Media Niugini Ltd v Agiru [2012] PGSC 42; SC1203 (9 November 2012)

SC1203

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 37 OF 2009

BETWEEN:

MEDIA NIUGINI LIMITED
t/a EMTV
First Appellant

AND:

GLEN ARMSTRONG, General Manager,
Media Niugini Limited t/a EMTV
Second Appellant

AND:

SCOTT WAIDE, Presenter, Media
Niugini Limited t/a EMTV
Third Appellant

AND:

JERRY GINUA, Senior Reporter,
Media Niugini Limited t/a EMTV
Fourth Appellant

AND:

MR ROBIN TUNA
Fifth Appellant

AND:

ANDERSON PAWA AGIRU
Respondent

Waigani: Cannings, Gabi and Hartshorn JJ
2012: 31st October
: 9th November

Appeal of National Court decision to strike out defence and enter judgment for failure to file a verified list of documents

Facts:

The respondent initially commenced proceedings in the National Court seeking damages for defamation. The appellants have filed a defence. The respondent served a notice for discovery on 3rd March 2009 pursuant to which the appellants' verified list of documents was to be filed and served by 18th March 2009. The appellants failed to file their verified list, despite two extensions of time given by the respondent, for the verified list to be filed by 22nd April 2009. The appellants provided an unverified list to the respondent's lawyer and the National Court on 7th May 2009. Upon application by the respondent under Order 9 Rule 15 and Order 12 Rule 1 National Court Rules, the primary judge struck out the appellants' defence and judgment was entered in favour of the Respondent. That decision is the subject of this appeal.

Held:

The exercise of discretion by the primary judge was unreasonable and plainly unjust and the appealed decision should be quashed.

Cases cited:

Government of Papua New Guinea v. Barker [1977] PNGLR 386
Bean v. Bean [1980] PNGLR 307
Lewis v The State [1980] PNGLR 219
Logicrosce Ltd v. Southend United Football Club (The Times, 5 March 1988)
Westpac Bank-PNG-Ltd and Bank of South Pacific Ltd v. Hugo Canning Co Pty Ltd, SCA No 11 of 1991, unnumbered and unreported, delivered 20th December 1991
Arrow Nominees Inc v. Blackledge, [2000] EWCA Civ 200; [2000] All ER (D), 854
Curtain Bros (PNG) Ltd v. UPNG (2005) SC788
Rural Development Bank Ltd v. Maria Laka (2007) SC897
Independent State of Papua New Guinea v. Central Provincial Government (2009) SC977
Napitalai v. PNG Ports Corporation Ltd (2010) SC1016
Rex Paki v. Motor Vehicle Insurance Ltd (2010) SC1015
Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1144
Totona v. Registrar of Companies (2012) SC1182

Counsel:

Mr. A. Mana, for the First, Second, Third and Fourth Appellants
Mr. E. Komia, for the Respondent

9th November, 2012

1. BY THE COURT: The first, second, third and fourth appellants (appellants) appeal against a striking out of their defence and an entry of judgment against them by the National Court for their failure to file a verified list of documents by an agreed date (appealed decision). Leave to appeal the interlocutory appealed decision has been granted. The respondent opposes the appeal.

Background

2. The respondent commenced proceedings in the National Court seeking damages for defamation. The appellants have filed a defence. The respondent served a notice for discovery on 3rd March 2009 pursuant to which the appellants' verified list of documents was to be filed and served by 18th March 2009. The appellants failed to file their verified list, despite two extensions of time given by the respondent, for the verified list to be filed by 22nd April 2009. The appellants provided an unverified list to the respondent's lawyer and the National Court on 7th May 2009. The primary judge made the appealed decision on 22nd May 2009 upon application by the respondent pursuant to Order 9 Rule 15 and Order 12 Rule 1 National Court Rules.

Grounds of appeal

3. The appellants' grounds of appeal in essence are that the primary judge erred in ordering as he did as:

a) the appellants' defence disclosed disputed facts which can only be determined at a trial,

b) the respondent was not prejudiced by the appellants' default,

c) the delay occasioned by the appellants' default could have been circumvented by an order for specific discovery,

d) the appellants have a defence on the merits but have been denied the right to have their defence heard,

e) the appellants' default was not chronic or recurrent such that it threatened the respondent's right to a proper trial as the matter had not been set down for trial,

f) an order for costs on an indemnity basis would have adequately compensated the respondent for the appellants' delay,

g) he allowed extraneous or irrelevant matters to persuade him.

4. The respondent contends amongst others, that the primary judge was entitled to exercise his discretion as he did as the appellants had defaulted three times in providing their list of documents.

Discretion

5. The appellants challenge the primary judge's exercise of discretion in striking out the appellants' defence and entering judgment against them. Where an appeal is against the primary judge's exercise of discretion, the onus is upon an appellant to show that the exercise of discretion is clearly wrong or an identifiable error has occurred in the exercise of discretion. Alternatively, a judgment or order may be set aside where there is no identifiable error, but it is "unreasonable or plainly unjust" and such that an error can be inferred: Government of Papua New Guinea v. Barker 1977 PNGLR 386, Bean v. Bean 1980 PNGLR 307, Lewis v. The State 1980 PNGLR 219, Curtain Bros (PNG) Ltd v. UPNG (2005) SC788, Independent State of Papua New Guinea v. Central Provincial Government (2009) SC977, Napitalai v. PNG Ports Corporation Ltd (2010) SC1016, Rex Paki v. Motor Vehicle Insurance Ltd (2010) SC1015, Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1144 and Totona v. Registrar of Companies (2012) SC1182.

