Konda'lane Properties Ltd v Parkop [2022] PGSC 80; SC2289 (31 August 2022)

SC2289

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM NO 52 OF 2019

KONDA’LANE PROPERTIES LIMITED
Appellant

V

HON POWES PARKOP MP, CHAIRMAN, FOR AND ON BEHALF OF NATIONAL CAPITAL DISTRICT PHYSICAL PLANNING BOARD
First Respondent

AMANDA BINOKA, CHIEF PHYSICAL PLANNER,
NATIONAL CAPITAL DISTRICT COMMISSION
Second Respondent

NATIONAL CAPITAL DISTRICT COMMISSION
Third Respondent

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Respondent

Waigani: Salika CJ, Cannings J, Dingake J
2022: 27^th July, 31^st August

JUDICIAL REVIEW – remedies – damages – circumstances in which damages should be awarded in judicial review proceedings.

COSTS – discretionary – circumstances in which it is appropriate to order that parties bear their own costs.

The appellant was the plaintiff in judicial review proceedings in the National Court. It succeeded in proving that errors of law were made by the primary respondents in refusing its application for planning permission under the Physical Planning Act to erect fencing around its property. It was granted orders of certiorari and mandamus, quashing the decisions that had refused planning permission and compelling the primary respondents to grant planning permission to fence the property. The National Court, however, refused to award damages to the appellant and ordered the parties to bear their own costs. The trial judge took the view that damages, like all judicial review remedies, are at the discretion of the Court. The trial judge held that the appellant had not established an entitlement to damages as it did not come to Court “with clean hands”. As to costs, the trial judge found that, though the primary respondents had erred in law, they were not motivated by improper purposes so costs should not follow the event. The appellant appealed against the decision to refuse to award damages and to order the parties to bear their own costs.

Held:

(1) An award of damages, like all judicial review remedies, is at the discretion of the Court, and the discretion ought only to be exercised in favour of a successful applicant for judicial review by the award of anything other than a notional amount of damages where the applicant has pleaded and established a private law cause of action, eg breach of statutory duty, misfeasance in public office, negligence.

(2) Here, the appellant’s originating statement included only a vague pleading for damages, and at the trial the evidence and submissions regarding damages were general and failed to establish any identifiable cause of action.

(3) The trial judge properly considered the circumstances of the case and justifiably concluded that the appellant did not come to court with clean hands.

(4) The trial judge did not err in any of the ways argued in the grounds of appeal.

(5) A decision as to costs is at the discretion of the Court. Provided the discretion is exercised judicially an appeal court should rarely intervene. Here, the trial judge justifiably considered that the respondents did not act for any improper motive. The decision to order that the parties bear their own costs was a proper and lawful exercise of discretion.

(6) The appeal was dismissed.

Cases Cited

The following cases are cited in the judgment:

Papua New Guinean Cases

Curtain Bros (PNG) Ltd v UPNG (2005) SC788
James Kruse v Beatrice Geita (2015) SC1849
Mision Asiki v Manasupe Zurenuoc (2005) SC797
Namah v Pato (2016) SC1497
Petrus & Gawi v Telikom PNG Ltd (2008) N3373
Thiess Bros (Pacific) Pty Ltd v Chief Collector of Taxes [1982] PNGLR 385

Overseas Cases

Chan Yee Kin v Minister for Immigration [1991] FCA 358; (1991) 31 FCR 29

Counsel

D E Doiwa, for the Appellant
L Raula, for the First, Second and Third Respondents

31^st August, 2022

1. BY THE COURT: This is an appeal against the decision of the National Court (per Thompson J) refusing to award damages in a judicial review proceeding otherwise decided in the appellant’s favour and to order the parties to bear their own costs.
   
2. The appellant sought damages in the amount of K5.8 million.
   
3. In the National Court the appellant was successful in reviewing and setting aside the decisions of the primary respondents, who had refused the appellant’s application for planning permission under the Physical Planning Act to erect fencing around its property in the National Capital District.
   
4. The National Court, being satisfied that the primary respondents had committed errors of law, granted orders in certiorari and mandamus, quashing the decisions that had refused planning permission and compelling the primary respondents to grant planning permission to fence the property.
   
5. Aggrieved by the refusal to award damages and costs in its favour the appellant now appeals to this Court to quash the decision of the National Court. It relies on four grounds outlined in its notice of appeal. We have considered each of the grounds upon which the appellant relies in this appeal.
   
6. It is not necessary to reproduce the said grounds verbatim as they can be condensed or crystalized into one ground, namely, that the National Court erred in fact and in law in refusing to grant the damages sought and to award the appellant the costs of the suit.
   
