Venugopal v Port Moresby Pipes Limited [1999] PGSC 14; SC634 (21 May 1999)

Unreported Supreme Court Decisions

SC634

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SCA NO. 22 OF 1999
SANKARAN VENUGOPAL
FIRST APPELLANT
AND: PNG PIPES LIMITED
SECOND APPELLANT
AND: PORT MORESBY PIPES LIMITED
FIRST RESPONDENT
AND: GLOBE LIMITED
SECOND RESPONDENT

Waigani

Sakora J
24-25 February 1999
21 May 1999

Counsel

D. Coyle for the Applicants

G. Sheppard for the Respondents

21 May 1999

SAKORA J: This is an application to “stay” the orders of the National Court made 23 February 1999. It should be clarified at the outset that, perhaps, as part of or an extension of the ongoing multiplicity of proceedings between these parties since 1995, this application is made pursuant to the filing of an Application for Leave to Appeal designated SCA No. 22 of 1999, in direct consequence of an order made 23 February 1999 in fresh proceedings designated WS. No. 120 of 1999, which order (now appealed against by the present applicants) had the effect of setting aside orders of another National Court made 18 December 1998 in respect of the proceedings designated OS. No. 451 of 1995.

It is, therefore, not without consequence to note here also that, simultaneous to the filing of the Writ of Summons WS. No. 120 of 1999 on 15 February 1999 (issued of even date), the two respondents in the Appeal SCA No. 22 of 1999 filed a Notice of Motion (as plaintiffs/applicants) seeking injunctive orders. Whilst this Court has not entertained this application, it is worth noting here certain aspects of the reliefs sought therein in the light of the documented history of the ongoing litigation between these parties, and to enlighten upon the circumstances surrounding the appellants’ application for “stay”.

The first relief sought (para. 1) is to have the time prescribed by Order 4 Rule 44 of the National Court Rules (NCR) for service of the Notice of Motion and supporting documents “abridged to the present time”. Rule 44 of Order 4 provides only for the filing of affidavits with the Notice of Motion and serving these on the “affected” parties who may file answering affidavits. It does not prescribe time limits. The time limit requirements of the NCR in respect of Notices of Motion are the combined effects of Rules 38 and 42 of Order 4. The former requires service of the Notice of Motion on all interested or affected parties unless any of the circumstances envisaged under Sub-rule (2) are present. It is not suggested in the application of the respondents that those circumstances are present.

The latter Rule is in the following terms:

42. Time for service of notice.

Where notice of a motion is required to be served, it shall, unless the Court otherwise orders, be served not less than three days before the date named in the notice for hearing the motion.

Perhaps what is intended by the relief sought under paragraph (1) of the respondents’ Notice of Motion is dispensing with the requirements of Rule 38(1) of Order 4 NCR as provided for under Order 1 Rule 7 (Relief from Rules). Abridgement of time in the way the respondents seek in their application is provided for under Rule 15 of Order 1 (Extension and abridgement). But the terms “abridge” or “abridgement” in relation to prescribed time limits are used, more often than not, in respect of enforcement of judgments or orders, and their respective formal entry (see: Order 13 NCR). In any case, Order 4 Rule 38 (2) sets out the specific circumstances under which service and service within three clear days (Rule 38(1) and Rule 42) can be dispensed with.

The two respondents then seek certain reliefs that are intended basically to prevent these applicants/appellants from further invoking the jurisdiction of the superior courts to seek relief, seek justice, by initiating interlocutory or substantive proceedings (paragraphs (2), (3), (4) and (5) of their 15 February 1999 Notice of Motion). And the only thing that can and should be said about these now is that a party’s right or entitlement to come to the courts and invoke the jurisdiction of these courts arise by or emanate from or by the operation of law (and the rules of the respective courts), and are determined or extinguished by these also.

It is instructive to note also, in the light of the injunctive reliefs sought by the two respondents (in their 15 February 1999 Notice of Motion), that this Notice of Motion and the Writ of Summons (WS. No. 120 of 1999, supra) were preceded by their Notice of Motion filed 11 February 1999, on the originating process OS. No. 451 of 1995. Now, that Notice of Motion came before my brother Woods J. on 23 February 1999.

It would appear that the learned judge heard, as well as Mr Sheppard for the (now) respondents, Mr Manase of counsel for and on behalf of the two appellants, on their Notice of Motion dated and filed 12 February 1999. It is the decision of the Court in respect of those two Notices of Motion that the present appellants have filed the Application for Leave to Appeal against (23 February 1999), and in respect of which they seek “stay” of here.

As well as the Order of 23 February 1999, entered of even date (by the granting of abridgement of time for entry of such Order), I have the benefit of a brief decision of the learned judge of the same date. His Honour, after dismissing the appellants’ application: seeking injunctive orders to enable the enforcement of, and in fact enforce, the consequences of the orders of the National Court (constituted by a different judge) of 18 December 1998, granted the application of the respondents in a limited way. But the contention of the appellants in their application for leave to appeal, just as in this application for “stay” is that the orders of 23 February 1999 in favour of the two respondents had the effect of setting aside the final order of another National Court of 18 December 1998.

