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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO.58 OF 2021
BETWEEN:
AUS PNG RESEARCH & RESOURCES IMPEX LIMITED
Appellant
AND:
LOI BAKANI
First Respondent
AND:
CENTRAL BANK OF PAPUA NEW GUINEA
Second Respondent
Waigani: David J
2021: 27th July & 7th August
SUPREME COURT PRACTICE AND PROCEDURE – application for restraining order pending appeal – jurisdictional basis for seeking order to be cited in application - Supreme Court Act, Section 5(1)(b), Order 13 Rule 15 Supreme Court Rules.
SUPREME COURT PRACTICE AND PROCEDURE – application for stay – exercise of discretion – principles for exercise of discretion - Supreme Court Act, Section 19.
Cases Cited
Aerato Security Services Pty Ltd v MVIL [1998] PNGLR 232
Andrew Kwimberi of Paulus M. Dowa Lawyers v The State (1998) SC548
McHardy v Prosec Security and Communication Ltd (2000) SC646
Pacific Equities & Investments Ltd v Teup Goledu (2009) SC962
Joshua Kalinoe v Paul Paraka; Hon Biri Kimisopa v Paul Paraka (2010) SC1024
Steven Punagi v Pacific Plantation Timber (2011) SC1153
British American Tobacco (PNG) Ltd v TST 4 Mile Ltd (2011) N4589
Joseph Nandali v Curtain Brothers Ltd (2012) SC1483
MVIL v Niugini Nominees Ltd (2014) SC1334
The State v Independent Timbers & Stevedoring Ltd (2016) N6331
National Capital Ltd v Port Moresby Stock Exchange (2010) SC1053
John Molu v Wawoi Guavi Timber Company Ltd (2016) SC1494
Behrouz Boochani v The State (2017) SC1566
Solomon Tato v Samson Akunai (2016) SC1625.
Yii Ann Hii v the Deputy Commissioner of Taxation (2017) SC1626
Manase v Polye (2019) SC1907
Counsel:
John Napu, for the Appellant
Ian Molloy with Dakan Doiwa, for the First and Second Respondents
RULING
7th August, 2021
1. DAVID J: INTRODUCTION: By application filed on 25 June 2021, the appellant, Aus PNG Research & Resource Impex Limited seeks two distinct orders and these are:
“(a) Pursuant to s.19 of the Supreme Court Act, the terms 3 and 4 of the Orders of the National Court, by His Honour Miviri J, made in the matter of OS No.178 of 2020 – Aus-PNG Research & Resource Impex Limited v Loi Bakani & Central Bank of Papua New Guinea dated 16 June 2021; which stays all related proceedings to the proceedings herein filed by the Appellant, and the Order by His Honour that certificates of taxation under WS No.61 of 2016 in the sum of K77,026.40 and OS No.841 of 2016 in the sum of K70,000.00 be paid within 30 days be stayed pending the determination of the Appeal.
(b) Mr. Ian Molly (sic) be restrained from making further appearance in any proceedings, arising between the Appellant and the Respondents on matters arising out of, or relating to MP No.937 of 2006 – Wilson Kamit v Aus-PNG Research & Resources Impex Limited, until issues regarding his conflict of interest situation, raised in the substantive appeal is resolved.”
2. The appellant relies on the affidavits of Reginaldo Melis sworn on 23 June 2021 and filed on 25 June 2021 and of Betty Doni sworn and filed on 14 July 2021. An undertaking as to damages was filed on 25 June 2021.
3. The respondents, Loi Bakani and Central Bank of Papua New Guinea oppose the applications for a stay referred to in paragraph 1(a) above and an application to restrain Mr. Molloy’s appearance referred to in paragraph 1(b) above. They rely on the affidavits of Bathsheba Pora and Loi Bakani each sworn and filed on 21 July 2021 including the annexures thereto.
