Wan Global Ltd v Luxurflex Ltd [2012] PGSC 32; SC1199 (12 October 2012)

SC1199

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 91 OF 2012

BETWEEN:

WAN GLOBAL LIMITED
Applicant

AND:

LUXURFLEX LIMITED
Respondent

Waigani: Hartshorn, J.
2012: 27th September,
: 12th October

Application for leave to Appeal

Facts:

The applicant, Wan Global Ltd, seeks leave to appeal a National Court judgment that refused to dismiss a proceeding for being an abuse of process.

Held:

Wan Global Ltd has established an arguable or prima facie case that the exercise of discretion by the judge at first instance may have been incorrect and the wrong decision made.

Cases Cited:
Papua New Guinea Cases

National Executive Council and Luke Lucas v. Public Employees Association [1993] PNGLR 264;
Michael Gene v. Hamidian Rad [1999] PNGLR 444
Matiabe Oberia v. Police and the State (2005) SC801
Telikom PNG Ltd v. ICCC and Digicel (2008) SC906
Rabaul Shipping Ltd v. Rupen (2008) N3289
Sekesu Sisapi Land Group Inc v. Turama Forest Industries Ltd (2008) SC976
Lyons Putupen v. Enga Provincial Government (2009) SC1035
Stephen Punagi v. Pacific Plantation Timber Ltd (2011) SC1153
Ruing v. Marat (2012) N4672

Overseas Cases

O'Reilly v. Mackman [1983] UKHL 1; [1982] 3 WLR 1096

Counsel:

Mr. A. MacDonald, for the Applicant
Mr. I. R. Shepherd, for the Respondent

12th October, 2012

1. HARTSHORN, J: The applicant, Wan Global Ltd, seeks leave to appeal a National Court judgment that refused to dismiss a proceeding for being an abuse of process. Leave to appeal is required as the judgment sought to be appealed is interlocutory: s. 14(3)(b) Supreme Court Act; Stephen Punagi v. Pacific Plantation Timber Ltd (2011) SC1153.

Background

2. The respondent, Luxurflex Ltd, has commenced a proceeding in the National Court by originating summons that seeks amongst others, orders in the nature of declarations that it is the registered proprietor of certain property and that the purported cancellation of two State Leases for the property by the Registrar of Titles is null and void and of no effect.

3. Wan Global submitted before the judge at first instance that the relief that Luxurflex was seeking was in essence in the nature of a prerogative writ which required an application for judicial review pursuant to Order 16 National Court Rules. As Luxurflex had sought relief pursuant to Order 4 instead of Order 16, Luxurflex's proceeding was an abuse of process. The judge at first instance decided otherwise and dismissed Wan Global's application to dismiss.

4. Wan Global contends that the judge at first instance erred by amongst others:

a) holding that Luxurflex was correctly before the National Court by using the Order 4 procedure to seek declarations and injunctions, when Luxurflex should have commenced proceedings by way of judicial review as the relief sought in essence was in the nature of a prerogative writ.

b) refusing to dismiss the National Court proceeding as the proceeding should have been brought under Order 16 and not Order 4.

c) placing reliance upon certain judgments that could be distinguished and contrasted with the facts of this case.

Leave to appeal

5. The case of Matiabe Oberia v. Police and the State (2005) SC801 details the requirements for a successful leave to appeal application and has been followed by the decisions of Sekesu Sisapi Land Group Inc v. Turama Forest Industries Ltd (2008) SC976 and Lyons Putupen v. Enga Provincial Government (2009) SC1035. On an application for leave to appeal, an applicant should demonstrate that there is a prima facie case that the decision sought to be appealed was wrong and that substantial injustice will be done by leaving the erroneous decision unrevised. As to whether an applicant has demonstrated such a prima facie case, the following factors are to be considered:

a) Is there an arguable or prima facie case demonstrated that the trial judge was wrong?

b) Does the appellant have recourse in the Court below?

c) Was the ruling within the discretion of the Court? Has it been shown that its exercise was manifestly unreasonable, exercised on wrong principle or a mistake of fact?

d) Does the decision have any bearing on the final determination of the issues between the parties? Will it affect the primary rights of the parties or prevent the determination of the issues?

e) Will substantial injustice be caused by allowing the decision to stand?

f) Has cause been shown for the trial process to be interrupted by an appeal?

