Wawoi Guavi Timber Company Ltd v Mondia [2007] PGSC 47; SC1028 (16 October 2007)

SC1028

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 22 OF 2007

BETWEEN:

WAWOI GUAVI TIMBER COMPANY LIMITED
First Appellant

AND:

PAPUA NEW GUINEA FOREST AUTHORITY
Second Appellant

AND:

KEN NORAE MONDIA
First Respondent

AND:

PNG ECO FORESTRY FORUM INC.
Second Respondent

AND:

JOHN DANAIYA FOR HIMSELF AND ON BEHALF OF THE KUYULE NETENE AND DEBELE
CLANS OF THE KASUA TRIBE
Third Respondent

Waigani: Injia, CJ
2007: 16th October

SUPREME COURT –appeal –application for leave to appeal from an interlocutory judgment granting leave to apply for judicial review – leave to appeal against grant of leave for judicial review necessary – whether applicant has shown there is prima facie case or an arguable case – no apparent or patent error shown in the manner in which the trial judge exercised his discretion on leave – application dismissed with costs to the respondents - s.14 Supreme Court Act, Order 16 rule 3 National Court Rules

Cases Cited:

Papua New Guinea Cases

Asakusa v Kumbakor (2008) N3308
Baing v PNG Stevedores Pty Ltd (2000) SC627
Boyepe Pere v Emmanuel Ningi (2003) SC711,
Breckwoldt v Groyke [1974] PNGLR 106.
Don Polye v Jimson Sauk & Electoral Commission (1999) SC651
Garamut Enterprises Ltd v Steamships Trading Company Ltd (1999) SC625.
Ila Geno & Others v PNG [1993] PNGLR 22 at 24.
Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & others (2008) N3340.
Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122.
Matiabe Oberia v Police and the State (2005) SC801
Olasco Niugini v Kaputin [1986] PNGLR 244 at 245
Peter Peipul v Pila Niningi, Unpublished judgment in SCR No. 89 of 1988 delivered on 8th May
Sir Julius Chan v Ombudsman Commission of Papua New Guinea [1999] PNGLR 240, Rimbink Pato v Anthony Manjin [1999] PNGLR 6
William Moses v Otto Magiten (2006) SC875

Overseas cases

Inland Revenue Commissioners; Ex parte National Federation of Self-Employed and Small Businesses Ltd [1981] UKHL 2; [1981] 2 WLR 722

Counsel:

I Molloy with J Shepherd, for the First Appellant
J Haiara, for the Second Appellant
J Brooks, for the First and Second Respondents
S Chandele, for the Third Respondent

16th October, 2007

1. INJIA, CJ: This is an application for leave to appeal from an interlocutory judgment given by the National Court on 16 March 2007 in proceedings OS (JR) 259 of 2006 in which the Court granted the respondents leave to apply for judicial review under O16 r 3 of the National Court Rules (NCR). Leave to appeal under s 14 of the Supreme Court Act is necessary to appeal against grant of leave for judicial review: Garamut Enterprises Ltd v Steamships Trading Company Ltd (1999) SC 625.

2. The application is supported by several affidavits. The respondents contest the application. They rely on several affidavits. I have considered those affidavits and the submissions made by counsel representing the parties.

3. There is no contest on the relevant principles on grant of leave to appeal. I remind my self of the principles on grant of leave. The grant or refusal of leave to appeal is of course discretionary. The main test is whether the applicant has shown that there is a prima facie case or an arguable case that the decision was wrong and that substantial injustice will be done by leaving the erroneous decision un-revisited or unrevised on appeal. The Court is not determining the merits of the appeal itself. It will suffice if the Court is persuaded that the proposed appeal raises issues of law or mixed fact and law which are fairly arguable and require judicial discretion: Matiabe Oberia v Police and the State (2005) SC 801, Sir Julius Chan v Ombudsman Commission of Papua New Guinea [1999] PNGLR 240, Rimbink Pato v Anthony Manjin [1999] PNGLR 6, Baing v PNG Stevedores Pty Ltd (2000) SC 627, Boyepe Pere v Emmanuel Ningi (2003) SC 711, Breckwoldt v Groyke [1974] PNGLR 106. In civil appeals, which involve trial Judge’s exercise of discretion on a procedural matter within the Court’s jurisdiction, such as the interlocutory judgment given in this case, the test ought to be much higher than in appeals against other types of interlocutory judgments. A passage from the majority view in Chan v Ombudsman Commission is pertinent. I quote from page 258:

"So to obtain leave to appeal an interlocutory judgment, it is not simply a matter (of) asserting there is an arguable case; that there has been some error. It is not the case that every error will effect the outcome of the substantive proceedings. What must be shown is, not only that there is patent error, but that the error effects a party’s substantive rights or will prevent the proper determination of the issues."

4. The grant of leave to apply for judicial review under NCR O16 r 3 is a special discretionary judgment in a civil matter within the Court’s jurisdiction. The error to be demonstrated must relate to the nature of the discretion exercised by the trial Court. In an application for leave to apply for judicial review under O16 r 3 of the National Court Rules, the applicant is required to demonstrate an arguable case under any of the recognized grounds on which judicial review relief is available: Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122. In an application under O16 r 3, the Court is not determining the merits of any application for judicial review. The Court simply forms an opinion on whether there are arguable or triable issues to warrant a full hearing on the merits, based on a quick perusal of the matters pleaded in the Statement filed under O 16 r 3 and the material placed before the Court in support of or in defence of the application for leave: R v Inland Revenue Commissioners; Ex parte National Federation of Self-Employed and Small Businesses Ltd [1981] UKHL 2; [1981] 2 WLR 722 at 739, 749; Olasco Niugini v Kaputin [1986] PNGLR 244 at 245; Ila Geno & Others v PNG [1993] PNGLR 22 at 24.

5. I apply these principles to the circumstances of this case.

6. The administrative decision for which leave was granted is certain decisions of the second appellant (NFB) made on 20th December 2005 in relation to the Kamulo Doso Forest Management Area (FMA). The decisions in respect of which judicial review was sought is pleaded in paragraph 2 of the Statement filed in support of the leave application in OS 259 of 2009 as follows:

"(a) The decision and resolutions of the National Forest Board and consequently the Papua New Guinea Forest Authority Board and consequently the Papua New Guinea Forest Authority made on or around 20 December 2005 in relation to the Kamulo Doso Forest Development Project as follows:

" (i) Pursuant to the resolution of Board Meeting No. 54 of 4 February 1999 Wawoi Guavi Timber Co. Ltd (WGTC) was "invited" to submit Project Proposals under Section 64 (3) (amended) of the Act.

(ii) the Board represented its intentions to grant extension to Kamula Doso FMA in correspondences subsequent to 4 February 1999 resolution notice as confirming the invitation to the Developer.

(iii) WGTC submitted its application on account of Forestry Regulation Form 92 on 23 March 1999 pursuant to Section 64 (3) (amended) of the Act.

(iv) Resolved that by operation of or in accordance with Section 63 (1) of Interpretation Act Ch. No.2, the Board shall and does hereby determine and approve Wawoi Guavi Timber Company's (WGTC) application pursuant to Section 64 (3) (amended) and not Forestry Amendment Act,2000.

(v) Resolve that the Forestry Management Agreement (FMA) of October 1997 is valid and subsisting. However, the FMA has been rectified by the parties.The Minister for Forests shall be advised to sign the rectified FMA document.

(vi) The legal proceedings numbered OS No. 557 of 2004;-

(a) Be settled out of Court (in the light of the overwhelming legal advice not in favour of success); and

(b) That an appropriate Deed of Settlement and Release with an appropriate court order in the form of duly agreed terms be executed; and

(c) No order as to costs; and

(d) That the PNGFA lawyers be instructed accordingly.

(vii) that the Board directs the Acting Managing Director to negotiate and executes the terms of the Deed of Settlement & Release pursuant to Resolution (VI) above".

