Goma v Protect Security & Communication Ltd [2013] PGSC 61; SC1300 (29 November 2013)

SC1300

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 73 0F 2010

MATHIAS GOMA AND 703 OTHERS
Appellants

V

PROTECT SECURITY & COMMUNICATION LIMITED
Respondent

Waigani: Injia CJ, Davani & Cannings JJ
2013: 27 August, 29 November

TORTS – breach of statutory duty – whether breach by an employer of its statutory obligation to remit employer and employee contributions to an authorised superannuation fund gives rise to a private right of an action – elements of tort of breach of statutory duty.

STATUTORY INTERPRETATION – constitutional principles – National Goals and Directive Principles; Basic Rights; Basic Social Obligations; Rule of Law; dispensation of justice to be paramount consideration.

COURTS AND JUDGES – obiter dictum: meaning of term – circumstances in which a decision of law of the Supreme Court is binding on other Courts – Constitution, Schedule 2.9.

This was an appeal against the decision of the National Court to dismiss the claims of the appellants who alleged that they suffered losses due to the failure of their former employer, the respondent, to comply with its statutory obligations to remit employer and employee contributions to an authorised superannuation fund. The National Court held that breaches of the statutes that imposed such obligations, in particular the National Provident Fund Act Chapter 377 and the Superannuation (General Provisions) Act 2000, are not intended to be enforceable by private right of action. Hence the appellants were not entitled to relief even if any of them was able to prove that he was an employee of the respondent, that the respondent breached its statutory obligations and that his claim was not statute-barred. The two grounds of appeal were that the National Court erred in law by (1) finding that it was not intended that breaches of the statutes in question are enforceable by private right of action and (2) not following the decision of the Supreme Court on the same point of law in Anave Ona v National Housing Corporation (2009) SC995, which decision, if followed, would have resulted in a finding that the appellants had an enforceable cause of action.

Held:

Per Injia CJ and Cannings J:

(1) The cause of action known as breach of statutory duty is a tort that formed part of the common law in force in England immediately before Independence Day, 16 September 1975. It is therefore part of the underlying law of Papua New Guinea by virtue of Section 20(1) of the Constitution and Section 3(1)(b) of the Underlying Law Act 2000.

(2) The elements of the tort of breach of statutory duty are that: (a) a statute imposed an obligation on the defendant; (b) the obligation was breached by the defendant; (c) the purpose of the statute was to protect a particular class of persons; (d) the plaintiff was a member of that class of persons; (e) the plaintiff suffered damage as a result of the breach; and (f) the Parliament intended to create a private right of action for breach of the statutory obligation.

(3) There was evidence before the National Court of five of the elements of the cause of action. The trial Judge correctly identified that the critical issue was whether there existed a parliamentary intention to create a private right of action.

(4) In determining whether there was such a parliamentary intention the Court is required to have regard to the purpose of the statutes and the principles of statutory interpretation provided for by the Constitution, some of which are unique to Papua New Guinea. It must: give effect to the National Goals and Directive Principles (Constitution, s 25), the Basic Rights, including the right of all persons to the full protection of the law (Constitution s 37) and the Basic Social Obligations (Constitution s 63), exercise the judicial authority of the People, which entails upholding and enforcing the Rule of Law (Constitution, s 158(1)) and give paramount consideration to the dispensation of justice (Constitution, s 158(2)).

(5) The interests of justice require that persons for whose benefit statutory obligations exist do not have to wait for some other person or authority to take action to enforce those obligations.
(6) The National Provident Fund Act Chapter 377 and the Superannuation (General Provisions) Act 2000 both sufficiently evince an intention on the part of the National Parliament to create a private right of action on the part of employees or former employees for breach of the statutory obligations. The National Court erred in law by drawing the opposite conclusion.

(7) Obiter dicta are statements of law or other observations made by a Judge or a Court, either orally or in a written judgment, which are not necessary to the disposition or final decision in the case. Statements of law that are obiter dicta are not binding authority but can be of persuasive authority.

(8) The Supreme Court in Anave Ona v National Housing Corporation (2009) SC995 decided that former employees who are adversely affected by the failure of their former employers to comply with statutory obligations to remit contributions to an authorised superannuation fund have a private right of action in tort. That decision of law was not obiter dictum, it was binding on the National Court, which erred in failing to follow it.

Per Davani J (dissenting):

(9) The trial judge properly exercised his discretion by deciding to consider as a threshold issue whether the appellants could mount a private right of action, where the statute has already provided a remedy.

(10) The appellants were given the opportunity to address all relevant issues at the trial.

(11) The observations of the Supreme Court in Anave Ona v National Housing Corporation (2009) SC995 were obiter dicta and therefore not binding on the National Court.

(12) Parties are confined to their pleadings and must make a clear case for relief before the Court. The appellants’ statement of claim in the National Court was confusing and their lawyer failed to assist the National Court (or the Supreme Court) in determining what was the actual cause of action.

(13) The appellants without obtaining the leave of the Court attempted to raise issues in the Supreme Court that were not argued in the National Court.

(14) The trial judge did not err and the appeal should be dismissed.

Per Injia CJ and Cannings J (Davani J dissenting):

(15) Both grounds of appeal were upheld, the appeal was allowed, the order of the National Court was quashed and the National Court proceedings were reinstated.

Cases cited

The following cases are cited in the judgment:

Anave Ona v National Housing Corporation & Nambawan Supa Limited (2009) SC995
Application by Gabriel Dusava (1998) SC581
Byrne v Australian Airlines Limited [1995] HCA 24 (1995) 185 CLR 410
Constitutional Reference No 1 of 1977 [1977] PNGLR 362
Eddie Tarsie v Ramu Nico Management (MCC) Ltd (2010) N4005
Enforcement Pursuant to Constitution s 57; Application by Gabriel Dusava (1998) SC581
Ginson Goheyu Saonu v Bob Dadae (2004) SC763
Haiveta v Wingti (No 3) [1994] PNGLR 197
Hon Patrick Pruaitch MP v Chronox Manek (2010) SC1052
Inakambi Singorom v John Kalaut [1985] PNGLR 238
Isidore Kaseng v Rabbie Namaliu & the Independent State of Papua New Guinea (No 1) [1995] PNGLR 481
MAPS Tuna Ltd v Manus Provincial Government (2007) SC857
Mathias Goma & 703 Others v Protect Security and Communication Ltd (2010) N4046
Norman v Barnet Council [1978] WLR 220
Placer Holdings Pty Ltd v The State [1982] PNGLR 16
PLAR No 1 of 1980 [1980] PNGLR 326
Premdas v The State [1979] PNGLR 329
Raymond Groves v Airlink Pty Ltd (2002) WS 1156 of 1995, unreported
Re Application by Anderson Agiru (2001) SC671
Re Application by Herman Joseph Leahy (2006) SC855
Re Public Prosecutor’s Power to Request the Chief Justice to Appoint a Leadership Tribunal (2008) SC1011
Reference by Dr Allan Marat, In the matter of Prime Minister and NEC Act 2002 Amendments (2012) SC1187
Ruth Kaurigova v Dr Russo Perone (2008) SC964
SC Ref No 1 of 2008, Reference by the Ombudsman Commission (2010) SC1058
SCR No 6 of 1984; Re Provocation [1985] PNGLR 31
Telikom PNG Ltd v ICCC (2006) SC906
The State v Downer Construction (PNG) Ltd (2009) SC979
Timothy Bonga v Justice Maurice Sheehan [1997] PNGLR 452
Timothy Lim Kok Chuan v Simon Goh Say Beng (2004) N2753
Titi Christian v Rabbie Namaliu (1996) OS No 2 of 1995, 18.07.96
Whisprun Pty Ltd v Dickson [2003] HCA 48; (2003) 200 ALR 447
X (Minors) v Bedfordshire [1995] UKHL 9

APPEAL

This was an appeal against dismissal of proceedings by the National Court.

Counsel

N Kiuk, for the appellants
E Hampalekie, for the respondent

29^th November, 2013

1. INJIA CJ: Background: The circumstances pertaining to this appeal are canvassed in the judgment of Justice Cannings which I adopt. For purpose of setting the stage for my reasons, I summarize those circumstances.
   
2. Pursuant to provisions of the National Provident Fund Act Chapter 377 (NPFA), in order to benefit from the Fund, employees of the private sector (private employees) are required to be enlisted as contributors of the Fund. A private employer is obliged to make contributions to the Fund in two components for the benefit of the employee – the employee’s contribution through pay deduction and the employer’s contribution. The employer is obliged to remit the contributions to the Fund within 14 days from the end of each calendar month. The contribution held by the Fund is credited to the employee and becomes payable after the employee leaves his employment. It is a criminal offence for a private employer to fail to remit the contributions to the Fund. The Fund may institute or cause to be instituted criminal prosecution of the offending employer, in the context of which the court may, in addition to any punishment imposed, order the defaulting employer to remit the unpaid contributions.
   
3. The appellants (plaintiffs in the court below) were employees of the respondent company. When their employment ceased, they claimed payment from the Fund. It appears from the pleadings in the statement of claim filed in the Court below that the Fund could not pay to them the respondent’s share of the contribution to the Fund. The appellants commenced proceedings in the court below to recover the unpaid contributions. The trial Judge found that as a matter of construction of provisions of the statutes in question, a private cause of action is not available to the appellants. For that reason, he dismissed the claim.
   

Issue for determination in the appeal

4. The determinative question in the case in the Court below is the same before us. The question is whether as a matter of construction of provisions of the National Provident Fund Act (NPFA) and the Superannuation (General Provisions) Act 2000 (SFA), a private law cause of action is available to a private employee who is a contributor to the Fund established under NPFA.
   
5. In question is the construction of Sections 31 and 32 of NPFA, and Sections 78 and 79 of SFA. I set out in full those provisions. I also set out other provisions of NPFA which I consider to be relevant to those provisions.
   

Statutory provisions for construction:

6. NPFA, s 31 and s 32 are in the following terms:
   

“31. CONTRIBUTIONS BY EMPLOYER.

All contributions by employers shall be made in accordance with the mandatory contribution provisions of the Superannuation Act.

32. CONTRIBUTIONS BY EMPLOYEE.
    

(1) All contributions paid under this Part shall be paid into the Fund in the prescribed manner.

(2) The Board shall cause to be credited to each member of the Fund the amount of every contribution paid on his behalf.”

7. NPFA, s 35 is relevant and it is in the following terms:

“35. Contributions to be paid into Fund.

(1) All contributions paid under this Part shall be paid into the Fund in the prescribed manner.

(2) The Board shall cause to be credited to each member of the Fund the amount of every contribution paid on his behalf.”

8. NPFA, s 38 is also relevant and it provides as follows:

“38. Protection against attachment.

The amount standing to the credit of any member in the Fund or of any exempted employee in a provident fund shall not—

(a) in any way be capable of being assigned or charged; and

(b) be liable to attachment under any decree or order of any court,

in respect of any debt or liability incurred by the member or the exempted employee.”

9. NPFA, s 56(b) provides as follows:

“56. Offences.

A person who—

(b) fails to pay to the Fund within such period as may be prescribed any amount which he is liable to pay under this Act in respect of or on behalf of any employee in any month;..........

is guilty of an offence.

Penalty: For the first offence—a fine not exceeding K1,000.00 or imprisonment for a term not exceeding one year. For a second or subsequent offence—a fine not exceeding K2,000.00 or imprisonment for a term not exceeding two years.

