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GR Logging Ltd v Dotaona [2018] PGSC 34; SC1690 (12 July 2018)

SC1690

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]


SCM NO 21 OF 2017


GR LOGGING LIMITED
Appellant


V


DAVID DOTAONA, CHAIRMAN OF THE NATIONAL FOREST BOARD, & TONOU SABUIN, JENNY VIESAMI, JOSEPHINE GENA,
GUNTHER JOKU, JACOB AREMAN & BOB TATE,
MEMBERS OF THE NATIONAL FOREST BOARD
First Respondents


HONOURABLE DOUGLAS TOMURIESA MP, MINISTER FOR FORESTS
Second Respondent


PNG FOREST AUTHORITY
Third Respondent


THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Respondent


PULIE ANU TIMBER COMPANY LIMITED
Fifth Respondent


MATUFI (PNG) LIMITED
Sixth Respondent


Waigani: Cannings J, Collier J, Dingake J
2018: 27 June, 12 July


JUDICIAL REVIEW – leave requirements – whether a person can make a fresh application for leave for judicial review after an earlier application for leave for judicial review of the same decisions on the same grounds has been dismissed as an abuse of process – res judicata – need to establish whether first application was determined on its merits.


PRACTICE AND PROCEDURE – whether objection to competency of an appeal can be made without notice of objection to competency – appeals from orders under Order 16 (applications for judicial review) of the National Court Rules – Supreme Court Rules, Order 10, Rule 3(b)(ii) – need to annex certified copy of National Court order.


The appellant applied to the National Court for leave to seek judicial review of administrative decisions under the Forestry Act of the National Forest Board and the Minister For Forests regarding granting of a timber permit to the fifth respondent. Leave was refused on the ground that the application was an abuse of process as the appellant had engaged in a multiplicity of proceedings by filing another National Court proceeding challenging the same decisions. The appellant discontinued the related proceeding, then made a fresh application for leave for judicial review of essentially the same administrative decisions on the same grounds as those advanced in its first application. Leave was again refused, this time on the ground that the application for leave was res judicata, as the first application, which relied on the same cause of action as the second application, had been heard and determined. The appellant appealed against the second refusal of leave. At the hearing of the appeal the fifth respondent argued – without filing a notice of objection to competency – that the appeal was incompetent due to the appellant’s failure to comply with Order 10, Rule 3(b)(ii) of the Supreme Court Rules (the notice of motion by which the appeal is instituted is to have annexed to it a certified copy of the order appealed from).


Held:


(1) Leave to allow the fifth respondent to object to competency of the appeal was refused as no reason was offered as to failure to file a notice of objection to competency, the fifth respondent failed to follow the procedure for filing a notice of objection under Order 7, Rule 12 of the Supreme Court Rules and the basis on which it was claimed that the appeal was incompetent (failure to comply with Order 10, Rule 3(b)(ii)) was controversial. The appeal was therefore determined on its merits.

(2) The first refusal of leave for review was not final and on the merits of the case, such that the second application for leave was res judicata. Dismissal of proceedings for reasons other than determination of the substantive questions pertaining to the cause of action is not “final”, such that a subsequent claim pleading the same cause of action is res judicata.
(3) The appeal was allowed, the decision of the National Court was quashed and the application for leave for judicial review was remitted to the National Court for re-hearing.

Cases cited:
Papua New Guinea Cases


The following cases are cited in the judgment:


Amet v Yama (2010) SC1064
Anderson Agiru v The Electoral Commission (2002) SC687
Hegele v Kila (2011) SC1124
John Wanis Wek v Sobol Trading Ltd (2016) SC1535
Kuk v O’Neill (2014) SC1331
Leto Darius v The Commissioner of Police (2001) N2046
Louis Medaing v Minister for Lands & Physical Planning (2010) N3917
Madang Timbers Ltd v Kambori (2009) SC992
Mahuru v Hon Lucas Dekena (2013) N5305
Mountain Catering Ltd v Frederick Punangi (2013) SC1225
National Capital Ltd v Bakani (2014) SC1392
National Executive Council v Public Employees Association [1993] PNGLR 264
Nema v Rural Development Bank Ltd (2012) N5317
Nipo Investment Ltd v Nambawan Super Ltd (2017) SC1642.
O'Neill v Eliakim (2016) SC1539
Titi Christian v Rabbie Namaliu (1996) SC1583
Totamu v Small Business Development Corporation (2009) N3702
Yama v PNGBC Ltd (2008) SC922


Overseas Cases


Baines v State Bank of New South Wales (1985) 2 NSWLR 729
Blair v Curran [1939] HCA 23; (1939) 62 CLR 464
Davis v Gell [1924] HCA 56; (1924) 35 CLR 275
DSV Silo-und Verwaltungsgesellschaft mbH v Owners of the Sennar [1985] 2 All ER 104
Green v Weatherill [1929] 2 Ch 213
Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423
Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993
Pople v Evans [1968] 2 All ER 743
Re May [1885] UKLawRpCh 13; (1885) 28 Ch D 516
Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572
Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251


APPEAL


This was an appeal against a decision of the National Court, refusing an application for leave to seek judicial review.


Counsel:


I Molloy & C Copland, for the Appellant
S Phannaphen, for the Fifth Respondent


12th July, 2018


  1. BY THE COURT: By this notice of motion the appellant appeals the whole of a judgment of the National Court in proceeding OS (JR) No 116 of 2017 under Order 16 of the National Court Rules dismissing the appellant’s application for leave to apply for judicial review. The appellant seeks orders quashing the decision at first instance, granting it leave to apply for judicial review in proceeding OS (JR) No 116 of 2017, and costs.
  2. Written submissions were filed on behalf of all parties except the fourth respondent which took no active role in these proceedings. Counsel for the appellant and fifth respondent also provided oral submissions at the hearing.
  3. Counsel for the first to third respondents and counsel for the sixth respondent both arrived late to the hearing and sought leave to appear. The practitioners submitted that their tardiness was due to, inter alia, traffic congestion, late change of court room, and a perceived change of hearing time. We found these explanations unsatisfactory and refused leave for Counsel to appear. In the interests of justice, however, the Court has considered the written material filed on behalf of the first to third respondents and the sixth respondent in lieu of oral submissions by their respective Counsel.

BACKGROUND

  1. At first instance the appellant sought leave to review three decisions relating to the issue of a timber permit to the fifth respondent on 25 November 2016 in Pulie Anu, an area in Kandrian District, West New Britain province. The decisions were:
  2. Before the primary Judge the fourth respondent, the State, raised a preliminary point, namely that the application for leave was res judicata because this application had been made before Makail J on 9 February 2017 and leave was then refused. The appellant argued that Makail J had not considered the merits of the leave application, but had decided the proceeding on a technical issue, namely the multiplicity of proceedings. Makail J had refused leave on the basis that the application was an abuse of process. It is useful to examine the proceedings before Makail J before considering the issues raised in this appeal.

Proceedings before Makail J

  1. The application for leave for judicial review in OS (JR) 893 of 2016 before Makail J on 9 February 2017 was commenced by the appellants in this appeal. Proceedings in OS 862 of 2016 – also instituted by the current appellant – were also on foot. Mr Bokomi for the plaintiffs at the hearing of OS 893 of 2016 submitted as follows:
... Now the related proceeding that Mr Lome advised the court of essentially touches on and challenges the legality of the deed. Now it may be argued or intimating [sic] to the court that this would be an abuse of process if this matter were to be heard.

