Wahune v Barton [2017] PGSC 40; SC1636 (10 November 2017)

SC1636

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 71 OF 2016

BETWEEN
NELSON WAHUNE
First Appellant

AND
KAREANA ESTATES PTY LTD
Second Appellant

AND
FAITH BARTON,
in her capacity as the Acting Solicitor-General of Papua New Guinea
First Respondent

AND
DR. KEN NGANGAN,
in his capacity as the Secretary for Finance
Second Respondent

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent

Waigani: Kandakasi, Makail & Lindsay JJ
2017: 2^nd & 10^th November

SUPREME COURT – Appeal against dismissal of proceedings – Proceedings held as failing to disclose reasonable cause of action – Identification of cause of action – Pleading of cause of action – Lack of pleadings – Lack of particulars – Cause of action vague – Mode of proceedings – Originating summons – Claim for damages– National Court Rules – Order 4, rules 1, 2 & 3 & Order 8, rule 32

Cases cited:

Patterson Lowa v. Akipe [1992] PNGLR 399
Kerry Lerro v Phillip Stagg & Ors (2006) N3050
Philip Takori & Ors v. The State & Ors (2008) SC905
Mt Hagen Urban Local Level Government v Sek No. 15 Ltd (2009) SC1007
Fly River Provincial Government v. Pioneer Health Services Ltd (2003) SC705

Counsel:

Mr. D. Kop, for Appellants
Mr. H. Monei, for Respondents

JUDGMENT

10^th November, 2017

1. BY THE COURT: This is an appeal against dismissal of proceedings by the National Court for failing to disclose a reasonable cause of action.

Background Facts

2. The proceedings arose from an alleged destruction of property by members of the self-style Bougainville Revolutionary Army (BRA) during the Bougainville crisis on the then North Solomon Province. The property was owned by the second appellant of whom the first appellant is the sole director.

3. Prior to these proceedings, the appellants had commenced proceedings WS No. 713 of 2003 against the State seeking damages for loss of property, economic loss and breach of human rights in the total sum of K5 million.

4. Those proceedings were allegedly settled by the third respondent in the sum of K4 million and a sum of K2 million was paid to the appellants on 24^th May 2004 after the then Attorney-General Mr. Francis Damem wrote to the then Secretary for Finance, Mr. Thaddeus Kambanei requesting payment to the appellants.

5. The dispute arose when the balance in the sum of K2 million was withheld when the whole claim became a subject of investigation and direction (stop payment) by the Ombudsman Commission. The first appellant and Mr. Damem were arrested and charged. The first appellant was charged with false pretence and misappropriation while the latter was charged with abuse of office. Both were subsequently discharged after the prosecution filed a nollie prosequi.

6. On 15^th June 2010, the direction by the Ombudsman Commission was lifted and the appellants pursued the payment of the balance with the new Attorney-General and also the Solicitor-General. On 18^th May 2012 the new Attorney-General Dr. Allan Marat purportedly directed the Solicitor-General to pay the balance to the appellants. The purported direction was by way of a footnote made on a letter from the appellants to him dated 12^th April 2012.

7. Nothing further was heard from the respondents in particular, the first respondent and proceedings were commenced in the National Court to recover the balance.

Proceedings in the National Court

8. By an originating summons filed on 6^th August 2015 the appellants sought the following orders:

“1. An order in the nature of declaration pursuant to s. 155(4) of the Constitution that Cheque No. 788313 dated 26 August 2004 for the sum of K2 million is the property of the plaintiffs.

2. A declaration pursuant to s. 155(4) of the Constitution that the delay by the first and second defendants in facilitating the replacement or reissuance of the said cheque to the plaintiffs is unreasonable.
   
3. An order in the nature of a declaration pursuant to s. 155(4) of the Constitution that the letter by late Francis Damem then Attorney General dated 3^rd July 2003 and the endorsement by way of footnote dated 18 May 2012 by Dr. Allan Marat [the successor Attorney-General to Francis Damem] on a letter to him while he was the Minister for Justice and Attorney General dated 12 April 2012 constitute and remain current as sufficient legal clearance for payment of the balance of the claim
   
4. An order pursuant to s. 13(2) of the Attorney-General Act 1989 and on the basis of Dr. Marat’s footnote dated 18 May 2012 issued in his capacity as the Attorney General at the material time, the first defendant write and advise the second defendant to reissue or draw a similar cheque in the sum of K2 million payable to Nelson Wahune C/Daniel Kop Lawyers “Trust” Account PO Box 4079 Boroko, NCD from moneys legally available.
   
