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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO 20 OF 2003
BETWEEN
SEVERINUS AMPAOI
First Appellant
AND
JAMES TAURIKO
Second Appellant
AND
BOUGAINVILLE COPPER LIMITED
Respondent
Waigani: Kirriwom, Mogish & Makail, JJ
2011: 02nd March
2012: 01st March
SUPREME COURT - PRACTICE & PROCEDURE - Application for judgment - Judgment by admissions - Summary Judgment - Distinction of - Principles of - National Court Rules - Order 9, rule 30 & Order 12, rule 38.
SUPREME COURT - PRACTICE & PROCEDURE - Judgment by admissions - Application of - Exercise of discretion - Onus on applicant to show a clear and unanswerable case - Serious issues of law and fact raised in pleadings and evidence - Appeal dismissed - National Court Rules - Order 9, rule 30 & Order 12, rule 38.
Facts
The appellants applied for judgment by admissions or summary judgment in the sum of K1.466 million against the respondent pursuant to O 9, r 30 and O 12, r 38 of the National Court Rules. They alleged, among other reasons, the respondent had made admissions in its defence, and that, there was uncontested evidence that the respondent owed that sum of money. They further alleged the money was compensation in respect of their Special Mining Lease (SML) at Panguna on the island of Bougainville. The National Court refused the application for judgment. They appealed against the refusal of judgment.
Held:
1. An application for judgment by admissions under O 9, r 30 of the National Court Rules and application for summary judgment under O 12, r 38 of the National Court Rules are two distinct applications. Alfred Alan Daniel -v- Pak Domoi Ltd (2009) SC970 and Imawe Bogasi Land Group Inc -v- Bank South Pacific Limited and Toale Hongiri ILG & Ors (2011) SC1102 referred to. (per Makail, J).
2. According to O 9, r 30(1) of the National Court Rules, judgment may be entered against a party where admissions are made by the party in his pleadings or otherwise. The phrase "otherwise" covers other circumstances where admissions are made by the party such as affidavits, letters or answers to interrogatories. Alfred Alan Daniel -v- Pak Domoi Ltd (2009) SC970, John Kul -v- The State (2010) N3898 and TNA Limited -v- Paul Kua & Kongo Coffee Limited (2011) N4225 referred to. (per Makail, J).
3. For judgment by admissions to be granted, an applicant must show a clear and unanswerable case or the admissions must be strong and unambiguous. Alfred Alan Daniel -v- Pak Domoi Ltd (2009) SC970, Imawe Bogasi Land Group Inc -v- Bank South Pacific Limited and Toale Hongiri ILG & Ors (2011) SC1102, TNA Limited -v- Paul Kua & Kongo Coffee Limited (2011) N4225 and Dep International Private Limited -v- Ambogo Sawmill Pty Limited [1987] PNGLR 117 referred to. (per Makail, J).
4. Summary judgment will not be granted where there are serious issues of law and fact raised either in the pleadings or evidence. It will only be granted in very clear cases. Imawe Bogasi Land Group Inc -v- Bank South Pacific Limited and Toale Hongiri ILG & Ors (2011) SC1102 and Chief Collector of Taxes -v- TA Field Pty Limited [1975] PNGLR 144 referred to. (per Kirriwom, J & Makail, J).
5. In the present case, the primary judge properly refused judgment by admissions because the appellants had failed to show a clear and unanswerable case or the admissions were strong and unambiguous. The alleged admissions in the pleadings and evidence of the alleged debt by the respondent were vague and ambiguous. (per Makail, J).
6. Further, the primary judge properly refused summary judgment as there were serious issues of law and fact raised in the pleadings and evidence of parties in relation to the alleged debt by the respondent. (per Kirriwom, J & Makail, J).
7. A joinder applicant raising serious allegations of fraud against the appellants in securing consent for representative action by the appellants on behalf of the landowners clearly demonstrated that there was an arguable case to go to trial and therefore had to be joined ( per Kirriwom, J).
8. The appeal was dismissed with costs.
Cases cited:
Bruce Tsang -v- Credit Corporation (PNG) Limited [1993] PNGLR 112
Commissioner for Internal Revenue -v- Bougainville Copper Limited (2009) N3988
CL Toulik and CL Business Consultant Limited -v- Andy Kuek and Fincorp Limited (2006) SC876
Alfred Alan Daniel -v- Pak Domoi Ltd (2009) SC 970
Chief Collector of Taxes -v- TA Field Pty Limited [1975] PNGLR 144
John Kul -v- The State (2010) N3898
TNA Limited -v- Paul Kua & Kongo Coffee Limited (2011) N4225
Imawe Bogasi Land Group Inc -v- Bank South Pacific Limited and Toale Hongiri ILG & Ors (2011) SC1102
Dep International Private Limited -v- Ambogo Sawmill Pty Limited [1987] PNGLR 117
Counsel:
Mr B Ovia, for the First Appellant
No appearance, for the Second Appellant
Messrs E Anderson and M Mukwesipu, for the Respondent
01st March, 2012
JUDGMENT
1. KIRRIWOM, J: The appellants have appealed against the decision of the National Court refusing their application for summary judgment pursued under Order 12, Rule 38 of the National Court Rules. Before the commencement of the hearing it was noted that the second appellant was not present to prosecute the appeal, either in person or by counsel. He is represented by lawyers and the relevant notice for the hearing was duly served on him and his lawyers as per the affidavit of service in the file. His absence without explanation to the Court is hereby deemed that he has abandoned his appeal. The appeal is therefore pursued by the first appellant alone.
2. A preliminary application was moved orally by counsel for the respondent, Bougainville Copper Ltd, seeking the Court's powers under s. 6(1) (a) Supreme Court Act to introduce in this appeal certain documents that were not part of the proceeding in the Court below at the time of summary judgment application. We gave unanimous decision allowing these affidavits into the appeal for consideration while deliberating on this appeal. Our decision was formally delivered in favour of the respondent and we allowed the application. I reproduce below part of our reasons for so ruling.
"1. There is no evidence to show what the amount is for, to whom it should be paid and for which the respective heads of compensation should it come under. The best the 1991 report shows is the respondent responsibly put away money for its various obligations under its operations of the mine in Bougainville. The report does not say it is for the damages pursued by the appellants in the court proceedings.
