Mulia (PNG) Ltd (1-39641) v Sheppard [2023] PGSC 152; SC2504 (24 August 2023)

SC2504

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 27 OF 2021

BETWEEN
MULIA (PNG) LIMITED (1-39641)
Appellant

AND
GREGORY JAMES SHEPPARD & HARVEY MALADINA
trading as YOUNG & WILLIAMS LAWYERS
First Respondent

AND
GLORIA SALIKA
Second Respondent

AND
MOLLY SUMBUK
Third Respondent

AND
VANESSA VEE
Fourth Respondent

Waigani: Kariko J, Liosi J & Dowa J
2022: 22^nd November
2023: 24^th August

SUPREME COURT – practice and procedure – objection to competency of appeal – appeal against summary dismissal of proceedings in the National Court – the grounds of appeal: not comply with the Supreme Court Rules; raise questions of fact and leave to appeal not sought; raise matters not argued in the National Court.

Facts:

After the Appellant lodged an appeal against the summary dismissal of its claim in the National Court, objection was filed by the Respondents challenging the competency of the appeal alleging non-compliance with the Supreme Court Rules, failure to obtain leave on questions of fact, and raising issues not raised in the trial.

Held:

1. Provided there is one ground of appeal that invokes the jurisdiction of the court, the appeal is competent to proceed to hearing: Coca Cola Amatil (PNG) Ltd v Marshall Kennedy (2012) SC1221 referred to and endorsed.
   
2. The grounds of appeal should inform the respondents of the basis of the appeal so that they can prepare their arguments in response, and the court must be informed of the issues that it is to determine: Haiveta v Wingti (No 2)[1994] PNGLR 189 referred to.
   
3. The Objection to Competency was dismissed as two of the grounds of appeal properly invoked the jurisdiction of the Court.
   

Cases Cited:
Coca Cola Amatil (PNG) Ltd v Marshall Kennedy (2012) SC1221
Hagahuno v Tuke & Electoral Commission (2020) SC1966
Haiveta v Wingti (No 2) [1994] PNGLR 189
Kuman v Digicel (PNG) Ltd (2017) SC1638
Lovika v Malpo (2019) SC1895
Lucas Dekena v Nick Kuman (2018) SC1715
PNGBC v Jeff Tole (2002) SC694
Rea Joseph v Manau Sereva (2011) SC1152
Yakham & The National v Merriam [1997] PNGLR 555

Legislation:
National Court Rules
Supreme Court Act
Supreme Court Rules

Counsel:
No appearance for the Appellants
Mr. I. R. Shepherd, for the Respondents

24^th August 2023

1. BY THE COURT: This is a ruling on the Respondents’ Objection to Competency of the Appeal.
   
2. The Appellant appeals against the whole of the ex tempore decision of the National Court made on 16^th February 2021, in the proceedings WS No. 54 of 2020 – Mulia (PNG) Ltd v Gregory James Sheppard & Others, where His Honour dismissed the entire proceedings for failure to comply with Court orders.
   

Background

3. On 1^st December 2020 the Court gave directional orders that the parties negotiate and reach settlement by 14^th January 2021. Failing settlement, the parties were directed to settle upon a Statement of Agreed Facts and Legal Issues and come ready to address the Court on matters in dispute for the Court to consider and give a binding opinion or refer the matter for resolution by mediation. The orders were made to return on 4^th February 2021. On 4^th February 2021, the orders of 1^st December 2020 were extended for compliance especially by the Appellant with a proviso that any failure will result in summary determination of proceedings under Order 10 Rule 9 A (15) of the National Court Rules. The proceedings were then adjourned to return on 16^th February 2021.
   
4. When the matter returned to Court on the morning of 16^th February 2021 it became apparent that the parties had not complied with the directions of 1^st December 2020 and 4^th February 2021.The Court adjourned the proceedings to the afternoon and directed counsel for the Appellant to provide an affidavit explaining why there was noncompliance of the directional orders. Counsel provided an affidavit that afternoon, explaining that they could not comply with the orders because the pleadings were not closed and in the light of the defence raised it seemed improbable for any settlement to be reached and they were into discovery, and it would be premature to discuss settlement.
   
5. The Court, on hearing parties, considered the Appellant’s explanation unsatisfactory and dismissed the proceedings for noncompliance of the directions of the Court pursuant to Order 10 Rule 9 A (15) of the National Court Rules.
   