Default penalty: A fine not exceeding K100.00.”

10. NPFA, s 58 states as follows:

“58. Power of court to make orders.

Where a person is convicted of an offence under Section 56(b) the court may, in addition to any sentence or fine or imprisonment, order him to pay to the Fund the amount in respect of the non-payment of which he was convicted.”

11. SFA, s 78 and s 79 are in the following terms:
    

“78. TIME WHEN CONTRIBUTIONS TO BE REMITTED TO ASF

(1) Subject to Subsection (3), an employer shall remit its employer contributions to the ASF within 14 days of the end of each calendar month.

(2) Subject to Subsection (3), when an employee deducts employee contributions from pay, the employer shall remit those contributions to the ASF within 14 days of the date of deduction.

(3) ... (not relevant)

(4) An entity who fails to comply with Subsection (1) or (2), is guilty of an offence.

79. POWER TO RECOVER THE INTEREST ON DEFAULT
    

Where an employer defaults in making any contributions required under this Part, the licensed trustee of the relevant ASF may –

(a) by written notice, require the employer to make payment of the outstanding contributions together with penal interest at the prescribed rate set out in the regulations from the date on which payment was due until the date of actual payment; and

(b) commence proceedings in its own name against the employer for recovery of the outstanding contributions, interest and costs.”

Principles of statutory interpretation:

12. Judicial interpretation of statutes is essential for dispensation of justice to disputing parties in a case. Judicial interpretation is not and should not be limited to a construction exercise that purely involves ascertaining and giving effect to the Parliament’s intention that is expressed in the words used in the statute. Moreover, and more importantly, the court must conduct such exercise with the ultimate purpose of that task – dispensation of justice in the case before it. Judicial construction of statutes will serve no useful purpose if the meaning ascribed to the statute in question does not dispense justice. Indeed the Constitution itself mandates that in exercising its judicial authority “in interpreting the law the courts shall give paramount consideration to the dispensation of justice”. For if the exercise of statutory construction were purely one of ascertaining and giving effect to Parliament’s intention expressed in the words used in the statute without its application to the case before the Court to produce a just result, Parliament itself could do well to set up its own body, by law, to construct its own product (legislation) and such a body could be better placed to ascertain Parliament’s intention expressed in the statute. In my view, principles of statutory construction developed by the Courts in Papua New Guinea should be understood and applied in this manner.
    
13. It is a cardinal principle of statutory construction that where the intention of Parliament is made express in the words used in the statute, it is often said that the Court must declare that intention to be so and give the statutory provision its natural, plain or ordinary meaning. But I say more. Even so, if, to give effect to the plain or ordinary meaning will produce grave injustice in the case before it, the Court should make every effort to give a proper meaning to the express words used in the statute in order that justice is dispensed. The approach I am enunciating here is not of promoting judicial legislation from the bench; it is one of judicial innovation leading to a proper discharge of the Court’s Constitutional imperative to dispense justice. The Court’s pursuit of justice or a just result in the case before it is not to say the Court is superimposing alien criteria for the construction of statutes. The Court is simply adhering to the Constitutional imperative. Besides, laws are made for the common good of mankind and for achieving a just society.
    
14. In many instances, Parliament’s intention may not be clearly expressed in the words used in the statute because they are ambiguous, or that the intended words are omitted, or that the wrong words are used. It is necessary for the Court to construe those provisions in order to ascertain and give effect to Parliament’s intention. The words used in the provision in the context of the Statute must be read as a whole. The interpretation the Court gives to the provision in question must serve the purpose of the statute as a whole.
    
15. The Court having ascertained that intention, must then deal with the question whether that interpretation dispenses with justice in the case before it. If the particular interpretation were to produce injustice, such construction should be avoided in preference over an interpretation that would dispense in the circumstances of the case before it.
    
16. In constructing statutes, ascertaining and giving effect to the overall purpose of the statute always remains the main focus of the exercise. In the construction of statutes, the Court will ask itself if the interpretation that it ascribes to the words used in a statute conforms with the paramount consideration in that statutory construction exercise that the Court has just concluded takes into account and give effect to the dispensation of justice.
    
17. In reinforcing the approach to judicial interpretation of statutes I am enunciating, I prefer to adopt the words of Lord Denning in Norman v Barnet Council [1978] WLR 220 as those of my own. His Lordship said:
    

“In all cases now in the interpretation of statutes we adopt such a construction as will “promote the general legislative purpose” underlying the provision. It is no longer necessary for the Judges to wring their hands and say: “There is nothing we can do about it”. Whenever the strict interpretation of a statutes gives rise to an absurd and unjust situation, the Judges can and should use their good sense to remedy it – by reading words in, if necessary – so as to do what Parliament would have done, had they had the situation in mind”.

Determination of issue:

18. In the case before us, there is no express provision in the provisions of NPFA and SFA in question that allows a private law cause of action to enforce the private employer’s statutory obligation to make contributions to the Fund on behalf of the employee. The question is whether as a matter of construction, a private law cause of action is intended. The trial Judge quoted and applied passages from several cases: Raymond Groves v Airlink Pty Ltd (2002) WS 1156 of 1995, Byrne v Australian Airlines Ltd (1995) 185 CLR 410, at 424, and the House of Lords case of X (Minors) v Bedfordshire [1995] UKHL 9. I consider a passage from the statement of Lord Browne-Wilkinson to be of particular relevance to the issue before us and I quote it. His Lordship said:
    

“The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However a private law cause of action will arise if it can be shown, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of the class a private right of action for breach of the duty... The cases where a private right of action for breach of statutory duty have been held to arise are all cases in which the statutory duty has been very limited and specific as opposed to general administrative functions imposed on public bodies and involving the exercise of administrative decisions”.

19. The trial Judge found, and in my view, correctly so, that there were no express provisions in NPFA and SFA with regard to a private law cause of action to enforce breach of the employer’s breach of its statutory obligation. I also agree with the trial Judge it became a matter of construction. This is where I differ from the trial Judge in the way in which he construed the provisions in question to find that “it was not intended that breaches of the NPF Act and the Superannuation Act are to be enforceable by private right of action and consequently these Acts do not give rise to a private cause of action for damages in favour of the plaintiffs.” For reasons that I give below, I find that the trial Judge erred in the construction of the statutory provisions in question.
    
20. I have had the benefit of reading the draft judgment of Cannings J on the constructions of provisions of NPFA and SFA in question. I agree with his approach to judicial construction because it is in line with my own approach that I have enunciated. I also agree with his conclusions. That said, I give some additional reasons with regard to why the appeal should be allowed.
    
21. The question is whether a private law cause of action may be inferred from the construction of all these provisions read as a whole in the context of the purpose of the statutes. The main purpose of the NPFA is that it sets up a statutory scheme to cater for the financial welfare of employees in the private sector when they leave their employment. For achieving that purpose, employers are required to remit contributions to the Fund.
    
22. The NPFA is the sister statute of the SFA. The former provides for employees in the private sector whilst the latter caters for employees in the public service. The Funds set up under those statutes serve similar purposes. It is for this reason that the NPFA adopts the mandatory contribution provisions in SFA. NPFA makes it mandatory for such contributions to be made to the respective Funds during the employee’s term of employment. The Funds are managed by respective boards for the benefit of the employees. The Fund pays the monies to employees after they leave their employment.
    
23. The purpose of the Fund set up under NPFA is made abundantly clear in the provisions of the two statutes cited in paragraph 6- 8 hereof. The Fund is established for the sole purpose of benefitting private employees. To achieve this purpose, an employer “shall remit its employer contributions to the ASF); and the employee’s contribution in the form of “employee deductions from pay to the ASF”. (SFA, s 78) (1) & (2). Contributions “shall cause to be credited to each member of the fund”, “of the employee” (NPFA, s 3(2), s 35 (2)); and “the amount standing to the credit of any member in the fund” (NPFA, s 38). The funds are protected from assignment to their parties or from attachment in garnishee proceedings.
    
24. The purpose of the statutory schemes is not that it sets up a Fund for the benefit of any person or body other than private sector employees, be they the Fund and its management or the public at large. It is for the benefit of a select class of people who find themselves engaged in paid employment service in the private sector and whose future financial welfare when they leave employment is in need of protection. The Fund enables the future financial welfare of such employees when they leave employment, to be catered for.
    
25. Failure by a private employer to remit the contributions to the Fund attracts criminal prosecution: NPFA, s 56(b). If the criminal prosecution is successful, the court that convicts the employer may, in addition to any punishment prescribed for the offence, order the payment of unpaid contributions for which the conviction was entered: NPFA, s 58. Similar provisions exist for the protection of public servants: Failure by the State to remit the contributions may result in criminal prosecution (SFA, s 78(4) and recovery action instituted by the Fund through its licensed trustee (SFA, s 79).
    
26. Could it be said that by reason of s 56(b) and s 58 of NPFA, a private law cause of action instituted by a private employee to seek redress for a private employer’s breach of its statutory obligation, is precluded?
    
27. There cannot be any question that a private civil right over the contributions is vested in the employee by these provisions – the right to become a contributor to the fund and in turn benefit directly from the contributions to the Fund. The Fund and its authorized trustee, if any, is the custodian and trustee of the funds contributed and they hold the funds in trust for the benefit of the private employee. The Fund is entrusted with the responsibility of securing the contributions and taking appropriate recovery action over unpaid contributions. The Fund is accountable to the private employee in the security and management of those funds. Whilst it is true that NPFA makes no express provision for a private employee to have recourse to a private law cause of action against a defaulting employer, it is also true that such recourse is not precluded by express provision. It is long established principle of statutory construction that in a case where statutory provision is made to protect and benefit a disadvantaged class of persons in the society, and there exist more than one interpretations that may be open on the face of the statutory provisions in question, the Court must ascribe the interpretation that is favourable to the person for whom the statutory provision was enacted.
    
28. Applying that principle to the circumstances of the case at hand, I have no difficulty in finding that a private employee may bring a private law cause of action in a court of law to enforce or seek redress over unpaid contributions. An action may be brought in situations where the Fund itself fails to take commence or cause to be instituted criminal prosecution under s 56(b) and s 58 of the National Provident Fund Act and where the Fund fails to obtain a conviction for the offence and obtain an order for the recovery of unpaid contributions from the private employer. In the alternative, such as criminal prosecution.
    
29. The statutory scheme under NPFA clearly creates and confers an enforceable civil right on a private employee to receive the employer’s contributions to the Fund when he leaves his employment. The right to seek judicial determination in bringing a civil claim in a Court of law that is founded on a cause of action recognized in private law commenced in a Court of law is a civil right and founded in the Constitution, s 37(11) (Right to Protection of the Law). The exercise of that right is facilitated by the common law and other statutes and subordinate legislation. A private law cause of action founded on breach of statutory obligations that are designed for the benefit of particular class of persons is enforceable by following the practice and procedure contained in the enabling statute and the rules of Court governing practice and procedures of the court and the common law, that are established to facilitate such proceedings. The common law and rules of court recognize an action brought by any person having sufficient interest that is founded on breach of contract or tort based on a breach of statutory duty: see National Court Act (Ch 38), s 9 & s 10; National Court Rules 1987, Order 4 rr 2 & 3. An employee who is denied the payment of his or her contribution under NPFA falls into the class of persons who may bring such private law cause of action in a court of law.
    