5. In the alternative, this court pursuant to its inherent jurisdiction under s. 155(4) of the Constitution and all other powers it may make orders appropriate or issue direction/s in the circumstance of this case to with a view to dispose the matter promptly and cheaply.
   
6. Costs of the proceedings be met by the defendants.
   
7. Such further or other Order (s).”
   

National Court’s Decision

9. The trial judge held that the proceedings failed to disclose a reasonable cause of action and dismissed it. He came to this conclusion because the cause of action was vague and difficult to identify. He posed the same question as this Court did to counsel for the appellants during submissions as to the cause of action. Is it breach of contract or breach of a statutory duty?

10. Further, he held that if it was based on breach of statutory duty under Section 13 of the Attorney-General Act, 1989, the obligation to act on the instructions of the Attorney-General is not a duty owed by the Solicitor-General to the appellants or any claimants. Such a proposition is frivolous and untenable.

Cause of Action

11. Inevitably, civil proceedings are driven by pleadings and identification of a cause of action known to law is pivotal to their survival beyond the pleadings stage. The phrase ‘cause of action’ has two components. First, there must be a right given by law. This is what is referred to as the ‘form of action’. Secondly, the pleadings must disclose all the necessary facts which give rise to the form of action: Patterson Lowa v. Akipe [1992] PNGLR 399.

12. These principles have been adopted and applied in many subsequent cases including Kerry Lerro v Phillip Stagg & Ors (2006) N3050, Philip Takori & Ors v. The State & Ors (2008) SC905 and Mt Hagen Urban Local Level Government v Sek No. 15 Ltd (2009) SC1007.

13. Counsel for the appellants was unable to confirm if the cause of action was breach of contract or breach of a statutory duty but submitted that it was negligence. For this reason alone, it was quite obvious to us that the cause of action was vague.

Pleading of a Cause of Action

14. Similarly, pleading of a cause of action is pivotal to the survival of civil proceedings. A plaintiff is required by the rules of the Court to plead in clear and concise terms all the facts necessary to establish the elements or legal ingredients of a cause of action.

15. If the appellants are alleging breach of contract, they must plead all the necessary facts giving rise to firstly, the formation of a contract, that is who entered into the contract, the terms of the contract, secondly, its breach and finally, relief sought, be it damages or specific performance. In this case the appellants have failed to plead the relevant facts giving rise to a cause of action for breach of contract in the originating summons.

16. If it is breach of a statutory duty, they must plead the alleged duty imposed by statute, duty imposed on the party, its breach and relief sought. It is also necessary to plead with clarity the relief sought whether it is damages or a mandatory or prohibitory injunction. Additionally, Order 8, rule 32 of the National Court Rules requires particulars of breach to be pleaded. In this case, the appellants have failed to plead the relevant facts giving rise to a cause of action for breach of statutory duty in the originating summons.

17. In our view, the appellants gave no opportunity to the trial judge to appreciate what they were alleging to be the cause of action upon which the relief sought by them can be granted. And it is erroneous to expect the trial judge or any Court for that matter to ascertain the cause of action for them.

18. What the appellants did in the National Court was repeated before us and because there was total lack of or if not, vague pleadings, we were led by their counsel to believe that the cause of action was one of common law tort of negligence.

19. That purported cause of action also suffers from the same defect. It lacked all the necessary facts establishing a duty of care, its breach, particulars of breach and relief sought: Order 8, rule 32 of the National Court Rules. We should add that, if the appellants are relying on evidence of the first appellant to identify the cause of action, it is permissible if the facts are not in substantial dispute, which is the next consideration.

20. The trial judge’s difficulty was compounded by the appellants’ choice of mode of proceedings. They had two options, to commence proceedings by originating summons or writ of summons endorsed with a statement of claim: Order 4, rules 1, 2 and 3 of the National Court Rules.

21. According to Order 4, rule 3 (2) (a) and (b) of the National Court Rules, proceedings may be commenced by originating summons where the sole or principal question at issue is, or is likely to be, one of the construction of an Act or of any instrument made under an Act, or of any deed, will, contract or other document, or some other question of law or there is unlikely to be a substantial dispute of fact.

22. From the material before us, it is clear that facts are substantially in dispute. For instance, there is a serious contest in relation to whether the respondents agreed to settle the claim, and secondly, whether there was a deed of settlement. If there was an agreement, the next question is whether the then Attorney-General, Mr. Damem was authorised to negotiate and reach an agreement with the appellants.

