Foe Landowners Association Inc. v Yafereka Incorporated Land Group [2018] PGSC 21; SC1679 (6 June 2018)

SC1679

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 11 OF 2018

BETWEEN
FOE LANDOWNERS ASSOCIATION INC.
Appellant

AND
YAFEREKA INCORPORATED LAND GROUP
Respondent

Waigani: Dingake J
2018: 11^th, 19^th April

SUPREME COURT – Application for leave to appeal an Interlocutory Judgment – whether Applicant has met the requirements – no patent error shown in the manner in which the trial judge exercised his discretion – Application dismissed with costs.

Cases Cited:
Papua New Guinea Cases

Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853
Mc Hardy v Prosec Security and Communications Ltd [2000] PNGLR 279
Michael Walapali v Lipe Parindali (2007) N3172
Sir Julius Chan v Ombudsman Commission of PNG [1999] PNGLR, 240

Overseas Cases

House v The Queen [1036] HCA 40; (1936) 55 CLR 499

Counsel:

Ms. Judy. Nandape, for Appellant
Mr. Francis. Alua, for Respondent

6^th June, 2018

1. DINGAKE J: This is an application for leave to appeal and a stay of an interlocutory judgment of the National Court of the 14^th of December, 2017.
2. The applicant applied, unsuccessfully, in the Court below, by way of notice of motion to dismiss the originating summons proceedings commenced by the respondent as disclosing no reasonable cause of action, being frivolous, vexatious and as amounting to abuse of Court. Alternatively, the applicant sought to be removed as a party to the proceedings pursuant to Order 5 Rule 9(a) of the National Court Rules.
3. The main application was brought pursuant to Order 12 Rule 40(1) (a) and (b) of the National Court Rules
4. The aforesaid Order bears quoting in full:
   • “40. Frivolity, etc. (13/5)
     • (1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings —
     • (a) no reasonable cause of action is disclosed; or
     • (b) the proceedings are frivolous or vexatious; or...”
5. Essentially the proceedings brought by the respondent, by way of originating summons, in the Court below, that the applicant sought to dismiss, raised issues around unfair distribution of benefits deriving from the land in the Kutube PDL 2 area.
6. The respondent complained that, its benefits are not proportionate to its claim that it is most impacted by the petroleum project as its land hosts over eighty percent (80%) of all petroleum installations.
7. The court below found there was no merit in the application brought in terms of Order 12 Rule 40. The Court held, in effect, that the respondent in its originating summons established a reasonable cause of action and the proceedings were not futile or bound to fail if the matter proceeds to trial.
8. The Court also refused the application brought in terms of Order 5 Rule 9(a) of the National Court Rules, holding that it was without merit because the applicant interests would be affected by the orders sought by the respondent.
9. I am alive to the fact that paragraph 36 of the National Court Judgment relating to the parties may not be clear in so far as it makes reference to, “The first plaintiff should be removed as a party to the Proceedings” – but I have no doubt that a close and contextual reading of that paragraph, together with paragraph 37, reveals that the Court was of the view that the applicant should not be removed because its interests would be affected by the orders sought by the respondent.
10. The law on an application for leave to appeal and stay is well established.
11. In Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853, the Supreme Court adopted the principles enunciated in House v The Queen [1036] HCA 40; (1936) 55 CLR 499 and stated:
    • “The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate Court may exercise its own discretion in substitution for his if it has the material for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate Court may infer that in some way there has been a failure properly to exercise the discretion which the law repose in the Court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
12. In the case of Sir Julius Chan v Ombudsman Commission of PNG 1999 PNGLR, 240, at p.258 the Court held that:
    • “So to obtain leave to appeal an interlocutory judgment, it is not simply a matter asserting there is an arguable case; that there has been some error. It is not the case that every error will affect the outcome of the substantive proceedings. What must be shown is, not only that there is patent error, but also that the error affects a party’s substantive rights or will prevent the proper determination of the issues.”
13. The law governing stay applications is neatly captured in the case of Mc Hardy v Prosec Security and Communications Ltd 2000 PNGLR 279. In such applications the basic premise of departure is that the judgment creditor is entitled to the benefits of the judgment.
14. The other considerations are:
    • Whether leave to appeal is required and whether it has been obtained;
    • Whether there has been any delay in making the application;
    • Possible hardship, inconvenience or prejudice to either party;
    • The nature of the judgment sought to be stayed;
    • The financial ability of the applicant;
    • Preliminary assessment about whether the applicant has an arguable case on the proposed appeal;
    • Whether on the face of the record of the judgment there may be indicated apparent error of law or procedure;
    • The overall interest of justice;
    • Balance of convenience;
    • Whether damages would be sufficient remedy.
15. The applicant has faulted the National Court for a number of alleged errors. These are that the Court dealt with the alternative relief, when same was not moved in the Court below; for only dealing with the issue of “no reasonable cause of action” leaving other issues such as the respondent’s claim being frivolous and vexatious; that in finding that the respondent claim discloses a reasonable cause of action the Court considered the allegations of fact as contained in the plaintiff’s affidavits instead of focussing on the claim as set out in the originating summons.
