Petroleum Exploration Joint Venture Ltd v Talu [2020] PGSC 104; SC2019 (28 October 2020)

SC2019

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 24 OF 2019

BETWEEN
PETROLEUM EXPLORATION JOINT VENTURE LIMITED
Appellant

AND
STANIS TALU
First Respondent

AND
DANIEL NERE
Second Respondent

AND
PUKULA HEREBA
Third Respondent

Waigani: Thompson, Berrigan & Miviri JJ
2020: 29^th September
2020: 28^th October

SUPREME COURT- APPEAL– practice and procedure - Notice of objection to competency – whether Notice can be amended – necessity to cite the jurisdictional basis – issues of competency may be raised at any time – is necessity for grounds of appeal to specify why the judgment wrong in law - application to adduce fresh evidence – must have been unavailable before hearing.

Cases Cited:

John Peng v The State (1982) PNGLR 331
Koitachi Ltd v Johnson Zhang (2007) SC870
William Chilen v The State (2011) SC 1099
PNGBC v Jeff Tole (2002) SC 694
PNG Law Society v David Cooper (2016) PGSC 69
Aiwasa v Derari (2017) N6602
Motor Vehicle Insurance Ltd v Niugini Nominees Ltd (2014) SC1334
PNG Law Society v Cooper (2017) PGSC 10
Bruce Tsang v Credit Corporation (PNG) Ltd (1993) PNGLR 112
Barava Ltd v Giregire Estates Ltd (2008) SC958.
Mary ToRobert v Henry To Robert (2011) SC 1130
Neville v National Executive Council (2015) SC 143
Jimmy Lama v NDB Investments Ltd (2015) SC 1423
PK Investments Ltd v Mobil Oil New Guinea Ltd (2015) SC 1456

References cited

Order 7 Rule 9(c), 10, 19
Order 8 Rule 50(1), 51(1)
Order 11 Rule 11
Order 13 Rule 15

Counsel

Mr. G. Gileng, with Mr. K. Pato, for the Appellant
Mr. G. Manda, with Mr. R. Leo, for the Respondent

DECISION ON OBJECTION TO COMPETENCY OF NOTICE OF APPEAL & APPLICATION FOR LEAVE TO ADDUCE FRESH EVIDENCE

28^th October, 2020

1. BY THE COURT: The matters before the Court were an Objection to Competency of the Notice of Appeal, and an Application for Leave to Adduce Fresh Evidence.

Background

2. In April 2013, the Plaintiff/Appellant issued proceedings on WS 357 of 2013 against the Defendants/Respondents. The Appellant’s claim is that the Respondents fraudulently received and disbursed K18m in 2011 and 2013, of which K8m is frozen in the National Court Trust Account, because their conduct was not authorized by the Board. Although it was not pleaded with clarity, it appeared that the Appellant alleges that the conduct was unauthorized because it was in breach of Clause 4 of a Joint Venture Agreement made in 1999 for the establishment of the Appellant company. It alleges that the JVA set out the way in which Board Directors were to be appointed, and the Respondents were not so appointed.

3. On 24 May 2013, the National Court heard an application by the Respondents to dismiss the proceedings for failing to disclose a reasonable cause of action and for being an abuse of process, because the Appellant had not authorized the issue of the proceedings. The documents before us do not show the names of the persons who had issued the proceedings in the name of the company.

4. The Respondents’ application was adjourned to 17 July 2013 for the purpose of allowing the Appellant to produce evidence of a resolution made by directors who were duly recorded as directors in the Office of the Registrar of Companies at that time, rectifying the decision to commence the proceedings.

5. The evidence subsequently produced by the Appellant was a record of two meetings held on 11 May and 5 July 2013, confirming a resolution to commence proceedings. The Appellant did not produce evidence that those persons who took part in the meetings, were recorded at the Office of the Registrar of Companies as directors. The evidence of the IPA records produced by the Appellant showed that the four persons who took part in the meetings, were only appointed as directors on 29 January 2015, more than 18 months after the meetings.

6. Further, the person who was shown in the record of the meetings as the Chairman, gave evidence that he had been bribed by the Appellant, he was not the Chairman, and the First Respondent was the Chairman of the Board of the Appellant company.

