Telikom (PNG) Ltd v Rava [2018] PGSC 39; SC1694 (13 July 2018)

SC1694

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCR 84 of 2017

APPLICATION FOR REVIEW PURSUANT
TO S. 155(2)(b) OF THE CONSTITUTION

BETWEEN:
TELIKOM (PNG) LIMITED
Applicant

AND:
KILA RAVA, NICHOLAS PALIOU,
BERNARD SUI, OWEN BOKU
and 23 other Ex-Employees of Telikom (PNG) Limited
First Respondents

AND:
IDA BASUGARI PALEK
Second Respondent

AND:
MARIA EGINAKA
Third Respondent

AND:
RAVU TAVIRI
Fourth Respondent

AND:
THE INDEPENDENT STATE
OF PAPUA NEW GUINEA
Fifth Respondent

Waigani: Injia CJ, Hartshorn and Higgins JJ
2018: 2^nd May,
: 29^th June,
: 13^th July

Application to review pursuant to s. 155(2)(b) Constitution

Cases Cited:
Papua New Guinea Cases

Nae Ltd v. Curtain Bros Papua New Guinea Ltd (2015) N6124
Amos Ere v. National Housing Corporation (2016) N6515
Jacob Popuna v. Ken Owa (2017) SC1564

Overseas Cases

Hunter v. Chief Constable of the West Midlands Police and Others [1981] UKHL 13; [1982] AC 529

Counsel:

Mr. E. Komia and Mr. Z. Kamaso, for the Applicant
Mr. T. Kamuta, for the First, Second and Third Respondents

13^th July, 2018

1. INJIA CJ: I have read the draft judgment of Hartshorn J from which I adopt the background to this review and the threshold point for determination before us. It is an abuse of process for an applicant who has exhausted his right of appeal to then seek a review of the same decision involving the same parties. I agree with Hartshorn J that it is an abuse of process per se in those circumstances. The point was squarely decided by the full Court in Jacob Popuna v. Ken Owa (2017) SC1564. In Popuna, as with the situation in the case at hand, the appeal was dismissed without a determination of the merits of the appeal.

2. The question that begs an answer is whether the decision to dismiss an appeal, without a determination of the merits of the appeal, is binding on the merits of the appeal. The abuse of court process is without doubt a Court policy consideration that protects the court process. A dismissal of an appeal for want of prosecution, want of competence, breach of directional orders or for some other reasons are associated with Court policy and case management. Should court policy or case management considerations override important points of law in an appeal needs careful consideration? This point was not fully addressed in Popuna and has not been fully addressed by the parties before us and I am unable to determine this point.

3. One other important point in this application that I am not assisted by the parties is a point that may go to the merits of the appeal of the decision of the National Court. That is with regard to the legal obligation of an employer to perform the duties of a tax agent to deduct the income tax component from service entitlement payments due to an employee and remit those to the tax office. Legal liability for personal income tax attaches to the individual income-earner and given that the tax regime is strictly regulated by statute, any tax obligation imposed on an employer to remit the tax component of service entitlement payments of an employee and liability of the employer for default, must surely rest in the statute governing income tax. The applicant fears that it may be double-taxed by the tax office if the decision of the National executive Council to exempt tax on redundancy payments due to the respondents (first, second, third and fourth respondents) is implemented and the redundancy payments that includes the tax component is paid to the respondents. Personal income liability tax is ordinarily a matter for the tax office to take up directly with the income earner and the tax office, except where there is a clear statutory imposition or legal obligation on the employer to perform tax agency duties. It may be that the applicant may be assuming a tax burden that the law may or may not impose on it. It may be that the tax office could pursue the tax component of the redundancy payment with the employee concerned and not go after the employer. The parties did not fully argue this point before us and I am not persuaded if the applicant has a case on this point of law.

4. These issues remain to be addressed and determined by this Court in an appropriate case. I am not persuaded by the applicant that this Court should depart from the reasoning in Popuna. For the forgoing reasons, I too would dismiss the application with costs.

5. HARTSHORN J: This is a decision on a contested application for the review of a National Court decision brought pursuant to s. 155(2)(b) Constitution.

Background

6. The respondents, apart from the State which did not make an appearance in this application, are former employees of the applicant Telikom (PNG) Limited (Telikom).

7. In 2011, as a result of a restructure, a number of Telikom employees became redundant. The National Executive Council (NEC) made a decision that amongst others approved the exemption of tax obligations on redundancy entitlements of Telikom and/or its staff affected by the restructure.

8. Notwithstanding the NEC decision, relevant redundancy payments were not exempted from tax.

9. Former employees of Telikom commenced proceedings seeking amongst others, declaratory relief concerning Telikom’s failure to comply with the NEC decision and orders that Telikom must comply with a certain Enterprise Agreement 2010.

10. On 6^th March 2015 the National Court, in three proceedings that were consolidated, after finding that Telikom had acted in bad faith in a mediation, in essence ordered that:

a) Telikom is liable to pay the respondents all their final entitlements without tax pursuant to the NEC decision which purportedly exempted tax; and

b) Telikom is obliged to pay the first respondents all monies that it had deducted as income tax and had paid to the Internal Revenue commission as income tax; and

c) Telikom pay a sum of about K12 million to the respondents except the State.

11. It is the decision of the National Court dated 6^th March 2015 that is sought to be reviewed (decision to be reviewed).

Whether this proceeding is an abuse of process

12. It is not in dispute that the decision to be reviewed was appealed. That appeal is SCA 35 of 2015 Telikom (PNG) Ltd v. Kila Rava and Others (Appeal).

