Geru Holdings Ltd v Kruse [2022] PGSC 118; SC2318 (25 November 2022)

SC2318

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 142 OF 2021

GERU HOLDINGS LIMITED
Appellant

V

JAMES KRUSE
First Respondent

DELOITTE TOUCHE TOHMATSU
Second Respondent

ROBIN FLEMING, CHIEF EXECUTIVE OFFICER,
BANK OF SOUTH PACIFIC FINANCIAL GROUP LIMITED
Third Respondent

BANK OF SOUTH PACIFIC FINANCIAL GROUP LIMITED
Fourth Respondent

MOROBE PROPERTIES LIMITED
Fifth Respondent

Waigani: Cannings J, Liosi J, Berrigan J
2022: 23^rd, 25^th November

PRACTICE AND PROCEDURE – objection to competency of appeal – whether grounds of appeal met requirements of Supreme Court Rules, Order 7 rule 9(c) and 10 – whether grounds of appeal raised questions of fact for which leave of the Court was required – whether grounds of appeal were based on fresh evidence for which leave of the Court was required – whether raising issues in an appeal that were not argued in the National Court is a matter of competency.

The first to fourth respondents filed a notice of objection to competency of an appeal. The appeal is against a final order of the National Court, which dismissed proceedings commenced by the appellant against the respondents for being an abuse of process and time-barred and declared that the appellant was a vexatious litigant. The appeal raised 12 grounds of appeal and multiple sub-grounds. The primary ground of objection was that the 12 grounds of appeal failed to comply with the Supreme Court Rules as they were unclear, failed to say why the primary judge was wrong and what the judge ought to have found, made statements without identifying the alleged error of the primary judge or made submissions and general statements that are not grounds of appeal. It was also argued that some grounds of appeal raised questions of fact without leave or attempted to adduce fresh evidence without leave or raised issues that were not argued before the National Court.

Held:

(1) Order 7, Rules 9(c) and 10 of the Supreme Court Rules impose three requirements for a ground of appeal: (a) the ground must be stated briefly, but specifically (ie the ground must make grammatical and legal sense and be intelligible); (b) if it is alleged that a judgment is against the evidence or the weight of the evidence, the notice must specify with particularity the ground relied on to demonstrate that it is against the evidence or the weight of the evidence; (c) if it is alleged that the judgment is wrong in law, the notice must specify with particularity the ground relied on to demonstrate the specific reasons why the judgment is alleged to be wrong in law.

(2) A ground of appeal that raises a question of fact only, as distinct from mixed fact and law, is only valid if leave of the Court has been granted.

(3) A ground of appeal that is based on fresh evidence is only valid if leave to adduce that evidence is granted.

(4) An objection to competency must demonstrate that all grounds of appeal are invalid. If one ground of appeal is valid, the appeal is competent and the objection fails.

(5) Seven grounds of appeal were identified as valid as they met the requirements of Order 7 rules 9(c) and 10 and were not raising questions of fact for which leave was required or attempting to adduce fresh evidence. That some of those grounds arguably raise issues that were not before the National Court is not relevant to the question of competency of the appeal.

(6) The objection to competency was refused.

Cases Cited

The following cases are cited in the judgment:

Coca Cola Amatil (PNG) Ltd v Kennedy [2012] 2 PNGLR 205
Geru Holdings Ltd v James Kruse and 4 Others (2021) N9169
Ipili Porgera Investments Ltd v Bank South Pacific Ltd (2007) SC1322
Lama v NDB Investments Ltd (2015) SC1423
Pacific Equities & Investments Ltd v Teup Goledu (2009) SC962

Counsel:

C M Gagma, for the Appellant
I R Shepherd, for the First to Fourth Respondents
P Kewa, for the Fifth Respondent

25^th November, 2022

1. BY THE COURT: The first to fourth respondents object, by notice filed on 17 November 2021, to the competency of the appeal, SCA 142 of 2021. Their objection is supported by the fifth respondent and opposed by the appellant.
   
