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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SC REV NO. 21 OF 2023 (IECMS)
THE APPLICATION UNDER SECTION 155(2)(b) OF THE CONSTITUTION
BETWEEN:
CHINA HARBOUR ENGINEERING COMPANY (PNG) LIMITED
First Applicant
AND
CHINA HARBOUR ENGINEERING COMPANY LIMITED
Second Applicant
V
BUNI MORUA
First Respondent
Waigani: Anis J
2023: 10th, 11th & 14th August
LEAVE TO REVIEW – Application made under s.155(2)(b) – Constitution – Order 5 Rules 1, 3 and 6 – Supreme Court Rules as amended - whether leave should be granted – consideration - ruling
APPLICATION FOR STAY – application made under s.19 – Constitution – stay subject to leave being granted – whether stay should be granted – consideration - ruling
Cases Cited:
Avia Aihi v. The State (No. 2) [1982] PNGLR 44
Application by Anderson Agiru (2002) SC686
Application by Herman Leahy (2006) SC855
Application by John Maddison and Bank of South Pacific Ltd (2009) SC984
Alphonse Tay v. Newcombe Gerau (2011) SC1097
Benjamin Sengi v. The State (2015) SC1425
Motor Vehicles Insurance Ltd v. Fura Opeta (2020) SC1954
Southern Highlands Provincial Government v. Ronald Kalu (2016) SC1568
Elizabeth Kavi v. ANZ (2020) SC1951
Ganglau Landowner Co Ltd v. Medaing (2020) SC1963
Gary McHardy v Prosec Security & Communications Limited trading as Protect Security [2000] PNGLR 279
Ombudsman Commission v. Gabriel Yer and Ors (2009) SC1041
Kalinoe v Paraka (2010) SC1024
Counsel:
J Nalawaku, for the Applicants
N Kiuk, for the Respondent
RULING
14th August, 2023
1. ANIS J: I heard 2 applications filed by the applicants. The first was Leave to Review filed 14 July 2023 (leave application) and the second Stay Application filed 4 August 2023.
2. This is my ruling.
BACKGROUND
3. The applicants lost their rights of appeal. They were out of time to file their notice of appeal by 24 days. The decision they seek to review was a final decision of the National Court dated 11 May 2023, in proceeding WS No. 437 of 2019, Buni Morua Aloysius and 79 Ors v China Habour Engineering Company (PNG) Limited and Ors (WS 437). The National Court has awarded damages in favour of the respondent and others who live alongside the Laloki River in the Central Province. The damages awarded were for destruction caused to the environment, trespass, exemplary damage, interest at 8 % per annum and cost.
4. The final orders of 11 May 2023 read, and I quote:
(i) A sum of K80,000.00 being for trespass;
(ii) Nil sum for loss of income;
(iii) Nil sum for negligence;
(iv) Nil sum for statutory breach.
Total: K7,733,740.00
5. The claim was for trespass, environmental pollution and constitutional or statutory breaches. The respondent and the group that he represented in WS 437 sued the applicants and the State and its agencies, in relation to impacts that had occurred on a land in relation to a development project that had been undertaken in 2015 at Laloki in the Central Province between the State and the applicants. The State had engaged the applicants to construct the now newly built Laloki Bridge. The respondent and his group complained that the applicants had occupied and used their land without their authority and that consequently they had and continued to suffer from the damage that the applicants had caused to their land around the Laloki area.
6. Default judgment was granted against the applicants on 25 September 2020 with damages to be assessed. And on 11 May 2023, after a trial that had proceeded ex parte, judgment in the final sum of K7,733,740.00 plus interest and costs were awarded against the applicants.
ISSUES
7. The main issues are whether the applicants have established the criteria for grant of leave and stay, and whether I should exercise my discretion to grant them.
COMMON GROUND
8. The trial on assessment of damages was conducted ex parte. The trial date was set on 27 February 2023. Both the applicants and the State applied to vacate the trial date on 27 February 2023. Their applications were declined. Counsel for applicants and the State both excused themselves thereafter without participating in the trial on assessment of damages.