2. It is argued that the National Court could not grant judgment based on admission as there is no clear admission of the amount due and owing to the appellants. Any alleged admissions in the pleadings or the 1991 annual report is ambiguous and requires further investigation by the Court.
3. The power to grant summary judgment is discretionary and the court is entitled to refuse the application. In this matter there was more good reason to refuse judgment and allow the other interested parties to be involved especially when the matter involved landowners in Bougainville seeking compensation arising from the mine.
4. Even if court accepts that the appellants were not heard properly on its application for summary judgment the proper course is to remit the matter back to National Court for hearing. It should not grant summary judgment if as the appellants say they were not properly heard in the application for summary judgment."
Background
3. The background to this appeal can be explained as follows. The appellants were plaintiffs in the proceeding in the National Court commenced by way of originating summons seeking substantially declaratory orders in representative capacities on behalf of themselves and other landowners of the then Bougainville Copper Ltd land where a huge mine then operated prior to its closure in 1989.
4. Their purported authority to act on behalf of these other landowners whose names were contained in a list of names and whose consent are said to be represented by their signatures beside their names. There were also names without signatures besides them.
5. Some years after the commencement of the proceeding under originating summons, the action then took a different shape when a statement of claim was filed setting out the pleadings. The relief sought in the statement of claim changed the nature of proceeding from one of seeking declaratory orders to one of claim to be paid to the plaintiff.
6. In the course of the pleading there appeared to be admission made by the respondent of having set aside K1.466 million as compensation for the landowners after the mine closed which the mining warden was to determine the quantum for each landowners since the issues pending the proceedings were resolved.
7. This understanding was then codified into a consent order signed by the lawyers representing the two appellants and the respondent.
8. Based on the admission made and this consent order the appellants filed an application for summary judgment.
9. Bougainville Provincial Government got wind of the proceedings by the two appellants and instructed Warner Shand Lawyers to represent it and be joined as party in the proceeding. A number of affidavits were filed in support of the application for joinder. This application was moved orally by counsel on the same day that the appellants moved their application for summary judgment.
10. The trial Judge after hearing both applications refused to enter summary judgment and even refused to entertain oral application by Bougainville Provincial Government to join the proceedings and directed it to file their application in Court. This was subsequently attended to.
11. Meanwhile the two plaintiffs aggrieved by the decision of the trial Judge refusing to enter summary judgment, filed an appeal against the decision.
Grounds of Appeal
12. The grounds of appeal are as follows:
"(a) The Appellants were, by court order, appointed Plaintiffs in the action as representatives of certain classes of Bougainville landowners who claim to be contractually and/or statutorily entitled to the payment to them of landowner compensation by the Respondent.
(b) The Appellants filed affidavit material in which, inter alia, it was deposed that in respect of part of their claim against the Respondent:
(i) the Respondent had admitted its indebtedness to the Appellants both in its Defence and elsewhere;
(ii) the Respondent had not denied that it was indebted to the Appellants;
(iii) there was no defence to the Appellants claim the subject of the application for summary judgment;
(iv) summary judgment ought to be entered against the Respondent.
(c) On 6 December 2002, the Appellants' application for judgment against the Respondent was listed for hearing in the National Court at Kokopo. The hearing of the application was adjourned by consent. Affidavits were subsequently filed on behalf of the Appellants concerning the circumstances in which such hearing was adjourned.
(d) On 7 February 2003, the date fixed for the adjournment of the Appellants' original application, the Appellants made application for summary judgment against the Respondent pursuant to O.9 r.30 or alternatively O.12 r.38 of the National Court Rules.
(e) On 7 February 2003, an oral application was made on behalf of the Bougainville Interim Administration that it be granted leave to intervene and/or appear, and that it be joined as a party to the action.
(f) During the course of argument concerning such application made on behalf of the Bougainville Interim Administration:
(i) The Appellants submitted to His Honour that the application was misconceived in that the Administration lacked the relevant legal interest in the subject matter of the action sufficient to justify its joinder as a party, that that Bougainville Interim Administration lacked locus standi to make the application, and that the application for joinder ought to be dismissed.
(ii) The Respondent argued in support of the application for joinder.
(iii) The Respondent otherwise indicated that irrespective of the outcome of the application for joinder, the Respondent would be making application for an adjournment of the application for judgment brought against it. In that respect, it is noteworthy that the Respondent had filed no affidavit material either denying the debt claimed to be owing by it, or otherwise denying that the application or judgment ought to be refused.
(g) After His Honour heard argument concerning the Appellants' application and the application for joinder, His Honour stood the matter down, indicating immediately prior to doing so that he would re-convene the Court after he had considered the respective submissions made on behalf of the parties on the question of joinder only.
(h) In due course, His Honour re-convened the Court at which time he:
(i) dismissed the application that the Bougainville Interim Administration be joined as a party;
(ii) did not address the Respondent's submission that irrespective of the outcome of the application for joinder, the Respondent would be seeking an adjournment of the Appellants' application for summary judgment;
(iv) dismissed the application for summary judgment made on behalf of the Appellants;
(v) gave no reasons for dismissing the Appellants' application for summary judgment;
(vi) gave no reasons for failing to address the Respondent's submission that it intended to seek not the dismissal, but the
(vii) adjournment of the Appellants' application for summary judgment;
(viii) adjourned the Court.
(i) The Learned Judge has to date failed to publish any written reasons for his having dismissed the Appellants' application for summary judgment.
(j) The Learned Judge failed to afford to the Appellants the opportunity to:
(i) be fully heard on the question of the dismissal of the Appellants' application for summary judgment;
(ii) make appropriate submission as to why the Appellants' application for summary judgment ought not be dismissed;
(iii) be heard on the question of the effect of the Respondent's foreshadowed application for the adjournment of the Appellants' application for summary judgment;
(iv) be afforded natural justice upon the hearing of their application for summary judgment.
(k) By reason of the matters referred to in paragraph (j) hereof, and further by reason of the contents of the affidavits filed on behalf of the Appellants, the Learned Judge was wrong at law in:
(i) failing, in the circumstances, to afford natural justice to the Appellants' application for summary judgment;
(ii) dismissing the Appellants' application for summary judgment;
(iii) failing to grant the Appellants' application for summary judgment;
(iv) failing to award to the Appellants their costs of and incidental to the application for summary judgment, including the costs of overseas counsel.