2. The appeal is against a final order of the National Court of 21 September 2021, which dismissed proceedings, WS 221 of 2021, commenced by the appellant against the respondents for being an abuse of process and time-barred and declared that the appellant was a vexatious litigant (Geru Holdings Ltd v James Kruse and 4 Others (2021) N9169).
   
3. The appeal raises 12 grounds of appeal and multiple sub-grounds.
   
4. The first to fourth respondents assert that none of the grounds of appeal validly invokes the jurisdiction of the Supreme Court. The primary ground of objection is that all grounds of appeal fail to comply with Supreme Court Rules as they are unclear, fail to say why the primary judge was wrong and what the judge ought to have found, make statements without identifying the alleged error of the primary judge or make submissions and general statements that are not grounds of appeal. It is also argued that some grounds of appeal raise questions of fact without leave or attempt to adduce fresh evidence without leave or raise issues that were not argued before the National Court.
   

GENERAL PRINCIPLES

5. There are some general principles to apply in determining an objection to competency:
   
   • Order 7, Rules 9(c) and 10 of the Supreme Court Rules impose three requirements for a ground of appeal:
     

(a) the ground must be stated briefly, but specifically (ie the ground must make grammatical and legal sense and be intelligible);

(b) if it is alleged that a judgment is against the evidence or the weight of the evidence, the notice must specify with particularity the ground relied on to demonstrate that it is against the evidence or the weight of the evidence;

(c) if it is alleged that the judgment is wrong in law, the notice must specify with particularity the ground relied on to demonstrate the specific reasons why the judgment is alleged to be wrong in law (Ipili Porgera Investments Ltd v Bank South Pacific Ltd (2007) SC1322, Pacific Equities & Investments Ltd v Teup Goledu (2009) SC962, Lama v NDB Investments Ltd (2015) SC1423).

• A ground of appeal that raises a question of fact only, as distinct from mixed fact and law, is only valid if leave of the Court has been granted (Supreme Court Act, s 14(1)(c)).
  
• A ground of appeal that is based on fresh evidence is only valid if leave to adduce that evidence is granted (Supreme Court Act, s 6(1)).
  
• An objection to competency must demonstrate that all grounds of appeal are invalid. If one ground of appeal is identified as valid, the appeal is competent and the objection fails (Coca Cola Amatil (PNG) Ltd v Kennedy [2012] 2 PNGLR 205).
  

THIS CASE

6. The last of the principles stated above is critical. It means that the objecting parties, the first to fourth respondents, must demonstrate that each of the 12 grounds of appeal is invalid in that it fails to invoke the jurisdiction of the Supreme Court.
   
7. We are not so satisfied. We have identified seven of the 12 grounds of appeal that validly invoke the jurisdiction of the Court: grounds 2, 3, 4, 5, 8, 10 and 11.
   

Ground 2 states:

2. Her Honour erred in law or mixed fact and law when she ruled/held that the plaintiff was a vexatious litigant and thereafter dismissed the proceedings in its entirety with costs to be paid on solicitor-client basis along with orders for costs be paid prior to any new proceedings on basis of Section 16 (1) of the Frauds and Limitations Act 1988 when:
   
   • (a) The Court proceeded to consider/ accept/rely on and thus gave irrelevant weight to the fifth Respondent’s evidence and the fifth respondent's submissions without considering or determining the evidence put forward by the appellant which on the whole, was equally relevant and sufficient enough to refute/rebut the respondents’ claim that the appellant's claim was indeed time-barred;
     
   • (b) The cause of action accrued from the time of disclosure of the illegal transactions executed to transfer the property described as Allotment 10 Section 3 (State Lease Volume 29 Folio 161) in 2018 where the actual transactions appears to occur in 2017; and
     
   • (c) For reasons set out in (a) above, the appellant was not afforded the avenue/opportunity to be heard for purposes of ensuring a fair/reasonable hearing contrary to the principles of natural justice envisaged by Section 59 of the Constitution.
     
