Barrick (Niugini) Ltd v Nekitel [2020] PGSC 102; SC2013 (14 October 2020)

SC2013

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM NO. 18 OF 2020

BETWEEN
BARRICK (NIUGINI) LIMITED
Appellant

AND
STANLEY NEKITEL
First Respondent

AND
JERRY GARRY
Second Respondent

AND
MINERAL RESOURCES AUTHORITY
Third Respondent

AND

HON. JOHNSON TUKE, MP as MINISTER FOR MINING
Fourth Respondent

AND
HON. JAMES MARAPE MP
Fifth Respondent

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Sixth Respondent

AND
MINERAL RESOURCES ENGA LIMITED
Seventh Respondent

AND
HON. DAVIS STEVEN, MP
Eighth Respondent

Waigani: Thompson J
2020: 7^th October
2020: 14^th October

SUPREME COURT – PRACTICE AND PROCEDURE - Application for disqualification of judge - reasonable apprehension of bias - test to be applied - necessity to demonstrate real connection between the Judge’s knowledge and the issue for adjudication.

Counsel:
Mr. M. Varitimos Q.C. with Mr. D Wood, for the Appellant
Mr. N. Saroa, for the First, Third & Fourth Respondents
Mr. L. Kandi, for the Fifth Respondent
Mr. T. Tanuvasa, for the Second, Sixth and Eighth Respondents
Mr. G. Geroro, for the Seventh Respondent / Applicant

14^th October, 2020

1. THOMPSON J: FACTS: On 28 April 2020 the Appellant filed proceedings OS (JR) No. 5 of 2020, seeking to judicially review the decisions of the National Executive Council made on 11 March 2020 and the Head of State published on 27 April 2020, to refuse the Appellant’s application to extend a Special Mining Lease (“SML”). On 5 June 2020 Leave was granted for judicial review of those decisions.

2. On 1 September 2020 those proceedings on OS (JR) No.5 of 2020 were summarily dismissed “... for abuse of process and for being incompetent”.

3. On 7 September 2020 the Appellant filed an appeal against that decision by way of a Notice of Motion (“these proceedings”) and an Application for a Stay.

4. These proceedings came before His Honor Justice Hartshorn, (“the Judge”) when the 7^th Respondent (“MRE”) indicated that they wished to apply for the Judge to disqualify himself. The Appellant’s Application for a Stay was then heard and determined by another judge.

5. On 10 September 2020 MRE filed an Application that “... the Honorable Mr. Justice Hartshorn be disqualified from presiding over these proceedings”, and it was this Application which came before this court.

6. The Application was made on the grounds of apprehended, not actual, bias. It was supported by all the Respondents. The Eighth Respondent, the Attorney-General, made it clear that he was not in any way impugning the integrity or impartiality of the Judge, and was supporting the Application on the sole basis of an apprehension of bias by a fair-minded observer.

Issues

7. The factual basis stated by the Applicant was that the Porgera Joint Venture (“PJV”) was established and issued with the SML in 1989, the Judge had been a Director of a company named Goldfields PNG Holdings Limited (“Goldfields”) from November 2000 to April 2003, that this company had a participating interest in the PJV, and that in 2006 the company had amalgamated with Barrick (Goldfields PNG Holdings) Limited. In March 2020 the NEC had referred to “legacy issues” amongst other matters when making a decision to refuse the SML. In September 2020 the Appellant’s proceedings to judicially review the NEC decision were summarily dismissed, for incompetence and a multiplicity of proceedings amounting to an abuse of process. The Appellant issued these proceedings by way of an appeal against that decision.

8. Other evidence in these proceedings showed that the PJV was an unincorporated entity held 95% by the Appellant and 5% by the 7^th Respondent. There was no direct evidence such as a Joint Venture Agreement, of Goldfields’ interest in the PJV. MRE’s evidence relied on some of the financial statements of Goldfields for 2001 which contained a statement in the Notes to the Accounts that Goldfields held a 25% interest in the PJV. MRE submitted from the Bar table that it must be inferred from the statement in the Notes to the Accounts that at that time, in 2001, there were different parties to the PJV, than now. Other evidence showed that there had been a number of changes to the PJV parties since 1989, none of which referred to Goldfields.

