Yambaki v Namues [2022] PGNC 466; N9983 (17 October 2022)

N9983

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1062 OF 2010
WS NO. 1090 OF 2010

BETWEEN:

RUTH YAMBAKI, TIMOTHY MADDISON & AMY MADDISON as Administrators of the Estate of the late JOHN MADDISON
Plaintiff

AND:

ROBIN FLEMING
Plaintiff

AND:

DETECTIVE CHIEF SERGEANT FRANCIS NAMUES
First Defendant

AND:

GARY BAKI, THE COMMISSIONER FOR POLICE
Second Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND:

ANTHONY WAGAMBIE, THE COMMISSIONER FOR POLICE
Fourth Defendant
Waigani: Shepherd J
2017: 25^th October
2022: 17^th October

TORTS – Negligence – elements – whether investigating police officer owed duty of care to plaintiff – duty to exercise reasonable care to comply with due process – failure of police officer to comply with requirements of District Courts Act to obtain arrest warrant – no reasonable basis to pursue criminal charges against plaintiff – defective arrest warrant - breach of duty of care established.

TORTS - Negligence – whether Commissioner for Police owes duty of care to members of public – whether Commissioner for Police is liable for lack of supervision and training of police officers – no liability of Commissioner for Police for operational matters such as training of police officers unless there has been direct supervision of offending police officer.

TORTS - Malicious Prosecution – elements – police officer must have honest belief that accused is guilty of offence or that such belief is based on reasonable grounds – police officer must not have improper purpose when prosecuting and arresting accused person – motive to punish accused for benefit of initial complainant or other person is improper purpose.

ARREST – Warrants of Arrest – District Court has concurrent jurisdiction to issue arrest warrant either in Form 21 of District Court Regulation pursuant to s.35(1) and s.49(1) of District Courts Act or in Form 2 of Arrest Regulation pursuant to s.8 of Arrest Act – arrest warrant can only validly issue after formal information in Form 16 of District Courts Regulation has been sworn on oath by informant before a Magistrate pursuant to s.28(a) and s.35(1) of District Courts Act – Magistrate administering oath must sign formal information - arrest warrant issued without formal information having been sworn on oath before a Magistrate by informant police officer is void - person arrested under void warrant may have civil cause of action for breach of statutory duty against arresting police officer – Arrest Act s.26(1) – District Court and National Court may award exemplary damages under s.26(3) of Arrest Act to person aggrieved.

CONSTITUTION - Breach of Constitutional rights – enforcement - right to full protection of the law – right to protection against harsh and oppressive acts – right to liberty.

DAMAGES – Multiple Causes of Action - assessment of quantum of damages for negligence, malicious prosecution, breach of Arrest Act and breach of Constitutional rights – each case treated on its merits – if facts for different causes of action result in different injuries then general damages may be assessed separately – if same facts give rise to multiple causes of action with similar injuries then general damages may be assessed as a whole - damages for breach of Constitutional rights may justify separate assessment within general damages – injury to reputation may be relevant to assessment of general damages for civil wrongs where multiple causes of action are pleaded.

DAMAGES – Exemplary Damages – Wrongs (Miscellaneous Provisions) Act, s.34(3) – statutory bar against exemplary damages where cause of action has survived deceased plaintiff – exemplary damages may only be awarded against the State if breach of Constitutional rights is severe or continuous – Claims By and Against the State Act, s.12(1).

COSTS - Costs Orders on a solicitor/client basis – at discretion of the Court – may be awarded where no factual or legal basis for defendant to have maintained a defence at trial.

Cases Cited:

Papua New Guinean cases
Aire v Togoi (2016) N6434
Baikisa v J & Z Trading Ltd (2016) N6181
Balepa v Commissioner for Police (1995) N1374
Bau v Bine (2016) N6268
Coyle v Henao [2000] PNGLR 17
Etepa v Baki (2015) SC1502
Haluya v The State (2001) N2109
Hembihi v Kuma (2018) N7156
Justice Gibbs Salika v Pacific Star Ltd (2014) N5699
Kalo v Akaya (2007)
Kapi v Kambang Holdings Ltd (2011) N4451
Kolokol v Amburuapi (2009) N3571
Kuman v Digicel (PNG) Ltd (2019) SC1851
Lambu v Dugube (2006) N3082
Lamon v Senior Constable Baumai (2010) N3920
Limitopa v The State [1988-89] PNGLR 362
Lin Wan Xin v Wang Yanhong (2001) N2160
Maku v Maliwolo (2011) SC1171
Meta v Kumono (2012) N4598
Molomb v The State (2004) N2861
Nayos v Gawi (2014) N5667
Pain v The State (2014) N5604
Pinzger v Bougainville Copper Ltd [1985] PNGLR 160
Pitil v Clytus (2003) N2422
PNG Aviation Services Pty Ltd v Somare [1997] PNGLR 515
PNG Ports Corporation Ltd v Canopus No. 71 Ltd (2010) N4288
Sakura Marine Products Ltd v Taia (2013) N5674
Trokowa v Ipai (2018) N7119
Wakalu v Police (2017) N6600
Wani v Provincial Police Commander, Western Highlands Province (2010)
Whyatt Gallagher Basset (PNG) Ltd v Diau (2002) N2277
Yayonga v Haniken (2012) N4876

Overseas Cases

Davies v Gell [1924] HCA 56; (1924) 35 CLR 275
Hill v Chief Constable of West Yorkshire [1989] AC 53

Legislation Cited:
Arrest Act Ch. 339, ss.8, 18, 26
Claims By and Against the State Act 1996, ss.5, 12
Constitution, ss. 37, 41, 42, 57, 58
Criminal Code Ch. 262, ss.128, 525(1)(b)
District Courts Act Ch. 40, ss.35, 49
District Courts Regulation Ch. 40, Form 16 (Information)
Judicial Proceedings (Interest on Debts and Damages) Act 2015, ss.4, 6
National Court Rules 1983, Order 22 rr.11, 24, 35
Wrongs (Miscellaneous Provisions) Act Ch. 297, s.34

Counsel:

Mr Ian Molloy and Mr Clayton Joseph, for the Plaintiffs
Mr Maleva Kipa, for the Defendants

DECISION

17^th October, 2022

1. SHEPHERD J: The late John Maddison and Robin Fleming instituted separate proceedings in this Court claiming damages, including exemplary damages, for negligence, malicious prosecution, breach of the Arrest Act and breach of Constitutional rights for their alleged unlawful arrest and prosecution by the first defendant.
   
2. As the causes of action for both plaintiffs are essentially the same and arise out of similar fact situations, this decision deals with each of the claims made in the two proceedings.
   

WS NO. 1062 OF 2010 – ESTATE LATE JOHN MADDISON -v- DETECTIVE SERGEANT FRANCIS NAMUES, GARI BAKI AS COMMISSIONER FOR POLICE, THE INDEPENDENT STATE OF PAPUA NEW GUINEA AND ANTHONY WAGAMBIE AS COMMISSIONER FOR POLICE

PRELIMINARY

3. The writ of summons for this proceeding was filed for the late John Maddison on 20 August 2010. He subsequently died on 22 December 2016 before the trial of his case could take place.
   
4. Letters of Administration of the late John Maddison’s Estate were granted to Ruth Yambaki, Timothy Maddison and Amy Maddison by the Supreme Court of Victoria at Melbourne on 3 July 2017.
   
5. An order was made in this proceeding WS No. 1062 of 2010 on 18 August 2017 pursuant to Order 5 Rule 9 of the National Court Rules for the substitution of Ruth Yambaki, Timothy Maddison and Amy Maddison as the personal representatives of the Estate of the late John Maddison (the Estate).
   
6. This proceeding is continued by the substituted plaintiffs for the benefit of the Estate This is allowed for in Part V of the Wrongs (Miscellaneous Provisions) Act Ch. 297. Section 34 of that Act relevantly provides:
   

34. Effect of death on certain causes of action

(1) Subject to this section, on the death of a person after 1 January 1963 (being the date of commencement of the pre-Independence Law Reform (Miscellaneous Provisions) Act 1962) all causes of action subsisting against or vested in him survive against or for the benefit of, as the case may be, his estate.

...

(3) Where a cause of action survives under this section for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate—

(a) do not include exemplary damages. ...

7. As s.34(3) of the Wrongs (Miscellaneous Provisions) Act operates as a statutory bar against any award of exemplary damages where a cause of action has survived a deceased person, senior counsel for the Estate rightly indicated at trial that exemplary damages claimed for in Mr Maddison’s pleadings would not be sought by the administrators of the Estate.
   

BACKGROUND FACTS

8. The agreed facts of this case are that at all material times the late John Maddison (hereafter referred to as Mr Maddison) was the Senior Manager for the Legal Services Unit of the Bank of South Pacific Limited (BSP) based in Port Moresby. He had previously been an executive bank manager for many years holding various top management posts with the former Papua New Guinea Banking Corporation (PNGBC) from October 1992 until the merger of that financial institution with BSP in August 2005, which is when Mr Maddison transferred to BSP.
   
9. On 6 January 2010 Mr Maddison was at his office at BSP’s headquarters in Port Moresby when he was informally arrested by Detective Chief Sergeant Francis Namues (the first defendant) of the National Fraud & Anti-Corruption Directorate of the Royal Papua New Guinea Constabulary (Police) who was accompanied at that time by Detective Constable Agatha Poga and Detective Constable Danny Tai. The first defendant arrested Mr Maddison pursuant to a warrant which had been issued earlier that day by Magistrate Fred Tomo of the Waigani District Court.
   
10. The warrant for arrest was issued by Magistrate Tomo on the complaint of the first defendant dated 29 December 2009 who had purportedly laid an information alleging that Mr Maddison had conspired with his colleague Robin Fleming at BSP and others to defeat the course of justice. The allegation against Mr Maddison as contained in the warrant was, without editorial correction, in these terms:
    

“ You did conspired with other persons Namely, Robin Fleming, Mary Johns, Kerenga Kua, Dr Joh Mua and Chris James Kruse to defeat the course of the justice by defiying a Legitimate Supreme Court Order Number “SCA: 52 of 2000” in ordering Motor Vehicle Insurances Limited to pay Yama Security Services an amount of K7,303,115.85 but instead the said Moneys were diverted to Deloitte Touche Tohmatsu as an agent of Bank of South Pacific

Thereby contravening to Section: 128 of CRIMINAL CODE ACT 262. ”

11. Section 128 of the Criminal Code Chapter 262 states:

128. Conspiring to defeat justice.

(1) A person who conspires with another to obstruct, prevent, pervert, or defeat the course of justice is guilty of a crime.

Penalty: Imprisonment for a term not exceeding seven years.

12. Mr Maddison was taken to the office of the National Fraud & Anti-Corruption Directorate Headquarters at Konedobu where he was interviewed by the first defendant and Detective Chief Inspector Philip Rambaliku regarding the charge for just over 3 hours in the afternoon of 6 January 2010. Mr Maddison denied having committed any offence. He was then formally charged by the first defendant under s.128(1) of the Criminal Code (the First Charge) and was taken under police escort to Boroko Police Station.
13. At Boroko Police Station Mr Maddison was kept in a police cell for about one hour and then transferred, still under arrest, to one of the interview rooms at Boroko Police Station. Mr Maddison was released from police custody approximately 7 hours later at 11.40 pm on 6 January 2010 after having been granted police bail upon payment of a cash surety of K5,000 and on condition that he appear in the District Court at Waigani the next day, 7 January 2010, at 9.30 am.
    
14. On 7 January 2010 Mr Maddison duly attended at Waigani District Court accompanied by his counsel, Thomas Anis of Ashurst Lawyers, but his matter was not listed.
15. On 8 January 2010 Mr Maddison applied to the National Court at Waigani and was granted bail to allow him to travel to Australia for urgent medical treatment involving surgery to remove a potentially cancerous growth on his tongue. He subsequently travelled to Australia for that treatment on several occasions and then returned to Port Moresby.
16. On or about 7 April 2010 Magistrate Tomo listed the committal proceedings in connection with the charge against Mr Maddison for hearing on 4 May 2010 subject to confirmation from the Court on that date.
17. Mr Maddison attended Waigani District Court on 4 May 2010 and was informed that there were no sittings on that day because no prosecutor was available.
18. On 5 May 2010 Mr Maddison again attended at Waigani District Court and this time was informed that his committal proceeding had been adjourned to the next day, 6 May 2010, for hearing.
19. On 6 May 2010 Mr Maddison appeared again before Magistrate Tomo. On application by his counsel, Mr Greg Egan, the charge, by information purportedly laid by the first defendant against Mr Maddison on 7 January 2010, was struck out by his Worship on the ground that the first defendant had failed or neglected to have the information signed and laid before a Magistrate in breach of s. 35(1) of the District Courts Act Chapter 40.
20. On 30 July 2010 the first defendant obtained from Magistrate Lawrence Kangwia of Waigani District Court a second warrant for the arrest of Mr Maddison, again based on the first defendant’s own complaint dated 29 December 2009 alleging that the late Mr Maddison had committed an offence under s.128(1) of the Criminal Code (the Second Charge). A similar warrant was issued for the arrest of Mr Maddison’s colleague at BSP, Robin Fleming.
    
21. On 5 August 2010 Mr Maddison and Mr Fleming voluntarily attended at the National Fraud & Anti-Corruption Directorate Headquarters at Konedobu at the direction of the first defendant. They were accompanied by their lawyer, Michael Henao. They were then both taken under police escort to Boroko Police Station where Mr Maddison and Mr Fleming were each charged under s.128(1) of the Criminal Code with having conspired with others to defeat the course of justice. They were both formally arrested and later that same day taken to Waigani District Court where they were arraigned by Magistrate Kangwia who granted each of them bail with K1,000 cash surety.
    
22. After several further appearances at Waigani District Court, on 8 November 2010 Mr Maddison was committed to stand trial in the National Court.
    
23. On 26 May 2011, when appearing in the National Court before Justice Mogish, the Public Prosecutor presented a Declaration signed by him under s.525(1)(b) of the Criminal Code by which he declined to lay any charge against Mr Maddison or against his co-accused Mr Fleming for lack of evidence. Justice Mogish accordingly discharged both Mr Maddison and Mr Fleming from the charges which had been laid against them by the first defendant.
    

MR MADDISON’S CLAIM IN WS NO. 1062 OF 2010

24. An amended statement of claim was filed by Ashurst Lawyers for Mr Maddison on 29 July 2013, leave to do so having been granted by the Court on 25 July 2013. Mr Maddison’s amended statement of claim pleaded that he had been wrongfully arrested, detained and charged by the first defendant on two different occasions with an offence under s.128(1) of the Criminal Code without good reason. Mr Maddison pleaded four causes of action:

(1) the tort of negligence, in that it was alleged that the first defendant had breached his duty of care to exercise reasonable care in charging, arresting and prosecuting Mr Maddison, that the other defendants were also liable for the first defendant’s conduct in this regard and that the State and the two Police Commissioners were further liable for negligence in their supervision and control of the first defendant.

(2) the tort of malicious prosecution, in that was alleged that the first defendant had wrongfully used the criminal process against him without reasonable or probable cause;

(3) breach of the first defendant’s statutory duty under the Arrest Act Chapter 339, in that it was alleged that the first defendant had no reasonable grounds to apply to the District Court at Waigani for the issuance of warrants for his arrest.

