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Inugu v Maru [2019] PGSC 83; SC1873 (13 November 2019)

SC1873


PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]


SCM NO. 06 OF 2019


BETWEEN:
ROSELYN INUGU, WENDY INUGU, ANA INUGU, MARGARET INUGU & VERONICA INUGUas members of the Management Committee of the YAKAINGI BUSINESS GROUP (INC)
First Appellants


AND:
YAKAINGI BUSINESS GROUP (INC)
Second Appellant


AND:
HON. RICHARD MARU, MP in his capacity as the MINISTER FOR TRADE, INDUSTRY AND COMMERCE
First Respondent


AND:
ALEX TONGAYU in his capacity as the REGISTRAR OF COMPANIES
Second Respondent


AND:
ADRIAN INUGU, NELSON NEA INUGU & NAKANDA KAIMALAN as the members of the purported Management Committee of YAKAINGI BUSINESS GROUP (INC)
Third Respondents


AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Respondent


Waigani: Kirriwom, Yagi and Collier JJ
2019: 30 October and 13 November


PRACTICE & PROCEDURE – Dismissal of proceedings for want of prosecution – alleged failure of Registrar to comply with National Court Rules – power of National Court to set aside ex parte orders – dismissal order sought and made irregularly – lack of notice of summary dismissal hearing – National Court Rules, Order 16 Rule 13 (13)(2)(c) – National Court Rules, Order 12 Rule 8(3) and (4)


Cases Cited:
Papua New Guinea Cases


Aiwasi v Derari [2017] PGNC 15; N6602 (2 February 2017)
Ango v Kaluvia [2017] PGSC 31; SC1628 (3 November 2017)
Breckwoldt & Co. (N.G.) Pty Ltd v. Gnoyke [1974] PNGLR 106
Christopher Smith v Ruma Constructions Ltd (2002) SC695
Curtain Brothers (PNG) LTD v University of Papua New Guinea (2005) SC788
Elema v Pacific MMI Insurance Limited [2007] PGSC 52
Feflo Plantation (PNG) Ltd v Lolo Development Corporation Ltd [2013] PGNC 242; N5065
Isaac Lupari v. Sir Michael Somare (2010) SC1071
Kalinoe v Kereme [2017] PGSC 26; SC1631
Kond v National Development Bank Ltd [2015] PGSC 18; SC1432
MVIT v Joseph Bure (1999) SC613
National Superannuation Fund Limited v Yawenaik Holdings Limited [2018] SC1709
New Britain Oil Palm Ltd v Sukuramu [2008] PGSC 29; SC946
Ron Napitalai v. PNG Ports Corporation Ltd and Ors (2010) SC1016
State v. Sam Akoita and Ors (2009) SC977
Thomas Rangip v Peter Loko (2009) N3714
Wasis v Elias & Anor (2016) PGSC 5
Wawoi Guavi Timber Company Ltd v Molu [2016] SC1514


Overseas cases


Australia Coal and Shale Employees’ Union v The Commonwealth [1953] HCA 25; (1956) 94 CLR 621


Legislation cited


Business Groups Incorporation Act 1974, s 45
National Court Rules, O 12 r 8, O 16 r 13(13)(3)(2)(c)
Supreme Court Act, s 14


Counsel


Mr A. Serowa, for the Appellants
Mr B. Lai, for the Third Respondents
No appearances for the first, second and fourth respondents

REASONS FOR JUDGMENT


13th November, 2019


  1. BY THE COURT: On 12 March 2019 a National Court Judge delivered judgment in proceedings in OS (JR) No. 366 of 2017 – Roselyn Inugu & Ors v Hon. Richard Maru &Ors (O.S. JR 366 of 2017). His Honour refused the appellants’ application to set aside the National Court Order dated 24 October 2018, which ordered the summary dismissal of the proceedings for want of prosecution.
  2. On 20 March 2019, the appellants filed a notice of motion pursuant to Order 10 of the Supreme Court Rules. For the purposes of section 14 of the Supreme Court Act (SCA), the appeal lies without leave, as the judgment of the National Court is final in nature.
  3. Before turning to the grounds of appeal it is helpful to examine relevant background facts and the decision of the primary Judge the subject of this appeal.


BACKGROUND

  1. The proceedings were initially filed on 27 March 2017. The appellants sought to have reviewed a decision of the first respondent, the Honourable Richard Maru, MP in his capacity as the Minister for Trade Industry and Commerce, dated 15 December 2016. In that decision, the Minister recognised the third respondents, Adrian Inugu (the nephew of the late Mr Daniel Inugu), Nelson Nea Inugu and Nakanda Kaimalan (third respondents) as the members of the Management Committee of the second appellant, Yakaingi Business Group (Inc) (YBG), under s 45 of the Business Groups Incorporation Act 1974.
  2. By way of procedural background, the appellant’s extract of arguments dated 1 October 2019 sets out a useful timeline of events:
  3. Following this, there was a lengthy history of correspondence: see paragraph 20 of the Affidavit of McRonald Nale filed on 11 December 2018. The lawyers for the appellants then made various attempts to list the matter for directions as follows:
  4. In his affidavit of 29 August 2018 Mr Tony Noki, a lawyer for the appellants, deposed that:
  5. Subsequently on 1 October 2018, the appellants’ lawyers again wrote to the Registry seeking to have the matter listed for directions:
We are aware that this matter is on the Summary Determination list for unknown reasons. We have not received any letter or correspondence in terms of that. We found out through our searches at the Court House registry. We are very concerned because we have written numerous letters to request the matter to be listed.
Please have this matte [sic] listed for directions hearing as we have an application on foot and we intend to expedite it and the matter.
Please advise parties in writing once you have it listed.

