Ipili Porgera Investments Ltd v Bank of South Pacific Ltd [2007] PGSC 55; SC1322 (27 June 2007)

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PRACTICE AND PROCEDURE – objection to competency – notice of appeal – whether grounds of appeal stated with sufficient particularity – whether notice of appeal complies with Supreme Court Rules, Order 7, Rules 8 and 9.

JUDGES – member of Supreme Court ceasing to be a Judge after hearing of application – whether remaining Judges can deliver judgment – Supreme Court Act, Section 3, continuation of appeal notwithstanding absence of Judge.

This is a ruling on an objection to competency. The respondent to an appeal took issue with the grounds of appeal set out in a notice of appeal, arguing that they were not stated with sufficient particularity and that the appeal should be dismissed for being incompetent. Between the dates of hearing the objection and giving of judgment, one member of the bench retired so the remaining Judges had to decide as a preliminary issue whether the Court was duly constituted.

Haiveta v Wingti (No 2) [1994] PNGLR 189
Henao v Coyle (2000) SC655
NCD Water and Sewerage Ltd v Tasion (2002) SC696
PNG Forest Authority v Securimax Ltd (2003) SC717

1. INJIA DCJ AND CANNINGS J: This is a ruling on an objection to competency of an appeal to the Supreme Court. The respondent argues that the grounds of appeal set out in the notice of appeal fail to comply with the Supreme Court Rules and that the appeal should be dismissed for being incompetent. The appellant says the grounds comply perfectly with the Rules and there is no good reason to dismiss the appeal. The case raises these issues:

2. Before addressing those issues there is a peculiar aspect of the hearing of the objection that we need to address, plus we need to explain the background of the case.

3. When we heard the objection the court was constituted by three Judges, one of whom – Los J – has since retired. This raises the issue of whether the Court, now consisting of only two Judges, can determine the objection. Or should it be set down for rehearing before three Judges? The general requirement arising from Section 161(2) of the Constitution is:

Subject to Section 162(2) (jurisdiction of the Supreme Court) and for the purposes of any hearing, the Supreme Court shall consist of at least three Judges.

In such cases as are provided for by or under an Act of the Parliament or the Rules of Court of the Supreme Court, the jurisdiction of the Supreme Court may be exercised by a single Judge of that Court, or by a number of Judges sitting together.

(1) Where in the course of an appeal before the Supreme Court and at any time before the delivery of the judgement, a Judge hearing the appeal is unable, through illness or any other cause, to attend the proceedings or otherwise to exercise his functions as a Judge—

(a) the hearing of the appeal shall, subject to Subsection (2), continue; and

(a) either party does not agree to the remaining Judges continuing to hear the appeal; or

(1) Where a Constitutional Law requires or permits an act or thing to be done by more than two persons, a majority of them may do it.

(2) Subsection (1) does not affect any requirement of a quorum, and, subject to Subsection (3), where no quorum is prescribed for a body the quorum is the full membership of the body. ...

7. Section 3 of the Supreme Court Act says that where in the course of an appeal and at any time before the delivery of judgment a Judge hearing the appeal is unable to exercise his functions as a Judge, the judgment shall be given by the remaining Judges, provided that the parties agree to that course of action. In interpreting this provision we must by virtue of Section 158(2) of the Constitution give paramount consideration to the dispensation of justice. We should avoid if possible a multiplicity of hearings and further delay. Schedule 1.12 of the Constitution encourages us to take a practical approach to such issues, so that decisions made by constitutional institutions such as the Supreme Court are made expeditiously.

8. Though we have not heard an appeal, as such, we have heard an application (the objection to competency) that is incidental to, and an integral and preliminary part of, the appeal. The objection was made "in the course of an appeal" and in our view that is sufficient for Section 3 to operate. Neither of the parties to the hearing of the objection has expressed any disagreement with the judgment being given by the remaining Judges. Therefore the Court is duly constituted, we are required to give the judgment and no rehearing is necessary.

9. The appellant, Ipili Porgera Investments Ltd ("Ipili"), was the plaintiff in the National Court. It sued the respondents, Bank South Pacific Ltd ("BSP") and Resources & Investment Finance Ltd ("RIFL"), claiming damages for breach of contract and negligence and recovery of over-charged interest. BSP and RIFL loaned about K4 million to Ipili in the 1990s to construct a number of buildings at Porgera, Enga Province. It was a condition of the loan agreement that each drawdown be preceded by a progress claim and a certificate issued by a quantity surveyor. Ipili claims that the bank allowed the money to be drawn down without the certification, ie that the bank lent it money negligently.

