National Development Bank Ltd v Noka Builders Ltd [2020] PGSC 44; SC1953 (5 February 2020)

SC1953

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 83 of 2018

BETWEEN:
NATIONAL DEVELOPMENT
BANK LIMITED
Appellant

AND:
NOKA BUILDERS LIMITED
Respondent

Waigani: Hartshorn J, Shepherd J, Koeget J.
2019: 1^st May,
2020: 5^th February

SUPREME COURT - Appeal – appellant appeals against decision of primary judge that dismissed appellants crossclaim for want of prosecution and not considering appellants application for consolidation

PRACTICE AND PROCEDURE - respondent objects to competency of appeal – principles on objection to competency – consideration of – respondent has not satisfactorily made out that court's jurisdiction to hear appeal has not been engaged – objection to competency of appeal dismissed

APPEAL - appellant has satisfactorily made out that the primary judge made identifiable errors in the exercise of her discretion in not considering whether the purported delay was intentional, inordinate or inexcusable; in not considering or taking into account the questions of prejudice occasioned or to be occasioned by either of the parties; in not giving sufficient weight to the established principles concerning an application for dismissal for want of prosecution and giving too much weight to whether the two subject cross claims were an abuse of process – appeal is upheld

Cases Cited:
Curtain Bros (PNG) Ltd v. UPNG (2005) SC788
State v. Sam Akoita and Ors (2009) SC977
Isaac Lupari v. Sir Michael Somare (2010) SC1071
Sweden Tani v. MVIL (2010) N3984
Ron Napitalai v. PNG Ports Corporation Ltd and Ors (2010) SC1016
James Marape v. Peter O'Neill (2016) SC1486
Michael Kuman v. Digicel (PNG) Ltd (2017) SC 1638
National Superannuation Fund Ltd v. Yawenaik Holdings Ltd (2018) SC1709

Counsel:

Mr. I.R. Molloy and Mr. C. Joseph, for the Appellant
Mr. D. Levy, for the Respondent

5^th February, 2020

1. BY THE COURT: This is a decision on a contested appeal from a National Court decision which dismissed the appellant's cross claim for want of prosecution (order appealed).

Background

2. The dispute arises out of two building contracts whereby the appellant, National Development Bank Ltd (NDB) engaged the respondent Noka Builders Ltd (Noka) to construct two buildings in Lae, Morobe Province. NDB terminated the two contracts prior to completion. Noka commenced proceeding WS1213/12 for unpaid balance of progress payments and was successful. Judgment was entered for K621,473.88. NDB's cross claim for loss of rent and damages was dismissed. On appeal the judgment for Noka was confirmed and NDB's cross claim was remitted to the National Court for hearing and determination.

3. Noka commenced a new proceeding, WS131/18, in respect of other unpaid invoices arising out of the same contracts. NDB filed a defence and cross-claim. Noka sought to dismiss NDB's cross claim in WS1213/12 for want of prosecution and NDB sought to consolidate its cross claim in WS1213/12 with proceeding WS131/18. The National Court in the order appealed dismissed NDB's cross claim in WS 1213/12 for want of prosecution and did not consider NDB's application for consolidation.
Objection to competency

4. Noka objects to the competency of the appeal. In summary, it is submitted that the grounds of appeal are incompetent as they do not meet the requirements of Order 7 Rules 9(b), (c) and 10 Supreme Court Rules. That is, they do not particularise with specificity how the primary judge committed the alleged errors of law and fact or mixed law and fact. The grounds of appeal also do not state the correct interpretation which should have been given by the primary judge, Noka
submits.

5. NDB submits that an objection to competency questions the competency of an appeal. An appeal is competent if the notice of appeal has properly invoked the jurisdiction of the Supreme Court. If there is at least one ground of appeal which engages the court's jurisdiction the objection to competency should be dismissed. Noka's objections to competency raise matters that do not go to the competency of the appeal. They raise other matters which are not valid objections to competency.