Order 9 Rule 15

6. The appealed decision was made upon application under Order 9 Rule 15 National Court Rules. Order 9 Rule 15(1) is as follows:

15. Default. (23/15)

(1) Where a party makes default in filing or serving a list of documents or affidavit or other document, or in producing any document as required by or under this Division, the Court may make such order as it thinks fit, including—

(a) if the party in default is a plaintiff—an order that the proceedings be stayed or dismissed as to the whole or any part of the relief claimed by him in the proceedings; or

(b) if the proceedings were commenced by writ of summons and the party in default is a defendant—an order that his defence be struck out and that judgment be entered accordingly.

7. The application of this Rule has been considered by this Court in, amongst others: Westpac Bank-PNG-Ltd and Bank of South Pacific Ltd v. Hugo Canning Co Pty Ltd, SCA No 11 of 1991, unnumbered and unreported, delivered 20th December 1991, Curtain Bros (supra) and Rural Development Bank Ltd v. Maria Laka (2007) SC897.

8. In Westpac Bank v. Hugo Canning (supra), the following points were made as to the Rule's application:

1. the remedies that the Court may impose include the dismissal of the offending party from the action, but it is only one of the options open to the Court; not necessarily the first course of action that the Court should take;
   
2. other courses include the obvious imposition of costs; in an appropriate case, the exclusion of documents not disclosed; and, or conditional orders rendering greater or lesser penalties, in the event discovery is not made within a fixed time, including once again the option of dismissal of action or defence;
   

100. dismissal of a party from the action for failure to give discovery can only be justified when the Court finds that the failure or refusal can be seen as a tactic to abort the trial;
     

4. "if when pleadings are completed an action is ready to be heard, it is indeed a serious and the severest penalty to strike out a defence so that a party suffers judgment without trial";
   
5. "the only justifiable pursuit of a motion to strike out, is to either enforce discovery or, in a case of refusal, where there has been blatant avoidance, for the purpose of delaying or avoiding trial, to recognise the refusal by closing out the offending party's case".
   

9. In Curtain Bros (supra), the Court agreed that the power to strike out and enter judgement for default in discovery should only be exercised:

a) after full consideration of the facts and circumstances of the case, including the prejudice to the party allegedly in default;

b) and if the failure of the defaulting party is repeated, verging on chronic; or,

c) discovery was deficient rendering a fair trial almost impossible;

d) if the applicant shows it will be prejudiced in the conduct of its case by the default.

10. In RDB v. Laka (supra), the Court reproduced the following passage from the judgment of Mr Justice Millett in Logicrosce Ltd v Southend United Football Club (The Times, 5 March 1988). This passage was approved by Chadwick LJ, with whom Ward and Roch LJJ agreed, in Arrow Nominees Inc v Blackledge, [2000] EWCA Civ 200; [2000] All ER (D), 854 at para 53-54 and expounds on the application of the principles applicable to discovery and the right to a fair trial:

"the object of the rules as to discovery is to secure the fair trial of the action in accordance with due process of the court; and that, accordingly, a party is not to be deprived of his right to a proper trial as a penalty for disobedience of those rules - even if such a disobedience amounts to contempt or defiance of the court - if that object is ultimately secured, by 'for example' the late production of a document which has been withheld.

But where a litigant's conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render the further proceeding unsatisfactory and to prevent the court from doing justice, the court is entitled - indeed, I would hold bound - to refuse to allow that litigant to take further part in the proceeding and (where appropriate) to determine the proceedings against him. The reason, as it seems to me, is that it is no part of the court's function to proceed to trial if to do so would give rise to a substantial risk of injustice. The function of the court is to do justice between the parties; not to allow its process to be used as means of achieving injustice. A litigant who has demonstrated that he is determined to pursue proceedings with the object of preventing a fair trial has forfeited his right to take part in a trial. His object is inimical to the process which he purports to invoke."

11. We respectfully agree with the comments expressed in this passage concerning the object of the rules of the discovery and their application.

12. As to the respondent's contention that the primary judge correctly exercised his discretion as the appellants had defaulted three times in providing their list of documents, from a perusal of the respondent counsel's own submissions it is clear that the appellants did not comply with the deadlines agreed to with the respondent twice only; 20th March and 22nd April 2009. Notwithstanding these instances of non compliance, we are of the view that it is significant that no order of the Court had been breached by the appellants, at the time of the appealed decision only 33 days had elapsed since the last agreed date for the appellants' verified list to be provided, and an unverified list had been provided. When compared to the default in providing discovery in Curtain Bros (supra) of 20 months where this Court upheld an appeal against an order that had struck out an amended defence for failure to give discovery, the appealed decision appears unreasonable or plainly unjust, especially in circumstances where the Court could have made an order for specific discovery or that the unverified list be verified by a certain date. The provision of an unverified list by the appellants, in our view, is indicative of them not embarking on a course to pursue proceedings with the object of preventing a fair trial.

13. In all of the circumstances we are satisfied that the exercise of discretion by the primary judge was unreasonable and plainly unjust and the appealed decision should be quashed. As to the orders sought in the Notice of Appeal for a verified list of documents that was filed after the appealed decision to be accepted as sufficient discharge of the appellants' discovery obligations, that is a matter for the National Court. As to the matter reverting to the National Court, it is unnecessary for this Court to address this issue as there is nothing to revert. The parties will bear their own costs of both this appeal and the National Court proceedings as although they have won the appeal, the appellants' default led to the decision appealed and to the appeal.

Orders

14. The Orders of the Court are:

a) the appeal is allowed,

b) the decision of the National Court dated 22nd May 2009 in WS 364 of 2008, Waigani, is quashed,

c) each party shall pay their own costs.

___________________________________________________________

Allens Arthur Robinson: Lawyers for the First, Second, Third and Fourth Appellants
Jerry Kiwai Lawyer: Lawyers for the Respondent