LEAVE
9. The Court’s power to grant leave is discretionary. In regard to the criteria for granting leave to review, case law has provided some guidance. The cases Avia Aihi v. The State (No. 2) [1982] PNGLR 44, Application by Anderson Agiru (2002) SC686. Application by Herman Leahy (2006) SC855, Application by John Maddison and Bank of South Pacific Ltd (2009) SC984, Alphonse Tay v. Newcombe Gerau (2011) SC1097 and Benjamin Sengi v. The State (2015) SC1425, Motor Vehicles Insurance Ltd v. Fura Opeta (2020) SC1954 and Southern Highlands Provincial Government v. Ronald Kalu (2016) SC1568 made references to the various criteria, and I state those that, in my view, are relevant to this case as follows:
(i) reasonable explanation why appeal against the judgment was not filed within time;
(ii) if any delay, satisfactory explanation(s);
(iii) whether there are cogent and convincing reasons and exceptional circumstances, eg. some substantial injustice is manifest or the case is of special gravity; and
(iv) whether it is in the interest of justice to grant leave.
CONSIDERATION - LEAVE
10. I have taken both counsel to task at the hearing, and I note their submissions made on behalf of their clients.
11. As stated, the applicants were out of time to file their notice of appeal by about 24 days. There is actual contest as to when the judgment on assessment was delivered, and I refer to the affidavit in support of David Sopane filed 9 August 2023. In the actual decision, it states 5 May 2023. However, counsel for the respondent stated that the judgment was delivered on 11 May 2023. The submission is verified by the respondent’s affidavit in response filed 9 August 2023. However, the applicants also complains that the ex parte order and judgment were served on them very late on 17 May 2023 and 25 May 2023 respectively. I note that this evidence is verified by the respondent in his affidavit.
12. I must say that I find it odd in the confusions that had occurred, that is, on when the decision was delivered and the manner of service of the order and judgment by the respondent on the applicants. These to me would add to support the applicants on the delay issue. The applicants then had about 20 days or so to prepare their appeal. In regard to the explanation for delay, I must say that I am not fully convinced of the reasons given by the applicants’ former lawyer Mr Sopane in his affidavit. He said he had another engagement and had briefed out another lawyer to prepare and lodge the appeal but that the said lawyer did not do so. I note that an action or inaction of a lawyer cannot be regarded as a reasonable excuse for the lawyer’s client to not comply with a statutory time limit. See cases: Elizabeth Kavi v. ANZ (2020) SC1951 at [10] and Ganglau Landowner Co Ltd v. Medaing (2020) SC1963 at [26].
13. Let me address the second issue, which is whether there was a significant delay in filing the application for leave to review. As stated, the delay was 24 days. The appealed decision was handed down on 11 May 2023. The expiry date to appeal was 21 June 2023, and I note that the leave application was filed on 14 July 2023.
14. In my view, I do not find the delay of 24 days as very long or significant. I find that in favour of the applicants.
15. Moving on to the next issue, I ask myself this. Do I find any cogent and convincing reasons? Are there exceptional circumstances in this case for example that some substantial injustice is apparent, or the case is of special gravity? I would answer that in the affirmative in favour of the applicants. When I heard submissions from the parties, including considering the evidence in support, I note the following. The trial proceeded ex-parte to assess what damage if any should be awarded against the applicants. The trial Judge was of course under an obligation to proceed with the trial fairly. The Court would have, amongst others, considered the pleadings and evidence on damages to determine whether that they make legal sense and whether the respondent was entitled in law to be awarded with such damages or relief that were sought.
16. What the applicants claim in the proposed grounds of review, which is supported by evidence (i.e., affidavit of Sid Zhand and David Sopane filed 14 July 2023 and 9 August 2023) is this. They refer to the judgment on liability which was entered by default as well as the decision of the Court on assessment. Then they refer to the proposed grounds of review and argue that the trial Court erred in his decision.
