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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA No. 89 of 2014
BETWEEN:
IRABMILE INVESTMENTS LIMITED TRADING AS WESTERN FUEL DISTRIBUTION, EASTERN FUEL DISTRIBUTION & BOKI SERVICE STATION LIMITED
Appellant
AND:
MOBIL OIL NEW GUINEA LIMITED
Respondent
Waigani: Kirriwom, Collier and Ipang JJ
2015: 2nd & 3rd July
CIVIL PRACTICE AND PROCEDURE – Appeal from National Court – Whether Judge erred in his discretion to dismiss the cause of action for want of prosecution without having regard to the relevant facts – Whether decision of Judge unreasonable – Appeal dismissed.
Facts
This is an appeal against the trial judge's decision dismissing the Appellant's case for want of prosecution. The appellant contended
that trial judge erred in dismissing the proceeding when the matter was ready for trial, as such his decision was unreasonable, harsh
and oppressive in the circumstances. Respondent contended that the alleged verbal agreement between the parties was made over 11
years ago and delay in the matter reaching hearing had prejudiced the respondent whose witnesses had long left the country and could
not be located thus rendering fair trial impossible. Appellant did not rebut this argument.
Held:
The appeal is dismissed with costs
Full facts are in the judgment.
Cases Cited:
Papua New Guinea Cases
PNG Nambawan Trophy Ltd v Dynasty Holdings Ltd [2005] SC811,
In re Application by Sakaire Ambo [2012] SC1195 at [5]
Curtain Bros (PNG) Limited v University of Papua New Guinea [2005] SC788
Ombudsman Commission v Peter Yama (2004) SC747
Overseas authorities cited
Australia Coal and Shale Employees' Union v The Commonwealth [1953] HCA 25; (1956) 94 CLR 621
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223.
Minister for Immigration and Citizenship v Li [2013] HCA 18, (2013) 297 ALR 225
Counsel:
Mr GJ Sheppard with Mr W Mininga, for the Appellant
Mr I Shepherd, for the Respondent
3rd July, 2015
1. BY THE COURT: Before the Court is an Appeal against the whole of the judgment of a Judge of the National Court delivered on 3 June 2014 in proceedings WS No. 560 of 2003.
2. In the National Court, Irabmile Investments Limited trading as Western Fuel Distribution, Eastern Fuel Distribution & Boki Service Station Limited (Irabmile) (the appellant in this case) commenced proceedings against Mobil Oil New Guinea (Mobil) (the respondent in this case) for damages for breach of contract.
3. On 3 June 2014, the National Court dismissed Irabmile's claim for want of prosecution, in the terms of the orders sought by Mobil in its Notice of Motion filed 22 April 2014. Irabmile claims that the National Court fell into error in the exercise of judicial discretion in dismissing Irabmile's claim in the National Court in two respects:
4. It is useful to set out the background to the current proceedings before turning to consideration of the grounds raised in the appeal.
Background
5. The claims of Irabmile in the National Court were based on an allegation that, by way of oral agreement made in or about August 2000 between agents for and on behalf of Irabmile and Mobil, Mobil appointed Irabmile its sole distributor of Mobil oil and petroleum products in the Highlands Region of Papua New Guinea. Mobil also allegedly appointed Irabmile to be licensee of Mobil bulk fuel depots and service stations at Mount Hagen and Goroka.
6. Irabmile claimed that, pursuant to that oral agreement, it was contracted to:
(a) occupy, operate and manage Mobil's bulk depots and service stations at Mount Hagen and Goroka; and
(b) distribute and promote the sale of Mobil oil and petroleum products to all business institutions and customers throughout the Highlands region.
7. The case of Irabmile is that Mobil was contracted to supply and deliver all oil and petroleum products to the bulk depots required and necessary for the distributorship, at prices agreed by and between the parties from time to time. The initial term of the agreement for distributorship was allegedly three years from 1 September 2000 (when the appellant commenced operations) until 31 August 2003.
8. However, Irabmile claimed that in or about February 2003 Mobil:
9. On 7th July 2003, Irabmile filed an action in the National Court (WS No.560 of 2003) for damages for breach of contract. Irabmile claimed that the actions of Mobil were in breach of the express or otherwise implied terms of the agreement, in that the agreement:
(a) did not continue in force up to and including 31st August 2003;
(b) was not properly terminated
(c) did not afford the appellant sufficiently adequate and/or proper notice of the respondents intention or actions to terminate the agreement and
(d) was not otherwise renewed after 31st August 2003 despite the profitability of the agreement.