  1. On 24 October 2018, the matter was listed for a summary determination hearing before the primary Judge. His Honour dismissed the proceedings in their entirety for want of prosecution by the appellants. This order was made in the absence of the appellants or their lawyers. Mr Laifor the third respondents was, however, present in Court on that date.


NATIONAL COURT PROCEEDINGS

  1. By notice of motion filed on 17 December 2018 (although dated 29 November 2018) the appellants applied to the National Court for the following orders:
    1. Pursuant to Order 12 Rule 8 (3) and Order 4 Rule 49 (19)(4) of the National Court Rules and the inherent power of the court, the ex parte order of this Honourable court made on 24 October 2018 be set aside.
    2. Pursuant to Order 12 Rule 1 of the National Court Rules and the inherent power of the court, these proceedings and the interim Stay Order granted on 18 May 2017 be reinstated.
    3. The matter be listed for directions.
    4. Costs of and incidental to this application be in the cause.
    5. Time as to entry of these orders be abridged to the date of settlement by the Registrar which shall take place forthwith.
    6. Any other or further order this Honourable court deems fit.
  2. Pending the hearing of the substantive application, on 3 January 2019 the National Court made orders including restraining the respondents from changing the signatories and conducting any transactions on YBG’s bank account with Bank South Pacific Limited, pending the hearing and determination of the appellants’ notice of motion filed on 17 December 2018.
  3. The substantive application was heard on 21 February 2019. Before the primary Judge were Counsel for the third respondents, Counsel for the fourth respondent and Counsel for the appellants.


DECISION OF THE PRIMARY JUDGE

  1. On 12 March 2019, his Honour refused the substantive application. In summary, his Honour found:
  2. First, the primary Judge identified the procedure that the Registrar must follow in referring the matter for summary determination under Order 16 Rule 13(13)(2)(c) of the National Court Rules. His Honour observed:
Under this rule the first thing the Registrar does is to send a notice letter to the plaintiff informing him or her that he intends to refer the matter for summary determination. The grounds of the referral and the reasons for the referral which is inactivity by the plaintiff in a given period are also stated in that letter of notice. The notice letter is a standard one. All the respondents are forwarded copies of the same notice letter. The letter also gives the plaintiff 30 days to respond and fixes a return date and time for the matter to go before a judge.
In appropriate cases the notice letter is published in the print media. This is however made optional by the rules. If the Registrar receives a response to his notice letter either in writing or verbal, the response letter is placed in the court file where the response is verbal and a note of the verbal response is also placed in the court file and then advises the plaintiff to appear in court on a date and time fixed. Upon the expiration of 30 days the Registrar forwards the file with any response received from the plaintiff to the court. The court then determines the matter on the basis of all the materials contained in the file regarding compliance of the notice letter and which essentially contains the requirements of the rules and that compliance is to be by the plaintiff and the Registrar. That is what the court looks at.
A determination is made by the court taking into account not just the response letter by the plaintiff but any explanations given by the plaintiff and on anything the respondent or the defendant may wish to say. The order by the court is then settled, sealed and served on all parties. The last requirement under the rules is that if the matter is dismissed for want of prosecution the court file is closed and forwarded to the archives for storage. The procedure is obviously detailed and exhaustive. This is in order to give the plaintiff an opportunity to defend the referral of the matter by the Registrar for summary determination.
  1. The primary Judge noted that the appellants claimed they were not made aware by the Registrar of the matter being listed for summary determination, and that they had done everything possible to have the matter set down for directions hearings but the registry had not acted upon those requests.
  2. His Honour noted the evidence before the Court to the effect that the appellants conceded their law firm became aware of the case being listed for summary determination on 22 August 2018, although they also stated that the firm was not notified of the matter being listed for summary determination.
  3. His Honour continued:
The elaborate nature of the procedure set out in order 16 rule 13(2)(c) is aimed at ensuring that the parties, especially the plaintiff is given a fair opportunity to be heard. The scheme and the clear intention of the rules is that the plaintiff in particular must be given an opportunity to turn up in court and defend the matter being summarily determined if he so decides.
The prime purpose of the procedure under the rules is to ensure that the plaintiff is notified of the matter being listed for summary determination because if the case is dismissed the plaintiff is the one that would suffer loss.
  1. His Honour noted from the endorsements on the court file that, on 24 October 2018 when the proceeding was dismissed for want of prosecution, only Mr Lai, Counsel for the third respondent, appeared. His Honour continued:
... The plaintiffs also did not appear. In his submissions, Mr Lai, counsel for the third defendant, said the matter was published in the newspaper. So what is crucial to my mind is that the parties, especially the plaintiff being made aware that the matter – were aware that the matter had been listed for determination.
No case is listed for summary determination by the Registrar unless the steps prescribed in the rules outline the procedure to inform the parties of the matter being listed for summary determination are fully complied with. In this case I have no reason to think that the Registrar did not comply or follow the procedure to inform the parties including the plaintiff of the matter being listed for summary determination. What is not in dispute is that the plaintiff and the third defendant knew that the matter was listed for summary determination. Mr Lai turned up on behalf of his client on 24 October 2018 as I said but not the plaintiffs or their lawyers.
The plaintiffs’ lawyer’s affidavit according to the plaintiffs’ lawyer, Mr Nale, the plaintiffs became aware of the case being listed for summary determination. However, all they did was to write to the Registrar to have the matter listed for directions. So to me, their non appearance in court on 24 October 2019 – sorry, 2018 was their slackness – was due to their slackness in not finding out from the registry about the return date or the hearing date of the summary determination matters. Instead of writing letters to the Registrar they should have gone to the registry and enquired about the date of the summary determination hearing.
  1. The primary Judge held that as the proceedings had been dismissed in their entirety, his Honour has no jurisdiction to entertain the plaintiff’s notice of motion. The National Court Rules provide that once a case is dealt with or dismissed, the relevant court file is archived, which indicates the end of the case.
  2. His Honour further observed that a decision to dismiss the proceeding is final. Despite Counsel for the plaintiff relying on a number of cases in support of the contention that the decision should be set aside, the primary Judge held “a firm view” that the decision being final in nature, the proper recourse for the appellants is either to appeal or review his Honour’s decision.
  3. His Honour stated that Counsel for the appellants relied on James Aiwasi v Monty Derari and others [2017] N6602, however this case did not assist the appellants, because in that case, Justice Kandakasi (as he then was) said that an ex parte order dismissing a proceeding terminated the proceeding in its entirety and the only way to challenge the dismissal was to either appeal a decision or have it reviewed. To challenge such a decision by a notice of motion to set aside, as in this case, was found to be an abuse of process. His Honour followed and adopted the Supreme Court decision in Christopher Smith v Ruma Construction Limited SC695 in which the Supreme Court said that the National Court lacked jurisdiction to review a dismissal order because the National Court would have to apply the principles relevant to appeal.
  4. His Honour observed that, following the case being listed for summary determination on 22 August 2018, the appellants had two months to comply with the requirements of the National Court Rules and take appropriate steps to ensure that they were heard on the day of the hearing. The primary Judge found the only relevant letter was dated 1 October 2018, as the two other letters were sent in June and July. His Honour was not satisfied with the appellants’ explanation for why they had allowed the case to be dismissed in their absence. In particular his Honour held that no genuine steps had been taken to progress the substantive matter, including in respect of mediation.
  5. The primary Judge rejected the appellants’ argument that the Registry did not notify them of the case being listed for summary determination. His Honour found that the lawyer for the third respondents made an appearance on 24 October 2018 on the basis that the summary determination list was published in the print media, which his Honour deemed to be sufficient compliance by the Registrar regarding the rules to notify appellants. His Honour considered that any doubt that the Registrar had not notified the appellants of the matter being listed for summary determination was removed when the lawyers of the appellants found out through their searches at the Registry on 22 August 2018 that the case was listed for summary determination.
  6. Ultimately, his Honour concluded that the appellants, through their lawyers, did not take genuine steps to appear and be heard on 24 October 2018, and that although they had the opportunity to be heard, they simply failed to avail themselves to that opportunity.
  7. The application was dismissed with costs to the third respondent, and further with the other respondents to pay their own costs.