(l) Alternatively to the matters referred to in paragraph (k) hereof, the Learned Judge was wrong in fact in dismissing the Appellants' application for summary judgment in circumstances where the Respondent had not demonstrated that it had any defence to the Appellants' application for summary judgment.
(m) In the foregoing premises, the Learned Judge ought to have:
(i) Heard and determined the Appellants' application for summary judgment according to law;
(ii) Granted the Appellants' application for summary judgment;
(iii) Ordered that the Respondent pay the Appellants' costs of and incidental to the application, including the costs of overseas counsel.
(n) The determination of the issues in paragraph (a) – (m) hereof inclusive give rise to important questions of law and/or justice which respectively ought to be decided by the Supreme Court of Justice."
Parties' Submissions
13. Mr. Ovia argued that the trial Judge erred in refusing to enter summary judgment because there was clear evidence of debt owing to the Appellants by the Respondent.
14. It was also argued that there was a consent order by all the parties which the Respondent could not detract from and the Court should have entered summary judgment against the Respondent.
15. The matters raised in the affidavits fell outside the sphere of the pleadings and the trial Judge erred in allowing his mind to be influenced by these evidence.
16. It was further argued that there were issues that can be appropriately addressed once the summary judgment has been entered in accordance with clause 11 of the Consent Order.
17. Mr. Anderson argued to the contrary. He submitted that it was not right for the Appellants to be awarded lump sum payment of K1.466m in compensation in the light of the evidence deposed to in the affidavits sought to be relied upon by the Bougainville Provincial Government.
18. He further submitted that the consent order was only executed by the parties in the original proceeding and did not reflect the views of those other landowners who have since realized what the appellants were seeking after the nature of the proceeding changed from one of seeking declaratory reliefs to one of monetary award in a lump sum. They strongly resist any lump sum as such being paid to the Appellants and make reference to the past history of the crises in Bougainville which the First Appellant featured prominently.
19. He further submitted that the Appellants have not clearly demonstrated where the trial Judge had gone wrong in his decision.
20. The originating summons referred to herein only sought these reliefs:
1. (a) Severinus Ampa'oi be appointed to represent all that
class of people who are entitled to make a claim for compensation/ or other relief for and in respect of Special Mining Lease No. 1 being lease for mining purposes No. LMP B9 (hereinafter after referred to as the "Port, Mine, Access Road Lease").
(b) James Tauriko be appointed to represent all that class of people who are entitled to make a claim for compensation/ or other relief for and in respect of Special Mining Lease No. 1 being lease for mining purposes No. LMP B6, B7, and B8 (hereinafter referred to as the "Tailings Lease").
2. A Declaration that the rights of the said classes referred to in paragraph 1 hereof to statutory compensation, are governed, as a matter of construction, by an agreement entered into by the Defendant and dated the 25th March 1986, the Mining Act (Chapter No. 195) and the Mining (Bougainville Copper Agreement( and Chapter 196).
3. Alternatively to the Order sought in paragraph 2 hereof, a declaration of the rights of the set classes referred to paragraph 1 hereof to statutory compensation are governed, as a matter of construction, by an Agreement entered into by the Defendant and dated the 25th March 1986, the Mining Act 1992 and the Mining (Bougainville Copper).
4. Alternatively to the Orders sought in paragraphs 2 and 3 hereof, Declarations as to which Acts and/ or Act govern the rights of the said classes referred to paragraph 1 hereof to statutory compensation in respect of the said lease.
5. A Declaration that the amount of statutory compensation payable to the said classes referred to in paragraph 1 hereof ought to be assessed by a Mining Warden after Notice of Dispute concerning compensation has been given to the Chief Warden.
6. A Declaration that any Appeal instituted by the First Plaintiff and/ or the Second Plaintiff and/ or the Defendant from a decision of the warden relating to the entitlement of the said classes to the payment of statutory compensation by the Defendant and/ or amount of statutory compensation payable by the Defendant ought to be commenced in the National Court.
21. Between the original parties there were on-going discussions which resulted in a consent order signed by the lawyers for the First and Second Plaintiff and the Defendant. The consent order is expressed as follows:
1. The First Plaintiff, Severinus Ampaoi is appointed to represent all that class of people entitled to make a claim for compensation and/ or other relief for and in respect of Special Mining Lease No. 1 (referred to in these proceedings as the SML) and the Lease for Mining Purpose No. LMP B9 (referred to in these proceedings as "the Port, Mine, Access Road Lease").
2. The Second Plaintiff, James Tauriko be appointed to represent all that class of people entitled to make a claim for compensation and/ or other relief for and in respect of Leases for Mining Purposes Nos. LMP B6, B7, and B8 (referred to in these proceedings as "the Tailings Leases").
3. Leave be granted to persons in the class of people enitled to make a claim for compensation and/ or other relief for and in respect of Special Mining Lease No. 1 (referred to in these proceedings as the SML) and the Lease for Mining Purpose NO. LMP B9 (referred to in these proceedings as "the Port, Mine, Access Road Lease") and in respect of Leases for Mining Purposes Nos. LMP B6, B7, and B8 (referred to in these proceedings as "the Tailings Leases") to apply to be joined as Co-Plaintiffs with the First and Second Plaintiffs to represent all other persons in that class of claimants.
4. That the matter proceed, on all issues other than quantum of compensation which may be payable, in the National Court, by pleadings.
5. That the Plaintiffs shall file and serve a Writ and Statement of Claim, setting out therein, the nature of their claim and a statement of particulars, setting out the basis at law and the facts and the circumstances upon which the Plaintiffs rely for their claim within thirty (30) days of the date hereof.
6. That evidence in the National Court proceedings be given on Affidavit.
7. That should the Defendant require any further Statement of Particulars, it make a request for those Particulars, specifying the matters upon which further Particulars be provided, with twenty eight (28) days of receipt of the Writ of Statement of Claim and Particulars.
8. That each party gives discovery, with verification, within twenty eight (28) days of the Defendant's Defence being filed and served.
