Kulunga v International Education Agency of Papus New Guinea Ltd [2011] PGSC 6; SC1106 (29 April 2011)

SC1106

PAPUA NEW GUINEA
IN THE SUPREME COURT OF JUSTICE

SCA NO 63 0F 2010

FRANCIS KULUNGA
Appellant

V

INTERNATIONAL EDUCATION AGENCY OF PAPUA NEW GUINEA LIMITED
Respondent

Waigani: Gavara-Nanu J, Cannings J, Kariko J

2011: 28, 29 April

APPEALS – whether alleged error of law by primary Judge based on a correct interpretation of primary judge's findings

PRACTICE AND PROCEDURE – whether a notice given to the State after commencement of proceedings but before joinder of the State as a party is sufficient – Claims By and Against the State Act, Section 5 – dismissal of proceedings, National Court Rules, Order 12, Rule 40.

JUDGEMENTS AND ORDERS – whether interim injunction should continue in the event that a defendant is improperly named

The respondent commenced proceedings in the National Court, challenging the appellant's title to land. The National Court made an interim order restraining the appellant from entering or developing the land, pending trial. The respondent and the appellant then each applied to the National Court for various orders. The respondent applied for leave to join additional parties and to amend its originating summons by seeking additional relief. The appellant applied for an order for dismissal of the entire proceedings and in the alternative to set aside the interim order restraining him from entering or developing the land, pending trial. The National Court made the orders sought by the respondent and refused to make the orders sought by the appellant. The appellant appealed against all orders of the National Court, on five grounds.

Held:

(1) All grounds of appeal were dismissed as the appellant failed to demonstrate that the primary Judge made any errors of law or fact in the manner alleged.

(2) The parties were ordered to bear their own costs as the respondent failed to appear at the hearing of the appeal.

Cases cited

The following cases are cited in the judgment:

Haiveta v Wingti (No 2) [1994] PNGLR 189
International Education Agency of PNG Ltd v Francis Kulunga (2010) N3991
Papua Club Inc v Nusuam Holdings Ltd (2005) SC812

APPEAL

This was an appeal against an interlocutory order of the National Court.

Counsel

R Lains, for the appellant

29 April, 2011

1. BY THE COURT: This is an appeal against an interlocutory order of the National Court, constituted by Justice Makail, in civil proceedings concerning a dispute over a block of land in Mt Hagen.

2. The land in question is Section 29, Allotment 5. It is adjacent to the Mt Hagen International School, which is owned and controlled by the respondent, the International Education Agency of PNG Ltd (the IEA). In 2009 the Minister for Lands and Physical Planning granted a State Lease over the land to 'J K Wills Limited', a company which is apparently owned and controlled by the appellant, Francis Kulunga.

3. The respondent believed that it should have been granted the lease over the land, as it had erected a basketball court on it and its students have used it for sporting purposes for several years. On 19 February 2010 it commenced proceedings by originating summons against the appellant, seeking a declaration that he is not the legal title holder of the land. On 22 February 2010 Makail J granted an ex parte interim injunction, restraining the appellant from entering or developing the land, pending trial.

4. The respondent and the appellant then each applied to the National Court for various orders. The respondent applied for leave to join additional parties and to amend its originating summons by seeking additional relief. The appellant applied for an order for dismissal of the entire proceedings and in the alternative to set aside the interim order restraining him from entering or developing the land, pending trial. On 1 April 2010 his Honour heard the two motions and on 9 April 2010 handed down a written ruling on them (International Education Agency of PNG Ltd v Francis Kulunga (2010) N3991). His Honour made the orders sought by the respondent and refused to make the orders sought by the appellant.

5. The appellant has appealed against all orders of the National Court, on five grounds, set out as grounds 3(a) to (e) in the notice of appeal. We have for the sake of convenience renumbered them as grounds 1 to 5 and we will address each one in turn. It is argued that his Honour erred in law and/or fact in five respects.

GROUND 1: ERROR OF FACT BY DECIDING THAT THERE WAS FRAUD IN OBTAINING THE TITLE UNDER J K WILLS LTD WHEN IT WAS NOT THE ISSUE IN THE NOTICE OF MOTION HEARING

6. This ground of appeal is based on the false premise that his Honour made a finding of fraud. No such finding was made. His Honour, after setting out the evidence in the form of various affidavits that had been filed and referring to the allegations of fraud that would appear to arise from the affidavits and explaining the differing judicial approaches to the meaning of "fraud" in the Land Registration Act, stated that he was satisfied that it is arguable that there was constructive fraud in the grant of title to J K Wills Ltd. His Honour made that finding for the purposes of determining the part of the appellant's motion that sought to dismiss the proceedings for not disclosing a reasonable cause of action, being frivolous and vexatious and an abuse of process.

7. That was a proper finding to make, given the affidavits that were before his Honour, and given the issues of law arising from the appellant's motion for dismissal. No error of fact or law was made in the manner contended for by the appellant. Ground No 1 is dismissed.