Arguable case

6. Wan Global contends that by seeking the relief that it has in its originating summons, Luxurflex is challenging the exercise of the statutory powers and discretion of the Registrar of Titles to cancel State Leases. In order to determine this challenge, the Court must first review the relevant statute and from evidence of the exercise of discretion, decide whether the particular official committed any error which breached the principles of administrative law such as whether he acted beyond his powers or failed to take into account relevant considerations or was biased in his decision-making.

7. Even though the declaratory relief sought by Luxurflex does not state that it seeks an order in the nature of a prerogative writ, such as certiorari or mandamus, the reality is that when the purpose and substance of the proposed relief are considered, in addition to the language of the proposed relief, it is clear that orders in the nature of a prerogative writ are sought.

8. Once it is determined that in reality an order in the nature of a prerogative writ is sought, application must be made by way of an application for judicial review in accordance with Order 16 National Court Rules. Wan Global contends that this approach was recognised in the Supreme Court cases of National Executive Council and Luke Lucas v. Public Employees Association [1993] PNGLR 264; Michael Gene v. Hamidian Rad [1999] PNGLR 444 and Telikom PNG Ltd v. ICCC and Digicel (2008) SC906; and the National Court cases of Rabaul Shipping Ltd v. Rupen (2008) N3289 and Ruing v. Marat (2012) N4672.

9. Wan Global contends that the judge at first instance erred by incorrectly applying certain statements from Telikom (supra). At paragraph 30 of the National Court judgment, whilst it is stated that it was held that, "..the Court must examine the nature of the reliefs (sic) sought," in paragraph 31, it is stated that, "The Plaintiff.... is not seeking orders for certiorari, rather it is only seeking Declarations and injunctions. So it can come to Court under the Order 4 procedure which is an option it has and which is available to it under O.4 Rule 3 of the NCR."

10. Further, Wan Global contends that it is clear from the National Court judgment that the judge at first instance only considered the language of the relief sought and did not examine both the nature of the case and the substance of the relief sought. That is, that when a Court is requested to declare a purported cancellation of a State lease illegal, it is really being requested to quash the Registrar's decision to cancel, which is an order in the nature of certiorari, and where the Court is requested to cancel a State Lease, it is really requesting that the Registrar be compelled by mandamus to quash the State Lease.

11. Counsel for Luxurflex conceded that Wan Global had an arguable case but that the judge at first instance did not commit an error. It was further contended that it is not appropriate for the decision of the Registrar of Titles to cancel the State Leases to be the subject of judicial review as that decision was not an exercise of discretion; it was merely an incorrect decision that the Registrar of Titles should not have made. Consequently, this case is distinguishable from Ruing v. Marat (supra).

12. Further, the judge at first instance was correct in endorsing the comments of Lord Diplock in O'Reilly v. Mackman [1983] UKHL 1; [1982] 3 WLR 1096 which were reproduced in Luke Lucas (supra) to the effect that there is no absolute rule which obliges proceedings to have been commenced by way of judicial review, even if it would seem to be more appropriate, as no prejudice occurs to any defendant in ruling that the proceedings may continue as commenced. Here, submits the counsel for Luxurflex, Wan Global would not be prejudiced if the National Court proceeding continued as commenced. Further, the proceeding is almost ready for substantial hearing. If the National Court proceeding was dismissed as a result of an appeal by Wan Global being successful, the matter would not be resolved and further proceedings would be issued. It would be to the benefit of both parties for the National Court proceeding to continue and be resolved.