9. That any inspection of documents take place within fourteen (14) days of Discovery.
10. That any further interlocutory steps or applications be commenced within twenty one (21) days of inspection of documents.
11. That upon the hearing and determination of this matter in the National Court, the issue of quantum of compensation payable and related issues be remitted to the Mining Warden's Court for determination with priority.
12. The parties to have liberty to apply within seven (7) days written notice.
22. Consequently, a statement of claim was filed on 2nd August 2001 containing seven pages of pleadings and claiming as reliefs the following: -
1. A Declaration that the company is lawfully obliged to pay compensation to the said classes of people represented in this action by the First Plaintiff and the Second Plaintiff from on or about 1989 till such time as the company lawfully relinquishes or otherwise assigns or transfers its rights to carry out Mining operations on the island of Bougainville pursuant to the SML, the Port Mine Access Road Lease and the Tailings Leases.
2. A Declaration that the Company has not surrendered the SML, the Port Mine Access Road Lease and the Tailings Leases.
3. A Declaration that the Company has declared a Trust in favour of the said classes of people represented in this action by paying monies into Bank Accounts by way of compensation for them in respect of the SML, the Port Mine Access Road and, the Tailings Leases.
4. Judgment for the sum of money deposited by the company into any Bank account subsequent to 1989 for or in respect of compensation to the classes of people represented in this action pursuant to the terms of the said written Agreement on the 25th of March 1986 or, alternatively pursuant to: -
(a) The Mining Act Chapter 195;
(b) The Mining (Bougainville Copper Agreement) Act Chapter 196; and
(c) The Mining Act 1992.
5. Alternatively to the Orders sought in paragraph 3 hereof, Judgment for damages for breach of Trust.
6. In the further alternative, Judgment for damages for breach of contracts for lease and/or payment of statutory compensation.
23. In response the Defendant filed a very lengthy Defence comprising of seven pages setting out a schedule of payments made by way of compensation during the time it was in operation to the time of crisis which stopped all operations and the company pulled out of the area.
Consideration of Grounds of Appeal
24. The grounds of appeal, as summarized raised three issues:
(i) Dismissal of summary judgment application was erroneously made as the appellants were denied opportunity to be heard.
(ii) Denied natural justice in the hearing of the summary judgment application.
(iii) Trial Judge's decision dismissing the summary judgment application was erroneous in that the Defendant had not demonstrated it had any difference to the application for summary judgment.
25. Before dealing with the grounds of appeal, I point out at the outset that dismissal of summary judgment application did not terminate this proceeding nor did it deprive the appellants from prosecuting their case. Otherwise this ground is extensively covered in the judgment of my brother Makail, J which I, with respect, adopt to the extent where I omitted mentioning some areas in my judgment on the topic.
26. It was within the trial Judge's discretion to allow a new party to join the proceeding at any stage and I note no objection has been taken of the North Solomons Provincial Government joining in this action. With this turn of events in the course of this proceeding the fairest thing for the Court to do was to decline the summary judgment application and allow all parties to properly prosecute their case and the Court determines the final outcome on the evidence and the merits of each party's claim.
27. I agree with counsel for the respondent that the summary judgment application was destined to fail for several reasons:
1. There was no admission by the respondent of owing any money to the appellants.
2. There was no evidence by a responsible person that the respondent had no defence to the claim.
3. The consent order did not include North Solomons Provincial Government which was not a signatory to the instrument.
4. Grant of summary judgment would render meaningless the consent order which bestowed upon the Mining Warden the power to determine quantum of compensation payment to all those identified.
5. New evidence tendered by the intervening party showed some element of fraud involved in obtaining consent of landowners named in the list of plaintiffs provided by the two appellants, thus necessitating proper and full investigation.
28. In my view the requirement stipulated by law in Bruce Tsang -v- Credit Corporation (PNG) Limited [1993] PNGLR 112 on summary judgment has not been satisfied at all and coupled with the joinder and fairness issues, the decision by the trial judge was the only correct one open to him to make.
29. The law on summary judgment under Order 12 Rule 38 of the National Court Rules is already well established in this jurisdiction in numerous case authorities emanating from both the Supreme Court and the National Court. Rule 38 provides:
"38. Summary Judgment. (13/2)
(1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff –
(a) there is evidence of the facts on which the claim or part is based; and
(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,
the Court may, by order, direct the entry of such judgment for the plaintiff on that claim or part, as the nature of the case requires.
(2) Without limiting Sub-rule (1), the Court may under that Sub-rule direct the entry of judgement for the plaintiff for damages to be assessed.
(3) In this rule "damages" includes the value of goods."
30. Justice Lay (as he then was) in Commissioner for Internal Revenue -v- Bougainville Copper Limited (2009) N3988 summed the legal position this way:
"The General Propositions of Law Relating to Ordinary Summary Judgment Applications.
12. National Court Rules O12 r38 provide for summary judgment when there is (a) evidence of the facts, proving the essential elements of the claim; and (b) that the plaintiff or some responsible person gives evidence that in his belief there is no defence.
13. A recent Supreme Court decision setting out the principles is William Duma -v- Eric Meier (2007) SC898; PGSC 34, Injia DCJ, Batari and Gabi JJ where the Court said at [10]:
"The principles relating to applications for summary judgment are well settled in this jurisdiction. Summary judgment is discretionary power and may be granted if there is evidence of facts on which the claim is based and evidence is given by some responsible person that in his belief the defendant has no defence to the claim or part of the claim. (see Hornibrooks Constructions Pty Ltd -v- Kawas Express Corporation Pty Ltd [1986] PNGLR 301 and Bruce Tsang -v- Credit Corporation (PNG) Limited [1993] PNGLR 112). The discretion conferred on the Court should be exercised in a clear case and with considerable care. Summary judgment should be granted only where there is no serious triable issue of fact or law. If there is no dispute as to fact and there is clear admissions of the claim or part of the claim then judgment must be entered for the plaintiff (see Chief Collector of Taxes -v- TA Field Pty Limited [1975] PNGLR 144; Dep International Private Limited -v- Ambogo Sawmill Pty Ltd [1987] PNGLR 117; Kumul Builders Pty Ltd -v- Post and Telecommunication Corporation [1991] PNGLR 299; and Curtain Brothers (Qld) Pty Ltd and Kinhill Kramer Pty. Ltd -v- The State [1993] PNGLR 285."