GROUNDS OF APPEAL IN THE SUPREME COURT


  1. On 20 March 2019, the appellants filed a Notice of Motion where they relied on lengthy grounds of appeal, which are as follows:
3.1. The learned judge erred in law when he failed to take into consideration that the Registrar had failed his duty under Order 16 Rule 13 (13)(2)(c)(i) of the NCR where he referred the matter for summary determination without issuing a proper notice to the appellants at their lawyers’ address for service informing the appellants:
a) of his intention to refer the matter to a judge for summary determination.
b) the grounds upon which he intends to refer the matter for summary determination.
c) giving the appellants thirty (30) days to show cause why the matter should not be referred to a judge for summary determination.
d) the date and the time of the summary determination hearing.
3.2. The learned judge erred in law and in fact when he held that the Registrar had complied with his duty under Order 16 Rule 13 (13)(2)(c)(i) of the NCR by publishing a notice in print media when:
a) there was no evidence before the court below that established that such a notice had been published in print media.
b) publication of a notice under Order 16 Rule 13 (13)(2)(c)(i) in print media is optional in appropriate cases where a plaintiff is not represented by a lawyer and has no permanent address for service of such notices etc.
3.3. The learned judge erred in law and in fact when he blatantly failed to take into consideration that the dismissal orders of 24 October 2018 in dismissing the proceeding for want of prosecution was irregular on the basis that the Registrar had failed to comply with a condition precedent to specifically give notice to the appellants in accordance with Order 16 Rule 13 (13)(2)(c)(i) of the NCR which the appellants were entitled to set aside as of right.
3.4. The learned judge erred in fact and in law by holding that the Registrar’s duty to comply with Order 16 Rule 13 (13)(2)(c)(i) of the NCR had been waived when the appellants became aware that the matter was listed for summary determination for want of prosecution when:
a) the Registrar’s duty to give notice to the appellants under Order 16 Rule 13 (13)(2)(c) of the NCR couched in mandatory terms cannot be waived by non-compliance on the part of the appellants after becoming aware that the matter was listed for summary determination.
b) the appellants’ duty under Order 16 Rule 13 (13)(2)(c) of the NCR can only be discharged by them effectively conditional upon a proper notice being issued by the Registrar to the appellants.
3.5. The learned judge erred in fact and misapplied the law when he held that the appellants had failed to take any steps to address the matter after being aware that the matter was listed for summary determination when he failed to take into consideration that:
a) the appellants appeared in court on 22 August 2018, the initial date the matter was listed for summary determination before her Honour Justice Nablu despite not being served a proper notice under Order 16 Rule 13 (13)(2)(c)(i) of the NCR by the Registrar.
b) the Court on 22 August 2018 did not sit and the matter was adjourned to the Registry.
c) the appellants had filed an Affidavit of Tony Noki on 29 September 2018 showing cause why the matter should not be determined summarily and further wrote a letter on 1 October 2018 to the National Court Registry to have the matter listed for directions.
3.6. The learned judge erred in fact and misapplied the law when he held that the appellants had not provided any adequate explanation why they failed to turn up in Court and allowed the proceeding to be dismissed ex parte on 24 October 2018 when he failed to take into consideration that:
a) the initial date the matter was listed for summary determination hearing was on 22 August 2018 which the appellants turned up in Court but the Court did not sit.
b) the appellants were not notified by the Registrar of the new summary determination hearing date which was on 24 October 2018.
c) it was incumbent or the onus was on the Registrar to inform the appellants of the new summary determination hearing date after the matter was not dealt with on 22 August 2018 which the Registrar failed to do so under the circumstances where he had purportedly undertaken the process under Order 16 Rule 13 (13)(2)(c) of the NCR to list the matter for summary determination.
3.7. The learned judge erred in law when he held that he had no jurisdiction under Order 12 Rule 8 (3) of the NCR to hear the appellants’ application to set aside the ex parte orders of 24 October 2018 when various Supreme Court authorities confirm that the National Court has the jurisdiction under Order 12 Rule 8 (3) of the NCR to set aside ex parte orders. (See Ango v Kaluvia (2017) SC 1628; Elema v Pacific MMI Insurance Limited [2007] PGSC 52)
3.8. The learned judge erred in law and breached Schedule 2.9 (1) of the Constitution when he completely ignored or did not give any judicial consideration to the Supreme Court authorities of Ango v Kuluvia(2017) PGSC 1628 and Elema v Pacific MMI Insurance Limited [2007] PGSC 52 submitted by the appellants which established that the National Court had jurisdiction under Order 12 Rule 8 (3) of the NCR to set aside ex parte orders which were binding on him.
3.9. The learned judge erred in law and in fact when he held that the appellants had not provided any explanation for why they failed to turn up in Court on 24 October 2018 when he failed to take into consideration that the appellants were not notified by the Registrar that the matter would be listed for summary determination hearing on 24 October 2018.
3.10. The learned judge erred in law and in fact and misapplied his judicial discretion resulting in grave injustice to the appellants where he failed to take into consideration that the appellants had prosecuted the matter in the Court below with due diligence where:
a) the appellants through their lawyers had turned up on all Court hearings throughout the course of the proceedings in the Court below except on the 24 October 2018.
b) the appellants had written letters and had sent emails to the National Court Registry requesting for the matter to be listed for directions where it can be prosecuted thereon wherein the Registrar had failed to adhere to their request.
c) the listing of matters for directions and hearings is an incumbent duty of the National Court Registry and the Registrar, something which was beyond the control of the appellants which they failed to carry out effectively and efficiently when letters were sent requesting for the proceeding in the Court below to be listed for directions.
  1. The appellants seek the following orders:
  2. The grounds of appeal can conveniently be grouped into two categories, namely concerning:


CONSIDERATION

  1. This appeal, at this stage, only concerns issues of practice and procedure rather than the substantive issues raised in the originating summons filed in the National Court. Relevantly, Order 16 Rule 13(13)(2)(c) provides:
(2) Summary disposal
(c) Where the Registrar refers a matter for summary determination, the following procedure shall apply:
i. A notice letter in the form in Schedule C is issued by the Registrar which gives notice to the Applicant of his intention to refer the matter to the judge for summary determination on the grounds stated in the letter. The letter also gives the Applicant thirty (30) days to respond and fixes a return date and time for the matter to come before the judge. A copy of the same letter is sent to the respondent. In appropriate cases, the notice letter may be published in the media.
ii. If the Registrar receives a response, either in writing or verbal, he shall place on the file the response or note of the verbal response and advise the Applicant to appear in Court on the date and time fixed.
iii. Upon expiry of 30 days, the Registrar shall forward the file to the judge together with any response received.
iv. The judge may determine the application summarily based on the response received or report by the Registrar together with any explanation given by the Applicant and/or the respondent in court.
v. if the parties are unrepresented by a lawyer, the Registrar shall draft and settle the Court Order and forward sealed copies to the parties.
vi. the Registrar shall also forward a sealed copy of the Order together with a copy of the judgment, if any, to the Clerk of the Court or tribunal which made the decision.
vii. the file shall be closed and forwarded to Archives for storage.
  1. Order 16 Rule 13(14) provides that a judge may dispense with any requirements of these rules in an appropriate case. There is no equivalent provision in the National Court Rules or anywhere else for that matter, to permit a Registrar to dispense with such requirements