GROUND 2: ERROR OF LAW AND FACT BY ALLOWING THE MATTER TO PROCEED WITH FURTHER PLEADINGS AFTER ESTABLISHING FRAUD

8. Mr Lains, for the appellant, submitted that his Honour erred in law by not dismissing the proceedings when it became apparent that the respondent was seeking to argue fraud against the appellant or his company. His Honour should have dismissed the proceedings, it was submitted, as the respondent had commenced them by originating summons, when they should have been commenced by writ of summons. If a plaintiff's claim is based on an allegation of fraud the proceedings must, by virtue of Order 4, Rule 2(1)(b) of the National Court Rules, be commenced by writ of summons.

9. On the face of it this is a reasonable proposition of law to make, and Mr Lains made a detailed written submission in support of it. However, the argument must fail, for three reasons.

10. First, it falls outside the ground of appeal that was put before the court. The general rule is that an appellant is confined in argument before the Supreme Court to issues of law or fact raised in the grounds of appeal set out in the notice of appeal; and argument on issues that fall outside the grounds of appeal will only be allowed with the leave of the Supreme Court (Papua Club Inc v Nusuam Holdings Ltd (2005) SC812). Leave was not sought to argue the points of law that have been relied on in support of ground No 2, so this ground of appeal cannot, for that reason alone, be upheld.

11. Secondly, as is the case with ground of appeal No 1, ground No 2 is based on the false premise that his Honour made a finding of fraud. For that reason also ground No 2 must fail.

12. Thirdly, the argument that the respondent had used an improper mode of commencement of proceedings was not properly before the National Court. It was not raised in the appellant's notice of motion. It was not addressed in oral submissions. And, although it might have been alluded to in the appellant's written submissions that was not sufficient to put it properly before the National Court.

Ground No 2 is dismissed.

GROUND 3: ERROR OF LAW BY HOLDING THAT SECTION 5 NOTICE TO THE STATE WAS GIVEN PROPERLY

13. This ground of appeal relates to Section 5 of the Claims By and Against the State Act. The appellant argued before the National Court that the proceedings should be dismissed as the respondent had not given notice to the State of its intention to make a claim against the State prior to commencement of the proceedings. His Honour rejected the argument, for the reason that, on the date of commencement of the proceedings, 19 February 2010, the State was not a party. Furthermore, by the time that the motions were heard, 1 April 2010, the respondent had given the necessary notice to the State; it was given on 11 March 2010.

14. We find no error in his Honour's determination of those issues. Mr Lains submitted before us that the respondent and its lawyers were guilty of an abuse of process due to deliberate avoidance of the requirements of Section 5. However, there is no evidence to support that proposition. Besides, if there is any real prejudice to the State arising from the timing of the Section 5 notice, the State is at liberty to raise this before the trial. Alleged non-compliance with Section 5 has not, to our knowledge, ever been relied on by a third party as a basis for having proceedings dismissed. It is a matter that must be raised by the State.

15. Ground No 3 of the appeal is therefore dismissed.

GROUND 4: ERROR OF LAW BY ALLOWING INTERIM ORDERS TO CONTINUE AFTER ESTABLISHING THAT THE APPELLANT WAS WRONGLY NAMED AS A PARTY TO THE PROCEEDINGS

16. The appellant argues that his Honour should have dismissed the proceedings once it was clear that the appellant had been incorrectly named as defendant. As the appellant was not himself the registered proprietor of the State Lease – the registered proprietor was J K Wills Ltd – it was J K Wills Ltd that should have been named as defendant. The proceedings were materially defective and should have been dismissed.

17. We are not persuaded by this argument. The learned primary judge carefully addressed it. His Honour accepted the submission that the proceedings were defective and were susceptible to being dismissed. However, he held that, because he was satisfied that it was arguable that there had been constructive fraud in the grant of title to J K Wills Ltd, to dismiss the proceedings simply on the ground that the respondent had sued the wrong party would prejudice the respondent's interest in the land and deny it the opportunity to test its claim of fraud in court. Further, the joinder of J K Wills Ltd would benefit both parties, as would the joinder of the Registrar of Titles and the State. For these reasons – which we endorse as good and sufficient – his Honour refused to dismiss the proceedings, and, after setting out the principles regarding continuation of interim injunctions, allowed the interim orders to continue.

18. We therefore dismiss ground No 4.

GROUND 5: ERROR OF LAW AND FACT BY NOT ENTIRELY DISMISSING THE PROCEEDINGS

19. This ground of appeal fails to meet the requirements of Order 7, Rules 8(c) and 9 of the Supreme Court Rules as to the drafting of grounds of appeal. As the Supreme Court explained in Haiveta v Wingti (No 2) [1994] PNGLR 189 these requirements exist for two reasons:

• the respondent must be informed of the basis of the appeal so they can prepare their arguments;
  
• the court must be informed of the issues to be determined.
  

20. This ground is vague, general and meaningless. Therefore ground No 5 is dismissed.

CONCLUSION

21. We have dismissed all grounds of appeal. The appeal will therefore be dismissed.

22. As to the costs of these proceedings, as there was no appearance by the respondent, we will not order costs against the appellant.

ORDER

(1) The appeal is entirely dismissed.

(2) The parties shall bear their own costs.

Judgment accordingly.

_____________________

Jerry Kiwai Lawyers: Lawyers for the Appellant
Nonggorr William Lawyers: Lawyers for the Respondent