10. Irabmile issued a writ of summons on 7 May 2003, Mobil filed a defence and cross claim on 28 May 2004, and Irabmile filed a reply and defence to cross claim on 16 August 2004.
11. Subsequently however, on any objective standard it is fair to say that the proceedings progressed very slowly. Indeed between 2004 and 2009 there appeared to be absolutely no activity on this matter in the National Court.
12. Irabmile amended its statement of claim on 6 April 2009 and Mobil filed an amended defence on 29 May 2009. On 12 October 2011 the parties agreed to mediation orders and attended mediation on 5 September 2011, however they were unable to reach agreement.
13. It appears that nothing further happened until 22 January 2013 when the lawyers for Mobil wrote to the lawyers for Irabmile in the following terms:
"It would appear from a review of this file that it is now almost 12 months since your client rejected our client's "without prejudice" offer of settlement that, in fact, the Plaintiff has taken no steps to progress its claim since attending an unsuccessful mediation on 6 December 2011.
As these proceedings commenced almost 10 years ago, we give notice that unless the Plaintiff takes immediate steps to progress the matter to trial, then we have instructions to make application to dismiss the proceedings for want of prosecution".
14. The lawyers for Irabmile replied by letter on 29 January 2013 stating that Irabmile was "keen to proceed with this matter", and enclosing a sealed pleadings book which was apparently filed on 28 January 2012 (but not previously served).
15. The matter was listed for directions on 8th August 2013 at which time the parties signed draft consent directions in the following terms:
16. No further affidavits were filed by Mobil pursuant to the Order.
17. At the directions hearing of 5 September 2013 there was no appearance by either party.
18. On 22 April 2014, Mobil filed a Notice of Motion seeking orders that the proceedings be dismissed for want of prosecution pursuant to Order 4 Rule 36 and/or Order 10 Rule 5 of the National Court Rules.
19. The lawyers for Irabmile wrote a letter to the respondent on 6 May 2014. Irabmile contends that there was no response to that letter. Instead, Mobil proceeded to move its application for the substantive proceedings to be dismissed for want of prosecution.
Decision of Trial Judge
20. We understand that the parties appeared before his Honour below to argue Mobil's application for dismissal for want of prosecution at some time between 22 April 2014 (when the notice of motion was filed) and 3 June 2014 (when the trial Judge gave his ruling). Unfortunately there is no material before us in the form of evidence, submissions or transcript to assist this Court in respect of the manner in which the respective cases of the parties were put to his Honour.
21. The only transcript before the Court is that of 3 June 2014 when his Honour gave judgment in respect of Mobil's notice of motion for dismissal. It is helpful to set out the ruling in its entirety, as it is relatively short, and Irabmile seeks to point to errors of his Honour in the ruling.
HIS HONOUR: There are no appearances for the ruling but I hand the ruling down in absentia of the parties.
The defendant, Mobil Oil New Guinea Limited, has applied under order 4 rule 36 and order 10 rule 5 of the National Court Rules for the proceedings to be dismissed for want of prosecution.
The plaintiff, Irabmile Investment Limited, filed this action on7 May 2003. The claim arises from an oral agreement entered into between the parties in August 2000. Pleadings did not close until 2009 for various reasons including amendment to the statement of claim on 6 April 2009. In late 2011, parties agreed and attended to mediation but this process for settlement failed. In January 2013, the defendant's lawyers threatened an application to dismiss the proceedings for want of prosecution but did not pursue this upon being assured by the plaintiff's lawyers that they were seeking to have the matter listed for directions.
The matter was referred to the Registrar for summary determination and came before me on 3 July 2013 but upon appearance of counsel for the plaintiff and hearing submissions, it was removed from the summary determination list. It was then listed for directions on 8 August 2013. The parties signed draft consent directions for endorsement by the court. Subsequently these main directional orders were issued by the court.
(1) The defendant/cross claimant shall file and serve any further affidavits in response to the plaintiff's affidavits by or before 30 August 2013. And (2) proceedings are adjourned to 5 September 2013 for directions and for a trial date to be obtained.
There were no appearances by the parties on 5 September 2013, returnable date, and there was no further activity until the present notice of motion was filed by the defendant on 22 April 2014. Sorry, just a correction, the date in the second order should read 5 September 2013.
And then I will read again, there were no appearances by the parties on 5 September 2013 and there was no further activity until the present notice of motion was filed for the defendant on 22 April 2014.
