Independent State of Papua New Guinea v Kunai [2019] PGSC 94; SC1835 (1 July 2019)

SC1835

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 163 OF 2018

BETWEEN:
INDEPENDENT STATE OF PAPUA NEW GUINEA
First Appellant

AND:
PAPUA NEW GUINEA FOREST AUTHORITY
Second Appellant

AND:
JACOB POPUNA in his capacity as PUBLIC
CURATOR OF PAPUA NEW GUINEA
Third Appellant

DAIRI VELE in his capacity as Secretary
for DEPARTMENT OF TREASURY
Fourth Appellant

DR KEN NGANGAN in his capacity as Secretary
for DEPARTMENT OF FINANCE
Fifth Appellant

FRANCIS KUNAI for himself and on behalf of all the 8 Jimi
Timber Right Purchase Agreement Holders as landowners
and beneficiaries stated in the Schedule attached marked “A”
First Respondent

KOMAP MAPULGIE BUSINESS GROUP (Inc)
Second Respondent

KELLY KALIT for himself and on behalf of all the Waripa
Timber Right Purchase landowner and beneficiaries
Third Respondent

Waigani: Hartshorn J.
2018: 29^th November & 3^rd December,
2019: 1^st February & 1^st July

SUPREME COURT – PRACTICE AND PROCEDURE - Application for stay

Cases Cited:

Gary McHardy v. Prosec Security [2000] PNGLR 279
Ombudsman Commission v. Gabriel Yer (2009) SC1041
William Duma v. James Puk (2019) SC1754

Counsel:

Mr. R. Webb SC and Mr. J. Sione, for the Appellants
Mr. J. Abone, M. K Makeu and Mr. T. Tape, for the First, Second and Third Respondents

1^st July, 2019

1. HARTSHORN J. This is a decision on a contested application for a stay of a final decision of the National Court pending the hearing and determination of the notice of appeal filed 11^th October 2018.

Background

2. The first, second and third respondents commenced a proceeding in the National Court on behalf of landowners they represent to recover funds which had been invested on the landowners’ behalf. The funds were invested during the colonial administration in the late 1960’s. The State did not dispute that the investments were with the State. On 4^th September 2018 the primary judge delivered judgment for the respondents in the sum of K85,022,532.86 together with interest and costs.

3. The appellants, being the State, the Papua New Guinea Forest Authority, the Public Curator and the Secretaries for the Departments of Treasury and Finance, appeal on grounds that amongst others, the primary judge fell into error in:

a) Hearing and determining the proceeding when he had been appointed mediator in respect of issues in the proceeding and had participated in mediations in the proceeding which had not resolved the proceeding;

b) Failing to find that from the termination of the said mediations he had no jurisdiction or power to continue to preside over, hear and determine the proceeding regardless of whether the parties had consented to him doing so;

c) Deciding the matter on the basis that the amount owed was not a debt and that the State was a fiduciary or acted unlawfully;

d) Finding that the respondents’ were entitled to interest as damages when a claim for such was not pleaded;

e) Awarding punitive damages in respect of the non-payment of a debt.

This application

4. The appellants submit that a stay should be granted as amongst others:

a) A refusal to grant a stay will cause injustice to the appellants by exposing them to proceedings to enforce the amount of judgment;

b) There are pending notices of motion in the National Court proceedings seeking to distribute funds paid by the State into the National Court trust account;

c) The State’s position is that it is not liable for non-payment of the principal and interest of the investment funds. If it is liable, the sum for which it is liable is substantially less than the amount in the National Court trust account;

d) If a motion for payment was successful, money would be distributed to a large number of people and it would be difficult to recover in the event that the appeal was successful;

e) It is in the interests of justice that the status quo be maintained.

5. The respondents submit that the stay should not be granted as amongst others:

a) This is a second application for a stay in this proceeding and as such is an abuse of process;

b) An undertaking as to damages filed is inadequate;

c) The lawyers and counsel for the appellants have not been properly instructed by the Attorney General;

d) The appellants have not satisfied the criteria for a stay;

e) They are entitled to the fruits of their judgment.

Preliminary

6. The respondents raised objections to the application for stay. I consider those of moment. The first objection I consider, was that this is the second application for a stay in this proceeding. The first application was dismissed and it is an abuse of process to make a second application for a stay, it is submitted. The appellants submit that the first application was not considered on its merits and was made pursuant to s. 5 Supreme Court Act. Further, the Supreme Court Act does not preclude a second application.

7. From a perusal of the Court file, when the Chief Justice refused the first application, he also ordered that any reapplication for stay by the appellants is tentatively set down for hearing on Thursday 29^th November 2018 9:30am. The Chief Justice therefore foreshadowed a reapplication for stay, as distinct from a review of his dismissal decision. Further, the first application was made pursuant to s. 5(1)(b) Supreme Court Act. This application is not. I am not of the view that this application for stay is an abuse of process.

8. An objection was raised on the basis that the lawyers and counsel for the appellants have not been properly instructed to act for the appellants. Counsel for the appellants submitted that they have been properly instructed and if the respondents wish to pursue the issue further, they should file an appropriate application, which to date they have not. I concur with these submissions and reject this objection.

Law

9. In regard to the application for stay, s. 19 Supreme Court Act provides that unless otherwise ordered by the Supreme Court or any Judge, an appeal, or an application for leave to appeal, to the Supreme Court does not operate as a stay of proceedings.