Consideration

6. In regard to the law concerning an objection to competency, we reproduce the following passage from James Marape v. Peter O'Neill (2016) SC1486, [7] - [9]:

"7. The wording of Order 7 Rule 15 Supreme Court Rules 2012 is clear. It concerns an objection to the competency of an appeal or of an application for leave to appeal. As this Court said in Waghi Savings and Loan Society Ltd v. Bank of South Pacific Ltd (1980) SC185, an objection to competency:

“.... is really an objection to the jurisdiction of the Court to entertain the point....”

8. As mentioned in Ramu Nico Management (MCC) Ltd v. Eddie Tarsie (2010) SC1056, this decision has been referred to with approval in the cases of State v. John Talu Tekwie (2006) SC843 and Jeffrey Turia v. Gabriel Nelson (2008) SC949 amongst others.

9. More recently in Joseph Nandali v. Curtain Bros Ltd (2012) SCA No 14 of 2011 (Unnumbered and Unreported Judgment 4^th May 2012), the Court said:

“Unless the effect of a notice of objection to competency is that, if upheld, this Court has no jurisdiction at all to entertain the appeal as instituted by the notice of appeal, the objection must be dismissed.”

and in Coca Cola Amatil ( PNG) Ltd v. Joshua Yanda (2012) SC1221 the Court said:

“The importance........ of recognising that an objection must go to the competency of the appeal, not a ground of appeal per se cannot be over-emphasised.”"
7. From a perusal of Noka's grounds of objection for appeal ground 4(a), it is apparent that Noka has read each of the sub-paragraphs separately and not together. We concur with the submissions of NDB that the court should read the sub-paragraphs together.

8. In regard to the objection that Order 7 Rules 9(b), (c) and 10 of the Supreme Court Rules have not been complied with, from a perusal of paragraph (1) of the Notice of Appeal, it states that the whole of the subject judgment and orders are being appealed, thus complying with Order 7 Rule 9(b) Supreme Court Rules. Ground 4(a) of the Notice of Appeal sets out a ground which is brief and specific and in our view complies with Order 7 Rule 10. The allegation of abuse of process is not a proper objection to competency. We are satisfied that in regard to Ground 4(a) of the Notice of Appeal no valid objection to competency is raised and Ground 4(a) is a valid ground of appeal. Consequently, as there is at least one ground of appeal which engages the court's jurisdiction, the objections to competency should be dismissed : Michael Kuman v. Digicel (PNG) Ltd (2017) SC1638, [30] - [38]. Further, following a consideration of the other objections to competency we are not satisfied that Noka has satisfactorily made out that this court's jurisdiction to hear this appeal has not been engaged.

The Appeal

9. NDB submits that its appeal should be upheld as the primary judge fell into error in, amongst others, exercising her discretion by:

a) not considering sufficiently the principles that should determine whether a proceeding should be dismissed for want of prosecution;

b) not considering whether any prejudice was caused to Noka by the alleged non prosecution of the cross claim;

c) not considering that there was no evidence of any such prejudice;

d) not considering any prejudice to NDB if its cross claim was dismissed ;

e) giving undue consideration to whether the two subject cross claims constituted an abuse of process when there was no application to dismiss for an abuse of process, rather than considering the issues which govern an application to dismiss for want of prosecution.

10. Noka submits that the appeal should be refused as amongst others:

a) essentially because of the objections to competency it has raised;

b) it was the responsibility of NDB to prosecute its cross claim and this did not occur during negotiations concerning costs;

c) no explanation was given by NDB for the delay in prosecuting its cross claim;

d) having two cross claims the same is an abuse of process;

e) the grounds of appeal raise issues of fact only for which leave to appeal was required but was not obtained;

f) the appeal is an abuse of process;

g) the primary judge did not fall into error.

Consideration

11. First, in regard to Noka's objections to competency, we have already considered these and found accordingly. Second, in regard to the submission that the grounds of appeal raise issues of fact only, from a perusal of the grounds of appeal, none of them raise issues of fact only. We concur with the submission of NDB which is that the grounds of appeal allege an error in the exercise of discretion by not giving weight or sufficient weight to various facts or circumstances, or that in the circumstances the decision is plainly unjust. The submission that the discretion thereby miscarried, is an issue of law and/or mixed fact or law. Third, in regard to the submission that the appeal should be dismissed as an abuse of process, there is no application before the court seeking such relief.