BRIEF BACKGROUND
4. The appellant was a buyer and exporter of gold until its Gold Export Licence (GEL) authorizing it to trade in and export gold was cancelled by the second respondent at the end of 2006. GEL is the authority enabling persons or entities to trade in gold export and is subject to terms and conditions that must be complied with. GEL is issued by the Governor of the second respondent on application and issued on a yearly basis. The 2006 authority issued on 7 February 2006 on the application of the appellant dated 19 December 2005, was expressed to be effective from 2 January 2006 to 31 December 2006 and the second respondent reserved the right to amend the terms and conditions and or rescind the authority at any time during the period of validity. Prior to the cancellation, the second respondent had been granting the appellant authority to trade on an annual basis under the Central Banking (Foreign Exchange and Gold) Regulation.
5. After the cancellation of the appellant’s gold export licence, Wilson Kamit, the then Governor of the second respondent, instituted a criminal prosecution against the appellant alleging breaches of the Central Banking (Foreign Exchange and Gold) Regulation. Mr Kamit instituted the prosecution by Information filed on 11 December 2006 in the National Court in proceedings MP No.937 of 2006, Wilson Kamit v Aus-PNG Research & Resources Impex Limited. The Appellant defended the prosecution and applied by motion to have the criminal prosecution dismissed alleging that it was an abuse of process. On 2 February 2007, the National Court quashed the Information and dismissed the criminal prosecution. The National Court also ordered that; the second respondent immediately grant a new authority to the appellant to trade in and export gold in the same or equivalent form and subject to the same or equivalent conditions as for the authority granted to the Appellant in February 2006, such new authority to be effective from 1 January 2007; and the second respondent not to revoke or vary any condition of the new authority without leave of the National Court which, if sought, were to be originating summons supported by affidavit.
6. On 9 February 2007, the second respondent issued a GEL to the appellant for the year 2007.
7. On 29 January 2008, the second respondent issued another GEL, on the application of the appellant dated 27 November 2007, for 2008 and was valid up to 31 December 2008.
8. The appellant asserts that the GELs issued in 2007 and 2008 were defective and that subsequent applications for GELs were queried and refused by the respondents as it was alleged that the appellant did not export gold in 2007, 2008 and 2009.
9. A GEL for 2009 was actually issued to the appellant on 14 April 2009 which was valid up to 31 December 2009 on the application of the appellant dated 3 November 2008 and a supporting letter from Young & Williams Lawyers explaining why the appellant did not export any gold in 2008.
10. On 17 November 2020, the appellant commenced contempt of court proceedings against the respondents in the National Court by way
of originating summons in OS No.178 of 2020, Aus-PNG Research & Resources Impex Limited v Loi Bakani and Central Bank of Papua
New Guinea (the contempt proceedings) for alleged breaches of the court order made on 2 February 2007 in proceedings, MP No.937 of
2006 asserting that the respondents did not issue the appellant with a GEL for the years 2010, 2011, 2012, 2014, 2015 and 2016.
11. By notice of motion filed on 18 December 2020, the respondents applied for orders to; stay the contempt proceedings until the
appellant, within 30 days of the date of the order, paid costs payable by the appellant to them of K77,026.40 in proceedings WS No.61
of 2016 which were dismissed on 15 September 2018 and K70,000.00 for costs payable by the appellant to them in proceedings OS No.841
of 2016 which were dismissed on 8 November 2018 or alternatively, to dismiss the contempt proceedings for being frivolous and vexatious
and an abuse of the court process under Order 12 Rule 40(1) of the National Court Rules.
12. By notice of motion filed on 27 May 2021, the respondents applied to strike out the amended originating summons and amended statement of charge filed on 3 March 2021 and a notice of motion filed on 20 April 2021 for being filed without leave of the court.
