N3289

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 303 OF 2006

BETWEEN

RABAUL SHIPPING LTD
Plaintiff

AND

CHRIS RUPEN,
General Manager National Maritime Safety Authority
First Defendant

NATIONAL MARITIME SAFETY AUTHORITY
Second Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Kokopo: Lay J.
2008: 7 & 27 March

CIVIL - action for declarations and injunction against public body commenced by ordinary summons - short issue of statutory interpretation - whether O16 judicial review procedure mandatory - whether proceedings abuse of process - whether proceeding should be struck out for want of prosecution.

Cases Cited:

PNG Cases 

NEC, Lucas v PEA [1993] PNGLR 244 
The Attorney General and ors v Hamidian-Rad [1999] PNGLR 444 
Telecom PNG Ltd v ICCC & Digicell (2007) N3144
Zachary Gelu v Francis Damem (2004) N2762
Yakapo v Redundancy Monitoring Committee (2002) N2224
Melina Ltd v Fred Martens (2001) N2183
Vivivio Seravo v Jack Bahofa (2001) N2078
Ronald Nicholas v Commonwealth Niugini Timbers Pty Ltd [1986] PNGLR 133
John Niale v Sepik Coffee Producers Ltd & ors (2004) N2637
Ahmadiyya Muslim Mission v Bank of South Pacific Ltd (2005) N2845
Kevin Masive v Iambakey Okuk & Anor [1985] PNGLR 105

Overseas Cases

O'Reilly v Mackman [1983] 2 AC 237

References

S.A. de Smit, Judicial Review of Administrative Action.
 Protection of the Sea (Shipping) Act

Counsel

J. Haiara, for the Applicant/Defendants
R. Asa, for the Respondent/Plaintiff

27 March, 2008

RULING ON MOTION

1.	 LAY J.: In 2006 the Plaintiff filed proceedings by originating summons for an interpretation of the meaning of "ship"... actually carrying oil in bulk as cargo" as used in Section 1 of the Protection of the Sea (Shipping Levy) Act No.8 of 2003 and for declarations that:

 1.	a levy had been improperly imposed on the plaintiff's motor passenger vessel Kula Queen because it does not carry oil in bulk as cargo;

 2.	the Kula Queen is not a "ship" within the meaning of the Act because it does not carry oil as cargo.

2.	The defendants applied to strike out the proceedings on two basis:

a)	abuse of process, per order 12 rule 40, and

b)	want of prosecution per Order 4 rule 36.

Abuse of Process

3.	 The Defendant puts its argument for abuse of process on the ground that the appropriate proceeding is judicial review under Order 16 and it is an abuse of process to commence by an ordinary summons because the orders sought question the decision taken by a public body under an Act of the Parliament. The plaintiff responds that the proceedings are:

"04 r 3(2) Proceedings-(a) in which the sole or principal question at issue is, or is likely to be, one of the construction of an Act or of an instrument made under an Act, or of any deed, will, contract or other document, or some other question of law..."

4.	 Order 16 was considered in the 5 judge bench Supreme Court case of NEC, Lucas v PEA [1993] PNGLR 244 where the court said at page 268:

" Order 16 does not make any distinction between declarations or injunctions as a remedy for infringement of a right protected under public law, as opposed to those under private law. The distinctions in 016 relate to the nature of remedies set out in r1 (1) which provides judicial review as the exclusive procedure, and declarations and injunctions under r 1(2) which provides for optional procedures".

5.	 In that case, in the National Court, the trial judge had found that there are differences between the United Kingdom rules for judicial review and Order 16 of our National Court Rules. As a consequence the trial judge ruled that where only declarations or injunctions are involved pursuant to O 16 r 1(2) the plaintiff can elect to proceed by way of ordinary summons or judicial review. Five judges of the Supreme Court agreed with that view.

