Donigi v Base Resources Ltd [1992] PGSC 5; [1992] PNGLR 110 (1 May 1992)

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[1992] PNGLR 110 - SC Review No 1 of 1992; Peter Dickson Donigi v Base Resources Ltd

ADMINISTRATIVE LAW - Judicial review of judicial acts - Application to review National Court decision - Civil jurisdication - Grounds for - Where failure of lawyers to lodge appeal within time - Whether grounds for review cogent and exceptional in the merits of the review - Constitution s 155(2)(b).

CONSTITUTIONAL LAW - Powers of Supreme Court - Judicial review of judicial acts of National Court - No cogent and special circumstances established in the merits of the review - Leave refused - Constitution s 155(2)(b).

CONSTITUTIONAL LAW - Fundamental right - Right to property - Meaning of compulsory acquisition within s 53 of Constitution.

The applicant applied to the Supreme Court under s 155 (2)(b) of the Constitution for a review of a decision of the National Court which dismissed his action as being ill conceived. In the earlier action, he claimed to be entitled to 1.67% direct interest in a Petroleum Prospecting Licence (licence) granted to Base Resources Ltd; and that the latter was contractually bound to transfer 10% of the licence to a company in which the applicant had substantial interest in the share capital. In that action, the applicant claimed that the defendant had unjustly deprived him of property (s 53 of the Constitution) and he sought to enforce this right under s 57 of the Constitution (i.e. enforcement of a fundamental right). The action was struck out on the ground, inter alia, that it disclosed "no cause of action".

The applicant then instructed his lawyer to file an appeal against the decision. However, the lawyer failed to do so and the appeal became time barred. The applicant, therefore, filed this application to the Supreme Court for judicial review. The applicant's lawyer gave no explanation for his failure to lodge the notice of appeal.

N1>1. Whether negligence of a lawyer in failing to file a notice of appeal or failing to protect the right of appeal does amount to an exceptional circumstance to warrant an exercise of jurisdiction to review when application is time barred.

N1>2. Whether the merits of review provide any cogent and convincing reasons and exceptional circumstances in favour of granting leave to review.

N1>1. Failure of applicant's lawyer to lodge appeal within time does not provide a cogent or special circumstances for the exercise of the discretion to review the decision of the National Court.

N1>2. The merits of a review may establish cogent and convincing reasons and exceptional circumstances in favour of granting leave to review, and this consideration may outweigh the reasons for failure to lodge timely notice of appeal. These considerations were not satisfied in this application.

KAPI DCJ HINCHLIFFE SALIKA JJ: This is an application by the applicant under s 155(2)(b) of the Constitution to review a decision handed down by the National Court on 18 November 1991. A copy of the judgement was brought to the attention of the applicant on 26 November 1991. In a letter bearing the same date, the applicant instructed Mr John Reeve, a lawyer in Port Moresby, to file an appeal against the decision pursuant to the provisions of the Supreme Court Act Ch 37. However, the lawyer failed to file such a notice of appeal, and the appeal period of 40 days pursuant to the provisions of the Supreme Court Act expired on 28 December 1991. The lawyer has not given any explanation for the failure to lodge the notice of appeal. The applicant filed this application for judicial review on 23 January 1992.

The ambit of Supreme Court's review jurisdiction under s 155(2)(b) of the Constitution has been settled by the Supreme Court in a number of cases. It is not necessary to set out all these cases. We need only refer to New Zealand Insurance Co Ltd v Chief Collector of Taxes [1988/89] PNGLR 522, which reviews all the previous decisions. For the purposes of this case, it can be stated that this case supports the proposition that negligence of a lawyer in failing to file a notice of appeal or failing to protect the right of appeal does not amount to an exceptional circumstance to warrant an exercise of jurisdiction to review. Secondly, notwithstanding that there has been a failure by the lawyer to protect the interest of the applicant, the Court should consider whether the merits of a review provide any cogent and convincing reasons and exceptional circumstances in favour of granting leave to review. This consideration may outweigh the reasons for failure to lodge the notice of appeal within time. The case of New Zealand Insurance Co Ltd v Chief Collector of Taxes was a test case which involved the tax liability of insurance companies administering the Motor Vehicles Insurance Trust Funds. It had some commercial importance, and this provided the cogent and convincing reasons and exceptional circumstances for the court to review the decision.

In the present case, the failure of the lawyer in not lodging the notice of appeal or protecting the right to appeal to the Supreme Court is not a ground for the review of the decision. With regard to the merits of review, the applicant has presented its case in the following manner. Petroleum Prospecting Licence No 56 was granted to Base Resources Ltd and another on the 12 December 1985. The Base Resources Ltd agreed to transfer 10% interest of Petroleum Prospecting Licence No 56 to PNG Petroleum Exploration Ltd. The applicant and the shareholders of Wian Pty Ltd are beneficially entitled to one sixth of the issued capital of the PNG Petroleum Exploration Ltd and, therefore, would be entitled to 1.67% direct interest in the said Petroleum Prospecting Licence No 56 if 10% of the interest is transferred to the PNG Petroleum Exploration Ltd. The Base Resources Ltd refused to transfer the 10% interest to PNG Petroleum Exploration Ltd as agreed. The applicant applied to enforce his rights under s 57 of the Constitution. In this application, the applicant sought to enforce his right under s 53 of the Constitution.

