Nema v Rural Development Bank Ltd [2013] PGSC 15; SC1243 (26 June 2013)

SC1243

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 102 OF 2012

BETWEEN

SAMUEL AIYE NEMA
Appellant

AND
RURAL DEVELOPMENT BANK LIMITED
Respondent

WAIGANI: DAVANI, KASSMAN, COLLIER, .JJ

2013: 25th, 26th June

RES JUDICATA – principles of res judicata – whether previous judicial decision involved the determination of the same question – whether fresh tender in respect of mortgaged property by subsequent advertisement

Cases Cited:

Herman Gawi v PNG Ready Mixed Concrete Pty Ltd [1984] PNGLR 74
Yama v PNGBC Limited (2008) SC 922

Counsel:

Mr P. Ame, for the Appellant
Mr I. Shepherd, for the Respondent

DECISION
26th June, 2013

1. This is an appeal from the decision of Hartshorn J delivered on 27 July 2012 in Nema v Rural Development Bank Limited WS 391 of 2012. In that decision his Honour had upheld the application of the respondent, Rural Development Bank Limited, to dismiss the proceeding pursuant to Order 12 Rule 40 National Court Rules, to grant the respondent an order for vacant possession of the appellant's property, and to grant the respondent leave to issue a writ of possession.
   
2. In summary, in finding for the respondent his Honour dismissed the substantive proceeding of the applicant on the basis that the doctrine of res judicata applied. In particular, his Honour found that the questions raised in the substantive proceeding had previously been the subject of determination, by him, in WS 199 of 2006 (a decision affirmed on appeal by the Supreme Court in SCA 128 of 2009). In particular, his Honour found that the proceedings in WS 391 of 2012 and WS 199 of 2006 involved the same mortgage, the same parties, the same property, and the same issues.
   
3. The Notice of Appeal before this Court originally contained three grounds of appeal. At the hearing, Mr Ame for the appellant abandoned a ground of appeal claiming that his Honour had shown bias towards the appellant. However Mr Ame pressed the remaining two grounds of appeal, namely:
   
   • That the learned judge erred in law and fact in holding that the matter was res judicata as the issue of the amount owed by the Appellant was not decided by His Honour in WS 199 of 2006, and the Supreme Court in SCA No 17 [sic] of 2009.
     
   • The learned judge erred in law in holding that the matter was res judicata when the new and fresh tender had rendered nugatory previous proceedings or superseded the WS No 199 of 2006 and SCA No 7 [sic] of 2009.
     

Background to the current appeal

4. The background facts are not in dispute.
   
5. In summary, the appellant owned property the subject of a mortgage to the respondent. The appellant defaulted on that mortgage and the respondent sought to enforce its rights under the mortgage.
   
6. The appellant commenced proceedings in the National Court in WS 199 of 2006 against the respondent seeking, inter alia, an order that the mortgage over the property be discharged, as well as orders for damages and compensation. The appellant also sought an order that his constitutional rights had been breached when the respondent entered the property pursuant to rights conferred by the mortgage. Significantly, in the course of those proceedings the appellant abandoned a claim for a statement of account to be given.
   
7. Hartshorn J found (inter alia) that the appellant continued to be in substantial debt to the respondent, that an order discharging the mortgage should be refused, and that the appellant's constitutional rights had not been breached. Accordingly, his Honour refused to order the relief sought by the appellant.
   
8. The appellant appealed to the Supreme Court from the decision of Hartshorn J in WS 199 of 2006. That appeal was dismissed.
   
9. The appellant subsequently commenced fresh proceedings against the respondent in WS 391 of 2012. It is not in dispute that the appellant sought relief against the respondent in respect of the same property and the same mortgage. Inter alia, the appellant sought an interim injunction to restrain the respondent from selling the property, and an order that the respondent's mortgage over the property be discharged. As we have already noted, the respondent sought an order that the proceedings be dismissed for res judicata.
   
10. In his decision in WS 391 of 2012 Hartshorn J observed that res judicata is a legal doctrine recognised by Schedule 2.8 (1)(d) of the Constitution, and referred to principles explained by Bredmeyer J in Herman Gawi v PNG Ready Mixed Concrete Pty Ltd [1984] PNGLR, 74 and noted by the Supreme Court in Yama v PNGBC Limited (2008) SC 922. In Herman Gawi Bredmeyer J stated that six probanda must be established by a party setting up res judicata, namely:
    
    1. was the earlier decision a judicial decision?
    2. was the judicial decision pronounced?
    3. did the judicial tribunal have competent jurisdiction?
    4. was the judicial decision final?
    5. did the judicial decision involve the determination of the same question?
    6. are the parties the same?
       