In my submission, your Honour, until leave is granted by your Honour, in this proceeding after hearing arguments of both my client and the State no substantive cause of action is on foot, that is number 1 as yet, in judicial review; (2) it is still within my client’s powers to decide whether to continue or otherwise discontinue against or withdraw proceedings against the other parties including Mr Lome’s client, the sixth defendant in that other proceeding filed under OS number 862 of 2016. We were necessitated to file those proceedings under a general originating summons seeking declaratory orders on the basis that at the material time we were not aware of the grant of the timber permit. We were only made aware of the grant of the timber permit after we had filed proceedings.

Now, even well before or after the grant of the timber permits there were exchanges of correspondences and views between the minister’s office and the bureaucrats of PNG Forest Authority. In particular the officers of the resource allocation division and the office of the MD even well after the timber permit had already been granted on the 25th. There were correspondences up until about 11 or 12 December on that same issue of whether or not the deed was signed and it was legal or otherwise. So, the entire matter was kept secretive by the office of the Honourable Minister for Forests and our clients were not made aware of anything and in order to preserve the status quo and the interest of my client company we had to go to court. And then necessitated by the change of circumstance we filed these proceedings but that does not mean that our client has liberty to also consider, reconsider its position in the other one because that matter has been adjourned back to the registry for, I think, her Honour Madame Justice Kiele to preside over. But, no directions has yet been given, we have not been advised.

So that, in a nutshell, is my response to Mr Lome’s position...
(transcript pages 3-4)

  1. Mr Bokomi also explained the application in OS (JR) 893 of 2016 in the following terms:
Your Honour, this is the plaintiff’s application for leave to apply for judicial review of the ministerial decision of the Honourable Minister for Forests, Honourable Douglas Tomuriesa, purportedly exercising his powers under section 73 of the Forestry Act to grant a timber permit designated and described as PP14-04 to Tulialo Timber Company, the fifth defendant in these proceedings, on 25 November 2016. The application essentially is brought under order 16 rule 3 sub-rules (1) and (2) of the National Court Rules by way of an originating summons and a statement in support filed on 22 December 2016 setting out the basis facts and the grounds for review and also an affidavit verifying facts in accordance with the court rules filed also on that date.

The plaintiff will also rely on the affidavit in support of Joe Bilifs sworn and filed on 23 December 2016 as well as the affidavit of Paul Aivia sworn and filed on 23 December 2016. Now, for purposes of getting your Honour to understand and appreciate the background facts about the plaintiff company and its operations culminating in its applying for renewal of its timber permit, let me state for the record, my client was the timber permit holder although its timber permit had expired and which it had a right to renew up until the grant, the subject of this application for leave to apply for judicial review on 25 November 2016, to another company. (transcript pages 4-5)
  1. Extensive further submissions were made by Mr Bokomi (pages 6-11 of the transcript), and subsequently in answering questions from his Honour (pages 11-17 of the transcript).
  2. His Honour then heard submissions from Mr Geita for the State. Mr Geita submitted that in OS 862 of 2016 the plaintiff sought two things: first, challenging the validity of the deed of assignment; and second, a claim for declaration of invalidity of the relevant timber permit issued by the Minister. Mr Geita submitted that the claim for the declaration of invalidity was also the essence of the judicial review proceedings in OS (JR) 893 of 2016, and continued:
In the other proceedings as I was saying, in the other proceedings at paragraphs 2, 3 and 4, they are basically asking for declaratory orders that if the court finds that the deed of assignment is invalid, it must follow that the minister’s decision to grant the permit to the fifth defendant is invalid. That is the essence of the argument.

... in the other proceedings and we say that the similarity is at page 2, 3 and 4 of the amended originating summons. Other paragraphs talk about the validity of the deed of settlement. And at paragraph 11 of the amended originating summons, OS 862, it is basically seeking an order to the effect that the forest minister execute instruments for grant and renewal of the timber permit to the plaintiff. This is basically similar to the reliefs sought in these GR proceedings where the minister’s instrument to grant timber permit to the fifth defendant is sought to be quashed and mandamus sought to compel the Minister to grant TP 14-04 to the plaintiff. The essence of our submission basically is that that amounts to duplicity and multiplicity of proceedings. They involve the same parties. The parties are very identical, similar issues and seeking similar reliefs.

Your Honour, we also submit at paragraph 11 the court to note that the amended OS was filed on 20 December 2016 and this originating summons – sorry this judicial review process was filed two days later on 22 December. And we are basically saying that it is possible that the plaintiff is taking advantage of two processes before it; testing the waters, trying to see if whichever succeeds it will take that. It is on the strength of that submission we say that there is an abuse of process here and court should refuse leave or dismiss proceedings at this stage. (transcript pages 19-20)
  1. Before Makail J Mr Bokomi for the plaintiff then submitted that he held instructions from his client to withdraw the proceedings in OS 862 of 2016 if his Honour granted leave, because all matters could be dealt with in OS (JR) 893 of 2016, particularly in terms of the legality of the deed.
  2. After hearing these arguments Makail J concluded as follows:
Yes all right, I need not hear any further submissions I think it is quite clear based on what Mr Geita on behalf of the State submits and endorsed by Mr Lome of counsel for the fifth defendant or sixth defendant that there are two different proceedings filed around the same time challenging the validity of first the timber – sorry, the deed of assignment and secondly, the grant of a timber permit by the Minister for Forest, the second defendant in these proceedings to the fifth defendant; consequently, the fifth defendant entering into a logging and marketing agreement with the sixth defendant for operation purposes.

As far as I can see in this originating summons and relief being sought and comparing it with the other relief sought in the other proceedings before the civil court OS 862 of 2016, they are the same or more or less have the same effect and this is the challenge to the validity of the deed of assignment and the decision of the minister to grant the timber permit to the fifth defendant. Apart from that the parties are the same. The plaintiff must decide which proceedings it must pursue and that is not for the plaintiff to commence two different proceedings and come before the court and then decide which one to pursue. It is actually before proceeding with commencing proceedings that the plaintiff must decide or any party for that matter must decide which mode of proceedings a party must commence. That decision must be made before commencing any legal proceedings and to say that the plaintiff can come after commencing proceedings and decide or elect which proceedings to maintain is misconceived.

In this case, the plaintiff has filed an originating summons that I have mentioned, that was filed on 20 December 2016 and the originating summons for the judicial review leave application was filed on 22 December 2016, about two days later. So, that is essentially an abuse of process.

The one that was filed earlier in the civil court that is not subject of the present hearing. It is before another judge and to be dealt with at its own time. This one is before the court for the application for leave to apply for judicial review and I am not satisfied that leave should be granted because the same relief has been sought in the related proceedings in the civil court. It makes no difference at all in maintaining these proceedings. All it does is a multiplicity of proceedings, judicial time is wasted, counsel’s time is wasted, cost is wasted and so parties must be reminded, particularly the plaintiff in this case that it must make that decision before commencing proceedings.

That other proceedings can be dealt with at its own time, but these proceedings must come to an end today for the brief reasons I have given.
  1. In light of these findings his Honour refused leave to apply for judicial review of the relevant decisions.