The Registrar’s requirement to give notice

  1. Grounds of appeal 3.1-3.6 and 3.9-3.10 relate to whether the primary Judge erred in exercising his discretion on 12 March 2019 in refusing to set aside Orders of 24 October 2018 summarily dismissing the proceedings.
  2. In Kond v National Development Bank Ltd [2015] PGSC 18; SC1432, Lenalia, David and Yagi JJ discussed the nature of legislative provisions in general being either mandatory or directory, as well as the subsequent consequences. At [38], their Honours said:
[38] The main principles that emerge from these case authorities therefore are:
1. in statutory provisions that are considered imperative, the courts have decided that where there is non-compliance, the whole proceedings become a nullity and that everything that follows upon them are all void;
2. where a statutory provision is found to be directory, the courts have decided that non-compliance does not render subsequent proceedings a nullity or void.
  1. Their Honours noted at [32] that in ordinary usage, the word “shall” is taken as imperative.
  2. The appellants argue that the term “shall” in Order 16 Rule 13(13)(2)(c) is imperative and that any noncompliance should make the ex parte order void.
  3. The third respondent does not dispute that the provisions of Order 16 Rule 13(13)(2)(c) are mandatory, and must be complied with. However they also submit that:
  4. We do not accept these submissions of the third respondents, for the following reasons.
  5. First, as the primary Judge in this case noted, the procedure set out in Order 16 Rule 13(3)(2)(c) is ultimately aimed at giving a plaintiff a fair opportunity to be heard and to defend a matter being summarily determined. Indeed, the terms of this rule make it plain that it is the plaintiff or applicant whose interests are of the utmost importance in ensuring that they are notified and that the prescribed process is followed. The rule specifically states that a notice letter in the relevant form “is issued by the Registrar which gives notice to the Applicant” of the Registrar’s intention to refer the matter to the judge for summary determination “on the grounds stated in the letter”. The letter “gives the applicant thirty (30) days to respond and fixes a return date and time for the matter to come before the judge”.
  6. The rule further makes it very clear that the interests of the defendant/respondent at this point are of secondary importance. It is not the defendant’s case which is at risk of being summarily determined. The rule goes on to state that “a copy of the same letter is sent to the respondent”.
  7. The rule reflects and gives effect to a fundamental principle of the administration of justice, namely the right of a party who has properly instituted litigation in the National Court to have its case heard and determined, without fear or favour. To extinguish such a right by way of summary determination in terms contemplated by Order 16 Rule 13(13)(2)(c) can only occur in the strictest and clearest circumstances.
  8. Second, the third respondents submit that the appellants’ right to be heard was not extinguished by any failure on the part of the Registry to issue a notice in accordance with Order 16 Rule 13(13)(2)(c). This technically may be the case, however the effect of the listing of the proceedings for summary determination without compliance with this rule clearly was that the appellants’ right to be heard was denied.
  9. Third, the third respondent was unable to identify any evidence to support a finding that the process set out in Order 16 Rule 13(13)(2)(c) was complied with in this case. Further, the third respondents relied on no evidence to the effect that they had received a copy of the letter referred to in the rule. We can identify no notice in proper form on the Court file.
  10. The Judges of the National Court rely on the proper compliance by the Registry with the provisions of the National Court Rules insofar as those Rules require action by the Registry. If the Judges cannot have confidence that proper procedures have been followed, it undermines the administration of justice by the National Court. However in circumstances where the appellants gave uncontested evidence that no notice letter in accordance with Order 16 Rule 13(13)(2)(c) was issued to them, the third respondents could not provide any evidence that they had received a copy of that notice letter, and there was nothing on the National Court file to support a finding that a notice letter had been issued by the Registry, the conclusion is inescapable that no notice letter was issued before the matter was referred by a Registrar to a Judge of the National Court.
  11. We note that his Honour referred to a statement, from the Bar Table, by Mr Lai for the third respondents that “the matter was published in the newspaper”. In the appeal, the Bench sought further submissions from Mr Lai as to what appears to have been the nature of that submission by him at first instance, however he was unable to assist the Court. It is entirely unclear how Mr Lai knew of the alleged publication in “the newspaper”, whether he himself had seen the alleged publication, which newspaper he was referring to, and which date he was referring to. In our view the third respondents’ submissions both in the National Court and in this appeal, in relation to the alleged publication of the summary determination listing in the print media, have no substance.
  12. In this regard we consider there is a very real likelihood that the primary Judge was led into error by submissions of the third respondents concerning publication of the notice letter in the media.
  13. However, as a matter of law, even if there had been publication in a form of “print media” as contended by the third respondents, that in itself is no answer to the requirement that notice must be given in terms of Order 16 Rule 13(13)(2)(c). Indeed, Order 16 Rule 13(13)(2)(c)(i) specifically contemplates that “in appropriate cases”, the notice letter “may” be published in the media. It is plain that publication of the notice letter in the media is a fall-back position “where appropriate”. The rule does not contemplate that the option available to the Registry of publishing a notice letter in the media supersedes the prescribed process of direct communication with the parties, in particular the plaintiff/applicant.
  14. The policy reasons for this are plain. Order 16 Rule 13(13)(2)(c) contemplates that a plaintiff/applicant may not see the notice letter in the media, and is entitled to be directly told of the prospect of imminent summary dismissal of its claim in the National Court. An appropriate circumstance for the purposes of the Rule where a notice letter “may” be published in the media could be where the plaintiff/applicant is at an unknown address, or the notice letter is returned to the Registry for want of delivery. As was patently obvious however, this was not the case in these proceedings. Indeed to the contrary – the evidence before the National Court is that the appellants’ lawyers had written on multiple occasions to the Registry seeking to have the proceedings listed for directions, and had filed a notice of motion seeking Court mediation. There are also in evidence email correspondence between Court Registry staff and Mr Tony Noki of the appellants’ lawyers on 2 May 2018, in relation to the prospect of the proceedings being listed for directions.
  15. Fifth, the third respondents submit in response to the appellant’s submissions in this appeal that it is not possible for the Registry to write to everyone affected by a prospective summary determination in terms of Order 16 Rule 13(13)(2)(c).
  16. This is not correct. It is possible, and indeed it is a mandatory requirement. If the Registrar is unable to comply with the terms of Order 16 Rule 13(13)(2)(c) of the National Court Rules, the matter cannot be referred to a Judge for summary determination.
  17. Sixth, the uncontested evidence before the National Court was that the appellants had inadvertently learned of the summary listing on 22 August 2018 when their lawyer was at Court for another matter, and that they had not been notified of the listing. The primary Judge found that, in circumstances where the appellant had learned of the summary determination listing on 22 August 2018, they were then put on notice that the matter would eventually proceed to summary determination when the listing on 22 August 2018 did not eventuate.
  18. In our view the fact that the appellants had learned of the listing of 22 August 2018 does not mean that they either waived proper notification in terms of Order 16 Rule 13(13)(2)(c), or that they were then estopped from complaining if the matter was listed at a future date without proper notification to them. Order 16 Rule 13(13)(2)(c) is in mandatory terms. No notice of listing was subsequently (or, indeed, ever) provided to the appellants. It is very clear under the National Court Rules that the Registrar has no power to dispense with the requirements of Order 16 Rule 13(13)(2)(c). Indeed, we are unable for present purposes to envisage any circumstances in which a plaintiff/applicant could “waive” such requirements, which are imposed on the Registrar irrespective of the desires of the parties.
  19. We also note that the appellants’ lawyers wrote to the National Court Registry on 1 October 2018 requesting that the matter be listed for directions to enable them to progress their existing notice of motion filed 13 September 2017 seeking mediation. There is no basis on which the appellants could be seen to have “waived” any entitlement to notification under Order 16 Rule 13(13)(2)(c) by the simple fact that they apparently inadvertently became aware of Court process instigated without their knowledge.
  20. Finally, there is extensive evidence indicating that the appellants had been actively prosecuting their claims in the National Court prior to the referral of the proceedings to the summary determination list. The matter was in no way dormant, or wanted prosecution. This would have been plain to the Registry, which had been the recipient of multiple requests by the appellants for listings for directions and mediation. It is difficult to understand what more the appellants could have done by them to engage the attention of the Registry or prosecute their notice of motion for mediation.
  21. The evidence before the Court demonstrates that the appellants did not allow the case to be dismissed in their absence, that the appellants had not been properly informed pursuant to Order 16 Rule 13(13)(2)(c) of the listing of the matter for summary determination, and that the appellants’ lawyers had acted properly in communicating with the Registry as they did.
  22. However, and notwithstanding the views we have just expressed, even if we consider that his Honour erred in the exercise of the Court’s discretion to refuse to set aside the ex parte Orders of 24 October 2018 summarily dismissing the proceeding, we note the finding of his Honour that the National Court on 12 March 2019 lacked jurisdiction to set aside those Orders. In oral submissions in this appeal the third respondents submit that the primary Judge lacked jurisdiction because the ex parte Orders of 24 October 2018 were final. We now turn to this issue, which concerns serious questions of power of the National Court to set aside its own ex parte decisions.