(4) breaches of the following sections of the Constitution in connection with the first defendant’s repeated arrest of Mr Maddison:

(a) s. 37 (protection of the law);

(b) s.41 (proscribed acts);

(c) s.42 (deprivation of liberty).

25. Mr Maddison pleaded that because of the wide publicity which the two charges against him had generated in the national press, irreparable damage was caused to his reputation as a senior bank officer with the Bank of South Pacific Ltd and that this had caused him mental stress and anxiety. He also pleaded that he had incurred legal fees and expenses with the charges made against him by the first defendant.
26. Mr Maddison claimed the following relief in his amended statement of claim:

(1) general damages;

(2) exemplary damages (but no longer pursued by the Estate);

(3) interest on damages;

(4) costs.

Defence of the Defendants

27. The defence to Mr Maddison’s amended statement of claim was filed for all four defendants by Fairfax Legal on 13 August 2013. The defence denied that the cited Police Commissioners were negligent in their supervision and control of the first defendant. The defence further pleaded, among others, to the effect that the first defendant was only carrying out his lawful duties in his prosecution of Mr Maddison, that the first defendant never intended to cause Mr Maddison to suffer any stress or anxiety, that the first defendant’s conduct was not harsh or oppressive, that the first defendant had discharged his police duties in a diligent and reasonable manner and that the first defendant had not acted with malicious intent against Mr Maddison.
    

Mr Maddison’s Evidence

28. At trial, senior counsel for the Estate, Mr Ian Molloy, relied on two affidavits sworn by Mr Maddison which were respectively filed on 19 November 2013 and 6 June 2014 in this proceeding and which recounted the events in connection with Mr Maddison’s double arrest as set out in the agreed facts outlined in the above background to this case. Mr Maddison additionally deposed at length in his second affidavit as to the reasons why judgment monies owed by Motor Vehicles Insurance Limited (MVIL) to Yama Security Services Ltd were paid by Mr James Kruse of the Port Moresby office of accountancy firm Deloitte Touche Tohmatsu as Court-appointed Receiver of Yama Security Services Ltd to BSP. Those monies were paid by Mr Kruse as Receiver of Yama Security Services Ltd to BSP pursuant to the crystallisation on 16 December 2009 of a fixed and floating charge which Yama Security Services Ltd had previously given over its assets to PNGBC prior to that bank’s merger with BSP.
29. Mr Molloy for the Estate further relied at trial on the affidavit of Clayton Joseph filed on 8 August 2017 which deposed as to service on the State on 27 June 2011 of notice of Mr Maddison’s claim under s.5 of the Claims By and Against the State Act 1996 in respect of matters arising from Mr Maddison’s alleged wrongful arrest on the Second Charge. The validity of that notice was not disputed by counsel for the defendants at trial and no issue regarding that notice was pleaded or arose at trial.
    

Defendants’ Evidence

30. Counsel for the defendants, Mr Maleva Kipa, relied at trial on the affidavit of the first defendant which was filed on 29 November 2013. This was the only evidence adduced at the trial for all defendants. Much of the factual material deposed to by the first defendant in his affidavit is consistent with the agreed facts set out in the background to this decision.
31. The first defendant also deposed in his affidavit as to a judgment debt of K4.4 million plus an undisclosed amount of interest which the Supreme Court had confirmed in a civil case on appeal was owed by Motor Vehicles Insurance Ltd (MVIL) to Yama Security Services Ltd, a subsidiary within the Yama Group of Companies, and which judgment debt was the subject of a garnishee order obtained on 18 December 2009 and served on MVIL “in consultation with Bank of South Pacific Headquarters”. The first defendant gave no further explanation in his affidavit as to what then occurred with the garnishee order other than stating that after it had been served on MVIL, “within two days Deloitte Tohmatsu Touche was appointed as a Receiver ” and that this occurred without the knowledge of the Yama Group of Companies but with the full knowledge of Mr Maddison.
    
32. The first defendant concluded his affidavit by stating on oath:

“ 14. At all material times, my conduct in arresting and charging the Plaintiff was based on formal information and complaint under law.

15. I have no personal grudge against the Plaintiff that may warrant my action to be one of malicious nature or improper purpose. My conduct at all material times was legal and in accordance with my responsibilities as Senior Criminal Investigator with the office of the National Fraud & Anti-Corruption Directorate. ”

ISSUES

33. I consider that the issues presented in this case are these:
    
    1. Have any of the following of Mr Maddison’s causes of action been established on the evidence:

(a) the claim against the first, second, third and fourth defendants based on the tort of negligence?

(b) the claim against the first defendant based on the tort of malicious prosecution?

(c) breach of the first defendant’s statutory duty under the Arrest Act?

(d) breaches of Mr Maddison’s constitutional rights as pleaded?

2. If any or all of these causes of action are established, what quantum of damages should be awarded to the Estate?
   
34. If the Court finds that liability is established for any of Mr Maddison’s four causes of action, the defendants have already admitted in para. 1 of their defence to the effect that the State will be vicariously liable for the actions of the first, second and fourth defendants as pleaded in para. 3 of Mr Maddison’s amended statement of claim. Subject to the Court’s findings on liability in respect of the first, second and fourth defendants, the State’s vicarious liability is therefore not in issue in this proceeding.
    

CONSIDERATION

ISSUE 1(a): NEGLIGENCE

35. The tort of negligence, developed by English common law, has long been adopted as part of the underlying law of Papua New Guinea. It is well established in our jurisdiction that to found a cause of action in negligence, there are four elements that a plaintiff must establish, namely:

(a) the defendant owed a duty of care to the plaintiff;

(b) the defendant breached that duty of care;

(c) the breach of duty caused damage to the plaintiff;

(c) the type of damage was not too remote.

36. The authorities which confirm that all four of these elements must be proven to exist to found a claim in the tort of negligence are numerous: see for example Baikisa v J & Z Trading Ltd (2016) N6181; Bau v Bine (2016) N6268; Hembihi v Kuma (2018) N7156; Trokowa v Ipai (2018) N7119; Kuman v Digicel (PNG) Ltd (2019) SC1851.
37. I now address each of these four elements as regards the first defendant and then separately as against the second and fourth defendants.
    

Negligence – did the First Defendant owe a duty of care to Mr Maddison?

38. Mr Molloy for the Estate submitted to the effect that the first defendant owed a duty of care to Mr Maddison to ensure that only a lawfully valid prosecution would be undertaken by the first defendant in the performance of his police duties and functions when he arrested Mr Maddison on the First Charge and again when Mr Maddison was arrested on the Second Charge.
    
39. As to the First Charge, it was submitted by Mr Molloy that the laying of an unsworn, unsigned information before Magistrate Tomo, which caused the issuance of an illegal warrant for the arrest of Mr Maddison on the First Charge, was a serious breach of the duty of care which the first defendant owed to Mr Maddison. This breach of s.35(1) of the District Courts Act Chapter 40 and breach of the first defendant’s duty of care ultimately resulted in the whole of that invalid prosecution being struck out by Magistrate Tomo on 6 May 2010.
    
40. As to the Second Charge, Mr Molloy submitted that the first defendant again breached his duty of care to Mr Maddison when the first defendant persisted with obtaining from the District Court at Waigani on 30 July 2010 a second warrant for the arrest of Mr Maddison in circumstances when the first defendant knew, or ought to have known, that there was no evidence at all of any criminality on the part of Mr Maddison to support a charge under s.128(1) of the Criminal Code of conspiracy to defeat the course of justice. Mr Molloy’s reasons for this contention, which apply equally to the First Charge against Mr Maddison, are extensive and are summarized below.
41. It was submitted for the Estate that the negligence of the first defendant in respect of both the First and Second Charges is established by the fact that the first defendant proceeded on two occasions to lay, or purport to lay, informations pursuant to s.49(1) of the District Courts Act to obtain warrants for the arrest of Mr Maddison when there was no evidence as to criminality on the part of Mr Maddison from which any police officer could reasonably conclude that there was a prima facie or arguable case that any criminal offence had been committed.
    
42. Mr Molloy referred to Mr Maddison’s second affidavit which explains why the garnishee order which Yama Security Services Ltd obtained on 18 December 2009 in its endeavour to attach monies held in MVIL’s bank account at BSP to pay the judgment debt which MVIL owed Yama Security Services Ltd was unsuccessful. The reason was straightforward. On 16 December 2009, two days before Yama Security Services Ltd was granted a garnishee order by the National Court, BSP had appointed Mr Kruse as Receiver of Yama Security Services Ltd. That appointment was made under a fixed and floating charge over Yama Security Services Ltd’s assets to secure loan finance for the Yama Group of Companies which Yama Security Services Ltd had executed in 1999 in favour of PNGBC, and which bank on merger had become BSP in 2005. On crystallisation of the fixed and floating charge and appointment of Mr Kruse as Receiver on 16 December 2009, the Receiver had then lawfully accounted to BSP for the value of the judgment debt owed by MVIL to Yama Security Services Ltd in furtherance of powers contractually given by Yama Security Services Ltd to the Receiver under the fixed and floating charge which that company had granted to the PNGBC, now BSP. MVIL’s monies to pay the judgment debt it owed Yama Security Services Ltd were paid to BSP by the Receiver pursuant to the fixed and floating charge, not to Yama Security Services Ltd, to offset substantial accumulated debt which Yama Security Services Ltd (in receivership) owed to BSP.
43. Mr Maddison deposed at paras. 3 and 4 of his second affidavit as follows:

“ 3. It is important to note that the criminal charges which are the subject of these proceedings were instituted shortly after Peter Yama and Yama Security Services Limited’s attempt to garnishee Bank of South Pacific Limited in National Court proceedings WS 225 of 1999 were aborted when Bank of South Pacific Limited through its agent James Kruse of Deloitte Touche Tohmatsu exercised its powers pursuant to a Fixed and Floating Charge dated 6 May 1999 and obtained payment from the judgment debtor in the said proceedings, Motor Vehicles Insurance Limited. The entire judgment debt due to Yama Security Services Limited, the amount of K7,653,115.85, was subsequently paid to Bank of South Pacific Limited as part payment of the debt due to it by Yama Security Services Limited.

4. The date that the Bank crystallised the Fixed and Floating Charge was 16 December 2009 and it would appear from the summary of facts attached to the police hand up brief in both Robin Fleming’s matter and my matter that a complaint was made shortly after Kerenga Kua, who appeared for Motor Vehicles Insurance Limited in the National Court proceedings, appeared before His Honour Justice Sakora on or about 23 December 2009 to advise the Court that the judgment debt had been paid to Bank of South Pacific Limited. This meant, in effect, that Yama’s company would not receive its judgment debt. ”

44. Mr Maddison then deposed in his second affidavit to a meeting which the first defendant had with him at the Port Moresby Branch of BSP on or about 23 January 2008, almost two years before Mr Kruse was appointed as Receiver of Yama Security Services Ltd on 16 December 2009. At that meeting in late January 2008 the first defendant requested information from BSP regarding Yama Security Services Ltd’s fixed and floating charge, which he was given. Mr Maddison says that the first defendant gave him a list of 15 questions regarding Yama Security Services Ltd’s fixed and floating charge and other documents, which Mr Maddison answered by letter dated 15 February 2008. Most of the first defendant’s questions enquired as to what authority BSP had under its security documentation with the Yama Group of Companies to debit legal fees against Yama Group company accounts with BSP for debt recovery proceedings instituted by BSP against subsidiaries within the Yama Group of Companies, including Yama Security Services Ltd. A copy of Mr Maddison’s lengthy letter in response to the first defendant’s list of questions is annexure “A” to Mr Maddison’s affidavit. Mr Maddison’s letter of 15 February 2008 to the first defendant concludes with this statement:

“ In addition to the above we believe we should draw your attention to the decision of the National Court in WS Number 675 of 2001 handed down on 23 August 2004 – a copy of the judgment is attached for your information. It seems that in making his complaint to you Mr Yama has failed to disclose the existence of this National Court ruling and has laid a knowingly false complaint.

This Court judgment expressly deals with the question of the debiting the Yama loan accounts with the Bank’s legal and other costs on pages 3 to 6 of the judgment and clearly finds that this is allowed for in the documentation entered between the Bank and the Yama Group. Whilst the judgment deals with the Guarantee document, it quotes various clauses in the Guarantee in the judgment and you will note that they are effectively identical to relevant clauses in the Fixed and Floating Charges referred to in our response to Question 1.

On page 6 of the judgment the Court ruled:

“ As to whether the defendants can now raise the argument that they should be given the opportunity to give evidence as to whether they agreed to pay the legal fees referred to in the statements of accounts. I find that evidence is already before me in the form of guarantees executed by all defendants and which they acknowledge to be their documents. These guarantees are in effect evidence that the Defendants had agreed to have various fees and charges including legal fees, debited to their loan accounts.”

The National Court has given a formal Order that it is legal and proper for the Bank to debit the loan accounts with the costs related to the recovery or enforcement action undertaken by the Bank and that the guarantors (defendants) agreed to this course of action. As the Guarantees and Fixed and Floating Charges contain similar clauses on this point it is reasonable that the Court would reach a similar conclusion for the borrowing entity. ”

45. Mr Maddison then deposed in his second affidavit that, in his opinion, had the first defendant carefully considered the responses which Mr Maddison had given for BSP in his letter of 15 February 2008, which had already explained BSP’s various contractual rights under fixed and floating charges to obtain payment of debts owed to BSP by the Yama Group of Companies, including Yama Security Services Ltd, then the first defendant would have accepted that there could be no element of criminality in the role taken by Robin Fleming and himself in the crystallisation on 16 December 2009 of the fixed and floating charge which BSP had over the assets of Yama Security Services (in receivership). One of those assets was the judgment debt of K7,653,115.85 which MVIL owed to Yama Security Services Ltd. It was that judgment debt which was lawfully diverted by the Receiver of Yama Security Services Ltd and accounted for to BSP under the company’s fixed and floating charge held by BSP, payment having been made by the Receiver to BSP to offset extensive indebtedness which Yama Security Services Ltd then owed to BSP.
    
46. Mr Maddison says in his second affidavit to the effect that the first defendant, instead of accepting that Mr Fleming and Mr Maddison were only acting in compliance with contractual rights given by Yama Security Services Ltd to the BSP in connection with the crystallisation of the subject fixed and floating charge on 16 December 2009, negligently proceeded to disregard BSP’s lawful position and determined, on complaint by Mr Peter Yama, to have Mr Fleming and himself arrested under s.128(1) of the Criminal Code.
47. Mr Molloy specifically directed the Court’s attention to the evidence given at paras. 8 and 9 of Mr Maddison’s second affidavit where Mr Maddison had deposed:

“ 8. Instead [of accepting absence of any criminal conduct], it would appear from the material obtained in the Police Hand Up Briefs, that the First Defendant attended upon Senior Magistrate Fred Tomo on or about 19 January 2010 to lay an Information against Robin Fleming that we had conspired with others including Kerenga Kua, Dr John Mua and James Kruse to defeat the judgment which Yama Security Services Limited had obtained against Motor Vehicles Insurance Limited despite the facts, that:

(a) There was no evidence of any unlawful act that occurred and there was no evidence of any agreement or any other conversation between the alleged co-conspirators which could have constituted the alleged criminal offence.