Proceeding before the primary Judge

  1. During the course of the hearing the primary Judge observed that, because the application before the Court was for leave, the plaintiff was only required to address her Honour on those four main leave requirements, namely whether the plaintiff had a sufficient interest; whether it had exhausted all the administrative remedies; whether there had been delay; and whether the plaintiff had an arguable case (transcript page 9). The plaintiff made extensive submissions on the issue of merit (transcript pages 9-13, 14-16).
  2. Counsel for the plaintiff at the hearing, Mr Bokomi, informed her Honour that the plaintiff had withdrawn or discontinued “the proceeding to challenge the legality or the illegality of that deed of assignment”. (We presume that this is a reference to proceedings in OS 862 of 2016.)
  3. Further submissions were made by Mr Bokomi in relation to the standing of the plaintiff (transcript pages 17-19). The following interchange then took place at pages 19-21:
HER HONOUR: Leave was refused, right?
MR BOKOMI: Leave was refused but it was not refused on the merits. We say that the matter is not res judicata as the substantive rights or parties and the nature of the case as required...
HER HONOUR: But you did argue the leave?
MR BOKOMI: We argued the leave but that...
HER HONOUR: And his Honour made a decision?
MR BOKOMI: His Honour made a decision...
HER HONOUR: Which refused your application?
MR BOKOMI: Yes. But that was not on the basis of the four legal criteria for leave. It was done on the basis that there is a competing proceeding on foot and it was...
HER HONOUR: And there was an abuse of process?
MR BOKOMI: That is correct.
HER HONOUR: Yes
MR BOKOMI: And that is clearly stated.
HER HONOUR: Well, should you not be appealing to the Supreme Court?
MR BOKOMI: No. Because we considered that the matter is not res judicata as substantive right of parties has not been substantively determined because the court ought to consider also the nature of the case in the competing proceeding as well as the rights of parties. And we rely on the case of Ekepe v Gaupe [2004] PGNC 82; N2694 (13 October 2004). It is a decision by his Honour Justice Cannings. Now, that decision clearly demonstrates the principles applied in situations where arguments in relation to res judicata can be brought. We submit in our client’s case, the matter is not res judicata. If your Honour reads the transcript of the proceedings, you will basically ascertain the basis upon which leave was refused and we submit that this proceeding on that basis...
HER HONOUR: Is the relief the same that you were seeking in that previous judicial review application? Was the relief the same?
MR BOKOMI: In which proceeding?
HER HONOUR: The previous proceedings which his Honour made a decision?
MR BOKOMI: Yes. The relief was different. We sought principal reliefs for declarations in OS number 862 and then...
HER HONOUR: I am asking about the relief in the judicial review that you filed which was refused by his Honour. Is the relief the same as the relief you are seeking in this application?
MR TOKEN: If I may assist your Honour. They are different.
HER HONOUR: How are they different?
MR TOKEN: In the previous proceeding which leave was refused, we only sought a review of the Minister’s decision of 25 November 2016. In this proceeding, we are seeking to review three decisions. One is the Minister’s decision of 25 November 2016 and the second is the chairman of the National Forest Board’s decision to grant to the fifth defendant an operating license and the third decision is the decision by the National Forest Board to grant the fifth defendant’s three forest working plan your Honour, without complying with the due process as per the Forestry Act, such as verifications – to ascertain marketable timber trees physically as Pulie Anu local forest area your Honour. Thank you your Honour.
  1. Mr Isaac however subsequently submitted (page 22 transcript) that:
... to say that this proceeding is different than the first one is misleading your Honour, because in this proceeding, only two new grounds are added to the first.
So it does not make this – the answer no was not the right answer that her Honour – the court should have been given. Yes, but two grounds are added to make it look different but in fact, the same Minister’s decision is the essential ground, which the plaintiff seeks to have this Court void. Therefore your Honour, we submit that the plaintiffs have abused the court process by filing another JR and seeking leave when the appeal procedure available to them under the relevant rule was not exhausted and therefore your Honour should refuse leave and dismiss the proceedings.
  1. At [7]-[11] her Honour noted as follows:
7. The plaintiff had filed another civil application by way of an ordinary originating summons essentially seeking the same relief. The proceedings were OS 862 of 2016. Whilst that proceeding was on foot, the plaintiff filed an application for leave to seek judicial review OS (JR) 893 of 2016.
8. When that earlier leave application was brought to my attention, I directed the Court Reporting Service to provide a transcript of that proceeding. They had complied with that order and the transcript was annexed to the affidavit of Jimmy Bokomi, which was filed on 10th April 2017.
9. The applicant submitted that in those proceedings the merits of leave were not fully argued. The plaintiff then cured the defect by discontinuing the other civil proceedings. Therefore, the applicant argued that they are entitled to file this application for review.
10. The plaintiff argued that this matter was not res judicata because the issues between the parties, that is, the leave requirements were not determined by the Court. Counsel referred this Court to the case of Ekepe v Gaupe (2004) N2694 to support its submissions.
11. The State and Mr Isaac for the first, second and third defendants argued that the plaintiff had already sought leave and the application was refused. The learned Judge had heard and determined the application on its merits. This application was therefore an abuse of process.
  1. Her Honour said that a threshold issue had presented itself for determination in the proceedings before the Court, namely whether the applicant had the right to seek leave to review the decisions again, and therefore whether the leave application was competent (at [13]).
  2. Her Honour observed that, on the face of the Court record, the matter was res judicata and the applicant was estopped from raising the same issues for leave before the Court. In so observing, her Honour found in summary:
  3. Her Honour concluded that the application before the Court in OS (JR) No 116 of 2017 was an abuse of Court process. Her Honour refused leave and ordered the applicant to pay the State’s costs of and incidental to the application.

GROUNDS OF APPEAL

  1. The appellant raised ten grounds of appeal from the decision of her Honour, as follows:

SUBMISSIONS OF THE PARTIES

Appellant

  1. The appellant submitted, in summary:

The primary matter has never been determined on the merits and, therefore, there exists no res judicata or issue estoppel that would prevent the application for leave for judicial review from being considered.

Order 12 Rule 7 of the National Court Rules does not prevent bringing fresh proceedings or claiming the same relief in fresh proceedings.

Dismissal of the proceedings for abuse of process does not automatically preclude subsequent proceedings being commenced.

The primary Judge failed to consider that the abuse had been remedied by the appellant discontinuing the other proceedings.

The primary Judge should have heard and determined the application for leave on its merits and concluded that leave to apply for judicial review should be granted.

First to third respondents

  1. In their joint written submissions, the first to third respondents relevantly submitted, in summary:

The appellant failed to demonstrate satisfactory reasons to justify its decision to reapply for leave for judicial review.

The Court had a wide discretion to determine whether there was indeed an abuse of process.

The issue of leave was heard and determined by a Court of competent jurisdiction.

The appeal should be dismissed with costs.

Fourth respondent

  1. The fourth respondent did not file written submissions and did not appear at the hearing to make oral submissions.

Fifth respondent

  1. The fifth respondent raised preliminary issues relevant to the competency of the appeal. In summary, the fifth respondent submitted that:

The appeal is not competent because it does not comply with Order 10 Rule 3(b)(ii) of the Supreme Court Rules. Specifically, the appeal book does not contain a certified copy of the order the subject of this appeal.