8. This ground adequately frames an argument that the primary judge erred in law in finding that the proceedings were time-barred.
   

Ground 3 states:

3. Her Honour erred in law or mixed fact and law when she wholly heard, considered and deliberated on the fifth defendant's application for dismissal of the entire proceedings pursuant to Order 12 rule 40 of the National Court Rules when:
   
   • (a) there was no cause of action or claim against the fifth defendant only to the extent that there were two consequential relieves [sic] sought in the statement of claim in relation to the property described as Allotment 10 Section 3 (State Lease Volume 29 Folio 161) which was purportedly sold to the fifth defendant by the first, second, third and fourth defendants; and
     
   • (b) there was no defence on merit filed and no affidavits of evidence in rebuttal to the claim that have formed the basis to rely on in the application to dismiss.
     
9. This ground raises the distinct argument that the primary judge erred by upholding an application for dismissal made by a party against which there was no claim.
   

Ground 4 states:

4. Her Honour erred in law or mixed fact and law when her Honour proceeded to consider/ accept/rely on and thus gave irrelevant weight to the fifth respondent’s evidence and submissions without considering or determining the causes of actions pleaded in the statement of claim and supported by affidavit evidence put to the court by the appellant.
   
   • (a) Consequently, facts of the case as stated at paragraphs 2 and 3 at page 3 of the judgment in relation to a loan default by Piunde Limited in 2009 that resulted in the exercise of rights by the Bank of South Pacific Ltd to sell the property owned by the Plaintiff, a guarantor of the loan to the fifth defendant are misconceived and erroneous facts of the case.
     
   • (b) Whilst relied on the misleading submissions by the fifth defendant without pleadings in defence, her Honour deviated from the actual cause of action and replaced with cause of action and facts which were not before the court by way of pleadings and evidence.
     
   • (c) For that reason, the appellant was not afforded the avenue/opportunity to be heard tor purposes of ensuring a fair/reasonable hearing contrary to the principles of natural justice envisaged by Section 59 of the Constitution.
     
10. This ground argues adequately that the primary judge erred by misapprehending the causes of action pleaded in the statement of claim.
    

Ground 5 states:

5. Her Honour erred in law or mixed fact and law when she ruled/held that the plaintiff was a vexatious litigant and thereafter dismissed the proceedings in its entirety with costs to be paid on solicitor-client basis along with orders for costs be paid prior to any new proceedings when:
   
   • (a) Despite evidence presented by both the appellant and respondents showing that the proceedings OS 797 of 2015, Geru Holdings Ltd v Kruse & Deloitte Touche Tohmatsu, WS 428 of 2017 Geru Holdings & Ors v BSP & Ors, OS 675 of 2017 Geru Holdings & Ors v BSP & Ors and OS 189 of 2018 Geru Holdings& Ors v BSP & Ors were all discontinued, the Court instead proceeded to consider/accept, rely on and thus gave irrelevant weight to the respondents’ evidence and submissions on the issue of “multiplicity of proceedings” without giving sufficient/adequate or due consideration of the Appellant's evidence and pleadings which remained undistorted and had substance on the merits;
     
   • (b) Those proceedings named were never judicially determined the same issues to a finality by a competent jurisdiction; and there was or were no other similar or related court proceedings pending before the District, National and Supreme Courts running parallel that may constitute a multiplicity of proceedings;
     
   • (c) Similarly and despite evidence being presented by the respondents showing that the other related cases alongside those referenced in (a) above were before the National Court and had cause of actions that were distinct in nature as regards the issue of “estoppel" and “functus officio”, the Court instead proceeded to consider/ accept/ rely on and thus gave irrelevant weight to the respondents’ evidence and submissions without given sufficient/adequate or due consideration of the appellant's evidence and submissions which remained undistorted and had substance on the merits.
     