17. Their first proposed main review ground is this. They argue that they had formally filed a motion for adjournment which was supported by an affidavit (annexure B to Mr Sopane’s affidavit filed 9 August 2023) at the commencement of hearing which was not properly considered and determined by the trial Judge; they submit the trial judge rejected the application on a minor technical jurisdiction issue without considering the merit of the request thus the applicants were denied their rights to be heard at the trial on assessment. The applicants submit that the reason for requesting an adjournment was because their then lawyer was still awaiting approval from the Law Society regarding his Unrestricted Practising Certificate and therefore that he was unable to appear to proceed with the hearing.
18. I have had the benefit of perusing the appealed decision which is in evidence. At paragraph 21, the trial Judge stated and I quote:
On the 27th February 2023 I proceeded to conduct the trial on assessment. Mr. Malis Minimbi appeared for the first and second defendants and made an application from the bar table for trial to be vacated. I refused the oral application in the interest of justice as the Notice of Hearing had been served on the first and second defendant...
19. There is no detailed discussion by the trial judge in regard to his ruling to refuse to grant the adjournment. It may be in the transcript of proceeding; however, it is not before me. The decision to refuse adjournment was of course a matter for the trial Judge. However, what I see here from the adduced evidence is that the applicants had filed and made a formal application for an adjournment. And when the application was refused, as shown in the evidence, a further oral application for a short adjournment which was made to the Court was also denied. The Court decision on this point however only refers to an oral application made by counsel for the applicants. So, I ask myself this. What about the decision of the Court in relation to the formal application that was made by the applicants to vacate the trial date? Where is that in the appealed decision? Was it addressed at all?
20. I note that the decision of the Court in refusing the applicants their motion to adjourn was crucial to their case and of their ability to respond to the trial on assessment of damages.
21. Secondly, the applicants argue that no award at all should have been made for trespass and that the trial Judge erred in that regard. They make this claim:
(i) because they claim that the respondent was not the registered proprietor of the land at the material time when the gravel was extracted between 2015 to 2017; and
(ii) at the material time, they say they had the consent of the then registered proprietors of the land, namely, Ita’a Meme and Aloysius (as joint tenants), and that they had a written contractual agreement (gravel contract) with the then owners and their agents and servants; and
(iii) premised on the said gravel contract, the applicants had been paying the then registered proprietors of the land in question for the extraction of gravel on the land during the period of the gravel contract; and
(iv) they attach the title to the land (annexure F to Mr Zhand’s affidavit filed 14 July 2023) which shows the former owners and the current registered proprietors (where the respondent is one of them); and
(v) the evidence of title they say confirms the fact that the respondent and his other joint tenants acquired the land on 22 June 2018, which was some 2 years later or after the event, that is, after the applicants have completed their main contract with the State (which was to construct the Laloki Bridge) and after they have left the site; and
(vi) they submit, amongst others, that had the trial Judge properly examined the evidence or made the necessary inquiry, he would not have awarded damage for trespass for the sum of K80,000 and environment damage of K4,653,740.00, because the respondent was not the registered proprietor of the land at the material time.
22. The land that is referred to is described as a State Lease, Portion 1189, Graville, Moresby, Central Province (the Land).
23. I note that the respondent (by his affidavit filed 9 August 2023) and his counsel do not deny the fact that the respondent and his co-joint tenants did acquire or own the Land on 22 June 2018.
24. The third main proposed ground of review is this. The applicants claim that the trial Judge erred when he awarded damages caused to the environment on the Land in the sum of K4,653,740. They, amongst other reasons, repeat their reasonings as summarised above, that is, (i), that they had entered the Land with the authority of the previous registered proprietors, (ii), they had signed a valid gravel agreement which is in evidence (annexure C to Mr Zhand’s affidavit of 14 July 2023) that showed that their actions in extracting gravel on site was valid; Mr Zhand also attaches receipts of payments that had been made to the previous owners and their associates at the material time, (iii), they could not have committed trespass because the respondent did not own the Land at the material time or in 2015 to 2017.
