Independent State of Papua New Guinea v Toka Enterprises Ltd [2013] PGSC 62; SC1346 (29 November 2013)

SC 1346

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCR Rev. 43 of 2002

In the matter of an Application for review under s 155 (2) (b) of the Constitution

Between:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
First Applicant

And:

PEPI KIMAS, SERCETARY FOR LANDS & PHYSICAL PLANNING
Second Applicant

And:

DR. PUKA TEMU, MINISTER FOR LANDS & PHYSICAL PLANNING
Third Applicant

And:

TOKA ENTERPRISES LIMITED
Respondent

Waigani: Injia, CJ
2013: 29th November

JUDICIAL REVIEW – Leave to seek review – First application under new Rules of Court – Jurisdiction – Exercise of discretion – Principles – Application of principles to facts – Application granted – Constitution, s155 (2)(b); Supreme Court Rules 2012, O 5 rr 1, 2 & 3.

Counsel

A Manase, for the Applicants
S Guava, for the Respondents

29th November, 2013

1. INJIA, CJ: This is a contested application for leave to apply for review of several decisions of the National Court following the applicant's failure to institute appeals against those decisions. The application is made under O 5 rr 1 & 3 of the Supreme Court Rules 2012 (SCR).

2. This is the first application to come before me under the new Supreme Court Rules 2012. On 19 December 2012, the Judges promulgated a new set of rules of court governing the practice and procedure of the Supreme Court. The new rules, contained a consolidation of the then existing Supreme Court Rules 1987 and subsequent amendments made to those rules.

3. By way of background, prior to 19 December 2012, the SCR contained provisions for instituting applications for judicial review but no provisions for separate leave for review applications. The case law as it stood then allowed applications for judicial review as of right in cases where a statute barred appeals from decisions of the National Court and that a person aggrieved by that decision had no other way of seeking redress in the Supreme Court. The case law also allowed reviews by leave only where a statute allowed appeals but the right to appeal had been lost. In the case of the latter, the question of leave and the substantive application for review were heard and determined together because there were no separate procedures for leave applications.

4. In 2002, the SCR was amended to require separate application for leave for review with regard to review of decisions of the National Court in an election petition brought under the Organic Law on National and Local-Level Government Elections. The principles governing the exercise of discretion on leave are established: see Jurvie v Oveyara (2008) SC935.

5. With regard to application for leave for review in other matters, SCR 2012, Order 5 Rules 1, 2 and 3 made provision for separate application and determination on the question of leave. That rule is in the following terms:

" Division 1. Form of review application

1. An application to the court under Constitution Section 155(2)(b) lies with leave only, or without leave. Where the application lies with leave only the provisions of Order 7 Division 2 shall be followed, substituting the word "applicant" for the word appellant" and the word "application" for the word "appeal".
   
2. An application for leave by a prisoner who is not legally aided may be made in form 2 Schedule Two.
   
3. An application for leave for review shall be made before a Judge".
   

6. The principles governing exercise of discretion to be applied in determining leave for review are those enunciated by the Supreme Court in Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120. I quote the pertinent parts of the joint judgment of the majority in that case comprising Justice Gavara-Nanu and Justice Yagi, as follows:

"Leave

2. For the applicant to be granted leave it must satisfy the following criteria:-

(i) Whether there was a delay by the applicant in making the application, if so whether there are exceptional circumstances showing manifestation of substantial injustice or whether the case is of such special gravity warranting the grant of leave;

(ii) The grant of leave is in the interest of justice; and

(iii) That there are clear arguable issues warranting leave to review the decision.