9. MRE submitted that although the nature or date of the legacy issues referred to by the NEC were not identified, it must be inferred that they meant historical issues including the operation and development of the Porgera Gold Mine in 2000-2003, so that the financial accounts showed that the Judge must be assumed to have had special knowledge of legacy issues which existed in 2000-2003. MRE speculated that this special knowledge might include expert reports and information concerning legacy issues which would “...eventually be transferred to or inherited by Barrick (Goldfields PNG Holdings) Ltd” in 2006.

10. There was no evidence of any such actual reports or information. There was no evidence of any connection between Barrick (Goldfields PNG Holdings) Limited and the Appellant, Barrick (Niugini) Limited. The company searches showed no common shareholders, and Barrick (Goldfields PNG Holdings) Ltd was not shown as a previous name or predecessor of the Appellant.

11. The submission was that, based on these facts, inferences and speculation, the Judge either had or would be reasonably assumed to have had “... special knowledge concerning matters which are the subject of these proceedings”. It was submitted that as a result of this special knowledge, a reasonable apprehension of bias would arise in the mind of a reasonable bystander with knowledge of the facts, that the Judge would be predisposed to reach a particular conclusion in “these proceedings”, other than on the merits.

12. The test to be applied in determining an application for disqualification for apprehended bias, is well-settled. The parties have referred to all the numerous relevant case authorities which establish that: would a reasonable and fair-minded person knowing all the relevant facts, have a reasonable apprehension that a fair hearing was not possible?

- The apprehension must be based on reasonable, not fanciful, grounds.

- General knowledge on the part of the Judge, obtained in the course of previous employment, of the subject matter of the legal proceedings, will not by itself give rise to a reasonable apprehension of bias in the event that the Judge deals with the matter in a judicial capacity.

- There must be a real connection between the Judge’s knowledge, and the issues for adjudication in the proceedings.

(Application by Herman Leahy (2006) SC 981 and many others).

13. A fair-minded lay observer is to be attributed with having some knowledge of the way in which lawyers and judges work – “...the observer is taken to be reasonable, and the person being observed is a ‘professional judge whose training, tradition and oath ... require the judge to discard the irrelevant, immaterial and the prejudicial.”(Peter Yama v Bank South Pacific Ltd (2008) SC921)”.

14. The applicant needs to properly identify the facts, matters and circumstances by reason of which it is said that the Judge might decide the proceedings other than on merit, and demonstrate a logical connection between those facts, matters and circumstances, and the apprehended deviation from the course of deciding the proceedings on its merits.(Workers Mutual Insurance (PNG) Ltd (in liquidation) v Sathasivam Sivakumaran (2013) N4987).

15. Having identified the matters relied on, MRE then has the onus of demonstrating a logical connection between those matters, and the apprehended bias of the Judge resulting in an inability to decide the case impartially and without prejudice.

16. MRE’s submission is that an objective observer would reasonably infer from the facts and inferences that the unidentified legacy issues referred to by the NEC in 2020, would include issues existing in 2000-2003 for Goldfields, and that by reason of his position as a Director of Goldfields in 2000-2003, the Judge had special knowledge of legacy issues.

17. It is not sufficient that these inferences be accepted as reasonable. MRE must further show that they are logically connected to the issue for adjudication by an Appeal court in these proceedings, which is whether or not the primary judge erred in September 2020 by summarily dismissing judicial review proceedings challenging the 2020 NEC decision.

18. The unidentified legacy issues of which the Judge is said to be assumed to have had special knowledge, are not “matters which are the subject of these proceedings.” The Appeal documents speak for themselves. They show that the only matter which is the subject of these proceedings is whether or not the primary Judge erred in law by ordering summary dismissal of OS (JR) 5 of 2020, instead of allowing it to proceed to trial.