7. The appellant contends that it was entitled to general damages because it was subjected to hardship, distress and unjust deprivation in pursuing the fencing permit, which the primary respondents unlawfully denied, triggering this review application.
   
8. As to costs, the appellant argues that the trial judge erred in law and fact in not awarding costs in its favour having regard to the following:
   
   • the judicial review was successful;
   • there were no exceptional circumstances warranting costs not following the event;
   • the appellant had forewarned the respondents of the likely outcome of a judicial review and been forced to commence the proceedings; and
   • it was unjust, harsh and oppressive not to award costs to the appellant as it had been unlawfully denied its rights over its property by the respondents.
     
9. The issue that falls for determination is whether the National Court erred in fact and in law in refusing to award damages and ordering each party to pay its own costs.
   
10. By way of background it is important to state that there are a small number of cases in which the National Court has awarded damages to successful judicial review applicants. The appellant’s submissions that it is entitled to damages raises the issue of the propriety of an award of damages for unlawful administrative action.
    
11. The idea of introducing massive monetary remedies for general damages for misdirected exercise of public power is without precedent in Papua New Guinea. As far as we can establish there is no general right to an award of damages by reason of damage suffered through unlawful administrative action.
    
12. A comparative perspective may put issues of moment in sharp perspective. Under Australian law, the law with respect to the propriety of awarding damages for unlawful administration action is well reflected in Einfeld J’s remarks in Chan Yee Kin v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 358; (1991) 31 FCR 29 that “the mere invalidation of administrative decision does not provide a cause of action or a basis for an award of damages” (see generally E Rock and a Weeks, Monetary Awards for Public Law Wrongs: Australia’s Resistant Legal Landscape Volume 41(4) UNSW Law Journal 1159).
    
13. Considering the persuasive approach of the Australian courts on the issue of damages, consequent to unlawful administrative action, we think it is important that this Court pronounce itself clearly on the matter.
    
14. As a basic premise of departure we accept, as a matter of principle, that damages is one of a range of remedies available in judicial review and is to be regarded, like all judicial review remedies, as available at the discretion of the court.
    
15. It is trite law that a discretionary judgment may be set aside, if it is plain from the said judgment that there was an identifiable error, or if there is no identifiable error, the judgment or order is unreasonable or plainly unjust.
    
16. The leading authority of this Court that sets out the principles that govern setting aside of discretionary judgments is the case of Curtain Bros (PNG) Ltd v UPNG (2005) SC788, which learned counsel placed reliance on.
    
17. In the above case, this Court held that a discretionary judgment by a lower Court can only be upset where there is an identifiable error that manifests in any of the following ways:
    
    • (i) acting on a wrong principle; or
    • (ii) giving weight to an extraneous or irrelevant matters; or
    • (iii) failing to give weight to relevant considerations; or
    • (iv) making a mistake as to facts.
      
18. The appellant argued before us that the judgment of the National Court offended all the above elements or principles that govern the setting aside of discretionary judgment. Before us counsel for the appellant seemed to lay emphasis on the submission that the National Court erred in exercise of its discretion in not awarding damages because it had a mistaken perception as to the propriety of the appellant’s title.
    
19. According to the appellant, the National Court failed to attach weight to the fact that the appellant was unjustifiably denied the right to develop its property and that the refusal to grant the fencing permit was unlawful. Furthermore, the appellant argued that the National Court recognized that the appellant suffered delay but denied compensation.
    
20. It is a matter of record that although the National Court accepted that the appellant suffered delay in being able to develop the land, it also pointed out that such delay could only have been relevant to the appellant’s obligation to construct residential units, in accordance with the conditions of the 2015 State Lease and Planning Permission. It is also plain from reading the judgment of the National Court that the court was satisfied that there was no evidence before it to show that the appellant intended to commence residential construction and suffered any loss from failures to construct residential housing units.
    
21. With respect to the argument that the National Court gave weight to extraneous or irrelevant matters, we must say that we went through the judgment with a fine comb and found no such irrelevant matters the National Court considered in refusing to award damages.
    
22. The National Court refused to award damages based on its evaluation of the evidence before it. It held that the appellant’s claim for damages, as pleaded, was not proven, and that there was no evidence showing that the State Lease was mistakenly issued for residential, instead of commercial purposes.
    
23. The National Court also found the appellant’s evidence with respect to leasing the subject land to Friendly Hire Cars (“FHC”) untenable on a number of grounds, including FHC’s doubtful financial capacity and the fact that it had only been registered in September 2014, twelve months before the signing of the lease and had limited assets in the form of motor vehicles.
    