3. (In) regard to the issue of delay it has to be considered subjectively to matters raised by the other criteria for leave. The Court has wide discretion when considering delay, thus, even if the Court finds that there is delay, if the applicant can satisfy all or any of the criteria for leave, the Court can in the exercise of its discretion still grant leave: Avia Aihi v. The State (No. 2) [1982] PNGLR 44"

7. The majority found that the delay by 2 years in bringing the application was found to be unreasonable and unsatisfactory and that notwithstanding the delay, grave injustice would occur if the decision was not reviewed in the circumstances of the case. The majority said:

"9.Except for the issue of delay, the applicant has in our opinion satisfied the other three criteria stated above for the grant of leave. In our opinion the interest of justice merits a review, given that if the application is dismissed at leave stage on the basis of delay alone, there will be substantial injustice to the applicant, the decision will have serious and grave consequences for the applicant. The manner in which the applicant obtained the title to the property is a serious legal issue which ought to be properly and fully determined on merit. All these matters in our respectful opinion merit review. As we alluded to earlier, the issue of delay has to be considered subjectively and in our opinion the Court would not be exercising its discretion properly and judicially if application is dismissed on the basis of delay alone."

8. Counsel for the applicants referred to a number of other cases which discuss the criteria for grant of leave, however those cases do not say anything different to the criteria canvassed by the majority in Lae Bottling Industries Ltd case: Danny Sunu v The State [1984] PNGLR 305, The State v Colbert [1988] PNGLR 138, Joseph Kupo v Steven Raphael (2004) SC751 & Application of Herman Leahy (2006) SC 855.

9. There are two other additional criteria that, in my view, are also relevant in an application for leave. First, the question of the applicant's standing or locus standi to make the application becomes relevant to be determined. In a situation where the applicant is a party in the proceedings in the Court below, the question of standing does not arise. The question will arise if the applicant is not a party in the proceedings in the court below. The test is whether the applicant is directly affected by the decision of the Court below such that he or she has sufficient interest in the subject matter of the application: see Kitogara Holdings v NCDIC [1988] PNGLR 346.

10. Secondly, an applicant must have a satisfactory explanation for failing to appeal the decision. That explanation coupled with the explanation for the delay in bringing the application for leave should be considered together when the Court is considering the question of delay.

11. I agree with Mr Manase that the second criteria in the Lae Bottling case may also be approached from the perspective of some serious legal or factual issues that are raised from some patent error on the Court's part that is manifest on the face of the record, that stands to produce grave or substantial injustice.

12. I also accept submissions of counsel for the respondent that in considering the question of leave, the Court is not considering the merits of the issues raised. That task rests with the full Court that is determining the substantive application for review.

13. I apply those principles to the circumstances of the present case under the various criteria set out in the Lae Bottling case, which I have expounded upon, as follows:

. Locus standi

. Satisfactory explanation for default in bringing appeal

. Satisfactory explanation for delay in bring application for leave for

Review

. Exceptional circumstances showing manifestation of substantial injustice; or serious legal or factual issues that raise an arguable case for a full review of the decision

. Interests of justice

14. But first it is necessary to identify the decisions of the Court the subject of the application. Those are identified in the leave application as follows:

(a) Judgment of Justice Lay given on 7 June 2007, in National Court judicial proceedings OS No 240 of 2007, granting the applicant in that case (respondent in this application) leave to apply for judicial review pursuant to Order 16 rule 3(1) of the National Court Rules (NCR) ex parte;

(b) The Judgment of Justice Salika (as he then was) given on the 27th June 2008 granting the application for judicial review (substantive) ex parte; in which orders in the nature of mandamus were granted;

(c) The Judgment of Justice Salika (as he then was) give on 27 November 2008 in which the Court awarded damages in the sum of K27,784,536.00 for general damages and economic loss.

15. The applicant did not appeal those three decisions referred to in paragraph 12 herein. Some 4 - 5 years on, the applicants have brought this application.

Locus standi

16. The applicants were parties in the proceedings in the court below. The question of standing does not arise.

Satisfactory explanation for default in bringing appeal within time

17. The question is whether the applicants have offered a satisfactory explanation why they failed to appeal the decisions. The applicants through the various affidavits they filed shift the blame to a number of factors which are to do with the inefficiencies and internal conflicts experienced in the office of the Solicitor General which prevented them from attending to their duties diligently. I find the explanation offered by those who seek to explain away the fault to be unreasonable and unsatisfactory. Lawyers employed in the private sector and public sector alike owe the same duty of care to their clients to serve with due diligence.

