for K2,248,620.00;
(2)	That all the defendant’s files on which he or his firm acted for the plaintiff (and the defendant’s trust account) be audited by a chartered accountant at the defendant’s costs;
(3)	That all files on which the defendant acted for the plaintiff be taxed by the Court Taxing Officer;
(4)	That interest pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act Chapter 52 be paid by the defendant to the plaintiff;
(5)	Cost of the proceedings be paid by the defendant to the plaintiff."

The applicant lodged an appeal to the Supreme Court against that decision, in SCA 123 of 2003, the grounds of appeal in summary being that the orders were granted despite the fact that the applicants Defence and Cross-Claim were on foot, and which were not addressed by the court. Further grounds were that paragraphs 2 and 3 of the orders of 19th December, 2002, were made in circumstances where there were no pleadings or that the pleadings did not plead those various issues, hence judgment was irregularly granted. 

The Supreme Court ultimately dismissed the appeal for want of prosecution. After the dismissal of the appeal, summary judgment took effect.

On 14th April, 2004, the applicant paid the respondent the full amount of the judgment debt of K2,248,620.00, together with interest from the date the applicant received the money into its trust account to the date of payment, calculated at K745,265.32 and costs at K70,000.00. The applicant paid these by BSP Bank cheque no. 379274 of K3,063,886.32 through the respondent’s lawyers Trust Account under cover letter of that same date.

The enquiry before the Lawyers Statutory Committee, proceedings now sought to be stayed, although arising from these same facts, is in relation to a claim for breach of professional conduct by Paraka Lawyers principal, Paul Paraka. The charges are contained in Notice of Enquiry dated 29th July, 2003 which is annexure ‘P’ to Paul Paraka’s affidavit sworn on 28th April, 2004, the terms of which are set out in full below.

The applicants challenge is in relation to Kandakasi .J’s orders of 19th December, 2002. It also seeks to restrain the Lawyers Statutory Committee from conducting any enquiry or determination against the applicant as per the Notice of Enquiry dated 29th July, 2003. To the Notice of Enquiry is attached a cover letter from the Lawyers Statutory Committee dated 20th July 2003, which letter is addressed to "Mr Paul Paraka, Paraka Lawyers…". The letter is addressed to Mr Paraka personally, not to the firm Paraka Lawyers. The letter, amongst others, gives Mr Paraka the opportunity to respond to the charges continued in the Notice of Enquiry. The charges read; 

"Count 1:	you engage in conduct that was unprofessional in that;

(1)	About 1999 you were retained by the public Officers Superannuation Fund (POSF) through the execution of two (2) Retainer Agreements. The first of these agreements was executed on the 1st December 1997 for a period of twelve (12) months and the second executed on the 1st January 1999 for a period of thirty (30) months; and
(2)	About 1999 you were instructed by the said client to act in a debt recovery claim against the State in National Court proceedings numbered WS No. 262 of 1999; and
(3)	Upon receiving the judgment you unilaterally withheld the monies as payment offsetting the legal fees owed to you by POSF in the sum of K935,364.78 and for fees for the premature termination of the second Retainer Agreement, and
(4)	Notwithstanding your actions of withholding the total judgment debt, you took out a writ of summons registered WS No. 79 of 2000 in which you sued the POSF for K350,084.90 of the monies, which you had,

Count 2:	upon receiving the decision of the national court on or about the 21st October 2001, to which you said client POSF received three (3) installment cheques in the sum of K2,248,620.00, you failed to inform the said client of the decision of the court thereby contravening Rule 13 (i) and Rule 23 (2) (a) of the Professional Conduct Rules 1989.

Count 3:	on or about the 14th July 2000, knowing that POSF was represented by Gadens Lawyers, you communicated directly with the Principal Legal officer of Public Superannuation Fund Board regarding the National Courts decision in which judgment debt was handed down in favour of POSF thereby breaching Rule (2) (3) of the Professional Conduct Rules 1989.

Count 4:	you failed to respond to the Committee’s letter of the 11th January 2002, requesting you to respond to the complaint filed against you on the 11th December 2001, within the next 21 days thereby contravening Rule 3 (d) of the Professional Conduct Rules 1989."

Submissions for and against motions filed by both Paraka Lawyers and O’Briens Lawyers and submissions by Gadens Lawyers.

I will deal with each order sought in the motion separately and also at the same time address the responses by the applicant, the respondent and the LSC. I deal firstly with the applicants motion to set aside judgment.

Order no. 2 sought in the applicant’s notice of motion to set aside orders as being irregularly obtained; As denoted in the facts portrayed above, after the dismissal of the appeal to the Supreme Court, the applicant has now returned to the National Court asking the National Court to invoke its powers to set aside Kandakasi .J’s orders of 19th December, 2002, which orders were the subject of the appeal to the Supreme Court. The applicant claims the orders were irregularly entered and relies on ss. 155(4) and 185 of the Constitution and O. 12 R. 8 of the National Court Rules to set aside that judgment. I set these provisions out in full in the latter part of this decision.

On the preliminary issue of Res Judicata raised by applicant’s counsel, particularly as to issue estoppel and cause of action estoppel, the applicant submits they do not apply because the appeal was dismissed on technicalities and not on the merits. He submits that the issues he now raises, can be raised in the National Court. In saying that, he relies on the case Samamoto Ltd v. Lim Ng Leong and Others N1966, a judgement of Sevua .J. He quotes Sevua .J at pg. 7;

"Whilst I agree that previous application similar to this was dismissed, I consider that the basis for such dismissal does not preclude the plaintiffs from making the application…that application was dismissed for want of prosecution…the merits of application were not determined so it was dismissed on a mere technicality…"

In the Samamoto Ltd (supra) case, the application for dismissal for want of prosecution was heard in the National Court, so counsel could, relying on the principle of Res Judicata, institute the same action again, in the same court, because the matter had not been determined on the merits. However, in this case, the appeal that was struck out for want of prosecution, was in the Supreme Court. If the applicant had refiled the appeal in the Supreme Court, then that court would be the appropriate forum for this issue to be raised. In this case, the application being made in the National Court is a fresh application. Whether it is rightly or wrongly made are issues dealt with in this judgment. The issue of Res Judicata is therefore irrelevant to this application.

In relation to the application for stay now before me, events may have overtaken this application because the judgment debt has already been satisfied. Furthermore, it is now too late in time to consider an application to set aside because the application was filed some two years after the judgment was entered. This court can dismiss the applicants application on the grounds of delay and judgment debt having been satisfied. However, because the applicant has raised extensive arguments on the various areas of the law in relation to this application, I will consider them, in any event.