In response to this, the plaintiff's lawyers advised the defendant's lawyers by a letter dated 6 May 2014 that they have been waiting for the defendant's affidavits pursuant direction order 1 of 8 August 2013 and that the matter was otherwise ready for a trial date to be allocated.
In opposing the application in court, Mr Griffin for the plaintiff again submitted the same matters essentially blaming the defendant for the delay in progressing this case by not filing affidavits as directed by the court. There are many case authorities that emphasise – sorry, that explain the relevant principles concerning applications for dismissal for want of prosecution including the cases of Markscal Limited and Robert Needham v Mineral Resources Development Company Limited, Masket Iangalio, Gerea Aaopi and Charles Lepani [1999] numbered judgment N1807 and PNG Nambawan Trophy v Dynasty Holding Limited [2005] numbered judgment SC811, cited by Mr Shepherd for the defendant.
A clear statement regarding the principles was made by Justice Sevua in the Markscal Limited case where his Honour said and I quote: "In my view a plaintiff who institutes a lawsuit has an obligation to prosecute it without unnecessary delay. He has a duty to comply with the rule of the court to ensure the prosecution of the suit reaches finality without inordinate delay and without causing prejudice to the defendant. A party cannot just ignore court process. If he does, he does so at his peril."
The onus on prosecuting this claim is therefore on the plaintiff. The fact that the defendant did not file any affidavits in the time allowed by the court was no reason why the plaintiff could not take any further steps to progress its claim. The relevant directional order was discretionary. The delay since August 2013 is inordinate and I do not consider the explanation for the delay offered by the plaintiff as reasonable. It is noted also that the proceeding is nearly 11 years old and mediation concluded in 2011. I am also satisfied that the delay has prejudiced the defendant in that its relevant officers then in office when the agreement in dispute arose have long since left the country. I allow the defendant's application and grant the orders in terms of the notice of motion filed 22 April 2014.
I note Mr Griffin is here. He would have heard the concluding part of my ruling.
MR GRIFFIN: Yes, your Honour.
HIS HONOUR: Associate, adjourn the court.
Appeal to the Supreme Court
22. The notice of appeal of 10 July 2014 contains the following grounds:
were reasonable explanations to warrant the proceeding not to be dismissed.
(Errors in original)
23. The appellant seeks the following orders:
Submissions of the parties
24. Both parties have filed detailed submissions in this appeal.
25. In summary, Irabmile submitted as follows:
The explanation by the Appellant's then counsel that he was appearing in a contested matter in the Supreme Court and could not attend at the return date which was on 5 September 2013.
26. We also note that Irabmile does not dispute the finding of his Honour below that the delays in progressing this litigation prejudices Mobil because Mobil's witnesses have long since left Papua New Guinea. Similarly, Irabmile does not complain about the conduct of Mobil's lawyers in this matter.
27. Mobil's case in this appeal can be summarised as:
Consideration
28. It is common ground that the source of his Honour's power to dismiss the substantive proceedings for want of prosecution was Order 10 rule 5 of the National Court Rules which provides:
Want of prosecution
Where a plaintiff does not, within six weeks after the pleadings are closed, set the proceedings down for trial, the Court, on motion by any other party, may, on terms, dismiss the proceeding or make such other order as the Court thinks fit.
29. Further, it is clear that the power of the National Court to dismiss proceedings for want of prosecution is an exercise of discretion, which exercise must be based on proper principles of law: PNG Nambawan Trophy Ltd v Dynasty Holdings Ltd [2005] SC811, In re Application by Sakaire Ambo [2012] SC1195 at [5].
30. In PNG Nambawan the Supreme Court distilled propositions relevant to the exercise of the Court's discretion to dismiss an appeal for want of prosecution. Whilst their Honours in that case were considering such an application in the context of an appeal, the principles are applicable mutatis mutantis to applications in the National Court for dismissal for want of prosecution. Relevantly their Honours observed as follows:
An appeal might be struck out if it is not set down as required by the rules.
(1) Where an appeal has not been set down as prescribed the power to dismiss for want of prosecution remains discretionary.
(2) The discretion is to be exercised having regard to all the circumstances of the case including, inter alia,
- The length of and reasons for delay on the appellant's part;
- The extent to which, having regard to any delay, evidence likely to be adduced may lose its cogency;
- The availability of a transcript, and
- Any negotiations between the parties.
(3) Matters relevant to the want of due diligence include failure to promptly serve the Notice of Appeal, failure to attend on settlement of the appeal book, failure to explain non attendance, failure to respond to correspondence and failure to provide any explanation for dilatory conduct where an explanation could properly be expected. The absence of explanation is fatal to a respondent to an application for dismissal where an explanation could quite properly be expected.