(b) The First Defendant had requested information from me in January 2008 and without further contact either by telephone or otherwise, he entered Bank of South Pacific Port Moresby Branch in the company of other police officers to personally arrest myself on 6 January 2010 and then did the same thing to Robin Fleming on 18 January 2010. The act of entering the Bank of South Pacific Head Office in this manner was extremely intimidatory and, in my opinion, unnecessary as Robin Fleming and myself would have readily attended the office of the First Defendant for the purpose of an interview, this is precisely what Robin Fleming and I did do on 5 August 2010 when we were both charged for a second time following the dismissal of the charges on the first occasion on 6 May 2010.

9. That is, there was no reason why the First Defendant had to personally attend the Bank to carry out the arrests in the company of other officers in the manner in which he did. He could have asked us to attend his office for the purpose of an interview at any time as neither of us were likely to flee the jurisdiction in order to avoid attending an interview. We were both long term residents, both married or in relationships with Papua New Guinea women and both had families to Papua New Guinea women. ”

48. Mr Molloy advanced a further reason why the first defendant breached his duty of care to the first defendant to only pursue criminal proceedings in circumstances where the first defendant knew, or ought to have known, that there was a prima facie or arguable case that criminal conduct had occurred. This was because the first defendant persisted with the Second Charge, followed by committal of Mr Maddison to the National Court on the charge of criminal conspiracy, notwithstanding that the first defendant knew, or ought to have known, that the charges he had brought against Robin Fleming and Mr Maddison of conspiracy to defeat justice under s.128(1) of the Criminal Code could never be successfully prosecuted.
49. In support of this proposition Mr Molloy relied on para. 12 of Mr Maddison’s second affidavit where Mr Maddison referred to the fact that the Public Prosecutor, once he was fully appraised and briefed in relation to the purported evidence against Robin Fleming and Mr Maddison, on 25 May 2011 in National Court proceedings CR No. 1445 of 2010 and CR No. 1446 of 2010 filed a Declaration pursuant to s.525(1)(b) of the Criminal Code that no indictment would be laid against Mr Maddison and Mr Fleming as the Public Prosecutor could find no evidence of criminality against either of them.
50. A copy of the Public Prosecutor’s Declaration is annexed to the affidavit of Ian Shepherd sworn 17 October 2011, document no. 19, in Robin Fleming’s related civil proceeding WS No. 1090 of 2010.
51. It was this Declaration of the Public Prosecutor which led to the discharge by his Honour Justice Mogish on 26 May 2011 of Mr Maddison and Mr Fleming from any prosecution in the National Court for the offence of conspiracy to defeat the course of justice which had been alleged and so persistently pursued against them by the first defendant.
52. Mr Molloy submitted that as the Public Prosecutor could find no evidence of criminal conduct by Mr Maddison and Mr Fleming, so too should the first defendant have found no such evidence. Yet despite that absence of evidence, the first defendant persevered with the Second Charge to the point where Mr Maddison and Mr Fleming were compelled to appear before the National Court on 26 May 2011 under threat of continuing prosecution for a most serious indictable offence carrying with it on conviction a sentence of up to 7 years. This, Mr Molloy, says is further reason for the Court to find that the first defendant breached his duty of care to Mr Maddison.
53. Against this, the evidence given by the first defendant in his affidavit was that he deposed that at all material times his conduct in arresting and charging Mr Maddison was legal and in accordance with his responsibilities as a senior criminal investigator with the office of the National Fraud & Anti-Corruption Directorate.
54. Counsel for the defendants made no written submission in answer to Mr Maddison’s cause of action based on the allegation of negligence on the part of the first defendant.
55. The submission which counsel for the defendants Mr Kipa made orally at trial with regard to the issue of civil negligence pleaded by Mr Maddison was to assert that there had been no breach of any duty of care that the first defendant owed to Mr Maddison and that the first defendant had discharged his duties with diligence. This is what the transcript of the trial shows in this regard at pp. 13 and 14:

MR KIPA: ... Your Honour, in relation to the allegations of negligence, we submit that the first defendant did not breach any duty of care towards the plaintiff. The first defendant was simply acting upon a formal information and complaint.

...

MR KIPA: ... For the first charge, the plaintiff was arrested and interviewed for about an hour and a half. And then at about 4 pm he was then taken to the Boroko Police Station and locked in there for about an hour and was released from the cells but continued to remain under arrest in of the offices until bail was granted later that night. And in our submission there was no excessive or unreasonable dealing on the part of the first defendant in arresting and charging the plaintiff. We say that this defendant had discharged his duties diligently in processing the plaintiff in custody and releasing him and bringing him back – bringing him before a court of law to answer the charges. My learned friend has also submitted that the negligence of the first defendant lay in the – or lies in the laying of the evidence, laying of an information in relation to the first charge when there was no evidence to lay such an information. And we submit that there was evidence of circumstances that was before the first defendant which we say would have created a reasonable suspicion in his mind as to the offence with which the plaintiff was charged and the steps that the first defendant took were steps in a process leading towards ascertaining whether such a charge could be made out.

56. I reject the two contentions for the first defendant that he was only acting on an information and complaint and that the first defendant acted throughout with diligence in the performance of his police duties in his prosecution of Mr Maddison. My reasons for rejecting this oral submission by counsel for the defendants are set out below.
57. I have already noted that that the criminal offence created by s.128(1) of the Criminal Code of conspiracy to defeat the course of justice is an indictable offence punishable on conviction with a sentence of up to seven years imprisonment.
58. However, it is important to note that Section 128(2) of the Criminal Code states:

128(2) A person shall not be arrested without warrant for an offence against Subsection (1).

59. I consider that if a police officer in the position of the first defendant had genuine cause to believe that there was a prima facie or arguable case based on reasonable grounds that Mr Maddison had committed the offence of criminal conspiracy and that therefore s.128(2) of the Criminal Code required his arrest, that officer would need to assiduously ensure that all procedural formalities required by law for the commencement of the prosecution against Mr Maddison were observed before any application could be made to a Magistrate for the issuance of an arrest warrant. Otherwise that officer would be in breach of his or her civil duty of care owed to Mr Maddison to prosecute a case in good faith according to due process of law.
60. In my view, due process of law in this case required that a proper foundation needed to be laid by the first defendant for commencement of criminal proceedings against Mr Maddison before any warrant for arrest could be applied for.
61. Where a warrant to arrest a party who is to be charged with a criminal offence is required from a District Court, the Court has two concurrent jurisdictions for the issuance of a warrant: s.35(1) and s.49(1) of the District Courts Act, alternatively s.8 of the Arrest Act.
62. Section 35(1) of the District Courts Act provides:

35. Form of information

(1) Where it is intended to issue a warrant in the first instance against the party charged, the information shall be in writing and on oath by the informant or some other person.

63. Section 49 of the District Courts Act relevantly provides:

49. Issue of warrants of arrest.

(1) Where an information is laid before a Magistrate—

(a) that a person is suspected of having committed an indictable offence in the country;

(b) ...

the Magistrate may, subject to Subsection (2), issue his warrant for the arrest of that person and cause him to be brought before a Court to answer to the information and to be further dealt with according to law.

(2) In a case referred to in Subsection (1), the Magistrate, if he thinks fit, instead of issuing his warrant in the first instance for the arrest of the person charged, may proceed by summons and issue a summons against the person charged.

(3) Notwithstanding the issue of a summons, a Magistrate may issue his warrant at any time before or after the time specified in the summons for the appearance of the defendant.

64. Section 8 of the Arrest Act provides:

8. Issue of warrant by a court other than a Local Court^[1]

Where an information is laid before a court, other than a Local Court, that there are reasonable grounds for believing—

(a) that a person has committed an offence within the country; and

(b) that it would not be practicable or desirable to proceed against the person by summons in that his arrest is necessary—

(i) to ensure his appearance in court to answer a charge for the offence; or

(ii) to prevent—

(A) the continuation or repetition of the offence; or

(B) the commission of a further offence; or

(iii) to preserve the safety or welfare of a member of the public or of the person,

the court may issue a warrant for the arrest of the person.

[underlining added]

65. An applicant seeking an arrest warrant can elect to proceed under ss.35(1) and 49(1)(a) of the District Courts Act or under s.8 of the Arrest Act. But no matter which jurisdiction of the District Court is selected for the issuance of an arrest warrant, both processes require an information in the form prescribed by the District Courts Act to be sworn by the applicant before a Magistrate as a statutory pre-condition for the issuance of an arrest warrant. This is because the issuing of an arrest warrant is a serious matter. It involves the deprivation of liberty of the party to be charged and arrested. The relevant statutory provisions are clear. An arrest warrant should not be sought in preference to the summons procedure allowed for in the District Courts Act unless there is reasonable cause, deposed to by an applicant on oath before a Magistrate by way of a formal information.
66. Form 16 of the District Courts Regulation Chapter 40 is the prescribed form for an information:

PAPUA NEW GUINEA

District Courts Act

Act, Secs. 28, 35 Form 16

INFORMATION

The information of ... of ..., laid ..., 19..., before the undersigned, a Magistrate of a District Court, who (on oath) says that on ..., 19..., at ... (state the offence).

Laid/Sworn* before me the day and year first abovementioned at ...

Magistrate

*Strike out whichever is inapplicable

67. Where application is made to a District Court for an arrest warrant under s.35(1) and 49(1)(a) of the District Courts Act, the prescribed form is Form 21 of Schedule 1 of the District Courts Regulation.
68. In the present case, the first defendant elected to apply for a warrant for the arrest of Mr Maddison under s.8 of the Arrest Act on 6 January 2010. He did this again on 30 July 2010. Copies of these two arrest warrants are annexures “A” and “C” to Mr Maddison’s first affidavit.
69. The purported information relied on by the first defendant to ostensibly support the first warrant for the arrest of Mr Maddison is annexure “B” to Mr Maddison’s first affidavit.

First warrant for arrest

70. The warrant for the first arrest of Mr Maddison was issued by Magistrate Tomo of Waigani District Court on 6 January 2010. The arrest warrant states that it was issued to “Det. Francis Namues of the Nat. Fraud Squad” on his own complaint dated 29 December 2009. The warrant further states that it was necessary for the Court, according to that complaint, to arrest Mr Maddison for having conspired with Robin Fleming and others to defeat the course of justice in contravention of s.128 of the Criminal Code.
    
71. I find that the first warrant of arrest is defective for three reasons:

(1) the warrant was erroneously based on the first defendant’s “complaint” dated 29 December 2009, not on a formal information in Form 16 sworn on oath by the first defendant before Magistrate Tomo as required by ss.35(1) and 49(1)(a) of the District Courts Act.

(2) The so-called information relied on by the first defendant to support the issuance of the first arrest warrant was never sworn on oath by the first defendant in the presence of Magistrate Tomo or of any other Magistrate. It was this failure of the first defendant to have sworn on oath that he had reasonable grounds for believing that Mr Maddison had committed the offence of criminal conspiracy in contravention of s.128(1) of the Criminal Code and the first defendant’s failure to secure the signature of Magistrate Tomo to any information that eventually resulted in his Worship dismissing the First Charge against Mr Maddison as a nullity on 6 May 2010.

(3) Of equal significance is the fact that the first defendant’s defective unsworn information bearing his signature, evidenced by annexure “C” to Mr Maddison’s first affidavit, uncontested by the first defendant, was dated 7 January 2010, the day after the first arrest warrant was issued on 6 January 2010.

72. There was no evidence for the first defendant adduced at trial before me to explain why the defective information, unsigned by Magistrate Tomo, which the first defendant had prepared in his endeavours to obtain the issuance of the first arrest warrant from the Waigani District Court on 6 January 2010 was belatedly and negligently dated 7 January 2010.

Second arrest warrant for arrest

73. I find that the prosecution of Mr Maddison on Second Charge and the second arrest warrant issued by Magistrate Kangwia of the Waigani District Court, evidenced by annexure “B” to Mr Maddison’s first affidavit, were also defective and therefore void at law. The second warrant of arrest, as with the first warrant, clearly stated that it was based on the “complaint” dated 29 December 2009 of the first defendant, not on any formal information which had been sworn by the first defendant laid before Magistrate Mr Kangwia as required by ss. 35(1) and 49(1)(a) of the District Courts Act. The second arrest warrant was a nullity for this reason alone.
    

Conclusion on status of First and Second Arrest Warrants

74. For these reasons I find it misleading and disingenuous for counsel for the defendants to have submitted that the first defendant was only acting on a complaint and information when prosecuting the case against Mr Maddison. The two arrest warrants that were respectively issued out of the Waigani District Court on 6 January 2010 and 5 August 2010 were based on the first defendant’s own “complaint”, not on any “information”, valid or otherwise, which he may have laid. According to the wording used in both arrest warrants, neither of them were issued based on an “information”. This is not a matter of quibbling over semantics or use of incorrect language. An arrest warrant can only be valid for the purposes of s. 35(1) and 49(1)(b) of the District Courts Act, alternatively s. 8 of the Arrest Act, if a valid information has been sworn on oath before a Magistrate and signed by that Magistrate.
75. I agree with Mr Molloy that this is a case that relates to negligent acts or omissions specific to the charging, arresting and prosecuting Mr Maddison. The evidence establishes that no reasonably competent police officer would have considered that there was a reasonable basis for bringing or pursuing a charge of criminal conspiracy against Mr Maddison.
76. I go further and find that the evidence clearly establishes that no reasonably competent police officer would have ignored the necessity for compliance with the statutory requirements for:
    

(a) laying of a valid information, sworn on oath by that police officer before a Magistrate who then signed the information; and

(b) the issuance of an arrest warrant by a Magistrate based on a valid information, not on some “complaint” made by the police officer concerned.

77. I accordingly find that the submission made for the first defendant that he acted with diligence in his ultimately aborted two attempts to prosecute Mr Maddison for criminal conspiracy is without any foundation. The facts speak for themselves. I find that the first defendant acted carelessly, without ensuring his own compliance with due process. In so doing I find that the first defendant breached his duty to Mr Maddison to exercise reasonable care to comply with due process, that such breach was to the detriment of Mr Maddison who suffered reputational damage, stress and anxiety, and that the harm sustained by Mr Maddison was a forseeable consequence of the first defendant’s breach of his duty of care to Mr Maddison.
78. As I am satisfied that all elements of the tort of negligence have been proven beyond the standard of civil proof insofar as concerns the conduct of the first defendant, Mr Maddison’s cause of action in negligence against the first defendant has therefore been established. I find that the first defendant is liable to the Estate for damages for the first defendant’s negligence in his prosecution of Mr Maddison. The State is vicariously liable for the first defendant’s negligence in view of the admission contingent on a finding of liability of the first defendant which is contained in para. 1 of the defence.
    

Negligence – did the Second Defendant and Fourth Defendant owe a duty of care to Mr Maddison?