Although a formal notice of objection to the appeal was not filed, issues of competency can be raised at any stage of the proceedings at the discretion of the Court.

  1. The fifth respondent also submitted that, in light of the expiry and renewal of the relevant licence, judicial review would be of no utility.
  2. In relation to the substantive appeal, the fifth respondent relevantly submitted, in summary:

The primary Judge did not err in her Honour’s finding of res judicata because the parties in both matters are the same, the issues in both matters are the same, the decision in one of the related proceedings was made after a full hearing of the leave application and the foundation of the entire proceedings was extinguished, and the first decision was made by a competent Court.

The primary Judge was correct in dismissing the proceedings based on the doctrine of estoppel.

Once leave was refused, the matter was determined finally and the appellant was not entitled to file a duplicate application for leave in new proceedings.

All grounds of appeal lack merit and the appeal should be dismissed.

Sixth respondent

  1. In its written submissions, the sixth respondent relevantly submitted, in summary:

There is no utility in granting leave for judicial review.

The requirements for establishing res judicata were met in circumstances where the only difference between the proceedings was the Court reference number.

If, on appeal, the Court finds res judicata did not apply, the doctrine of estoppel is nonetheless invoked and the primary Judge was correct to conclude that the proceedings could be dismissed based on that doctrine.

It was appropriate for the primary Judge to find the proceedings were an abuse of process.

The grounds of appeal lack merit and the appeal should be dismissed with costs.

Appellant’s response to purported issue of competency

  1. In response to the fifth respondent’s claim that the appeal is incompetent and judicial review would be of no utility, the appellant submitted in summary:

An objection to competency must itself be competent. The objection raised by the fifth respondent was not within the specified time, not in the correct form and did not specifically identify the Court’s jurisdiction. Overall, the Court’s jurisdiction to consider any issues of competency was not enlivened.

The appellant complied with the Rules because it annexed a signed, sealed order of the National Court to its notice of motion.

Whether there is utility in judicial review is a matter for the National Court.

CONSIDERATION

  1. The appellant purports to rely on ten separate grounds of appeal, but in reality grounds 2-9 are variations of the first ground of appeal. By ground 10 the appellant purports to reserve to itself the right to frame further grounds of appeal as they become apparent. As of the date of hearing no further grounds had been filed.
  2. At the hearing Counsel for the appellant acknowledged the overlap between ground 1 and grounds 2-9. His submissions focussed on grounds 1 and 4 of the appeal, which he submitted were the key points advanced by the appellant in this proceeding. We accept this approach as helpful in the circumstances.
  3. The fifth respondent purported to raise an objection to the competency of the appeal and argued that the entire proceeding ought to be dismissed. As a result it is appropriate that we take the following approach to the matter before the Court:

(1) Objection to competency of the appeal

  1. Order 10 Rule 3(b)(ii) of the Supreme Court Rules provides:
3. The notice of motion shall—
(a) ...
(b) have annexed—
(i) copies of all documents which were before the Judge of the National Court appealed from; and
(ii) a copy of the order made, certified by the Judge's Associate or the Registrar; ... (emphasis added)
  1. In submitting that the appellant failed to comply with this rule, the fifth respondent relied in particular on the decisions of the Supreme Court in National Capital Ltd v Bakani (2014) SC1392 and Nipo Investment Ltd v Nambawan Super Ltd (2017) SC1642.
  2. In National Capital Ltd v Bakani the respondent had filed a notice of objection under the Supreme Court Rules, referable (inter alia) to alleged non-compliance with Order 10 Rule 3(b)(ii). The Supreme Court found as follows:
23. The relevant parts of Order 10 which arise for consideration are r 1 (1) and 3 which appear under Division 1. Order 10 regulates appeals authorised by Order 16 r 11 of the NCR. Both provisions make up a single legislative scheme. The two provisions must therefore be read together and the two provisions should be in harmony with each other. Order 10 must therefore be interpreted in the context of the mandatory requirement of Order 16 r 11, that appeals against orders given under order 16 must be by way of a notice of motion pursuant to Order 10. This makes it mandatory on an appellant instituting an appeal under Order 10 to strictly comply with the terms of Order 10, including r 3 (b) (ii), the interpretation of which is the central issue here. As a general rule of interpretation, Order 10 must be read and interpreted as a whole to ascertain its purpose and legislative intent.
24. Notably, Order 10 r 3 starts with a sentence that includes the word “shall”, which subject to the context in which it is used, prima facie means that the whole of r 3 is mandatory. Thus, when one reads r 3 (b)(ii) in its proper context and ordinary meaning, it becomes very plain that first; the certification of a copy of the order of the trial court is to be done either by the Judge’s Associate or the Registrar and second; such certified copy of the order of the trial court is to be annexed to the notice of motion before the notice of motion is filed. So, when the notice of motion is filed it should already have annexed to it a duly certified copy of the trial court’s order. This requirement is mandatory. It follows that the certification of the trial court’s order that is required under r 3 (b) (ii) cannot be validly made after the notice of motion is filed. To do so would amount to a serious breach of r 3 (b) (ii). This indicates clearly the intention of the legislature regarding Order 10 r 3 (b) (ii). It must be strictly complied with as a mandatory regulatory provision. Thus, in the instant case, the mandatory requirements of r 3 (b) (ii) had to be strictly complied with in order for the appeal to be valid and competent. Having reached this conclusion, it follows that we must respectfully disagree with the view held in Madang Timbers Ltd v. Kambori & Ors (supra) that the certification of a copy of the trial court’s order can be validly made after the notice of motion is filed. We also respectfully disagree that annexing the trial court’s judgment to the notice of motion and the subsequent entry and signing of the trial court’s orders by the Registrar would meet the requirements of r 3 (b) (ii). We are also respectfully of the view that the court in Madang Timbers Ltd considered irrelevant and extraneous matters which influenced its decision. We respectfully adopt and affirm the views held by the courts in Haiveta v. Wingti (No 2)(supra) and Dr Arnold Kukari v. Honourable Don Pomb Polye (supra) that Order 10 is mandatory and its requirements must be strictly complied with.
25. Applying the principles enunciated in Haiveta v. Wingti (No 2) and Dr Arnold Kukari v. Honourable Don Pomb Polye to this case, we find that the failure by the appellant to annex a duly certified copy of the order made by the trial court to the notice of motion as required by Order 10 r 3 (b) (ii) is indeed fatal to the appeal. The requirement under r 3 (b) (ii) is that a duly certified copy of the order of the trial court must be annexed to the notice of motion before the notice of motion is filed in order for such appeal to be valid and competent. Therefore, the annexation of the judgment of the trial court to the notice of motion, and the subsequent signing and entry of the orders contained in that judgment after the notice of motion had been filed, was in serious breach of r 3 (b) (ii) effectively rendering the appeal invalid and incompetent. The argument by the appellant must therefore fail because it is inconsistent with the mandatory requirements of r 3 (b) (ii). The end result is that the appeal is incompetent and should be dismissed. (emphasis added)
  1. In Nipo Investment Ltd v Nambawan Super Ltd (2017) SC1642 the Supreme Court stated:
While the strict application of these rules can lead to what may appear to be a harsh result, the need for parties to comply with Rules of Court is not an exercise in pedantic technicality. The Rules ensure that the difficult and often complex process of litigation occurs in an ordered manner, meeting the expectations of the Court and all parties. This Court has been consistent in finding that breach of Order 10 Rule 3 (b)(i) and (ii) is fatal to an appeal. Bakani v Daipo (2001) SC659, Kukari v Polye (2008) SC 907 and National Capital Ltd v Bakani (2014) SC1392 remain good law, and no reason has been advanced to us to persuade us that we should not follow these authorities.
  1. The appellant however directed our attention to the reasoning of the Supreme Court in Madang Timbers Ltd v Kambori (2009) SC992. In that case no notice of objection to the competency of the appeal was filed, and the respondent sought leave to do so. One of the grounds on which the respondent sought leave was that the notice of appeal failed to comply with Order 10 Rule 3 (b)(ii) of the Supreme Court Rules.
  2. Materially, the Court observed as follows:
26. As to ground (a), we consider that the matters concern arguable defects in the notice of motion. We find that there is merit in the arguments advanced by the appellant because the meaning of the word "certified" in the Oxford English Dictionary 2nd Edition, to be "made certain, assured, certainly informed, attested by certificate, furnished with a certificate" meant that the Registrar "made certain" these were the orders made by the trial judge. This is endorsed by the fact that:
(i) The National Court Act, National Court Rules, Supreme Court Act and Supreme Court Rules do not provide for any particular mode of certification, more particularly, they do not provide for a form of a certificate;
(ii) The Registrar of the National Court signed and entered the orders of 27th November, 2008, thereby certifying the trial judge’s orders announced on 22nd October, 2008 and which are contained in his published reasons. We also point out that the respondents are not genuinely aggrieved by this because if they were, they would have exercised the option available to them under Order 12 Rule 8(1) of the NCR to apply to set aside or vary a direction for entry of judgment, before the judgment was entered, or even after. They did not.