Firstly, the applicant claims judgment was irregularly entered. The applicant submits that the court should set aside judgment pursuant to the second limb of ss. 155 (4) and 185 of the Constitution and O. 12 R. 8 (5) of the National Court Rules. I will deal firstly with submissions made under O. 12 R. 8 (1 – 5) of the NCR. This rule reads;

"8.	Setting aside or varying judgment or order;

1.	The Court may, on terms, set aside or vary a direction for entry of judgment where notice of motion for the setting aside or variation is filed before entry of the judgment.

2.	The court may, on terms, set aside or vary a judgment –

(a)	where the judgment has been entered pursuant to O. 12 Division 3 (default judgment); or
(b)	where the judgment has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or
(c)	when the judgment has been entered in proceedings for possession of land pursuant to a direction given in the absence of a person and the court decides to make an order that the person be added as a defendant.

3.	The court may, on terms, set aside or vary an order –

(a)	where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or
(b)	where notice of motion for the setting aside or variation is filed before entry of the order.

4.	In addition to its powers under sub-rules (1), (2) and (3), the court may, on terms, set aside or vary any order (whether or not part of a judgment) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.

5.	Nothing in this rule affects any other power of the court to set aside or vary a judgment or order."

The respondent in opposing the application, submits that O. 12 R. 8 (1) of the NCR does not apply, because the order for judgment has been entered, and that this (the entry) occurred before the application to set aside was filed. In this instance, the order for summary judgment was entered on 10th February 2003 and the applicants motion to set aside was filed on 28th April 2004, one year, two months later. Definitely, this application is made too late in time.

I note also that none of the sub-categories of O. 12 R. 8(2) apply because this was a summary judgment, not a default judgment. Both parties attended and presented arguments at the hearing of the application for judgment. Furthermore, the orders are also not in relation to the possession of land, so O. 12 R. 8(2) (c) does not apply.

Additionally, that neither of the grounds set out in the two sub-categories of O. 12 R. 8(3) apply as the judgment was not ex-parte and this motion was filed well after the order was entered.

As for O. 12 R. 8 (4), it provides that the Court may set aside or vary any order except insofar as the order determines any claim for relief. In this case, the nature of the order for summary judgment determined the whole claim, as such O. 12 R. 8(4) does not apply.

O. 12 R. 8(5) only states that this rule does not affect any of the courts other powers to set aside or vary a judgment or order, so this then prompts me to consider the applicant’s submissions to set aside under s. 155 (4) and 185 of the Constitution.

Constitution – s. 155 (4)

This provision of the Constitution reads;

"(4)	Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders are necessary to do justice in the circumstances of a particular case."

Relying on Aundak Kupil v. the State [1983] PNGLR 350, the applicant submits that this provision enables the court to tailor its remedies to the circumstances of an individual case to ensure that the primary rights of a party are protected. The applicant submits that its primary rights is to have its cross-claim heard by the court together with all relevant issues in relation to outstanding legal fees and breach of retainer agreement to be conclusively determined by the court. The applicant submits that it is therefore "necessary to do justice in the circumstances of the case" (s. 155 (4) of the Constitution) for reasons I refer to in my discussions on s. 185 of the Constitution, in the latter part of this judgment. The applicant submits that for those reasons, the National Court has inherent powers to set aside orders no. 2 and 3 of the trial judge. 

Additionally, the applicant submits that it is its primary right to have his cross-claim and all other issues relating to the retainer, to be heard and conclusively determined by the court.

The applicant referred to Aundak Kupil (supra) where Bredmeyer .J held;

"those cases have decided that the latter words [of s. 155 (4)] are disjunctive from the former, that is the latter orders do not have to be in the nature of prerogative writs. The section is a grant of power or of jurisdiction. It does not affect the primary rights of parties which are determined by the substantive law. It is no warrant for the court allowing a new cause of action for example. The section encompasses remedies, adjectival and procedural orders. It enables the court to tailor its remedies to the circumstances of an individual case to ensure that the primary rights of a party are protected".

His Honour continues;

"…The section has been used to justify a Mareva injunction and a declaration of right. I consider it could be used to justify the arrest of a ship on the issue of a writ, on Anton Pillar order and the issue of a writ and the entry of judgment in a foreign currency (now widely allowed in England as a common law development following Millangos v George Frank Textiles Ltd [1976] A.C 443)".

In that judgment, Bredmeyer .J ordered the periodic payment of damages rather than a lump sum. The existing common law then did not permit an order for periodic payment of damages. However, Bredmeyer .J, relying on the courts inherent power to make "…such other orders as are necessary to do justice in the circumstances of a particular case" (s. 155 (4) of the Constitution), then ordered periodic payments. The reasons justifying such an order are detailed, one reason being "…A lump sum payment based on a three-year life span would be unjust to the plaintiffs if they should live longer than three years and to the defendant if they should die before then." (pg 364 – 385). 

However, the distinction between Aundak Kupi (supra) and this case is that in Aundak Kupil (supra), the applicants were applying for orders following a process which was legally correct and available to them. In this case, after entry of summary judgment, the effect is that the Defendant does not have a Defence or no arguable Defence. The law is that the plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of law and fact (see Hornibrooks NGI Pty Ltd v Lihir Management Company Pty Ltd and Waste Process Engineering Pty Ltd (Administrator appointed) N1735 dated 18th June 1998). The court entered summary judgment after having reviewed the affidavit of Paul Paraka and ruled that it was a foregone conclusion from that affidavit that monies should be repaid to the respondent. (pg. 27 of court transcripts attached as annexure ‘B’ to Paul Paraka’s affidavit sworn on 22nd July 2004). 

Being dissatisfied with that decision, the applicant then lodged an appeal to the Supreme Court which was dismissed for want of prosecution. The applicant now asks the court to protect its primary rights in a situation where this court is unable to properly exercise its powers because there would be serious procedural and jurisdictional flaws if it did.

Secondly, the applicant insists that the summary judgment must be set aside because briefly, there are anomalies or defects in the pleadings and that the rules do not provide for the kind of orders made by the learned judge and which were ‘mistakenly’ made.

These issues as I said earlier, should have been raised in the appeal court. If it was or was not raised in that court, then counsel cannot raise it now and ask the court to give favourable consideration to it. The reasons advanced by counsel for the applicant are aimed at asking for a second chance and using whatever avenues that are available to it to do so.