79. It was pleaded by Mr Maddison in paras. 16 and 31 of the amended statement of claim that the two Police Commissioners, respectively cited in this proceeding as the second and fourth defendants, were negligent in their supervision and control of the first defendant in respect of his prosecution of Mr Maddison and that the State is vicariously liable for that alleged negligence of the two Police Commissioners. The second defendant was the Police Commissioner at the time of the first defendants’ prosecution of the First Charge against Mr Maddison. The fourth defendant was the Police Commissioner when the Second Charge was prosecuted by the first defendant.
80. It was advanced by Mr Molloy at trial that apart from the first defendant’s own negligence, it is a reasonable inference, in the absence of any evidence from the defendants to the contrary, that the first defendant was not adequately or sufficiently trained or supervised at the material times by the second and fourth defendants and that this gives rise to a separate claim of negligence against the two Police Commissioners for which they and vicariously the State are liable.
81. While I have found that the first defendant is liable in the tort of negligence for breach of the duty of care he owed to Mr Maddison, I have difficulty in finding that the two Police Commissioners owed a separate duty of care specific to Mr Maddison to ensure that the first defendant was adequately or sufficiently trained or supervised.
82. In Maku v Maliwolo (2011) SC1171 (Lenalia, Makail & Kariko, JJ) it was held that the police owe no duty of care to the public at large. Further, there will be no duty of care if there are wider policy issues, such as where the imposition of such a duty of care could adversely affect the way in which police carry out their duties for fear of litigation.
83. The facts in Maku were that a class action was brought by a group of villagers against the Commissioner for Police and several Police Commanders for their alleged failure to have stopped a tribal fight involving members of an enemy tribe which had resulted in the death of two men as well as extensive destruction of property.
84. The Supreme Court found that as the Commissioner for Police and the two Police Commanders did not directly cause the killings and the destruction of the appellants’ property, they owed the appellants no duty of care to have attended and stopped the tribal fight because the Police owe no duty of care to the public at large, and to impose such a duty of care would be against public policy. In coming to this conclusion, the Court referred to principles of English common law formulated in the leading House of Lords decision in Hill v Chief Constable of West Yorkshire [1989] AC 53 where it was said by Lord Keith at page 85 in connection with the investigative operations of the police:

“ The manner of conduct of such an investigation must necessarily involve a variety of decisions to be made on matters of policy and discretion, for example as to which particular line of inquiry is most advantageously to be pursued and what is the most advantageous way to deploy the available resources. Many such decisions would not be regarded by the courts as appropriate to be called in question, yet elaborate investigation of the facts might be necessary to ascertain whether or not this was so. A great deal of police time, trouble and expense might be expected to have to be put into the preparation of the defence to the action and the attendance of witnesses at trial. The result would be a significant diversion of police manpower and attention from their most important function, that of the suppression of crime. Closed investigations would require to be reopened and retraversed, not with the object of bringing any criminal to justice but to ascertain whether or not they had been competently conducted. ”

85. The Supreme Court in Maku went on to find that the Hill decision has been adopted in other common law jurisdictions such Australia, Fiji, Kiribati and Tonga as establishing a common law immunity from negligence actions for police when they are involved in the suppression and investigation of crime and that this immunity has been extended to cases where the claim in negligence is for alleged police “inaction”. The rationale for this immunity is founded on public policy grounds in that it applies to operational matters affecting the deployment of police resources, including the expertise of officers required to investigate or suppress crime. The Supreme Court observed at para. 30:

“ The Court is not in a position to deliberate on the range of operational matters that impact on the ability of the police to investigate, suppress or solve crime. But it should be made very clear that the immunity is not a blanket immunity for police from all liability.”

86. The principles applied in Maku have been reinforced in numerous subsequent decisions: see Yayonga v Haniken (2012) N4876 (Kariko J); Etepa v Baki (2015) SC1502 (Manuhu, Kariko, Murray, JJ); and Aire v Togoi (2016) N6434 (Toliken J).
87. I find that the matter pleaded for Mr Maddison in the present case to the effect that the two Commissioners for Police in the present case owed a duty of care to Mr Maddison to ensure that the first defendant was adequately or sufficient trained to be able to conduct a competent investigation and that such notional duty of care was breached by those Commissioners for Police is an issue which goes to operational matters affecting the deployment of training resources within the Royal Papua New Guinea Constabulary. No evidence was adduced on this issue. The Court was asked to find that such a liability exists in this case on inferences alone. The Court declines to do so.
88. As the first element of the tort of negligence has not been proven to exist, no cause of action in negligence has been established as having been committed by the second and fourth defendants. It follows that the State therefore bears no vicarious liability for the alleged negligence of the two Police Commissioners in their training and supervision of the first defendant.
89. However, if the circumstances were such that this was not an operational matter going to general training of different facets of police functions and that either of the two Commissioners had personally conducted or had personally supervised the first defendant when he was conducting his prosecution of Mr Maddison, the immunity attaching to the two Commissioners’ liability in the tort of negligence might well have been susceptible to challenge.

ISSUE 1(b): MALICIOUS PROSECUTION

90. Mr Maddison has sued the first defendant and vicariously the State for malicious prosecution. The elements which must be substantiated to support the tort of malicious prosecution are set out by Hartshorn J in Sakura Marine Products Ltd v Taia (2013) N5674. The four elements are these:

(a) the defendant was responsible for the institution of the proceedings against the plaintiff;

(b) the defendant instituted the proceedings without reasonable and probable cause;

(c) the defendant was motivated by malice or some other improper purpose; and

(d) the criminal proceedings were resolved in favour of the plaintiff.

I will address each of these four elements in turn.

Institution of proceedings

91. It is an agreed fact that the first defendant instituted the two prosecution proceedings against Mr Maddison. This is admitted by the first defendant in para. 1 of the defence filed on 13 August 2013. The same admission is contained in paras. 1 and 8 of the parties’ statement of agreed and disputed facts and issues for trial filed on 29 November 2013.
92. The prosecution for the First Charge was commenced when the first defendant made a complaint to Waigani District Court on 29 December 2009 that Mr Maddison had allegedly committed the offence of criminal conspiracy with his colleague Robin Fleming and others to defeat the course of justice. That proceeding was struck out by Magistrate Tomo on 6 May 2010 on the ground that the first defendant had failed or neglected to have a valid information laid before him on 6 January 2010 as required by s.35(1) of the District Courts Act.
93. After the first prosecution was aborted as a nullity, the first defendant instituted the proceeding for the Second Charge on 30 July 2010 by applying to Magistrate Kangwia for the issue of another warrant for the arrest of Mr Maddison by again relying on the same complaint he had made to Waigani District Court back on 29 December 2009 that Mr Maddison had allegedly conspired with Robin Fleming and others to defeat the course of justice in contravention of s.128(1) of the Criminal Code. This is clearly evident from the copy of the arrest warrant which is annexure “C” to Mr Maddison’s first affidavit. The second prosecution was pursued by the first defendant from committal of Mr Maddison by Magistrate Mr Kangwia through to Mr Maddison’s appearance almost a year later in the National Court on 26 May 2011 before Justice Mogish. As already observed, on 26 May 2011 a Declaration signed by the Public Prosecutor under s.525(1)(b) of the Criminal Code was produced to his Honour in open court. By that Declaration the Public Prosecutor declined to lay any indictments against Mr Maddison and his co-accused Mr Fleming for their alleged offence of criminal conspiracy because the Public Prosecutor considered that there was insufficient evidence on the part of Mr Maddison and Mr Fleming to proceed with prosecution of the Second Charge. Mr Maddison and Mr Fleming were both discharged by Justice Mogish.

Were the proceedings instituted without reasonable and probable cause?

This second element of the tort of malicious prosecution requires proof that there was no good reason for the first defendant to have instituted the two criminal proceedings against Mr Maddison. There must be proof that the first defendant did not honestly believe that Mr Maddison was guilty of the offence of criminal conspiracy and/or that if the first defendant did hold such a belief then it was not based on reasonable grounds: Kapi v Kambang Holdings Ltd (2011) N4451 (Cannings, J).

94. Mr Molloy contends for the Estate that the first defendant did not honestly believe that Mr Maddison and Mr Fleming were guilty of criminal conspiracy, or that if the first defendant did hold such a belief then it was not founded on reasonable grounds.
95. Mr Maddison’s evidence in this regard is set out in his second affidavit, much of which I have already referred to in connection with Mr Maddison’s cause of action based on the tort of negligence. I do not propose to repeat that evidence in extenso here. However the gist of Mr Maddison’s evidence is that the first defendant had no reasonable cause to believe as a result of the first defendant’s pre-prosecution investigations into the complaint lodged by Mr Yama at Boroko Police Station that there was any agreement or conversation between Mr Maddison, Mr Fleming and their other alleged co-conspirators Mary Johns, Dr John Mua, Receiver James Kruse and lawyer Kerenga Kua which could provide evidence that they or any of them committed criminal conspiracy with each other within the meaning of s.122(1)(b) of the Criminal Code. Mr Maddison clearly deposed in his affidavit evidence that had the first defendant carefully considered the detailed information which he, Mr Maddison, had earlier provided to the first defendant regarding BSP’s contractual rights pursuant to interlinked securities which the BSP held from Yama Security Services Ltd and other companies within the Yama Group of Companies, the first defendant would have accepted that there could be no element of criminality in the crystallisation of BSP’s charge over Yama Security Services Ltd’s assets, and the payment by Receiver Mr Kruse to BSP of MVIL’s judgment debt to Yama Security Services Ltd.
96. In his defence, I observe that the first defendant did refer in para. 5 of his affidavit to the evidence which he considered justified his prosecution of Mr Maddison. The first defendant deposed that certain matters were “revealed” to him in the course of his investigations into Mr Yama’s complaint lodged at Boroko Police Station. However, none of the “revelations” deposed to by the first defendant in his affidavit touched on any conduct on the part of Mr Maddison, Mr Fleming and others which could conceivably have supported a charge of criminal conspiracy against them. The first defendant’s evidence in summary was simply that a garnishee order had been obtained by the Yama Group of Companies against an undisclosed garnishee, presumably BSP, and that the amount for which the garnishee order had been issued had not been paid by the Receiver of Yama Security Services Ltd. No further evidence as to how that fact situation was connected to any alleged criminal conduct on the part of Mr Maddison, Mr Fleming and their alleged co-conspirators was put before this Court by the first defendant in this proceeding, nor I surmise, was it put by the first defendant before either of the two Magistrates in the two prosecutions which had been instituted by him at Waigani District Court.
97. I accordingly find that even if the first defendant did have an honest but misguided belief that Mr Maddison, Mr Fleming and their alleged co-conspirators were guilty of the offence of criminal conspiracy to defeat the course of justice, that belief was not held by the first defendant based on reasonable grounds. The second element of the tort of malicious prosecution is accordingly proven.

Was the first defendant motivated by malice or some other improper purpose?

98. While the first defendant’s actions in pursuing hopeless criminal proceedings against Mr Maddison and Mr Fleming may not have been malicious in the commonly accepted understanding of that word, it is sufficient for the third element of the tort of malicious prosecution to be established if the Estate can satisfy the Court that the first defendant’s actions in prosecuting Mr Maddison were motivated by some improper purpose.
99. It is argued for the Estate that even if the first defendant did have an honest belief of criminal conduct by Mr Maddison, Mr Fleming and others based on the first defendant’s investigations (which honest belief was disputed by Mr Maddison in his affidavit material), the first defendant nevertheless had an improper purpose and motive in instituting the two prosecution proceedings. The improper purpose was said by Mr Maddison to have been the first defendant’s perceived need to comply with the wishes of initial complainant Mr Yama that senior officials of BSP be punished because BSP had appointed Mr Kruse as the Receiver of Yama Security Services Ltd and the company’s judgment monies owed by MVIL had been paid by the Receiver to BSP to defray existing indebtedness owed by Yama Security Services Ltd to BSP. Mr Yama was aggrieved because Mr Kruse had exercised contractual powers given to him as Receiver by Yama Security Services Ltd to pay to BSP what was owed by MVIL to Yama Security Services Ltd, thereby not giving priority and bypassing a garnishee order that ranked below pre-existing securities held by BSP, including the fixed and floating charge over the assets of Yama Security Services Ltd.
100. Mr Maddison deposed in para. 10 of his second affidavit:

“ It is clear in my mind that the First Defendant was acting on the specific instructions of Peter Yama when he arrested Robin Fleming and I twice for the same offence which he ought to have known could never have been sustained and that the reason for this was to punish us and Bank of South Pacific Limited for denying, in effect, Yama Security Services Limited’s judgment against Motor Vehicles Insurance Limited in December 2009 and it was because of our involvement in that process that we were both charged and intimidated. ”

101. The first defendant denied in paras. 13 and 19 of the defence to the effect that he had acted maliciously in his prosecution of Mr Maddison. He pleaded that he was only acting on a complaint and information. However, that denial did not disclose that the complaint and information in each case were made or purportedly laid before Magistrates by the first defendant himself, not by Mr Yama. The first defendant’s references to a “complaint” in paras. 13 and 19 of the defence were references to his own formal “complaints” filed with Waigani District Court on 29 December 2009, not the complaint which Mr Yama had earlier lodged at Boroko Police Station.
102. According to the Australian case of Davies v Gell [1924] HCA 56; (1924) 35 CLR 275, cited with approval by Davani J in Kalo v Akaya (2007) N3213 at para. 36, to incur liability as a prosecutor when sued for malicious prosecution, a defendant must have played an active role in the criminal proceedings by setting them in motion. In the present case, the first defendant case set the criminal proceedings against Mr Maddison in motion by his own “complaint” made to the Waigani District Court on 29 December 2009. It is the first defendant’s complaint dated 29 December 2009 which is referred to in the first warrant issued for the arrest of Mr Maddison on 6 January 2010. It is this same complaint which is referred to in the second warrant issued for the arrest of Mr Maddison on 30 July 2010.
103. The first defendant affirmatively deposed in para. 15 of his affidavit that he had no personal grudge against Mr Maddison that could warrant his actions being considered to be malicious or that he had any improper purpose in prosecuting Mr Maddison.
104. Having considered the evidence given by Mr Maddison on the first defendant’s improper purpose and the paucity of the evidence in response by the first defendant on this issue, I find that if the first defendant had exercised the same degree of objectivity as the Public Prosecutor had applied towards the lack of evidence of any criminal conduct on the part of Mr Maddison, Mr Fleming and their alleged co-conspirators, the first defendant would not have succumbed to pressure brought to bear on him by Mr Yama to have instituted the subject criminal proceedings in the first place.
105. I find that the first defendant acceded to demands made of him by Mr Yama that he prosecute senior officials of the BSP in circumstances where any senior criminal investigating police officer with the office of the National Fraud and Anti-Corruption Directorate would have, or should have known, that there was no evidence or insufficient evidence to support such a prosecution. I consider that the first defendant as a senior criminal investigating police officer did not have sufficient knowledge of the law of bank securities and the law of garnishee proceedings because it is apparent that if he did have that knowledge, he could not have held any reasonable belief that there was any criminal conduct on the part of Mr Maddison and Mr Fleming in the circumstances which were presented to him during the course of his pre-prosecution investigations. I find that, because of his lack of knowledge of relevant banking law and garnishee proceedings, the first defendant’s objectivity when presented with Mr Yama’s complaint was overborne by the improper purpose of pursuing the prosecution of Mr Maddison and Mr Fleming at the behest of Mr Yama to punish them and BSP for Mr Yama’s grievances against BSP and against Mr Kruse as the duly appointed Receiver of Yama Security Services Limited.

Were the criminal proceedings resolved in favour of Mr Maddison?

106. It is an agreed fact that the two prosecutions which the first defendant pursued against Mr Maddison resulted in dismissals. Each of the two prosecutions were resolved in favour of Mr Maddison.