23. The financial limit of the Attorney-General is also a relevant consideration. Any settlement of a claim must be within the financial limit of the Attorney-General. Any claim over and above it, must be approved by the relevant authority, for instance, the National Executive Council (NEC). As the purported settlement was with the State, statutory approvals under the Public Finances (Management) Act, 1995 come to the fore: Fly River Provincial Government v. Pioneer Health Services Ltd (2003) SC705.

24. A statement of claim endorsed to a writ of summons which pleads all the necessary facts or the elements of a cause of action would have been the most appropriate mode of proceedings to commence by the appellants. Instead, the appellants chose to go by originating summons. They sought at paras. 1 to 3, declaratory orders; at para. 4, an order which is quite vague but appears to be a mandatory injunction to secure compliance by the respondents.

25. In the alternative, at para. 5, they sought directions in relation to how the K2 million dispute could be, settled. This relief reinforces our view that the choice of mode of proceedings by the appellants was poor. It does not advance their case beyond the pleadings stage and it was open to the trial judge to dismiss the proceedings for lack of pleadings, and inappropriate mode of proceedings and abuse of process.

Breach of Statutory Duty

26. However, it appears he gave the appellants the benefit of doubt and proceeded to determine the merits of the claim. The appellants alleged that the first respondent failed to comply with the direction from the Attorney-General to facilitate or arrange for a replacement cheque to be processed by the Department of Finance which would finally settle the claim. The failure was a breach of duty imposed on the first respondent by Section 13(2) of the Attorney-General Act, 1989. They contended that, that duty was to accept instructions from the Attorney-General in matters coming before the Courts in Papua New Guinea, one of which was their case and to settle it.

27. The trial judge took a view that the cause of action was one of breach of statutory duty but held that the duty did not extend to third parties such as the appellants to claim a right to be protected and dismissed the proceedings.

28. It is quite clear that the appellants assumed that Section 13 of the Attorney-General Act, 1989 imposed a duty on the first respondent. The purported duty is that the first respondent was to comply with the directions of the Attorney-General and settle the claim.

29. Section 13 states:

“13. Function of Solicitor-General.

(1) The primary function of the Solicitor-General is to appear as an advocate for the State in matters coming before the courts in Papua New Guinea.

(2) In the exercise of his function under Subsection (1), the Solicitor-General shall accept instructions only from the Attorney-General.”

30. In our view, Section 13 (2) is merely directory and not obligatory. It does not create nor impose a duty on the Solicitor-General to comply with the directions of the Attorney-General to settle the claim per se. On the contrary, it is a statement of the working relationship between the Attorney-General and the Solicitor-General in the performance of the latter’s functions, the primary one being to appear as an advocate for the State in matters coming before the Courts in Papua New Guinea.

31. As an advocate for the State, the Solicitor-General is conferred the discretion to decide which cases coming before the Courts should be defended or settled. The discretion is exercised sparingly after careful consideration of the evidence, facts and applicable law in any given case. Other than legal reasons, no cases should be settled and if the Solicitor-General forms a view that the case be settled, it must be communicated to the Attorney-General for further instructions/directions.

32. We do not believe that Section 13 (2) envisage a situation where the Attorney-General can direct the Solicitor-General to settle a claim without first consulting the Solicitor-General. By the same token, for transparency and good governance reasons, the Attorney-General is kept informed by the Solicitor-General of cases prior to settlement and may give appropriate instructions/directions. The exercise undertaken by the Solicitor-General is to avoid settlement of claims that may have no merits or for ulterior motives, for instance, political reasons.

33. Where the Solicitor-General fails to comply with the direction, it will be a matter for the Attorney-General to deal with administratively. The trial judge was correct to refer to it as an “internal administrative matter” for the Attorney-General to determine. No such duty can be ascribed to third parties, such as the appellants to claim a right to be protected by law.

34. The appellants further argued that the trial judge failed to find on the evidence before him that the first respondent failed to comply with the direction of the Attorney-General to facilitate the payment of K2 million. The evidence of that came from the footnote on the letter from the appellants to the Attorney-General dated 12^th April 2012.

35. This argument must fail because the direction was to the first respondent. The appellants were not copied this direction, hence not privy to it. They have not explained how they came into possession of this information. Even, their counsel had no explanation for it. It reinforces our view that the duty imposed by Section 13 cannot be extended to the appellants.

36. For these reasons, we find no error in the trial judge’s reasons and conclusion. We dismiss the appeal with costs.

Order

37. The orders of the Court are:

1. The appeal is dismissed.

2. The appellants shall pay the costs of the appeal, to be taxed, if not agreed.

________________________________________________________________
Daniel Kop Lawyers: Lawyers for Appellants
Solicitor-General: Lawyers for Respondents