30. A construction of the provisions of NPFA in question in a way that precludes a private law cause of action would produce grave injustice to private employees who are faced with defaulting employers and lack of recovery action through criminal prosecution instituted by the Fund of its own motion or in association with criminal prosecution authorities. Private employees who are denied the payment of those contributions would be faced with complete inability to seek their redress in a court of law, whilst the private employer continues to unjustly enrich itself from the illegal retention of those contributions with impunity.
    
31. Whilst I accept that the breach of the mandatory provisions of NPFA and SFA do not of themselves give rise a private law cause of action, by reason of the construction of the provisions of NPFA in question, the statutory duty imposed by those provisions is for the benefit of a select class of members of the public who are private sector employees and for whose benefit private employers are required to make contributions to the Fund. A private law cause of action accrues to those contributors against their employer if their employer fails to make contributions on their behalf and for their benefit and such action may be brought after the employee ceases employment with the employer.
    
32. The interpretation I have accorded to the provisions of NPFA is not new. The Supreme Court took a similar position in Anave Ona v National Housing Corporation (2009) SC995, in which similar provisions of SFA were in question. That interpretation equally applies to the construction of provisions of NPFA in question by reason of the express adoption of the mandatory provisions of SFA in s 32 of NPFA. The Court said:
    

“19. ... a contributor, while still in employment, could not take action for recovery and payment of superannuation contributions to himself. He is not entitled to collect his superannuation contributions unless he ceases to be a contributor. A recovery action would be available to a contributor only when he ceases to be a contributor. His private law right to sue in tort to recover superannuation contributions or entitlements accrues only when he ceases employment in the public service.

20. In this case, the cause of action in the National Court was a claim in tort, which action was not available to Mr Ona at the time of failure between 1989 and 1993 when he was still in the employ of the Corporation. He was only entitled to a public law remedy which he opted not to take. But his failure did not preclude him from exercising his right to sue in tort which became available to him upon cessation of employment.”

Conclusion:

33. I find that the trial Judge erred in the construction of the provisions of NPFA in question. The construction that he ascribed to the provisions in question is not a proper construction, one that leads to unjust grave injustice to contributors and one that must be avoided.
    
34. For the foregoing reasons, I agree with the orders proposed by Justice Cannings.
    

DAVANI J:

35. Before the Court for hearing is Notice of Appeal filed on 18^th June, 2010 by Nikiuma Lawyers for and on behalf of the appellants. Originally, the Notice of Appeal pleaded three grounds. However at the hearing of the appeal, Mr Kiuk for the appellants withdrew with leave of the Court, the whole of ground 3 in the Notice of Appeal. Ground 3 related to the Underlying Law which appellants’ counsel choose to abandon and so is not before us. The Court proceeded to hear only grounds 1 and 2.

36. I set out in full, grounds 1 and 2 of the Notice of Appeal which read:

“1. His Honour erred in law and fact in finding that it was not intended that breaches of the National Provident Fund Act and the Superannuation Act are to be enforceable by private right of action and consequently these Acts do not give rise to a private cause of action for damages in favour of the Plaintiffs when:

(a) The Plaintiffs’ cause of action was premised not for damages arising as a consequent of breach of the Statutes or Acts but a cause of action for recovery and payment of superannuation contributions due to each individual Plaintiff.
(b) The Plaintiffs were not seeking damages for breach of the Statutes or acts but for recovery and payment of superannuation contributions due to each individual Plaintiff as is pleaded in the Amended Statement of Claim.

2. His Honour erred in law and fact in finding that the Supreme Court decision in Ona v National Housing Corporation & Anor (2009) only made obiter observations concerning public and private law rights and did not give a detailed consideration to the requirements for a successful claim based on a breach of statutory duty, when:
   
   • (a) The observations made by the Supreme Court are principles of law enunciated from the facts of that case. These principles are not mere statements of facts but are authoritative precedents binding on lower courts (National Court).
   • (b) The observations made by the Supreme Court are authoritative precedent and not obiter dictum as these are statements of law and require the lower court (National Court) to consider and follow.”
     

Background:

37. The appellants are former security guards employed by Protect Security & Communication Limited, the respondent (‘Protect’). They filed proceedings WS 69 of 2007 claiming payment to them by the National Provident Fund (‘NPF’) of entitlements owing to them which were to have been deducted fortnightly from their pay and paid to the NPF as their superannuation benefits. The appeal is against the decision of the National Court delivered on 12^th May, 2010 after a trial to determine liability. In his decision, the trial Judge dismissed the claim in its entirety because the claim did not have any basis. His Honour found that if it was intended that breaches of the NPF Act and the Superannuation Act are to be enforceable by private right of action and consequently, those acts do not give rise to a private cause of action for damages in favour of the plaintiffs.

38. The reliefs sought in the Notice of Appeal are the following:

- for payment to the appellants of amounts due and payable to them in accordance with the National Provident Fund Act 1980 (‘NPF Act’) and the Superannuation Fund Act (‘Superannuation Act’) the sum of K1,995,717.31,
- an order for damages including general, exemplary and special damages,
- an order that the defendant be fined and dealt with under Section 58 of the National Provident Fund Act 1980,
- an order for costs.

Analysis of Evidence and the Law

1. The fallacy of Mr Kiuk’s submissions
   

39. Although Mr Kiuk did not specifically plead that, on review of the two grounds of appeal, I note that these grounds effectively challenge the manner in which the trial Judge exercised his discretion in dealing with the matter.

40. The trial Judge’s reasons for his decision set out how he dealt with the matter. His Honour pointed out four issues, however decided to only consider issue C as the first issue. He said that was to determine whether the plaintiffs are entitled to the relief that they seek and that an adverse finding for the plaintiffs on this question will determine the proceedings.

41. The issues his Honour posed in his ruling were these:

(a) all of the plaintiffs were ex-employees of Protect?
(b) Protect breached Sections 31, 32 and 33 of the National Provident Fund Act of 1980 (NPF Act) and the Superannuation (General Provisions) Act 2000 (Superannuation Act)?
(c) The plaintiffs each and severally are entitled to the loss and damages as per the amended Statement of Claim?
(d) The plaintiffs’ claims are statute barred?

42. His Honour decided that by considering issue C before all the others, he would be determining the plaintiff’s claim, which, as far as I can tell, is a claim for statutory losses under the NPF Act and Superannuation Act, together with the additional claims for loss and damages. The statutory losses which are the superannuation contributions due to each individual plaintiff, are available to them under the Superannuation Act, more particularly Sections 31 and 32 of the NPF Act and also Part XIV of the Superannuation Act. Sections 76 to 84 are the relevant provisions. I set them out below.

43. Sections 31 and 32 of the NPF Act reads:

“31. CONTRIBUTIONS BY EMPLOYER.

All contributions by employers shall be made in accordance with the mandatory contribution provisions of the Superannuation Act.

32. CONTRIBUTIONS BY EMPLOYEE.
    

(1) All contributions paid under this Part shall be paid into the Fund in the prescribed manner.

(2) The Board shall cause to be credited to each member of the Fund the amount of every contribution paid on his behalf.”

44. Sections 78 and 79 of the Superannuation Act, which are penalty provisions, read:

“78. TIME WHEN CONTRIBUTIONS TO BE REMITTED TO ASF

(1) Subjection to Subsection (3), an employer shall remit its employer contributions to the ASF within 14 days of the end of each calendar month.

(2) Subject to Subsection (3), when an employee deducts employee contributions from pay, the employer shall remit those contributions to the ASF within 14 days of the date of deduction.

(3) Where the State is the employer-

(a) The fund to which the contributions are to be paid is DFRBF, the provisions of Subsections (1) and (2) do not apply; and
(b) The fund to which the contributions are to be paid is SCF the provisions of subsection (1) and (2) do not apply, and the State shall make contributions to POSF in accordance with Schedule 9.

(4) An entity who fails to comply with Subsection (1) or (2), is guilty of an offence.

79. POWER TO RECOVER THE INTEREST ON DEFAULT
    

Where an employer defaults in making any contributions required under this Part, the licensed trustee of the relevant ASF may, by written notice, require the employer to make payment of the outstanding contributions together with penal interest at the prescribed rate set out in the regulations from the date on which payment was due until the date of actual payment.”

45. Mr Kiuk for the appellants couched his submissions in this manner, by addressing these two issues below:

(1) Whether a provision of a penalty for breach of a statute preclude a right to sue for breach of statutory duty, and

(2) Whether or not the Supreme Court decision in Anave Ona v National Housing Corporation & Nambawan Supa Limited (2009) SC995 only made obiter observations concerning public and private rights.

46. My view is that Mr Kiuk should have challenged or appealed the manner in which the trial Judge exercised his discretion when he decided to consider issue No C as a preliminary or threshold issue, which of course, determined the outcome of the decision and the fate of the plaintiffs’ claim. Having answered that, he should have then proceeded to question or challenge the trial Judge’s findings on that issue. I say this because by making that determination and finding, the trial Judge did not have to consider all the other evidence and facts in relation to whether the plaintiffs had standing to sue as ex employees of Protect and also whether the claims were statute barred. I address this also, later below.

ii. Issues

47. Having considered the manner in which the trial Judge proceeded to deal with this matter, I find these to be the issues, which the Supreme Court must consider:

- whether the trial Judge properly exercised his discretion by deciding to consider as a threshold issue, whether the plaintiffs could mount a private action, where statute has already provided a remedy?

- whether the plaintiff’s lawyer was given the opportunity to address that issue?

- are the observations in Anave Ona v National Housing Corporation & Anor (2009) SC995, obiter?

- what is the nature of the plaintiffs’ claim?

- can the appellant raise the other grounds not pleaded in the Notice of Appeal?

First Issue - Whether the trial Judge properly exercised his discretion by deciding to consider the claim the way he did?

48. If that discretion was not properly exercised, then the matter should be returned to the National Court for a re-hearing on the evidence because the trial Judge had not properly exercised his discretion.

49. No doubt, trial Judges are in total control of the proceedings before them. A Judge’s judicial duty is to master the issues in the proceedings. The High Court of Australia recently described this as a “paramount judicial duty” which is the duty to give proper consideration to a party’s case (Whisprun Pty Ltd v Dickson [2003] HCA 48; (2003) 200 ALR 447 at 464). In fact the Judge must understand what the plaintiff wants, the basis and grounds for seeking such relief and why the defendant resists it. If the pleadings which form the basis of the claim are clear, then there is a concrete foundation on which the trial Judge can make his findings. However, if the pleadings are not clear, then the task becomes very difficult for the trial Judge.

50. Judges sitting on appeal, can only glean from the documentation in the appeal book, what actually occurred in the trial court or the Court below. The transcript of proceedings of course does provide an insight into the exchanges between counsel and the bench, however, in my view, that is not an accurate reflection and transmission of events before the trial court, at that moment in time.
51. In this case, the appellants are a group of ex-security guards who say that their NPF contributions were not deducted from their salaries and paid to the NPF, a statutory requirement under law. The Amended Statement of Claim (pg 65 of Appeal book (‘AB’)) pleads a claim for recovery of statutory losses and damages. This is aptly demonstrated at paras 8 (a) to (f) of the Amended Statement of Claim. It reads:

“a. Loss of their superannuation contribution and entitlement, particulars of which are provided and detailed in the scheduled (sic) attached to the Writ to this Statement of Claim.”