14. Bruce Tsang -v- Credit Corporation (PNG) Limited [1993] PNGLR 112 at 117 and Curtain Brothers (Qld) Pty Ltd and Kinhill Kramer Pty. Ltd -v- The State [1993] PNGLR 285 at 288 the Supreme Court said:
"As to the second element, the plaintiff must show in the absence of any defence or evidence from the defendant, that in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that, upon the facts and / or the law, the defendant has no defence. The plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of fact or law. Whether a case should go to trial on these issues will be determined on the facts of each case."
15. In United Kingdom courts have said that the procedure should not be used to obtain an immediate trial which requires determining points of law taking hours or days and requiring the citation of many authorities: Home and Overseas Insurance Code Ltd -v- Mentor Insurance Co (UK) Ltd [1983] 3 All ER 74 at 77; or the judge conducting a mini trial: Swain -v- Hillman & Anor [1999] EWCA Crim 2251 at [20], per Lord Woolf MR."
31. The first point to note here is that this power of the Court to grant summary judgment is discretionary. The trial judge had considered all the evidence that was placed before him and gave his ruling declining the application. No detailed reasons were given for his ruling but what I note is that that was not the only ruling he made. There were several other rulings which also impacted on the application for summary judgment.
32. The application by Bougainville Interim Government to join as a party to the proceeding is an important consideration. The evidence relied upon by the intervening party clearly show that the factual scenario pertaining to the money held in trust is really not that straight-forward as the appellants want the Court to believe.
33. Evidence tendered by the respondent and the Bougainville Interim Government show a number of scenarios that did not support the application for summary judgment:
a. As the responsible authority who ought to be involved in the discussions on the funds in the bank and managed by the interim provincial government, it was not correct for the appellants to seek ownership of the funds without the interim provincial government having a say on its disbursement.
b. Some of the people purportedly represented by the appellants through signed list of names of landowners relied on by the appellants have been rebutted in evidence, alleging fraud.
c. The purported admission that is relied on by the appellants is not an unambiguous admission of debt owing to the appellants or landowners by the respondent. It is a mere statement of report prepared by the respondent for public record purposes rather than admitting liability to anyone for that matter.
d. Most landowners who supported the appellants was based on different understanding on the nature of proceedings that the appellants were pursuing. But when the nature of proceeding changed from one of seeking declarations to seeking monetary payments to the appellants, there is no evidence that all the landowners are aware of this.
e. There is no clear evidence of the exact purpose and to whom does the money of K1.466m belong.
f. Only the Mining Warden can determine the disbursements of this money.
34. There were so many issues of fact and law that needed to be properly addressed by all the parties. This is evident from the lengthy defence filed by the respondent. And the joinder application and supporting affidavits also showed serious issues to be resolved including fraud. When such triable issue are abound, Court properly exercising its discretion cannot enter summary judgment, ignoring all these issues.
35. Therefore, even if the trial Judge may have been wrong in that he did not properly hear the appellants' application for summary judgment, no substantial miscarriage of justice had resulted for the above reasons that it would have been premature to entertain such an application when on the evidence there were clear competing interests in the subject proceedings. To have acceded to that application without taking into consideration these new evidence would have resulted in gross injustice and justice would have miscarried.
36. It is therefore appropriate that this appeal be dismissed and the case is returned to the National Court in Kokopo for the substantive proceedings to continue in that Court, this time including the new party, Bougainville Interim Government or the Autonomous Bougainville Government as it is now referred to since the General-Elections. The Appellants have failed to demonstrate where his Honour had gone wrong so I would dismiss this appeal with costs and order this matter to return to the National Court for completion.
Order
37. The appeal is therefore unmeritorious and must be dismissed with costs in favour of the respondent.
38. MOGISH, J: I have read the separate draft judgments of my brothers Kirriwom, J and Makail, J and agree with the reasons and conclusions they have reached. I have nothing further to add.
39. MAKAIL, J: This is an appeal against the decision of the National Court of 07th February 2003 at Kokopo which refused the appellants' application for judgment by admissions or alternatively for summary judgment in the sum of K1.466 million against the respondent. The appellants seek to quash the decision of the National Court and enter judgment for that sum in this appeal.
Brief Facts
40. On 16th May 2001, the appellants commenced proceedings by way of an originating summons seeking, inter-alia, declarations that they were entitled to compensation and/or other relief for and in respect of their respective Special Mining Leases (SML). Their claim for compensation was based on an agreement entered between the respondent and Panguna Landowners Association on 25th March 1986 for a period of four years commencing on 15th March 1986 and ending on 14th March 1990.
41. By an order of the National Court of 03rd July 2001, they were appointed to represent all the class of people entitled to make a claim for compensation and/or other relief for and in respect of their respective SMLs at Panguna on the island of Bougainville. The National Court also ordered them to file and serve a statement of claim setting out the details and nature of the claim. They filed a statement of claim and in response, the respondent filed a defence.
42. The appellants alleged the respondent made admissions in its defence that it paid K1.466 million as compensation into an interest bearing deposit account. They also alleged there was uncontested evidence that the respondent owed that sum of money. That sum of money, they alleged was compensation due to them for and on behalf of them and other landowners pursuant to the agreement of 25th March 1986. They applied for judgment to be entered against the respondent pursuant to O 9, r 30 and O 12, r 38 of the National Court Rules. The National Court refused the application for judgment.
Grounds of Appeal
43. They raised 13 grounds of appeal. I consider the 13 grounds may be grouped into four broad categories because they overlap. The first ground relates to whether the application for judgment, if granted would amount to a breach of the consent order of 03rd July 2001. The second ground relates to whether the appellants were denied natural justice in the hearing of the application for judgment.
44. The third ground relates to whether the circumstances in which the hearing of the application for judgment proceeded was unfair on the appellants and the final ground relates to the National Court's exercise of discretion in the consideration of the application for judgment under O 9, r 30 and O 12, r 38 of the National Court Rules.