27. This ground will not render the appeal incompetent or does not demonstrate that the Court lacks jurisdiction to hear the appeal.
  1. Order 11, Rule 28 provides that the provisions of Order 7, Division 5 apply to any proceedings before the Court, substituting the nature of the proceedings for the word ‘appeal’ where necessary. In particular Order 7 Rule 15 provides:
15. A respondent who objects to the competency of an appeal or of an application for leave to appeal shall, within 14 days after service on him of the notice of appeal—
(a) file an objection in accordance with form 9; and
(b) serve a copy of the objection on the appellant.
  1. It is not in dispute that no respondent to this appeal filed an objection complying with the terms of Order 7 Rule 15 (a) or served a copy of any such objection on the appellant in accordance with Order 7 Rule 15 (b). It follows that, if the fifth respondent now objects to the competency of the appeal, it must seek the leave of the Court to do so: see discussion in Hegele v Kila (2011) SC1124 at [9]-[11]. The fifth respondent however relies on Amet v Yama (2010) SC1064, Mountain Catering Ltd v Frederick Punangi (2013) SC1225 and Kuk v O’Neill (2014) SC1331 as authorities for the proposition that competency issues can be raised at any stage of the proceedings, at the discretion of the Court.
  2. Pursuant to Section 155(4) of the Constitution the Supreme Court has power to make such orders as are necessary to do justice in the circumstances of a particular case. This inherent power permits the Court to address appeals which are clearly incompetent. As the Supreme Court said in Kuk v O'Neill (2014) SC1331:
8. In this case, there is no dispute that the respondent did not file and serve the Notice of Objection to Competency within 14 days after service upon his lawyers of the Notice of Appeal. However, the position at law is that in the exercise of its discretion, a Court can hear an objection that is raised after the expiration of the 14 days period (see Sir Arnold Amet v. Peter Charles Yama (2010) SC1064; Mountain Catering Ltd v. Frederick Punangi, Secretary, Department of Defence, and 2 Ors (2013) SC 1225). This inherent power of the Court carries with it the onerous responsibility to safeguard its processes and procedures against abuse. The issue of competence has to do with legal and jurisdictional aspects of the court process. Salika DCJ, Batari and Davani JJ in Sir Arnold Amet (supra), held that more often than not, this concerns the validity of the very proceedings before the Court, therefore, allowing for an aggrieved party, to raise it, at any stage of the proceedings. But it must be a proper exercise of discretion relying on evidence before the Court, to demonstrate that there are indeed good and sound grounds warranting the hearing of the objection. In this case, it meant that the Court has had to review the grounds relied on to assist it in deciding whether to uphold the application or not. On a quick review of the grounds, the Court notes that the applicant seeks a dismissal of the appeal because the Notice of Appeal was filed upon a dismissal of Judicial Review Proceedings, contrary to Order 10 Division 1 of the Supreme Court Rules.
9. Order 10 Rule 1 is in mandatory terms that an appeal from orders made in O. 16 proceedings "shall" be by way of Notice of Motion. That alone is convincing enough for us to find that the preliminary objection is without merit and that the Objection is properly before the Court. (emphasis added)
  1. The fifth respondent identifies an issue concerning the competency of the appeal in this case, namely the alleged failure of the appellant to comply with the mandatory requirements of Order 10 Rule 3 (b)(ii) of the Supreme Court Rules. However on balance we consider that the Court should not grant the fifth respondent leave to object to the competency of the appeal for the following reasons.
  2. First, the fifth respondent offers no reason for failing to file a notice of objection to competency in accordance with the Supreme Court Rules within the time prescribed by Order 7 Rule 15, or for confining its objection to submissions in response to the submissions of the appellant on appeal. It cannot be said that the fifth respondent was taken by surprise in respect of the contents of the appeal book or the appellant’s case.
  3. Second, we note that Supreme Court authority supports the principle that compliance with Order 10 Rule 3(b)(ii) is mandatory. If, as the fifth respondent claims, there is a conflict of authority between Madang Timber and Bakani, this case raises a very serious issue. Such an issue ought properly to have been the subject of a notice of objection to competency with all parties given the opportunity to make fulsome submissions, and the Court given the opportunity to consider whether the notice of objection should be determined separately prior to the hearing of the appeal.
    1. The failure on the part of the fifth respondent to follow proper procedure, in accordance with the Supreme Court Rules, thus preventing proper examination of the issue raised, militates against a grant of leave to object in these circumstances.
    2. Third, and perhaps most importantly, the basis on which the fifth respondent claims that the appeal is incompetent is controversial. At the hearing of this appeal Counsel for the fifth respondent submitted, in essence, that compliance with Order 10 Rule 3(b)(ii) required a certification “stamp” or statement followed by the signature of the Judge’s Associate or the Registrar. However as the Supreme Court found in Madang Timber, none of the National Court Act, National Court Rules, Supreme Court Act or Supreme Court Rules provides for any particular mode of certification, and more particularly, they do not provide for a form of a certificate. We do not understand this finding to be in dispute. Further, although aspects of the decision in Madang Timber were the subject of criticism in Bakani, we do not understand that the Supreme Court in Bakani made findings as to the meaning of “certified” in Order 10 Rule 3(b)(ii).
    3. The orders of the primary Judge found in the appeal book at pages 701-704 bear the stamp of the National Court of Justice, a signature which appears to be “for” the Registrar (with the word “JUDGE” struck through) under the words “BY THE COURT” at appeal book page 704, and what appears to be an initial and date on page 703 of the appeal book.
    4. Prima facie, the form of order attached on page 704 bears the signature of the Registrar of the National Court. To the extent that the meaning of “certified” in Order 10 Rule 3 (b)(ii) is not defined we are not persuaded at this stage that the absence of a stamp including the word “certify” is critical to “certification” within the meaning of the Rule. Arguably, the form of order with the signature of the Registrar satisfies the provisions of Order 10 Rule 3 (b)(ii).
    5. Accordingly, the fifth respondent does not have leave to object to the competency of the appeal.