2. loss of interest payable on the said entitlement
   

100. loss of utility and benefit of such entitlement
     

4. cost incurred in seeking the payment of this lawful entitlement, including out of pocket expenses
   
5. legal costs in recovery of this entitlement
   
6. anxiety and stress caused by the failure to pay the entitlement”
   

52. The reliefs sought in the Amended Statement of Claim are:

“i. an order of K1,995,717.31 being the amount due and payable to the plaintiffs in accordance with the National Provident Fund Act 1980 and the Superannuation Fund Act;

2. An order for damages including general, punitive, exemplary and special damages;
   
3. An order that the defendant be fined and dealt with under Section 58 of the National Provident Fund Act 1980;
   
4. An order for cost;
   
5. Any other orders sought or the Court deems to make in the circumstance.”
   

53. Sighting these reliefs, and of course, being aware of the law on these matters, of course the preliminary issue that came to the fore and which the trial Judge found should be determined first, is whether a private right of action for breach of that statutory duty which is often independent of negligence, can give rise to a claim for damages, as is alleged by the plaintiff in the National Court.

54. Because the trial Judge was in total control of the proceedings, in my view, he properly exercised his discretion by deciding to consider that as a preliminary issue because a finding on that issue would then determine whether he could proceed to consider the other issues raised above.

55. And that is what the trial Judge did. In my view, that is a proper exercise of discretion. This is analogous to a situation where the Court, when considering a claim for damages, say under the MVIL Act or against the State, when becoming aware that the mandatory notices were not issued prior to lodging a claim ie notice under s 54(6) of the MVIL Act or Section 5 of the Claims By and Against the State Act or whether the claim is statute barred under Section 16 of the Frauds & Limitations Act, can raise it.

56. And of course the next question that then arises is whether the plaintiffs’ lawyer was given the opportunity to address that issue.

Second issue – Was the plaintiff’s lawyer given the opportunity to address this issue?

57. In relation to whether the plaintiff was given the opportunity to address this issue, the exchanges between Mr Kiuk for the plaintiff/appellant and the trial Judge is at page 2439 and 2440 of the appeal book. Whilst Mr Kiuk was making submissions on the evidence, his Honour enquired in this way:

“HIS HONOUR: Is that the case? Correct me if I am wrong but my understanding of your client’s claim is that it alleges that the defendant did not make any employees’ contributions under the National Provident Fund Act. Because it did not make those payments, therefore, it has committed an offence and as a result and in addition, they have breached those statutory duties in making payment. So what your clients are trying to do is to sue the defendant for breach of its statutory duty. Is that not right?

MR KIUK: Yes, your Honour.

HIS HONOUR: Does section 16 of the Frauds and Limitations Act not apply then?

MR KIUK: Your Honour, our respectful view is that Section 16 does not apply. This is purely a statutory claim.

HIS HONOUR: But it is not a statutory claim, is it? Your claim is not all by statute against the defendant. You are claiming against them because they have failed in their statutory duty to comply with this particular Act. So, it is not a statutory claim. You are not bringing your claim against the defendant pursuant to a specific section of a specific Act, are you?

MR KIUK: Very well. Your Honour, our respectful submission is that as a result, it is a consequential matter as a result of the breach of the statutory duty. The plaintiffs who are entitled to receive these contributions have suffered because of the action of the defendant in breaching the statutory provisions.

HIS HONOUR: Yes, that is what they are alleging. And so their claim against the defendant is for a breach of its statutory duty. And as you have said, a breach of statutory duty is a tort. Anyway, something for you to ponder. Carry on.”(my emphasis)

58. In that exchange, Mr Kiuk admits that he is making a separate claim for damages for breach of statutory duty. In my view, that was the opportunity for plaintiffs’ counsel to address the query raised by the trial Judge. Even then, the transcripts show that the defendant’s lawyers had asked for time to file their written submissions, so Mr Kiuk could have asked the trial Judge, to address that issue in written submissions.

59. But it is obvious from perusing written submissions filed by the both counsel in the trial and the appeal, that both counsel and more particularly, the plaintiff, had never addressed his mind to this very important legal issue. And even after the Court raised it, Mr Kiuk did not use that opportunity to review his submissions. I do note of course that at para 2 of Mr Kiuk’s written submissions before the trial Judge (pg 105 to 107 of the AB and pg 10 to 12 of the written submissions) he did address the fact that ss 31, 32 and 33 of the NPF Act and the Superannuation Act had been breached. However, instead of addressing the legal basis of his clients’ additional claim for damages, which incidentally, he now raises in this appeal, he proceeded to seek damages on the basis of a breach of contract (pg 107 and 108 of AB and pgs 12 and 13 of written submissions), when the plaintiffs were not even employed on contracts.

60. In my view, the plaintiff/appellants’ lawyer was not prejudiced in any way because he had ample opportunity to address this point.

Third Issue – Are the observations in Anave Ona v National Housing Corporation & Anor (2009) SC995, obiter?

61. To answer that issue, I would have to refer to the Judge’s reasons.

62. The trial Judge, when proceeding to consider whether the plaintiffs were each and severally entitled to loss and damages as per the amended Statement of Claim, found himself not assisted by both counsel. He said in his reasons:

“6. I presume that the cause of action is that Protect breached its statutory duty by not complying with the NPF Act and the Superannuation Act, and as a consequence the employees suffered loss.

7. As to the requirement that have to be satisfied in a successful claim for breach of statutory duty in circumstances such as the present, neither counsel cited any relevant authority and I have been unable to find any Supreme or National Court authority specifically on point.”
   

63. His Honour conducted his own research in reaching a decision deemed fair under the circumstances. One of the cases he referred to was Raymond Groves v Airlink Pty Ltd (2002) WS 1156 of 1995. I set out below what the trial Judge said in that case;

“while it may be – depending on the proper construction of the statute – that a breach of a statutory duty can give rise to a civil cause of action, it is not the law that any event or error that occurs contrary to provisions of a statute designed to avert or prevent occurrences of themselves establish a breach of statutory duty. It is not a res ipsa loquitur or absolute liability situation where the mere happening of an error establishes a statutory breach.” (my emphasis)

64. There, the Court made it abundantly clear that a breach of statutory duty need not give rise to a civil cause of action.

65. His Honour then referred to Anave Ona v National Housing Corporation & Anor (2009) SC995. In that case, the plaintiff sought relief in respect of the non-payment of superannuation contributions under the Public Officers Superannuation Fund Act. The trial Judge also noted that in the course of considering the question before it, namely whether the proceedings were time-barred, that the Supreme Court made obiter observations concerning public and private law rights and did not give a detailed consideration to the requirements for a successful claim based on a breach of statutory duty. Therefore, he said these comments were not binding.

66. Mr Kiuk however, submits that the Supreme Court’s comments at pg 8 of that decision, are binding. The subject comments from Anave Ona are these:

“18. An employer and the Board are charged with the statutory duty, on behalf of contributors as defined by the Act, to take appropriate steps to manage and restore a contributor’s superannuation contributions. Consequently, in the event of a breach beyond the scope of the Act, a contributor could make an application in the nature of judicial review under Order 16 of the National Court Rules 1983 for mandamus requiring his employer and or the Board to comply with their statutory duty. Indeed, the Board would be entitled to file the same application requiring an employer in default to carry out its statutory obligations in relation to a contributor’s superannuation entitlements.

19. On the other hand, a contributor, while still in employment, could not take action for recovery and payment of superannuation contributions to himself. He is not entitled to collect his superannuation contributions unless he ceases to be a contributor. A recovery action would be available to a contributor only when he ceases to be a contributor. His private law right to sue in tort to recover superannuation contributions or entitlements accrues only when he ceases employment in the public service.”
    

67. Is the trial Judge correct or is Mr Kiuk correct in his observations that the above comments are binding? I have been assisted by Sir Anthony Mason AC KBE’s comments in his article “the Nature of the Judicial Process and Judicial Decision Making” where he said at pg 5:

“Obiter dicta may be persuasive, particularly if uttered by a Judge of renown or of reputation and in the relevant area of law. But obiter dicta should never be applied blindly. A Judge should never abdicate responsibility for deciding a question of law by simply adopting the view of someone else. If the Judge relies on dicta in support of his or her decision, it is because the Judge, on thinking the question through is persuaded that the dicta are soundly based.” (my emphasis)

68. The trial Judge did not rely on the statements made by the Supreme Court in Anave Ona because they were not “soundly based”. Sir Anthony’s comments also extended to the role of the trial Judge. He said at pg 4 of that same article:

“Generally speaking, the primary Judge ascertains the law to be applied in the form of principles stated in earlier decisions. The primary Judges’ role in ascertaining the law is confined by the force of precedent and stare decisis. From time to time however, there arises a question of law which is not governed by earlier authority.

The appellate Judge is less concerned with the reception of evidence, reviews findings of fact as well as find facts. The appellate Judge is, of course, more frequently confronted with questions of law unresolved by earlier authority or earlier authority which binds the appellate court...

How then does the Judge, wherever he or she sits in the Court hierarchy, go about deciding a question of law which is not governed by authority? The first step is to identify the relevant body of rules and principles from the established corpus of authority...”

69. The trial Judge did identify the relevant rules and principles when he reviewed both PNG and overseas cases and found the comments in Anave Ona (supra), to be obiter.

70. Is this Supreme Court revisiting an earlier decision of the Supreme Court? In Titi Christian v Rabbie Namaliu (1996) OS No 2 of 1995 dated 18 July, 1996, the full Supreme Court bench of Amet CJ, Kapi DCJ, Los J, Salika J, Doherty J, Andrew J and Sevua J relying on Isidore Kaseng v Rabbie Namaliu & the Independent State of Papua New Guinea (No 1) [1995] PNGLR 481, noted the position at law that the Supreme Court is not bound by its previous decisions by virtue of Schedule 2.9(1) of the Constitution. It noted also that case authorities have established authoritatively that this provision and power vested in the Court is not absolute. That this power may be invoked and exercised by the Supreme Court, to review its earlier decision only in clear and proper cases and with the exercise of great caution and only in the most exceptional circumstances where the earlier decision is said to be clearly and manifestly wrong and will be injurious to the public interest.

71. However, in this case, this Supreme Court is not revisiting an earlier decision, rather as a Judge on the bench, I am expressing a view as to whether the Supreme Courts’ comments in Anave Ona are binding.

72. My view is that the comments by the Supreme Court in Anave Ona are obiter. I say this because the appeal in Anave Ona is against a decision by a motions Judge who dismissed the appellant’s claim because it was statute-barred. Mr Ona’s appeal against that decision is related specifically to whether the claim was time-barred or not. Any Court should be slow to make comments that will or that addresses a serious point of law when that is not the issue before it and proper submissions have not been made by all counsel, as was what occurred in Anave Ona. Of course, I say this, noting para Nos 18 and 19 of the decision in Anave Ona. The appellate Judges role as stated by Sir Anthony Mason in his article referred to above, is more frequently confronted with questions of law unresolved by earlier authority or earlier authority which binds the appellate court. Paras 18 and 19 of Anave Ona, in my view, are neither.

73. In Anave Ona, the learned Supreme Court bench had to determine whether the trial Judge properly exercised his discretion to dismiss proceedings for being statute-barred. They were not deciding on the same issues now before me. Therefore because that was not an issue before that Supreme Court, their comments are not binding on other Courts but are obiter.

74. I say this bearing in mind that the primary Judge’s role in ascertaining the law is confined by the force of precedent and stare decisis. Departure from precedent is always radically confined hence the reluctance for the Supreme Court to overrule its own decisions. In this case, it is not a case of overruling the Supreme Court’s decision as wrongly suggested by Mr Kiuk, rather it is a case of deciding whether the statements are binding.