13. On 1 June 2021, when the two motions returned for hearing, Mr. Molloy appeared for the respondents by video link. The appellant objected to Mr. Molloy’s representing the respondents raising conflict of interest and asserting that Mr. Molloy had represented him in the past in the same matter, but the objection was rejected by the National Court
14. On 16 June 2021, the National Court ruled in favour of the respondents to grant the orders sought in the motions and ordered that:
APPLICATION FOR RESTRAINING ORDER
16. Mr Napu for the appellant contends that Mr Molloy should be restrained from representing the respondents in these proceedings as it was an undisputed fact that he acted for the appellant in the past and that amounted to a conflict of interest. It was argued that by acting for the appellant in the past, he possessed information that was confidential to the appellant which information was relevant to the decisions appealed and could be adverse to the appellant’s appeal. Mr Napu also argued that Mr. Molloy’s conduct was contrary to Section 10 of the Professional Conduct Rules. Mr. Napu also submitted that reliance on Section 19 of the Supreme Court Act was sufficient as the application was being made during the prosecution of the stay application.
17. On the converse, Mr. Molloy for the respondents argues that the application should be refused for want of competence as the appellant has failed to engage the jurisdiction of the Court by not identifying either correctly or at all the Court’s jurisdiction. In addition, counsel argued that the application was not seeking a stay of the National Court proceedings or any other order of the Court or Judge for reliance to be placed on Section 19 of the Supreme Court Act.
“All applications for interlocutory orders must contain a concise statement of the Court’s jurisdiction to grant the orders being sought. With the exception of urgent applications, all other applications for interlocutory orders shall be made to the Duty Judge on a scheduled motions day. All applications shall be made in Form 4.”
“Unless otherwise ordered by the Supreme Court or a Judge, an appeal, or an application for leave to appeal, to the Supreme Court does not operate as a stay of proceedings.”
22. An interim restraining order may be granted by a Judge of the Supreme Court pursuant to Section 5(1)(b) of the Supreme Court Act to prevent prejudice to the claims of the parties: Behrouz Boochani v The State (2017) SC1566. Section 5 states:
“(1) Where an appeal is pending before the Supreme Court—
(a) a direction not involving the decision on the appeal; or
(b) an interim order to prevent prejudice to the claims of the parties; or
(c) an order in any proceedings (other than criminal proceedings) for security for costs; or
(d) an order dismissing an appeal in any proceedings (other than criminal proceedings) for default in furnishing security; or
(e) an order admitting an appellant to bail,
may be made by a Judge.”
23. However, the power under Section 5(1) can only be exercised where an appeal is pending before the Supreme Court: National Capital Ltd v Port Moresby Stock Exchange (2010) SC1053, John Molu v Wawoi Guavi Timber Company Ltd (2016) SC1494. This application is being made while the appeal is pending before the Supreme Court.
24. In Manase v Polye (2019) SC1907 at paragraph 6, Batari, J observed:
“However, the point is made, that O. 13 r.15 of the Supreme Court Rules requires all applications for interlocutory orders to contain a concise statement of the Court’s jurisdiction to grant the orders being sought. The general form in Form 4 is to be adopted, subject to inclusion of the jurisdictional basis for the application. Applying the strict approach, technical flaws in non-compliance with O.13 r.15 are enough in themselves to warrant dismissal for want of competence: Pacific Equities & Investments Ltd v Teup Goledu (2009) SC962; Joseph Nandali v Curtain Brothers Ltd (2012) SC1483; Behroug Boochani v State (2017) SC 1566.”
25. Clearly, the application for a restraining order is flawed for non-compliant with the requirement to cite the jurisdictional basis for the grant of the order sought: Pacific Equities & Investments Ltd v Teup Goledu (2009) SC962, Joseph Nandali v Curtain Brothers Ltd (2012) SC1483, MVIL v Niugini Nominees Ltd (2014) SC1334, Manase v Polye (2019) SC1907, Behrouz Boochani v The State (2017) SC1566.
26. Given this, I am satisfied that this application does not contain a concise statement of the Court’s jurisdiction that will enable it to grant the order sought. Consequently, this application is refused.