In my view, the court should be hesitant to entertain submissions of this nature because of the very fact that if the applicant had been aggrieved by the orders of the trial judge, that it should have actively pursued the Supreme Court appeal. The arguments raised by the applicant in relation to the court revisiting its own decision and rectifying its own error or mistakes is again repeated in this part. The court would in fact be embarking on what is clearly procedural error by entertaining arguments that should be raised in an appeal court. Again, the applicant is aggrieved by what had occurred in the trial court. It is clearly an abuse of the court’s process by the applicant now rejuvenating arguments it could have raised in the appeal court but failed to do because of reasons known to itself which then resulted in the appeal being struck out for want of prosecution. The applicant cannot have two bites of the cherry. I accept the respondent’s submissions that reliance is had by the applicant on this provision because there are no provisions which support the applicant’s submissions or which the applicant could sensibly rely on. I accept also that the purpose of s. 155 (4) of the Constitution is not to create new substantive rights when none exists. I, will not do that.

I find that these submissions are not only misconceived but misleading as well.

Constitution – s. 185

In applying to set aside the summary judgment, more specifically, to set aside the trial judge’s orders no. 2 and 3, the applicant also seeks to rely on s. 185 of the Constitution. S. 185 reads;

"185.	Lack of procedural provision

If in the circumstances of a particular case before a court, no provision, or no adequate provision is made in respect of a matter of practice or procedure, the court shall give ad-hoc directions to remedy the lack or inadequacy."

The applicant submits that in the event the court finds it has no jurisdiction at Common Law and s. 155 (4) of the Constitution, that the court should then give ad-hoc directions under s. 185 of the Constitution to set aside the trial judge’s orders nos. 2 and 3 because this involves matters of "practice and procedure". He submits that this is because there are no express provisions in the National Court Rules for the setting aside of erroneous and baseless orders once entered.

The applicant also requests that the court consider its submissions earlier raised in relation to s. 155(4) of the Constitution and on "mistakes", which I discuss in the latter part of this decision. 

The applicant submits further that by the court’s making those orders, either party will not suffer any repercussions or that the orders will not do injustice to either parties.

The applicant is in fact asking the court to give him another chance because clearly it is aware that there are no other avenues available to it in obtaining a remedy, apart from complying with Kandakasi .J’s orders and proceeding with the hearing now before the Lawyers Statutory Committee. 

The provision states in no uncertain terms that the court can give ad-hoc directions to remedy the lack of or inadequacy of practice and procedure. In this case, there is existing legislated procedure for the applicant to pursue i.e the appeal. It is not as if procedure is non-existent. Can s. 185 be invoked by this court? In Hugo Berghuser v Joseph Aoae [1982] PNGLR 379 at pgs. 382 to 383, the Supreme Court held that s. 185 has no application where the law expressly sets out procedures to bring a matter before the court. In such circumstances, there is no lack of practice or procedure. It held that s. 185 may not be used to amend the law.

Again, in Evangelical Lutheran Church of New Guinea v Peninsula Hotels Pty Ltd [1977] PNGLR 147, there was uncertainty and possible inadequacies on the statutory procedures available to the court relating to appeals from the Liquour Licensing Commission, particularly on material to be furnished to the trial court on appeal. The court then gave ad-hoc directions relying on s. 185 of the Constitution.

In this case, after entry of summary judgment and on appeal to the Supreme Court the Supreme Court on dismissal of the appeal for want of prosecution, held that;

"…It is quite clear to us that even up to the date of the hearing of the present application, neither the draft index nor the draft appeal book has been settled. The appeal is not even ready for hearing. A period of 12 months has gone without an end in sight. The delay is inexcusable. This shows clear case of want of prosecution." (see Annexure ‘H’ to Paul Paraka’s affidavit sworn on 22 July 2004).

This is not a situation where there is "no adequate provision… in respect of a matter of practice or procedure…" (s. 185 of the Constitution) and that "the court shall give ad-hoc directions to remedy the lack or inadequacy." (s. 185 of the Constitution) This is a very clear case where the court in complying with the National Court Rules and existing rules of practice in relation to taxation of costs, has ordered that the applicant’s files be audited. These orders were then appealed and the appeal dismissed. I cannot see the lack of practice and procedure or inadequacy in procedural provisions that the applicant refers to, that would then lead me to exercise powers available to me under s. 185 of the Constitution.

As to the nature of the orders made by the learned judge, more particularly orders no. 2 and 3, these are questions of law that should have been raised at an appeal. Again, relying on Hugo Berghuser (supra), if the law has expressly set out procedure, then s. 185 cannot be relied on. There is no inadequacy in procedure here.

All other arguments raised by the applicant on lack of pleadings etc are misleading and misconceived.

This now takes me to the applicant’s cross-claim which pleads the Retainer that was in existence between the respondent and the applicant and which is now the subject of the proceedings before the Lawyers Statutory Committee. By subject, I refer to the applicants principal’s actions in relying on the Retainer to deduct monies for the applicants legal fees, and for which the LSC has now charged him i.e his actions being unprofessional and unethical.

The defence and cross-claim dated 1st October, 2001 and filed on 11th October, 2001 by the applicant, seeks these reliefs;

1.	A declaration that the sum of K2,248,620.00 was properly transferred into the cross-plaintiff’s operating account in satisfaction of outstanding legal fees entitlement were consistent with Retainer Agreement and Letter of Authority of the Board dated 31st August, 1999.

2.	An order that the cross-defendant pay the cross-plaintiff forthwith the sum of K3,127,435.48 being outstanding fees under the Retainer Agreement. 

The orders of 19th December 2003 were for summary judgment and for a complete audit of the files and for costs to be taxed. Therefore, it is obvious that only after taxation and audit, that monies will then be shown to be owing or overcharged. As submitted by the respondent, either party will then or may take the appropriate step/s i.e for the both parties to move for judgment, if necessary, on the monies owing. This appears to be the sensible approach.