Consideration of each Grounds of Appeal
45. In relation to the first ground of appeal, the appellants submitted the National Court erred in entertaining the application for joinder by Bougainville Provincial Government because they, by a consent order of 03rd July 2001, had been appointed as representatives of landowners who claimed to have been contractually and/or statutorily entitled to compensation by the respondent. The respondent submitted it does not dispute the appellants' representative capacity or authority but strongly submitted there is a jurisdictional issue in relation to the National Court dealing with compensation claims arising from SML areas.
46. The first matter to note is in the originating summons issued under OS No 310 of 2001, the appellants sought among other reliefs, orders relating to right to represent all the landowners and the proper instruments under which the claim for compensation could be brought.
47. On 03rd July 2001, consent orders were entered allowing the appellants to issue proceedings against the respondent and also directions for the further conduct of the matter. Term 11 of the consent order is in the following terms:
"that upon hearing and determination of this matter in the national court, the issue of quantum of compensation payable and related issues be remitted to the Mining Warden's court for determination with priority."
48. The application seeks judgment in the sum of K1.466 million plus interest. I note this amount is not determined by the Mining Warden but is derived from the respondent's 1991 annual report.
49. Under section 157 (Determination of compensation by the Warden) of the Mining Act1992, the Mining Warden has jurisdiction to determine any compensation issues arising from an SML area. There is no dispute the appellants' claim for compensation arose from SML areas. That being the case, I am of the view as the Mining Warden has not made a determination for the respondent to pay K1.466 million to the appellants and the landowners that they represent, it was and would be premature for the National Court to proceed to enter judgment against the respondent. Further, in my view, the National Court would be acting beyond its jurisdiction to determine compensation for landowners within the SML areas.
50. For these reasons, while I accept that there is a consent order appointing the appellants as representatives of landowners within the SML areas, such that, there can be no issue or argument in relation to their standing or authority to bring the action against the respondent for compensation, I am not satisfied the claim for compensation and of course the application for judgment for K1.466 million was and is properly before the National Court.
51. In my view, the National Court could not have possibly granted judgment that took away the right of the Mining Warden to determine the quantum as required by the consent order and equally important, section 157 of the Mining Act 1992. This is because the application for judgment seeks to take away the issue of assessment of compensation from the Mining Warden as required by the consent order and section 157 of the Mining Act 1992. In other words, even though the appellants were, by the consent order of 3rd July 2001, appointed as representatives of landowners to pursue the claim for compensation against the respondent, the same consent order required them to pursue it with the Mining Warden. If judgment was entered, it would contradict the consent order.
52. For these reasons, I find the primary judge did not err when he entertained the application for joinder by the Bougainville Provincial Government and refused the application for judgment. I dismiss this ground.
53. Turning to the second ground of appeal, the appellants submitted they were denied natural justice in the hearing of the application for judgment. They submitted on 7th February 2003, the application for judgment came on for hearing and as they were about to move their application, the Bougainville Provincial Government sought to intervene and the respondent sought an adjournment. The primary judge, without further hearing their application, heard the application for joinder by the Bougainville Provincial Government and adjourned for a ruling.
54. When his Honour re-convened, he dismissed the application for joinder by the Bougainville Provincial Government and also dismissed their application for judgment. Given this scenario, they strongly submitted they were denied natural justice and the appeal be upheld on this ground. The respondent submitted the appellants have failed to show that the primary judge erred in relation to this ground. They advanced this submission because they said his Honour did hear the appellants on their application before ruling against them.
55. The principles of natural justice are an integral part of the underlying law of Papua New Guinea, the minimum requirement of which, expressly recognised by section 59 of the Constitution, is "the duty to act fairly, and, in principle, to be seen to act fairly." The case of CL Toulik and CL Business Consultant Limited -v- Andy Kuek and Fincorp Limited (2006) SC876, the Supreme Court held that:
"A judge should not grant relief on a basis not argued nor grant a remedy not sought without giving the parties an opportunity to be heard on the basis or remedy. To do so is unfair to the parties as it deprives them of full knowledge of the case to be met and the possible consequences."
56. In the present case, the only application before the National Court on 7th February 2003 was the application for judgment. The appellants were present to prosecute the application. According to the primary judge's notes, the appellants were allowed to be heard and made submissions on the facts as well as law citing case authorities relating to the application for judgment.
57. In my view, the appellants were accorded the right to be heard before the National Court gave its ruling. It is not a case where they were not heard on the application before judgment was passed on them. It may be true that the appellants did not have the opportunity to properly argue the application for judgment or why it should not be dismissed but that is not the same as saying the appellants did not have a say on the application. For these reasons, I find the primary judge did not err. I dismiss this ground.
58. As for the third ground, the appellants submitted the manner in which the learned judge dealt with their application was unfair because the Court's attention was diverted from the application for judgment to joinder by the Bougainville Provincial Government. As a result, the primary judge did not hear full arguments on the application for judgment. The respondent submitted otherwise. They said, the learned judge did consider the appellants' application for judgment as well as the application for joinder by Bougainville Provincial Government and adjourned. When he re-convened, his Honour dismissed both applications.
59. The evidence from the primary judge's note shows that:
60. Part of the primary judge's ruling from his notes stated:
"(1) On application by Mr Egan is refused as I observe the list tendered to me on the schedule and in the affidavits of the plaintiff. Many of this people have not signed.
(2) there can arise a situation where the defendants is paying for people who are already deceased."
61. Based on these evidence, I am of the view the appellants were given equal opportunity to present their case on the facts, the law and make submissions before the learned judge gave his decision. They were not denied the opportunity to present their case. For these reasons, I find no error here and dismiss this ground.
62. In relation to the final ground of appeal, the appellants submitted the National Court erred in refusing their application because first the respondent had made admissions in its defence. They referred to paragraphs 3, 5 and 13 of the respondent's defence and submitted the respondent has admitted it owed compensation to the landowners of the SML areas of whom they represent. Secondly, there was uncontested evidence by way of affidavits that the respondent owed that sum of money and referred to the 1991 annual report of the respondent which declared K1.466 million as compensation for landowners.