The Appeal

6. The Appellant appeals the decision of the trial Judge pleading various grounds of appeal which are set out in paragraphs 3 and 4 of the Notice of Appeal the details of which are reproduced below:
   

“3. The Grounds replied upon are as follows:

3.1 The learned judge in the Court below erred in fat and in law to dismiss the Plaintiffs claims for failure to comply with directional orders issued on December 01, 2020 when;

(a) The formal Orders he relied upon were not made clear in court which would have been taken out by one of the parties as is the usual practice of but instead issued in chamber slater in the date and only upload onto the IECMS system without any advise whatsoever to both parties that the said orders had been uploaded onto the IECMS system and in the absent of such advise without serving the order on either party.

(b) When the parties appeared in court on December 01, 2020 and the learned Judge made the direction orders relied upon he did not specifically forewarn the parties especially the Appellant that failure to comply with the orders to settle out of court before the next return date would result in the proceeding been dismissed.

(c) The learned Judge wrongly rejected the explanation given by the Appellants Lawyer for non-compliance and failed to consider the difficulty to settle out of Court on the basis that the Respondents had denied liability and denied that the Appellant was entitled to the relief claimed which denied was rebutted by the Appellant in its Reply to the Defense making it very obvious that trial was the only way the Appellants claim could be determined.

(d) Upon been made aware that any settlement out of Court needed to be guided by the pleadings filed in court the learned Judged fell into error by failing to consider that the parties could not be forced to settle out of court when settlement out of court was not mandatory and not the only option available to the parties to determine the proceedings and failed to exercise discretion to accept that the orders for settlement out of court were impossible to be complied with which should have been corrected by issuing fresh directions for the further conduct of the case when the facts before him supported such a finding.

(e) The learned judged erred by refusing to accept the explanation that the matter was still at Discovery stage and that without disclosure of relevant documents and either party engaging in Interrogatories if they chose to either party could not meaningfully prepare any statement of agreed and disputed facts and legal issues, and not be able to settle out of court.

(f) The learned judge erred and failed to consider that the orders for settlement out of court may have been issued in error or prematurely after the Appellant explained the difficulty of settlement in the absence of any admittance by the Respondents of liability for part or whole of the Appellant claim which if done would have resulted in the said orders been set aside and fresh directions issued to do justice to the parties.

(g) The learned judge erred by ailing to exercise discretion to set aside the orders of December 01, 2020 and to issue fresh directions for the further conduct of the case after the Appellant’s Lawyer provided the explanation for non-compliance and submitted that issuance of fresh directions would not prejudice the Respondent.

(h) The learned judge erred by failing to consider that the Appellant had complied with the orders of February 04, 2021 in relation to payment of adjournment costs in the sum of K500.00 to the Respondent Lawyers before February 16, 2021 and erred to give more consideration to the failure by the Appellant to settle out of court.

3.2 In dismissing the Appellants claim the learned judge failed to properly consider the following overall facts:

(a) The matter was at discovery state and without either party having documents to be relied upon in their possession they could not be forced to settled out of Court.

(b) The delay to prosecute the case had been caused by the Defendants failure to file their Defense within the period required under the rules for which the learned judge readily granted leave to file their defense out of time against principles for extension of time,

(c) The learned judge misguided himself to hold that the Appellant s case was about defamation when the case was not about defamation but about professional negligence of the Respondents as the Appellants previous Lawyers.

3.3 The Appellant was denied natural justice or the right to be properly heard in the matter before the learned judge wrongly dismissed the Appellants claim preventing the Appellant from having its day in Court.

(a) The orders were not specifically made clear in court on December 01, 2020 and after been issued in chambers later that day not served had been uploaded onto the IECMS system.

(b) No forewarning notice was given to the Appellant on December 01, 2020 or anytime before February 04, 2021 that non-compliance of the order issued in chambers on December 01, 2021 would result in dismissal of the Appellant claim.

(c) The time give to the Appellants Lawyer to prepare an Affidavit setting out a more detailed explanation for non-compliance with court orders involving the period between 10:30 am and 2:00pm on the same day was too short and unreasonable.

(d) The exercise of discretion by the learned Judge to dismiss the Appellant claims was without proper basis and unsupported by the facts before the court which showed that the Appellant had not been forewarned that failure to comply with the order to settle its claim out of court before the next return date would result in dismissal of the proceeding.

