National Capital Ltd v Port Moresby Stock Exchange [2010] PGSC 6; SC1053 (21 May 2010)

SC1053

PAPUA NEW GUINEA
IN THE SUPREME COURT OF JUSTICE

SCA No. 22 of 2010

BETWEEN:

NATIONAL CAPITAL LIMITED
First Appellant

AND:

BENJAMIN TERENCE O’DWYER
Second Appellant

AND:

PORT MORESBY STOCK EXCHANGE
Respondent

Waigani: Injia, CJ
2010: 10th & 21st May

SUPREME COURT – Practice and procedure – Jurisdiction - Application for stay – National Court order - Order for costs – Consequential to order for dismissal of proceedings – No appeal against order for costs to stay relates – Whether Supreme Court lacks jurisdiction to stay - Supreme Court Act (Ch 37), s 14 (3) (c ); s 17; Supreme Court Rules, 1984; O 7 rr 26 – 18.

SUPREME COURT – Practice and procedure - Leave to appeal – Leave necessary for appeal "against order for costs only" – Leave not necessary if order for costs is incidental to or consequential only to main decision appealed from- Appeal against the whole or part of order for cost must be stated and grounds for appeal must include appeal against order for costs – Supreme Court Act (Ch 37), s 14 (3) (c ); s 17; Supreme Court Rules, 1984; O 7 rr 26 – 18.

SUPREME COURT - Practice and procedure – Interlocutory applications – Desirable to plead specific statutory provision or rules of Court which confers jurisdiction and under which order application is made and orders are sought .

Cases cited:

Papua New Guinea Cases
Pacific Equities & Investments Ltd v Teup Goledu (2009) SC962

Overseas Cases
Wheeler v Summerfield [1966] 2 QB 94

Counsel:

G Poole, for the appellants/applicants
P Wright, for the respondent

21 May, 2010

1. INJIA, CJ: The appellants apply for stay of an order for costs made in favor of the respondent, by the National Court on 2nd March 2010. Although an application for stay is made under s 19 of the Supreme Court Act (Ch. 37), this provision is not stated in the application.

2. The application is brought under an appeal lodged against the main decision in which the National Court dismissed the appellant’s claim. The order for costs was consequential on dismissal of the proceedings.

3. The order for costs is not challenged in the appeal. In the notice of appeal, no specific reference is made to the order for costs and there are no ground of appeal that relates to the order for costs. A preliminary issue arises as to whether this Court has jurisdiction to stay an order for costs which is not the subject of an appeal.

4. Section 19 of the Supreme Court Act 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. (my emphasis).

5. In the absence of a specific procedural provision in the Supreme Court Act and the Supreme Court Rules 1984 governing application for stay, it is common practice amongst lawyers to invoke s.19 and the Supreme Court has accepted this practice.

6. It is obvious from s.19 that a stay is granted in an appeal that is pending before the Court. The same applies to directional orders that may be granted under s 5 (1) of the Supreme Court Act.

7. The time for appealing and form of appeal is provided in s 17 which is in the following terms:

"17. Time for appealing under Division 2.

Where a person desires to appeal to or to obtain leave to appeal from the Supreme Court, he shall give notice of appeal, or notice of his application for leave to appeal, as the case may be, in the manner prescribed by the Rules of Court within 40 days after the date of the judgement in question, or within such further period as is allowed by a Judge on application made to him within that period of 40 days." (my emphasis).

8. Supreme Court Rules (SCR), O 7 Division 3, rr 6 – 8, provide for the manner and form of appeal in the following terms:

"Division 3.—Notice of appeal

6. An appeal shall be instituted by a notice of appeal.

7. The notice of appeal and all subsequent proceedings shall be entitled "In the Supreme Court of Justice" and shall be entitled as between the party as appellant and the party as respondent.