Result of Issue 1(b) – Malicious Prosecution

107. I am satisfied that all four elements of the tort of malicious prosecution have been established by the Estate for Mr Maddison on the civil standard of proof. Consequently the first defendant and vicariously the State as third defendant are liable to the Estate for general damages for malicious prosecution, as was claimed by Mr Maddison in this suit.

ISSUE 1(c): BREACH OF ARREST ACT

108. Mr Madison pleaded that his arrest by the first defendant was carried out in breach of provisions of the Arrest Act. Damages for that breach were claimed pursuant to s.26 of the Arrest Act.
109. The Arrest Act sets out the method and circumstances in which an arrest warrant may be obtained and executed. I have already found for the reasons given at paras. 59 to 74 of this decision that that the two warrants for the arrest of Mr Maddison that were respectively issued out of the Waigani District Court on 6 January 2010 and 30 July 2010 were invalid and therefore in breach of the Arrest Act.
110. There was no credible evidence adduced for the first defendant at trial before me that Mr Maddison, Mr Fleming and their alleged co-conspirators had committed any offence under s.128(1)(b) of the Criminal Code. But even if the first defendant, given his obvious lack of knowledge of bank securities and garnishee proceedings, had nevertheless honestly believed that there was sufficient evidence to arrest Mr Maddison with warrant as required by s.128(2) of the Criminal Code, the first defendant nevertheless owed both a civil duty of care to Mr Maddison and a statutory duty under the Arrest Act to observe due process in the obtaining of the two warrants of arrest to ensure that Mr Maddison’s constitutional right to liberty was not infringed. Breach of that dual civil duty of care and statutory duty occurred when the first defendant commenced the prosecution of Mr Maddison for the First Charge with the filing of a ‘complaint” on 29 December 2009 instead of an information, then obtaining an invalid warrant for the arrest of Mr Maddison on 6 January 2010, followed by a belated information dated 7 January 2009 which had not been sworn on oath before Magistrate Tomo and which had not been signed by his Worship. That civil duty of care and statutory duty to observe due process was breached yet again when the first defendant instituted the prosecution of Mr Maddison for the Second Charge when there was no credible evidence of any criminality on the part of Mr Maddison, Mr Fleming and others, as was confirmed by the filing by the Public Prosecutor in the National Court of his Declaration under s.525(1)(b) of the Criminal Code.
111. Section 26 of the Arrest Act provides:

26. Civil remedy for wrongful exercise of powers conferred by this Act

(1) A person who—

(a) exercises a power to make an arrest to which this Act applies in breach of this Act; or

(b) exercises a power conferred by this Act, other than a power of arrest; or

(c) performs a duty imposed by this Act in breach of this Act; or

(d) fails or refuses to perform a duty imposed by this Act,

may be liable in damages to the person aggrieved by that breach.

(2) An action under Subsection (1) may be brought—

(a) in the National Court; or

(b) in a District Court, and in the case of a District Court, the court has jurisdiction within the limits prescribed by Section 21 of the District Courts Act;

(3) In an action under Subsection (1), a court may award exemplary damages.

(4) The provisions of this section are in addition to and not in derogation of the provisions of the Constitution or any other law dealing with the enforcement of any constitutional right, power, duty, restriction or prohibition.

112. To succeed in an action for unlawful arrest, a plaintiff must prove that police breached the Arrest Act. As was said by Makail J in Wani v Provincial Police Commander, Western Highlands Province (2010) N3900 at para. 11:

“ Once the plaintiff is able to establish breaches of the Arrest Act, Ch 339, it follows that the plaintiff’s personal liberty guaranteed by section 42(3) of the Constitution is also breached. This in turn means that the actions or conduct of the policemen are unlawful and the policemen must be held liable for damages that may arise.”

113. I am satisfied on the evidence presented for Mr Maddison at trial that the Estate has an actionable claim in general damages against the first defendant based on his breach of his statutory duty to observe due process vis-à-vis Mr Maddison under the Arrest Act. That claim will, however, not extend to any award of exemplary damages because of the bar against such awards provided for in s.34(3)(a) of the Wrongs (Miscellaneous Provisions) Act.

ISSUE 1(d): BREACH OF CONSTITUTIONAL RIGHTS

114. The final cause of action pleaded by Mr Maddison in this suit is based on alleged breaches by the first defendant of certain of Mr Maddison’s human rights, entrenched by various provisions of Division III.3 of the Constitution (Basic Rights).
115. Breach of constitutional rights is a cause of action that is separate and distinct from the three other causes of action pleaded by Mr Maddison in his amended statement of claim. Mr Maddison pleaded that the first defendant, and vicariously the State, breached his human rights in three respects:

(a) his right to full protection of the law under s.37 of the Constitution;

(b) his right to protection against harsh and oppressive acts under s.41 of the Constitution; and

(c) his right to liberty under s.42 of the Constitution.

The Estate seeks to enforce these rights in this suit pursuant to s.57(1) of the Constitution by way of compensation awarded as general damages under s.58 of the Constitution.

(a) Full protection of the law

116. Section 37(1) of the Constitution (protection of the law) states:

37(1) Every person has the right to the full protection of the law, and the succeeding provisions of this section are intended to ensure that that right is fully available especially to persons in custody or charged with offences.

117. Section 37(17) of the Constitution (protection of the law) states:

37(17) All persons deprived of their liberty shall be treated with humanity and with respect for the inherent dignity of the human person.

118. Section 18(d) of the Arrest Act relevantly states:

18. Duties of officer-in-charge of station

(1) Where a person has been arrested and taken to a police station, the officer-in-charge of the police station shall—

...

(d) as soon as practicable consider and accordingly grant or refuse bail in accordance with the Bail Act;

119. The first defendant failed to afford Mr Maddison the full protection of the law. I have already found that the first defendant had no reasonable or probable cause to believe that Mr Maddison had committed the offence of criminal conspiracy. The first defendant had no right to detain and arrest him for the First Charge or the Second Charge. But having arrested Mr Maddison on 6 January 2010 on the First Charge, the first defendant took Mr Maddison to Boroko Police Station mid-afternoon where Mr Maddison was unlawfully locked and detained in a cell for approximately one hour before being released from the cell and made to wait, still under arrest, for a further 7 hours before he was granted bail on payment of a surety of K5,000 cash on condition that he appear at Waigani District Court at 9.30 am on 7 January 2010, which he did.
120. On 5 August 2010 Mr Maddison, this time with Mr Fleming, was again arrested by the first defendant without lawful cause at Boroko Police Station and charged with the same offence as before. Mr Maddison then had to appear in the District Court at Waigani that same day, where he was arraigned by Magistrate Kangwia and released from police custody after having been granted bail on K1,000 surety.

(b) Protection against proscribed acts

121. Section 41 of the Constitution states:

41. Proscribed acts

(1) Notwithstanding anything to the contrary in any other provision of any law, any act that is done under a valid law but in the particular case—

(a) is harsh or oppressive; or

(b) is not warranted by, or is disproportionate to, the requirements of the particular circumstances or of the particular case; or

(c) is otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind,

is an unlawful act.

(2) The burden of showing that Subsection (1)(a), (b) or (c) applies in respect of an act is on the party alleging it, and may be discharged on the balance of probabilities.

(3) Nothing in this section affects the operation of any other law under which an act may be held to be unlawful or invalid.

122. The protection afforded by s.41 of the Constitution was aptly described by Cannings J in Meta v Kumono (2012) N4598 at para. 15 in these terms:

“ Section 41 proscribes (i.e. prohibits) and gives protection against seven sorts of acts (Petrus and Gawi v Telikom PNG Ltd (2008) N3373). Even if done under a valid law and notwithstanding anything to the contrary in any law, an act is unlawful if it is, in the particular case:

• harsh; or
• oppressive; or
• not warranted by the requirements of the particular circumstances; or
• disproportionate to the requirements of the particular circumstances; or
• not warranted by the requirements of the particular case; or
• disproportionate to the requirements of the particular case; or
• otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind.”

123. Section 41(2) provides that the evidentiary burden of showing on the civil standard of proof that another person has committed an act coming within one of the seven categories of acts proscribed by s.41(1) is on the party alleging it.
124. I am satisfied for the reasons already given in this decision in relation to Mr Maddison’s other three causes of action that the Estate has discharged its burden of proving that the first defendant’s actions in prosecuting the First Charge and the Second Charge against Mr Maddison can be properly categorised as coming within all seven of the acts proscribed by s.41(1) of the Constitution.

(c) Right to liberty

125. Section 42(1) of the Constitution guarantees that a person shall not be deprived of liberty except in one or more of eight circumstances, including “upon reasonable suspicion of his having committed, or being about to commit, an offence.”: s.42(1)(d).
126. Section 42(1) bolsters the right to freedom based on law conferred by s.32 and the right to full protection of the law conferred by s.37 of the Constitution.
127. The first defendant’s actions breached Mr Maddison’s right to liberty under s.42(1). By arresting Mr Maddison not once but twice without reasonable or probable cause for the same offence of criminal conspiracy, Mr Maddison’s right to liberty was seriously infringed by the first defendant.
     

Conclusion as to cause of action for breach of Constitutional rights

128. In the result, I find that the Estate has established a cause of action under s.57(1) of the Constitution for breach by the first defendant of Mr Maddison’s constitutional rights conferred on him by ss.37, 41 and 42 of the Constitution for which damages are available to the Estate under s.58 of the Constitution. Liability for that cause of action having been established against the first defendant, the State as third defendant is, by its own admission contingent on a finding of any breaches of Mr Maddison’s constitutional rights, vicariously liable for the damages to be awarded to the Estate for those breaches.

ISSUE 2: ASSESSMENT OF QUANTUM OF DAMAGES

129. I have found that liability for all four of the causes of action pleaded in Mr Maddison’s statement of claim have been established to the requisite civil standard of proof as against the first defendant and therefore vicariously against the State as third defendant. I have rejected the claim in negligence pleaded by Mr Maddison against the two Commissioners for Police as second and fourth defendants as I have found that, in the particular circumstances of this case, they owed no specific duty of care to Mr Maddison as regards the training and supervision of the first defendant.
130. I pass now to assessment of quantum of general damages for the four causes of action pleaded by Mr Maddison now proven against the first defendant and the State for:
     • the tort of negligence
     • the tort of malicious prosecution
     • breach of statutory duty under the Arrest Act
     • breach of constitutional rights.
131. I am conscious of the need for the Court, when determining what is fair and reasonable compensation when awarding general damages, to refer to awards in previous similar or comparable cases but to also make an award of general damages that takes into account factors such as the rise in inflation and changes which have taken place in the national economy subsequent to previous comparable cases.
132. Mr Molloy for the Estate, in his submissions at trial in support of the claims originally made by Mr Maddison and now the Estate, stated to the effect that it is accepted that the claims made in this case are not cumulative and that if damages were to be awarded by the Court then there should be a single or global award of damages in respect of those causes of action where liability has been established.
133. This submission by Mr Molloy aligns with what was said by Cannings J in Molomb v The State (2004) N2861 at p.10:

“ Each case must be treated on its merits. If it is convenient to clearly delineate how different causes of action have caused different injuries, damages should be assessed separately. But if the same facts give rise to different causes of action it will be difficult, and a rather artificial forensic process, to allot different categories of injury to each one; so the causes of action are best regarded as merging, in which case damages should be assessed as a whole. ”

134. I propose in this instance to assess general damages as a whole, having regard to comparable verdicts on quantum for each of the established causes of action, there having been no objection to this approach taken by counsel for the defendants.
135. The facts in Molomb were that the plaintiff was a villager who had been arrested by police in December 1995 and charged with being in possession of stolen property and unlawful possession of a firearm and ammunition. After seven appearances by the plaintiff in the Minj District Court, the first charge of stolen property was dismissed for lack of evidence. The other charges were never pursued by the police. In April 1998 the plaintiff commenced civil suit against the State claiming general damages for mental distress and injury to reputation he had suffered because of malicious prosecution and negligence on the part of the State for alleged failure to properly supervise the police officers who had initiated the failed prosecution. Cannings J found that the facts of that case established causes of action based on negligence, malicious prosecution and breach of s.41 of the Constitution. However, as the facts that constituted each of these three causes of action were essentially the same, his Honour accepted the State’s submission that the case lent itself to be being treated as a malicious prosecution case. His Honour assessed general damages for the plaintiff in the sum of K9,000 after consideration of past awards by the Court for malicious prosecution.
136. In Molomb, Cannings J considered that if there was proof of reputational damage, then awards made in defamation suits could have relevance when assessing general damages in actions based on malicious prosecution. I return to this aspect of assessing general damages for Mr Maddison later in this decision.
137. Apart from Molomb, Mr Molloy for the Estate also referred the Court to Nayos v Gawi (2014) N5667 (Sawong J) and several cases therein referred to where awards of general damages have been made for successful claims founded on negligence, malicious prosecution and breach of constitutional rights by police officers.
138. Nayos is indicative of the alternative approach which the National Court has at times taken as regards awards of damages where the facts support similar causes of action. The circumstances of that case were that the police had arrested, detained and charged the plaintiff, a well-known local businessman in Lae, with murder. The plaintiff operated a poultry business, a trade store and several other business outlets which were shut down when he was detained at Buimo CIS for a total of 92 weeks. He was subsequently released on bail but his trial in the National Court did not take place until a year later, at which time he was acquitted after a successful ‘no case to answer’ submission. The plaintiff then commenced a civil action against the prosecuting police officers and the State relying on negligence, malicious prosecution and breach of constitutional rights as his causes of action. He claimed general damages for his detention, mental distress, anxiety, inconvenience and injury to his reputation, special damages for loss of business income and exemplary damages.
139. In Nayos, Sawong J made a finding that the plaintiff’s arrest on the charge of murder was based on evidence that had been fabricated by the second defendant, a police officer. The plaintiff had been wrongfully arrested, wrongfully prosecuted and unlawfully deprived of his liberty when incarcerated for 92 weeks, a period of 1 year 7 months. His Honour accepted that the plaintiff had suffered greatly from the actions of the arresting police officers. His Honour awarded general damages under separate heads:
     • general damages for pain, suffering and humiliation K100,000
     • false imprisonment: K 20,000
     • malicious prosecution: K 20,000
     • breach of Constitutional rights:
       • breach of right to full protection of the law [s.37(1)]: K 10,000
       • breach of right to freedom of movement [s.52]: K 10,000
140. In Haluya v The State (2001) N2109 the plaintiff was the proprietor of a liquor outlet in the Koroba District of the Southern Highlands Province. He was arrested and charged with selling beer without a licence and kept in custody. He was tried in Tari District Court and acquitted. One month later the plaintiff was re-charged with the same offence notwithstanding that he had already been acquitted of the offence. At the second trial no evidence was led by the arresting police officers but the plaintiff was found guilty and sentenced to 6 months imprisonment, which he was forced to serve. The plaintiff sued the State for, among others, wrongful arrest, false imprisonment, malicious prosecution and breach of Constitutional rights. The State did not file a defence so the plaintiff obtained default judgment. At the trial on assessment of damages Sakora J concluded that there had been a blatant manipulation of the legal and judicial system and deliberate abuse of State powers. His Honour found that there had been a complete disregard of the fundamental principle of autrefois acquit in criminal law. The plaintiff was awarded general damages under each of these distinct heads:
     • wrongful arrest: K 10,000
     • false imprisonment: K 10,000
     • malicious prosecution: K 18,200
     • breach of Constitutional rights: K 6,000
141. In contrast, Cannings J applied the global award approach when making awards of general damages ranging between K70,000 to K100,000 for five plaintiffs in Lamon v Senior Constable Baumai (2010) N3920 by combining compensation for breaches of human rights with general damages for pain, suffering, humiliation and shame. In that case the plaintiffs, all young village men from the Rai Coast district of Madang Province, had been arrested on suspicion of involvement in a murder. The arresting police officers had subjected the plaintiffs to torture and degrading inhuman treatment over a 3-week period and had unlawfully detained them before taking them to Madang where they were remanded in custody for a month. The five plaintiffs were released by order of the District Court at Madang after the police failed to pursue any criminal prosecution against them.
142. In Pain v The State (2014) N5604 Cannings J conducted an assessment of damages and compensation for human rights breaches by certain police officers at Wewak, one of whom had shot the plaintiff in the back while the plaintiff was trying to explain to another police officer that he and some friends had merely been defending themselves by throwing stones at a pack of aggressive dogs which had attacked them and that they had not intended to disturb adjacent householders. On being shot, the plaintiff had collapsed and was taken unconscious by police to Boram Hospital. The bullet was surgically removed from the plaintiff’s back 11 days after admission. The plaintiff was discharged from hospital the next day. His Honour determined that the plaintiff had established a cause of action for breach of four of his Constitutional rights:
     • freedom from inhuman treatment [s.36(1)]

• protection of the law [s.37(1)]
• protection from proscribed acts, including harsh or oppressive acts [s.41(1)]
• freedom of movement [s.52(1)].