10. The writ was issued and served in late 1997. The defendants filed their defences and responded to a notice for discovery in 1998. There was then no activity on the court file for five years. In September 2003 Ipili filed a notice to set down the case for trial. The trial did not, however, eventuate. In August 2005 the defendants filed a motion for dismissal of the proceedings for want of prosecution and for failing to disclose a reasonable cause of action. The motion was heard by Salika J on 28 October 2005.

11. On 18 January 2006 his Honour handed down a written ruling, upholding the defendants' motion and dismissing Ipili's case both for want of prosecution and for failing to disclose a reasonable cause of action. His Honour said that the plaintiff, Ipili, had more than adequate time to progress the matter but had not done so and failed to show cause why the proceedings should not be dismissed. Further, the pleadings were badly drafted and left the defendants guessing what their wrongdoings were. His Honour dismissed the proceedings, and also dismissed a cross-motion by Ipili for an extension of time to amend its statement of claim.

12. Ipili appealed against Salika J's judgment, then filed a supplementary notice of appeal. It is the supplementary notice of appeal that is the subject of the objection to competency. It contains five grounds of appeal, numbered (a) to (e). The respondent, BSP, objects to each of the grounds. Before ruling on the objections we will set out the requirements of the Rules.

FIRST ISSUE: WHAT ARE THE REQUIREMENTS OF THE SUPREME COURT RULES REGARDING DRAFTING OF GROUNDS OF APPEAL?

13. There are three and they arise from Order 7, Rules 8(c) and 9 of the Supreme Court Rules. Rule 8(c) states:

The notice of appeal shall ... state briefly but specifically the grounds relied upon in support of the appeal.

Without affecting the specific provisions of Rule 8, it is not sufficient to allege that a judgment is against the evidence or the weight of the evidence or that it is wrong in law, and the notice must specify with particularity the grounds relied on to demonstrate that it is against the evidence and the weight of the evidence and the specific reasons why it is alleged to be wrong in law.

16. As the Supreme Court explained in Haiveta v Wingti (No 2) [1994] PNGLR 189 these requirements exist for two reasons:

17. The Supreme Court has discretion to strike out the offending ground(s) of appeal. Examples of cases where it did that are Haiveta v Wingti (No 2) [1994] PNGLR 189, Henao v Coyle (2000) SC655 and NCD Water and Sewerage Ltd v Tasion (2002) SC696. Alternatively, the Court could dismiss the entire appeal as incompetent.

18. We reject the submission of Mr Shepherd, for Ipili, that defective grounds of appeal cannot render an appeal incompetent. He argued that incompetency only covers issues such as delay in filing an appeal and appeals being filed without leave, when leave is required by the Supreme Court Act. Objections to competency are dealt with in Division 7.5 of the Supreme Court Rules (Order 7, Rules 14 to 18).

19. There is no suggestion that the question of competency of an appeal is constrained to the types of procedural errors referred to by Mr Shepherd. We agree with the dicta of Sakora J in PNG Forest Authority v Securimax Ltd (2003) SC717 that when it hears an objection to competency the court should not delve into the merits of the appeal. An objection to competency must raise serious threshold issues concerning legality or viability, or otherwise, of a particular process. If any ground of appeal fails to meet the requirements of Order 7, Rules 8(c) or 9, that is a serious threshold issue concerning the legality and viability of the appeal. If, for example, all of the grounds set out in a notice of appeal were defective in that they failed to comply with the requirements of Order 7, Rules 8(c) and 9, the natural conclusion to draw would be that the appeal is incompetent.

20. The respondent, BSP, argues that each ground of appeal fails to comply with the requirements of the Rules. They also raise, at the outset, a general objection to all grounds of appeal. In the following table we set out, firstly, the general objection and make a ruling on it. Then we set out each ground of appeal, the objection to it and the ruling on each objection.