11. After noting that probanda 1,2,3,4 and 6 were satisfied, Hartshorn J carefully examined whether the judicial decision in WS 199 of 2006 involved determination of the same question as was before him in WS 391 of 2012. His Honour concluded that it did. In particular, his Honour observed:
    

"8. When regard is had to the pleading in the statement of claim, the first four paragraphs are substantially the same as the first pleadings in WS 199/06. The statement of claim then contains a recital of what occurred in WS 199/06 and the Supreme Court Appeal. In paragraphs 9 to 15 of the statement of claim there are pleadings to the effect that the property has been advertised for sale again and that because the National Court in WS 199/06 and the Supreme Court did not "come up" with the exact amount owing, RDB should do so but has not.

9. In my view, no new or any cause of action is disclosed in paragraphs 9 to 15 of the statement of claim. The pleading concerns the same mortgage between the parties that has already been dealt with by the courts. As to the submission concerning the further advertisement of the property, the evidence given on behalf of RDB, which postdates the advertisement in April 2012, is to the effect that the purchaser of the property under a contract with RDB dated 23rd December 2005 is proceeding with the purchase but requires vacant possession. A letter from the lawyers for the purchaser dated 2nd May 2012 and a notice to vacate are also in evidence. This evidence is not contradicted by Mr Nema. The argument of Mr Nema that is based on a new advertisement, has no substance given that the purchaser under the 2005 contract with RDB is proceeding with the purchase. This argument does not require further consideration.
   
10. I am satisfied that the pleading in the statement of claim, such that it is,. Concerns and is in essence the same as the cause of action in WS 199/06. The fifth probanda is satisfied. Consequently for the above reasons Mr Nema is estopped from bringing this proceeding. This proceeding should be dismissed as an abuse of process."
    

Consideration

12. In our view this appeal lacks merit. We have formed this view for the following reasons.

13. In claiming that his Honour erred in finding res judicata, Mr Ame submitted that the proceeding before his Honour involved a claim for a Statement of Account, and accordingly raised a different issue to the proceeding in WS 199 of 2006 where a claim for a Statement of Account had been specifically abandoned. This ground of appeal is clearly misconceived because:

• The appellant in both WS 199 of 2006 and WS 391 of 2012 plainly sought the same relief in both sets of proceedings. Specifically, the appellant sought orders of the National Court against the respondent to prevent the respondent acting to enforce the same mortgage over the same property owned by the appellant. In all respects by which litigation can achieve a result, the end point in both sets of litigation was precisely the same.
  
• Mr Ame's submission that the determination of the National Court in WS 199 of 2006 raised different issues than those in WS 391 of 2012 because a Statement of Account was not pressed in WS 199 of 2006 (but was raised in WS 391 of 2012) invokes fallacious reasoning. The falsity is exposed by a simple illustration – such a submission is tantamount to claiming that a proceeding where discovery was not pressed by an applicant was different to a subsequent proceeding involving the same issues but where discovery was actually pressed. Such a proposition is fundamentally flawed.
  
• Finally, and in any event, it is by no means obvious that the appellant in WS 391 of 2012 sought a "Statement of Account" as claimed. In the Writ of Summons filed 1 May 2012 the appellant sought an order that "The Parties take the matter to ADR to settle the amount that is owing unless the Defendant can produced [sic] records of payments made by the Plaintiff and receipted." In our view this claim was, at best, a claim for the matter to be referred to alternative dispute resolution on a narrow point relevant to broader issues already decided in previous litigation. His Honour was perfectly at liberty to refuse to make such an order.
  

14. Further, in relation to the appellant's claim that the mortgaged property was subject to a fresh tender on 27 April 2011 – specifically by the placement of an advertisement in The National newspaper on that date advertising a "Mortgagee Sale" of the relevant property – we find no fault in his Honour's reasoning. While we note that the respondent was unable to provide an explanation for the placement of that advertisement, similarly we note that there was no evidence that the advertisement constituted a "fresh tender" so as to affect the existing rights of the respondent as mortgagee or actions it had already taken to enforce the relevant mortgage. We accept the submission of the respondent that this ground of appeal was similarly misconceived and that his Honour correctly dealt with the issue in the primary judgment.
    

Conclusion

15. Consideration of the decision of his Honour below reveals no error in that decision. In our view the application of the appellant in WS 391 of 2012 and this appeal were not only futile, but have apparently significantly extended the period by which the mortgagee has been unable to enforce its legitimate rights over the mortgaged property.

16. We note that in delivering judgment in WS 391 of 2012 Hartshorn J ordered, in summary, that:

• The claim of Mr Nema against the respondent be dismissed
• The respondent be granted vacant possession of the land known as Portion 2329 Bomana, National Capital District and be given leave to issue a writ of possession forthwith
• Mr Nema pay the costs of the respondent.
  

17. The dismissal of this appeal means that those Orders of his Honour are to immediately take effect.

Formal Orders

18. Therefore, the formal orders of the Court are:
    
    1. The appeal be dismissed;
    2. The appellant shall pay the respondent's costs of and incidental to the appeal to be taxed if not agreed;
    3. The Orders of Hartshorn J in WS 391 of 2012 shall take effect immediately.
       

___________________________________________

Ame Lawyers: Lawyer for the Appellant
Ashurst Lawyers: Lawyer for the Respondent