Motor Vehicles Insurance Ltd v Kunjil [2012] PGSC 18; SC1183 (26 April 2012)

SC1183

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 38 OF 2012

MOTOR VEHICLE INSURANCE LIMITED
Applicant/Appellant

AND:

MICHAEL KUNJIL FOR AND ON BEHALF OF HIMSELF,
MARIA YALGOL AND SARAH JOHANNES
Respondent

Waigani: Sawong, J
2012: 19th and 26th April

SUPREME COURT APPEAL – practice and procedure – application for stay of National Court proceedings pending hearing and determination of application for leave to appeal - principles of grant or refusal of stay orders discussed - eleven (11) factors that needs to be satisfied as set out in Mc Hardy case - Court to consider all relevant and appropriate circumstances in deciding what is just and reasonable to stay proceedings – most factors favour applicant – application granted with costs to the respondent

Counsel:

F. Griffin with P.Tabuchi, for the Applicant
T. Beren, for the Respondent

Cases cited:

Gary Mc Hardy v. Protect Security and Communication Ltd [2000] PNGLR 279
Richard Wapua v. Poss Lopkopa & 4 Others (2010) SC1048

RULING

26th April, 2012

1. SAWONG J: The applicant applies for stay of the National Court proceedings in WS. NO. 1288 of 2011, pending the hearing and determination of an Application for Leave to Appeal or Appeal. This application is brought pursuant to Sections 5 and 19 of the Supreme Court Act. The application is contested by the respondent.

2. On the 19th of this month I granted an interim stay of the National Court proceedings pending the ruling on this application, as the respondent was moving for default judgment the following day.
   
3. In support of its application, the applicant relies on two affidavits of Mr. Tabuchi. The respondent has not filed any affidavit in response. The background facts are derived from those two affidavits.
   

Background

4. This application for stay stems from an application for leave to appeal against two National Court decisions given on 19th and 21st March 2012, respectively in proceedings WS. NO. 1288 of 2011.
   
5. The applicant has filed an Application for Leave to Appeal and a Notice of Appeal against those two decisions.
   
6. On 19th October 2011, the respondent instituted National Court proceedings, WS. NO. 1288 of 2011. A Notice of Intention to Defend and Defence were filed on 19th December 2011. Notwithstanding that, on 12th March 2012, the respondent's lawyers filed an application for default judgment.
   
7. On 16th March 2012, the Applicant filed an application for extension of time to file a Defence out of time. Both applications were made returnable before the Court on 19th March 2012.
   
8. On 19th March 2012, when the matter returned, lawyers for both parties submitted to the Court that they have by consent agreed that the time for filing the defence would be extended to the actual date of filing of the defence, which was 19th December 2011, and that the respondent's application for default judgment be withdrawn.
   
9. Lawyers for both parties submitted that the consent was pursuant to Order 1 Rule 15 (3) of the National Court Rules.
   
10. The trial judge sanctioned the withdrawal of the respondent's application for default judgment but refused to endorse the consent of the parties in respect of the extension of time for the filing of the defence.
    
11. On 21st March 2012, the Court refused to allow the time for filing of the Defence to be extended thereby refusing the applicant's application for an extension of time.
    
12. I have read the affidavits and considered carefully the submissions made by both counsel.
    

Law

13. The principles on the grant or refusal of stay orders are set out in Gary McHardy v. Protect Security and Communication Ltd [2000] PNGLR 279 (McHardy case). The grant or refusal of stay is discretionary and it is exercised on proper principles and on proper grounds. There are about eleven (11) factors set out in that case. In exercising its discretion, the Court must consider all relevant and appropriate circumstances in deciding what it is just and reasonable that the proceedings ought to be stayed. It is not intended that the discretion should be exercised on all or certain considerations and factors set out in McHardy before a stay is granted or refused, rather the Court is required to consider the totality of those relevant factors and circumstances, in order to dispense substantive justice in the circumstances of the case before it. The circumstance of a case may warrant greater or less or even no weight to a particular factor (s) and then again, all these go to the exercise of discretion, see Richard Wapua v. Poss Lopkopa & 4 others (2010) SC1048.
    
14. In the present case, most of the factors in McHardy do not apply because there is no judgment of the court below.
    
15. The next consideration is whether leave to appeal is required and whether it has been obtained. As to this factor it is obvious that leave to appeal is necessary, as the decision is interlocutory. An application for leave to appeal has been filed but no leave has been granted yet. This factor favours the applicant.
    
16. As to whether there has been any delay, I consider that there has been no delay, as the present application was filed a few weeks after the decision. This factor favours the applicant.
    
17. As to criteria number 4 and 5 of McHardy, I accept the submission of the applicant, in that these factors are not applicable.
    
18. As to factors 3 and 6 of McHardy these are considered together as these are interrelated. In respect of these matters I consider that the factors favour neither party.
    
19. As to factor 7 that is whether on the face of the record or judgment there may be indicated apparent error of law or procedure. A number of grounds have been pleaded in both the application for leave to appeal and the Notice of Appeal.
    
20. It has been submitted that this grounds raise an arguable case in that there is an error of law. It has been submitted that there are two basis which give rise to an error of law on the face of the record. The first is based on Order 1 Rule 15 (3) of the National Court Rules. This reads;
    

"The period within which a person is required by these rules or by any order to serve, file or amend any pleading may be extended by consent without an order for extension" (my emphasis)

21. This Rule was considered by Kapi, DCJ (as he then was) in Tai v. Australia New Zealand Banking Group (PNG) Ltd [2000] N1979. There His Honour said, "Where a defence is not filed within this prescribed period, parties may by consent extend time without leave of court (Order 1 Rule 15 (3). If there is no agreement between the parties, or the defendant fails to file within the agreed extended period the court may order extension (O.1 r. 15(1)"
    
22. His Honour then went on and said "I would interpret the critical words in context to mean a defence filed in accordance with the Rules. That is to say, a defendant who has allowed time to expire may file defence in accordance with O 1 r 15 (3), or in accordance with O 1 r 15 (1) or in accordance with O 7 r 6 (2). Where a defendant files a defence in accordance with these Rules, he cannot be said to be in default at the time of hearing of the application for default judgment."
    
23. I accept the submission of the applicant on this aspect. A close examination and consideration of O 1 r 15 (3) and the ruling in Tai (supra) shows clearly that, there is a clear error of law in this case, in that the parties had agreed to have the defence filed validated. The parties had by consent agreed for time to be extended for the defence to be filed or for the defence that had already been filed although late, to be accepted. When the learned trial Judge did not endorse that agreement of the parties, the exercise of her discretion was not in accordance with the terms of O 1, r15 (3) of the Rules. This was clearly an identifiable error of law. In my view the submission on this point clearly demonstrate that there is an arguable case. In my view of what I said, I do not consider it necessary to consider the submission on the second limb in respect of error of law submission. This factor favours the applicant.
    
24. Hearing in regard to the other factors, I would also say that these factors favours the applicant.
    
25. The end result is that I would grant the application and I make the following orders.
    
1. That the National Court proceedings in WS1288 of 2011 between Michael Kunjil and Others v. MVIL is stayed pending the hearing and determination of the Application for Leave to Appeal or Appeal.
   
2. The Respondent should pay the Applicants costs, to be agreed, if not, taxed.
   

Young and Williams Lawyers: Lawyers for the Applicant/Appellant
Public Solicitor: Lawyers for the Respondent