Vitolo v Mararea Land Group Incorporated [2023] PGSC 88; SC2438 (17 August 2023)

SC2438

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM NO. 3 OF 2023 (IECMS)

BETWEEN:
PHILIP VITOLO
First Appellant

AND
HERMAN PASI, VINCENT TOVILI & KENNY SONNY
Second Appellant

V
MARAREA LAND GROUP INCORPORATED
First Respondent

AND
HONOURABLE JUSTIN TKATCHENKO in his capacity as the
MINISTER FOR LANDS & PHYSICAL PLANNING
Second Respondent

AND
IRUNA ROGAKILA in his capacity as the
Registrar of Incorporated Land Groups
Third Respondent

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Respondent

AND
NEW BRITAIN PALM OIL LIMITED
Fifth Respondent

Waigani: Anis J
2023: 9^th & 17^th August

APPLICATION FOR STAY – application filed under appeal that is commenced by notice of motion – Order 10 – Supreme Court Rules as amended – considerations of various McHardy criteria for grant of stay – exercise of discretion

Cases Cited:
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
Phillip Vitolo and 1 Or v Mararea Land Group Incorporated and Ors (2023) SC2432
Rai v Imbuni (2021) SC2080

Counsel:
E. Isaac, for the Appellants
H. Leahy, for the First Respondent
N. Yano, for the Second, Third & Fourth Respondents
W Mininga, for the Fifth Respondent

RULING

17^th August 2023

1. ANIS J: The appellants moved their application for stay on 9 August 2023 (SA or stay application). The fifth respondent supported the application whilst the first respondent strenuously opposed it. The State on the other hand did not appear to make any submissions.

2. I reserved my ruling to 15 August 2023, which was adjourned generally in chambers. Parties have been notified so I will rule on it now.

BRIEF BACKGROUND

3. The appeal filed herein (present appeal) under Order 10 of the Supreme Court Rules 2012 as amended (SCR) stems from a decision of a judicial review Court dated 13 December 2022 (appealed decision) in proceeding OS (JR) No. 925 of 2018 (JR proceeding/Court). The appealed decision was handed down after the JR Court had heard 2 notices of motion that were filed by the appellants and the first respondent. The appellants’ motion was to dismiss the JR proceeding whilst the first respondent’s motion was for security for costs.

4. The trial judge in summary dismissed the appellants’ motion to dismiss and granted the first respondent’s motion for security for cost. His Honour’s final orders were as follows:

1. The 5^th to the 8^th defendants notice of motion of the 17^th November 2022 is denied and dismissed in its entirety forthwith.
   
2. The Plaintiff’s Notice of Motion for Security for Costs is granted as pleaded.
   
3. The 5^th to the 8^th Defendants are hereby ordered to pay into the National Court Trust Account K250,000.00 between now and Monday 6^th February 2023.
   
4. Further the 5^th to the 8^th Defendants are ordered to file proof of that payment into Court and serve that on the other side by or before Monday 6^th February 2023.
   
5. Further the 5^th to the 8^th Defendants are granted liberty to file any further proceedings in this Court upon production of proof that they have paid upfront K250,000.00 into the National Court Trust Account.
   

5. The first respondent is the plaintiff in the JR proceeding. The JR proceeding is on foot and is about to go for trial. The dispute primarily concerns ownership or control over an agricultural lease or special agricultural and business lease. The land is described as Portion 2487C, Milinch Megigi, Formil Talasea, West New Britain Province (Portion 2487C/Land).

6. Portion 2487C consists of 1090 hectares of land. On 12 November 2001, Portion 2487C was granted to Mami Incorporated Land Group (ILG). Mami ILG was created in 2000 by landowners within the area under the provisions of the Land Group Incorporation Act Chapter No. 147. The applicants are some of Mami ILG’s former executives or members. Soon after its incorporation and on 23 November 2001, Mami ILG signed a sub-lease agreement with the fifth respondent for a term of 40 years. On 13 January 2015, Mami ILG was deregistered by the third respondent. Prior to its deregistration, on 7 November 2014, another landowner group within the area was created which is the first respondent. On 14 January 2015, the first respondent was granted with the title over Portion 2487C.