25. The respondent argues that the applicants should have but had failed to obtain a permit to extract gravel from the Land. He submits that the environmental damage was ongoing even after the applicants left the site. I had put to counsel for the respondent this question; that if the respondent never owned the Land at the material time, then how can they claim and be awarded with damages for trespass: Counsel, with respect did not give a straight answer or provide a legal basis for that except to submit that the trespass and contamination continued after 2017 and continues to this day. I also ask counsel this question; that if the applicants had entered the Land and extracted gravel with the consent of the previous owners, then how can they justify their claim for damage for environmental damage? I inquired that since they did not own the Land then, and that since it was something that was carried out by the previous registered proprietors of the Land with the applicants, how was it that the respondent can claim damages for environmental damage and be awarded with a substantial sum of over K4,000,000. Again, and with respect, I received no satisfactory arguments from counsel.
26. In regard to interest of justice, I am satisfied for the above stated reasons, that interest of justice warrants that leave be granted.
SUMMARY
27. In summary and in my view, I make this finding. I am satisfied that there are cogent and convincing reasons that exist thus the matter should require a review. This is despite the fact that I am not totally satisfied with the explanation provided by the applicants’ former counsel Mr Sopane for not appealing within the 20 days that he had after he was belatedly served with the appealed decision. I say this because actions or inactions of a lawyer are not reasonable excuse for the lawyer’s client not to comply with a statutory time limit (see Elizabeth Kavi v. ANZ (2020) SC1951 at [10] and Ganglau Landowner Co Ltd v. Medaing (2020) SC1963 at [26]).
28. I note however, that if leave is refused, that there will be substantial injustice caused to the applicant for the reasons stated above, especially, whether the respondent, who was not the registered proprietor of the Land at the material time, was entitled to claim and receive damages as were awarded by the National Court. The judgment sum has now accrued to more than K12,000,000 and the respondent by his own evidence (at para 13 and annexure L to his affidavit) states that enforcement proceeding for writ of levy of property has already commenced on 2 August 2023, to enforce judgment against the applicants’ properties.
29. Let me say in conclusion. I note that the applicants were never heard on liability. Judgment was entered against them in default by the National Court. Judgment was again entered against them on damages ex parte by the National Court. So essentially, the applicants have never been heard in their defence in any real or substantive way before they were ordered to pay this substantial damage in the sum of K7,733,740. They were also ordered to pay interest at 8% per annum on the judgment sum which is back dated to 2015, which was at the time when the respondent never held title to the Land, to the date of settlement. If the interest component is added, the total sum will exceed K12,000,000. And so, if leave were to be now refused by the Supreme Court, what that would mean is that the applicants will have been shut out completely from the legal process or system of justice from being heard. Thus, the circumstances of the case as stated herein further strengthens the arguments that interest of justice and exceptional circumstances strongly favour grant of leave to review.
STAY APPLICATION
30. Having granted leave for review, I now turn to the Application for Stay filed 4 August 2023 (SA). The application was contested, and I also heard submissions from the parties.
31. In responds to the SA, counsel for the respondent began by raising preliminary objections in regard to the form of the SA. I addressed them and essentially ruled out the arguments raised by the respondent, and I would refer to the transcript of proceeding for that. But I will also make this additional ruling. Preliminary issues or matters that a party wishes to raise in relation to an application such as this, should be raised before the applicant or the application is formally moved on its merit. A party that fails to bring that to the Court’s attention early should not be permitted to belatedly raise the argument. In this case, I also find that the preliminary issues were belatedly raised and so I also dismiss them for this reason.
32. Granting of a stay application is discretionary.
33. The case law is also settled on what type of criteria to apply. Case: Gary McHardy v Prosec Security & Communications Limited trading as Protect Security (2000) PNGLR 279. Case law is also settled that one should not just tick the boxes of the listed criteria but that the Court should consider and apply them or the relevant criteria premised on the circumstances of the case that the Court is faced with. Case: Ombudsman Commission v. Gabriel Yer and Ors (2009) SC1041.