The plaintiff was awarded general damages of K20,000 for his pain, suffering and inconvenience. He was awarded a separate amount of K20,000 as compensatory damages for breach of his Constitutional rights based on K5,000 for each category of breach.

143. Breach of constitutional rights attracting compensation at a tariff of K5,000 for each breach was awarded by Cannings J in a similar but earlier case: Kolokol v Amburuapi (2009) N3571. In that case the essential facts were that the plaintiff had been shot in the leg and foot by police who had chased him on suspicion of his being involved in an armed robbery. He was subsequently charged with being in possession of a dangerous weapon, a metal-handled axe, but 3 months later the criminal charge against him was struck out by the Lae District Court.
144. I refer back now to the case of Molomb, where it will be recalled that general damages for a global amount of K9,000 were awarded for three causes of action based on negligence, malicious prosecution and breach of s.41 of the Constitution. In that case, Cannings J considered that assessment of general damages could take into account reputational damage generated by publicity given to a wrongful arrest. His Honour said this at page 9:

“ In cases of this nature, much as in a defamation case, the court should receive evidence of (1) the reputation enjoyed by a plaintiff before the tortious act was committed, and (b) evidence of how it was affected, perhaps destroyed by that act. A ‘before and after’ picture should be presented, so that the court can assess the extent of the injury and therefore the amount of damages that should be awarded. ”

145. A leading case on defamation in this jurisdiction is PNG Aviation Services Pty Ltd v Somare [1997] PNGLR 515. Bredmeyer J observed at page 574 that when the Court assesses general damages for defamation, the extent of injury to reputation is next to impossible to ascertain; and to obtain an exact measure of adequate compensation is equally difficult. However, the law presumes in an action for defamation that damage to the plaintiff’s reputation has arisen from publication of the defamatory material and that the plaintiff is entitled without more to an award of damages sufficient to vindicate the plaintiff’s reputation according to the seriousness of the defamation, the range of its publication and the extent to which the defendant has persisted with the defamation.
146. PNG Aviation Services Pty Ltd v Somare was the first in a series of National Court cases which significantly increased awards of general damages for defamation in Papua New Guinea. In that instance, general damages of K100,000 were awarded to each of three company directors, a total of K300,000, when they and their aircraft maintenance company based at Jacksons Airport had been subjected to false allegations on the floor of Parliament and in the press that they were disreputable, dishonest and had attempted to cheat the PNG Government.^[2]
147. In Coyle v Henao [2000] PNGLR 17 (Los, Jalina, Kirriwom, JJ) the Supreme Court confirmed a National Court award of K50,000 for general damages for a well-known lawyer and former president of the PNG Law Society who had been defamed by members of another law firm in a letter written to the Attorney-General alleging professional misconduct on the part of the respondent. The appellants had claimed on appeal that the National Court award was excessive. In upholding and confirming the award of K50,000, the Supreme Court said at page 32 that damages awarded in defamation serve three purposes, which in reality overlap:

(1) consolation for the personal distress and hurt caused to the person defamed by the publication;

(2) reparation for the harm done to that person’s personal and business reputation; and

(3) vindication of that person’s reputation.

148. Coyle was followed by a succession of defamation cases between the years 2000 to 2003 where awards of K50,000 were similarly made for general damages for defamation found to be serious but not as grievous as in PNG Aviation Services: see Lin Wan Xin v Wang Yanhong (2001) N160 (Sevua J); Whyatt Gallagher Basset (PNG) Ltd v Diau (2002) N2277 (Kandakasi J); Pitil v Clytus (2003) N2422 (Kandakasi J).
149. In Lambu v Dugube (2006) N3082 (Kandakasi J) the plaintiff, a qualified lawyer and respected member of his local and wider PNG community, was seriously defamed by a police officer who, acting on a defamatory letter written by someone else, widely circulated and published the contents of that letter to crowds of people at meetings held at Surinki in the Laiagam District of Enga Province. The plaintiff was falsely accused of having purchased and supplied a firearm and ammunition to purposely kill persons involved in a tribal fight with the tribe of the plaintiff’s wife. The Court found that the defamatory statements, apart from being untrue, gravely endangered the life of the plaintiff. General damages of K100,000 were awarded for injury to the plaintiff’s professional reputation and community standing.
150. In the subsequent case of Justice Gibbs Salika v Pacific Star Ltd (2014) N5699 (Davani J) the plaintiff, a respected senior member of PNG’s judiciary and now Chief Justice was awarded general damages of K250,000 and aggravated damages of K50,000, a total of K300,000, for a most egregious defamation published in the National newspaper in an article which contained untrue imputations, among others, that the plaintiff was unfit to be a judge and that he was a friend of a member of the same church as one of the litigants in a court case in which his Honour had been presiding. The newspaper’s reporter had failed to cross-check with Court staff certain purported but incorrect facts which had prompted the offending newspaper article. The reporter had merely relied on a statement given to her by another litigant in the case. If the reporter had checked the story with Court staff before publication of her article in the newspaper, she would have ascertained that those parts of the article she had written which related to the plaintiff were untrue. The editor of the newspaper compounded the injury to the plaintiff’s reputation by declining to print an apology when requested by the plaintiff to do so, thereby failing to mitigate the quantum of general damages awarded to the plaintiff, which in turn, when taken with the defendant’s overall lack of remorse and indifference to the injury which the defamation had caused to the plaintiff’s reputation, accounted for the additional award of K50,000 for aggravated damages.

Evidence of reputational damage suffered by Mr Maddison

151. In the present case, Mr Maddison deposed in his first affidavit that he was an Australian citizen but a long-term resident in Papua New Guinea. He said he had lived in Papua New Guinea for 17 years having first arrived in October 1992 until 1998 when he was employed by the former PNGBC as Assistant Manager-Credit and then Credit Manager. He left Papua New Guinea in 1998 but returned in March 2001 as Manager-Asset Management with PNGBC. On merger of PNGBC with BSP in August 2005, Mr Maddison transferred to BSP as its Senior Manager-Legal Services. This was the senior executive position he held with BSP when the subject events of 2010 occurred.
152. Mr Maddison says in para. 15 of his first affidavit that throughout the time of his two arrests, when he was on bail from 8 January 2010 until 6 May 2010 and again from 5 August 2010 to 26 May 2011, his arrests and subsequent Court appearances were widely publicised in the Post-Courier and the National newspapers. Both of those newspapers have a wide circulation throughout Papua New Guinea. Similar reporting occurred in the Australian press with reportage of Mr Maddison’s arrests having been made by Australian Associated Press.
153. Annexed to Mr Maddison’s first affidavit are multiple newspaper articles and reports relating to the arrests of Mr Maddison and Mr Fleming during 2010. One of those articles, published in The National newspaper on 7 January 2010, the day after Mr Maddison was arrested on the First Charge, has a large photograph depicting Mr Maddison in front of Boroko Police Station. The caption under the photograph reads: “Two detectives from the police fraud squad escorting John Maddison to the Boroko police cell yesterday after he was arrested.” This to me indicates that the first defendant or some person on his behalf in the mid-afternoon of 6 January 2010 tipped off a reporter with The National newspaper that Mr Maddison had just been arrested and that the reporter and a cameraman should be present to witness Mr Maddison being taken into Boroko Police Station by the arresting police officers. I infer that this tip-off would have been done with the objective of maximising reportage for public consumption on the arrest of Mr Maddison as one of Port Moresby’s most senior banking executives and thereby intentionally exacerbating the humiliation suffered by him.
154. Indicative of the content of the press reportage that beleaguered Mr Maddison is the following extract taken from an article published on page 4 of The National newspaper on 8 January 2010:

“ Police releases charged banker

Banker John Maddison was yesterday released from the Boroko police cell after being charged with conspiring with others to pervert the course of justice. Police said he was brought to Boroko police station, charged under section 218 of the Criminal Code and then locked up at Boroko police cells. He was later released on medical grounds, a policeman said. It is unclear if he appeared in court over the fresh charge. Maddison was arrested as his lawyers were fighting other charges in court on Wednesday.

The charges stem from complaints filed by Peter Yama, the owner of the Yama group of companies. Mr Yama claimed that the actions of Maddison and others involved were preventing him from getting money from Motor Vehicles Insurance Limited (MVIL).

The charges are in relation to the case between Yama Security Services and MVIL, which the court had granted in favour of Yama Group of companies. Maddison has denied the allegations, and is fighting the allegations in court.”

155. The board of BSP endeavoured to offset the adverse publicity that was given to the arrests of Mr Maddison and Mr Fleming in the PNG press by having the following statement published on page 7 of the National newspaper dated 27 January 2010:

“ BSP wary of bad publicity

THE Bank South Pacific (BSP) board is ‘extremely concerned” over the high level of public comment and media attention levelled at two senior executives who have been charged by the anti-fraud squad for alleged misappropriation. It said the executives had carried out their duties in a professional manner and had the full confidence of the bank. They had acted in the normal course of banking business,- it said in reference to the charges. “We are gravely concerned that while civil proceedings are in progress – these criminal charges laid are to distract fair hearing of matters before the courts. However, we are confident justice will prevail and the truth will be made known to all”, the board said. It also said the threat to the staff’s personal safety had increased significantly.”

156. Mr Maddison stated at para. 16 of his first affidavit that the charges and publicity surrounding the charges caused him great stress and anxiety both in his personal life and in his professional life as a banker. As he rightly observed, the charges against him were without any foundation or merit, as the Public Prosecutor ultimately decided.
157. I accept that the charges and adverse press that followed Mr Maddison’s two arrests by the first defendant caused him intense stress and worry in his personal life. In 2010 Mr Maddison had already been in a long term relationships with his de facto wife, a PNG citizen, and they had a four year old daughter, both of whom were dependant on him.
158. I find that the combined effect of the criminal charges which were wrongfully made and pursued by the first defendant against Mr Maddison, together with the wide publicity that those charges generated in the press, was that they seriously impugned Mr Maddison’s integrity as a career bank officer and suggested to the public at large, both in Papua New Guinea and Australia, that Mr Maddison was dishonest in the performance of his duties as a senior executive manager of BSP.

Comparisons

159. Liability of the first defendant and the State has been established in this suit for four distinct causes of action: negligence, malicious prosecution, breach of statutory duty under the Arrest Act and breach of Constitutional rights. However, all four of these causes of action are largely based on the same facts. This is why it is appropriate, taking the same approach as Cannings J took in Molomb, to regard those four causes of action for the purpose of assessment of general damages as having merged, meaning that general damages should be assessed as a whole rather than being separated into individual awards for each cause of action.
160. This generic approach nevertheless requires reference to be made to comparable awards for the four different causes of action that have been proven in this proceeding.
161. The purpose of an award of general damages in negligence is to compensate a person, so far as money can, by restoring that person to the extent possible to the same position they would have been in had they not suffered the injuries incurred because of another person’s negligence. General damages are intended to be neither a reward nor a penalty. A plaintiff receives compensation, not restitution: Pinzger v Bougainville Copper Ltd [1985] 160 (Pratt, Amet, Woods JJ) at p. 172: Limitopa v The State [1988-89] PNGLR 362 (Brunton, AJ) at p. 373.
162. In assessing general damages for the reputational damage which Mr Maddison sustained in his personal and professional life, I will refer to awards made in several malicious prosecution and defamation cases which I consider provide a useful and proportionate guide when determining the overall quantum of general damages to which Mr Maddison, and now the Estate, is entitled.
163. When comparing awards made by the Courts in the authorities cited above with the circumstances particular to Mr Maddison’s case, significant points of comparison arise:

(1) In Nayos, the plaintiff was a well-known businessman in Lae. He lost credibility with his local urban community when he was falsely arrested and detained at Buimo CIAS for a period of 1 year 7 months on suspicion of murder. His several business enterprises were shut down. He suffered much mental distress, anxiety and injury to his personal and business reputation. In 2014 he was awarded a total of K140,000 by the National Court (Sawong J) for his pain, suffering and humiliation, his false imprisonment and malicious prosecution. He received a further K20,000 for breach of his Constitutional right to full protection of the law and his right to freedom of movement.

While Mr Maddison was not subjected to a lengthy period of detention, unlike the plaintiff in Nayos, Mr Maddison having been detained under arrest at Boroko Police Station on 6 January 2010 for approximately 8 hours before being released on police bail, he was nevertheless seriously injured in his professional reputation as one of Port Moresby’s most prominent and respected bankers and in his personal life as a husband and father. His initial arrest and subsequent re-arrest in 2010 for alleged criminal conspiracy generated much interest in the press in Papua New Guinea and in Australia. A photo of Mr Maddison being escorted into Boroko Police Station by two detectives after his first wrongful arrest on 6 January 2010 was published the next day in the National newspaper. That media interest at Papua New Guinea country-wide and Australian levels continued to pursue Mr Maddison for almost 18 months until after he was discharged by Justice Mogish at the National Court from any wrongdoing on 26 May 2011.

I consider that the reputational damage suffered by Mr Maddison as a result of the civil wrongs committed against him by the first defendant warrants a high award of general damages, almost comparable to that which was awarded in Nayos but discounted somewhat to allow for the difference in the shorter loss of liberty experienced by Mr Maddison when compared with the plaintiff’s lengthy period of incarceration in Nayos.

(2) There was little or no evidence of damage to the reputation of the plaintiffs in Molomb decided in 2004 and Pain in 2014 as they were not prominent persons in their respective community, so with the benefit of hindsight this may account in part for the comparatively low awards of general damages which those plaintiffs received for their claims variously based on negligence, wrongful arrest, false imprisonment, malicious prosecution and breach of Constitutional rights.