Notwithstanding the above, the position at law is also that upon entry of summary judgment, the court has effectively found there to be either a lack of a Defence or no Defence. Justice Kandakasi noted this in his judgment when he held that;

"The material before me consists of the affidavit material filed in support of the application by the plaintiff as well as Mr Paraka’s affidavit which essentially admits to everything that has been pleaded in essence. There is not a single reference to there being a Defence on the merits and he ought to be given the opportunity to be heard on the defence before judgment. Instead the affidavit, in the crux of it, is simply showing or speaking to or deposing to discussions entered into between the parties where the plaintiff appears to have said, yes, you ought to repay in a certain way. But there seems to be no agreement reached, it only concerns repayment. Liability therefore is not the subject of the negotiations it seems to be a foregone conclusion from the affidavit of Mr Paraka himself that the money ought to be repaid to the plaintiff. In these circumstances, I do not see what is the need, what is the purpose, for not granting judgment…" (see pgs. 26 and 27 of National Court (Wgni) transcripts of application for summary judgment heard by Kandakasi .J on 19 December 2002), marked annexure ‘B’ and attached to Paul Paraka’s affidavit sworn on 22nd July, 2004). 

The above statement supports the well established principle, that before entry of summary judgment, an applicant must show or establish the following two elements;

1.	evidence of the facts proving the essential elements of the claim; 

and

2.	that the plaintiff or some responsible person gives evidence that in his belief there is no defence.

(see Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112, and followed in Curtain Bros (Qld) Ltd & Kinhill Kramer Pty Ltd v the State [1993] PNGLR 285).

Mr Paraka filed an affidavit in that application which the learned judge considered. Clearly, there has not been a procedural error for the applicant to rely on s. 185 of the Constitution.

I dismiss these submissions as being misconceived and having no merit.

Mistakes

Furthermore, in its submissions under O. 12 R. 8 (5) of the NCR, the applicant submits that the National Court has power to set aside or vary a judgment or order if such powers are available or are found in Statute Law or Common Law. In submitting that and relying on re Swire, Mellor v. Swire (1885) 30 Ch.D.239, Counsel for the applicant submits that the same court can revisit its own decision and rectify its own error or mistake. The applicant’s lawyer submits that the orders that have been "mistakenly made" are orders numbered 2 and 3 which relate to the audit and taxation of the applicants files.

The applicant’s lawyer submits that these are mistakes because order no. 2 is not claimed as a relief in the Statement of Claim and is not supported or preceded by any pleadings. The applicant’s lawyer also submits that in relation to order no. 2, the auditing of files and trust accounts are functions vested in the PNG Law Society pursuant to part VII (s. 75 – 79) of the Lawyers Act 1986 and that the matter should have been referred to the PNG Law Society and not through the courts.

In relation to order no. 3, the applicant’s lawyer submits that it was not pleaded as a relief in the Statement of Claim and furthermore, that it was not supported by any pleadings in the Statement of Claim. He submits that there is no known process described as the taxing of files which is known in law or the rules of practice of the court. He submits that what is known is the taxing of costs of lawyers in that a party can make an application to the Registrar for the lawyers bills to be taxed, not to the court.

He submits that orders 2 and 3 cannot be granted on an application for summary judgment pursuant to O. 12 R. 38 of the National Court Rules as this provision deals with monetary or damages claims and that orders 2 and 3 are neither monetary nor are they damages claims. He submits that the supporting affidavits of Patricia Taureka and Ces Iewago sworn on 27th February 2002 and 28th February 2002 respectively and filed in support of the plaintiff’s application for summary judgment do not depose to evidence supporting orders sought in paragraphs 2 and 3 of the Notice of Motion. The applicant’s lawyer submits that the orders 2 and 3 are interlocutory in nature and they are not final. They serve as a "means" to an "end" and that therefore there is no utility or purpose for which those orders were intended to serve. He submits that despite the fact that the respondent made submissions for summary judgment to be entered, that there was never any argument presented in support of orders 2 and 3, that the orders made by Justice Kandakasi, were erroneous and without basis. He submits further that because no cause of action was pleaded in the Writ of Summons and Statement of Claim in support of orders 2 and 3, that the respondent could not traverse in his Defence or raise any form of defence to it. He submits that therefore these are mistakes made by the learned judge and that the court should set aside by exercising its inherent powers.

This court must firstly appraise itself on the nature of a ‘mistake’. This principle was discussed in the case In the matter of the Organic Law or National Elections and in the matter of Returns for the Southern Highlands Provincial Electorate: Dick Mune v Paul Poto SC 508 dated 21 September 1996, cited to me by applicant’s counsel. It is a case where three Election Petitions were heard together by the same judge after agreement by the counsel, because they all raised the same or similar facts and issues. The learned judged handed down his decision in respect of the three petitions after he considered only one ground, whereupon he then dismissed the whole three petitions. He did not consider the other grounds upon which the petitions were based. This error was noted by the lawyers for the petitioner who then filed a subsequent application before the same judge to reinstate the petitions in relation to the hearing of the balance of the grounds stated therein. The Judge heard the application and reinstated the petitions. In reinstating the petitions, the trial judge said;

"…the question has arisen as to whether or not I am able to stay my own judgment or and vary it. I think that fairness and justice quite simply dictates that if there has been an error in the final ruling and the orders made thereby are able to be corrected and parties find no prejudice, then there is no great difficulty in doing that. So in respect of that petition of Paul Poto I acknowledge that I have overlooked the balance of the petition which remain to be dealt with in several stages so that it is not difficult to amend the judgment in respect of that. I therefore vacate my ruling that that petition is dismissed. It is unsuccessful only in respect of the ground of the loss of ballot boxes…the balance of the petition therefore remain to be dealt with".

The respondent then sought judicial review under s. 155 (2) (b) of the Constitution challenging the reinstatement of the petitions The Supreme Court held;

"The National Courts inherent power in that section is to review decisions of subordinate courts, semi-judicial and administrative tribunals. Where the National Court makes a mistake, the Supreme Court may correct that mistake by virtue of its appellate powers or where (there is) no appeal provision is provided, by virtue of its inherent power in section 155 (2) (b) of the Constitution…".

In that case, the Supreme Court found that s. 220 of the Organic Law on National Elections was not applicable to the power of the National Court to rectify a mistake and that therefore, was not in conflict with common law principles. It found that common law principles were applicable and that the trial judge had power to reinstate the petition. 

The Supreme Court found that the trial judge had erred when he dismissed the whole of the petition after considering only one ground. What he should have done was simply dismiss the particular ground in question then deal with the other grounds in the petition. The applicant’s lawyer in relying on Swire, Mellor v. Swire (supra) submit that an order, even when passed and entered, may be amended by the court so as to carry out the intention and express meaning of the court at the time when the order was made, provided the amendment be made without injustice or on terms which preclude injustice.