7. Having considered the documents and other evidence, the primary judge found that he “cannot be satisfied to the required standard that the properly appointed directors of the Appellant have resolved to commence and continue these proceeding against the Respondent”, and he dismissed them on 11 March 2019.

8. On 14 March 2019 the Appellant filed a Notice of Appeal, and on 20 March 2019 obtained an ex parte Order for a stay of the National Court decision.
9. Order 7 Rule 13 of the Supreme Court Rules says that a copy of the Notice of Appeal shall be served without delay.

10. Order 7 Rule 15 of the SCR says that a Respondent who objects to the competency of the Appeal, shall file an objection within 14 days after service on him of the Notice of Appeal.

11. The Notice of Appeal was not served on the Respondent, but the Respondent became aware of it, and on 18 April 2019 filed a Notice of Appearance, a Notice of Objection to Competency, and a Notice of Cross Appeal.

12. On 23 April 2019, the Respondent filed an amended Notice of Objection to Competency which was identical to the earlier Notice, except that it also contained a reference to the Court’s jurisdiction to make the Objection under Order 7 Rule 15. The Respondent also filed an amended Notice of Cross Appeal on that date.

13. On 30 April 2019 the Appellant served the Notice of Appeal of 14 March 2019 and the Court Order of 20 March 2019, on the Respondents.

14. On 3 February 2020 the Appellant filed an Application for Appeal to adduce fresh evidence.

Application to adduce fresh evidence

15. The fresh evidence sought to be adduced, is an undated copy of a document said to be the Constitution of the Appellant lodged with the Registrar of Companies in 1999. It was not produced or certified by the Registrar of Companies. It was produced by Patterson Pipi, who said that he was the founding manager of the Appellant since 1999, and a company secretary since 2011. He says that “despite searches”, the Constitution could not be located in his office or at the IPA at the time of the hearing, but he located it on the IPA web site after the hearing. He gave no particulars or supporting evidence of the searches.

16. One of the Appellants’ lawyers deposed to the fact that on 3 July 2013, three months after the proceedings were issued, he had requested his clerk to attend at the IPA and obtain the cost of carrying out various searches, including a search for the company constitution. He did not say if the cost was obtained or if any search was subsequently done.

17. The principles applicable to such an application are well settled. The evidence has to be fresh, that is, it has to have been unavailable at the hearing, or only come to the knowledge of the party after the hearing and could not by reasonable means and care have come to his knowledge before the hearing. (John Peng v The State (1982) PNGLR 331, Koitachi Ltd v Johnson Zhang (2007) SC870, and William Chilen v The State (2011) SC109).

18. The document sought to be adduced is far from fresh. It was created and lodged at the Registrar of Companies in 1999, 14 years before the issue of the proceedings. There were numerous shareholders, directors, and company secretaries, including PP, who were obliged to maintain proper statutory records of the company. There was no evidence of why a copy was not available in the statutory records or the company’s register or from any of those persons. There was no evidence of what attempts if any had been made to search for it by any of those persons, or of attempts to obtain a copy from the IPA. There was no evidence that it was unavailable at the IPA at any time. The only evidence was that several months after the issue of proceedings, the cost of an IPA search was requested, and a copy subsequently obtained.

19. If the Appellant had intended to rely on the constitution as a ground for objection to the authority of the Respondents, it had to have been pleaded in the statement of claim, but it was not. It was not mentioned, even in the Amended Writ of Summons filed in 2015. The pleaded ground for objection was based on the Joint Venture Agreement.

20. An Application for leave to put the constitution into evidence now, would therefore not assist the Appellant, as evidence can only be given of matters which are pleaded (PNGBC v Jeff Tole (2002) SC 694), and the constitution was not pleaded.

21. The Appellant says it had knowledge of the existence of the constitution for over 20 years. It was not a fresh document. There is nothing to show that it was unavailable either before the proceedings were commenced in April 2013, or before the hearing commenced in May 2013, or before the hearing concluded on 17 July 2013. There was no evidence of reasonable, or indeed any, effort having made to obtain the constitution before the commencement of the proceedings of the hearing. Its probative value is doubtful, as it was not pleaded in the Statement of Claim. Even if the constitution had been available at the hearing in 2013, there was nothing to show that the Appellant would have been able to rely on it to oppose the Respondents’ application, because evidence could not be given of a matter not pleaded.