8. The notice of appeal shall—

(a) state that an appeal lies without leave or that leave has been granted and or annex the appropriate order to the notice of appeal;

(b) state whether the whole or part only and what part of the judgment is appealed from;

(c) state briefly but specifically the grounds relied upon in support of the appeal;

(d) state what judgment the appellant seeks in lieu of that appealed from;

(e) be in accordance with form 8;

(f) be signed by the appellant or his lawyer; and

(g) be filed in the registry." (my emphasis)

9. Section 14 (3)(c ) of the Supreme Court Act makes provision for appeal against an order for costs in a civil case in the following terms:

"14. Civil appeals to the Supreme Court

(1)...

(2)...

(3) No appeal lies to the Supreme Court without leave of the Supreme Court—

(a) ...

(b)...

(c) from an order of the National Court as to costs only that by law are left to the discretion of the National Court (my emphasis)".

10. Costs is generally a discretionary matter for the National Court. Leave of the Court is necessary to appeal from an order for costs per se or to use the exact words of s 14 (3)(c ), "an order...as to costs only" . It follows that leave to appeal is not necessary in an appeal against a judgment in which judgment for costs is incidental or consequential to the main judgment. The appellant may appeal against the order for costs in the same appeal against the main judgment, without leave, and the Supreme Court can assume jurisdiction to deal with the matter. It appears this interpretation of s 14 (3) (c) is not supported by any previous decisions of this Court. Mr Poole of counsel for the appellants cites an old English case which supports this interpretation and that is a decision of the English Court of Appeal in Wheeler v Summerfield [1966] 2 QB 94 at 106. In that case the Court considered the meaning of s 31 (1) of the Supreme Court Judicature (Consolidation) Act, 1925, which is identical to s14 (3)(c); the only difference being that leave to appeal against is given by the trial judge. In that case the appellant, an insurance assessor, brought an action claiming damages for libel in an article published in a local newspaper. The trial judge dismissed the action with costs. The appellant appealed against the main decision and the order for costs, without leave of the trial judge. The Court of Appeal dismissed the main appeal but dealt with the order for costs and varied the order for costs by awarding each party half of the costs. Lord Denning who delivered the main judgment of the Court interpreted s 31 (1) as follows:

" It was said that, seeing that in the result the plaintiff has failed on substantive points, this appeal comes down to an appeal as to costs only and therefore, it is prohibited without the leave of the trial judge.

I do not agree with that interpretation. As I have always understood this section of the Judicature Act, it means this: If a person makes no complaint against the judgment below, except about order for costs, then he must obtain leave of the trial judge before he can come to this court. But if he makes a complaint, not only about costs, but also about other matters, then he can appeal both on those matters and also on the costs; and this court has full jurisdiction to deal with them. Even if he fails on the other matters, this court has jurisdiction to deal with costs. His complaint on the other matters must, of course, be genuine. That is what happened in this case. The plaintiff has brought genuine complaints of other matters. He has also complained about costs. Although he has lost on the other matters, nevertheless his appeal as to costs stands. It is within the jurisdiction of the Court to consider it."

11. Lord Denning’s interpretation in Wheeler’s case confirms the undoubted meaning of s 31 (1) of the Supreme Court Judicature (Consolidation) Act, 1925 and the long standing practice in the United Kingdom that a notice of appeal filed as of right against the main decision may also include an appeal against incidental or consequential orders as to costs; and that an appeal against an order for costs only is brought by leave of the Court. In this country, the same practice has been adopted in relation to appeal against costs under s 14 (3) (c). The absence of case precedent on point suggests that that practice has been widely accepted and is beyond question.

12. Lord Denning’s statement in Wheeler’s case also affirms the long established principle that the appellant’s complaint against the order for costs in the notice of appeal confers on the appellate court jurisdiction to deal with the matter of costs. The same may be said of our collective reading of the provisions of the Supreme Court Act and Supreme Court Rules set out earlier.