Swire, Mellor v Swire (supra) set the threshold for mistakes to be corrected at common law when Bowen L.J said inter alia;

"…An order as it seems to me, even when passed and entered, may be amended by the court so as to carry out the intentions and express the meaning of the court at the time when the order was made, provided the order be made without injustice or on terms which preclude injustice…When there was any mistake which could be ascribed to the officers of the court, judgments at common law could always be amended in the term, and in some cases after the term in which they were pronounced."

Furthermore, in Dick Mune v Paul Poto (supra), the Supreme Court considered whether it had inherent jurisdiction at common law to rectify a mistake in order to avoid injustice. After it found that it did, it decided on the applicability of schedule 2.2 of the Constitution, as to whether the Common Law principles were;

a)	inconsistent with a Constitutional Law or statute; or
b)	inapplicable or inappropriate to the circumstances of the country; or 
c)	inconsistent with any custom.

However, because counsel before that court did not raise the applicability of schedule 2.2 as an issue, that the Supreme Court only focused on s. 220 of the Organic Law on National Elections which states effectively that;

"A decision of the National Court is final and conclusive and without appeal, and shall not be questioned in any way".

Again, this is not simply a case of rectifying a mistake. If counsel for the applicant was of the firm view that certain grounds were not properly pleaded and that the trial judge did not consider these submissions, then the appeal court is the appropriate forum to deal with this issue, not the National Court where the applicant seeks to obtain a remedy in the guise of a ‘mistake’. What occurred before Kandakasi .J is not a ‘mistake’ that falls within the ambit of the rule in Swire, Mellor v Swire (supra), nor am I sitting as a single Judge of the Supreme Court to then exercise my inherent powers under s. 155 (2) (b) of the Constitution. (see Dick Mune v Paul Poto (supra)).

Furthermore, as to the lack of pleadings in relation to orders no. 2 and 3, I note that paragraph 11 to 21 of the Statement of claim in WS 1165 of 2001 and paragraph (c) of the pleaded relief sought, form the basis of the court’s orders. Clearly, the statement of claim does plead the matters that enabled the judge to make the orders he made. I do not agree with applicants lawyers that the lack of pleadings is a mistake and must be amended. Again, the applicant’s submissions would be more appropriately made in an appeal court, not this court.

I find these submissions to be misconceived and misleading and will not accept them. 

Orders 3 and 4 sought in the applicant’s Notice of Motion - Stay of trial judge’s order.

The orders sought in the defendant’s Notice of Motion seek to stay all of the trial judge’s orders including the orders relating to taxation and audit of the bills of costs until the determination of the cross-claim. 

In this case, judgment was given for a sum of monies to be paid, this was appealed against and a stay pending hearing of the appeal was also granted by the Supreme Court. However the appeal was dismissed and the stay orders expired. Subsequently, the applicant paid the judgment amount.

The applicant submits that the trial judge granted the orders he made despite the fact that Defence and Cross-Claim were on foot. Mr Nii for the applicant submits that when the learned judge made those orders, he did not strike out the Defence and Cross-Claim and did not address them. The applicant submits that it is only fair that the court grant this stay to allow the cross-claim to be determined. 

The issue to be firstly determined is whether the court did or did not deal with the cross-claim in its reasons.

The law on applications for summary judgment is very clear in that the court will only make an order for summary judgment if the Defence is without merit and is not arguable. On the grant of summary judgment, the effect is that there is no defence. The applicant submits that the learned judge did not deal with the cross-claim after grant of summary judgment. Paul Paraka deposes to this at paragraphs 14 and 15 of his affidavit sworn on 28th April, 2004. These state;

"14.	Whilst I have paid the Judgment debt in full together with interest and costs in a total sum of K3,063,885.32, I still have my defence and cross-claim on foot.

15.	The conclusion of the proceeding by way of Summary Judgment, and the appeal from the judgment being dismissed on technicalities, namely for want of prosecution, effectively means that the substantive issues as to whether or not the Retainer Agreement and the Letter of Authority of 31st August 2001 are valid, and therefore the issue as to whether or not I had lawfully retained the proceeds of the Judgment debt in proceedings WS no 262 of 1999, are yet to be determined by the court, in my cross-claim which is still on foot. In fact the court did not determine those issues when granting summary judgment. The transcript of the proceedings confirms this."

At further paragraphs of that affidavit, Mr Paraka deposes as to how it was that the respondent was seeking payment of K2,248,620.00. He deposes to the Retainer in existence then and the arrangement entered by the applicant and the respondent. He deposes that based on that Retainer, his employed lawyers and him performed work for the respondent for which invoices were periodically rendered and paid. He deposes that on 31st August 1999, the respondent through its then Managing Director authorized the applicant to transfer to its operating account any monies held in trust for the respondent to pay unpaid legal fees for services rendered. However, on or about September 1999, the respondent’s incoming Acting Managing Director Mr John Ban terminated this agreement. Mr Paraka deposes that at the end of December 1999, the total fees owing to the applicant by the respondent board was K953,364.78. At this time, the applicant in WS 262 of 1999 for the respondent succeeded in recovering outstanding rental for a building owned by the respondent board, the Era Rumana Building. The court awarded K2,248,620.00, which monies were paid into the applicant firm’s Trust Account in three installments. These judgment monies were applied by the applicant toward payment of outstanding legal costs owing to the applicant by the respondent, under the Retainer. The applicant advised the respondent of these deductions, by its letter of 14th July, 2000, addressed to the respondents principal legal officer. The applicant submits that even after deduction and settlement of its outstanding legal costs, the applicant was still owed K265,694.30 by the respondent.

However, after entry of summary judgment and in satisfaction of Justice Kandakasi’s orders, the applicant paid K3,063,265.32 to the respondent on 14th April, 2004. Mr Nii for the applicant submits and agrees that after that payment, there is nothing to stay. He submits that the applicant asks only that the court make orders in terms of paragraph 5 of the applicant’ s Notice of Motion which is that the respondent, or its lawyers, Gadens Lawyers, pay into court the sum of K3,063,265.32 being the amount claimed on the cross-claim. The applicant submits that upon payment of these monies into the National Court’s Trust Account, the National Court can then proceed to grant orders sought in paragraph 3 of the Notice of Motion i.e to stay the trial judge’s orders of 19th December, 2002. 

The respondent opposes the applicant’s application to stay the hearing of the Statutory Committee on several grounds. These are that;

(a)	The court has completed matters the subject of the Statutory Committee’s complaint and that the court’s involvement was always irrelevant; 
(b)	The court lacks jurisdiction to injunct the investigative process of the Lawyers Statutory Committee;
(c)	It is not an appropriate situation for an injunction to be granted, given the principles applicable to the granting of interlocutory injunctions;
(d)	The complaint/matter before the Lawyers Statutory Committee is not "sub judice" before the Supreme Court or National Court.