24. There is no doubt that the National Court found that the primary respondents made errors that led to their decisions being quashed. However, our law is clear that establishing an error of law or for the court to uphold an application for judicial review does not automatically mean that a case for a remedy prayed for has been established (Mision Asiki v Manasupe Zurenuoc (2005) SC797). Whether or not the court should grant the remedy is a function of the circumstances of each case. In this case we take the view that the National Court did not fall into error in refusing to award damages. First, the appellant’s originating statement under Order 16 rule 3(2)(a) of the National Court Rules included only a vague pleading for damages, and at the trial, the evidence and submissions regarding damages were general in nature and failed to establish any identifiable cause of action. Even in submissions before this Court, counsel for the appellant struggled to point to any cause of action that had been pleaded and proven. The appellant’s case in the National Court and also before this Court was based on the simplistic and erroneous notion that proof of administrative error resulting in injury to the innocent party (the appellant) would constitute a cause of action, giving rise to a right to damages. Secondly, the National Court considered the whole circumstances of the case and justifiably concluded that the appellant had not come to Court with clean hands. The court accurately summed up the unsatisfactory circumstances in which the appellant had acquired confusing and contradictory State Leases and negotiated to sub-lease the property contrary to conditions of the State Leases, in the following way:
    

51. The evidence of:

(a) the way in which the plaintiff had the Open Space Recreation land re-zoned to Residential and obtained the original State Lease in 2015 for the specific purpose of Residential development, but then says that it obtained a completely different State Lease for the same land in 2018 for Business/Commercial Development, and

(b) the way in which the plaintiff says that it immediately leased the residentially zoned land in 2015 for commercial purposes, in breach of the State Lease conditions,

is sufficient to show that the plaintiff has not come to Court with clean hands.

52. Even if a plaintiff successfully establishes his grounds of judicial review, he is not automatically entitled to the relief sought. He must make a case for a remedy, which is a matter of discretion - (see Mision Asiki v Manasupe Zurenuoc (2005) SC 797 and Tzen Pacific Ltd v Pouru (2016) PGSC 68).

53. As the Supreme Court said in Dale Smith v Minister for Lands (2009) PGSC 60, when quoting from Mision Asiki’s case: “It is one thing to establish an error of law or a breach of natural justice and for the Court to uphold an application for judicial review. It is another separate step to establish a case for a remedy. In judicial review proceedings, the remedies to be granted are at the discretion of the Court.”

54. Again, when quoting from Tohian v Geita and Magugia (No 2) (1990) PNGLR 479, the Court said“.... in judicial review, even though the Court might find there has been an error, even an error affecting matters of jurisdiction, the court would not thereby be obliged automatically to quash the .... proceedings. The remedies available under judicial review remain always at the discretion of the court and will only be granted to avoid injustice. The court must therefore look at all the circumstances of the case and decide whether it is appropriate to grant a remedy ......”

55. In Peter Pagi v Mindili (2009) PGNC 135, the Court considered a claim that the Plaintiff had not come to court with clean hands. The court proceeded on the basis that this was to be determined by reference to the conduct of the parties.

56. In the present case, the plaintiff’s conduct in relation to its application to re-zone Open Space land which was used for recreational purposes by members of the public, to Residential use, to apply for a title on the basis of proposed residential development, to be granted title in 2015 for the sole purpose of residential development, but to lease the land for commercial development in 2015, to obtain a different title 3 years later allowing commercial development, and then make a claim based on that alleged loss of commercial use, shows that the plaintiff has not come to Court with clean hands.

57. I find that the plaintiff has not established an entitlement to damages for loss arising from the defendants’ decision, and that even if there had been a loss, it arose out of the plaintiff’s unsatisfactory conduct in purporting to lease or develop the land for commercial purposes in breach of the 2015 State Lease, and its conduct in apparently obtaining a subsequent different Lease for commercial purposes over the same land in 2018, after the issue of these legal proceedings.