10. In Gary McHardy v. Prosec Security [2000] PNGLR 279, the Supreme Court found that it had unlimited jurisdiction to do justice and should exercise its discretionary power depending on the factors and circumstances of a particular case. Factors to consider when deciding whether to grant a stay include:

a) Whether leave to appeal is required and whether it has been obtained;

b) Whether there has been a delay in making the application;

c) Possible hardship, inconvenience or prejudice to either party;

d) The nature of the judgment sought to be stayed;

e) The financial ability of the applicant;

f) A preliminary assessment about whether the applicant has an arguable case on the proposed appeal;

g) Whether on the face of the record of the judgment there may be indicated apparent error of law or procedure;

h) The overall interests of justice;

i) The balance of convenience;

j) Whether damages would be a sufficient remedy.
11. I make reference to the following passage of Injia CJ (as he then was) in Ombudsman Commission v. Gabriel Yer (2009) SC1041. His Honour was considering a stay application under s. 19 Supreme Court Act:

“The grant or refusal of stay is discretionary. The principles on grant of stay are set out in McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279 (McHardy case)..... In McHardy the Court said the starting point is the basic premise that the judgment creditor is entitled to enjoy the fruit of the judgment. There are ten (10) other considerations which are enumerated in that case which may be considered. The Court said the list is not exhaustive. In my view, it is not intended that the discretion should be exercised on all or selected consideration(s). The circumstances of a particular case may warrant greater or less or even no weight at all to be given to a particular consideration(s). It is open to the Supreme Court to expound on those considerations or introduce new considerations as necessitated by the circumstances of the case before it. In a case where a number of considerations are relevant, the Court must take into account the totality of those considerations in order to dispense substantive justice in the circumstances of the case before it. The onus is on the applicant to persuade the Court to exercise its discretion in his or her favour.”

12. I also make reference to William Duma v. James Puk (2019) SC1754 in which at [13] the Court said:

“13. As referred to, in determining whether a stay should be granted this Court must consider what is necessary to do justice in the circumstances of a particular case. There is no fetter on this Court’s discretion apart from this consideration. We are reminded in this regard of the oft cited statement of Bowen LJ in Gardner v. Jay (1885) 29 Ch 50, at 59:

“When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view of indicating the particular grooves in which the discretion should run, for if the Act or the Rules did not fetter the discretion of the Judge why should the Court do so?””

Consideration

13. In considering the principles in McHardy’s case (supra), leave to appeal is not required in this instance and I am not satisfied that there has been delay of any moment in making this application, particularly given that there was a prior application.

14. As to possible hardship, inconvenience or prejudice, if the judgment sum was paid it would be unlikely to be recoverable if the appellants’ appeal was upheld. Any recovery operation, if undertaken would be costly in terms of time and resources for the appellants. For the same reasons damages would not be a sufficient remedy. In regard to the respondents, the subject investments were made about 50 years ago. In that context it is unable to be said in my view, that the respondents are suffering as a consequence of not receiving funds given amongst others, that they have lived most of their lives and managed accordingly, without such funds.

15. As to whether there is an arguable case on appeal, in regard to the mediation grounds, it is not in dispute as I understand, that the primary judge acted as a mediator in the proceeding and then presided as a judge and delivered the judgment the subject of this appeal. The respondents’ submit that the primary judge reverted to acting as a judge with the consent of all parties and that this issue was not raised by the appellants in the National Court. Section 7D(4) National Court Act provides that:

“(4) If the mediation does not result in a settlement of the relevant proceeding, the proceeding shall continue to trial before a judge other than the judge who mediated the dispute.”

16. The appellants contend that as this subsection was not complied with the primary judge did not have the power to give the judgment, and a purported consent cannot give power to a Court that it does not have. To my mind, this prima facie, is a strong ground of appeal. Further, as it concerns whether the National Court had power and jurisdiction, the ground is likely to be considered notwithstanding that the issue was not raised in the National Court. Given this it is not necessary for me to consider the other grounds of appeal.

17. In my view, as there is a strong ground of appeal, and if the appeal succeeds the whole of the award by the primary judge will be set aside, if a stay is not granted a very large amount of money is likely to be required to be paid by the State. It is quite unlikely that if the sum of money is paid, that it would be able to be recovered if the appeal is successful. Damages would not be an adequate remedy. In such circumstances, the State is likely to suffer more hardship and prejudice than the respondents. The balance of convenience favours the status quo being maintained. I am satisfied that what is necessary to do justice in the circumstances of this case, is that the appellant’s application for stay should be granted. Given this, it is not necessary to consider the other submissions of counsel.

Orders

18. It is ordered that:

a) The final decision of the National Court per Kandakasi J. (as he then was) delivered on 4^th September 2018 and entered on 21^st September 2018 in proceeding WS 1273 of 2012, Francis Kunai and Ors v. State and Ors, Waigani, is stayed pending the hearing and determination of the appeal herein;

b) The entire proceeding in WS 1273 of 2012, Francis Kunai and Ors v. State and Ors, Waigani, is stayed pending the determination of the within appeal;

c) Costs are in the cause.
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Twivey Lawyers: Lawyers for the Appellants
Parkil Lawyers, Niuage Lawyers, Kandawalyn Lawyers: Lawyers for the Defendants