6.	 That case was considered in the Supreme Court in the case of The Attorney General and ors v Hamidian-Rad [1999] PNGLR 444 where the above-mentioned passage was cited at 449 and the Court went on to say:

"We have reached the conclusion that a person who is desirous of applying for an order in the nature of a prerogative writ is required to apply under O16 of the Rules. This is an exclusive procedure provided by the Rules (O16 r 1)".

7.	 In that case the Court did not say that O16 r1 (2) was of no effect. That Order 16 of the National Court Rules was the proper procedure if that case was conceded by the Respondent.

8.	 My attention has been drawn to the decision of my brother Kandakasi J. in Telecom PNG Ltd v ICCC & Digicell (2007) N3144 where his Honour at [26] referred to the Hamidian-Rad case and said "in so deciding, the Court did not follow the much earlier decision of NEC, Lucas v PEA". That passage suggests that there is some divergence between the two cases. The divergence appears to be this, in NEC, Lucas v PEA the Court said:

"Order 16 does not make any distinction between declarations or injunctions as a remedy for infringement of a right protected under public law, as opposed to those under private law. The distinctions in O 16 relate to the nature of remedies set out in r 1(1), which provides judicial review as the exclusive procedure, and declaration or injunction under r 1(2) which provide for optional procedures. 

An abuse of the process of the court may arise where, in an application for a remedy under O 16 r 1(1), a party can also obtain a declaration or injunction but does not do so and, subsequently, applies to obtain such an order by way of writ or originating summons in a separate proceeding. That would be an attempt to avoid the requirements under O 16 and would, as well, constitute multiplicity of proceedings. It is not wise to indicate the circumstances that may amount to abuse of the process of the court. This can be developed on a case by case basis.

In the present case, the respondent did not apply for a remedy under O 16 r 1. The only remedy sought was a declaration and, under the Rules, he may choose to proceed by originating summons under O 4 r 3. Our Rules permit such an option. The trial judge distinguished the English rules from our Rules, in that we do not have an equivalent of the English O 5 r 3 (sic)... With respect, we agree and endorse his Honour's interpretation."

2.	 Then in the Hamidian Rad case the Court placed the following interpretation on the passage quoted at [8]:

"The Court also considered the question of the abuse of the process of the Court. In this regard the Court adopted the general rule propounded by Lord Diplock in O’Reilly v Mackman (supra).The Court however did not apply the test on the basis that the remedy sought was one of declaration only under O16 r2.(sic – presumably r1(2) was intended). The assumption that is apparent in that conclusion is that the declaration sought could not be sought by way of prerogative writ under O16 r1 of the Rules. If the Court considered that was the case, it would have considered exercising its discretion on the question of the abuse of the process of the Court".

3.	 It is very clear from the NEC, Lucas v PEA case that the court adopted the views of the trial judge that there was a material difference in the drafting of O16 of the National Court Rules and O 53 of the English rules, so that there was not the compulsion under the National Court Rules to use the judicial review procedure if only a declaration or an injunction was sought in relation to a public officer’s decision. I am unable to follow how the Court in the Hamidian Rad Case came to arrive at the assumption it said was apparent in the passage quoted at [8]. It seems to me with respect, that the Court in NEC, Lucas v PEA could not have been clearer in saying there was an election. The observation in Hamidian Rad is strictly obiter because it was not necessary for the decision. The decision of the Court only involved affirming what Counsel for the Respondent had already conceded; that an order in the nature of certiorari must be sought by judicial review. As the Court said at p448 "The question which has arisen in this ground of appeal relates to the proper procedure for obtaining a prerogative writ in the National Court".

4.	 I therefore do not consider that Hamidian Rad has settled the issue in favour of there being no election available to seek a declaration by ordinary summons where a question of public law is involved, however desirable that course may be.