(3) My view that the injury to Mr Maddison’s business and personal reputation was serious and requires substantial compensation on account of general damages is supported by the award of K100,000 in general damages in defamation which was received by each of the company directors in PNG Aviation Services Pty Ltd in 1997 and by general damages in the sum of K50,000 for defamation awarded to the respondent in Coyle in 2000 and to the plaintiffs in Lin Wan Xin in 2001, Whyatt Gallagher Basset (PNG) Ltd in 2002 and Pitil in 2003.

Those latter awards of general damages of K50,000 for defamation were increased to K100,000 in the case of Lambu in 2006 and K250,000 for Justice Gibbs Salika (as he then was) in 2014.

However, bearing in mind that general damages are always at large and must be tailored to the circumstances of each case, I consider that the damage to Mr Maddison’s reputation in this instance, although serious, cannot be equated with the gravity of the defamation sustained in the case of Justice Gibbs Salika. The reputational damage in Mr Maddison’s case, as it occurred in 2010, four years after Lambu was decided, and allowing for a degree of inflation should in my considered opinion be assessed at K125,000.

164. In my view, as general damages in the particular circumstances of this case are to include a substantial amount for reputational damage which I have assessed at K125,000, that same amount will largely overlap with damages that would otherwise be awarded to Mr Maddison, now the Estate, for malicious prosecution and for the first defendant’s breaches of his civil duty of care in the tort of negligence and breach of statutory duty under the Arrest Act.
165. I am nevertheless persuaded that the Estate is entitled, as a component of general damages, to a separate amount by way of compensation for breaches of Mr Maddison’s constitutional rights which is in addition to compensation for the reputational damage Mr Maddison sustained as result of the first defendant’s conduct. That additional compensation is for the breach of Mr Maddison’s right to full protection of the law under s.37 of the Constitution, his right to protection against harsh and oppressive acts under s.41 of the Constitution and his right to liberty under s.42 of the Constitution.
166. Awards for breach of constitutional rights decided between 2001 and 2014 range from K5,000 to 10,000 per breach. I refer here to the damages awarded for breach of Constitutional rights in the above-cited cases of Haluya - K6,000 for breach in 2001; Kolokol - K5,000 per breach in 2009; Nayos - K10,000 per breach in 2014; and Pain - K5,000 per breach in 2014.
167. As the breaches of Mr Maddison’s constitutional rights occurred during 2010, I consider that an appropriate amount of compensation for his three constitutional rights which I have found to have been infringed by the first defendant would be K7,500 per breach, a total of K22,500. This amount will be incorporated into the overall award of general damages.

TOTAL OF GENERAL DAMAGES

168. The Estate will therefore obtain an award of general damages of K147,500 comprising:

(a) compensation of K125,000 for reputational damage, anxiety, mental and physical stress suffered by Mr Maddison caused by the first defendant’s malicious prosecution of him and by the breaches of the first defendant’s civil duty of care to Mr Maddison in the tort of negligence and the first defendant’s statutory duty of care under the Arrest Act; and

(b) compensation of K22,500 for breach of Mr Maddison’s constitutional rights under s.37, s.41 and s.42 of the Constitution.

INTEREST ON GENERAL DAMAGES

169. Mr Maddison’s amended statement of claim seeks interest on damages.
170. The current legislation which governs this Court’s jurisdiction to award interest on damages is the Judicial Proceedings (Interest on Debts and Damages) Act 2015. Section 2 of the Act states that it applies to all court orders made against the State on or after 1 January 2014. Section 4(2) of the Act provides that where proceedings are taken against the State, the rate of interest that can be awarded on damages “shall not exceed 2% yearly”. Subject to that limitation on the maximum rate of interest that can be applied to awards of damages payable by the State and to a prohibition in s.5 of the Act against the awarding of interest on interest (i.e.. compound interest) on general damages, the Court otherwise has a wide discretion when it comes to the matters relating to interest on damage.
171. Section 4(1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015 provides:
     4. Pre-Judgment interest on debts and damages

(1) Subject to Section 5, in proceedings in a court for the recovery of a debt of damages, the court may order a rate as it thinks proper to be applied to the sum for which judgment is given interest, on the whole or part of the debt or damages for the whole or part of the period between the dated on which the cause of action arose and the date of the judgment.

172. Section 6 of the Act relevantly provides:

6. Post-Judgment interest on debts and damages

(1) Subject to Subsections (2) and (3), where judgment is given or an order is made for the payment of money, interest shall, unless the court otherwise orders, be payable at the prescribed rate form the date when the judgment or order takes effect on such of the money as is, from time to time, unpaid.

(2) Where the judgment referred to in Subsection (1) is taken against the State, the rate of any interest under that subsection shall not exceed 2% yearly;

(3) Where, in proceedings on a common law claim, the court directs the entry of judgment for damages and the damages are paid within 30 days after the date that the direction is served, interest on the judgment debt shall not be payable under Subsection (1) unless the court otherwise orders.

173. I exercise the Court’s discretion regarding interest as follows:

(1) A plaintiff should in the normal course of events receive interest on damages. There is nothing in this case which would indicate that interest should not be awarded on general damages. Interest will be included in the overall sum for which judgment will be given.

(2) As this claim includes the State as third defendant, the maximum rate of interest that can be applied to the pre-judgment award of general damages payable by the State is limited by s.4(2) of the Act to 2% yearly.

(3) That same maximum rate of 2% yearly will also apply, by operation of s. 6(2) of the Act, to such of the judgment monies which post-judgment may remain unpaid by the State from time to time.

(3) I fix the date of filing of the writ on 20 August 2010 as the date for commencement of pre-judgment interest on general damages. Interest at 2% yearly on general damages is to run from that commencement date to the date of this judgment. Interest will therefore be payable on general damages of K147,500 at 2% yearly from 20 August 2010 to 17 October 2022, a period of 4,441 days, by applying the formula D x IR x (N/365 days) = I, where: D is the amount of general damages, IR is the rate of interest yearly, N is the number of days expressed as a percentage of years and I is the amount of interest. Pre-judgment interest is therefore K35,893.00 computed as follows:

K147,500 x 2% x (4,441/365 days) = K35,893.00.

COSTS

174. In relation to the costs of this proceeding, the Estate has been successful in its claim. The Court has a wide discretion as regards orders as to costs.
175. Order 22 rule 11 of the National Court Rules provides:

11. If the Court makes any order as to costs, the Court shall, subject to this Order, order that the costs follow the event, except where it appears to the Court that some other order should be made to the whole or any part of the costs.

176. In practice, an order that costs follow the event means that the costs are to be taxed on a party/party basis: Order 22 rule 24(1). Table 1 of Schedule 2 of the National Court Rules is the scale of costs which a taxing officer must adhere to when assessing a bill for party/party costs. This scale of costs has not been revised or updated since the coming into operation of the National Court Rules in 1983. It is generally recognized by lawyers and members of the judiciary that this scale is out of step with contemporary fees charged by lawyers to their clients. For example, when appearing and arguing a contested hearing for final relief where the claim is for an amount in excess of K50,000, counsel is only allowed K350 for the first day and 2/3rds of that for every subsequent day: Schedule 2 Table 1 item 6(1) (counsel’s fees). This equates to about K60 per hour for the first day and K40 per hour for every subsequent day of a contested trial or hearing. This does not bode well for a party who, having been awarded party/party costs, is in reality these days paying legal fees to that party’s counsel or lawyer which could well be 10 to 15 times higher than the K350 allowed by the party/party scale for a first day’s appearance at substantive trial or hearing. The party/party scale is clearly well overdue for revision or repeal.
177. In the exercise of its discretion, the Court can, as an alternative to party/party costs, make an order that a successful party’s costs be paid by the losing party on a solicitor and client basis under Order 22 rule 35 of the National Court Rules. Rule 35 provides to the effect that on a taxation of costs ordered to be paid on a solicitor and client basis, legal fees and associated costs shall be allowed by the taxing officer unless they are of an unreasonable amount. This form of costs order is also known as a solicitor/client costs order or a lawyer/client costs order.
178. A sampling of case authorities where the Courts have ordered that costs be paid on a solicitor/client basis is contained in the judgment of Kandakasi J (as he then was) in PNG Ports Corporation Ltd v Canopus No. 71 Ltd (2010) N4288. One of the many circumstances identified by his Honour where the Courts have made costs orders on a solicitor/client basis is where there was no factual or legal basis for a defendant maintaining a defence at trial: Balepa v Commissioner for Police (1995) N1374.
179. The plaintiff in Balepa sued the Commissioner for Police and the State for damages for the unlawful destruction of his trade store near Mendi, Southern Highlands Province. The defence was a simple denial of the plaintiff’s case. Two police officers filed affidavits in support of the defence but the evidence of the plaintiff and his witnesses went uncontradicted at trial. Neither police officer appeared at trial despite having been required to attend for cross-examination on their affidavits. His Honour Sheehan J found that the defence was token only and ordered the State to pay the plaintiff’s costs on a solicitor/client basis.
180. In the present case Mr Maddison’s evidence went uncontradicted by the first defendant and the State at trial except for the first defendant’s contentions that he had acted legally and with due diligence throughout the two prosecutions, that he was only acting on a complaint from Mr Yama and that he held no personal grudge against Mr Maddison. All of those contentions were readily disproved in this suit in that it was established that the first defendant had no reasonable or probable cause to have arrested Mr Maddison. By reason of the defence maintained right up to trial, the Estate incurred obvious substantial cost that could have been avoided had the State been minded to enter into settlement negotiations. The defence put forward at trial for the first defendant and the State was unsubstantiated and desultory at best. The costs of Mr Maddison, now the Estate, will accordingly be ordered to be paid on a solicitor/client basis by the first defendant and the State as third defendant.

CONCLUSION – JUDGMENT IN PROCEEDING WS NO. 1062 of 2010 – ESTATE LATE JOHN MADDISON -v- DETECTIVE SERGEANT FRANCIS NAMUES, GARI BAKI AS COMMISSIONER FOR POLICE, THE INDEPENDENT STATE OF PAPUA NEW GUINEA AND ANTHONY WAGAMBIE AS COMMISSIONER FOR POLICE

181. The Court directs entry of judgment in proceeding WS No 1062 of 2010 in the following terms:

(1) Judgment is entered for the Administrators of the Estate of the late John Maddison against the First Defendant and the Third Defendant, jointly and severally, in the sum of K183,393 comprising:

(a) general damages of K147,500; and

(b) pre-judgment interest on general damages of K35,893.

(2) Subject to any earlier interim orders as to costs, the first defendant and the third defendant are jointly and severally liable to pay the costs of the late John Maddison and the costs of his Estate of and incidental to this proceeding on a solicitor/client basis, such costs to be taxed if not agreed.

(3) Subject to Section 6 of the Judicial Proceedings (Interest on Debts and Damages) Act 2015, post-judgment interest shall accrue at the rate of 2% yearly on such of the judgment amount of K183,393 and/or taxed costs as may remain outstanding from time to time.

WS NO. 1090 of 2010 – ROBIN FLEMING -v- DETECTIVE SERGEANT FRANCIS NAMUES, GARI BAKI, COMMISSIONER FOR POLICE, THE INDEPENDENT STATE OF PAPUA NEW GUINEA AND ANTHONY WAGAMBIE, COMMISSIONER FOR POLICE

182. The writ of summons for this proceeding WS No. 1090 of 2010 was filed for the plaintiff Robin Fleming on 27 August 2010, one week after the writ for the late John Maddison was filed. Except for a variation in certain dates, the facts of this case mirror the facts in the case presented for the Estate of the late Mr Maddison. The causes of action pleaded by the plaintiff (Mr Fleming) in his amended statement of claim filed on 7 August 2013 are also the same as those pleaded by the late Mr Maddison, namely:

(1) the tort of negligence, in that it is alleged that the first defendant breached his duty of care to exercise reasonable care in charging, arresting and prosecuting Mr Fleming, that the other defendants are also liable for the first defendant’s conduct in this regard and that the State and the two Police Commissioners are further liable for negligence in their supervision and control of the first defendant.

(2) the tort of malicious prosecution, in that is alleged that the first defendant had wrongfully used the criminal process against Mr Fleming and was motivated by malice;

(3) breach of the first defendant’s statutory duty under the Arrest Act, in that it is alleged that the first defendant had no reasonable grounds to apply to the District Court at Waigani for the issuance of warrants for the arrest of Mr Fleming.

(4) breaches of the following sections of the Constitution in connection with the first defendant’s repeated arrest of Mr Fleming:

(a) s. 37 (protection of the law);

(b) s.41 (proscribed acts);

(c) s.42 (deprivation of liberty).

183. As with the case for the late Mr Maddison, Mr Fleming has pleaded that because of the wide publicity which the two charges against him had generated in the national press, irreparable damage was caused to his reputation as a senior bank officer with the Bank of South Pacific Ltd and that this has caused him mental stress and anxiety. Mr Fleming has also pleaded that he incurred legal fees and expenses with the two charges made against him by the first defendant.
184. Mr Fleming claims the following relief in his amended statement of claim:

(1) general damages;

(2) exemplary damages;

(3) interest on damages;

(4) costs.

BACKGROUND FACTS

185. The defence to Mr Fleming’s amended statement of claim was filed for all four defendants by Fairfax Legal on 23 August 2013. The defence contains the same denials as were contained in the defence filed in the late Mr Maddison’s proceeding WS No. 1062 of 2010. The defendants denied that the cited Police Commissioners were negligent in their supervision and control of the first defendant. The defence further pleaded, among others, to the effect that the first defendant was only carrying out his lawful duties in his prosecution of Mr Fleming, that the first defendant never intended to cause Mr Fleming to suffer any stress or anxiety, that the first defendant’s conduct was not harsh or oppressive, that the first defendant had discharged his police duties in a diligent and reasonable manner and that the first defendant had not acted with malicious intent against Mr Fleming. In short, that there was no case to answer for the causes of action pleaded by Mr Fleming.
     

Mr Fleming’s Evidence

186. Mr Fleming was represented at trial by senior counsel Mr Molloy. The evidence adduced for Mr Fleming at trial is contained in two main affidavits: the affidavit of Mr Fleming sworn and filed on 19 November 2013 and the affidavit of the late Mr Maddison sworn and filed in WS No. 1090 of 2010 on 6 June 2014.
     
187. Mr Fleming deposes in his affidavit that in 2010, which was when he was arrested twice by the first defendant, he was the Deputy Chief Executive Officer and Chief Risk Officer for BSP. Mr Fleming says that he was promoted to the post of BSP’s Group Chief Executive Officer on 1 June 2013. It is a matter of public record that Mr Fleming is still the BSP’s Group CEO.
188. In his affidavit Mr Fleming stated that as at November 2013 he had been working in Papua New Guinea for over 30 years. He holds the degrees of Master of Business Administration and Master of Management from Charles Sturt University which has campuses in New South Wales, Canberra and Victoria. His wife is a Papua New Guinea citizen and they have three children.
     
189. Mr Fleming deposed that on 18 January 2010 he was arrested by the first defendant and taken to the National Fraud & Anti-Corruption Directorate headquarters at Konebobu when he was interviewed from 2.30 pm to 4.00 pm. He says he was then formally charged by the first defendant and taken to Boroko Police Station where he was locked in a cell for one hour and remained under arrest until he was released at about 6.00 pm that evening after having been granted police bail upon payment of a cash surety of K5,000. This was the same alleged offence for which Mr Fleming’s colleague at BSP, the late Mr Maddison, had earlier been arrested by the first defendant on 6 January 2010.
     