By notice of motion filed on 18 September 1991, Base Recourses Ltd applied to strike out the application to enforce constitutional rights on the basis that it did not disclose a reasonable cause of action. The National Court heard this motion. The National Court struck out the cause of action on a number of grounds. It is not necessary to deal with the other grounds as they are not subject of review in this application. On the question of whether there is a reasonable cause of action under s 53 of the Constitution, the trial judge stated:

"When I read the section, the commentary and the notations in 'The Annotated Constitution of Papua New Guinea' (Brunton and Colquhoun-Kerr, UPNG Press), I cannot see how a subsequent argument arising out of the negotiations between persons or companies, free to negotiate between themselves, over a prospecting licence, can possibly give rise to a claim for unjust deprivation of property by the State. Mr. Donigi's own evidence relates to the terms of a supposed contract which he seeks to imply from documents in correspondence affecting Teyo No 28 Pty Ltd (subsequently PNG Petroleum Exploration Ltd) and Base Resources Ltd. Wian Pty Ltd (Mr Donigi's family company) was nominated as a shareholder in the PNG Petroleum Pty Ltd by virtue of the return filed with the Registrar of the Companies on the 13th of July 1987, subsequent to the date of the allocations of PPL 56 to Base Resources Ltd, in December 1985.

To appropriate a sense of grievance and describe it as a breach of constitutional right is a decisive step in the evolution of the law, one I am not prepared to make at this instance."

In this particular passage, the trial judge questioned the applicability of s 53 of the Constitution to the facts of this case. Later on in his judgment, the trial judge continued:

"The whole tenor of Mr Donigi's argument appears to revolve around what he sees as a contractual arrangement involving Base Resources Ltd. As I say he or his company's purported claim to stand in the place of PNG Petroleum and sue Base Resources Ltd may be argued, but it is not appropriate to be argued in this suit brought pursuant to s 57 of the Constitution. I am not willing to reframe his claim against Base Resources; no deprivation by the State of any property of the plaintiff has been shown to exist."

In essence, the trial judge concluded that s 53 is not applicable as there is no deprivation of the applicant's property by the State. The meaning and the ambit of s 53 of the Constitution has been considered in two cases. The first is the case of PNG Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396. The National Court at p 409 said:

"The Constitution, s 53, carries the heading: 'Protection from the unjust deprivation of property'. The detailed provisions of the section itself vary markedly from the recommendations of the Constitution Planning Committee. However Ch 5, paras 85-91 of the Committee's Final Report (Part I) make it clear that what the Committee was concerned with was the limitation on the power of government to distribute wealth by means of the compulsory acquisition of property from citizens. In its final form in the legislation the provision as to acquisition of property was widened to include forfeiture, extinction or determination of any right or interest in property. The key word is 'compulsorily' which I think implies the exercises of some power conferred by statute on the State or an instrumentality of State. In my view the section is not directed at the decision of the court which adjudicates, declares or determines pre-existing rights. The word 'deprivation' in the heading sheds further light to the subject. A person is not deprived of property unless he is stripped of something to which he is entitled. The judgement of a court which determines that a person's claim to be entitled to possession is not recognised at law or is recognised only to a limited extent (for instance until the happening of some supervening event such as a contrary claim by someone with a better right) does not deprive a person of that interest. On the other hand the powers exercisable under legislation such as the Land Acquisition Act 1974 (to which the Constitutional Planning Committee referred) do have the effect of stripping the landowner of the land to which he is entitled, and of substituting that right to land with a right to compensation. Thus it is that s 53(2) provides for just compensation to be made by the appropriating authority. It is quite inapposite to consider the applicant company as being in any way an 'authority'. It's action in seeking to enforce its right to possession may not be characterised as an act of expropriation. For these reasons I conclude that s 53 of the Constitution is inapplicable to the present case."

The case of png Ready Mixed Concrete Pty Ltd v The State has been approved and applied by the Supreme Court in SCR No 3 of 1990; application by Lapan Assembly (Unreported judgment SC384, dated 6 June 1990). This was a case in which certain provisions of the Forestry (Private Dealings) Act Ch 217 were considered. At p 3 of the judgment, the Supreme Court said:

"It follows from our reasoning that provisions of the Forestry (Private Dealings) Act does [sic] not deal with compulsory acquisition or possession of any property. Section 53 of the Constitution has no relevance and application to this Act. There are three main components to s 53.

(1) It deals with compulsory acquisition of property in accordance with an Organic Law or an Act of Parliament.

(3) Just compensation must be made on just terms by the expropriating authority.

As to the first matter, Mr Justice Miles in png Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396 at 409 said:

'The key word is 'compulsorily' which I think implies the exercise of some power conferred by statute on the State or instrumentality of the State.'

As we have stated, the Forestry (Private Dealings) Act does not deal with compulsory acquisition of any property interests or right over property. It simply provides for a procedure by which the customary owners of timber may be able to deal with other persons for purposes of selling the timber. This is a private matter and they may choose to enter into an agreement to sell timber at their own choice.

As to the second matter, it could not be argued that the Forestry (Private Dealings) Act authorises compulsory acquisition which is required for either a public purpose or for reasons that is justifiable in a democratic society that has a proper regard for the rights and dignity of mankind.

As to the third matter, it is even quite inappropriate to consider that an agent appointed under the Forestry (Private Dealings) Act is an expropriating authority for the purposes of just compensation."

We find that the conclusion reached by the trial judge is consistent with these cases. We are not satisfied that there are convincing, cogent reasons or special circumstances in the merits of the review which would cause us to exercise our discretion to review the decision of the National Court.

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Supreme Court of Papua New Guinea

Donigi v Base Resources Ltd [1992] PGSC 5; [1992] PNGLR 110 (1 May 1992)

Papua New Guinea Law Reports - 1992