Discussion

13. As to whether there is an arguable or prima facie case demonstrated that the judge at first instance was wrong, counsel for Luxurflex conceded that Wan Global has an arguable case. Further, from a perusal of the passages of the National Court judgment referred to by counsel for Wan Global, the judge at first instance appears to have accepted what was held in Telikom (supra), but then has not applied that when considering the relief sought by Luxurflex. This may constitute an error by the judge at first instance.

14. As to the contention of Luxurflex that it is not appropriate that the subject decision be judicially reviewed as it was not an exercise of discretion, merely an incorrect decision by the Registrar of Titles, the decision was that of a public official purportedly exercising powers that presumably he believes he has. If the decision was beyond the powers of the Registrar of Titles, it can be argued that because of the wording of Order 16 National Court Rules, the judicial review procedure so prescribed is the only procedure to be followed in this instance.

15. Further, as to the comments of Lord Diplock to which reference is made, it can be argued that those comments concern the procedure and rules applying in England in 1982. Our Order 16 provides that an order in the nature of a prerogative writ shall be made by way of an application for judicial review in accordance with Order 16. Consequently, it can be argued that the words, "no absolute rule" made by Lord Diplock are not appropriate when regard is had to the relevant National Court Rule of this jurisdiction.

16. Another consideration, is that it is evident that there are conflicting Supreme Court and National Court decisions on when Order 4 and Order 16 National Court Rules procedures are to be used when the relief sought concerns a decision made by a public official or body, although the language of the relief sought does not seek an order in the nature of a prerogative writ. The cases of Hamidian Rad (supra) and Telikom (supra) considered the substance as well is the wording of the relief sought. In Luke Lucas (supra) the issue of the substance of the relief sought does not appear to have been raised. In the recent Supreme Court decision of Hon Patrick Pruaitch v. Chronox Manek and Ors (2011) SC1093, the issue of whether the Order 16 National Court Rules procedure was the correct procedure was before the Supreme Court, and the Court appears to have accepted that in the circumstances of that case, the Order 4 procedure was able to be used.

17. For the above reasons and in light of the conflicting Supreme Court decisions at least two of which favour a consideration of the substance as well as the wording of the proposed relief, the approach apparently taken by the judge at first instance in considering only the wording of the proposed relief without a consideration of the nature of the case and substance of the proposed relief, I am of the view that Wan Global has established an arguable or prima facie case that the exercise of discretion by the judge at first instance was incorrect and the wrong decision made.

Other recourse

18. The only other recourse available to Wan Global is to continue with the National Court proceeding. If leave to appeal is granted and the appeal is successful, it will determine the National Court proceeding for being an abuse of process.

Exercise of discretion

19. I have already determined that there is an arguable case that the exercise of discretion by the judge at first instance was incorrect.

Bearing on final determination

20. If Wan Global is successful in an appeal, the National Court proceeding will be determined.

Substantial injustice

21. As to any substantial injustice, Wan Global submits that if there has been an abuse of process as alleged, the question of any injustice or prejudice is irrelevant. Luxurflex submits that it is to the benefit of both parties that the National Court proceeding continue. If an appeal is successful, it will delay the resolution of the matter. In my view, any delay will affect both parties. Further, a possible abuse of process should not be countenanced for the sake of a speedy resolution that may be flawed.

Should the trial process be interrupted?

22. As I have determined that Wan Global has established an arguable or prima facie case and that the exercise of discretion by the judge at first instance may have been incorrect, sufficient cause has been shown to interrupt the trial process. Accordingly leave to appeal should be granted.

Orders

23. The application for leave to appeal against the decision of the National Court delivered on 29th June 2012 at Waigani in proceeding OS 177 of 2010 is granted.

24. The costs of this application are costs in the cause.
_____________________________________________

Young & Williams Lawyers: Lawyers for the Applicant
Ashurst Lawyers: Lawyers for the Respondent