(e) No consideration or proper consideration was given to the Appellants explanation and submission that in the absent of any admittance by the Respondents of the part or the whole of the Appellant claim the parties could not be forced or compelled to settle out of court.

(f) Before dismissing the Appellants claims the learned judge erred and failed to consider that the Appellants was not asked on December 01, 2020 if settlement was likely or unlikely before making the orders for out of court settlement when the learned judge had in mind that any failure to settle out of court before the next return date would result in the proceedings been dismissed.

(g) Before dismissing the Appellants claim the learned judge failed to consider or properly consider that the Appellant had complied with the order for payment of adjournment costs before February 16, 2021.

(h) The order for settlement out of court was directed at both parties but the learned judge did not compel the Respondents on February 04, 2021 to provide their explanation by way of an Affidavit that day or on February 16, 2021 for the failure to comply with court orders whereas he did that to the Appellant on February 16, 2021 and unfairly put all the blame on the Appellant for not settling or attempting to settle the claim out of court whereas the Appellants claim was clearly pleaded in a Statement Claim and that it was the Respondents who needed to advise whether part or whole of the claim would be settled out of court or not.

(i) By failing to compel the Respondents to provide their explanation by way of Affidavits on February 04, 2021 and again on February 16, 2021 for non-compliance with court orders the learned judge erred when he failed to consider striking out the Respondents Defense and to enter judgement for the Appellant which was an option available to him and such failure was unfair to the Appellant.

(j) The learned judge did not consider or properly consider that the matter was still at discovery stage and not ready for trial and erred by proceeding to dismiss the Appellants claim without any proper basis thereby denying the Appellant its day in court.

3.4. There was actual and seeming apprehension of bias by the learned judge toward the Appellant when exercising the discretion to dismiss the Appellants claim without any proper and valid basis;

(a) The learned judge had readily granted leave to the Respondents to file their Defense out of time on November 02, 2020 after defaulting to file their Defense on the basis that the Respondents had Defense on the merit but without any proper and valid basis then contradicts himself, by dismissing the Appellant’s claim which had great merit.

(b) The learned judge failed to compel the Respondents on February 04, 2021 and again on February 16, 2021 to provide an explanation by way of Affidavit for non-compliance with court orders the same way he compelled the Appellant to produce an Affidavit on February 16, 2021.

(c) The learned judge failed in his duty and role as a judge to act and be seen to act just and fairly by disclosing to the Appellant on his own volition that he was a former partner of Young & Williams Lawyers the law firm that was been sued through its partners and employed lawyers and to disqualify himself from further dealing with the case to avoid any actual and or seeming apprehension of bias.”

Objection to Competency of Appeal

7. The Respondents object to the competency of the entire Appeal on various grounds set out in the Notice of Objection to Competency filed 13^th April 2021.The grounds of the objection can be divided into the following categories:

(a) Failure to comply with Order 7 Rules 9 (c) and 10 of the Supreme Court Rules.

(b) Failure to obtain leave to raise questions of fact pursuant to section 14 (1) (c) of the Supreme Court Act.

(c) Raising issues on appeal that were not raised in the trial.

Law

8. The Notice of Objection to Competency is filed pursuant to Order 7 Rule 15 of the Supreme Court Rules. The objections raised are for non-compliance of Order 7 Rule 9 (c) and 10 of the Supreme Court Rules and section 14 (1) (c) of the Supreme Court Act.
   
9. Order 7 Rules 9 and 10 of the Supreme Court Rules reads:
   

“9. The notice of appeal shall—

(a) state that an appeal lies without leave or that leave has been granted and or annex the appropriate order to the notice of appeal; and

(b) state whether the whole or part only and what part of the judgment is appealed from; and

(c) state briefly but specifically the grounds relied upon in support of the appeal; and

(d) state what judgment the appellant seeks in lieu of that appealed from; and

(e) be in accordance with form 8; and

(f) be signed by the appellant or his lawyer; and

(g) be filed in the registry.

10. Without affecting the specific provisions of Rule 8, it is not sufficient to allege that a judgment is against the evidence or the weight of the evidence or that it is wrong in law, and the notice must specify with particularity the grounds relied on to demonstrate that it is against the evidence and the weight of the evidence and the specific reasons why it is alleged to be wrong in law.”
    
10. Section 14 (1) of the Supreme Court Act reads:
    

“14. CIVIL APPEALS TO THE SUPREME COURT.