Fourth Issue - What is the nature of the plaintiffs’ claims?

75. On hearing both Mr Kiuk and Mr Hampalekie, it appears they are both not certain as to what was before the National Court. Although Mr Kiuk submits his clients are making a claim for what they are rightfully entitled to under the NPF Act and Superannuation Act, he also continues to pursue damages for breach of the mandatory requirement to deduct. Mr Hampalekie on the other hand, submits that the plaintiffs’ action is more a recovery action and did not address the issues, now raised.

76. As is the law, a party is confined to its pleadings. The Statement of Claim shows a claim as a private and public right of action being the statutory claim for outstanding entitlements and a separate claim for damages as a result of the breach. These are two, distinct, separate claims and the law governing these claims was aptly demonstrated by the trial Judge when he referred to and relied on the Australian High Court case of Byrne v Australian Airlines Limited [1995] HCA 24 (1995) 185 CLR 410. In that case Brennan CJ, Dawson and Toohey JJ stated at 424:

“A cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to offer protection (see Sovar v Henry Lane Pty Ltd [1967] HCA 31 (1967) 116 CLR 397 at 404,405). The question is one of the construction of the statute, although as Dixon J pointed out in O’Connor v S P Bray Ltd [1973] HCA 18 (1937) 56 CLR 464 at 477-478, an examination of the statute “will rarely yield a necessary implication possibly giving a civil remedy”.

“The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However, a private law cause of action will arise if it can be shown, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of the class a private right of action for breach of the duty. There is no general rule by reference to which it can be decided whether the statute does create such a right of action but there are number of indicators. If the statute provides no other remedy for its breach and the Parliamentary intention to protect a limited class is shown that indicates that there may be a private right of action since otherwise there is no method of securing the protection that statute was intended to confer. If the statute does provide some other means of enforcing the duty that will normally indicate that the statutory right was intended to be enforceable by those means and not by private right of action: Cutler v Wandsworth Stadium Ltd [1949] AC 398; Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173” and;

“The cases where a private right of action for breach of statutory duty have been held to rise are all cases in which the statutory duty has been very limited and specific as opposed to general administrative functions imposed on public bodies and involving the exercise of administrative decisions.” (my emphasis)

77. Obviously, the above passages assisted the Court in taking the step it took to dismiss the proceedings.

78. This could not have been a claim for breach of contract as was pleaded in the Statement of Claim. Mr Kiuk did not identify the issues at trial and before that, before closure of pleadings, that he was claiming both a breach of statutory rights and a claim for damages. However, he also failed to demonstrate to the Court, by case law and precedent, that his clients are entitled to damages for statutory breach. He cannot now do that in the Supreme Court as the Supreme Court, a Court of Appeal, is not concerned with the reception of evidence unless it is an application to admit fresh evidence, which is not the case.

Fifth Issue - Can the appellant raise other grounds not pleaded in the Notice of Appeal?

79. An appellant is generally confined to the grounds of appeal set out in the Notice of Appeal – except where leave is sought and obtained to amend the notice. In an application for review under Section 155(2)(b) of the Constitution, the applicant is confined to the grounds of review set out in the application for review, except where leave is granted to amend the application or exceptional circumstances exist and a point of law is debated before the Court and to ignore it would amount to a miscarriage of justice (Re Application by Herman Joseph Leahy (2006) SC855 per Kapi CJ, Cannings J, David J dated 15 December 2006; Telikom PNG Ltd v ICCC (2006) SC906 per Injia DCJ, Kirriwom J, Cannings J; Hon Patrick Pruaitch MP v Chronox Manek (2010) SC1052 per Kirriwom J, Gavara-Nanu J, Davani J).

80. The grounds in the Notice of Appeal relate to the appellants right to lodge a claim for “recovery and payment of superannuation contribution due to each individual” (see Ground 1(b) of Notice of Appeal) and is “a cause of action for recovery and payment of superannuation contributions due to each individual plaintiff” (see Ground 1(a) of Notice of Appeal). As I have seen, the appellants have now changed their stance by arguing that they are also making a claim in negligence. My view is that, appellants’ counsel does not fully comprehend and understand what is pleaded in the amended statement of claim because of his continuous reference to the fact that the plaintiffs were not seeking damages for breach of statute when para 8 (a) to (f) of the amended Statement of Claim and the reliefs sought in the amended Statement of Claim and the Notice of Appeal, all set out above, state otherwise.

81. Finally, the appellants' counsel's submissions in relation to Anave Ona (supra) and the statements made by the Supreme Court in that case, I find, are very misconceived. The issues now before us, were not before that Supreme Court. Those statements were that bench’s views on what they consider a superfund ought to do. That Supreme Court did not review found facts nor did it find facts, relating to this issue.

Conclusion

82. I find that the trial Judge did not err. I would dismiss both grounds of the appeal.

83. I would order that:

(1) The appeal is dismissed in its entirety.

(2) The appellants will pay the respondent’s costs of the appeal to be taxed if not agreed.

CANNINGS J:

84. Mathias Goma and 703 others appeal against the decision of the National Court to dismiss proceedings they commenced against the respondent, Protect Security and Communication Ltd.

85. The appellants had claimed in the National Court that they were former employees of the respondent and they suffered losses due to the failure of the respondent to comply with its statutory obligations to remit employer and employee contributions to an authorised superannuation fund. A trial was conducted and the National Court held that breaches of the statutes that imposed such obligations, in particular the National Provident Fund Act Chapter 377 and the Superannuation (General Provisions) Act 2000, are not intended to be enforceable by private right of action. Hence the appellants were not entitled to relief even if any of them was able to prove that he was an ex-employee of the respondent, that the respondent breached its statutory obligations, that he suffered loss or damage as a result of the breach of statutory obligations and that his claim was not statute-barred (Mathias Goma & 703 Others v Protect Security and Communication Ltd (2010) N4046).

GROUNDS OF APPEAL

86. There are two grounds of appeal. A third, regarding the alleged failure of the trial Judge to develop the underlying law, was abandoned during the hearing of the appeal. It is argued that the National Court erred in law by:

(1) finding that it was not intended that breaches of the statutes in question are enforceable by private right of action; and

(2) not following the decision of the Supreme Court on the same point of law in Anave Ona v National Housing Corporation (2009) SC995, which decision, if followed, would have resulted in a finding that the appellants had an enforceable cause of action.

GROUND 1: FINDING THAT BREACHES OF STATUTE NOT ENFORCEABLE BY PRIVATE RIGHT OF ACTION

Breach of statutory duty

87. The trial Judge, Hartshorn J, regarded the appellants’ cause of action as the tort of breach of statutory duty. His Honour noted that there were no PNG cases in which the requirements for a successful claim had been set out. He cited with approval the cautionary words of Sheehan J in Raymond Groves v Airlink Pty Ltd (2002) WS 1156 of 1995, unreported:

“While it may be – depending on the proper construction of the statute – that a breach of a statutory duty can give rise to a civil cause of action, it is not the law that any event or error that occurs contrary to provisions of a statute designed to avert or prevent such occurrences of themselves establish a breach of statutory duty. It is not a res ipsa loquitur [the thing speaks for itself] or absolute liability situation where the mere happening of an error establishes a statutory breach.”

88. Then his Honour cited as highly persuasive authority two decisions of courts in other jurisdictions. In the decision of the High Court of Australia in Byrne v Australian Airlines Ltd (1995) 185 CLR 410, Brennan CJ, Dawson J and Toohey J stated at 424:

“A cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to offer protection ... The question is one of the construction of the statute, although as Dixon J pointed out in O'Connor v S P Bray Ltd [1937] HCA 18; (1937) 56 CLR 464 at 477-478, an examination of the statute “will rarely yield a necessary implication possibly giving a civil remedy”.”

89. In the House of Lords case of X (Minors) v Bedfordshire [1995] UKHL 9, Lord Browne-Wilkinson stated that:

“The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However a private law cause of action will arise if it can be shown, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of the class a private right of action for breach of the duty. There is no general rule by reference to which it can be decided whether the statute does create such a right of action but there are a number of indicators. If the statute provides no other remedy for its breach and the Parliamentary intention to protect a limited class is shown that indicates that there may be a private right of action since otherwise there is no method of securing the protection that statute was intended to confer. If the statute does provide some other means of enforcing the duty that will normally indicate that the statutory right was intended to be enforceable by those means and not by private right of action: Cutler v Wandsworth Stadium Ltd [1949] AC 398, Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173 ...

The cases where a private right of action for breach of statutory duty have been held to arise are all cases in which the statutory duty has been very limited and specific as opposed to general administrative functions imposed on public bodies and involving the exercise of administrative decisions.”

Elements of cause of action

90. I consider that, although the cause of action was not clearly pleaded in the amended statement of claim, the trial Judge properly regarded it as breach of statutory duty. This is a tort (a private right of action giving rise, if proven, to a remedy in damages) that formed part of the common law in force in England immediately before Independence Day, 16 September 1975. It is therefore part of the underlying law of Papua New Guinea by virtue of Section 20(1) of the Constitution and Section 3(1)(b) of the Underlying Law Act 2000.

91. His Honour properly relied on the persuasive authority of the two overseas cases to explain the elements of the tort of breach of statutory duty. Though both decisions post-date 16 September 1975 they are a useful representation of the elements of this tort, which I consider are best expressed as follows:

(a) a statute imposed an obligation on the defendant;

(b) the obligation was breached by the defendant;

(c) the purpose of the statute was to protect a particular class of persons;

(d) the plaintiff was a member of that class of persons;

(e) the plaintiff suffered damage as a result of the breach; and

(f) the Parliament intended to create a private right of action for breach of the statutory obligation.

(See generally Halsbury’s Laws of England, 4^th edition, volume 24, paragraphs 588-593.)

Trial judge’s reasoning

92. The trial Judge tacitly found that with the exception of the final element there was evidence to support the existence of the elements of breach of statutory duty, in that:

(a) both the National Provident Fund Act Chapter 377 and the Superannuation (General Provisions) Act 2000 imposed obligations on the respondent to remit employee and employer contributions to an authorised superannuation fund;

(b) there was evidence (though his Honour made no findings of fact or law on this element) of breach of those obligations by the respondent;

(c) the purpose of the statutes was to protect a particular class of persons (this is a question of law and I consider that it appears that the purpose of each of the statutes is to protect the interests of a limited class of persons, viz employees of employers who are obliged to make contributions to authorised superannuation funds);

(d) there was evidence (though his Honour made no findings of fact or law on this element) that the appellants were members of that class of persons;

(e) there was evidence (though his Honour made no findings of fact or law on this element) that the appellants suffered damage as a result of the alleged statutory breaches, in that they gave evidence that they had not been paid their superannuation entitlements.

Critical issue: parliamentary intention

93. It was his Honour’s determination of the final element – the requirement that Parliament intended to create a private right of action for breach of the statutory obligation – that led to dismissal of the proceedings. It is the critical issue, which has led to this appeal. His Honour held:

“14 As to whether Parliament intended to confer on employees a private right of action for a breach of a duty under the Acts, there is no specific remedy given to an employee under the Acts against an employer. There is provision for a defaulting employer to be prosecuted and for a Court to order requisite payments to be made in addition to the imposition of a fine or a term of imprisonment. Further, under the Superannuation Act, the licensed trustee of an authorised superannuation fund can commence proceedings against a defaulting employer for recovery of outstanding contributions. The Acts therefore do provide a remedy for a breach by an employer of its duty under the Acts.