25. In relation to the arguments raised by the appellant, we find that:
    
    • the proposition that physical occupation by the respondents was not a prerequisite to establish a claim for deprivation of mesne profits is probably correct, but it is an inconsequential proposition in this case as there was no cause of action pleaded or proven;
      
    • it is not correct to say that there was overwhelming evidence that the appellant was deprived of its property for an extended period, as the contrary was the case: the appellant was never deprived of the use of its property, it was simply denied permission to fence its property;
      
    • it may well be the case that the wrongful refusal of a fencing permit caused the appellant’s property to be wrongfully accessed and used by the general public as a recreational area, however that circumstance did not by itself create a cause of action and it is an inconsequential proposition in this case as there was no cause of action pleaded or proven;
      
    • it is not correct to say that the wrongful use of the property was directly beneficial to the respondents;
      
    • it is equally without foundation to argue that the trial judge’s refusal to award damages was harsh and oppressive, as an unlawful act is not necessarily harsh or oppressive in nature (Petrus & Gawi v Telikom PNG Ltd (2008) N3373);
      
    • though the trial judge’s finding that the appellant’s claim for damages for distress and hardship had no basis due to it being a company, and that finding is contentious, the finding was only in relation to a particular and small part of its damages claim; and
      
    • the Court did not fail to give weight to relevant considerations or give weight to extraneous or irrelevant matters.
      
26. In our considered opinion the trial judge did not err in any of the ways argued in the grounds of appeal. We are not persuaded that the National Court committed any identifiable error or that the decision to refuse to award damages was harsh or oppressive.
    
27. We turn now to consider the issue of costs. The appellant argues that the National Court erred in law and in fact when it failed to award costs against the respondents, and that there were no exceptional circumstances established for costs not to be awarded.
    
28. There are three principles that govern an appeal to the Supreme Court against a decision of the National Court as to costs. First, the question of costs is always a matter for the discretion of the Judge, which discretion is to be exercised in accordance with recognized principles (Thiess Bros (Pacific) Pty Ltd v Chief Collector of Taxes [1982] PNGLR 385).
    
29. Secondly, the starting point in the exercise of discretion is that costs follow the event (Namah v Pato (2016) SC1497). However, it is not necessarily the endpoint as Order 22 rule 11 of the National Court Rules allows the Court to decide otherwise, by stating:
    

If the Court makes any order as to costs, the Court shall, subject to this Order, order that the costs follow the event, except where it appears to the court that some other order should be made to the whole or any part of the costs.

30. Thirdly, in any appeal against or review of a National Court order as to costs, the Supreme Court will take the same reticent approach required to be taken in respect of any discretionary judgment of the National Court. It will only intervene if the exercise of discretion is clearly wrong. The exercise of discretion will only be clearly wrong if an identifiable error has occurred or if, though there is no identifiable error, the resulting decision is so unreasonable or plainly unjust that it must be inferred that an error has occurred (James Kruse v Beatrice Geita and George Nicholas Constantinou and NC Resource Limited (2015) SC1849).
    
31. It is clear to us that in considering whether damages should be granted the Court adverted its mind to the correct legal principles as established by venerable judicial authority.
    
32. In ordering that each party pay its own cost the Court considered a relevant consideration, that the respondents, in making the unlawful decision to refuse planning permission for the erection of a fence, were not motivated by improper purposes but were motivated by protecting the public interest in open space recreational use of land.
    
33. In all the circumstances of this case we are satisfied that the appellant has provided no good reason to interfere with the exercise of discretion by the trial judge.
    
34. In summation we find that:
    
    • the fact that the judicial review was successful is not a determinative consideration in the exercise of discretion as to costs;
      
    • there is no requirement for exceptional circumstances to be established to warrant costs not following the event;
      
    • the fact that the appellant had forewarned the respondents of the likely outcome of a judicial review and been forced to commence the proceedings is not a determinative consideration in the exercise of discretion as to costs;
      
    • it was not unjust, harsh or oppressive for the trial judge not to award costs to the appellant; and
      
    • it is not correct to say that the appellant was unlawfully denied its rights over its property by the respondents.
      
35. Having regard to all the above we are satisfied that the National Court properly exercised its discretion in ordering that each party pay its own costs. It did not commit any error in so doing. The discretion was exercised judiciously and was based on good and sound reasoning.
    
36. In the result we dismiss all grounds of appeal and therefore dismiss the appeal. As to costs of the appeal, we will order the parties to pay their own costs due to the failure of the respondents to comply with the directions of the Court as to the steps to be taken in setting up the hearing of the appeal, in particular the failure of the respondents to file and serve submissions by the dates directed.
    

ORDER

(1) In the result this appeal is without merit and is dismissed.

(2) The order of the National Court made on 16 November 2019 in OS (JR) No 416 of 2017 is affirmed.

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

____________________________________________________________________
Makap Lawyers: Lawyers for the plaintiff
Counsel to NCDC: Lawyers for the First, Second & Third Defendants
Solicitor-General: Lawyer for the Fourth Defendant