The jurisdiction of the National Court

  1. The primary Judge observed that he had :
... a firm view that the decision being final in nature, the proper course for the plaintiffs is either to appeal or review my decision. Having dismissed the proceeding in its entirety, I have no jurisdiction to entertain the plaintiff’s notice of motion. I was as of the date of my decision to dismiss the proceeding became [sic] functus officio of this proceeding.
  1. The authorities cited by his Honour for this finding were Aiwasi v Derari [2017] N6602, Christopher Smith v Ruma Constructions Ltd (2002) SC695 and Feflo Plantation (PNG) Ltd v Lolo Development Corporation Ltd [2013] N5065.
  2. The question whether a Judge of the National Court can set aside ex parte orders summarily dismissing proceedings for want of prosecution was historically the subject of two conflicting lines of authority. These authorities must be read in light of the terms of Order 12 Rule 8 (3)(a) and (4) of the National Court Rules which relevantly provide:
(3) The Court may, on terms, set aside or vary an order—
(a) where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or
(b) ...
(4) In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgement) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.
(Emphasis added.)
  1. More recently, the issue of whether the National Court has power to set aside ex parte orders summarily dismissing proceedings was considered and determined by the Supreme Court in Ango v Kaluvia [2017] SC1628.
  2. In Ango v Kaluvia a Judge of the National Court had dismissed an application on behalf of a plaintiff requesting the setting aside of an order made ex parte to dismiss the proceedings, on the basis that the National Court had no power to set aside such an order.
  3. Relevantly in Ango v Kaluvia, orders were made in the National Court proceedings on 13 March 2015 to the effect that if the plaintiff failed to comply with certain orders made on 5 February 2015, the matter would stand dismissed. When the matter returned before the National Court on 8 May 2015, Counsel for the defendant erroneously told the Judge that the plaintiff had failed to comply with those certain orders, and his Honour ordered dismissal of the proceedings for want of prosecution, as well as failure to comply with court orders. The matter next returned on 14 August 2015 at which time the plaintiff’s lawyers explained that their firm had not been advised of the adjourned dates after 5 February 2015.
  4. The Supreme Court (Salika DCJ, Higgins and Lindsay JJ) observed at [23] that it was apparent that the plaintiff had an overwhelmingly strong case to set aside the order of 13 March 2015, however the National Court Judge held he had no jurisdiction to set aside the order of dismissal because the dismissal ended the action so only the Supreme Court could set aside that order. Their Honours continued:
    1. There is some logic to the view that if the action is dismissed no application can be made in the matter. However, that seems inconsistent with Order 12 rule 8 (3) which provides:
(3) The Court may, on terms, set aside or vary an order—
(a) where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order
25A. The principles to be applied are the same as those relevant to setting aside a default judgment (Christopher Smith v Ruma Constructions Ltd (2002) SC 695). That principle applies not only to default judgments but to other orders obtained ex parte.
  1. Further, it is well settled that a judgment entered irregularly may be set aside. This judgment could only have been entered for failure to comply with the orders of 5 February 2015 – see Green & Co Pty Ltd [1976] PNGLR 73, Wong v Haus Bilas Corporation [1988-89] PNGLR 42.
  2. Attention should be paid to the decision in Elema v Pacific MMI Insurance Limited [2007] PGSC 52 per Batari, Mogish & Cannings JJ. It was also an order for dismissal of proceedings for want of prosecution. The Court emphasised at [17] that a party moving the Court ex parte has a duty to alert the Court so all matters known so [sic] that party relevant to the matter. Had the lawyers for the State alerted Kandakasi J to the substantive compliance by the Plaintiff’s lawyers with the orders of 5 February 2015, his Honour would not have allowed activation of the self executing orders.
  3. Accordingly the Supreme Court allowed the appeal and remitted the case to the National Court for trial if not settled.
  4. In Elema (to which the Supreme Court bench in Ango v Kaluvia referred), a National Court Judge had made an order setting aside an ex parte order made by another Judge in circumstances where the ex parte order was to dismiss a case for want of prosecution. The Judge set aside the ex parte order because the Judge who had made that earlier order was not alerted to relevant key facts referable to a stay on the proceedings. The defendant appealed on the basis that the National Court Judge had misapplied principles about setting aside ex parte orders. The Supreme Court observed:
    1. The Commissioner submits that the principles that allow the National Court to set aside its own orders are well settled but Davani J did not follow them. The Commissioner submits that the leading case Christopher Smith v Ruma Constructions Ltd (2002) SC695 in which the Supreme Court followed its decision in MVIT v Joseph Bure (1999) SC613. When deciding whether to set aside an order or judgment made ex parte, the consideration to take into account are the same as those applying to an application to set aside a default judgment. The Court must be satisfied that:
(1) there is a reasonable explanation for allowing the order to be made ex parte; and
(2) the application is made promptly or if there is a delay there is a reasonable explanation for it; and
(3) there is a defence or valid argument affecting the merits of the case.
19. The Commissioner concedes that Pacific MMI may have had a defence on the merits, given that Kandakasi J had already found that there was an arguable case for judicial review. However, he submits that Davani J erred by concluding that Pacific MMI had a reasonable explanation for allowing the order to be made ex parte and for their delay in applying to have Injia DCJ’s order set aside. The Commissioner points out that Injia DCJ’s order was made on 18 November 2004 and Pacific MMI did not file their notice of motion to set it aside until 23 May 2005. That was an inordinate delay – six months – and Pacific MMI gave no proper explanation for it.