15 Given the above, as it cannot be ascertained as a matter of construction that Parliament intended to confer on an employee a private right of action for a breach of a duty under the Acts by an employer and as the Acts do not confer a specific remedy upon an employee but do provide other remedies for an employer's breach, pursuant to the criteria referred to in Byrne ... and X (Minors) ... it is apparent that it was not intended that a breach of a duty under the Acts was to be enforceable by private right of action.

Conclusion

16 I am of the view that it was not intended that breaches of the NPF Act and the Superannuation Act are to be enforceable by private right of action and consequently these Acts do not give rise to a private cause of action for damages in favour of the plaintiffs. The plaintiffs are not entitled to the relief that they seek even if they prove the allegations contained in the amended statement of claim. Given this finding, it is not necessary to consider the other arguments of counsel.

Orders

(a) the plaintiffs’ claims are dismissed.

(b) judgment is entered for the defendant against the plaintiffs.

(c) the plaintiffs shall pay the costs of and incidental to the proceeding to the defendant.”

94. To summarise, his Honour was led to the conclusion that no private right of action existed, by two considerations. First, neither statute provided a specific remedy to an employee against an employer. Secondly, the statutes provided a remedy for breach by employers of their statutory obligations, in that both statutes provided for a defaulting employer to be prosecuted and for a court to order requisite payments to be made in addition to the imposition of a fine or a term of imprisonment; and under the Superannuation (General Provisions) Act the licensed trustee of an authorised superannuation fund can commence proceedings against a defaulting employer for recovery of outstanding contributions.

Other considerations

95. I agree that both considerations were relevant to determining whether there existed a legislative intention to create a private right of action for breach of statutory obligations. However, I consider that the learned trial Judge paid insufficient attention to other considerations, which, if they had been fully taken into account, would have led to a different conclusion of law, these being:

• the purpose of the statutes in question;
  
• principles of statutory interpretation provided for by the Constitution.
  

Purpose of the statutes

96. It was necessary to consider the purpose of the statutes and in particular whether the legislative intention was to protect a limited class of persons, because if this is the case it is an indication of Parliament’s intention to allow a private right of action. This point is explained in Halsbury’s Laws of England, 4^th edition, volume 24, paragraph 1283:

“An individual may sue for a breach of statutory duty only if the statute imposes a duty enforceable by a party aggrieved. The answer to the question whether the statute imposes a duty so enforceable does not necessarily depend upon whether the statute was intended to protect a limited class of persons or the public as a whole. Nevertheless it is of importance to determine what was the intention of the statute in this respect, because, if the statute on its true construction is intended to protect a particular class, it is some indication that members of that class are intended to have a right of action ... On the other hand, if the statute is intended to protect the public as a whole, it will not usually be construed as giving a right of action to individual members of a particular class.”

97. The Courts in Papua New Guinea are obliged by Section 21 (purpose of Schedule 2) of the Constitution to develop “our indigenous jurisprudence adapted to the changing circumstances of Papua New Guinea”. In discharging that obligation it is incumbent on the Courts to actively consider the purpose of a statute when interpreting it (PLAR No 1 of 1980 [1980] PNGLR 326, Placer Holdings Pty Ltd v The State [1982] PNGLR 16, Inakambi Singorom v John Kalaut [1985] PNGLR 238, Haiveta v Wingti (No 3) [1994] PNGLR 197, Application by Gabriel Dusava (1998) SC581, Re Application by Anderson Agiru (2001) SC671, Re Public Prosecutor’s Power to Request the Chief Justice to Appoint a Leadership Tribunal (2008) SC1011, Ruth Kaurigova v Dr Russo Perone (2008) SC964, The State v Downer Construction (PNG) Ltd (2009) SC979, Hon Patrick Pruaitch MP v Chronox Manek (2010) SC1052, SC Ref No 1 of 2008, Reference by the Ombudsman Commission (2010) SC1058).

Purpose of Superannuation (General Provisions) Act

98. A general idea of the purpose of the Act is provided by its long title, which states:

“Being an Act to make provision for the licensing, regulation and supervision of superannuation funds, trustees, investment managers and fund administrators, the imposition of mandatory contributions to superannuation funds and to amend various Acts and for related purposes.”

99. More specifically, Section 2 (purpose of this Act) states:

“The purpose of this Act is to—

(a) make provision for and promote compulsory savings for retirement through mandatory or voluntary contributions to superannuation funds by employers and employees; and

(b) make provision for the licensing and regulation of the superannuation industry in Papua New Guinea in a manner consistent with the continued development of a viable and competitive industry; and

(c) make provision of the prudent management of superannuation funds and licence holders; and

(d) provide for the protection of the interests of members of superannuation funds; and

(e) for related purposes.” [Emphasis added.]

100. It is clear that a primary purpose of the Superannuation (General Provisions) Act is to promote a system of compulsory savings for retirement and therefore protect the interests of a limited class of persons: members of superannuation funds, including those persons who should have been, as a matter of law, members of such funds.

Purpose of National Provident Fund Act

101. The Act was repealed on the day on which the National Provident Fund became an authorised superannuation fund under the Superannuation (General Provisions) Act (see Section 119(2) (amendments to and repeals of existing Acts) of the Superannuation (General Provisions) Act). I understand that the relevant date is in the year 2000. However the National Provident Fund Act remained relevant to the National Court proceedings as a number of the appellants were saying that they were employed by the respondent in the period prior to the date of repeal of the Act, and they were seeking to enforce by private right of action alleged breaches by the respondent of its obligations under it. There was not the same sort of specific statement of the purpose of the Act as is found in Section 2 of the Superannuation (General Provisions) Act, but its long title gave some indication:

“Being an Act to provide for the institution and management of a National Provident Fund for employees in establishments and for related purposes.”

102. Part V (contributions) of the Act is also relevant to ascertaining the purpose of the Act. Sections 31 and 32 provided for mandatory contributions to the Fund in respect of each employee to whom the Act applied. Employers are required to pay 7% of the pay actually drawn by an employee during a month. Employees had to pay 5% of their pay. The obligation to pay those contributions was by Section 34 imposed on the employer. Section 35 (contributions to be paid into Fund) then provided:

“(1) All contributions paid under this Part shall be paid into the Fund in the prescribed manner.

(2) The Board shall cause to be credited to each member of the Fund the amount of every contribution paid on his behalf.”

103. I consider that these provisions, by providing for mandatory contributions to the Fund and compulsory savings for retirement and specifying that amounts of every contribution are to be credited to each member of the Fund, evince an intention to protect a particular class of persons, namely employees to whom the National Provident Fund Act applied.

Effect of consideration of purpose

104. The common purpose of the National Provident Fund Act and the Superannuation (General Provisions) Act is the protection of a limited class of persons. This is an indication that members of that class, including the appellants, who say that they are former employees of the respondent who are suffering due to the respondent’s failure to comply with its statutory obligations, are intended to have a private right of action to enforce those obligations.

Principles of statutory interpretation provided for by the Constitution

105. The Constitution provides principles of interpretation which must be considered whenever a Court is required to ascertain the intention of the Parliament. The Court must:

• give effect to the National Goals and Directive Principles;
• enforce the Basic Rights;
• give effect to the Basic Social Obligations;
• uphold the Rule of Law; and
• give paramount consideration to the dispensation of justice.
  

Giving effect to the National Goals and Directive Principles

106. The five National Goals are set out in the Preamble to the Constitution. To summarise, they are:

1. Integral human development: every person to be dynamically involved in the process of freeing himself or herself from every form of domination or oppression so that each man or woman will have the opportunity to develop as a whole person in relationship with others.
   
2. Equality and participation: all citizens to have an equal opportunity to participate in, and benefit from, the development of our country.
   
3. National sovereignty and self-reliance: Papua New Guinea to be politically and economically independent, and our economy basically self-reliant.
   
4. Natural resources and environment: Papua New Guinea's natural resources and environment to be conserved and used for the collective benefit of us all, and be replenished for the benefit of future generations.
   
5. Papua New Guinean ways: to achieve development primarily through the use of Papua New Guinean forms of social, political and economic organization.
   

107. Section 25 (implementation of the National Goals and Directive Principles) of the Constitution indicates that it is necessary for the Courts to give effect to the National Goals and Directive Principles when enforcing laws. It states:

“(1) Except to the extent provided in Subsections (3) and (4), the National Goals and Directive Principles are non-justiciable.

(2) Nevertheless, it is the duty of all governmental bodies to apply and give effect to them as far as lies within their respective powers.

(3) Where any law, or any power conferred by any law (whether the power be of a legislative, judicial, executive, administrative or other kind), can reasonably be understood, applied, exercised or enforced, without failing to give effect to the intention of the Parliament or to this Constitution, in such a way as to give effect to the National Goals and Directive Principles, or at least not to derogate them, it is to be understood, applied or exercised, and shall be enforced, in that way.

(4) Subsection (1) does not apply to the jurisdiction of the Ombudsman Commission or of any other body prescribed for the purposes of Division III.2 (leadership code), which shall take the National Goals and Directive Principles fully into account in all cases as appropriate.”

108. Section 25(3) is the key provision: though the National Goals and Directive Principles are generally non-justiciable, all laws are to be understood, applied or exercised, and shall be enforced in such a way as to give effect to the National Goals and Directive Principles, or at least not to derogate them (without failing to give effect to the intention of the Parliament or to the Constitution).

Enforcing the Basic Rights

109. Basic Rights are conferred by the Constitution in two ways. First, by general statements of principle in the Preamble. Secondly in the detailed provisions of Division III.3 (basic rights), comprising Sections 32 to 58. The Preamble includes this fundamental statement of their importance:

“Basic Rights

WE HEREBY ACKNOWLEDGE that, subject to any restrictions imposed by law on non-citizens, all persons in our country are entitled to the fundamental rights and freedoms of the individual, that is to say, the right, whatever their race, tribe, places of origin, political opinion, colour, creed or sex, but subject to respect for the rights and freedoms of others and for the legitimate public interest, to each of the following:—

(a) life, liberty, security of the person and the protection of the law; and

(b) the right to take part in political activities; and

(c) freedom from inhuman treatment and forced labour; and

(d) freedom of conscience, of expression, of information and of assembly and association; and

(e) freedom of employment and freedom of movement; and

(f) protection for the privacy of their homes and other property and from unjust deprivation of property,

and have accordingly included in this Constitution provisions designed to afford protection to those rights and freedoms, subject to such limitations on that protection as are contained in those provisions, being limitations primarily designed to ensure that the enjoyment of the acknowledged rights and freedoms by an individual does not prejudice the rights and freedoms of others or the legitimate public interest.”

110. Primary responsibility for enforcement of the Basic Rights is given to the Supreme Court and the National Court by Section 57(1) (enforcement of guaranteed rights and freedoms) of the Constitution, which states:

“A right or freedom referred to in this Division shall be protected by, and is enforceable in, the Supreme Court or the National Court or any other court prescribed for the purpose by an Act of the Parliament, either on its own initiative or on application by any person who has an interest in its protection and enforcement, or in the case of a person who is, in the opinion of the court, unable fully and freely to exercise his rights under this section by a person acting on his behalf, whether or not by his authority.”

111. Section 57(1) imposes on the Supreme Court and the National Court the duty to protect the Basic Rights of all persons (Constitutional Reference No 1 of 1977 [1977] PNGLR 362). That duty must be discharged in the exercise of all judicial functions, including statutory interpretation and ascertainment of the intention of the Parliament. Statutes should be interpreted as far as possible in a way that protects and allows for enforcement of the Basic Rights.