34. The criteria stated in Gary McHardy are as follows:
(a) Whether leave to appeal is required and whether it has been obtained;
(b) Whether there has been any delay in making the application;
(c) Possible hardship, inconvenience or prejudice to either party;
(d) the nature of the judgment sought to be stayed;
(e) The financial ability of the applicant;
(f) Preliminary assessment about whether the applicant has an arguable case on the proposed appeal;
(g) Whether on the face of the record of the judgment there may be indicated apparent error of law or procedure;
(h) The overall interest of justice;
(i) Balance of convenience;
(j) Whether damages would be sufficient remedy.
35. The principle premise for requiring stay application in pending appeal hearing is that the party in whose favour judgment has been obtained in the trial court is entitled to the benefit of that judgment. The onus therefore rests with the applicant to demonstrate why the appeal court should intervene and stall enforcement, implementation or the operation of the judgment of the trial court.
36. The Supreme Court has said "the discretion available to the Judge or the Court when deciding whether to grant the interim orders or a stay of proceedings, is very broad. See case: Kalinoe v Paraka (2010) SC1024. In that case, the Supreme Court also said an applicant, in the Supreme Court, for stay is not required to provide an undertaking as to damages.
CONSIDERATION - STAY
37. First, leave is required in this instance, and I note that I have granted the applicants leave to review above in my decision.
38. In regard to delay, I note that the leave application was filed on 14 July 2023 and the SA was filed 30 days later on 4 August 2023. I do not find that to be a significant delay. I must add that the application was filed when the applicants learnt that the respondent has taken steps to commence enforcement proceedings.
39. In regard to the criteria Possible hardship, inconvenience or prejudice to either party, I find that it is the applicants that will suffer hardship and prejudice if the stay is refused, and I would refer to my reasonings above on leave to review.
40. In regard to the financial ability of the applicants and undertaking as to damages, I am minded to rule in favour of the applicants. Although not a requirement as held in the case law, the applicants have given an undertaking. The respondent has objected to it on the premise that it was not signed by a duly authorised person of the applicants and that it did not have the company seal on. The applicants responded by drawing the Court’s attention to Mr Zhand’s affidavit of 14 July 2023 where he attaches at annexure A evidence what he claims gives him the authority to sign documents in this proceeding. The authority was given by one Eason Liu who is the Managing Director of the first applicant. I note that no evidence is adduced by the applicants regarding their financial capacities. However, I also note that they have given an undertaking as to damages when they were not required to. Further, I note that the applicants are involved in construction and possess plant and equipment that are or may be worth millions of kina. I say this taking into account the fact that the respondent is already taking steps to issue a writ of levy against some of their properties.
41. In regard to criteria arguable case and apparent error of law or procedures, I would find them to favour the applicants, that is, premised on what I have stated above in my decision on leave to review. I take them into account herein and make the same ruling in regard to criteria overall interest of justice and balance of convenience.
42. Therefore, and in view of my findings, the SA will be granted in favour of the applicants pending the final determination of the review.
SUMMARY – STAY
43. In summary, the applicants’ stay application is granted.
COST
44. An award of cost is discretionary. I will order that costs for the 2 applications shall be to the review.
ORDERS OF THE COURT
45. I make the following orders:
(a) The applicants shall prepare an application for review in accordance with Order 5 Rule 4 of the SCR;
(b) The applicants shall, pursuant to Order 5 Rule 1 and Order 7 Division 2 of the SCR, file their application for review within 21 days from the date of this Court Order;
(c) The applicants shall as soon as possible, after the expiry of the said 21 days for filing their application for review, serve sealed copies of the application for review on all parties to the National Court proceedings from which the judicial act to be reviewed arises, that is, in accordance with Order 5 Rule 5 of the SCR.
(d) The applicants shall thereafter prepare and file a draft index to review book and obtain a date of settlement of the same with the Registrar and notify the parties of the same.
(e) The parties to settle and file a review book thereafter in preparing for hearing of the substantive review.
The Court orders accordingly
________________________________________________________________
Namani & Associates: Lawyers for the Applicants
Kiuk & Associates: Lawyers for the Respondent
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