20. We agree with the Commissioner that the leading case is Christopher Smith v Ruma Constructions Ltd. We also agree that a Judge hearing a motion to set aside an ex parte order must apply the three considerations or principles set out above. However, we do not agree that Davani J misapplied them.
  1. Further, in Wawoi Guavi Timber Company Ltd v Molu [2016] SC1514 a National Court Judge had set aside ex parte orders dismissing proceedings for want of prosecution. On appeal an argument was raised in respect of the power of the National Court to set aside such orders. Justices Sawong and Neill in a joint judgment in the Supreme Court noted:
    1. A significant conflict of views is expressed in various opinions and judgments by members of the National Court and this Court on Rule 8(3).
    2. In essence the issue of the parties in this appeal over Rule 8(3) is: The Appellants say that the order of Murray J is a final order and so the only avenue for a disappointed litigant who is subject to an order made in their absence, is an appeal. This is the first leg of the Appellants’ appeal. ...
    3. The Respondents rely on Rule 8(3) as providing the basis for the Respondent’s application before Cannings J and his decision, in that Rule 8(3) does give an alternative to not go on appeal to the Supreme Court. In the circumstance set out in the Rule, a person who is affected by an order made in his absence may go to another judge or the same judge of the National Court. This is the Respondent’s argument...
    4. Broadly speaking, the philosophy behind the differing views is, on the one hand a concern for finality of litigation and to prevent a litigant dragging out a matter by abusing the Rules. On the other hand there is a concern to not let a litigant be denied the opportunity to present his case where there is good reason for his failure to attend court on a dismissal application.
  2. Their Honours continued:
    1. The Appellants say that the structure of appeal in Papua New Guinea requires that a final order of the National Court can only be overturned by an appeal to the Supreme Court. It follows from that argument that the dismissal for want of prosecution is categorised as a final order so it must go on appeal.
    2. The other view is that Rule 8(3) gives an alternative to appeal. Notably, this Rule gives the right to come to Court regardless of whether the party was served with a notice. Hence an order in those circumstances cannot be final for the obvious reason that the Rules provide an alternative to an appeal.
  3. Their Honours at [70] rejected the “jurisdictional” argument of the appellants in that case and found that there was a valid exercise by the National Court Judge of the jurisdiction empowered under Rule 8(3).
  4. In addition to these authorities we note National Superannuation Fund Limited v Yawenaik Holdings Limited [2018] SC1709 (in particular at [12]-[15]) and the earlier decision of the National Court in Thomas Rangip v Peter Loko (2009) N3714.
  5. Turning now to whether the primary Judge in the present case had jurisdiction to set aside the earlier ex parte Orders made on 24 October 2018, we make the following observations.
  6. There is now recent and extensive Supreme Court authority – in particular Elema, Wawoi Guavi Timber Company Ltd v Molu, Ango v Kaluvia and National Superannuation Fund Limited – deciding that the National Court has power under Order 12 rule 8 (3) to set aside earlier ex parte orders of the National Court summarily dismissing proceedings for want of prosecution.
  7. In relation to the submission of the third respondents that the orders made ex parte on 24 October 2018 were final in nature such that the proper course for the appellants was to appeal, we note that there is no limitation in Order 12 rule 8(3) as to the type of orders which the National Court can set aside, if the relevant orders were made in the absence of a party. Whether the ex parte orders were “final” or not, is irrelevant for the purposes of Order 12 rule 8(3) and the powers granted by that Rule.
  8. We note the terms of Order 12 rule 8 (4), which appears to prevent the National Court, inter alia, setting aside an order for dismissal of proceedings. However this rule is specifically qualified by the preamble “In addition to its powers under Sub-rules (1), (2) and (3)”. To that extent Order 12 rule 8(4) does not apply to setting aside of any orders, including orders for dismissal of proceedings, which are made in the absence of a party (which is the subject of powers under sub-rule (3)).
  9. Notwithstanding that there is authority at high level ruling on the nature of “final” orders of the National Court – and we particularly note in this regard the Supreme Court in Steven Punagi v Pacific Plantation Timber Ltd [2011] SC1153 – for the reasons we have explained, the principle of finality articulated in Punagi is irrelevant to the issues in the present case. We reiterate that Order 12 rule 8(3) of the National Court Rules applies, and is limited to, circumstances where orders – including for orders for summary dismissal for want of prosecution – are made in the absence of a party. Order 12 rule 8(3) is not concerned with the question whether such an order, made in the absence of a party, was final or interlocutory. The regime in Order 12 rule 8(3) empowers the Court to set aside an ex parte order, and is outside the appeal process established by the Supreme Court Act.
  10. As explained in Wawoi Guavi Timber Company Ltd v Molu, Order 12 rule 8(3) provides a specific alternative in the National Court Rules to the avenue of appeal in circumstances where an order is made ex parte. Once an application is made to the National Court pursuant to Order 12 rule 8(3) to set aside an ex parte order, and the Court makes its decision on that application, the process in Order 12 rule 8(3) is exhausted. If a plaintiff/applicant applies to the National Court have those ex parte Orders set aside, any decision of the National Court in respect of that question is final within the terms explained in Punagi, and may be the subject of appeal to the Supreme Court without leave.