Giving effect to the Basic Social Obligations

112. The Basic Social Obligations are set out in the Preamble to the Constitution, as follows:

“Basic Social Obligations

WE HEREBY DECLARE that all persons in our country have the following basic obligations to themselves and their descendants, to each other, and to the Nation:—

(a) to respect, and to act in the spirit of, this Constitution; and

(b) to recognize that they can fully develop their capabilities and advance their true interests only by active participation in the development of the national community as a whole; and

(c) to exercise the rights guaranteed or conferred by this Constitution, and to use the opportunities made available to them under it to participate fully in the government of the Nation; and

(d) to protect Papua New Guinea and to safeguard the national wealth, resources and environment in the interests not only of the present generation but also of future generations; and

(e) to work according to their talents in socially useful employment, and if necessary to create for themselves legitimate opportunities for such employment; and

(f) to respect the rights and freedoms of others, and to co-operate fully with others in the interests of interdependence and solidarity; and

(g) to contribute, as required by law, according to their means to the revenues required for the advancement of the Nation and the purposes of Papua New Guinea; and

(h) in the case of parents, to support, assist and educate their children (whether born in or out of wedlock), and in particular to give them a true understanding of their basic rights and obligations and of the National Goals and Directive Principles; and

(i) in the case of the children, to respect their parents.

IN ADDITION, WE HEREBY DECLARE that all citizens have an obligation to themselves and their descendants, to each other and to the Nation to use profits from economic activities in the advancement of our country and our people, and that the law may impose a similar obligation on non-citizens carrying on economic activities in or from our country.”

113. Section 63 (enforcement of the Basic Social Obligations) of the Constitution indicates that it is necessary for the Courts to give effect to the Basic Social Obligations when interpreting laws. It states:

“(1) Except to the extent provided in Subsections (3) and (4), the Basic Social Obligations are non-justiciable.

(2) Nevertheless, it is the duty of all governmental bodies to encourage compliance with them as far as lies within their respective powers.

(3) Where any law, or any power conferred or duty imposed by any law (whether the power or duty be of a legislative, judicial, executive, administrative or other kind), can reasonably be understood, applied, exercised, complied with or enforced, without failing to give effect to the intention of the Parliament or to this Constitution, in such a way as to enforce or encourage compliance with the Basic Social Obligations, or at least not to derogate them, it is to be understood, applied, exercised, complied with or enforced in that way.

(4) Subsection (1) does not apply in the exercise of the jurisdiction of the Ombudsman Commission or other body prescribed for the purposes of Division III.2 (leadership code), which shall take the Basic Social Obligations fully into account in all cases as appropriate.”

114. Section 63(3) is the key provision: though the Basic Social Obligations are generally non-justiciable, all laws are to be understood, applied or exercised, and shall be enforced in such a way as to enforce or encourage compliance with them, or at least not to derogate them (without failing to give effect to the intention of the Parliament or to the Constitution).

Upholding the Rule of Law

115. Papua New Guinea has an independent judiciary and one of its primary functions is to uphold the Rule of Law. This is an essential part of our system of constitutional democracy. It embodies the notion that all power belongs to the People, including the judicial power, which is vested in the Courts and which must be exercised impartially and independently to ensure that no person or authority is above the law (Reference by Dr Allan Marat, In the matter of Prime Minister and NEC Act 2002 Amendments (2012) SC1187, per Injia CJ at para 44). These principles are entrenched by various provisions of the Constitution, especially Sections 99 (structure of government), 157 (independence of the national judicial system) and 158 (exercise of the judicial power).

116. Section 99 (structure of government) states:

“(1) Subject to and in accordance with this Constitution, the power, authority and jurisdiction of the People shall be exercised by the National Government.

(2) The National Government consists of three principal arms, namely:—

(a) the National Parliament, which is an elective legislature with, subject to the Constitutional Laws, unlimited powers of law-making; and

(b) the National Executive; and

(c) the National Judicial System, consisting of a Supreme Court of Justice and a National Court of Justice, of unlimited jurisdiction, and other courts.

(3) In principle, the respective powers and functions of the three arms shall be kept separate from each other.

(4) Subsection (2) is descriptive only and is non-justiciable.”

117. Section 157 (independence of the national judicial system) states:

“Except to the extent that this Constitution specifically provides otherwise, neither the Minister responsible for the National Justice Administration nor any other person or authority (other than the Parliament through legislation) outside the National Judicial System has any power to give directions to any court, or to a member of any court, within that System in respect of the exercise of judicial powers or functions.”

118. Section 158 (exercise of the judicial power) states:

“(1) Subject to this Constitution, the judicial authority of the People is vested in the National Judicial System.

(2) In interpreting the law the courts shall give paramount consideration to the dispensation of justice.”

119. These principles require that when interpreting the law the Courts give special attention to the Rule of Law. A statute should be presumed to be imposing enforceable rights and obligations. Statutory provisions should only be regarded as providing merely guiding or otherwise unenforceable principles if they are expressly made non-justiciable or in some other way it is made clear that they are not enforceable.

Giving paramount consideration to the dispensation of justice

120. This is such an important principle that, even though I have referred to it in the bundle of provisions that requires maintenance of the Rule of Law, it warrants special exposition. Section 158(2) of the Constitution states:

“In interpreting the law the courts shall give paramount consideration to the dispensation of justice.”

121. When interpreting a law the Court must consider which of the competing interpretations will result in the dispensation of justice. This is not just a guiding principle: it is “a constitutional dictate” and “the Courts are bound by this mandate” (Ginson Goheyu Saonu v Bob Dadae (2004) SC763). Absurd or unjust consequences of interpretation of a law must be avoided (SCR No 6 of 1984; Re Provocation [1985] PNGLR 31).

Application of principles of statutory interpretation provided for by the Constitution

122. In my view it would be contrary to the National Goals and Directive Principles, the Basic Rights and the Basic Social Obligations, and defeat enforcement of the Rule of Law and be unjust to interpret the National Provident Fund Act and the Superannuation (General Provisions) Act in a way that would allow employers to breach their statutory obligation to remit contributions to an authorised superannuation fund and to prohibit the persons for whose benefit those obligations are imposed from enforcing their rights. I say this for the following reasons:

1. National Goal Nos 1 (integral human development), 2 (equality and participation) and 3 (Papua New Guinean ways) would be given effect by allowing former employees to enforce their own rights in the event of a failure by their former employers to discharge their statutory obligations to remit contributions to an authorised superannuation fund.
   
2. It would not encourage compliance with the Basic Social Obligations (especially the obligation to respect and to act in the spirit of the Constitution) to interpret the law in a way that would in effect make employers who failed to comply with their statutory obligations to be immune from civil suit instigated by former employees whose rights (which are intended to be protected by statute) have been breached.
   
3. It would be contrary to the Basic Rights of all persons to the full protection of the law (which is conferred generally by the Basic Rights provision in the Preamble to the Constitution and specifically by Section 37(1): “Every person has the right to the full protection of the law”) to interpret statutes, which impose clear obligations on employers and vest rights in employees, in a way that would deprive employees a private right of action against employers who are alleged to be in breach of their statutory obligations. I consider that the narrow construction of the statutes by the learned trial Judge had the effect of depriving the appellants the full protection of the law, and amounted to a failure on the part of the National Court to discharge its duty under Section 57(1) of the Constitution to protect and enforce the Basic Rights of the appellants.
   
4. Maintenance of the Rule of Law entails a presumption that the written laws of Papua New Guinea impose obligations and confer rights that are enforceable in the Courts by persons with a legitimate interest and sufficient standing in their enforcement. In the present case the appellants had a sufficient interest in the proceedings that they had commenced. It tends to defeat the Rule of Law if the Courts send a message through their interpretation of statutes that a person who wants to argue that his statutory rights have been violated and that the statutory obligations of another person have been breached is denied access to the Court on the basis that he or she has no private right of action.
   
5. It is unjust to deny access to the Court to someone who wants to argue that his or her rights have been breached by another person who has breached their statutory obligations. Put another way, I would not be dispensing justice if I were to interpret the law in a way that would allow employers to breach their statutory obligation to remit contributions to an authorised superannuation fund and to prohibit the persons for whose benefit those obligations are imposed from enforcing their rights. The interests of justice require that persons for whose benefit statutory obligations exist do not have to wait for some other person or authority to take action to enforce those obligations.
   

Conclusion re ground 1 of the appeal

123. I consider that the learned trial Judge erred in law by not considering the purpose of the National Provident Fund Act and the Superannuation (General Provisions) Act and five principles of interpretation that the National Court is obliged to take into account in interpreting and applying any statute. If those matters had been considered it would have been apparent that there existed a legislative intention to create a private right of action in respect of aggrieved persons in the position of the appellants.

124. The final element of the tort of breach of statutory duty – described as element (f) in my summary of the elements: that Parliament intended to create a private right of action for breach of the statutory obligation – was satisfied in this case. The National Court erred in law in reaching the opposite conclusion and dismissing the proceedings on that ground. I uphold ground 1 of the appeal.

GROUND 2: NOT FOLLOWING DECISION OF SUPREME COURT ON SAME POINT OF LAW

125. The appellants argue that the trial Judge erred in law by not following the decision of the Supreme Court in Anave Ona v National Housing Corporation (2009) SC995, which decision, if followed, would have resulted in a finding that the appellants had a private right of action. This ground of appeal gives rise to a number of issues:

(a) What was decided in Ona?

(b) How did the trial Judge deal with Ona?

(c) Was the opinion expressed in Ona obiter dictum?

(d) Was the opinion expressed in Ona binding?

(e) Did the failure of the National Court to follow Ona constitute an error of law?

What was decided in Ona?

126. Ona was an appeal against dismissal of proceedings in the National Court. The appellant, Mr Ona, was a former officer of the National Housing Corporation. He was employed from 1989 to 2001. In 2006 he commenced proceedings in the National Court against the Corporation and Nambawan Supa Ltd (formerly the Public Officers’ Superannuation Fund Board). He sought redress in respect of the failure of the Corporation in the period from 1989 to 1994 to comply with its statutory obligations (under the Public Officers Superannuation Fund Act 1990) to remit both employee and employer contributions to Nambawan Supa and the failure of Nambawan Supa to enforce the obligations of the Corporation.

127. The National Court dismissed the proceedings on the basis that the appellant’s action was “to recover any sum recoverable by virtue of an enactment”, that the cause of action accrued in 1989 (when the initial breach of statutory duty occurred) and that therefore it was time-barred by Section 16(1)(d) of the Frauds and Limitation Act 1988, which provides that such actions “shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued”.

128. The Supreme Court (Mogish J, Manuhu J, Makail J) held that the National Court erred in deciding that the cause of action accrued in 1989, as the appellant had no private right of action until he ceased employment in 2001. He commenced the proceedings in 2006, five years after accrual of the cause of action, which was within the six-year limitation period. The appeal was allowed and the proceedings in the National Court were reinstated. Significantly the Supreme Court held that the appellant had a private right of action which accrued upon cessation of employment. Prior to cessation of employment he had only had public law rights available to him (he could have sought leave to apply for judicial review of the failure of the Corporation and Nambawan Supa to perform their statutory obligations). The Supreme Court held that:

19. ... a contributor, while still in employment, could not take action for recovery and payment of superannuation contributions to himself. He is not entitled to collect his superannuation contributions unless he ceases to be a contributor. A recovery action would be available to a contributor only when he ceases to be a contributor. His private law right to sue in tort to recover superannuation contributions or entitlements accrues only when he ceases employment in the public service.