7. On 18 August 2016, the then Lands Minister Hon. Benny Allan (in a letter to the fifth respondent) appeared to indicate that he had directed his department to re-instate Mami ILG and restore and transfer the title of Portion 2487C from the first respondent to Mami ILG. On 25 January 2018, the then new Lands Minister Hon. Justin Tkatchenko rescinded the recommendations or decision of Hon. Benny Allan made on 18 August 2016. However, about 2 years later on 31 October 2018, Minister Tkatchenko (by way of a letter) reversed his own earlier decision made on 25 January 2018. The effect of that, according to the first respondent, is that it re-instates the initial decision or recommendations of Hon. Benny Allan made on 18 August 2016.

8. These events led to the JR proceeding. The first respondent, as the plaintiff therein, has been granted leave to challenge Minister Benny Allan’s decision of 18 August 2016, and (ii), Minister Tkatchenko’s decisions of 25 January 2018 and 31 October 2018.

ISSUES

9. The issue of course is to consider the criteria for stay application as are provided under Gary McHardy’s case (Gary McHardy v Prosec Security & Communications Limited trading as Protect Security (2000) PNGLR 279), consider which ones are relevant or applicable, and determine whether the applicant has met those relevant criteria before I could exercise my discretion and grant a stay or otherwise.

GARY McHARDY

10. Granting a stay application is discretionary.

11. 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 (supra). The case law is also settled that one should not just tick off the boxes from the listed criteria as set out in McHardy but that the Court may consider and apply all or only those criteria that are relevant to the circumstances of the case in question. Case: Ombudsman Commission v. Gabriel Yer and Ors (2009) SC1041.

12. The criteria 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.

13. The Supreme Court in Kalinoe v Paraka (2010) SC1024 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. The Supreme Court therein also stated that an applicant in a stay application is not required to provide an undertaking as to damages. I quote from part of para 26 and 27 therein as follows:

An applicant does not have to provide an undertaking as to damages to obtain such orders. An applicant does not even have to prove that there are special or exceptional circumstances to warrant the making of interim orders. There are no hard and fast pre-conditions that have to be satisfied. Provided that the court exercises its discretion justly and reasonably and in accordance with the principles of natural justice or procedural fairness, 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 (Isaac Lupari v Sir Michael Somare MP(2008) SC951).

27. We have considered the reasons given by both Kapi CJ and Injia DCJ for making the stay orders of 22 November 2006 and 5 March 2007. Neither of their Honours erred in failing to insist that an undertaking as to damages be provided by the appellants. We consider that the law is settled that an injunction and a stay order are conceptually different orders. While an undertaking as to damages is in most cases an essential prerequisite to the granting of an injunction, it is not so for the granting of a stay order. The respondent has failed to persuade us that we should disturb the well-settled distinction between an injunction and a stay of proceedings. The applications before us are without merit. [Underlining mine]

CONSIDERATION

14. Let me address the relevant criteria. First is leave, and I ask myself whether leave is required. The applicants and the first respondent serious contest this issue, that is, not on whether leave is required for this present appeal because both parties agree that leave is required, but rather, on whether leave which had been sought earlier in another Supreme Court proceeding would suffice as leave been granted for the present appeal. I do not wish to dive into the arguments on that. The argument is already raised in an objection to competency which has been filed and which is pending. I note that I have briefly discussed that in my recent decision in this matter, where I was asked before the hearing this SA (to consider as a preliminary matter) whether I have jurisdiction as a single judge to hear the SA given the serious contest that is raised on whether leave is required in regard to the present appeal. I delivered my decision on 9 August 2023 in Phillip Vitolo and 1 Or v Mararea Land Group Incorporated and Ors (2023) SC2432.

15. In my view and as I have stated therein, the issue cannot be properly before me; there is already an Objection to Competency filed by the first respondent thus the issue will be raised at the appropriate forum. So, for this purpose, I will put a question mark under this criteria.

16. The next relevant criteria, in my view, is delay in making the application. Was there a delay? The first respondent submits that there was a delay of about 5 months. The applicants submit that there was no delay. I note the parties’ submissions in that regard.

