Golobadana No 35 Ltd v Bank of South Pacific Ltd [2020] PGSC 98; SC2009 (2 October 2020)

SC2009

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 2 OF 2018

GOLOBADANA NO 35 LIMITED
Appellant

V

BANK OF SOUTH PACIFIC LIMITED
First Respondent

PORT MORESBY RUGBY LEAGUE INC
Second Respondent

Waigani: Cannings J, Anis J, Thompson J
2020: 28^th September, 2^nd October

PRACTICE AND PROCEDURE – dismissal of National Court proceedings on the own motion of the Court for failure to comply with previous orders – conditional orders –whether necessary for Court to specify the date by which previous orders had to be complied with – whether necessary for Court to specify a return date to assess whether previous orders had been complied with.

The appellant, which was the plaintiff in civil proceedings in the National Court, appealed against an order to dismiss the proceedings due to its failure to comply with previous orders requiring it to settle the proceedings or file a statement of relevant facts and issues in a form decreed by the primary judge or produce an affidavit explaining the non-compliance. The appellant argued that the primary Judge erred in law in two main areas: (1) by failing to adhere to the requirement for the last order made, on 7 December 2017, prior to dismissing the proceedings on 12 December 2017, to set a specific time by which previous orders had to be complied with; and (2) by failing to set a specific time and date on which the proceedings would return.

Held:

(1) Order 12, Rule 4(1) of the National Court Rules provides that any judgment or order which requires a person to do an act shall specify the time within which it must be done. Order 12, Rule 4(2) of the National Court Rules provides that if the time is not specified, the time shall be 14 days after the date of service of a minute of the order on the person required to do the act. Here, no time was specified, no minute of the order was taken out or served and the order of 12 December 2017 was made in less than 14 days after the order of 7 December 2017, so the orders of 7 and 12 December 2017 failed to meet the requirements of the Rules.

(2) If a Court makes a conditional order that unless certain things are done, the proceedings will be dismissed, and does not make the order self-executing, the order must set the time and date at which the proceedings will return. Here the order of 7 December 2017 was a conditional order that failed to meet that requirement, and was made in error.

(3) It followed that the order of 12 December 2017, dismissing the proceedings on the basis of failure to comply with the order of 7 December 2017 and previous orders, was made in error.

(4) The appeal was allowed, the order of the National Court dismissing the proceedings was quashed and the proceedings were remitted to the National Court.

Cases Cited

The following cases are cited in the judgment:

Baing v PNG National Stevedores Pty Ltd (2000) SC627
Kalang Advertising Limited v Kuppusamy (2008) SC924
Kulunga v Western Highlands Provincial Government (2006) SC859

APPEAL

This was an appeal against the dismissal of proceedings by the National Court, on its own motion, for failure to comply with previous orders.

Counsel

R Raka, for the Appellant
M Tusais, for the first Respondent

2^nd October, 2020

1. BY THE COURT: Golobadana Ltd, the appellant, was the plaintiff in civil proceedings against Bank of South Pacific Ltd and another party in the National Court, in WS No 1701 of 2001 and WS No 384 of 2003 (consolidated). It appeals against the orders of the primary Judge, Kandakasi J, as he then was, of 7 and 12 December 2017. The order of 7 December 2017 was a conditional order, which required the plaintiff to do certain things to prevent dismissal of its proceedings. The order of 12 December 2017 was to dismiss the proceedings due to the plaintiff’s failure to comply with previous orders requiring it to settle the proceedings or file a statement of relevant facts and issues in a form decreed by the primary judge or produce an affidavit explaining the non-compliance.

2. The appellant argues that the primary Judge erred in law in two main areas: (1) by failing, when making the order of 7 December 2017, to set a specific time by which previous orders had to be complied with; and (2) by failing to set a specific time and date on which the proceedings would return.