5.	 In the case of Zachary Gelu v Francis Damem (2004) N2762 Davani J. refers to a passage from Halsbury's Laws of England fourth edition volume 1 (1) at page 180:

"The jurisdiction to grant a declaration or an injunction on an application for judicial review is concurrent with the jurisdiction to grant such forms of remedy or relief in action begun by writ or originating summons. As a general rule a person seeking a declaration or injunction in respect of an infringement of his rights at public law must proceed by way of an application for judicial review, and it would be an abuse of process of the court for such a person to seek redress by way of ordinary action. (See O'Reilly V. Mackman [1983] 2 AC 237

6.	 I agree with that statement as a general rule, which is a paraphrase of what Lord Diplock had to say and with whom all the other Lords agreed. Lord Diplock went on to say he would apply that rule to any application where the only relief claimed was a declaration of nullity in public law but that there would be exceptions to be worked out as the case law developed. However, I consider that observation has to be tempered by the observation that our rules are not identical to the English rules. And whereas that statement is perfectly true with respect to the English rules, it seems to me that the statement in NEC, Lucas v PEA that the plaintiff has an election under O16 r 1(2) reflects the position under our rules and that case is binding upon me. 

7.	 If this were a case where the Court was being asked to declare wrong a decision of a tribunal exercising a discretion I would have great difficulty in accepting that an ordinary summons was the appropriate procedure because in those circumstances the only purpose of such a declaration is to quash the decision of a tribunal given the statutory authority to make the decision. That is an order in the nature of a prerogative writ by another name, which I consider is the point being made in the passage quoted at [15]. This is not such a case.

8.	 Counsel for the defendants also drew my attention to the case of Yakapo v Redundancy Monitoring Committee (2002) N2224 Davani J. referred to the following passage from De Smit:

"... if the Plaintiff were to ask not for a declaration that the decision was invalid but for a declaration of his legal rights, he would be met with the preliminary objection that the appointed tribunal had already determined his rights and that it was not for the Courts too arrogate to itself an appellant or quasi original jurisdiction and make a new determination inconsistent with the binding (though possibly erroneous) determination of the appointed tribunal.... such a Declaration would be useless unless the Tribunal had power to rescind or vary its original determination, unless the Declaration would effectively preclude the tribunal from acting upon the determination or another person from acting upon it. The latter objection would have no less force if the plaintiff were instead to ask merely for a Declaration that the decision of the appointed tribunal was wrong in law." (Page 539-540 S.A. de Smit, Judicial Review of Administrative Action.

9.	 However, as I mention above and below we are not dealing with a tribunal vested with discretion. We simply have the appointed officers of the Second Defendant collecting a fee pursuant to the provisions of an Act from owners of qualifying ships and the short question which arises is - is the Plaintiff’s ship a qualifying ship? 

10.	 Therefore I am not persuaded simply by the fact that the plaintiff seeks a declaration in respect of a decision of a public body which turns on a short point of statutory construction, that the plaintiff is bound to commence the proceedings by way of judicial review. And in saying so I do not believe that I am traversing any statement of binding law contained in the Hamidian Rad case.

11.	 Under the Protection of the Sea (Shipping) Act the Minister may appoint a collector who collects the stipulated levy on behalf of the National Maritime Safety Authority. The collector exercises no discretion; he must collect the prescribed levy from the prescribed ships. Whether the Plaintiff's ship is a prescribed ship is a short question of law being the interpretation of the Act of Parliament and consequential declarations coupled with the nature of the Plaintiff’s ship and its cargo as a question of fact. No issue of delay in instituting the proceedings has been advanced (a significant factor in O’Reilly v Mackman). If the facts pleaded in the summons are made out by the evidence, then an arguable case would be demonstrated. There is no question of standing, the Plaintiffs are directly affected. It appears to be a case in which, if brought by judicial review procedure, leave would have been granted. I see no detriment to the Defendants in the form of the proceedings.

12.	 The Defendants have also raised the argument that because the Plaintiffs have sought no consequential relief, such as an order for a refund of levy paid, the choice of proceeding could lead to a multiplicity of proceedings. Having obtained its injunction and declarations the plaintiff may wish to take other proceedings to obtain a refund. Such a multiplicity of proceedings is an example of abuse of process given in NEC, Lucas v PEA.