   • (d) For reasons set out in (a), (b) and (c) above, the appellant was not afforded the avenue/opportunity to be heard for purposes of ensuring a fair/reasonable hearing contrary to the principles of natural justice envisaged by Section 59 of the Constitution.
     
11. This ground raises the argument with sufficient particularity that the primary judge erred by not taking into account that the previous proceedings which were held to give rise to a multiplicity of proceedings were all discontinued and were not current when the appellant commenced WS No 221 of 2021.
    

Ground 8 states:

8. Her Honour erred in law or fact and law when her Honour made a finding that the plaintiff was a vexatious litigant and subsequently declared the plaintiff a vexatious litigant when:
   
   • (a) there was no evidence before the court disclosing the same or similar court proceedings with same cause of action which were adjudicated as final, putting to rest all the rights of the parties;
     
   • (b) the notice of motion filed by the 1^st, 2^nd, 3^rd and 4^th defendants were unsupported by affidavit evidence and they abandoned the motion;
     
   • (c) only the 5^th defendant through its lawyers moved that motion filed by the 1^st, 2^nd, 3^rd and 4^th defendants over the bar table after the appellant here replied to the submissions by the defendants;
     
   • (d) in fact the appellant's lawyers objected to and Her Honour uphold that objection.
     
12. This ground is related to ground 7 and reinforces the argument that the primary Judge erred in law by failing to appreciate that the previous proceedings were discontinued and this led her Honour into error when drawing the conclusion that the appellant was a vexatious litigant.
    

Ground 10 states:

10. Her Honour erred in law or fact and law when Her Honour erroneously exercised her discretionary powers to make orders for costs on a solicitor/client basis to be equally met by the appellant and Gagma Legal Services when there was no relieves [sic] sought in that nature sought in the motions and that there was no evidence of forewarning notices given to the plaintiff and Gagma Legal Services contrary to Order 4, Rule 40 (1)(c)(d)(2) and Order 4 rule 49(8) of the National Court Rules.

13. This ground adequately raises an alleged erroneous exercise of discretion as to costs.
    

Ground 11 states:

11. Her Honour erred in law or fact and law when her Honour erroneously exercised her discretionary powers to make orders in relation to payment of costs before commencing any other proceedings when there was no relieve [sic] sought in that nature in the motions which would have invoke those discretionary powers which intended to preclude the appellant’s rights of seeking justice.
    
14. This ground is repetitious of ground 10 but of itself adequately argues an error in the exercise of discretion as to costs.
    

Summary

15. We are satisfied that all the above grounds are valid as they meet the requirements of Order 7 rules 9(c) and 10 and are not raising questions of fact for which leave was required or attempting to adduce fresh evidence. That some of those grounds arguably raise issues that were not before the National Court is not relevant to the question of competency of the appeal.
    

CONCLUSION

16. The objection to competency must be refused. The appeal will be referred to the Duty Judge.
    
17. As to costs, we reject the appellant’s contention that costs should be awarded in their favour on a solicitor-client basis. The objection was not frivolous. We agree with much of the criticism of the drafting of the grounds of appeal: they are lengthy, prolix, difficult to follow and in some respects, repetitious. We consider that the objection, though it has failed, was made for good reason. It was a genuine attempt to expedite resolution of a lengthy cycle of litigation instigated by the appellant, which to date has been unsuccessful. We also consider that the hearing of the objection has twice been vacated upon application by the appellant. In these circumstances, costs of the objection will be in the appeal.
    

ORDER

1. The objection to competency of the appeal is refused.
   
2. The appeal is referred to the Duty Judge, to give directions for hearing the appeal in accordance with Order 13 of the Supreme Court Rules.
   
3. Costs of the objection to competency are in the appeal.

________________________________________________________________
Gagma Legal Services: Lawyers for the Appellant
Ashurst Lawyers: Lawyers for the First to Fourth Respondents
Awi Lawyers: Lawyers for the Fifth Respondent