No	Ground	Objection	Determination
All	The notice of appeal stated that the appeal lies without leave as it involves issues of law only.	The grounds of appeal do not only raise issues of law, they concern issues of fact also. The appellant did not identify the primary facts which the primary Judge assessed or raised.	Objection refused. There is no dispute over the facts, as set out in the judgment being appealed against. The appeal lies without leave under Section 14(1)(a) of the Supreme Court Act.
(a)	His Honour erred in law in that he failed to properly take into account the explanation and material relevant to delay contained in the affidavits of J L Shepherd sworn on 24 June 2005 and 24 October 2005 filed on behalf of the plaintiff.	Fails to comply with Order 7, Rule 9 – fails to specify with particularity the explanation or documents in the affidavits that the primary Judge allegedly failed to take into account.	Objection refused. It is sufficient for a ground of appeal to refer to specific affidavits allegedly not taken into account by the primary Judge. It is not necessary to refer to specific paragraphs or documents.
(b)	His Honour erred in law in that he placed disproportionate weight on the affidavit material filed in support of the motion of the first defendant.	Fails to comply with Order 7, Rule 9 – fails to specify with particularity the parts of the first defendant's (respondent's) affidavit material that were given disproportionate weight.	Objection refused. It is sufficient for a ground of appeal to refer to another party's affidavits in general terms. The ground of appeal has been stated briefly and specifically. No material prejudice is caused to the respondents.
(c)(i)	His Honour erred in law in that he failed to properly take into account the evidence of ... the plaintiff that a draft amended statement of claim was furnished to the lawyers of the first defendant (first respondent) under cover of a letter from the plaintiff's lawyers dated 19 July 2005.	No objection taken.	Nil.
(c)(ii)	His Honour erred in law in that he failed to properly take into account the evidence of ... John Maddison for the first defendant who conceded in his affidavit sworn on 5 August 2005 that on reading the draft amended statement of claim he could now understand the plaintiff's case.	Vague ground of appeal which inevitably leads to speculation as to its relevance – fails to indicate whether it is relevant to (a) the issue of delay and the motion for dismissal for want of prosecution; or (b) the issue of whether the pleadings disclosed a reasonable cause of action.	Objection refused. It is easy to identify the argument the appellant wants to advance: that there was an affidavit by a bank officer conceding that he understood the plaintiff's case, which would be relevant to the question of whether the pleadings disclosed a reasonable cause of action; and the primary Judge did not consider the affidavit. It is a legitimate ground of appeal, stated briefly and specifically.
(d)	His Honour erred in law in that he failed to assess the merits of the plaintiff's draft amended statement of claim, which disclosed two or more reasonable causes of action.	The causes of action should have been specified, by reference to the paragraphs of the amended statement of claim that purport to disclose them.	Objection refused. The argument is clear: that the primary Judge was bound to, but did not, assess the merits of the draft amended statement of claim. It was not necessary to refer to the paragraphs of the draft. It is a legitimate ground of appeal, stated briefly and specifically.
(e)(i)	His Honour erred in law in that in the exercise of his discretion ... he failed to take into account adequately or at all that the respondents had not shown any or any significant prejudice.	Fails to specify the ground of appeal with particularity.	Objection refused. The argument is clear: the primary Judge was bound to, but did not, take into account the failure of the defendants (respondents) to show prejudice.
(e)(ii)	His Honour erred in law in that in the exercise of his discretion ... he failed to take into account that dismissing the appellant's claim was a step which should ordinarily only be taken in circumstances in which a party has shown contumelious disregard for the court process or a court order.	Fails to identify any evidence. This is not a ground of appeal but a submission.	Objection refused. The argument is clear: the primary Judge was bound to, but did not, take into account the principle that a claim should ordinarily only be taken in circumstances in which a party has shown contumelious disregard for the court process or a court order.
(e)(iii)	His Honour erred in law in that in the exercise of his discretion... he failed to take into account adequately or at all that dismissing the appellant's claim was a disproportionate reaction to the appellant's delay in prosecuting its claim and the deficiencies in the statement of claim.	Fails to identify any evidence. This is not a ground of appeal but a submission.	Objection refused. Though this ground of appeal is a little vague, the argument is stated briefly and specifically and no prejudice is done to the respondents by allowing it to remain.
(e)(iv)	His Honour erred in law in that in the exercise of his discretion ... he failed to have any or sufficient regard to the willingness and capacity of the appellant to henceforth pursue the claim in an expedient fashion.	Fails to identify any evidence. This is not a ground of appeal but a submission.	Objection refused. The argument is clear: the primary Judge was bound to, but did not, take into account the willingness and capacity of the appellant to henceforth pursue the claim in an expedient fashion.
(e)(v)	His Honour erred in law in that in the exercise of his discretion ... he failed to give any or sufficient consideration to imposing terms on the appellant, such as providing security or imposing a strict timetable, instead of taking the drastic step of dismissing the appellant's claim.	Fails to identify any evidence. This is not a ground of appeal but a submission.	Objection refused. The argument is clear: the primary Judge was bound to, but did not, consider any alternative courses of action to dismissal.

21. We have refused all the objections raised by the respondent, BSP. It has been easy for us to identify the grounds of appeal. They comply with the requirements of the Rules. Some are stated more clearly than others but now is not the appropriate time to delve into the merits of the grounds of appeal. We do not consider that any prejudice is done to the respondents by allowing the appeal to proceed in its present form.

Blake Dawson Waldron: Lawyers for the Appellant
Posman Kua Aisi: Lawyers for the first Respondent

Supreme Court of Papua New Guinea

Ipili Porgera Investments Ltd v Bank of South Pacific Ltd [2007] PGSC 55; SC1322 (27 June 2007)