(1) Subject to this section, an appeal lies to the Supreme Court from the National Court–

(a) on a question of law; or

(b) on a question of mixed fact and law; or

(c) with the leave of the Supreme Court, on a question of fact.”

11. Two differing views have been promulgated by the Supreme Court in relation to the law on objection to competency of appeal for failure to comply with the Supreme Court Act and the Supreme Court Rules. The first view is that there must be strict compliance. Cases that have endorsed this proposition include Yakham & The National v Merriam (1997) PNGLR 555, SC533, Rea Joseph v Manau Sereva (2011) SC1152; Lucas Dekena v Nick Kuman (2018) SC1715 and Lovika v Malpo (2019) SC1895. This approach is expressed in the dissenting judgment of Kandakasi J (as he then was) in Kuman v Digicel (2017) SC1638 at paragraph 12 as follows:
    

“...A failure to strictly meet the requirements of the Supreme Court Act and the Supreme Court Rules as to the correct form, pleading grounds of an appeal and the relevant and correct procedure amounts to a failure to properly invoke the jurisdiction of the Court. Consequently, the proceedings would not be correctly before the Court by reason of which they would be dismissed for being incompetent.”

12. The second is the liberal approach as promulgated by the Supreme Court decision in Coca Cola Amatil v Kennedy (2012) SC1221, followed by the majority decision in Kuman v Digicel (PNG), which stand for the proposition that provided there is one ground of appeal that invokes the jurisdiction of the Court, the appeal is competent to proceed to hearing.
    
13. The two approaches were discussed by a five-member Supreme Court consisting of Justices Mogish, Cannings, Manuhu, Koeget and Tamate in the case of Hagahuno v Tuke & Electoral Commission (2020) SC1966, who concluded at [41]:
    

“.... Coca Cola Amatil remains good law and, to the extent that there are conflicting lines of authority on the question of whether an appeal that has just one proper ground of appeal is competent, we would endorse Coca Cola Amatil as being correct and more authoritative than the alternative line of authority reflected in the dissenting opinion of Kandakasi DCJ in Kuman v Digicel (PNG) Ltd (2017) SC1638 ...”.

14. We too endorse the approach taken in Coca Cola Amatil as we consider the reasoning sound and good law.
    
15. A litigant should not be prematurely driven from the judgment seat, but in saying this, we are mindful that there will be cases where pleadings are so bad or convoluted or no clear ground is made out worthy of judicial consideration. In cases where an appeal contains grounds that clearly offend the Supreme Court Act and the Supreme Rules, such grounds be isolated and struck out so that only competent grounds proceed to a hearing. Whilst this approach would give an appearance of or have the effect of amending a Notice of Appeal, a Court should not be called upon to consider a matter where its jurisdiction is not properly invoked in respect of the offending grounds. After all, the onus is on the appellant to plead his grounds with relevance and particularity to be granted the reliefs he is seeking. Refer PNGBC v Jeff Tole (2002) SC694.
    
16. The grounds in the Notice of Appeal are rather long-winded and could have been better drafted and expressed more clearly and concisely. However, the Notice is not incontestably deficient that the Court or opposing parties are unable to discern the issues raised and whether the court's jurisdiction has been validly invoked. As this Court stated in Haiveta v Wingti (No 2)[1994] PNGLR 189, the respondent must be informed of the basis of the appeal so that they can prepare their arguments in response, and the court must be informed of the issues that it is to determine.
    

Consideration of the objections

17. We now turn to the grounds of appeal to determine whether the objections to the grounds are sustained.
    

Ground 3.1

18. In Ground 3.1, the Appellant pleads that the trial Judge erred in dismissing the appellant’s proceedings for noncompliance of orders issued on 1^st December 2020 for reasons that his Honour did not properly take into account that:
    
    • (a) the orders of 1^st December 2020 were issued in chambers and were not made clear and communicated to the Appellant.
    • (b) the Appellant was not warned that noncompliance of orders will result in dismissal of proceedings.
    • (c) the directions for settlement were prematurely issued when parties were not ready to negotiate settlement.
    • (d) b) the parties having not reached agreement for settlement cannot be forced to settle,
    • (e) the proceedings were still at discovery stage and were not able to ascertain their respective position before settling the Statement of Agreed and disputed Facts.
    • (f) the request by the appellant for the extension of the directions was not an unreasonable request and was not prejudicial to the other party.
    • (g) the appellant has partially complied with the directions by paying the Respondents’ costs as previously ordered demonstrating compliance
    • (h) the Respondents’ unwillingness to corporate and negotiate for settlement.
      