7. It is not disputed that in OS (JR) 557 of 2004, WGTC sought leave under NCR, O 16 r 3 to apply for an order of mandamus to enforce a decision made by NFB on 4th February 1999 to grant an extension of Timber Permit issued to it. There is no dispute that the court proceedings in OS No. 557 of 2004 was settled by agreement of the parties (WGTC & NDB) and eventually discontinued in March 2006.

8. In OS (JR) No. 259 of 2006, filed on 20th April 2006, the respondents sought leave to apply for review of the whole of the decision made on 20th December 2005. According to the relief set out in paragraph 3 of the Statement, the certiorari and accompanying declaratory orders were sought to review NFB’s decision to settle OS No. 557 of 2004. However I note from the relief sought and grounds pleaded in support of relief is that none of the grounds relate to the relief sought in respect of the settlement of proceedings in OS 557 of 2004. Therefore there was no proper challenge to the settlement of OS 557 of 2004 and subsequent discontinuance of those proceedings. In any case the Deed of Settlement has been set aside following orders and directions issued by the Supreme Court in SCM 3 of 2006, and proceedings have been discontinued.

9. There were eight (8) proposed grounds on which the judicial review relief was sought in the Statement. It is sufficient to quote from the heading of each ground:

(1) Application for extension approved when no valid National Forest Plan was in place. (The 1996 Plan in existence was not relevant for five year period from 1996-2001. In any case it had expired.)

(2) Approval for extension given over area not covered by National Forest Plan and therefore contrary to law.

(3) Decision made over Kamula Doso with no valid Forest Management Agreement in place at the material time so the Forestry Board had no timber rights to Kamula Doso to award to WGTC. No valid 1997 Kamula Doso Forest Management Agreement. Minister never approved nor signed "rectified"1999 Kamula Doso FMA –no valid 1999 FMA.

(4) The application for extension was approved under s 63 of the Forestry Act when it is clear as at 20th December 2005, the only extension that was sought to be approved was one that concerned a project that was small on its own, that it is unable to operate as a commercially sustainable forest development project, and it is consequently a decision that no reasonable decision maker ought to have made.

(5) The decisions were made when prerequisites of the Act relevant to the determination of a project as a possible extension were not satisfied, and no reasonable decision maker ought to have made the decisions.

(6) The decision to approve the application of WGTC and the ancillary decisions were made when WGTC was only contiguous permit holder invited to submit an application when there existed other contiguous permit holders who were not invited to submit, contrary to s 64 (4) of the Forestry Act.

(7) The National Forest Board breached provisions in and procedures required by the Forestry Act and Regulations in making the decision to grant the approval of WGTC’s application on 20th December 2005 and ancillary decisions.

(8) The National Forest Board erred as it failed to take into account relevant considerations. There are 8 documents enumerated in paragraph 4. 8(a) (1) - (9) at pages 9-10 of the Statement) which were not considered.

10. On 16th March 2007, the National Court granted leave. The present application relates to this decision.

11. The Deed of Settlement in relation to OS 557 of 2004 was reached pursuant to the NFB’s decision of 20th December 2005. Even though this Deed has been set aside and proceedings in OS 557 of 2004 have been discontinued, the text of the Deed sheds some light on the matters covered in the Deed which may be relevant for purpose of dealing with the appellant’s submissions. In the Deed, the body of the decisions in paragraph (i) – (v) of the decision of 20th December 2009 was incorporated in the text of the agreement and endorsed by Court order but that Court order was set aside on appeal in SCM 3 of 2006. The matter was remitted to the National Court for re-trial but later it was discontinued.

12. So what remains of the decision of 20th December 2005 to review for which leave was granted? Mr Molloy submits the discontinuance of OS 57 of 2004 spelt an end to any challenge to the Board’s decision of 20th December 2005 but the respondents still want to pursue OS 259 of 2006 and the trial Judge granted leave on issues which went beyond the decision of 20th December 2005 and thereby fell into error. His Honour granted leave in respect of acts and events which occurred many years prior to 20th December 2005 such as challenge to the 1996 National Forest Plan, a resolution of NFB of December 2002 (OS, paragraph 4), Forest Management Agreement made in 1997 (OS paragraph 5 & 6), Forest Management Agreement 1999 (OS paragraph 7) and a decision of NFB of 1992 (OS, paragraph 8). Application for leave to review many of these decisions was delayed by many years and it is defeated by the 4 months time bar prescribed by NCR, O 16 r 4.