13.	 I consider that a member of the public dealing with a government department or statutory authority is entitled to take the view that once the court has declared the law the authority will abide by it. It is an unreasonable assumption to consider that a government body will not act in accordance with the law as declared by the court, requiring proceedings to enforce the law. I do not consider the form of proceeding is an abuse of the process of the court on that basis. . I reject the contention that I ought to exercise my discretion to strike out the proceedings on the basis that the wrong procedure has been chosen.

Want of Prosecution

14.	 The originating summons was filed on 14 November 2006. No affidavit in support was filed. The Defendants filed their notice of intention to defend on 29 November 2006. A change of lawyers for the Defendants was filed on 19 August 2007. On 23 September 2007, the Defendant’s lawyer sent a warning letter to the plaintiff, in which the plaintiff says it did not receive. On the 5th December the Defendant sent a notice of motion to the plaintiff. The Plaintiff filed a notice of the change of lawyers on 10 December 2007. Amended notices of motion were filed on the 18 February 2008 and 6 March 2008, the latter being the version under consideration in this judgment.

15.	 The Defendants submit that the Plaintiff did not file an affidavit in support of the originating summons or take any other step from 14 November 2006 until the change of lawyers filed on 10 December 2007, a period of 13 months and that the plaintiff has still not filed an affidavit in support, some 16 months after filing the originating summons.

16.	 The Plaintiff says it lost its in-house lawyer and has been actively taking steps to find a replacement which has only been successful in the last few days and that lawyer appears with counsel for the Plaintiff today.

17.	 National Court Rules O4 r 36 provides:

"36.	Want of prosecution. (5/12)

(1)	Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may stay or dismiss the proceedings.

(2)	Sub-rule (1) applies, with any necessary modifications, in relation to a cross-claimant as it applies in relation to a plaintiff.

3.	 The number of cases discussing the principles to be applied on such an application is large. From them emerge a number of clear and well-established principles, the first of which is " It is always the plaintiff who has to take the next step in the proceedings to ensure that his claim against the defendant or defendants proceeds expeditiously as much as possible and avoid unnecessary delays and wastage of time and money": Melina Ltd v Fred Martens (2001) N2183, Kandakasi J. And in the case of Viviso Seravo v Jack Bahofa (2001) N2078, his Honour said:

"It is now clear law especially in the context of O.10 r.5 of the NCRs that an application for a dismissal of proceedings for want of prosecution may be granted if:

1.	The plaintiff's default is intentional or is allowing for an inordinate and inexcusable delay in a prosecution of his claim;

2.	There is no reasonable explanation given by the plaintiff for the delay; and

3.	That the delay has cause injustice or prejudice to the defendant.

This is apparent from cases like that of Ronald Nicholas v Commonwealth Niugini Timbers Pty Ltd [1986] PNGLR 133 which has been followed in a number of other cases such as Umbu Waink & Anor v Motor Vehicles Insurance (PNG) Trust and The State (15/08/97) N1630. I consider those principles relevant and therefore they apply in the context of O.4. r.36(1), in the absence of any authority to the contrary."

4.	 I agree with his Honour that those principles apply to the application of O4 r36 (1). Ronald Nicholas v Commonwealth Niugini Timbers Pty Ltd (supra) was a case applying the rule. More recently Cannings J. has suggested that the court should also look at the conduct of the parties and their lawyers: John Niale v Sepik Coffee Producers Ltd & ors (2004) N2637 and the duty of the court to give paramount consideration to the dispensation of justice under s 158(2) of the Constitution: Ahmadiyya Muslim Mission v Bank of South Pacific Ltd (2005) N2845 in the context of O 10 r 5. I adopt those suggestions as useful matters to be considered in an application under either rule.