In relation to the first point, Mrs Nongorr for the respondent submits that the court has made a final ruling on the question of whether or not the applicant was entitled to take the respondent’s judgment monies and has ordered the applicant to repay the amount to the respondent. The applicant appealed, the appeal was dismissed, and the court system will never again be required to consider the question of whether or not the applicant wrongfully took the funds off the respondent. 

In relation to the second point, the plaintiff submits there is no possibility of the facts before the Statutory Committee ever going before the court.

The respondent submits that although there is a cross-claim, it is in relation to the question of whether or not any legal fees are outstanding from the plaintiff to the respondent. It further submits that after the audit and taxation of the files, the parties will then know whether there are any monies owing to the applicant and that determination of the cross-claim cannot affect the question of whether or not the applicant took or was entitled to take the funds the subject of the complaint to the Statutory Committee. Mrs Nongorr for the respondent submits that the court has ruled that the applicant was not entitled to those monies and will never again consider that issue. 

Mrs Nongorr submits again that the issue of the cross-claim is irrelevant to the matters ruled on by Justice Kandakasi and which are the subject of the complaint to the Statutory Committee.

In relation to the court’s powers to injunct the investigation, the respondent’s lawyers submit that the Lawyers Act does not contain provisions that allow the National or the Supreme Court to injunct the investigation or hearing by the Lawyers Statutory Committee. Mrs Nongorr further submits that neither the Supreme Court Rules nor the National Court Rules contain provisions that will allow a court to interfere with the investigations or hearings of the Lawyers Statutory Committee. Mrs Nongorr submits that the Supreme Court and National Court have an inherent jurisdiction to control proceedings in court but the proceedings sought to be controlled are not before the court but before the Lawyers Statutory Committee. The respondent submits that the Lawyers Statutory Committee is an administrative tribunal and the National Court does have the power to review final decisions of the Lawyers Statutory Committee pursuant to the provisions of Order 16 of the National Court Rules which will only be utilized once a final decision is made and all other remedies exhausted. The court was referred by the respondents lawyer to Simon Ketan v. Lawyers Statutory Committee [2001] N2290 where it was held that an investigation by the Lawyers Statutory Committee cannot be injuncted by the National Court nor can it be the subject of review unless it is completed and a final decision has been made. (See also Rimbink Pato v. Anthony Manjin (SC622)). In Wilson Kamit v. Marshall Cooke [2003] N2369, where the applicant made application for leave for Judicial Review and sought an injunction to restrain the report and proceedings, the court held that it was inappropriate to interfere with the Commission completing its process.

Having canvassed both the applicant’s and respondents’ lawyers’ submissions, I now refer to the transcript of the proceedings to assist me in determining whether the trial judge did or did not deal with the cross-claim. 

The applicants filed Defence and Cross-Claim, pleads the Letter of Authority and Retainer. It seeks declaratory orders that K2,248,620.00 was properly transferred into its operating account and that the respondent should pay it K3,127,435.48, monies due to it under the Retainer. His Honour dealt with the issue of whether the monies were rightly or wrongly transferred when he said at pg. 18 of the transcripts;

"…so the question really would be one of, did you keep the POSF notified of the progress and the settlement or eventual judgment in the WS 262 of 1999? And then keeping them notified and advised of the application of the proceeds and in other words accounting for monies received and you say applied towards your costs. Quite apart from this, I cannot see any authority for you to apply summarily assessment and take from any monies you might have held in trust for a claim of damages or loss of business. That letter does not give any authority on that."

The transcripts also show a long dialogue between Mr Nii for the applicant and the learned judge from pgs. 18 to 20 of the transcripts, when, at pg. 20 of the transcripts and in reference to part 4 (h) of the Retainer, His Honour said;

"Clauses such as this are unenforceable. They amount to penalty. You can only get reasonable amount for any breach of contract and the reasonable amount is specified an amount calculated and if the court is of the view that this is reasonable, yes. But a blanket provision for payment of the balance of the contract is penalty, it cannot be enforced. That is the effect of that judgment…".

The respondents’ lawyer also addresses the effect of the Retainer and letter of authority in his submissions which are covered at pg. 20 and lines 10, 20 and 30 of the transcripts.

In his ruling, at pgs. 27 and 28 of the transcript, His Honour said;

"…It is not well and good enough for a lawyer to receive money and then automatically apply monies received on behalf of the client towards the payment of his cost without the specific instructions of the client on a bill of costs rendered for those monies to be paid out for monies received. As I said, it would be futile for us to allow this matter to progress any further than to resolve by way of summary judgment application which I grant for these brief reasons … As I say, the growing concern here is the retainer had expired or has terminated rather and all monies received thereafter belong to that of the client and the lawyer had no right to deal with them in the way he saw fit, without that retainer agreement subsisting." (my emphasis)

The submissions raised by Mr Nii are matters more appropriately dealt with at an appeal. I have referred to Kandakasi .J’s decision where he is clear in his reasons that he did deal with the cross-claim and was of the view that the retainer had expired and that the applicant must first obtain instructions from his client to deduct monies held in trust, and that the letter of authority is unenforceable. On my reading of those reasons, I see that His Honour, apart from granting summary judgment, also indirectly ruled on the cross-claim. It would be wrong for this court to grant a stay pending the hearing of the cross-claim, when the court has already dealt with that issue and formed a view.

I note also a recent motion filed by the applicant on 2nd December 2004, seeking orders for the cross-claim to be dismissed. That motion need not be argued because I am of the view Kandakasi .J has sufficiently dealt with the cross-claim.

In any event, Mr Nii for the applicant agrees that because the judgment debt has been satisfied, that there is nothing to stay.

Application Sub Judice

The applicant also seeks a stay because it submits the matter is "sub-judice". The respondent submits that it is not and has never been sub-judice.

It is necessary to understand the background to the sub-judice rule. It was developed as part of the law on Contempt of Court in common law. Briefly, it means that there must be a real risk of prejudice to the administration of justice before a matter can be sub judice. (see Halsburys Laws of England 4th edn.)

The law in relation to what may be published concerning current legal proceedings is sometimes referred to as the sub-judice rule. According to Halsburys Laws of England 4th Edn. Vol. 9(1) at par. 421;

"… Publication contempt, when not falling within the strict liability rule, consists of the usual two elements, actus reus and mens rea.