19. These Appeal proceedings do not involve the merits of the NEC decision or the unspecified legacy issues. It is the proceedings on OS (JR) No. 5 of 2020 which challenge the NEC decision. As those are judicial review proceedings, they also do not challenge the merits of the NEC decision, only the processes which were followed to make the decision. Those proceedings were summarily dismissed on competency grounds and for being an abuse of process due to a multiplicity of proceedings.

20. Neither the Order nor the transcript of the decision orally delivered by the primary judge, make reference to legacy issues or any other matters relating to the NEC decision. The transcript shows that the primary judge’s decision was based on his findings that the Appellants’ issue of those proceedings without prior consultation with MRE made those proceedings incompetent, that a separate company in Australia had issued proceedings for international Conciliation and Arbitration, that the corporate veil was lifted by the primary judge to find that it was the same company as the Appellant, that there was therefore a multiplicity of proceedings which amounted to an abuse of process, and that the dismissal of those proceedings was necessary to enable the parties to focus on the Conciliation and Arbitration proceedings.

21. It is against these findings, that the Appellant has lodged its appeal on SCM 18 of 2020. The sole issue for determination by the Supreme Court in this appeal, is whether or not the primary judge erred in law or on questions of mixed fact and law, in summarily dismissing the proceedings on OS (JR) No. 5 of 2020 without going to a trial. The issue of whether the Appellant was required to consult with MRE before issuing legal proceedings, was an issue of the interpretation of a JVA clause defining management duties, which is a question of law. The issue of the effect of other proceedings issued internationally, is a question of law. The Appeal court will not be determining the merits of, or any issue arising out of, the NEC decision.

22. Even if the evidence was sufficient to show that the Judge had acquired special knowledge of unidentified legacy issues in 2000-2003, MRE has failed to demonstrate any logical connection or relevance between that knowledge and the subject of these proceedings, namely, a challenge to a summary dismissal decision in 2020 for incompetence and abuse of process.

23. I am not satisfied that the evidence is sufficient to show that the Goldfields accounts for 2001 raise an inference that the company, and therefore the Judge, had information concerning legacy issues referred to in a 2020 NEC decision. But even if it was sufficient, there is no logical or factual basis showing a real connection between that information, and the issue for adjudication in these proceedings. The only issue for adjudication in these proceedings is whether or not the primary judge erred in summarily dismissing the proceedings on OS (JR) 5 of 2020. This issue does not require adjudication of the merits of the NEC decision or any legacy issues referred to in that decision.

24. I find that a reasonable observer having knowledge of the above mentioned matters, would not conclude that the Judge, because of knowledge of matters concerning Goldfields and the PJV in 2000-2003, could in any way have formed a pre-determination on the subject of these proceedings, namely, whether or not the primary judge made an error of law in 2020 by summarily dismissing other proceedings before a substantive hearing, or conclude that the Judge would determine these proceedings other than on merit.

25. In relation to costs, the Appellant has submitted that this Application was made on vexatious and speculative grounds, so that the Seventh Respondent and its lawyers should pay costs on an indemnity basis.

26. The Application was supported by all the Respondents. While the grounds were based on some speculative matters, they were not as high as vexatious. I place weight on the Attorney-General’s reassurance that there was no suggestion by him of actual bias, only that it could be apprehended by a layman observer.

27. I therefore make the following Orders:

1. The Application by the Seventh Respondent filed on 10 September 2020 that the Honourable Justice Hartshorn be disqualified from presiding over these proceedings, is refused.
   2. The Seventh Respondent is to pay the Appellant’s costs on a party/party basis, to be agreed or taxed.

3. Each of the other Respondents are to pay their own costs.

4. The time for entry of these Orders is abridged to the time of settlement by the Registrar, which shall take place forthwith.

__________________________________________________________________
Ashurst Lawyers: Lawyers for the Appellant
Nelson Lawyers: Lawyers for First, Third & Fourth Respondents
MS Wagambie Lawyers: Lawyers for Fifth Respondent
Office of The Solicitor-General: Lawyers for Second, Sixth & Eight Respondents
Geroro Lawyers: Lawyers for Seventh Respondents