5.	 I do not find the delay by the Plaintiff to be intentional but I do find that an inordinate delay has occurred by reason of filing an originating process without filing any evidence to support the relief sought. An originating summons must always be accompanied by a supporting affidavit because the court cannot declare the law in a vacuum; it must find facts from which the question of law arises: Kevin Masive v Iambakey Okuk & Anor [1985] PNGLR 105, Pratt J. So what the Plaintiff has done here is adopt the quick and truncated procedure that the Rules provide for a quick disposal of a matter where the facts are not really in dispute, and then the Plaintiff has not provided the facts as sworn evidence and has not proceeded quickly.

6.	 Further, I do not find the explanation for the delay to be a reasonable one. The Plaintiff knew full well that it had no legal representation in this matter which it had commenced against the Defendants. And it knew that was the position right up until it instructed Warner Shand.

7.	 Delay always causes prejudice to the defendant in the sense that a defendant has been brought to court and is entitled to have the allegation against it disposed of with all despatch. However, counsel for the Defendants in this matter conceded that there was no specific detriment which had been suffered by the Defendants. He also conceded that striking out the proceedings would not result in the proceedings being res judicata because the merits of the case would not have been determined.

8.	 Considering the actions of the parties and their lawyers, the lawyer for the Defendant has complied with the letter of the law. However, I would have thought that the lawyer would consider it surprising not to have received any response to his warning letter and have followed up with a telephone call. So that while I fully accept that the Plaintiff had the obligation to ensure that the Defendants had its correct communication addresses, the Defendants did not go out of their way to establish communication with the plaintiff. On the other hand, lawyers for the Plaintiff have taken no steps to advance this matter to a hearing since the application to strike out was filed.

9.	 In summary, my view is that the Plaintiff had a choice as to which proceeding it brought and it cannot be said that the originating summons proceeding is inappropriate for the short question of law raised and the orders sought which only have the effect of declaring whether or not a sum of money was lawfully collected. The judicial review proceeding would not place the Defendants in any more advantageous position than the current proceedings. The Plaintiff has not shown an adequate reason why the proceeding should not be struck out, but as that would not be an end to the proceedings and as the Defendants have suffered no specific detriment, striking out would simply multiply the paperwork and increase the costs for both parties. I have therefore decided that the proceedings ought not to be struck out. However the Defendants had a perfectly reasonable case to make the application to strike out for want of prosecution, and subject to what the parties have to say on costs after delivery of this judgment, I currently consider that the Defendants ought to have their costs inclusive of airfares and accommodation for counsel attending from Port Moresby to Rabaul.

10.	 Further, there should be no further delay in this matter. The plaintiff should get on with its’ action or discontinue it. The plaintiff should file its affidavit in support and serve it within the next 14 days. The Defendants shall have a further 14 days to file an affidavit in reply if they desire to do so. The parties shall observe the requirements of the Evidence Act section 35 and 36. The plaintiff should have the matter mentioned for pre-trial conference at the first call over after 28 days from today. I will make orders accordingly.

ORDERS:

1.	The application to dismiss the proceedings is refused;

2.	The Plaintiff shall file and serve its affidavit in support of the Originating Summons by 10 April, 2008;

3.	The Defendants shall file and serve any affidavit in reply by 24 April, 2008;

4.	All parties shall give notice of objection to the use of any affidavit or requiring a deponent for cross examination by 2 May 2008;

5.	The matter shall be listed for further directions, and pre hearing conference if appropriate, on 5 May 2008.

6.	The Plaintiff is to pay the Defendants costs of the motion on a full indemnity basis including reasonable accommodation and travel expenses.

As the parties agreed that the issues and arguments are identical in OS 304 of 2006 Massim Expeditions ltd v Chris Ruben, General Manager Rabaul Maritime Safety Authority and the State, I make the same orders in that case.

_______________________________

Warner Shand: Lawyers for Plaintiff 
Steeles Lawyers: Lawyers for Defendants