12. We shall consider the other arguments of Noka in our consideration of the exercise of discretion by the primary judge.

13. 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. in Breckwoldt & 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...”

14. 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; Ron Napitalai v. PNG Ports Corporation Ltd and Ors (2010) SC1016 and National Superannuation Fund Ltd v. Yawenaik Holdings Ltd (2018) SC1709.

15. The application before the primary judge upon which she delivered her decision was for the cross claim of NDB to be dismissed want of prosecution. At the National Court hearing, submissions were made on behalf of NDB concerning the power of the court to dismiss a proceeding for want of prosecution being discretionary under Order 10 Rule 5 National Court Rules. In addition, the principles governing a dismissal of a proceeding for want of prosecution are well established. Such an application may be granted if:

" 1. the plaintiff's default is intentional or is allowing for an inordinate and inexcusable delay in a prosecution of his claim;

2. there is no reasonable explanation given by the plaintiff for the delay;

3. the delay has caused injustice or prejudice to the defendant;

4. the conduct of the parties and their lawyers warrants;

5. it is in the interests of justice.": Sweden Tani v. MVIL (2010) N3984 at [17].

16. No issue was taken by Noka to the above principles and in our view they are the correct principles to be considered in determining whether the proceeding should be dismissed for want of prosecution. We refer to Sweden Tani (supra) and the decisions referred to therein at [17] and [18].

17. From a perusal of the judgment of the primary judge contained in the transcript, the primary judge has not referred to any prejudice to Noka which may have been suffered as a consequence of the alleged non-prosecution of the cross claim. Further, there is no reference by the primary judge of a consideration by her of whether the purported delay of NDB in prosecuting the cross claim was intentional, inordinate or inexcusable. There is also no reference in the primary judge's consideration of the interests of justice of any consideration by her of any prejudice that may have been suffered by NDB if its cross claim was dismissed.

18. There is also merit in the submission of NDB that the primary judge appears to have been diverted from the issues which govern an application to dismiss for want of prosecution by the argument that the two subject cross claims constituted an abuse of process. This is supported by the primary judge being recorded in the transcript as stating at p665 lines 1-4:

"Yes I was inclined to say that you have not suffered any prejudice and they may suffer prejudice but now you pointed out to me that they have got a cross claim which is the same as the cross claim now before me?"
19. As referred to, the application before the primary judge was for a dismissal for want of prosecution and not for an abuse of process.

20. We are satisfied, given the above, that NDB has satisfactorily made out that the primary judge made identifiable errors in the exercise of her discretion in not considering whether the purported delay was intentional, inordinate or inexcusable; in not considering or taking into account the questions of prejudice occasioned or to be occasioned by either of the parties; in not giving sufficient weight to the established principles concerning an application for dismissal for want of prosecution and giving too much weight to whether the two subject cross claims were an abuse of process. Further, we are satisfied that NDB has made out that the decision of the primary judge is unreasonable or plainly unjust. A period of seven or five months delay, in the absence of evidence to the contrary, cannot in our view be considered to be intentional, inordinate or inexcusable and such that it warrants a proceeding or cross claim to be dismissed. Given this, it is not necessary to consider the other submissions of counsel.

Orders

21. It is ordered that:

a) This appeal is upheld;

b) The judgment and orders of the National Court dated 22nd May 2018 in proceedings WS No. 1213 of 2012 are quashed;

c) The proceedings WS No. 1213 of 2012 are transferred to Waigani National Court and are to be heard together with National Court proceedings WS No. 131 of 2018 for hearing and determination;

d) The proceedings WS No. 1213 of 2012 and WS No. 131 of 2018 shall be heard and determined by another judge of the National Court;

e) The respondent shall pay the costs of the appellant of and incidental to this appeal to be taxed if not otherwise agreed.
__________________________________________________________________
Ashurst: Lawyers for the Appellant
Manase & Co: Lawyers for the Respondent