The actus reus of this contempt is the impedance of or interference with the administration of justice by the court. There must be a real risk of prejudice to the administration of justice. For this to be the case, proceedings must be pending or imminent at the time of publication.

The required mens rea is an intention to interfere with or impede the administration of justice; it seems that recklessness is not sufficient. The intention may be inferred.

The standard of proof which applies to contempts under this head is the criminal standard" (see pg. 256 of Halsburys (supra)).

As to when contempt is committed, it may be necessary for proceeding to be pending or imminent at the date of publication. (see Halsburys (supra) at par. 424). 

In this case, there are decisions from the National and Supreme Court. The judgment debt has been satisfied. The only proceeding pending is the complaint before the Lawyers Statutory Committee. The trial judge’s orders for summary judgment confirms that there is no arguable case, that there is no meritorious defence and that there are no legal issues. After the dismissal of the applicants appeal in the Supreme Court, the National Court’s orders remained and which order has been fully satisfied. As to the cross-claim for K3,127,435.48, in outstanding legal fees due under the Agreement, I have seen that Kandakasi .J has dealt with this and formed the view that there is no merit in the matters pleaded in the cross-claim. As for the claim in WS 79 of 2000, the applicant can deal with this in its own time. 

The issue is whether the proceedings of the Lawyers Statutory Committee will prejudice the hearing of existing claims. Again, if the applicant is of the view that he has claims for outstanding legal fees, then he can only file these, after the bills have been taxed. (my emphasis) That is the law. (See Jack Livinai Patterson v National Capital District Commission (2001) N2145 dated 5th October 2001; Sarea Soi trading as Soi and Associates Lawyers v Imawe Kewa Land Group Inc. (2004) N2560 dated 10th June 2004); Edward Manu trading as Manu and Associates Lawyers v Honiri Timber Resources Development Limited N2597 dated 23rd August 2004).

I reiterate again that the charges laid by the LSC are against Mr Paraka, not the firm Paraka Lawyers. This is significant because the gist of the applicants claims for outstanding legal fees are by it as Paraka Lawyers whereas, the enquiry by the LSC against Mr Paraka is against him personally. 

 The LSC is looking to embark upon an enquiry of "improper conduct" by Mr Paraka. The various provisions of the Lawyers Professional Conduct Rules alleged to have been breached in relation to each count are as follows;

i.	Count 1:	Rule 3 (a) iii

"3	DUTY OF EVERY LAWYER

(a)	not to engage in conduct (whether in pursuit of his profession or otherwise) which –
…
(iii)	is unprofessional; or
…

ii.	Count 2:	Rule 13 (i)

"13.	KEEPING THE CLIENT INFORMED

(1)	A lawyer shall inform his client fully of his rights and possible courses of conduct regarding issues of substantial importance and shall keep his client appraised of all significant developments and generally informed in the matter entrusted to him by that client unless he has been instructed to do otherwise."

(2)	A lawyer shall –

(a)	notify his client promptly of the receipt by him of monies or securities on behalf of that client; and
…"

iii.	Count 3:	Rule 20 (3)

"20.	PROFESSIONAL COURTESY
…
(3)	A lawyer shall not communicate regarding a legal matter in which he is acting with a person whom he knows is represented in that matter by another lawyer."

iv.	Count 4:	Rule 3 (d)

"3.	DUTY OF EVERY LAWYER
…
(d)	to respond within a reasonable time and in any event within twenty one (21) days (or such extended time as the Committee may allow) to any requirement of the Committee for comments or information on a complaint and in doing so he shall furnish in writing a full and accurate account of his conduct –

(i)	in relation to the matter the subject of the complaint; or
(ii)	in relation to any other matter the subject of an investigation or enquiry by the Committee; and
…"

The charges/counts show that the LSC has to consider whether the applicant’s conduct in relation to the withholding of monies applied towards payment of legal fees is a breach of the professional conduct rules. 

The issue to be decided on the applicant’s cross-claim is whether he should be paid what he claims is owing to him. The court and the LSC are considering two entirely separate issues, one being a civil claim for legal fees owing, the other being for improper conduct. A relevant issue the court should ask itself is whether a decision made by the Lawyers Statutory Committee would influence the mind of a Judge when the applicants various claims now before the court, go before it. The claims are for ‘unpaid’ legal fees. A judge always asks when claims for payment of legal fees are before it for determination, whether those fees have been taxed. If those fees have not been taxed, then the court must make an order that the claim be dismissed because there is no cause of action on foot and for the bills to be referred to the Registrar for taxation. (see Jack Livinai Patterson v National Capital District Commission (supra); Sarea Soi trading as Soi & Associates Lawyers v Imawe Kewa Land Group Inc. (supra)).

But if the bills have been taxed, then the judge will consider the claim together with Defences, if any. I do not see how the hearing of the Lawyers Statutory Committee or a decision will affect or influence the trial judge’s mind.

Furthermore, the principle of sub judice will only apply if there will be prejudice to the administration of justice. Again, I do not see how the enquiry before the Statutory Committee can prejudice the hearing of the applicant’s claims.

Again, for this court to find the existence of the required mens rea, there must be evidence of intention to interfere with or impede the administration of justice. But this principle may be applicable in a situation where a court proceeding is sought to be stayed. In this case, it is the Lawyers Statutory Committee, a quasi-judicial tribunal, which has yet to sit or make a decision.

In the Supreme Court case of the Public Prosecutor v. Nahau Rooney [1979] PNGLR 448, the court relied on the decision of Attorney General v. The Times Newspapers Ltd [1973] 3 ALL ENG LR pg. 54 where it said; "The law on this subject is and must be grounded entirely on public policy…it is there to prevent interference with the administration of justice and it should in my judgment be limited to what is reasonably necessary for that purpose." It further held that "conduct amounts to contempt where it presents a real risk as opposed to a mere possibility, of interference with the due administration of justice."

In SCR No. 3 of 1984 Ex p Callick & Koroma [1985] PNGLR 67, the court again adopted reasoning in the Attorney General v. the Times Newspaper, (supra), particularly at pg. 73 where it held:

"it is scarcely possible to imagine a case where comment would influence judges in the court of appeal or noble or learned lords in this house. And it would be wrong and contrary to the existing practice to limit proper criticism of judgments already given but under appeal".