17. The present appeal was filed on 22 February 2023. The SA was filed on 1 August 2023. So, the delay period of 5 months is about right. I note that the present appeal or the appealed decision stems from an interlocutory decision of the National Court. The circumstances of the case that had caused the applicants to lodge the SA was because the JR proceeding was about to be heard on its merits. It was set down for hearing sometimes last week or so which was why the appellants filed this SA.

18. There is some delay in filing the SA. However, the delay, in my view, is not significant or lengthy. I also note, which is not disputed, that similar stay application had been obtained by the appellants in related but separate Supreme Court proceeding, that is, in SCA No. 11 of 2023. The appellants had appealed against the same appealed decision, in SCA No. 11 of 2023. The appellants later successfully obtained a stay order against the appealed decision on 8 February 2023, that is, in SCA No. 11 of 2023. On 16 March 2023, the appellants withdrew SCA No. 11 of 2023 with leave of the Court. The stay order was also dissolved. So, I note that the stay application had been considered successfully earlier by the Supreme Court. I find this fact relevant and significant for consideration, and for this purpose, it favour of the appellants.

19. I will address possible hardship, inconvenience or prejudice, arguable case and apparent error of law or procedure together. I note the submissions of the parties. I note in particular and with interest in regard to the actual terms of the appealed decision. I had invited parties to interpret what terms of the orders mean. I suggested to counsel whether the order could mean that if the appellants fail to deposit the ordered security for costs of K250,000, that they will be barred from being heard or participate in the JR proceeding. Mr Leahy for the first respondent said that that would be reading too much into what the orders actually say. Counsel submits that the only way to understand it is to read the order as it is. Mr Leahy also submits that the appealed decision does not prevent the appellants from continuing to participate in the JR proceeding. The appellants, including the fifth respondent, on the other hand and amongst others, submit that the order is ambiguous and that the risk of them (i.e., the appellants) being restrained from participating without first paying the exorbitant sum of K250,000 as security for costs in the JR proceeding is real.

20. I think the best way to assess this uncertainty is to restate term 2 and 5 of the appealed decision, which are:

2. The Plaintiff’s Notice of Motion for Security for Costs is granted as pleaded.

......

5. Further the 5^th to the 8^th Defendants are granted liberty to file any further proceedings in this Court upon production of proof that they have paid upfront K250,000.00 into the National Court Trust Account.
   

[Underlining and bold lettering mine]

21. The next step is to perhaps observe the first respondent’s intention when it applied for orders for security for costs. Its notice of motion is located as annexure B to the Affidavit of the first appellant filed 1 August 2023. Relief 2 reads, and I quote:

2. Pursuant to section 155(4) of the Constitution and the jurisdiction that provision of the Constitution grants to the National Court to make “such other orders as a necessary to do justice in the particular circumstances of a case” before it; the Fifth, Sixth, Seventh and Eight Defendants (collectively referred to as the “Defendants”) give security for costs in the sum of K250,000.00 to be paid on terms as ordered by the Court and that the Defendants representation in Court in any hearing of the of the proceedings filed herein be barred until that security is given.”
   

[Underlining and bold lettering mine]

22. Obviously term 2 of the motion for security for costs, as expressly stated in order 2 of the appealed decision, shall be or consists as the order of the Court. The other orders following after order 2 are consequential. Secondly, and despite submission by counsel that the appellants would be at liberty to participate at the JR proceeding, the evidence and in particular as per term 2 of the relief sought in their motion for security for costs, as quoted above, shows that they had intended to bar or shut out the appellants completely from participating in the JR proceeding if the amount ordered as security for cost was not paid. Further, and as I have underlined above, the said relief 2 in the first respondent’s motion for security for costs is part of the appealed decision because and as the trial Judge has stated clearly under term 2 of the appealed decision, The Plaintiff’s Notice of Motion for Security for Costs is granted as pleaded. [Underlining and bold lettering mine]