GROUND 1: FAILURE TO SET A SPECIFIC TIME BY WHICH PREVIOUS ORDERS HAD TO BE COMPLIED WITH

3. The appellant takes issue with the order of Thursday 7 December 2017, which was not reduced to writing or entered as a formal order of the Court. It was an oral order, expressed in the following terms:

All right. So the way forward will be, I will make an order for this matter to return in that Supreme Court week on a date and time to be confirmed by the court. And then parties to file and serve on each other. I will just add the defendants, so this is what I will put, unless the plaintiff fully complies with all the previous orders as extended, last on 14 November 2017 or turns up in court with or files and serves an affidavit providing reasonable explanation for the failure to comply with court orders and the proceeding shall stand dismissed with costs to the defendants. The defendants shall be at liberty to file and serve the affidavit evidence of steps it has taken to comply with all previous orders. Yes that is right. Maybe I will change that order. Defendants shall be at liberty to file and serve any affidavit evidence supporting an order dismissing the proceedings in accordance with term 2 of this order. ...

The plaintiff shall pay all costs occasioned by the plaintiff’s non-compliance of all previous orders inclusive of today’s costs. All right. And the final order is time abridgment.

4. The appellant argues that in making the order of 7 December 2017 in those terms, the primary Judge failed to adhere to the requirements of Order 12, Rule 4 (time for compliance) of the National Court Rules, which states:

(1) Subject to Sub-rules (3) and (4), a judgement or order which requires a personto do an act shall specify the time within which he is required to do the act.

(2) The time shall, unless the Court otherwise orders, be 14 days after the date ofservice of a minute of the judgement or order on the person required to do the act.

(3) Sub-rules (1) and (2) apply to a judgement or order which requires a personto pay money.

(4) Sub-rules (1) and (2) do not apply to a judgement for possession of land or fordelivery of goods.

(5) Where a judgement or order requires a person to do an act within a specifiedtime, the Court may, by order, require him to do the act within another specified time.

(6) Where a judgement or order requires a person to do an act but does not specifya time within which he is required to do the act, the Court may, by order, require himto do the act within a specified time.

5. The appellant relies on Order 12, Rule 4(1), which provides that any order that requires a person to do an act shall specify the time within which it must be done. It is argued that the order of 7 December 2017 failed to meet that requirement and therefore, as the order was generally requiring the appellant to do certain things, the time for compliance would, in accordance with Order 12, Rule 4(2), be no sooner than 14 days after the date of service of a minute of the order on the appellant. Here, only five days passed before the proceedings returned to Court on 12 December 2017; and that was allowed to occur despite no minute of the order of 7 December 2017 being entered, let alone served on the appellant.

6. As to the proceedings of 12 December 2017, it is agreed by the parties, and we find as a fact for the purposes of the appeal, that the appellant was not given notice by the Court of the proceedings returning on that day, and was only notified by the first respondent on 12 December 2017, shortly before the matter returned, that the proceedings were about to return before the primary Judge.

7. When the matter was mentioned the appellant’s counsel, Mr Puka, who had carriage of the matter for the appellant’s lawyers, Henao Lawyers, sought an adjournment so that he might file an affidavit explaining the situation. His Honour was unmoved. He was concerned about the protracted delay in the proceedings and the continuing failure to comply with previous directions. His Honour stated:

We are in the precise situation here. The court issued a self-executing order on 7 December 2017 in relevant parts. Term two reads: "Unless the plaintiff fully complies with all previous orders as executed last on 14 November 2017 and or files and serves an affidavit providing reasonable explanation for failure to comply with court orders the proceedings shall stand dismissed with costs to the defendants," And this non-compliance does not end or just terminate on 14 November. Orders were issued last on 26 September 2017 aimed specifically to enable the parties to progress this matter to trial without delay and since then there has been non-compliance particularly on the part of the plaintiff.

The earlier orders were extended on 7 November, still non-compliance; 14 November extended, still non-compliance continued and the matter adjourned to 7 December, the failure to comply continues today. No satisfactory explanation provided, no affidavit filed and served as directed by the court. I was postulating the possibility of having this matter progressed to trial by an order that the statement of the relevant facts and issues for trial as drawn by the defendant might be sufficient but then that is going to be void of the crux of the plaintiff's claim which is damages and without the damages part covered in that statement that will be of no utility.