13. It is apparent from a collective reading of Supreme Court Act, s 14 (3) (c), s 17 and s 19 and SCR, O 7 rr 6 – 8 that in order to vest jurisdiction in the Supreme Court to review award of costs on appeal, there must be an appeal against an order for costs that is pending determination to which the application for stay relates. The notice of appeal must state the whole or part of the decision on costs appealed from and the grounds of appeal which relate to it. If, in the notice of appeal, the whole or part of the decision on costs is not specified or there are no grounds of notice of appeal relating to that part of the decision on costs, it cannot be said that an appeal against an order for costs is pending. The Court therefore lacks jurisdiction to deal with an application for stay in relation to the order for costs.

14. In the present appeal, the appellants have not complained of the order for costs. However Mr Poole submits the award of costs was consequential only and the order for costs is mentioned in the relief section of the notice of appeal. Therefore this Court can deal with the question of costs when it deals with the main appeal and an order for stay is appropriate.

15. The only reference on costs in the notice of appeal is in the relief section, which Mr Poole relies upon. The pertinent part is in the following terms:

"(b) That judgment is entered for the Appellants and Orders 1, 2, 3, 4 of the Originating Summons filed on 30th October 2009 granted".

16. My reading of the notice of appeal and the above clause relied upon shows no express reference to the order for costs. The Originating Summons is not before me and I have no idea what are those orders sought in those paragraphs. In any case, mere reference to costs in the notice of appeal in its relief section does not constitute an appeal against order for costs. In the circumstances, I am satisfied that there is no appeal against the order for costs to found the application for stay before me.

17. The nature of the order sought in this application as expressly stated in the Notice of Motion is one of stay. Section 19 is the only provision on stay and that jurisdiction is not expressly invoked in the application. If that had been done, it would have been the perfect answer to Mr Wright’s complaint on this point. Mr Poole in his submissions then went on to introduce alternative sources of jurisdiction under Supreme Court Act, s 5 (1) (a) & (b) and Constitution, s 155 (2); which added more confusion. It is this sort of pursuit by counsel of proper jurisdictional foundation to seek the orders applied for, in the course of the hearing, that has become an entrenched practice amongst many lawyers appearing before the Supreme Court. This practice is undesirable and it is not to be encouraged. In order to avoid this practice, it is highly preferable that the correct jurisdiction provision under which the order is sought should be stated at the outset in an interlocutory application brought before the Supreme Court. Support for this practice is found in a recent decision of the Supreme Court in Pacific Equities & Investments Ltd v Teup Goledu (2009) SC962, where the Court dealt with a notice of objection to competency of the appeal. The Court said failure to state the correct jurisdiction basis for the application and the orders sought in itself is sufficient reason to strike out a notice of objection to competency. The Court said:

"5. We are going to dismiss this objection for three reasons.

1 The notice of objection is defective

6. It is defective in two respects. It does not state the jurisdictional basis of the objection. ....

7. The notice of objection should have expressly referred to Order 7, Rule 14 of the Supreme Court Rules as its jurisdictional basis. It should have also referred to Order 7, Rules 8(c) and 9 of the Supreme Court Rules, they being the provisions of the Rules that specify how the grounds of an appeal must be set out in a notice of appeal.

8. These deficiencies in the notice of objection mean that it is itself incompetent and provide a sufficient reason to dismiss the objection."

18. A similar practice exists in the rules relating to filing of interlocutory applications by way of notice of motion and I see no reason why the same practice should be adopted by lawyers making interlocutory applications in the Supreme Court: see Rule 8 of National Court Motions (Amendment) Rules, 2005.

19. I have no hesitation in finding as a matter of law that the application for stay in this matter is brought under s 19. Section 5 (1) of the Supreme Court Act and s 155 (2)(b) of the Constitution have no application to an application for stay in the light of the express provision on stay in s 19 of the Supreme Court Act. I am satisfied that the fate of present the application can be determined purely on preliminary issue which I consider to be a threshold issue of fundamental importance. In the circumstances, it is not necessary to deal with counsels’ submissions on the question of discretion.

20. For these reasons, I dismiss the application with costs to the respondent.

O’Briens Lawyers: Lawyer for the Appellants
Posman Kua and Aisi: Lawyer for the Respondent