Before dealing further with the order of 23 February 1999, it will be convenient and instructive to trace the history of this matter very briefly. In the original proceedings OS. No. 451 of 1995, the present first respondent (in SCA. No. 2 of 1999 and first plaintiff in WS. No. 120 of 1999) was not a party. Three other parties (second and third plaintiffs and first defendant) are no longer parties.

The second appellant (in SCA. No. 22 of 199 and third defendant in OS. No. 451 of 1995) had been in the business of manufacturing pipes on its premises situated at Section 62 Allotment 14, Spring Garden Road, Hohola in the National Capital District (the ‘premises”). The first plaintiff (now the second plaintiff in WS. No. 220 of 1999 and second respondent in SCA. No. 22 of 1999) obtained exparte orders in the nature of Anton Pillar and Mareva injunction on 31 October 1995.

On 1 March 1996 the National Court ordered that the second plaintiff assume day-to-day control of the management and administration of the second defendant (the then third defendant). As a consequence of the said orders, the second plaintiff was placed in control of the business of the second defendant and in possession of the “premises” that comprised its registered office, and from which the second defendant’s business operates and at which all its plant, fixtures, fittings, stock-in-trade and business records are located. Thereafter, it is contended, the first and second plaintiffs operated the business of the second defendant for their own benefit and the first plaintiff purported to transfer same to the second plaintiff.

On 18 December 1998 the National Court constituted by my brother Sevua J. dismissed the proceedings OS. No. 451 of 1995 by reason of the failure of the second plaintiff to prosecute the action. The consequent Order entered 22 December 1998 is in the following terms:

THE COURT ORDERS THAT:

1. Leave is granted to the Defendants to withdraw the Notice of Motion filed by the Defendants on the 26th day of November 1996.

2. The proceedings in OS. No. 451 of 1995 are dismissed.

3. All property of the Third Defendant in the custody of the First Plaintiff be returned to the Third Defendants (sic)

4. Costs.

Parties were represented by counsel, and were heard before the Orders were made. His Honour published his reasons (unnumbered of 18 December 1998) for the ruling and the consequent orders. In relation to the delay in the prosecution of the action, the learned judge said this (at pp. 3 - 4):

I am therefore not satisfied that the delay in prosecuting this matter diligently has been adequately explained to the satisfactory of the Court. An order made by the Court is an order, and unless varied and stayed, it must be complied with. Why didn’t the plaintiffs comply with the order of 31st October, 1995? If I accept Mr Sheppard’s submissions, which is not based on any evidence, the plaintiffs did nothing to seek or stay (sic) of the order of 31 October, 1995 whilst the so-called “voluminous litigation” was going on. The fact that the litigation was in progress was not a stay of the Court Order. I need not say that the non-compliance with the order amounted to contempt of Court.

His Honour’s Order under paragraph (3) (supra) was to “undo” the effect of the orders of 31 October 1995, especially that giving the day-to-day control and administration of the third defendant, the present second appellant. In this respect counsel had submitted that the first plaintiff had, consequently, come into actual physical possession, custody and control of “some books and other records”, amongst other assets.

Thus, by the order of 18 December 1999 the interlocutory orders of 31 October 1995 and 1 March 1996 were made ineffective or superfluous. The proceedings OS. No. 451 of 1995 were dismissed for want of prosecution. There was (or were) no proceedings, no originating process, upon which the interlocutory orders (supra) could properly “associate” with and, thus, make sense. They could properly be said to have been vacated or “dissolved” by operation of law.

The plaintiffs (respondents) have sought to appeal against the said orders of 18 December 1998, and it is noted that an application by them to “stay” those orders was refused by the Supreme Court on 22 January 1999.

It would seem then that as part of this ongoing multiplicity of proceedings I have adverted to already, the respondents filed the Writ of Summons WS. No. 120 of 1999 on 15 February 1999, after “stay” was refused, and there being no Notice of Appeal filed, as ought to have been in confirmation of the application for “stay”. Thus, if I understand the chronology of events properly, and I respectfully maintain that I do, an interlocutory application was made pursuant to the 11 February 1999 Notice of Motion when the two following circumstances were in existence:

· The originating process OS. No. 541 of 1995 had been dismissed on 18 December 1998.

· The originating process WS. No. 120 of 1999 had not issued (or been filed).

Thus, strictly speaking, there was no originating process “on foot” for that interlocutory application to “relate to and affect”. And yet, it was purportedly brought in respect of OS. No. 451 of 1995, which, by an order of a court of competent jurisdiction, was no longer in existence.