22. The Application to adduce fresh evidence, is refused.

Objection to Competency

23. The basis of the Objection to Competency is that the Appeal was against findings of fact for which leave to appeal was required but had not been sought or obtained, and that the Appellant was not duly authorized to instruct lawyers or institute the Appeal proceedings.

24. The Appellant objected to the competency of the Respondents’ Objection, on the basis that the Notice of Objection could not be amended, the second Notice was therefore in-valid, and the first Notice did not cite the court’s jurisdiction.

25. The prescribed form of Notice of Objection to Competency does not include a reference to the court’s jurisdiction. Order 13 Rule 15 provides that all applications for interlocutory orders must contain a concise statement of the court’s jurisdiction to grant the orders being sought. Prima facie, a Notice of Objection to Competency may not be an application for an interlocutory order. It is an application for dismissal of the appeal proceedings on the basis that the court’s jurisdiction has not been validly invoked. Nevertheless, a number of case authorities have held that a Notice of Objection is defective if it does not cite its jurisdictional basis, which is fatal to the Objection. (see for example PNG Law Society v David Cooper (2016) PGSC 69).

26. The amended Notice of Objection does cite the court’s jurisdiction. The only issue is therefore whether or not the amended Objection is valid. There is no rule which specifically refers to amendment of Objections to Competency.

27. The Appellant referred to Aiwasa v Derari (2017) N6602, where the National Court held that the National Court Rules have no provision for amendment of a Notice of Motion, and O8 R51(1) only gives a party the power to amend a pleading. It is not clear if the court’s attention was drawn to the provision of O 8 R 50 (1) which allows the court at any stage, on application by any party or of its own motion, order that any document in the proceedings be amended. A Notice of Motion is a document, and prima facie, can be amended by court order. However, the National Court Rules are not relevant to the present case.
28. Order 11 Rule 11 provides that the court or a judge may order that the proceedings be amended. No restriction is imposed on the court’s power to amend. We respectfully agree with the findings in Motor Vehicle Insurance Ltd v Niugini Nominees Ltd (2014) SC1334 that:

“...I am satisfied that the Court has power to amend proceedings. That power is found in the general powers of the Court under O 11 R11 of the Supreme Court Rules ...(so that) it is not necessary to resort to O8R50 and 51 and O2 R1 to ‘fill in the gap’ so to speak and grant leave to amend.”

29. In PNG Law Society v Cooper (2017) PGSC 10, the court cited with approval the determination by the High Court of Australia in Crampton v R (2000) HCA 60, that:

“Whilst a case is still properly before the judiciary, the jurisdiction to prevent miscarriages of justice and fundamental errors of law should remain untrammeled by unduly protective procedural conceptions. I know of no final court ... which denies itself the right to permit enlargement of the issues before it where justice requires and convenience suggests that course. General speaking, the rigidities of procedural rules ... were replaced in the 20^th Century by a greater flexibility and by judicial impatience with rigidities that would prevent the ultimate attainment of justice according to law.”

30. It would have been preferable for the Respondents to have applied to the court for leave to amend their Notice of Objection. However, the amended Objection was filed only a few days after the initial Objection, before the Appeal had even been served, and has not caused any confusion or prejudice to the Appellant. Both documents were filed within time. There is only one Rule in the Supreme Court Rules which gives jurisdiction to file an Objection to Competency, and so there is no possibility of confusion as to the jurisdictional basis. For these reasons, pursuant to O11 R 11, we order that the Notice of Objection to Competency filed on 18/4/2019 be amended in the form of the Amended Notice of Objection to Competency filed on 23/4/2019.

31. If we are wrong, and the Notice of Objection to Competency cannot be amended, the question of competency may nevertheless still be raised by the court or the parties and considered at any time until judgement (Bruce Tsang v Credit Corporation (PNG) Ltd (1993) PNGLR 112, Barava Ltd v Giregire Estates Ltd (2008) SC958.) Even where a challenge to jurisdiction has been raised incompetently, the question of the Court’s jurisdiction remains open and can be challenged at any time (Mary ToRobert v Henry ToRobert (2011) SC 113). If the Appeal is dismissed as incompetent despite no valid notice of objection, then under O7 R 19, the Respondent shall not receive costs, unless the court orders otherwise.