20. In this case, the cause of action in the National Court was a claim in tort, which action was not available to Mr Ona at the time of failure between 1989 and 1993 when he was still in the employ of the corporation. He was only entitled to a public law remedy which he opted not to take. But his failure did not preclude him from exercising his right to sue in tort which became available to him upon cessation of employment. [Emphasis added.]

129. The Supreme Court thus decided a person who has ceased employment has a private right of action – he can sue in tort – in respect of the failure of his former employer to comply with its statutory obligations to remit both employer and employee contributions to the authorised superannuation fund.

How did the trial Judge deal with Ona?

130. His Honour mentioned Ona only once in his judgment (Mathias Goma & 703 Others v Protect Security and Communication Ltd (2010) N4046):

“A recent Supreme Court case, Ona v National Housing Corporation & Anor (2009) SC995 concerned an appeal against a decision that dismissed a proceeding because it was time barred. The appeal was successful. The proceeding was seeking relief in respect of the non-payment of superannuation contributions under the Public Officers Superannuation Fund Act. In the course of considering the question before it, namely whether the proceeding was time barred, the Court made obiter observations concerning public and private law rights and did not give a detailed consideration to the requirements for a successful claim based on a breach of statutory duty.”

131. His Honour thus regarded the statements of law in Ona as being obiter dictum, ie an opinion by the Supreme Court that was not an essential part of its decision. His Honour took the view that because the observations in Ona were obiter, they were not binding and were largely irrelevant to the matter before the Court. His Honour appears to have been strengthened in that view by his comment that the Supreme Court “did not give a detailed consideration to the requirements for a successful claim based on a breach of statutory duty”.

Was the opinion expressed in Ona obiter dictum?

132. Obiter dictum is a Latin term that means literally ‘an incidental remark’. The etymology of the term is explained in The Australian Concise Oxford Dictionary Third edition, Oxford University Press © 1997 as being from the Latin words obiter (‘by the way’) and dictum (‘a thing said’). Statements of law in a judgment that are obiter do not form part of the binding authority of a Court’s judgment. In Enforcement Pursuant to Constitution s 57; Application by Gabriel Dusava (1998) SC581 Sakora J examined the concept of obiter dictum in considerable detail, and I cite the following dictum from his Honour’s judgment with approval and gratitude:

“Osborn's Concise Law Dictionary (8th edition) defines obiter dictum as: a saying by the way. It is an observation by a Judge on a legal question suggested by a case before him, but not arising in such a manner as to require decision. It is, therefore, not binding as a precedent. But there is no justification for regarding obiter dicta a reason given by a Judge for his decision because he has given another reason also (ibid).

Put another way, obiter dicta (the plural form) are passing or incidental statements; statements made or decisions reached in a Court opinion which were not necessary to the disposition of the case. They are also propositions of law which do not form part of the ratio decidendi. Professor Goodhart defined obiter dictum as (see Essays in Jurisprudence and Common Law, page 22):

A conclusion based on a fact the existence of which has not been determined by the Court.

There are two types of obiter dicta. And the enormous assistance of Walker and Walker, the learned authors of the useful text, The English Legal System, Butterworths, 6th edition, 1985, pages 136-140, in the following discussion of this topic is respectfully acknowledged. Firstly, a statement of law is regarded as obiter if it is based upon facts which either were not found to exist or, if found, were not found to be material. For example, the famous statement of equitable estoppel contained in the judgment of Denning J (as he then was) in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 30, [1956] 1 All ER 256, is clearly obiter since it applied to a set of facts which were not found to be present in the case.

The second type of obiter is a statement of law which, although based on the facts as found, does not form the basis of the decision. An obvious example is a statement of law in support of a dissenting judgment.

The learned authors (supra) make the following statement which I respectfully adopt as reflecting the correct statement of the law on this matter (pages 139-140):

It would be erroneous to suppose that obiter dicta are of no authority. Strictly, they are not of binding authority but have only persuasive authority.

Nevertheless, where the statement in question has fallen from a court of high authority and is a deliberate statement of law as opposed to a casual expression of opinion it will usually be followed in the absence of binding authority to the contrary eg, the statement of the principle of equitable estoppel made by Denning J (as he then was) in Central London Property Trust Ltd, although clearly obiter, has been adopted by superior courts and is now an accepted rule of equity.

There could be no more striking [example] than the "neighbour principle" propounded by Lord Atkin in M'Alister (or Donoghue) v Stevenson [1932] AC 562. This statement of law, though far wider than the decision required, has become the basis of the modern tort of negligence and has been cited and applied on occasions far numerous to mention.”

133. I take the liberty of summarising the principles expounded by Sakora J in the following way:

• Obiter dicta (dictum is the singular expression) are statements of law or other observations made by a Judge or a Court, either orally or in a written judgment, which were not necessary to the disposition or final decision in the case.
  
• There are two types of obiter dicta: (i) a statement of law that is based upon facts which either were not found to exist or, if found, were not material facts; and (ii) a statement of law which, although based on the facts as found, does not form the basis of the decision, eg a statement of law in support of a dissenting judgment.
  
• Statements of law that are obiter dicta are not binding authority but can be of persuasive authority (and highly persuasive or otherwise) depending on whether the statements have been expressed by a court of high authority and whether they are deliberate statements of law as opposed to a casual expression of opinion. (On the latter point it is useful also to refer to the judgment of Wilson J in Premdas v The State [1979] PNGLR 329 who highlighted the importance when assessing the persuasive value of obiter dicta of distinguishing between a considered enunciation of a Court’s opinion on a point of law and a passing remark or casual expression of opinion: the former will usually be highly persuasive while the latter will often be of little persuasive value.)
  

134. Applying those principles to the relevant statement of law in Ona – that upon the cessation of employment, the appellant had a private right of action in tort – I conclude that that statement was necessary to the disposition or final decision in the case. The central issue in the case was whether the proceedings in the National Court were time-barred. The Supreme Court held that they were not, and could only have reached that decision by determining as a matter of law that the appellant had a private right of action that accrued upon cessation of his employment in 2001. The relevant statement of law in Ona was not obiter dictum.

Was the opinion expressed in Ona binding?

135. Schedule 2.9(1) (subordination of courts) of the Constitution (and Section 19 (rules of precedent) of the Underlying Law Act 2000) state:

“All decisions of law by the Supreme Court are binding on all other courts, but not on itself.”

136. This fundamental principle can be restated by saying: all decisions of law other than those that are obiter dicta are binding on all other courts but not on itself.

137. The decision of law in Ona – that a person in the position of the appellant, who had ceased employment, had a private right to action in tort to enforce the statutory obligations of his former employer to remit employer and employee contributions to an authorised superannuation fund – was, as I have just decided, not obiter dictum. It was binding on the National Court.

Did the failure of the National Court to follow Ona constitute an error of law?

138. Yes, in my opinion the trial Judge erred in law by regarding the decision of law in Ona as obiter dictum and by not following it.

139. If for some reason the decision on this point of law in Ona was regarded as obiter dictum it should, with respect, have been regarded as highly persuasive authority as it emanated from the Supreme Court of Papua New Guinea and was a deliberate statement of law, not just a casual expression of opinion. It is incumbent on the National Court, if it decides not to follow the highly persuasive authority of a Supreme Court decision and to prefer instead to follow decisions of courts in other jurisdictions, to provide careful and considered reasons for doing so.

Conclusion re ground 2

140. I uphold this ground of appeal as the National Court erred in law by not adhering to Schedule 2.9(1) of the Constitution.

CONCLUSION

141. I would allow the appeal. The appropriate order would be to quash the decision of the National Court and remit the case, pursuant to Section 16(d) (decision etc on appeal) of the Supreme Court Act Chapter No 37, to the National Court for further hearing. The proceedings WS No 69 of 2007 would be reinstated in the National Court.

142. Costs would follow the event, subject to the qualification that the respondent should be obliged to pay only two-thirds of the appellants’ costs of the appeal. This is because the notice of appeal contained three grounds of appeal and the appeal was set down for hearing on the understanding that the three grounds would be fully argued. However the third ground was abandoned during the course of the hearing and without notice to the respondent when it became apparent to the appellants’ counsel, upon it being pointed out to him by the bench, that the points of law raised by it were not argued before the National Court.

COMMENTS

143. There are three other aspects of the National Court proceedings on which I wish to comment. First I note that although embarking on a trial the Court did not admit into evidence the affidavits of the 704 plaintiffs. There was no formal opening and closing of the cases of the plaintiffs (the appellants) and the defendant (the respondent), which meant that it was not clear what evidence was before the Court. In any trial in any court there must be a clear demarcation between the admission of evidence and the submissions of the parties based on that evidence. If this practice is not adhered to, a mistrial might result (Timothy Bonga v Justice Maurice Sheehan [1997] PNGLR 452).

144. Secondly, although the trial Judge noted at the beginning of his judgment that the counsel for the parties had agreed that there were four issues for decision, his Honour chose to select one of those issues – whether the appellants were each and severally entitled to the losses and damages as per the amended statement of claim – and determined it, then, having found against the appellants, did not address the other issues and simply dismissed the proceedings. I tend to think that a better approach would have been for the trial Judge to have considered ordering that there be a decision on the question of law on which his Honour ultimately decided the case, before the trial. This could have been done under Order 10, Rule 21 (order for decision) of the National Court Rules, which states:

“The Court may make orders for—

(a) the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings; and

(b) the statement of a case and the question for decision.”

145. The Supreme Court in MAPS Tuna Ltd v Manus Provincial Government (2007) SC857 set out the circumstances in which it is appropriate to order that there be a decision on questions before a trial. This issue has also been considered by the National Court in Timothy Lim Kok Chuan v Simon Goh Say Beng (2004) N2753 and Eddie Tarsie v Ramu Nico Management (MCC) Ltd (2010) N4005. I consider that if the National Court does not invoke the power in Order 10, Rule 21 and proceeds to conduct a ‘full blown’ trial it will be obliged in most cases, as a matter of natural justice, to give its decision (even if only in a summary form) on all the issues on which there have been evidence and submissions.

146. Finally I offer the suggestion that if these proceedings are reinstated in the National Court, the parties, and indeed the Court, should give active consideration to whether the proceedings might appropriately be resolved through mediation in accordance with Part IIA (mediation) of the National Court Act Chapter No 38 and the ADR [Alternative Dispute Resolution] Rules 2010. The outcome of this appeal, if it is upheld, would simply be to decide a point of law in favour of the appellants. It would by no means guarantee the success of their proceedings in the National Court. The plaintiffs will still have to prove the factual elements of their claims. With such a large number of plaintiffs this process might most fairly and expeditiously be undertaken by mediation.

ORDER, BY MAJORITY:

(1) The appeal is allowed.

(2) The order of the National Court in WS No 69 of 2007 of 12 May 2010 is quashed.

(3) The case, WS No 69 of 2007, is remitted, pursuant to Section 16(d) (decision etc on appeal) of the Supreme Court Act Chapter No 37, to the National Court for further hearing and is accordingly reinstated in the National Court.

(4) Two-thirds of the costs of and incidental to this appeal shall be paid by the respondent to the appellants, to be taxed if not otherwise agreed.

Judgment accordingly.
_____________________________________________________
Nikiuma Lawyers: Lawyers for the Appellants
M S Wagambie Lawyers: Lawyers for the Respondent