(2) Substantive appeal

  1. The critical issue in this appeal is whether, in his decision of 9 February 2017 in OS (JR) 893 of 2016 dismissing an application for leave for judicial review of the relevant administrative decisions before him, Makail J decided that application for leave on the merits such that any future applications for leave for judicial review of those administrative decisions would be either res judicata or subject to the principles of issue estoppel. This issue is critical, because the primary Judge formed the view that Makail J did precisely that.
  2. Before turning to the specific issues in this case it is helpful to examine legal principles of res judicata and issue estoppel.

(a) Res judicata and issue estoppel

  1. As the learned authors of Res Judicata wrote:
A res judicata is a decision pronounced by a judicial or other tribunal with jurisdiction over the cause of action and the parties, which disposes once and for all of the fundamental matters decided, so that, except on appeal, they cannot be re-litigated between persons bound by the judgment.
(Spencer Bower and Handley Res Judicata (4th edition) (Butterworths Common Law Series, LexisNexis, 2009 paragraph 1.01).
  1. Res judicata is a principle of long standing – as Brett M.R. explained in Re May [1885] UKLawRpCh 13; (1885) 28 Ch D 516 at 518 :
The doctrine of res judicata is not a technical doctrine applicable only to records. It is a very substantial doctrine, and it is one of the most fundamental doctrines of all Courts, that there must be an end of litigation, and that the parties have no right of their own accord, after having tried a question between them and obtained a decision of a Court, to start that litigation over again on precisely the same questions.

(See also Green v Weatherill [1929] 2 Ch 213, 221; Davis v Gell [1924] HCA 56; (1924) 35 CLR 275; Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423 at [15]; Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251 at [18]; O'Neill v Eliakim (2016) SC1539.)

  1. The principle of res judicata is recognised by the Constitution Schedule 2.8 (1)(d) as having been adopted as part of the underlying law of Papua New Guinea (see Yama v PNGBC Ltd (2008) SC922 at [24]; Nema v Rural Development Bank Ltd (2012) N5317 at [6], Mahuru v Hon Lucas Dekena (2013) N5305 at [12]).
  2. The distinction – and overlap – between matters which are res judicata in respect of causes of action, and where principles of issue estoppel apply, is helpfully summarised in Halsbury’s Laws of England in the following terms:
The doctrine of res judicata provides that, where a decision is pronounced by a judicial or other tribunal with jurisdiction over a particular matter, that same matter cannot be reopened by parties bound by the decision, save on appeal. It is most closely associated with the legal principle of ‘cause of action estoppel', which operates to prevent a cause of action being raised or challenged by either party in subsequent proceedings where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties (or their privies), and having involved the same subject matter. However, res judicata also embraces 'issue estoppel', a term that is used to describe a defence which may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided, but, in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant, one of the parties seeks to reopen that issue. For this reason, res judicata has been described as a portmanteau term which is used to describe a number of different legal principles with different juridical origins upon which the courts have endeavoured to impose some coherent scheme only in relatively recent times.
Cause of action estoppel is absolute only in relation to points actually decided on the earlier occasion and there is no justification for the principle applying in circumstances where there has been no actual adjudication of any issue and no action by a party which would justify treating them as having consented, either expressly or by implication, to having conceded the issue by choosing not to have the matter formally determined. Equally, an exception to issue estoppel arises in the special circumstance where there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings.
The purpose of the principle of res judicata is to support the good administration of justice in the interests of the public and the parties by preventing abusive and duplicative litigation, and its twin principles are often expressed as being the public interest that the courts should not be clogged by re-determinations of the same disputes; and the private interest that it is unjust for a man to be vexed twice with litigation on the same subject matter. A distinction is often made between the doctrine of res judicata and the wider rule (alternatively seen as an extension of res judicata) that precludes a party from raising in subsequent proceedings matters which were not, but could and should have been raised, in the earlier ones for the purpose of establishing or negativing the existence of a cause of action ('abuse of process'), although the policy underlying both principles is essentially the same.(Halsbury’s Laws of England (2015) Volume 11 Civil Procedure paragraph 1603)(citations omitted, emphasis added)
  1. In Blair v Curran [1939] HCA 23; (1939) 62 CLR 464 at 532, Dixon J observed:
The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.
  1. Recently the Supreme Court of Papua New Guinea in O'Neill v Eliakim (2016) SC1539 discussed principles of res judicata and issue estoppel, in the following terms:
28. In Herman Gawi v PNG Ready Concrete (1983) unnumbered, unreported, Bredmeyer J. reproduced the following passage from The Doctrine of Res Judicata by Spencer-Bower and Turner 1969 2nd ed p1, as in his view it stated the law clearly and succinctly:
“In English jurisprudence a res judicata, that is to say a final judicial decision pronounced by a judicial tribunal having competent jurisdiction over the cause or matter in litigation and over the parties thereto, disposes once and for all of the matters decided, so that they cannot afterwards be raised for re-litigation between the same parties or their privies. The effect of such a decision is twofold. In the first place, the judicial decision estops or precludes any party to the litigation from disputing against any other party thereto in any other litigation, the correctness of the earlier decision in law and fact. The same issue cannot be raised again between them, and this principle extends to all matters of law and fact which the judgment decree or order necessarily established as the legal foundation or justification of the conclusion reached by the Court. In the second place, by virtue of the decision the right or cause of action set up in the suit is extinguished, merging in the judgment which is pronounced. Transit in rem judicatam. The result is that no further claim may be made upon the same cause of action in any subsequent proceedings between the same parties or their privies.”
29. That res judicata is concerned with causes of action that are the same, as distinct from issues that are the same is demonstrated by the following:
a) in the Australian High Court decision of Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 at [17]:
“17. The distinction between res judicata (in England called “cause of action estoppel”) and issue estoppel was expressed by Dixon J. in Blair v Curran [1939] HCA 23; (1939) 62 CLR 464, at p 532 in these terms: “in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.” (at p597)”
and then at [20]:
“The rule as to res judicata comes into operation whenever a party attempts in a second proceeding to litigate a cause of action which is merged into judgment on a prior proceeding.”
In the Supreme Court case of Titi Christian v. Rabbie Namaliu (1996) OS No. 2 of 1995, delivered on 18th July 1996, Amet CJ (as he then was) reproduced the following passage from Halsbury’s Laws of England (4th ed Reissue) at [977]:
“An estoppel which has come to be known as “issue estoppel” may arise where a plea of res judicata could not be established because the causes of action are not the same.”
30. The decision in Marape v. O’Neill (supra), did not dispose of a cause of action. It concerned a procedural matter, the joinder of parties. Similarly in this instance, the application before the primary judge was procedural in nature as it concerned the joinder of persons who wished to be heard in the proceeding.
31. We are satisfied that a res judicata did not arise before the primary judge in respect of the application before him by virtue of the decision in Marape v. O’Neill (supra). In finding otherwise, we are of the respectful view that the primary judge was wrong and he fell into error.
Issue estoppel
32. The third respondents contended that the appellant is estopped from contending that the third respondents should not be joined to the judicial review proceeding as an issue estoppel arises by virtue of the decision in Marape v. O’Neill (supra). Reliance is placed upon the decision of this Court in Peter O’Neill v. Nerrie Eliakim (2016) SC1522.
33. From a perusal of the decision the subject of this appeal, the primary judge does not refer to “issue estoppel”, and does not set out or consider principles relating to issue estoppel and apply them to the facts.
34. Even if the primary judge had made his decision on the basis of issue estoppel, which from a perusal of his decision, it is clear that he did not, we are of the view that he would have fallen into error. Issue estoppel arises:
“.... when a court of competent jurisdiction has determined some question of fact or law, either in the course of the same litigation (for example, as a preliminary point) or in other litigation raises the same point between the same parties: see Thoday v Thoday [1964] P 181, 189”: Watt (formerly Carter) v. Ahsan [2007] UKHL 51 at [31] per Lord Hoffman, cited with approval in O’Neill V Eliakim (supra).
35. The issue in the judicial review proceeding the subject of this appeal is not the same as that which arose in Marape v O’Neill (supra) and so does not give rise to an issue estoppel. In Marape v O’Neill (supra) a majority decision was made to join the third respondents to an appeal that concerned amongst others applications for restraining orders against members of the Police involved in investigating the payment of legal bills. The judicial review proceeding the subject of this appeal, concerns a review of the decision of the Chief Magistrate to issue an arrest warrant.
36. As the issue decided in Marape v O’Neill (supra) is not the same as the issue that was before the primary judge, the doctrine of issue estoppel could not have applied even if the primary judge had considered whether it did apply, which he did not.
  1. Accordingly, it is clear that questions of issue estoppel arise when, in subsequent litigation, a party seeks to raise an issue or fact which was previously determined by the Court in an earlier proceeding. A hypothetical example would be where a plaintiff has commenced proceedings against a defendant claiming breach of contract, and, when that claim is determined, the same plaintiff commences proceedings in tort against the same defendant referable to the same facts as were relied on in the earlier proceedings.
  2. This is not the case in the matter currently before the Court. In the proceedings before the primary Judge, the appellant did not seek to raise issues which were previously determined by Makail J. Rather, the appellant was seeking to argue before the primary Judge the issues that were not determined by Makail J because the earlier matter had been dismissed because of the multiplicity of proceedings.
  3. It follows that only the doctrine of res judicata, otherwise commonly referred to as cause of action estoppel, is relevant.