63. They also referred to a letter from the respondent to Panguna Landowners Association dated 13th March 1990, which extended the period of the 1986 agreement by one year (until 14th March 1991) and submitted, this letter was confirmation of the debt by the respondent. They also submitted the respondent's lawyers failed to respond to their lawyer's demand for payment and that is also an admission of debt. Finally, they submitted the respondent did not make any submissions in response to the application for judgment except for an adjournment.
64. From the way the application for judgment was premised in the National Court and also on appeal before this Court, it appears the appellants have misapplied the requirements for an application for judgment by admissions and application for summary judgment. These two applications are quite distinct. In Alfred Alan Daniel -v- Pak Domoi Ltd (2009) SC970, the Supreme Court made a clear distinction between a judgment based on admissions under O 9, r 30 of the National Court Rules and summary judgment under O 12, r 38 of the National Court Rules. It stated:
"These applications are quite distinct in a sense that the principles governing their application are different although they have a common resultant effect and that is, they dispose off proceedings in a "summary way"." (Emphasis added).
65. In relation to summary judgment, it stated:
"In an application for summary judgment under Order 12, rule 38, an Applicant must show that:
1. there is evidence of the facts proving the essential elements of the claim; and
2. that the Applicant or some responsible person give evidence that in his belief there is no defence.
If an Applicant is able to establish these two elements, summary judgment maybe granted without a need for a full trial."
66. The often quoted case of Bruce Tsang -v- Credit Corporation (PNG) Limited [1993] PNGLR 112 established these principles for summary judgments. It has also been held that summary judgment will only be granted in very clear cases: see Chief Collector of Taxes -v- TA Field Pty Limited [1975] PNGLR 144.
67. Judgment by admissions is provided under O 9, r 30 of the National Court Rules. It states:
"30. Judgement on admissions. (18/3)
(1) Where admissions are made by a party, whether by his pleading or otherwise, the Court may, on the application of any other party, direct the entry of any judgement or make any order to which the applicant is entitled on the admissions.
(2) The Court may exercise its powers under Sub-rule (1) notwithstanding that other questions in the proceedings have not been determined." (Emphasis added).
68. According to Sub-rule 1 of Rule 30, there are two situations by which judgments by admissions may be entered against an opposite party. The first situation is where admissions are made in pleadings of a party, for example, a defendant makes an admission in its defence to owing a sum of money to the plaintiff. The second situation is where admissions are made in other circumstances by virtue of the expression "otherwise". In our view, the expression "otherwise" would cover situations where admissions are made in a party's witness's affidavit, answers to interrogatories etc,: see Alfred Alan Daniel's case (supra), John Kul -v- The State (2010) N3898 and TNA Limited -v- Paul Kua & Kongo Coffee Limited (2011) N4225.
69. In Imawe Bogasi Land Group Inc -v- Bank South Pacific and Toale Hongiri ILG & Ors (2011) SC1102, the Supreme Court further clarified the confusion and emphasised that, "............. admissions may be based either on formal admissions in the pleadings or on informal admissions. For judgment to be entered under this rule, the respondents' admissions must be strong and unambiguous. Judgment will not be entered on admissions where serious questions of fact or law require consideration."
70. In an earlier case of Dep International Private Limited -v- Ambogo Sawmill Pty Limited [1987] PNGLR 117 at 118, Woods, J said this in relation to how the Court may exercise its discretion when dealing with an application for judgment by admissions:
"The principles here are that if a defendant makes admissions sufficient to support the claim against him the plaintiff may apply for judgment based on admissions. These admissions may be based either on formal admissions in the pleadings or on informal admissions. For judgment to be entered under this rule the defendant's admissions must be strong and unambiguous." (Emphasis added).
71. The principles deduced from these discussions are, for judgment by admissions to be granted, an applicant must establish either admissions in the pleadings of the opposite party or admissions in other documents such as affidavits of witnesses or reply to interrogatories of the opposite party and the admissions must be strong and unambiguous or the applicant must show a clear and unanswerable case: see Alfred Alan Daniel's case (supra), Imawe Bogasi's case (supra) and also John Kul's case (supra), TNA Limited's case (supra) and Dep International Private Limited's case (supra).
72. With those principles in mind, I deal first with the application for summary judgment. Did the learned judge properly exercise his discretion in the consideration of the application? First, it is noted the notice of motion seeks summary judgment of K1.466 million plus interest. Secondly, it is noted the respondent did not file any responding affidavits to the application. Be that as it may, the onus of proof is on the appellants to show a clear case of summary judgment. Having considered the respondent's defence, I am of the view it is substantial and raises serious issues of law and fact which require full and further investigation by the National Court in a trial proper before judgment can be given.
73. For example, at paragraph 14 of the defence, it raises the issue of time limitation under section 16 of the Frauds and Limitations Act, 1988. In my view, this defence raises serious issues of law and fact. Serious legal and factual issues arise in relation to whether or not the action by the appellants is time barred. This is a critical issue especially where the appellants rely on an alleged agreement entered in 1986 which ran for a period of four years and had allegedly expired in 1990. They then instituted proceedings in 2001, some 11 years after the agreement was signed and 7 years after it had expired. Whether this defence will succeed is another matter but in my view, proper consideration must be given to it and this can only be done at full trial.
74. Another example is the jurisdiction of the National Court to determine claims for compensation in SML areas. As noted above, the jurisdiction to determine compensation for landowners in a SML area is vested in the Mining Warden and even though the appellants have been appointed to pursue the claim for compensation for and on behalf of themselves and other landowners pursuant to the consent order, there is an issue in relation to whether their claim is properly before the National Court. In my view, this raises a serious issue of law that must be properly considered at trial.
75. In so far as evidence supporting the claim is concern, at paragraph 15 of his affidavit, the first appellant alleged that the respondent admitted its indebtedness at paragraph 13 of its defence. But in my view if paragraph 13 of the defence is read carefully, it does not state that the respondent is indebted to the appellants nor does it state that the respondent owed K1.466 million to the appellants and other landowners.