And yet, the application was entertained by another National Court judge and relief(s) granted in respect thereof. The effect of the orders of the National Court on 23 February 1999 (now sought to be appealed against), it is contended by the appellants, was to reinstate in separate proceedings orders that were refused in the concluded proceedings OS. No. 451 of 1995. Furthermore, it is contended that those orders granted to the respondents an order or relief refused by the Supreme Court on 22 January 1999.

I agree with the submissions of the appellants that these are the direct effects of the 23 February 1999 orders of my brother Woods J. And I accept the contention of the appellant that by entertaining the respondents’ application (Notice of Motion 11 February 1999) and making the orders complained of, the learned judge exercised jurisdiction over proceedings that had been found wanting by another National Court and consequently dismissed.

It is my respectful opinion that any party aggrieved by the “final” decision of the National Court on 18 December 1998 had only one option available to pursue: appeal to the Supreme Court. And if I misapprehend this, then such a party should go back to the Court (the Judge) who made that order to persuade it or him to “set aside” the order. To go to another National Court to have the order set aside was, to say the least, mischievous.

His Honour in his brief reasons for the orders of 23 February 1999 acknowledged that the proceedings OS. No. 451 of 1995 to have been completed on 18 December 1998 “by an order dismissing the proceedings”. But then the learned judge said this: “However it seems that there are some matters requiring resolution from that dismissal”. His Honour does not say what matters remained unresolved!

It is my respectful opinion that, even if there were lingering unresolved matters, it was not the business, the jurisdiction, of another National Court judge to entertain them. It was or were matters for the Supreme Court if and when properly brought before it.

This application is brought pursuant to s 19 Supreme Court Act. This provision is in the following terms:

19. Stay of Proceedings on appeal.

Unless otherwise ordered by the Supreme Court or a Judge, an appeal, or an application for leave to appeal, to the Supreme Court does not operate as a stay of proceedings.

“Stay” of proceedings has been defined to mean the suspension of proceedings in an action, which may be temporary until something requisite or ordered is done, or permanently, where to proceed would be improper: Osborn’s Concise Law Dictionary (6th ed). The Court has an inherent jurisdiction to stay all proceedings which are frivolous and vexatious, or an abuse of the process of the court, or taken for the purpose of delay, or otherwise, or where the claim or defence set up rests upon no solid basis (ibid). The latter part of the definition is a reproduction of the English Supreme Court Practice Rules, Order 18, r 19. Our National Court Rules (NCR) under Order 12, r 40 makes somewhat similar provision.

In support of the application learned counsel for the applicants referred me to the Supreme Court decision in: Independent State of Papua New Guinea and the Commissioner for Corrective Institution Service -v- Daniel Mollen, SCA. No. 72 of 1995 (Unreported SC 513 of 1996). The Court referred to its own previous decision in: PNG -v- Gulf Provincial Government [1994] PNGLR 34, where it held that the power of the Supreme Court to grant a stay pending appeal is an unfettered discretion but should only be exercised where “special” and “exceptional circumstances” are shown. It noted, however, that the language of the provision in question, s 19 Supreme Court Act, does not include those terms which it opined “maybe a restriction on the discretion of the Court ....” (p. 5)

The Supreme Court then noted that as this point (non-inclusion of those terms in s 19 Supreme Court Act) had not been fully argued by the parties, the issue had to await another case in future for it to determine the issue conclusively. Thus, the Supreme Court fell back on the test applied in the case of PNG -v- Gulf Provincial Government (supra).

This Court is, therefore, bound to apply the “special” and “exceptional circumstances” test to this application. On the material before me, more particularly the affidavits of Sankaran Venugopal sworn 23 February 1999, and Alfred Manase sworn 16 and 18 February 1999, with their respective annexures, I am satisfied that “special” and “exceptional circumstances” have been demonstrated by the applicants/appellants here for the Court to exercise this discretionary power in their favour. The history and the circumstances, more particularly between 28 December 1998 and 23 February 1999, as I have outlined above, demonstrate a situation warranting the use of those qualifying terms that constitute the required test.

The obligation is of course on the applicants, and I am satisfied that this obligation has been discharged here. Finally, it remains to note that the exercise of the discretion in favour of the applicants fell on the “balance of convenience” consideration vis-a-vis the material before me in support of the Application for Leave to Appeal. The balance of convenience here has been, in my respectful opinion, tipped in favour of the applicants in view of the intended grounds for challenge to the orders of the National Court made 23 February 1999.

There are strong arguments advanced to demonstrate that the learned judge fell into several errors in firstly entertaining the application of the respondents and, secondly, granting the reliefs sought.

It is the judgment of this Court that the application should be granted, and I do so, ordering that the order of the National Court of 23 February 1998 be stayed, pending the determination of the Application for Leave to Appeal.

Lawyers for the Applicants: Pato Lawyers

Lawyers for the Respondents: Maladinas Lawyers