19. The complaint against the trial Judge’s exercise of discretion involves matters of both law and fact. The trial judge was exercising judicial discretion based on factual matters or circumstances. He was applying the procedural law to the facts as it were. In our view these grounds are therefore errors of mixed fact and law. They are competent to proceed to trial where the Supreme Court has jurisdiction to determine whether the trial Judge made errors in the exercise of his discretion.
    

Grounds 3.2

20. In Grounds 3.2, the Appellant again challenges the exercise of discretion by the trial Judge and again claims that his Honour did not properly consider that:
    • (a) discovery was in progress and the parties were yet to ascertain their respective positions before engaging in a meaningful negotiation for settlement.
    • (b) the delay in the prosecution was caused by or attributed to the Respondent’s delay in filing their Defence which the Court readily granted an extension.
    • (c) the Appellant’s case was a professional negligence claim rather than one in defamation.
      
21. This ground also raises matters of mixed fact and law. In our view, they are sufficiently pleaded and competent to proceed to hearing.
    

Ground 3.3

22. In Ground 3.3, the Appellant pleads that it was denied natural justice in that:
    
    • (a) the orders of 1^st December 2020 were issued in chambers and were not made clear and communicated to the Appellant,
    • (b) the Appellant was not warned that noncompliance of orders will result in dismissal of proceedings, and
    • (c) time given to the Appellant to prepare an affidavit explaining noncompliance was too short and unreasonable.
      
23. The issue of whether the Appellant was denied natural justice involves the consideration of factual circumstances and is therefore a question of fact. It required leave under section 14 (1) (c) of the Supreme Court Act. Having not sought prior leave from the Supreme Court to raise these grounds, they are to that extent incompetent. For these reasons, we uphold the Respondent’s objections in respect of Ground 3.3.
    

Ground 3.4

24. In Ground 3.4, the Appellant pleads that there was bias or apprehension of bias by the trial Judge in circumstances where he:
    
    • (a) readily granted leave to the Respondents to file their Defence out of time on the grounds of merit but readily dismissing the Appellant’s claim which had great merit.
    • (b) failed to compel the Respondents to file affidavits for their noncompliance of orders of 4^th February 2021 in the same way he compelled the Appellant on 16^th February 2021.
    • (c) failed to disqualify himself as a former partner of the law firm, Young and Williams, whose current partners and employees were parties to the proceedings.
      
25. The Respondent objects to the competency of this ground on the basis that the issue of bias was not raised at the trial. It is trite law that where a party is apprehensive of the impartiality of the trial judge, he should apply for the recusal of the primary Judge at the first instance of becoming aware of the Judge’s interest in the matter. Refer Hon. Patrick Pruaitch, MP v Chronox Manek (2012) SC1168. The transcript does not show the issues of apprehension of bias was raised at the hearing before his Honour. That being the case, this ground seeks to raise matters not raised before the primary Judge and is therefore incompetent. For the foregoing reasons, we are inclined to uphold the objection.
    

Ground 4

26. In Ground 4, the Appellant pleads that there was great injustice done to the Appellant when the primary Judge dismissed the proceedings without any proper and valid basis. The Respondent objects to the competency of this ground submitting it is not particularised. We agree with the Respondent’s objection. This ground is only a concluding statement lacking particulars, thereby offending the requirements of Order 7 Rules 9 (c) and 10 of the Supreme Court Rules. It should be struck out.
    

Conclusion

27. It is clear from our findings that Grounds 3.1 and 3.2 of the Notice of Appeal are competent and having properly invoked the Court’s jurisdiction, they shall proceed to hearing. The rest of the grounds are struck out for being incompetent.
    

Costs

28. It is appropriate that the costs of the application should be in the cause.
    

Orders

29. The Court Orders that:

1. The Respondents’ Objection to Competency is upheld in part.
2. Grounds 3.3, 3.4 and 4 of the Notice of Appeal are struck out for being incompetent.
3. Grounds 3.1 and 3.2 of the Notice of Appeal shall proceed to hearing.
4. The case is adjourned to the Registry to be listed for directions hearing.
5. Costs of the application shall be in the cause.
   

___________________________________________________________________
Lomai & Lomai Attorneys: Lawyers for the Appellant
Ashurst PNG Lawyers: Lawyers for the Respondents