CONCLUSION

  1. The primary Judge erred in finding that the National Court lacked jurisdiction under Order 12 rule 8(3) of the National Court Rules to set aside the ex parte Orders of 24 October 2018.
  2. In respect of the question whether the National Court should make a determination under Order 12 rule 8(3) of the National Court Rules,it is clear that the power granted is discretionary: Wawoi Guavi Timber Company Ltd v Molu at [18], Elema at [3], [13]. As the Supreme Court observed in National Superannuation Fund Ltd v Yawenaik Holdings Ltd :
    1. This court’s role in an appeal from a discretionary judgment was considered in Curtain Bros (PNG) Ltd v. UPNG (2005) SC788:
“The appellant Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction, except where the exercise of that discretion is clearly wrong. A discretionary judgment may be set aside if an identifiable error occurred in the exercise of discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is “unreasonable or plainly unjust” and such that an error can be inferred. These principles are well established. We adopt a passage from Kitto J in the Australian High Court case of Australia Coal and Shale Employees’ Union v The Commonwealth [1953] HCA 25; (1956) 94 C.L.R. 621 at p.627, which was adopted by Clarkson J. inBreckwoldt& Co. (N.G.) Pty Ltd v. Gnoyke[1974] PNGLR 106 at p.112 –113:
“The decision by the primary judge to stay the action was made in exercise of a judicial discretion and I accept that in those circumstances the principles on which this Court should act are as described by Kitto J. in Australian Coal and Shale Employees’ Union v The Commonwealth ... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgements is that there is a strong presumption in favour of the correctness of the decisions appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance...”
  1. This passage was also cited with approval by Gabi J and Hartshorn J in their judgments in Isaac Lupari v. Sir Michael Somare (2010) SC1071 and in the Supreme Court decisions of State v. Sam Akoita and Ors (2009) SC977 and Ron Napitalai v. PNG Ports Corporation Ltd and Ors (2010) SC1016.
...
  1. At the beginning of his decision the primary judge accepted that the National Court has jurisdiction to set aside an order made ex parte, which dismissed a proceeding. His Honour made reference to WawoiGuavi Timber Company Ltd v. John Molu (2016) SC1514 in that regard. In that decision, favourable reference was made to Thomas Rangip v. Peter Loko (2009) N3714. In Rangip (supra), the National Court held that it has jurisdiction to set aside its own ex parte order that dismisses a proceeding for want of prosecution. The onus is on the applicant to satisfy the Court:
    1. why the judgment or order was allowed to be entered in the absence of the applicant;
    2. if there is a delay in making the application to set aside, a reasonable explanation as to the delay; and
    1. that there is a reasonable explanation for the proceeding not being prosecuted with due diligence.

(see also Kalinoe v Kereme [2017] SC1631 at [14]).

  1. Turning now to the three factors the Supreme Court identified in National Superannuation Fund Ltd at [15] which the National Court is required to consider in determining whether its ex parte Orders should be set aside, we find as follows.
  2. In our view it is very clear that there was a reasonable explanation for the absence of the appellants or their lawyers at the National Court hearing of 24 October 2018 when the ex parte orders were made summarily dismissing the proceedings. As we have found, no notice was given to the appellants or their lawyers by the Registrar pursuant to the mandatory requirements set out in Order 16 Rule 13 (13)(3)(c) of the National Court Rules. The appellants and their lawyers had no reason to be aware that the matter was listed for that date. We are not satisfied that the notice letter required by the National Court Rules had been published in the media, or that in the circumstances of this case any such publication would have obviated the requirement that the appellants be given notice in accordance with Order 16 Rule 13 (13)(3)(c).
  3. There was no undue delay on the part of the appellants to have the ex parte orders of 24 October 2018 set aside.
  4. Finally, as we have already observed the uncontested evidence before the National Court was that the appellants had endeavoured to prosecute the proceedings in the National Court but were impeded by the apparent lack of response to their frequent inquiries for listing dates by the Registry. We are not satisfied that the appellants failed to properly prosecute their claim.
  5. We are satisfied that, in this case, the primary Judge’s discretion miscarried in respect of his findings and orders of 12 March 2019.
  6. The appeal should be allowed, and the proceedings reinstated in the National Court with interim orders previously made by the National Court similarly reinstated. The third respondents who made appearance in the hearing of the appeal shall pay the costs of the appellants of and incidental to the appeal, such costs to be taxed if not agreed.

THE COURT ORDERS THAT:


  1. The appeal is allowed.
  2. The judgment of the National Court of 12 March 2019 in OS (JR) 366 of 2017 is quashed.
  3. The orders of the National Court of 24 October 2018 in OS (JR) 366 of 2017 made ex parte dismissing the proceeding for want of prosecution are set aside, and the matter is remitted to the National Court for it to be prosecuted accordingly.
  4. The interim order of the National Court granted on 18 May 2017 preserving the status quo of the proceeding in OS (JR) 366 of 2017 is reinstated with full force and effect.
  5. The respondents, their servants, agents and associates are restrained from implementing by any means whatsoever the impugned decision of the first respondent by way of letter dated 15 December 2016 to the second respondent upholding a purported appeal by the third respondent to recognise the third respondents as the management committee of the second appellant.
  6. The costs of the appellants of and incidental to this appeal be paid by the third respondents, to be taxed if not otherwise agreed.

Jema Lawyers: Lawyers for the Appellants
B. S. Lai Lawyers: Lawyers for the Third Respondents


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