Green International Ltd v Commissioner General of Internal Revenue [2022] PGSC 73; SC2269 (22 July 2022)

SC2269

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM 26 OF 2019

BETWEEN:
GREEN INTERNATIONAL
LIMITED
Appellant

AND:
COMMISSIONER GENERAL OF
INTERNAL REVENUE
Respondent

Waigani: Hartshorn J,
2022: 13^th & 22^nd July

SUPREME COURT – practice and procedure - application to amend notice of appeal pursuant to Order 11 Rule 11 Supreme Court Rules

Cases Cited:

Lawrence Kalinoe v. Philip Kereme (2017) SC1631
William Duma v. James Puk (2019) SC1754
Luke Manase v. Don Polye (2019) SC1854
Mirenbean Enterprises Ltd v. Nathan Kaugla (2019) SC1826
Petroleum Exploration Joint Venture Ltd v. Talu (2020) SC2019

Counsel:

Mr. J. Wohuinangu and Ms. E. E. Injia, for the Appellant
Mr. S. Sinnen, for the Respondent

22^nd July, 2022

1. HARTSHORN J: This is a decision on a contested application to amend the Notice of Motion by which this appeal was commenced. The application is made pursuant to Order 11 Rule 11 Supreme Court Rules.

Background

2. The appellant filed an appeal against a judgment of the National Court delivered on 10^th October 2019. The judgment refused the appellant’s application which had sought to file an appeal out of time against a decision of the respondent on an objection to an assessment of taxation.

3. The appellant seeks to amend the Notice of Motion by which the appeal was commenced. The amendments are sought as the National Court proceeding from which the judgment appealed emanates is an ordinary originating summons and not an originating summons for judicial review as had been incorrectly recorded by staff of the National Court Registry. The document required to commence the appeal therefore, is not a Notice of Motion as referred to in Order 10 Supreme Court Rules, but a Notice of Appeal.

4. The appellant submits that there exist special circumstances such that the amendment sought should be granted.

5. The respondent submits that the application amounts to the filing of a new appeal which offends s. 17 Supreme Court Act, that it is an attempt to render an incompetent appeal competent and that the reason given for the amendment sought, that former lawyers failed to competently discharge their duties, does not constitute exceptional reasons.

Consideration

6. Order 11 Rule 11 Supreme Court Rules upon which the appellant relies is:

“11. The Court or a Judge may order that any person be added as a party to proceedings under these rules or that the proceedings be amended and may impose such conditions as appear just, and give all consequential directions.”

7. The respondent impliedly submits that exceptional reasons must exist before an order to amend under Order 11 Rule 11 may be granted. No authorities are relied upon for this submission. The applicant submits that the discretion to amend may only be exercised on proper principles of law and that such discretion must only be exercised when there exist special circumstances which give rise to an exceptional circumstance. Numerous authorities are relied upon in support of this submission.

8. I have had recourse to the judgment of Mirenbean Enterprises Ltd v. Nathan Kaugla (2019) SC1826, which granted an application to amend a Notice of Appeal pursuant to amongst others, Order 11 Rule 11 Supreme Court Rules. I reproduce [11] – [18] of that judgment:

“11. The principles applicable to this issue have been set out in numerous cases in this jurisdiction.

12. In the case of Charles Bougapa Ombusu v The State (1996) PNGLR 335; SC 496, the Court stated the relevant test in the following terms:

“The test ... is whether there are special circumstances in a particular case which would make the case an exceptional case that should warrant the grant of leave to amend the notice of appeal ...”

13. It would not be prudent to seek to enumerate a list of special circumstances contemplated by the Court, suffice to say that each case must turn on its own circumstances.

14. It is trite learning that the grant of leave to amend is discretionary. Such discretion must be exercised reasonably, the focus being to promote the interest of justice, at all times.

15. In addition to the above, the modern trend is that, generally, amendments of the nature sought, are most likely to be allowed if the application is not mala fide or would not result in prejudice on the respondent, which cannot be compensated by costs.

16. In our considered view an amendment that facilitates a proper ventilation of the issues in dispute and causes no prejudice to the respondent should ordinarily be granted.

17. In this case, we are satisfied that there exist special circumstances that warrant this court granting the relief sought.