(b) Was the cause of action before the primary Judge res judicata because of the proceedings before Makail J?

  1. In light of the decision in O’Neill v Eliakim, and earlier Supreme Court authorities including Titi Christian v Rabbie Namaliu (1996) SC1583 at [21], questions to consider in determining whether a cause of action is res judicata are whether, in respect of an earlier decision, :
  2. It is not in dispute that the decision of Makail J was judicial, pronounced and within jurisdiction, and that the parties are the same. There is, however, a serious question as to whether the decision of Makail J was final, on the merits, and determined a question raised in the litigation before the primary Judge.
  3. The decisions of the National Court in Leto Darius v The Commissioner of Police (2001) N2046 and Louis Medaing v Minister for Lands & Physical Planning (2010) N3917 and the decision of the Supreme Court in John Wanis Wek v Sobol Trading Ltd (2016) SC1535 at [26] support the proposition that, in considering an application for leave for judicial review, the Court must be satisfied that:
  4. There is no dispute as to the correctness of these principles. They are, in summary, issues which are relevant to consideration by the Court as to the merits of an application for leave for judicial review.
  5. In this case there is also no dispute that, in his decision, Makail J did not determine the application for leave for review before him by reference to these principles. Makail J did not need to – his Honour considered that the multiplicity of proceedings constituted an abuse of process. Quite properly, in the context of this appeal the appellant does not challenge the decision of Makail J, and we note that the appellant concedes it would have been unable to appeal his Honour’s decision. However the appellant submits that the points actually decided by Makail J in refusing leave for judicial review concerned only the issue of abuse of process in light of multiplicity of proceedings, and that accordingly – to paraphrase Halsbury’s Laws of England – there was no actual adjudication of any issue and no action by the appellant which would justify treating it as having consented, either expressly or by implication, to having conceded the issue by choosing not to have the matter formally determined.
  6. A number of cases provide insight into relevant issues in the current appeal.
  7. First, the Judicial Committee of the Privy Council in Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993 found that a default judgment was not a judgment on the merits so as to render subsequent proceedings res judicata. The facts of Kok Hoong are summarised in the headnote as follows:
In 1954 the appellant, alleging that under an agreement made in June, 1952, he had let certain machinery on hire to the respondent company for 12 months at an agreed monthly rent, and that, on the expiry of the 12 months, the respondent had continued the hiring on the same terms, brought an action against the respondent claiming arrears of rent from September 20, 1953, and for subsequent months. He obtained judgment by default in November, 1954. Thereafter, in June, 1957, in an action between the same parties, the appellant, after pleading, inter alia, the agreement of June, 1952, and that by arrangement with the respondent company he had retaken possession of two items of the machinery in 1955, and that the hiring of the remainder was to continue on the terms and conditions of the agreement of June, 1952, subject to the variation that the hiring was to commence from April 20, 1955, claimed, inter alia, arrears of rent from April 20, 1955, and for subsequent months.
The respondents pleaded, inter alia, that the appellant was a moneylender within the meaning of section 3 of the Moneylenders Ordinance, 1951; that the transaction was a moneylending transaction and that, the appellant not having complied with the provisions of the Ordinance, the loans were not recoverable. They further pleaded that the agreement of hire was complementary to a written agreement of even date under which they purported to sell the machinery to the appellant; that the two agreements were to be read together and that the agreement of hire was, on its true construction and having regard to all the surrounding circumstances (including the agreement of sale), a bill of sale which, not being in the form required by, nor registered under, the Bills of Sale Ordinance, 1950 , was void and unenforceable. They alleged that the ownership of the machinery had always remained in them, and that the hire charges were really charges by way of interest.
By way of reply the appellant alleged, inter alia, that the respondents were estopped by the judgment by default of November, 1954, from contending either that the appellant was a moneylender or that the transaction was a moneylending transaction or that the documents were other than what they purported to be or that he was not entitled to the relief claimed on the question of the validity of the plea of estoppel.
  1. In finding that the proceedings were not res judicata notwithstanding the earlier default judgment, the Privy Council found, inter alia, that default judgments, though capable of giving rise to estoppels, must always be scrutinised with extreme particularity for the purpose of ascertaining the bare essence of what they must necessarily have decided and they could estop only for what must “necessarily and with complete precision” have been thereby determined. In particular their Lordships found, at 1013-1014:
Now what can the judgment of November 3, 1954, stand for, taking account of the plaint and the decree obtained upon it? That the plaintiff was entitled to recover from the defendant a sum of money by virtue of a written agreement under which machinery and equipment was let on hire at a monthly rent and a subsequent oral continuation of that agreement. It can be said for the appellant that what the respondent is now seeking to set up as part of his defence to the action based on the third agreement, that now in suit, is that the original agreement, out of which the others were formed, was not in reality a hiring agreement for rent at all, but a form of borrowing money on security.
In that sense it might be said that the respondent is seeking to set up something which either expresses or imports a contradiction of the record in the earlier action, to use the words employed by the court in Huffer v. Allen. It comes near to a traverse. But, in their Lordships' opinion, this proposition would not express the true nature of the respondent's proposed defence. They say nothing as to its ultimate validity as a defence, when the action comes to be tried, or as to the legal analysis of what it is that the respondent is seeking to say; but it seems that it does not deny the fact that it entered into the written agreement founded upon, which speaks of “rent” and “hire,” but rather that it maintains that, when that agreement is read in conjunction with another contemporaneous agreement the obligation to pay the moneys claimed will be seen to be part of a transaction the real nature of which was the borrowing of money on the security of goods. That is an issue which was not raised at all by the plaint in the first action. As a defence, it is more like a plea by way of confession and avoidance than a traverse. On the whole their Lordships think it impossible to say that there was anything in the first judgment which “necessarily and with complete precision” decided this issue against the respondent, and they hold consequently that the estoppel claimed cannot be maintained against it.(citations omitted, emphasis added)
  1. Second, in DSV Silo-und Verwaltungsgesellschaft mbH v Owners of the Sennar [1985] 2 All ER 104 (“The Sennar (No 2)”) the House of Lords considered more generally questions of finality in earlier decisions. This case concerned questions of issue estoppel, however there was also discussion by their Lordships of the question whether an earlier decision had determined issues finally and “on the merits”. Lord Brandon said at 110-111:
The argument in relation to the first contention was that the judgment of the Dutch Court of Appeal was procedural in nature, in that it consisted only of a decision that a Dutch court had no jurisdiction to entertain and adjudicate on the appellants' claim, and did not pronounce in any way on the question whether the claim itself, or any substantive issue in it, if it were to be entertained and adjudicated on, would succeed or fall. In my opinion, this argument is based on a misconception with regard to the meaning of the expression 'on the merits' as used in the context of the doctrine of issue estoppel. Looking at the matter negatively a decision on procedure alone is not a decision on the merits. Looking at the matter positively a decision on the merits is a decision which establishes certain facts proved or not in dispute, states what are the relevant principles of law applicable to such facts and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned. If the expression 'on the merits' is interpreted in this way, as I am clearly of opinion that it should be, there can be no doubt whatever that the decision of the Dutch Court of Appeal in the present case was a decision on the merits for the purposes of the application of the doctrine of issue estoppel. In my view, therefore, the argument for the appellants on this point is misconceived and should be rejected. (emphasis added)
  1. Third, in Baines v State Bank of New South Wales (1985) 2 NSWLR 729 the Supreme Court of New South Wales found at 738 that an order for the dismissal of the proceedings for want of compliance with an order for discovery, not following a hearing on the merits, would not give rise to an estoppel or a defence of res judicata in other proceedings between the same parties.
  2. Fourth, in Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572 the Full Court of the Supreme Court of South Australia found that summary dismissal for failure to disclose a cause of action was not a final determination of the claim such as to preclude a subsequent application. In the course of this case Lander J noted at 593:
In the ordinary course of events where a trial has taken place and a judgment entered, it is not difficult to determine whether the cause of action, the subject matter of a current set of proceedings, has been previously disposed of by a tribunal in circumstances which would give rise to a plea of res judicata.
More difficulty arises in circumstances where the matter has not gone to trial and has not been formally adjudicated upon by a tribunal for reasons that there has been a withdrawal by one party before the matter has concluded, or the parties have agreed to a compromise, or judgment has been entered by reason of the default of another party, or because the action has simply been dismissed.
  1. His Honour observed that if a party discontinued a proceeding there was nothing to stop it bringing fresh proceedings on exactly the same subject matter and pleading the same cause of action as in the discontinued proceedings (at 593).
  2. Fifth, in Pople v Evans [1968] 2 All ER 743 Ungoed-Thomas J held that that res judicata could not be founded on an order of dismissal for want of prosecution. His Lordship observed at 752:
That case [New Brunswick Railway Co v British and French Trust Corporation Ltd [1939] AC 1] and Kok Hoong v Leong Cheong Kweng Mines [1964] AC 933, showed the concern of the courts to limit the operation of res judicata to issues which can be fairly regarded or treated as having been disposed of by the order relied on their merits, for example, by trial admission or compromise. It seems to me that the non- technical and substantial nature of res judicata 'founded on the considerations of justice and good sense' has no place for mere dismissal for want of prosecution, and that Byrne v Frere (1828) 2 Moll 157 and Magnus v National Bank of Scotland (1888) 58 L T 617 rightly so establish.
  1. Sixth, in Totamu v Small Business Development Corporation (2009) N3702 David J held:
11. An order dismissing an action for want of prosecution, particularly when made ex-parte, is not a decision on the merits and therefore does not operate as res judicata. Consequently, a second action for the same relief sought in the earlier action based upon the same facts against the same party can be filed provided statutory time limits permit: Newmont v. Laverton Nickel NL (No 2) [1981] 1 NSWLR 221; Andrew v. Baradom Holdings Pty Ltd [1995] 36 NSWLR 700; and Bailey v. Bailey [1983] 3 All ER 495. (emphasis added)

CONCLUSION

  1. We are satisfied that the decision of Makail J was not final and on the merits of the case, such that the proceedings before the primary Judge were res judicata. As a general proposition, and as is clear from the authorities and learned writings we have examined, dismissal of proceedings for reasons other than a determination of the substantive questions pertaining to the cause of action is not “final”, such that a subsequent claim pleading the same cause of action is res judicata.
  2. Although Makail J dismissed the application before the Court as an abuse of process for multiplicity of proceedings, that finding did not involve determination of substantive issues relevant to the exercise of the judicial discretion to grant leave for judicial review, including those we set out earlier in this judgment. It follows that the primary Judge erred in finding that the application for leave before her was res judicata, or that the previous decision of Makail J created an estoppel, when there had been no determination of any cause of action, or any determination of any substantive issues in dispute between the parties on the merits.
  3. The appropriate order is to allow the appeal, with the appellant’s costs of the appeal to be paid by the first, second, third, fifth and sixth respondents.
  4. We note that the appellant also seeks an order that it be granted leave to apply for judicial review in proceeding OS (JR) No 116 of 2017. We do not consider it appropriate to grant an order in those terms – this is an issue for the National Court after hearing proper submissions as to whether leave ought to be granted.

ORDER

(1) The order of the National Court made on 5 May 2017 in proceeding OS (JR) No 116 of 2017 refusing and dismissing the appellant’s application for leave to apply for judicial review is quashed.

(2) The application for leave for judicial review in proceeding OS (JR) No 116 of 2017 is remitted to the National Court for re-hearing.

(3) The first, second, third, fifth and sixth respondents shall pay the appellant’s costs of and incidental to the appeal, to be taxed if not otherwise agreed.

Judgment accordingly.

_______________________________________________________________
Simpson Lawyers : Lawyers for the Appellant
Bradshaw Lawyers: Lawyers for the First, Second & Third Respondents
Lhyrn Lawyers: Lawyers for the Fifth Respondent
Jeffersons Lawyers: Lawyers for the Sixth Respondent

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