27. In addition, Grounds 4.1 and 4.2 pleaded in the Notice of Appeal filed on 19 June 2021 (Notice of Appeal) relate to the objection to Mr. Molloy’s appearance. Hence, I think, it would be improper for me to address and rule on any issue arising or possibly arising from those grounds which are matters falling within the domain of the Supreme Court and to be determined at the substantive hearing of the appeal.
APPLICATION FOR STAY
28. The application for stay is made pursuant to Section 19 of the Supreme Court Act.
29. An interim order for stay was made ex parte on 15 July 2021.
30. At the hearing, Mr Napu said the application for stay can be treated as a fresh application as distinct from one for continuity given the application was made inter partes now with all relevant and necessary material relied on by the parties for an against the application brought before the Court. There being no issue taken by the respondents on this proposal, I have treated this as a fresh application.
31. The principles applicable on a grant or refusal of stay application are well established in this jurisdiction and they are set out in McHardy v Prosec Security and Communication Ltd [2000] SC 646 (McHardy principles). There, the Supreme Court held that the powers of the Court to grant or refuse a stay application pending appeal is discretionary. The discretion available to a Judge of the Court is very broad: Joshua Kalinoe v Paul Paraka; Hon Biri Kimisopa v Paul Paraka (2010) SC1024. The requirements of justice demand that the exercise of discretion by the Court is based on proper principles and on proper grounds. That is not exhaustive and the circumstances vary from case to case. It is not necessary for the applicant to demonstrate special or exceptional circumstances. For a stay to be granted, it is sufficient that an applicant shows some reasons depending on the merits and circumstances of his particular case to warrant the exercise of discretion in his favour. The onus is on an applicant to persuade the Court as to why it should intervene and stall enforcement, implementation or the operation of the judgment of the trial court: Yii Ann Hii v the Deputy Commissioner of Taxation (2017) SC1626. However, the starting point is that a successful party is entitled to the fruits of the judgment.
32. The McHardy principles that may be considered are:
33. The circumstances of a particular case may warrant greater or less or even no weight to be given to a particular factor in the exercise of discretion: Solomon Tato v Samson Akunai (2016) SC1625.
34. I have considered the submissions made by counsel representing the parties on the application of the McHardy principles to the circumstances of the present case and I apply them in the following manner.
Leave to appeal
35. The appellant purportedly appeals against two decisions. According to the notice of appeal, one is the ruling made on 1 June 2021 concerning Mr. Molloy’s appearance for the respondents (first decision) and the other is the ruling made on 16 June 2021 to dismiss the contempt proceedings (second decision). According to the notice of appeal and reiterated by the appellant at the hearing, leave is not required.
36. There is no contest that leave is not required in relation to the second decision on the basis that it is final and the appellant purports to raise questions of law or mixed fact and law under Section 14 of the Supreme Court Act. This factor favours the appellant.
37. However, the respondents argue that the first decision, on what the appellant describes as a preliminary issue, was an interlocutory decision and not a final decision because it did not finally dispose of the proceedings relying on Steven Punagi v Pacific Plantation Timber (2011) SC1153. They submit that as leave to appeal was required under Section 14 of the Supreme Court Act, but was not sought or obtained, the notice of appeal, so far as it purports to challenge the first decision was incompetent and a notice of objection to competency was filed on 2 July 2021 in that regard. Given a notice of objection to competency was filed pertaining to this issue, I will treat this as a neutral factor as it is a matter pending determination by the Supreme Court.
Delay
38. There is no contest that there has been no delay in making this application. This factor favours the appellant.
Possible hardship, inconvenience or prejudice to either party
39. As to possible hardship, inconvenience or prejudice to either party, the appellant contends that it stands to suffer hardship, inconvenience and prejudice as a result of the decisions of the National Court. The appellant also contends that the preservation of the status quo was necessary because the decisions and orders made only go to frustrate the appellant from bringing the real issues to the fore and be dealt with by the appropriate court on their merit.