76. Further, I have perused the letter from the respondent to Panguna Landowners Association dated 13th March 1990 and I note it stated that the respondent proposed to extend the 1986 agreement for one year (until 14th March 1991) and further stated that: "[d]uring the twelve month period of this temporary arrangement up until a new compensation agreement between the parties is concluded within twelve months, all compensation money otherwise payable under the current agreement will be invested in an IBD account on behalf of the recipients"
77. The appellants rely on this statement in that letter and the sum of K1.466 million stated in the 1991 annual report and claimed that these are admissions of the debt and summary judgment should have been granted. That may be so but the respondent did not admit in that letter that K1.466 million is the amount of compensation due to the appellants and the other landowners. The sum of K1.466 million came from the 1991 annual report and in my view the annual report does not state that the sum of K1.466 million is compensation due to the appellants and other landowners.
78. All I can say based on the 1991 annual report is that, the sum of K1.466 million is money set aside by the respondent as compensation and will be paid as and when it is due. In my view, it is money set aside to pay landowners but it is not clear whether the full sum or a portion will be paid, when it will be paid and to whom it will be paid. Further, and very importantly, it is unclear what comprises the sum of K1.466 million bearing in mind there are various heads of damages the respondent is by law obliged to pay to the landowners: see section 154(2) of the Mining Act, 1992 which provides for various heads of damages.
79. The Court must satisfied that this is a clear case for summary judgment and the onus is on the appellants to establish with certainty the admissions by the respondent in order for the Court to be satisfied that there is no defence to the claim and grant summary judgment. The appellants need to discharge that onus well because I note at paragraph 6 of the respondent's defence, it denied carrying further operations on the SML areas from no later than 14th March 1991. Furthermore, at paragraph 9 of the defence, it pleaded a state of force majure had applied since 15th May 1989, suggesting that it had ceased operations on the SML areas because of what we all now know as the "Bougainville crisis".
80. In my view, these are serious issues raised in the respondent's defence. They relate to the basis of the claim for compensation, that is, how and why the appellants and other landowners are entitled to compensation for the use of their land when the respondent's operations had ceased due to the Bougainville crisis. Further, in my view, the alleged admissions of the debt in the defence and evidence are vague and ambiguous.
81. Given the ambiguity in the admissions in the pleadings and evidence, and that serious issues of law and fact have been raised, I am of the view this is not a case where summary judgment could have been properly entered against the respondent. For summary judgment will only be granted in very clear cases. For these reasons, I am not satisfied the appellants have made out their application for summary judgment. I find the learned judge had properly exercised his discretion in refusing the application. This ground is also dismissed.
82. I now deal with the last aspect of the appeal, which is the application for judgment by admissions. As noted above, an application for summary judgment is distinct from an application for judgment by admissions as the principles governing their application are different.
83. The issue then is, did the appellants establish a clear and unanswerable case in the National Court? The onus of proof was on the appellants to show that there were admissions in the pleadings of the opposite party or admissions in other documents such as affidavits of witnesses of the opposite party and the admissions must be strong and unambiguous. In that regard, it is also my view that it does not matter if the respondent had not contested the evidence of the appellants either by responding affidavits or submissions as the onus of proof is on the appellants and they were obliged to show that this was a clear and unanswerable case where judgment by admissions should have been granted.
84. In relation to the appellants' claim of admissions in the respondent's defence, again from my perusal of paragraph 5 of the defence, apart from the respondent admitting paragraph 5 of the statement claim which alleged the respondent had paid compensation to landowners for occupation fees, physical disturbance compensation, social inconvenience compensation, bush compensation, river and fish compensation and corps and economic tress compensation, there are no admissions that it owed them further compensation.
85. Further, the respondent denied owing any further compensation and alleged at paragraph 5(1) of its defence that monies were paid to the landowners until 14th March 1990 pursuant to the agreement. In my view, this is a clear denial of further compensation or indebtedness. Furthermore, as noted above in the discussions on summary judgment and I repeat them here, paragraph 6 of the respondent's defence alleged the respondent had ceased operations on the SML areas from no later than 14th March 1991 and paragraph 9 of the defence alleged a force majure had taken place since 15th May 1989, suggesting the respondent had ceased operations because of the Bougainville crisis.
86. Also, in my view, paragraph 13 of the defence does not state that the respondent is indebted to the appellants nor does it state that the respondent owed a sum of K1.466 million to the appellants and other landowners. In my view, these pleadings in the defence cannot be described as admissions of the alleged debt by the respondent.
87. In relation to any other documents that may show admissions by the respondent, the appellants referred to the affidavits of the appellants, affidavit of their lawyer Mr Emmanuel Mai, affidavits of their accountants from KPMG Chartered Accountants Ms Lynette Morris and Ms Phillipa Raurela and submitted these affidavits established the claim of K1.466 million and interest of K5,833,970.00 thereby giving a total of K7,299,970.00 due and payable by the respondent.
88. As noted in the discussions on summary judgment, the letter from the respondent to Panguna Landowners Association dated 13th March 1990 does state that the sum of K1.466 million is the amount of compensation due to the appellants and the other landowners. The sum of K1.466 million came from the 1991 annual report and in my view the annual report also does not state that the sum of K1.466 million is compensation due to the appellants and other landowners.
89. Further, there is no evidence to show what the amount is for, to whom it should be paid and for which of the respective heads of compensation should it come under: see section 154(2) of the Mining Act 1992 which provides for various heads of damages. Again, as noted above in the discussions on summary judgment, the best the 1991 annual report shows is the respondent responsibly put away money for its various obligations under its operations of the mine on Bougainville. In my view, the 1991 annual report does not say it is for damages sought by the appellants in the court proceedings.
90. As for the interest component, it was calculated by KPMG Chartered Accountants on assumptions and there is no admission by the respondent in its pleadings or affidavit to confirm the appropriate rate. In my view, the appellants assumed the amount was due and owing when the lawyers did not reply. But that is not the law. They must show that the respondent has admitted in its defence and evidence the appropriate rate and amount due as interest.
91. Based on the conflicting information in the pleadings and evidence, I am of the view, the National Court could not possibly grant judgment based on admissions as there was no clear admission of the amount due and owing to the appellants. For these reasons, I find the learned judge properly exercised his discretion in refusing the application for judgment by admissions. I dismiss this ground.
Order
92. In the end, I would dismiss the appeal and award cost to the respondent.
_________________________________________
Kundu Legal Services Lawyers: Lawyers for the First Appellant
Pato Lawyers: Lawyers for the Second Appellant
Gadens Lawyers: Lawyers for the Respondent
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