23. So, with the grant of the appealed decision, and as I had put to counsel for the first respondent, puts the parties at an unusual position. The unusual position or circumstance is this and I will elaborate. The first respondent was the plaintiff in the JR proceeding. It is therefore very odd, in my view, that a plaintiff would demand security for costs orders against a defendant and then obtain orders from the Court that shuts out the defendant from further participating in a proceeding unless security for costs is given. In other words, what has happened by this appealed decision is the first respondent has really shut out the appellants from defending or participating in the JR proceeding. I make this observation because the security for costs order of K250,000 appears to be a very huge sum that is made and where the court and the first respondent are expecting the appellants, who are ordinary landowners, to pay. It, therefore, and in my view, calls into question whether proper regard was given in the exercise of discretion by the trial Judge, as is being claimed in the present appeal. Also, I note that the source relied upon by the first respondent to seek security for costs was s.155(4) of the Constitution. This is despite the fact that Order 14 Division 4 of the National Court Rules contains the exclusive jurisdiction or provisions where one could invoke to apply for security for costs.

24. I also note from the trial Court’s decision that His Honour appears not to have addressed submissions made on these matters by the appellants.

25. So, with the security for cost order that is in place, the appellants, in my view, are clearly facing serious hardship and prejudice because they appear to have no money to make the substantial payment of K250,000 to the National Court Trust Account before they may be permitted to defend themselves or the issues that are before the JR Court. And further, since the appellants have not paid security for costs, they may have breached the terms and conditions of the appealed decision thus there is a real threat that they will be held for contempt of Court. The challenge of the appealed decision by the present appeal may be their only hope to avoid being held for contempt of court. Also, if the stay is not granted, the opportunity for the first respondent to proceed to trial or to demand a trial without the appellants participating in it is real and is there, that is, as long at the appealed decision remains binding.

26. I note that I could go on and on to consider other matters to see whether there are other arguable reasons for the grant of stay but I will stop here. In my view, I am satisfied that the appellants have established an arguable case for this purpose.

27. In regard to criteria financial ability, I note the submissions of the parties in that regard. What I observe is this. Both contending parties, the appellants and the first respondents, are landowners or consist of groups or institutions that are mange at a village or district level where funds may be scarce which is not an uncommon occurrence in the country. In my view, this criteria is not relevant or crucial consideration for the present purpose.

28. In regard to criteria overall interest of justice and balance of convenience, I find them in favour of the appellants for the reasons as I have stated above in my decision.

29. In regard to criteria Undertaking as to Damages, I have already addressed that in the earlier part of my decision. An undertaking as to damages, unlike an injunction, is not strictly required. Case: Kalinoe v Paraka (supra). I therefore dismiss the argument by the first respondent in this regard. I also do not find this criteria relevant or crucial to the SA.

OTHER MATTERS

30. Mr Leahy made an argument which in my view should be considered separately. Counsel submits that the appealed decision was not certified as required under Order 10 Rule 3(b)(ii) of the SCR and case law, that is, Rai v Imbuni (2021) SC2080.

31. Having looked at the argument and without getting into it in any detail, I note that it impinges on jurisdiction (or substantive flaw argument). As such and in my view, the argument should be reserved for the Court that is hearing the Objection to Competency application.

SUMMARY

32. In summary, I am minded to grant the appellants’ stay application.

COST

33. I will order that cost shall be to the appeal.

ORDERS OF THE COURT

34. I make the following orders:

1. The appellants’ stay application filed 1 August 2023 is granted.
   
2. Pursuant to s.19 of the Supreme Court Act Chapter No. 37, the orders of the National Court of 13 December 2022 and the proceedings OS(JR) No. 925 of 2018 before the National Court are stayed pending the determination of the Notice of Motion that is filed 22 February 2023 under Order 10 of the Supreme Court Rules as amended.
   
3. Costs shall be to the appeal.
   
4. Time for entry of these orders is abridged to the date and time of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly

________________________________________________________________
Emmanuel: Lawyers for the Appellant
Pacific Legal Group: Lawyers for the First Respondent
Office of the Solicitor General: Lawyers for the Second, Third & Fourth Respondents
Bradshaw: Lawyers for the Fifth Respondent