I have canvassed in detail, the applications that are supposedly before the National Court and before the Lawyers Statutory Committee. These two tribunals are considering two entirely separate issues.

I had also referred to the law on the sub-judice which was developed as part of the law on contempt.

The court has already ordered summary judgment resulting in Mr Paraka paying monies but it is his conduct as principal of the firm that is at issue here. Therefore, I can conclude that the issues before the Lawyers Statutory Committee are not sub-judice the National Court’s proceedings because there is no real risk of an interference with the due administration of justice.

In any event, the law is that the cross-claim for payment of legal costs cannot proceed until after those costs have been taxed. So therefore, it is futile for the applicant to proceed on a cross-claim or claim for recovery of outstanding legal costs, until after all outstanding costs have been taxed, meaning Kandakasi .J’s orders must take their course.

Injunctions

I have seen that Kandakasi .J has dealt with the cross-claim by expressing certain views.

However, notwithstanding, I reiterate that the basis for this finding in light of the present position at law is that the applicant cannot seek payment of outstanding legal fees he says he is entitled to, until after those bills have been taxed. And Kandakasi .J’s orders are the commencement of that process. Secondly, the issue of the validity of the Retainer and letter of authority are separate issues which can be dealt with in separate proceedings. 

But as to balance of convenience, the applicant submits that it will suffer irreparable damage to its professional career if the injunction is refused. He submits that if the Lawyers Statutory Committee continues to sit and determine the charges against its principal Paul Paraka and that if he is found guilty, he may be suspended from practice. He submits that this will definitely affect his legal practice which now has approximately 40 lawyers and in excess of 100 support staff and branch officers in six locations in this country. He further submits that in the event the National Court does hear the cross-claim and the court finds that the applicant did lawfully retain funds pursuant to a validly executed Retainer Agreement and a letter of authority then this will pose a practical threat and dilemma that can never be remedied. He submits that the Lawyers Statutory Committee’s decision can never be reversed in those circumstances and that the damage caused to the appellant is irreparable and cannot be matched by any form of compensation, monetary or otherwise.

However, he submits also that in the event the injunction is granted and the applicant does not succeed, the Lawyers Statutory Committee does not suffer any foreseeable damage at all. If it does, this can be indemnified by an award of compensation pursuant to the applicant’s undertaking as to damages.

In response, the respondent referred the court to Simon Ketan v. Lawyers Statutory Committee [2001] N2290 where the applicant was seeking to injunct the Lawyers Statutory Committee pending a review of his referral to the Lawyers Statutory Committee. In this case, the applicant only seeks to injunct the Lawyers Statutory Committee from sitting pending the hearing of the cross-claim. In Simon Ketan (supra), the court held that; 

"persons concerned with such investigations have the right to defend themselves once a formal charge has been laid. If there is say an allegation of defamation of one’s character, separate proceedings could be issued for defamation. But it is no reason to prevent such lawful authorities from carrying out their lawful investigations. If the courts were to readily come into the sphere of investigations and make orders preventing such authorities from carrying out their investigations, it would interfere in the process of proper investigations and bringing those responsible for any criminal or other misconduct to the appropriate authorities to be dealt with according to law." (pg. 11).

Justice Kandakasi said again at pg. 13 of that case;

"…the society is not excluded in the exercise of its powers and functions and or duties to refer to the committee any improper conduct of a lawyer coming to its attention however that may be … the clear statutory objectives of,,, the society which is to safeguard … the integrity of lawyers and maintain a higher level of proper professional conduct."

The LSC’s Notice of Enquiry is directed only at the applicant’s principal, to him as an individual. Simon Ketan (supra) is authority for the principle that LSC’s functions should not be injuncted. Furthermore, an injunction is an equitable remedy. The applicant must come to court with clean hands. In this case, the applicant has not complied with the court’s orders to submit the plaintiff’s files for audit and taxation. On that basis alone, it cannot seek injunctive orders, because it has not come to court with clean hands.

I note applicant’s submissions and reiterate again that the applicant’s claim which is in relation to unpaid legal costs, cannot be instituted or pursued until after the applicant’s bills have been taxed. The applicant should, for its own benefit, enhance compliance with Kandakasi J’s orders because it is the taxing of its files, that will enable it to then proceed confidently with its claims for unpaid legal fees (if any) against the plaintiff.

Payment into court

The orders sought in paragraph 5 of the applicant’s motion is for payment into court of the sum of K3,063,265.32 being outstanding legal fees pending determination of the cross-claim. I need not consider these submissions because of the position at law in relation to taxing of bills of costs. At this time this court does not know how much exactly is properly owed by the respondent to the applicant. This will be done after the bills have been taxed. Again, I urge compliance by the applicant with Kandakasi .J’s orders, for there to then be a certified amount, to be paid into court at a later time, if and where necessary.

Conclusion

I find that not only has the applicant sought to stretch the limits of the rules within which such applications are confined to, but that it also asks the court to exercise its inherent powers to set aside a final judgment which has been fully satisfied. The law is that a court has no power to set aside or vary a final judgment which has been passed and entered (see Bailey v Marinoff (1971) 125 CLR 529). There are exceptions to that rule, which the applicants claim does not fall under. I have seen that the judgment by Kandakasi .J is not an irregularly entered judgment that should be set aside ex debito justitiae (see Anlaby v Praetorius (1888) 20 QBD 764). It is my view that the application before me is a complete abuse of the courts process which should not be allowed to continue.

The orders I make are to enhance compliance with Kandakasi .J’s orders. I should also point out that although I have considered the directions sought by respondents counsel in its written submissions, that the orders I made will not be in those specific terms but are made to ensure completion of this matter.

Therefore, the court orders that;

1.	The Notice of Motion filed by Paraka Lawyers on 28th April, 2004 is dismissed in its entirety;

2.	Within 28 days from the date of this order, the applicant shall deliver to the taxing officer all its files subject to the orders of Kandakasi .J of 19th December, 2002;

3.	Subject to the terms of the same orders referred to in paragraph 2 hereof, the files shall be appropriately audited by a chartered accountant, then thereafter taxed by the taxing officer;

4.	The applicant shall pay the respondent and the Lawyers Statutory Committee’s costs of the applications before me, to be taxed if not agreed; 

5.	Time is abridged to time of settlement to take place forthwith.
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Lawyer for the Defendants/Applicants		:	Harvey Nii Lawyers
Lawyer for the Plaintiffs/Respondents		:	Gadens Lawyers
Lawyer for the Lawyers Statutory Committee	:	O’Briens Lawyers