(4) The discretionary powers under O7 r53(a) should not be exercised in favour of the respondent where no explanation for want of due diligence is made. That a lawyer cannot be present because he is appearing before another judge may be an adequate explanation. 7 months delay in applying for the transcript of evidence to be prepared requires a proper explanation and the absence of one may result in the appeal being dismissed.
The Court must consider the whole of the circumstances in which an application for dismissal on the grounds on want of prosecution is brought, in particular events that have taken place since the application was filed. The application to dismiss itself should be prosecuted with due diligence. Where an appellant has not done what the Rules require in the time required, but has made good its omissions before the application to dismiss is heard, the application may not be successful.
...
The general rules that the power of the Court to dismiss an action for want of prosecution should be exercised only where (a) the plaintiff's default had been intentional and contumelious or (b) where there had been inordinate and inexcusable delay on his or his lawyer's part giving rise to a substantial risk that a fair trial would not be possible or to serious prejudice to the defendant, apply principally before a trial. Once a judgment has been obtained public interest requires finality to the litigation. The risk to a fair trial is only relevant where evidence is to be called (footnotes in original omitted).
31. Principles relevant to the disturbance of a first instance discretionary judgment by an appellate Court in this country are well-settled. Mr Sheppard for Irabmile relied on the comments of the Supreme Court in Curtain Bros (PNG) Limited v University of Papua New Guinea [2005] SC788 where their Honours observed as follows:
A discretionary judgment may be set aside if an identifiable error occurred in the exercise of discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is "unreasonable or plainly unjust" and such that an error can be inferred.
32. In this context, we note that the Supreme Court also cited comments of Kitto J in Australia Coal and Shale Employees' Union v The Commonwealth [1953] HCA 25; (1956) 94 CLR 621 at 627 where his Honour noted:
... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decisions appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.
33. Applying all of these principles to the circumstances of this case it is plain that the grounds of appeal against the decision of his Honour below cannot be sustained.
34. At the hearing of this appeal Counsel for Irabmile submitted that an explanation for the absence of the lawyers for Irabmile at the directions hearing of 5 September 2013 had been provided to his Honour, but that his Honour had not taken that explanation into account. In this respect Counsel directed the Court's attention to the affidavit of Mr Francis Griffin sworn 20 May 2014. There are, however, a number of very serious flaws in respect of both this submission and this evidence.
35. The first flaw is that there is no evidence before us to demonstrate that this affidavit was actually admitted into evidence or even drawn to the attention of the learned trial judge. As we noted earlier in this judgment, no copy of the transcript of the hearing before his Honour in which the parties argued their respective cases was provided to this Court. We note that experienced lawyers were acting for both parties in the appeal to this Court. It is surprising to that extent that such a key aspect of the appellant's argument in this appeal, namely that his Honour disregarded the very important evidence of Mr Griffin, is not supported by anything other than the bare fact that the affidavit was apparently filed on 21 May 2014. Merely filing an affidavit does not mean that that evidence was admitted at a hearing.
36. Furthermore, even if the affidavit had been brought to his Honour's attention, it is interesting to speculate on the manner in which it would have actually assisted his Honour. The body of the affidavit reads as follows:
(1) Except where stated to be on information and belief, I have personal knowledge of the facts deposed to in this affidavit, and where so stated I believe such facts to be true.
(2) I am an associate to the firm Young & Williams Lawyers, lawyers for the plaintiff in these proceedings and am authorized to depose this affidavit.
(3) Annexed and marked "FG.1" is a true copy of Court Order made on 8 August 2013 and filed 12 August 2013.
(4) The sealed Order of 8 August 2013 was served on the Defendant's Lawyers on 14 August 2013 at or about 4:20pm. Annexed hereto and marked "FG.2" is a true copy of the Affidavit of Service of Vagi Jack sworn 1 May 2014 and filed 2 May 2014.
(5) Since serving the Order of 8 August 2013, the Defendant has not complied with the Order to serve its affidavits. The Defendant has not informed the Plaintiff, until serving its application for dismissal, of its reasons for non-compliance.
(6) The Plaintiff is ready to obtain a trial date, and was ready to obtain a trial date when the proceedings returned on 5 September 2013.
(7) On 6 May 2014, Young & Williams Lawyers caused a letter to the Defendant's Lawyers, Annexed hereto and marked "FG.3" is a true copy of the said letter of 6 May 2014, the contents of which I verify to be true and correct.