Satisfactory explanation for delay in bring application for leave for review

18. There is a delay by 4-5 years in bringing this application. The same explanation is offered. The explanations are unreasonable and unsatisfactory.

Exceptional circumstances showing manifestation of substantial injustice; or serious legal or factual issues that raise important and an arguable case for a full review of the decision:

19. I have perused the material before me and the arguments of counsel supporting their respective cases. There are several important and material aspects of the decisions of the Court that demonstrate errors occurred and those errors are borne out on the face of the record. They do raise serious legal and factual issues that are material to the outcome of the cases before the Court below. Those include the following:

(a) With regard to the decision of 7 June 2007, leave was granted on what seems to be an assumption that the recommendation for a State Lease granted to the respondent was current, when the five year term of the recommended lease had already expired some 13 years ago. Section 84 of the Land Act the term of the lease takes effect from the date that the term of the lease commenced on the date of gazettal in the National Gazzette of the grant by the Land Board. In this case the Land Board's decision to grant the lease was gazzetted on 15 February 1989 and the leave to apply for judicial review was granted on 7 June 2007, some 13 years after the term had expired.

(b) Further, there is no record of the decision of Lay J to show he exercised his discretion on the question of undue delay in bringing an application for leave 18 years after the grant of the lease by the Land Board. The argument by counsel for the respondent is that the application came before an experienced judge and he would have considered the delay to have been satisfactory should be supported by the court records. Those court records are not before me. The merits of that argument can be raised or resurrected before the full Court on review and determined by that Court when the court's record of proceedings are placed before the Court.

(c) With regard to the decision of 27 June 2008, the grant of mandamus is premised upon the decision of the land board. By virtue of s 84 of the Land Act, the term of the grant of lease had expired. The title issued in compliance with the order of mandamus covered the same term as the term contained in the original grant. Whether Court order intended a State Lease for that term remains a serious issue. The validity of the State Lease issued by reason of expiry of the term of the lease is also a serious issue. I understand the strength in the argument of counsel for the respondent that proper procedures should be followed in challenging registered State Lease title. It is an equally strong argument that can be raised in the substantive review.

(d) With regard to the decision of 27 November 2008, a major component of the award was with regard to economic loss. The award of damages based on a piece of land that the respondent spend little money on to produce scoping work appears to be exorbitant and therefore an erroneous exercise of discretion on quantum. The award also appears to have lacked adequate supporting particulars of loss and relevant and material evidence.

20. I am satisfied that the foregoing matters do constitute exceptional circumstances that tend to show substantial injustice and thereby raise an arguable case on review.

Interests of justice

21. A consideration that relates to the interest of justice is the application of the doctrine of res judicata to the case at hand. Counsel for the respondent raised an argument on the application of the doctrine of res judicata. The review process under s 155(2)(b) of the Constitution appears to displace the application of the principle. But the argument can be raised before the full Court for its determination.

22. Given the seriousness of the issues raised, the interest of justice demands that the three decisions of the National Court referred to be reviewed on their merits.

Conclusion

23. Notwithstanding the default in failing to appeal the three decisions and the unsatisfactory and unreasonable delay in bringing this application, the seriousness of the issues raised, the exceptional nature showing manifest injustice on the face of the record warrants a full review of the three decisions.

24. For the foregoing reasons, I grant orders in the following terms:

(1) The applicants are granted leave to apply for judicial review of the National Court decisions on 7 June 2008, 27 June 2008 and 27 November 2008.

(2) Cost of the applications shall be in the cause of the substantive application for review.

_________________________________________
Manase & Co Lawyers: Lawyers for the Applicants
Solicitor-General: Lawyers for the Respondent