40. The respondents contend that the stay sought by the appellant is only in relation to the third and fourth orders of the National Court. They rely on an affidavit of Bathsheba Pora purportedly sworn on 8 July 2021 which they say sets out the detriment that will be suffered by the respondents if the application were granted. Reliance was only placed on Bathsheba Pora’s affidavit sworn and filed on 21 July 2021 (see paragraph 3 of written submissions). I cannot glean from this affidavit any information or evidence that supports the submission. In his affidavit, the first respondent states, among others, that if the stay is granted the respondents will be deprived of their taxed costs as ordered by the National Court, costs which they are entitled to irrespective of the outcome of this appeal and the payment of which has been delayed by the appellant. I sympathise with the respondents on this argument, but there are enforcement processes and procedures under the National Court Rules they can avail themselves to.
41. I accept the appellant’s submission. This factor favours the appellant.
Nature of judgment
42. As to the nature of the judgment sought to be stayed, the respondents contend that the two costs orders made against the appellant in 2018, but which the National Court orders indicate were made in 2018 and 2019, are orders that the appellant can only challenge by way of a review of the costs orders which the appellant has failed to do. They also argue that there is nothing unfair or unjust in requiring the appellant to comply with court orders and a process which it has not challenged or appealed against. Evidence from Betty Doni shows that the hearing for the taxation of costs in connection with OS No.841 of 2016 before Assistant Registrar, Nickson James, was fixed for Thursday, 15 July 2021 at 2:00 pm. There is no evidence before me about the outcome of the taxation hearing. It was contended by Mr Napu for the appellant that the order to pay costs more than K147,000.00 within thirty days was harsh and oppressive. This argument has no merit. There is no other evidence to show that the costs orders have been challenged by appeal or review since they were made some two years ago. No payment has been made during that time. I accept the respondents’ submissions. This factor favours the respondents.
Financial ability of applicant
43. The appellant has not adduced evidence concerning its financial ability to either pay the two costs orders made against it in 2018, but which the National Court orders indicate were made in 2018 and 2019, or generally. Its failure to pay those orders to date is indicative of either unwillingness or inability to pay or both or suggests that it may be impecunious. This factor favours the respondents.
Preliminary assessment on whether the applicant has an arguable case
44. As to a preliminary assessment being made about whether the appellant has an arguable case on the appeal, the appellant states it has, arguing that there are strong grounds of law and it has a good chance of success.
45. On the converse, the respondents argue that the appellant does not have an arguable case, the purported appeal is plainly incompetent and beyond that it all grounds of appeal have no merit whatsoever. The respondents submitted that the appellant’s claims that Mr Molloy, counsel for the respondents had a conflict of interest based on advices given by him to the appellant in 2007 and 2016 which in themselves were given a long time ago and unrelated to the contempt proceedings. In addition, it was argued that it is not law that a lawyer may not act against a former client and no duty of loyalty survives the end of the retainer. It was also argued that there must be a risk that confidential information conveyed to the lawyer will be misused, the onus being on the appellant: Aerato Security Services Pty Ltd v MVIL [1998] PNGLR 232, British American Tobacco (PNG) Ltd v TST 4 Mile Ltd (2011) N4589, The State v Independent Timbers & Stevedoring Ltd (2016) N6331.
46. The stay application concerns the third and fourth orders made in the second decision. There is an indication of an apparent error of law or procedure in granting the order which I will address and explain below. In addition, the order for the dismissal of the contempt proceedings for being frivolous and vexatious and an abuse of the process under Order 12 Rule 40(1) of the National Court Rules was sought in the alternative. I am satisfied that the appellant has an arguable case. This factor favours the appellant.
Error on the face of the record of the judgment
47. As to whether on the face of the record of the judgment there may be indicated apparent error of law or procedure, the respondents submit that there is none that would warrant the stay being granted.