16. The applicant submitted that the Court below erred in suggesting that the respondent’s proceedings gave rise to matters which concerned the benefit sharing agreement, which it sought to review. The applicant contends that there is nothing in the originating summons that supports the view that the respondent sought to review the various benefit sharing agreements.
17. The applicant also submitted that had the Court below taken into account and ruled on its argument that the relief sought in the originating motions were clearly contrary to law, it would have found that the respondent’s claim was plainly untenable and could not possibly succeed if it proceeded to trial proper, and therefore frivolous and vexatious.
18. The applicant further argued that the interim orders of the 15^th of April, 2018, which restrained the payment of royalty and equity for the PDL2 beneficiaries, affected the applicant’s rights and interests.
19. With respect to the stay application, the applicant contended that in the event that this Court grants leave to appeal, it is only proper and in the best interest of the administration of justice that the National Court proceeding be stayed so that the proceedings before the National and Supreme Courts do not run concurrently.
20. The crux of the respondent’s submission is that its claim as pleaded in the originating summons is not obviously and incontestably bad as its claim raises triable issues relating to unfair distribution of benefits deriving from the land to the detriment of the most impacted and affected land owners.
21. The respondent submitted that the applicant has failed to demonstrate that the trial judge had committed errors of law warranting the Supreme Court to revisit the judgment.
22. I have considered the evidential material supporting and in opposition to this application. I have also considered the submissions of the parties in the context of the evidence and the applicable law.
23. I turn now to apply the principles derived from the authorities to the facts of this case.
24. It bears emphasizing that in an application for leave to appeal, the appellate court should not grant leave simply because if it had been in the position of the primary judge, it would have taken a different view. The appellate court should only intervene and grant the leave sought if it is plain that the primary judge misdirected himself/herself on the law and or facts – or if the judge has taken into account irrelevant or extraneous matters into account in coming to the decision sought to be impugned; or if the decision of the primary judge is plainly unreasonable and unjust.
25. The authorities are also clear that, to obtain leave, it is not just a matter of asserting that there is an arguable case and that there is an error. It is important to note that, the requirement, that the error that the applicant must establish is one that would affect the outcome of substantive proceedings.
26. Having regard to all the circumstances of this case, and the applicable principles, I am of the firm view that the applicant has failed to discharge the onus that lay with it to show that the discretion of the National Court was exercised on wrong principle of law or mistake of fact or that the order was otherwise unreasonable or unjust.
27. It must also be borne in mind that the Court in considering an application for leave is not applying the same considerations or principles as if it was sitting to consider the substantive appeal. The two (application for leave to appeal) and the substantive appeal are distinct and attract different considerations and principles.
28. In an application for leave to appeal, even if it could be established that the pleadings have some defects and the judgment of the lower court has some errors – so long as such defects or errors do not result in there being no reasonable cause of action – and so long as the mistakes in the judgment (if any) do not affect the outcome of the substantive proceedings, then, the application for leave to appeal ought not to succeed.
29. More significantly, having regard to the substantive relief sought and the judgment/ruling appealed against, I am satisfied, on the evidence placed before me, that the judgment being challenged has little or no bearing on the final determination of the issues between the parties.
30. In my considered opinion, a decision made on the principal relief sought makes it unnecessary to address the alternative relief. In the circumstances of this matter, I do not consider that the fact that the judge addressed the alternative relief, which was not moved, but was part of the notice of motion, results in any injustice or is a material misdirection in the circumstances of this case, where the application was made on the 26^th of May, 2017 and the decision delivered on the 14^th of December, 2017. Even if I were to accept the applicant contention that it was an error, I find that such an error would not have any material bearing on the judgment of the Court, or the final determination of the issues between the parties.
31. In this case the National Court found that there was a reasonable cause of action. Reading the judgment of the National Court as a whole it is clear that the Court took the view that the respondent’s claim, was not futile and bound to fail if the matter proceeds to trial proper.
32. In my mind there is no glass wall between the originating summons and the affidavits filed in support of the claim such that a judge, who in an attempt to establish whether the summons discloses a reasonable cause of action is not allowed to look at the supporting affidavits and that if he/she does so commits an error. (Michael Walapali v Lipe Parindali (2007) N3172.
33. In this case, the applicant has failed to discharge the onus that lies with it to demonstrate that the discretion of the National Court was exercised on wrong principles or mistaken fact; or that there was any error the Court committed; or that the decision was otherwise unreasonable or unjust.
34. In the premises, the application for leave is without merit and ought to be refused, as I hereby do.
35. It follows from my conclusion above that the application of stay cannot succeed.
36. In the result, the application is refused in its entirety, with costs.

___________________________________________________________
Nandape & Associates Lawyers: Lawyers for the Applicant
Alua Lawyers: Lawyers for the Respondents