13. The Appeal was dismissed for want of prosecution by this Court on 1^st September 2017 (Kirriwom, Yagi and Geita JJ).

14. The respondents submit that to make application pursuant to s. 155(2)(b) Constitution to review a National Court decision that has been the subject of an appeal, is an abuse of process. Reliance is placed upon amongst others, the Supreme Court decision of Jacob Popuna v. Ken Owa (2017) SC1564.

15. Telikom submits that this Court should review the decision to be reviewed as:

a) The Appeal was dismissed for want of prosecution. The substantive issues were not considered;

b) Exceptional circumstances exist as a substantial miscarriage of justice has occurred as Telikom has to pay double the requisite amount of tax;

c) Telikom has an arguable case;

d) It is in the interests of Justice;

e) This Court is vested with unfettered discretionary power to review a National Court decision;

f) An abuse of process requires more than one proceeding to be filed concerning the same cause of action simultaneously.

Consideration

16. In Jacob Popuna v. Ken Owa (supra), this Court (Gavara Nanu, Kariko and Kassman JJ) at [4], considered what it termed as the preliminary question to be decided of whether the application for review before it was an abuse of process in circumstances where an otherwise competent appeal raising the same issues as the application pursuant to s. 155(2)(b) Constitution has been determined by the Supreme Court by way of a summary dismissal.

17. This is a similar scenario to the application that is before this Court and is on point.

18. After a detailed consideration of authority the Court stated at [16]:

“16. In relation to the application before us, the order of the Supreme Court summarily dismissing the appeal SCM 34 of 2015 was a final determination of the grounds of grievance the applicants have against the National Court decision appealed against. The Supreme Court’s order of 30th June, 2016 was the end of that matter. It is immaterial that the appeal was summarily dismissed and not determined on its merits. It is also irrelevant that serious issues of public interest are involved. There must be finality in litigation. The applicants are now re-agitating the same grounds of grievance as they raised in appeal SCM 34 of 2015.By taking this course they are having “a second bite of the cherry”, which the Courts guard against as an abuse of process; Anderson Agiru v Electoral Commission and The State (supra) SC687, Application by Anderson Agiru (supra) SC704.”

19. As to what constitutes an abuse of process, the Court stated at [17] and [18]:

“17. In Pokia v Yallon (2014) SC1336 the Supreme Court at[20] stated:

“An abuse of process will exist if a plaintiff commences more than one proceeding concerning the same cause of action. Such an abuse can be committed when two proceedings are conducted simultaneously regarding the same cause of action (Telikom PNG Ltd v ICCC (2008) SC906) or when the plaintiff loses one proceedings then comes back to court for a "second bite at the cherry" to prosecute the same cause of action (Anderson Agiru v Electoral Commission (2002) SC687).”

18. In our view, the processes of this Court have been improperly used by the applicants. As Gavara-Nanu, J noted in Michael Wilson v Clement Kuburam (supra) at [25]:

“The types of abuses of process may vary from case to case but to establish an abuse of process there must be evidence showing that the processes of the court have been improperly used; or have been used for an improper purpose; or have been used in an improper way; or that such abuse of process have resulted in the right of the other party being denied, defeated or prejudiced: National Executive Council v. Public Employees Association [1993] PNGLR 264 and The State v. Peter Painke [1976] PNGLR 210.””

20. I am not satisfied that Telikom has given this Court cause to depart from the decision in Jacob Popuna v. Ken Owa (supra). That the Appeal did not consider substantive merits is immaterial. It is also irrelevant that Telikom may have an arguable case or that it considers that exceptional circumstances exist and that a substantial miscarriage of justice has occurred. As an aside, if indeed it is the case that exceptional circumstances exist and that a substantial miscarriage of justice has occurred, the question may be posed as to why Telikom conducted its Appeal in the manner that it did such that this Court dismissed the Appeal for want of prosecution. It would appear that Telikom is the author of its own misfortune in this regard.

21. Further, it is not necessary that there has to be more than one proceeding filed concerning the same cause of action simultaneously for an abuse of process to be constituted. I respectfully concur with the statements made by the Court in Jacob Popuna (supra) concerning what constitutes an abuse of process. To emphasise that the kinds of circumstances in which an abuse of process may arise are not closed, as I did in Nae Ltd v. Curtain Bros Papua New Guinea Ltd (2015) N6124 and Amos Ere v. National Housing Corporation (2016) N6515, I reproduce the following classic statement of Lord Diplock in the House of Lord’s decision of Hunter v. Chief Constable of the West Midlands Police and Others [1981] UKHL 13; [1982] AC 529, as to the inherent jurisdiction of a court to deal with an abuse of its process:

“This is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; ......... It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power.”

22. Consequently, for the above reasons, I am satisfied that this proceeding is an abuse of process of this Court and accordingly it should be dismissed.

Orders

23. It is ordered that:

a) This proceeding is dismissed;

b) The costs of and incidental to this proceeding of the first, second and third respondents shall be paid by the applicant.

24. HIGGINS J: I respectfully concur with the decision proposed by Hartshorn J and with the orders to be pronounced for the reasons he has articulated.

25. I would only add that the resolution of the National Executive Council to pay redundancy benefits to retired employees was a result of an industrial agreement with the State which is, effectively, the employer of those workers. It would be a grave breach of good faith to permit Telikom to hide behind technicalities of doubtful validity to avoid the obligation to its redundant workers which it voluntarily negotiated.

Chesterfield Lawyers: Lawyers for the Applicant
Kamutas Lawyers: Lawyers for the First, Second and Third Respondents