190. A copy of the warrant for the arrest of Mr Fleming which was obtained by the first defendant from Waigani District Court on 15 January 2010 is annexure “A” to Mr Fleming’s affidavit. The warrant states that was issued on the complaint of the first defendant dated 29 December 2009.
     
191. Mr Fleming was formally arraigned at Waigani District Court on 20 January 2010 on the charge that he had committed the offence of criminal conspiracy with the late Mr Maddison and others to defeat the course of justice in contravention of s.128(1) of the Criminal Code (the First Charge).
     
192. However, on 6 May 2010 the First Charge against Mr Fleming was struck out by Magistrate Tomo at Waigani District Court on the ground that the information which was supposed to found the issuance of the warrant for the arrest of Mr Fleming had not been made before a Magistrate as required by the District Courts Act. The charge against the late Maddison was also struck out by Magistrate Tomo on 6 May 2010 for the same reason.
     
193. On 5 August 2010, at about 9.00 am, Mr Fleming and the late Mr Maddison both voluntarily attended at the National Fraud & Anti-Corruption Directorate Headquarters at Konedobu with their lawyer Mr Michael Henao as they had heard that further warrants had been issued for their arrest. They were duly arrested by the first defendant.
     
194. Annexed to Mr Fleming’s affidavit and marked “B” is a copy of the warrant for his second arrest which the first defendant had obtained from the Waigani District Court on 30 July 2010. This second warrant states that it was issued on the complaint of the first defendant dated 29 December 2009, which was the same date of the complaint made by the first defendant for which the first warrant for the arrest of Mr Fleming was previously issued on 15 January 2010.
     
195. A copy of the purported information dated 5 August 2010 in respect of which the second warrant was issued, unsigned by any Magistrate, is annexure “C” to Mr Fleming’s affidavit.
     
196. Mr Fleming deposes that when he and the late Mr Maddison were at the National Fraud & Anti-Corruption Directorate Headquarters on 5 August 2010, the first defendant informed him that he was being re-arrested for the same offence as had been struck out at Waigani District Court on 6 May 2010. No record of interview was conducted by the first defendant. Mr Fleming and the late Mr Maddison (as deposed to by him in his first affidavit) were then taken straight to Boroko Police Station where they were both formally charged, arrested and later granted police bail on K1,000 surety. This was the second arrest of Mr Fleming by the first defendant (the Second Charge).
     
197. Mr Fleming says that on or about 13 August 2010 he successfully applied to the National Court for a variation of his bail conditions so that he was able to travel overseas on work-related business.
     
198. He then attended at the National Court on several occasions as required following his committal proceedings at Waigani District Court.
     
199. On 26 May 2011, just over a year after his second arrest on 6 May 2010, Mr Fleming and the late Mr Maddison were formally discharged from further prosecution and released by Justice Mogish at the National Court after the Public Prosecutor declined to lay any charges against them. As deposed to by the late Mr Maddison in his first affidavit, the Public Prosecutor presented to the National Court a Declaration pursuant to s.525(1)(b) of the Criminal Code that no indictment would be laid against Mr Fleming and the late Mr Maddison as the Public Prosecutor could find no evidence of criminality against either of them.
     
200. A copy of Acting Public Prosecutor Mr Camillus Sambua’s Declaration dated 25 May 2010, presented to Justice Mogish on 26 May 2010, is annexure “A” to the affidavit of Ian Shepherd filed in this proceeding WS No. 1090 of 2010 on 20 October 2011.
     
201. Mr Fleming says in his affidavit to the effect that he was effectively on bail and subject to restrictions on his travel for extended periods between the date of his first arrest for the First Charge on 18 January 2010 through to when he was discharged from the Second Charge by Justice Mogish on 26 May 2011.
     
202. Mr Fleming then refers in his affidavit to the extensive press and television coverage which his two arrests generated. His court appearances were widely publicised in the Post-Courier and The National newspapers as well as on television channel EMTV. Copies of numerous newspaper articles published in the Papua New Guinea press and also in Australia via the Australian Associated Press relating to the arrests and court appearances of Mr Fleming and the late Mr Maddison comprise annexure “D” to Mr Fleming’s affidavit.
     
203. Mr Fleming concludes his affidavit by stating that the charges and surrounding publicity caused him great distress and anxiety in both his personal and professional life. He says that his family also suffered great stress and anxiety during the period from when the First Charge was laid against him in January 2010 until the dismissal of the Second Charge on 26 May 2011. He says that on each occasion that he was arrested and before the Courts there was media presence and he was exposed to much adverse publicity in the media.
     
204. The next affidavit that was relied on by Mr Molloy for Mr Fleming at the trial in this proceeding WS No. 1090 of 2010 was the second affidavit of the late Mr Maddison filed in related proceeding WS No. 1062 of 2010 on 6 June 2014. This is the affidavit of the late Mr Maddison which explained the circumstances which gave rise to the payment by Mr Kruse as Receiver of Yama Security Services Ltd to BSP of MVIL’s judgment debt owed to Yama Security Services Ltd, that payment having been made pursuant to contractual powers given to the Receiver on crystallisation of the fixed and floating charge which Yama Security Services Ltd had previously given over its assets to PNGBC prior to that bank’s merger with BSP.
     
205. I have already referred at length in my preceding decision in WS No. 1062 of 2010 to the evidence given by the late Mr Maddison in his second affidavit, all of which evidence was admitted in this related proceeding WS No. 1090 of 2010 for Mr Fleming.
     
206. There is a third affidavit which was relied on by Mr Molloy at the trial of this proceeding, the affidavit of Clayton Joseph filed on 8 August 2017. However, nothing turns on Mr Joseph’s affidavit, which related to service on the State on 27 June 2011 of Mr Fleming’s notice of claim made under s.5 of the Claims By and Against the State Act. The validity of Mr Fleming’s s.5 notice was not challenged at trial by counsel for the defendants.

Defendants’ Evidence

207. Counsel for the defendants, Mr Kipa, relied at Mr Fleming’s trial on only one affidavit, the affidavit of the first defendant which was sworn and filed in WS No. 1090 of 2010 on 29 November 2013. The content of that affidavit is in essence a duplication of the affidavit of the first defendant which was filed on the same date on 29 November 2013 in the late Mr Maddison’s proceeding WS No. 1062 of 2010. In his affidavit filed in WS No. 1090 of 2010, the first defendant simply repeated what he said in his other affidavit that he acted on a complaint made by Mr Peter Yama that a garnishee order was served on the MVIL “in consultation with Bank of South Pacific Headquarters” and that within two days Deloitte Touche Tohmatsu (not Mr Kruse) had been appointed as receiver of an unnamed company, presumably Yama Security Services Ltd. The remainder of the first defendant’s subject affidavit confirmed that Mr Fleming had been arrested on the First Change and the Second Charge and was consistent with the facts in that regard deposed to by Mr Fleming in his affidavit filed on 19 November 2013.
208. The first defendant concluded his affidavit by stating on oath that (in his opinion) his “conduct in arresting and charging the plaintiff was based on formal information and complaint under law” and that he had no personal grudge against Mr Fleming that would warrant his actions to be considered malicious in nature or that he had any improper purpose.
     

ISSUES

209. At the joint trial of the Estate’s proceeding filed for the late Mr Maddison WS No. 1062 of 2010 and Mr Fleming’s trial in proceeding WS No. 1090 of 2010, it was agreed by the parties’ respective counsel, Mr Molloy and Mr Kipa, that they would each address the case for the late Mr Maddison first and that they would then briefly adopt the submissions they would be making for the late Mr Maddison’s case, with some minor variations, for the case for Mr Fleming. This was because both counsel had agreed that the same issues and largely the same evidence applied in both cases. This is the procedure which was in fact followed by both counsel and sanctioned by the Court. Therefore the issues before the Court for determination in Mr Fleming’s case are exactly the same as those which were raised in the case presented for the Estate of the late Mr Maddison. Those issues are set out below.
210. Have any of the following of Mr Fleming’s causes of action been established on the evidence:

(a) the claim against the first, second, third and fourth defendants based on the tort of negligence?

(b) the claim against the first defendant based on the tort of malicious prosecution?

(c) breach of the first defendant’s statutory duty under the Arrest Act?

(d) breaches of Mr Fleming’s constitutional rights as pleaded?

211. As all of these four issues have been resolved in favour of the Estate in respect of the late Mr Maddison’s claim, the same four issues must now be taken by this decision to have been similarly resolved in favour of Mr Fleming. The only issue that now remains for determination by the Court is the quantum of damages to be awarded to Mr Fleming for his causes of action, the liability of the first defendant and vicariously the State having already been established.
     

ASSESSMENT OF QUANTUM OF MR FLEMING’S CLAIM FOR DAMAGES

General Damages

212. Given that the same considerations which apply to resolution of the claim made by the Estate of late Mr Maddison are equally applicable to the claim made by Mr Fleming, it follows that the quantum of general damages for each of the four causes of action pleaded by Mr Fleming in his amended statement of claim should also be the same.
213. I accordingly find that Mr Fleming is entitled to an award of general damages of K147,500, being the equivalent to the same amount of general damages awarded to the Estate of the late Mr Maddison earlier in this decision. Mr Fleming will therefore be awarded general damages of K147,500 comprising:

(a) compensation of K125,000 for reputational damage, anxiety, mental and physical stress suffered by Mr Fleming caused by the first defendant’s malicious prosecution of him and by the breaches of the first defendant’s civil duty of care to Mr Fleming in the tort of negligence and the first defendant’s statutory duty of care under the Arrest Act; and

(b) compensation of K22,500 for breach of Mr Fleming’s constitutional rights under s.37, s.41 and s.42 of the Constitution.

Exemplary Damages

214. It was submitted by Mr Molloy that in view of the seriousness of the breaches of Mr Fleming’s constitutional rights, exemplary damages as claimed by Mr Fleming should be awarded.
215. The issue of whether to award exemplary damages, which are punitive in nature, must be considered in light of s.12(1) of the Claims By and Against the State Act 1996, which provides:

12(1) No exemplary damages may be awarded against the State unless it appears to the court that, regardless of the nature of the claim, there has been a breach of Constitutional rights so severe or continuous as to warrant an award of exemplary damages.

216. Exemplary damages can only be awarded against the State for the most serious incidents of breach of constitutional rights. Exemplary damages cannot, by operation of s.12(1) of the Act, be awarded against the State in common law actions for civil wrongs such those based on the torts of negligence and malicious prosecution.
217. In the present case, the issue is whether the breach of Mr Fleming’s constitutional rights by the first defendant was so severe or continuous as to require an award of exemplary damages?
218. In Kolokol, a case decided in 2009, the plaintiff was shot in the left leg without cause when pursued by a police officer. Cannings J awarded the plaintiff exemplary damages of K10,000 for this very serious breach of constitutional rights.
219. In 2014 Cannings J awarded the same amount of K10,000 in exemplary damages to the plaintiff in Pain, who had been shot in the back by a police officer when being spoken to by another police officer. His Honour also awarded exemplary damages of K10,000 to each of the plaintiffs in Wakalu v Police (2017) N660 for having been subjected, among other things, to humiliating and degrading treatment in public by arresting police officers.
220. In the present case, while Mr Fleming sustained no physical injury to his person as a result of his unlawful two arrests by the first defendant, I accept that he suffered much psychological injury in the form of humiliation, intense anxiety and stress. He was denied his constitutional rights to full protection of the law and the right to liberty. He was wrongfully detained for 8 hours at Boroko Police Station following his arrest on the First Charge. As a highly respected senior executive in the banking industry in Papua New Guinea, Mr Fleming then had to endure repeated humiliation caused by the extensive media publicity in press and television which surrounded his two arrests and appearances in the Waigani District Court and the National Court on totally false criminal charges. I consider that these breaches of Mr Fleming’s constitutional rights were so severe and continuous within the meaning of s.12(1) of the Claims By and Against the State Act 1996 to warrant an award of exemplary damages. I award the same amount of exemplary damages as in Kolokol, Pain and Wakalu: K10,000.

SUMMARY OF TOTAL DAMAGES

221. The combined total of damages awarded to Mr Fleming is K157,500 comprising:

(a) general damages: K 147,500

(b) exemplary damages: K 10,000

Total damages: K 157,500

INTEREST ON TOTAL DAMAGES

222. As with the Estate’s claim for the late Mr Maddison, pre-judgment interest will be awarded on Mr Fleming’s total damages at the rate of 2% yearly pursuant to s.4(2) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015 from date of filing of Mr Fleming’s writ on 27 August 2010 to the date of this judgment. Interest will therefore be payable on total damages of K157,500 at 2% yearly from 27 August 2010 to today, 17 October 2022, a period of 4,434 days, by applying the formula D x IR x (N/365 days) = I, where: D is the amount of general damages, IR is the rate of interest yearly, N is the number of days expressed as a percentage of years and I is the amount of interest. Pre-judgment interest is therefore K38,266 computed as follows:

K157,500 x 2% x (4,434/365 days) = K38,266

TOTAL OF JUDGMENT

223. The total of this judgment, inclusive of pre-judgment interest is K195,766:
     • Total of general and exemplary damages: K 157,500
     • Pre-judgment interest: K 38,266

Total of Judgment: K 195,766

COSTS

224. The same costs order as has been made for the Estate of the late Mr Maddison will apply to Mr Fleming’s claim for the costs of this proceeding.
225. Mr Fleming’s costs of this proceeding WS No. 1090 of 2015 are to be jointly and severally paid by the first defendant and the State as third defendant.

CONCLUSION – JUDGMENT IN PROCEEDING WS NO. 1090 of 2010 – ROBIN FLEMING -v- DETECTIVE SERGEANT FRANCIS NAMUES, GARI BAKI AS COMMISSIONER FOR POLICE, THE INDEPENDENT STATE OF PAPUA NEW GUINEA AND ANTHONY WAGAMBIE AS COMMISSIONER FOR POLICE

226. The Court directs entry of judgment in proceeding WS No 1090 of 2010 in the following terms:

(1) Judgment is entered for the Plaintiff against the First Defendant and the Third Defendant, jointly and severally, in the sum of K195,766 comprising:

(a) general damages of K147,500;

(b) exemplary damages of K10,000;

(c) pre-judgment interest on general damages of K38,266.

(2) Subject to any earlier interim orders as to costs, the First Defendant and the Third Defendant are jointly and severally liable to pay the costs of the Plaintiff of and incidental to this proceeding on a solicitor/client basis, such costs to be taxed if not agreed.

(3) Subject to Section 6 of the Judicial Proceedings (Interest on Debts and Damages) Act 2015, post-judgment interest shall accrue at the rate of 2% yearly on such of the judgment amount of K195,766 and/or taxed costs as may remain outstanding from time to time.

Judgment accordingly
__________________________________________________________________
Ashurst Lawyers: Lawyers for the Plaintiffs
Fairfax Lawyers: Lawyers for the Defendants

---

^[1] Local Courts were abolished by the Local Court (Repeal) Act 2000.
^[2] On appeal the company’s award of general damages of K50,000 for injury to trade reputation was increased by the Supreme Court from K50,000 to K100,000 and a further amount of K1,500,000 was awarded for the company’s financial losses caused by the defamation: PNG Aviation Services Pty Ltd v Somare (2000) SC658 (Salika, Sevua and Sakora JJ).