18. It is sufficient for present purposes to cite only one such circumstance: the judgment sum of K31,663,381.32, is an extra ordinary large amount of money, won in circumstances, in which the legality of the win is at best debatable.”

9. I also refer to the judgment of Petroleum Exploration Joint Venture Ltd v. Talu (2020) SC2019. Notwithstanding that the Court in that judgment considered Order 11 Rule 11 Supreme Court Rules in the context of an amendment to a notice of objection to competency, at [28], the Court, correctly and pertinently in my respectful view, stated that:

“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.”

10. In this regard I refer to the oft cited statement of Bowen LJ in in Gardner v. Jay (1885) 29 Ch 50, at 59:

“When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view of indicating the particular grooves in which the discretion should run, for if the Act or the Rules did not fetter the discretion of the Judge why should the Court do so?””

11. This statement has been reproduced and cited with approval in numerous National and Supreme Court judgments including, William Duma v. James Puk (2019) SC1754; Luke Manase v. Don Polye (2019) SC 1854 and Lawrence Kalinoe v. Philip Kereme (2017) SC1631.

12. As mentioned, Order 11 Rule 11 Supreme Court Rules does not fetter the discretion of the Court or a Judge conferred by that Rule. That there must be special circumstances before an amendment to a Notice of Appeal is permitted, is a requirement of the Supreme Court. Apart from the reference in Petroleum Exploration v. Talu (supra) to which I have referred, I am not aware of the Supreme Court considering the issue of whether special circumstances are required for the discretion conferred in Order 11 Rule 11 to be exercised in favour of an applicant for an amendment, when there is no fetter on that exercise of discretion in that Rule.

13. In this instance the submissions and evidence are to the effect that the appellant lodged applications for review by the Income Tax Review Tribunal; the Review Tribunal did not consider the review applications for over three years; the applicant therefore, withdrew the applications and sought to appeal to the National Court out of time; the National Court Registry staff erroneously registered the proceeding as a judicial review instead of an ordinary originating summons; the primary judge considered the matter before him on incorrect principles and the applicant’s then lawyers purportedly commenced an appeal by invoking an incorrect procedure.

14. In my view, the appellant has suffered from a catalogue of errors that do not appear to have occurred because of the actions or inactions of the appellant.

15. The amendments sought do not affect the substance of the appeal and to my mind do not constitute a new appeal which offends s. 17 Supreme Court Act. Further, there is no evidence that any prejudice will be caused to the respondent by the amendments sought. If the amendments sought are granted the respondent will have sufficient time to be able to prepare its case and in respect of the proposed amendments. The respondent submits that Order 11 Rule 11 Supreme Court Rules should not be used to render an incompetent appeal competent. No authority was cited for this proposition and there is nothing in Order 11 Rule 11 that prevents such use. Further, there is no evidence that the application is mala fide.

16. An important consideration in my view, is the submission that the amount of the taxation and penalties assessed is significant and may not be covered by any professional indemnity insurance that the appellant’s former lawyers may have.

17. After considering the evidence and submissions, in all of the circumstances, I am satisfied that a proper exercise of this court’s discretion is that the amendments sought should be permitted.

18. If it is necessary that it be found that special circumstances exist, I am satisfied that the catalogue of errors to which I have referred, together with the substantial amount of the tax assessment and penalties, constitute special circumstances. Given this, it is not necessary to consider the other submissions of counsel. The applicant has successfully made out that it is entitled to the relief sought.

Orders

19. The Court orders that:

a) The file reference of this proceeding “S.C.M” is deleted and replaced with “SCA”.

b) The title “NOTICE OF MOTION” in the originating document of this appeal is deleted and replaced with “NOTICE OF APPEAL”.

c) The phrase “leave to apply for judicial review” appearing at paragraphs 2 and 3(b) in the originating document of this appeal is deleted and replaced with “leave to extend time to appeal”.

d) Paragraph 6 in the originating document of this appeal is deleted.

e) The costs of and incidental to the application filed 25^th May 2022 of the appellant shall be paid by the appellant to the respondent.
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SLM Legal Practice: Lawyers for the Appellant
Internal Revenue Commission: Lawyers for the Respondent