13. The respondents rely on oral submissions made to the National Court in OS 557 of 2005 on 14 November 2008 at the hearing of the application for leave and subsequent correspondences between the lawyers representing the parties in particular WGTC and NFB that there is no longer any interest on their part to pursue the grant of the Kamulo Doso area an extension to the existing WGTC Timber Permit. This amounts to an admission that the respondents have an arguable case to warrant a hearing.

14. In my analysis of the material before me it is clear that the judicial review proceedings in OS 557 of 2004 were instituted by WGTC whereas the proceedings in OS 259 of 2006 was instituted by the respondents. I do not see how the discontinuance of proceedings instituted by WGTC in OS 557 of 2004 would determine the proceedings in OS 259 of 2006 instituted by the opposing party, in this case the respondents, particularly when the respondents sought relief totally different to those sought by WGTC and against NFB and WGTC. The respondents’ right to challenge the decision of NFB of 20th December 2009 is not dependant on the position taken by the appellants in OS 557 of 2004.

15. I also consider that the main decision under challenge in OS 259 of 2006 was the decision to extend WGTC’s timber permit for the reasons given by NFB. Those reasons relate to facts and circumstances which predate the decision of 20th December 2009. I do not think the respondents were challenging those individual decisions as such. The NFB considered those facts and circumstances to be relevant and took them into account in reaching its decision. Mr Molloy heavily relies on the identification of various decisions in the relief claimed in the Originating Summons to show that those decisions were also the subject of the leave application but in my view, the Originating Summons is not the place for defining the relief sought and the grounds on which the relief is sought. The only and proper relief that should be sought in the Originating Summons under NCR, O 16 r 3 is the "leave to apply for judicial review" of the decision of which is particularized. The substantive relief and other consequential relief and the grounds on which those relief are sought will be sought are set out in the Statement filed under NCR, O 16 r 3 and not otherwise: see NCR, O 16 r 6, Asakusa v Kumbakor (2008) N 3308.

16. The pleadings on the decision the subject of review in the Statement clearly shows is the "decision and resolutions" of NFB made on 20 December 2005. The NFB decision itself makes reference to NFB’s resolutions of February 1999, WGTC’s application of 23rd March 1999 and the Forest Management Agreement of 1997, all of which predates 20th December 2005 which were considered and resolutions made. Those decisions were not challenged on their but formed the basis of the decision to renew the timber permit. I am satisfied that the grounds of review set out in the Statement relevantly refers to these earlier decisions and circumstances. I am satisfied that they were properly considered by the trial judge and a conclusion was reached that the issues were arguable.

17. For these reasons, I am not satisfied that an apparent or patent error has been shown in the manner in which the trial judge exercised his discretion on leave. Those same issues now raised can also be raised and determined at the hearing of the substantive review. I see no reason why the appellants will be prejudiced by the grant of leave.

18. For these reasons I dismiss the application with costs to the respondents.

19. The respondents have sought costs on a lawyer/client basis in their submissions. No proper application on notice to the appellants is before me. An application for costs on a solicitor client basis should be properly made by Notice of Motion and served on the affected party and not pursued orally in the course of submissions. This should be the prevailing practice in the National Court pursuant to my decision in Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & others (2008) N 3340. That practice equally applies to the Supreme Court pursuant to the Supreme Court decisions in Don Polye v Jimson Sauk & Electoral Commission (1999) SC 651, William Moses v Otto Magiten (2006 ) SC 875 and Peter Peipul v Pila Ninigi, Unpublished judgment in SCR No. 89 of 1988 delivered on 8th May 2009. For this reason I award costs on a party/party basis.

_____________________________________
Blake Dawson: Lawyer for the First Appellant
Steeles Lawyers: Lawyer for the Second Appellant
Gadens: Lawyer for the Respondents