32. In relation to the merits of the Respondents’ Objection, the principles are set out in Neville v National Executive Council (2015) SC 143. When determining if a ground of appeal is a question of fact, or a question of law, or of mixed fact and law:

... “ it is important to distinguish between primary facts and the conclusions from them. Primary facts are ... facts proved by the production of a thing itself, such as an original document. Their determination is essentially a question of fact for the tribunal of fact, and the only question of law that can arise on them is whether there was any evidence to support the finding. The conclusions from primary facts are, however, inferences introduced by a process of reasoning from them. If and so far as those conclusions can as well be drawn by a layman ... as by a lawyer, they are conclusions of fact ... If and so far, however, as the correct conclusion to be drawn from primary facts requires ... determination by a trained lawyer ... the conclusion is a conclusion of law...”

33. In the present case, Ground 3 (a) (i-vii) of the Appeal sets out a number of facts. Ground 3 (a) pleads that the error is in the conclusion based on those facts, namely, that the court could not “be satisfied to the required standard that the properly appointed directors of the Appellant have resolved to commence and continue these proceeding against the Respondents.” Whether or not the inferences which could be drawn from the facts were sufficient to establish a legal standard of proof, is a question of law to be determined by a trained lawyer. Ground 3 (a) therefore alleges that the judgement is wrong in law.

34. Pursuant to O7 R 10, “it is not sufficient to allege that a judgment is... wrong in law.” The Appeal “... must specify with particularity the grounds relied on to demonstrate that it is against the evidence... and the specific reasons why it is alleged to be wrong in law.”
35. Ground 3 (a)does not specify any reason why it was wrong in law for the Judge to draw that inference from those facts, namely, the inference that the evidence was insufficient to prove that properly appointed directors had resolved to issue and continue the proceedings. It was not alleged that the finding was against the evidence or the weight of the evidence. No error in the judge’s process of reasoning is specified at all.

36. Ground 3 (b) (i)-(iv) sets out a number of facts. It pleads that the error is in the findings that the directors at the meetings did not include two of the Respondents, and that there was no evidence of any relevant extracts of the Registrar of Companies office. These findings were purely questions of fact. No inferences were pleaded to have been drawn. There was no allegation that the findings were against the evidence or the weight of the evidence. No reasons were given for why the findings were alleged to be wrong in law. As those findings were questions of fact, leave to appeal was required by S14(c) of the Supreme Court Act, but was not obtained.

37. Ground 3 (c) is merely a restatement of Ground 3 (a), with different facts. Whether or not the inference to be drawn from those facts was sufficient to establish a finding to the required standard, is a question of law. The Ground does not give specific, or any, reasons why it is alleged to be wrong in law. No error in the judge’s process of reasoning is specified.

38. The majority of the Grounds contain submissions, contentions and assertions of fact, instead of the specific grounds and reasons required by O 7 R 9 (c) and 10. None of the Grounds specify with particularity, or demonstrate the specific reasons why, the decision of the primary judge is alleged to be wrong, or how he is alleged to have fallen into error.(Jimmy Lama v NDB Investments Ltd (2015) SC 1423, PK Investments Ltd v Mobil Oil New Guinea Ltd ( 2015) SC 1456).

39. The Appeal does not validly invoke the Court’s jurisdiction and is incompetent.

40. The Court therefore orders:

1. The Respondents are given leave to amend the Notice of Objection to Competency filed 18 April 2019 in the form of the Amended Notice of Objection filed 23 April 2019.

2) The Notice of Appeal filed on 14 March 2019 is dismissed for being incompetent.
3) The interim Orders of 20 March 2019, are discharged.

4. The Appellant’s Application to adduce fresh evidence, filed on 3 February 2020, is refused.

5) The Cross Appeal may continue.
6) Each party is to pay its own costs.
__________________________________________________________________

Posman Kua Aisi: Lawyers for the Appellant

Greg Manda Lawyers: Lawyers for the Respondent