We are left therefore in a situation where the plaintiff has failed to take steps promptly as it should as a plaintiff to ensure all court appointments are met or court orders are complied with and where there is non compliance, a reasonable explanation is provided. We have none of those before the court. So this case is well and due for dismissal for want of compliance with court orders in accordance with the previous orders of this court, term two in particular. So I order dismissal of the proceedings with costs to the defendants. Such costs to be taxed if not agreed.

8. In this appeal, counsel for the first respondent, Ms Tusais, submitted that the order of 7 December 2017 sufficiently put the appellant on notice that it had to act quickly to remedy its non-compliance with previous orders and that the proceedings would be returning to Court in the following week, which was a Supreme Court week commencing Monday 11 December 2017. In these circumstances, Ms Tusais submitted, there was sufficient compliance with the requirements for making of conditional orders, including the requirement that the order indicate the time for compliance with the order, as explained in the leading cases, including Baing v PNG National Stevedores Pty Ltd (2000) SC627, Kulunga v Western Highlands Provincial Government (2006) SC859 and Kalang Advertising Limited v Kuppusamy (2008) SC924.

9. We are not persuaded by those submissions. We agree with the appellant that in making a conditional order, breach of which will potentially result in dismissal of proceedings, the Court must specify:

• what steps have to be taken by the parties;
• the date by which such steps must be taken (this being the specific requirement of Order 12, Rule 4(1));
• the date when the proceedings will return to check compliance with the conditional order and to assess whether the matter should be dismissed.
  

10. It is also necessary that any order that meets the above requirements is entered as a formal order of the Court and served on all parties, if it is intended to rely on it to allege that a party is in default.

11. In the present case the order of 7 December 2017 met none of those requirements. We consider that the failure of the primary Judge to specify the time by which steps had to be taken by the appellant amounted to an error of law under Order 12, Rule 4(1) of the National Court Rules. It meant that the order of 7 December 2017, even if it had been entered and served on the appellant, was incapable of giving rise to dismissal of the proceedings any earlier than 14 days after service of the order. Here the order was never entered. Hence there could be no dismissal of the proceedings pursuant to the order of 7 December 2017. We uphold the primary ground of appeal.

GROUND 2: FAILING TO SET A SPECIFIC TIME AND DATE ON WHICH THE MATTER WOULD RETURN

12. We agree with the appellant that if a Court makes a conditional order that unless certain things are done, the proceedings will be dismissed, and does not make the order self-executing, the order must set the time and date at which the proceedings will return to check compliance with the requirements of the conditional order. This is separate and apart from the requirement that the order specify the date by which things be done.

13. Here the order of 7 December 2017 was a conditional order that failed to meet that requirement, as it left the date on which the proceedings would return to be determined by the Court and notified to the parties. But the return date was not notified by the Court to the appellant, and the appellant’s counsel appeared at the hearing on 12 December 2017 only after being given short notice by the first respondent’s counsel, not by the Court. We uphold the second ground of appeal.

CONCLUSION

14. There were other arguments raised in the notice of appeal, but it is unnecessary to deal with them. We consider that the learned primary judge erred in law in dismissing the proceedings. We will allow the appeal, quash the orders of the National Court and remit the matter to the National Court, for trial, before a different Judge. We are authorised by s 16 of the Supreme Court ActChapter No 37 in hearing an appeal to, amongst other things, reverse or modify the judgment of the National Court, give such judgment as ought to have been given in the first instanceand/or remit the case for further hearing.The proceedings have been outstanding for an inordinate length of time and need to be expedited to trial without further delay. The material before us suggests that that is a realistic prospect. As to costs, we consider that, though the appellant has succeeded, costs should not follow the event as the appeal has become necessary due partly to the appellant’s failure to diligently prosecute the National Court proceedings. The parties will bear their own costs.

ORDER

(1) The appeal is allowed.

(2) The orders of the National Court of 7 and 12 December 2018 in WS No 1701 of 2001 and WS No 384 of 2003 (consolidated) are quashed.

(3) WS No 1701 of 2001 and WS No 384 of 2003 (consolidated) are remitted to the National Court, before a different Judge, for trial.

(4) The parties shall bear their own costs of the appeal.

Judgment accordingly.

________________________________________________________________
Henaos Lawyers: Lawyers for the Appellant
Dentons PNG: Lawyers for the First Respondent