37. Prima facie, none of this evidence is relevant to the absence of Irabmile's lawyers from the directions hearing of 5 September 2013. Turning however to the annexures to this affidavit and in particular annexure FG.3, we note that this document was a letter prepared on Young & Williams letterhead, signed "Yours faithfully, YOUNG & WILLIAMS LAWYERS" followed by an unintelligible signature and the words "for G.J. Sheppard". In this letter we note the paragraph:
We further note that on 5 September 2013, there was no appearance by any parties before the Honourable Court. The writer was not able to appear before the Honourable Court on that date due to his attendance before the Supreme Court (the Honourable Chief Justice) in a contested part heard matter.
38. This material, read together, raises the following questions which are not answered by the material before us, and may not have been addressed before his Honour, namely:
39. It is possible that, had the transcript of the proceedings before his Honour been produced to this Court, these questions could have been answered. It was not produced, and accordingly these questions cannot be answered. As it is, unless his Honour was specifically taken to the particular annexure of Mr Griffin's affidavit, on the face of that affidavit there is no reason for his Honour to have thought that the affidavit explained the absence of a lawyer from Young & Williams representing Irabmile at the directions hearing of 5 September 2013. In the circumstances we are not satisfied that a reasonable explanation for that absence was provided to his Honour at the hearing of the matter below.
40. In any event, in our view there are additional very strong reasons to uphold his Honour's judgment in this matter and to find that his Honour committed no error. Even if his Honour had been informed that Irabmile's lawyer was unavailable to attend the directions hearing of 5 September 2013 and the alleged reasons for that absence, this information neither explains nor excuses the many serious delays attending the prosecution of the proceedings by Irabmile. So:
41. All that we have outlined can be viewed through the prism of significant delays and unexplained inaction on the part of Irabmile, which clearly influenced his Honour's view of the circumstances of these proceedings.
42. Significantly we note that Irabmile does not dispute his Honour's findings that Mobil was seriously prejudiced by the delays in respect of this litigation. Indeed critically – the foundation of these proceedings was the claim by Irabmile that Mobil had breached oral contracts. It is reasonable to infer that the evidence of witnesses as to the existence, terms or otherwise of those oral contracts was critical to Mobil's case. The absence or unavailability of witnesses as a result of long delays on the part of Irabmile in prosecuting this litigation, would inevitably cause not only serious, but very serious prejudice to Mobil. We cannot fault his Honour's findings in this respect, or that this is a major issue in the balancing exercise of his Honour's discretion in this matter.
43. Finally, we note Mr Sheppard's submission that the decision of his Honour was "unreasonable or plainly unjust", relying on comments of the Supreme Court in Curtain Bros (PNG) Limited. The word "reasonable" is usually referred to in the context of "Wednesbury unreasonableness", a reference to the decision in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223. The formulation of the principle that a decision is "unreasonable" where it "is so absurd that no sensible person could dream that it lay within the power of the authority" was adopted by the Supreme Court of Papua New Guinea in Ombudsman Commission v Peter Yama (2004) SC747.
44. In recent years legal concepts of unreasonableness have received additional attention at high level in other jurisdictions. In Minister for Immigration and Citizenship v Li [2013] HCA 18, (2013) 297 ALR 225 French CJ approached the concept of unreasonableness in the following manner:
30. The requirement of reasonableness is not a vehicle for challenging a decision on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgment with which a court disagrees even though that judgment is rationally open to the decision-maker. Gleeson CJ and McHugh J made the point in Eshetu that the characterization of somebody's reasoning as illogical or unreasonable, as an emphatic way of expressing disagreement with it, "may have no particular legal consequence"(Footnotes in original omitted).
45. That his Honour in the National Court in these proceedings did not accept the submissions of Irabmile that there were reasonable explanations for delays in prosecuting the proceedings, and that a decision to dismiss the proceedings would be harsh and oppressive to Irabmile, does not, of itself, mean that his Honour acted "unreasonably". In no way can it be said that the decision before his Honour below was not open to him to make, or was such a decision that no reasonable person could make it. On the contrary, there was ample material before his Honour to justify the decision and orders the subject of this appeal.
Conclusion
46. We are satisfied that no error attended the decision of his Honour below. The appeal should be dismissed. Further, we see no reason that costs should not follow the event, to be taxed if not otherwise agreed.
47. The Court orders that:
Young & William Lawyers: Lawyer for the Appellant
Ashurst Lawyers: Lawyer for the Respondent
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