48. The stay application concerns the third and fourth orders made in the second decision. The orders were sought in the motion filed on 18 December 2020 relying on Order 12 Rule 7(2) of the National Court Rules. That rule states:
“Where —
(a) the Court makes an order for the dismissal of proceedings so far as concerns the whole or any part of any claim for relief by any party; and
(b) the Court orders that party to pay any costs; and
(c) before payment of the costs, that party brings against a party to whom the costs are payable further proceedings on the same or
substantially the same cause of action as that on which that claim for relief was founded,
the Court may stay the further proceedings until those costs are paid.”
49. In my view, proceedings for contempt of court are separate and distinct from “proceedings on the same or substantially the same cause of action as that on which that claim for relief was founded” as envisaged by sub-rule (2)(c). The Supreme Court in Andrew Kwimberi of Paulus M. Dowa Lawyers v The State (1998) SC 548 held that, contempt proceedings are criminal in nature. The practice and procedure regulating contempt of court proceedings are set out in Division 6 of Order 14 of the National Court Rules and must be complied with. The standard rules of criminal practice and procedure also apply: Andrew Kwimberi of Paulus M. Dowa Lawyers v The State (1998) SC 548. The principles of natural justice or fairness as provided for under Section 59 of the Constitution must also be observed.
50. However, the summary disposal procedure under Order 12 Rule 40 of the National Court Rules is open to a party to invoke in contempt of court proceedings. That rule specifically falls within Division 12.4 (summary disposal). Rule 37 states that Division 12.4, which consists of Rules 37 to 43, applies to all proceedings except for proceedings involving a claim by the plaintiff for libel, slander, malicious prosecution, false imprisonment, seduction, breach of promise of marriage, fraud or a claim for damages arising from death or personal injury. Clearly, contempt of court proceedings do not fall within the exception so Rule 40 is clearly capable of applying. Therefore, there was nothing wrong with the respondents applying for dismissal of the contempt proceedings under Order 12 Rule 40(1).
51. A close examination of Order 12 Rule 7(2)(c) seems to suggest a possible prohibition against prospective filing of “further proceedings on the same or substantially the same cause of action as that on which that claim for relief was founded.” The proceedings concerning the costs orders and WS No.15 of 2021 were filed before 16 June 2021 and in my view do not fall under Order 12 Rule 7(2)(c).
52. I am satisfied that there is on the face of the record an indication of an apparent error of law or procedure. I reject the respondents’ submission. This factor favours the appellant.
Overall interest of justice
53. As to the overall interest of justice, the respondents contend that given the appellant has already brought a number of unsuccessful proceedings against the respondents, that the appellant has not yet paid the costs of those proceedings to the respondents, and that there is no detriment to the appellant if the relief sought in the application is not granted, the interests of justice strongly favours the dismissal of the application. The respondents state that appellant is liable to satisfy the previous costs orders. Based on my earlier observations that the applicant has an arguable case and there is on the face of the record an indication of an apparent error of law or procedure, which I adopt and apply here, I reject the respondents’ submission. I am satisfied that the overall interest of justice favours the grant of the stay sought. This factor favours the appellant.
Balance of convenience
54. As to the balance of convenience, the respondents contend that the appellant has not produced any evidence to explain why the orders sought are required. They argue that whatever the outcome of the appeal, the appellant remains liable to satisfy the previous costs orders. The respondents argue that the stay sought would not only stay the immediate National Court orders, but would unfairly stay the costs orders made in previous proceedings. Based on my earlier observations that the applicant has an arguable case, there is on the face of the record an indication of an apparent error of law or procedure, and the overall interest of justice favours the stay sought, which I adopt and apply here, I reject the respondents’ submissions. I am satisfied that the balance of convenience favours the grant of the stay sought. This factor favours the appellant.
Damages as sufficient remedy
55. Damages is obviously not an appropriate remedy for either party. This is treated as a neutral factor.
Conclusion
56. In summary, notwithstanding a couple of considerations that I have considered in favour of the respondents, the weight of all other considerations favours the grant of the stay sought.
ORDERS
57. The formal orders of the Court are:
1. The application for the stay sought is granted.
_______________________________________________________
Napu & Company: Lawyers for the Appellant
Allens: Lawyers for the Respondents
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