McConnell v Loloata Island Resort Ltd [2024] PGSC 22; SC2553 (18 March 2024)

SC2553

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 182 OF 2023

BETWEEN:
JENNIFER MCCONNELL
Appellant

AND:
LOLOATA ISLAND
RESORT LIMITED
Respondent

Waigani: Hartshorn J.
2024: 22^nd February, 18^th March

SUPREME COURT APPEAL- Practice and Procedure - Application for Security for Costs

Cases Cited:
Brinks Pty Ltd v. Brinks, Incorporated [1996] PNGLR 75
Lambu v. Ipatas [1999] PNGLR 207
Electoral Commission v. Pila Niningi (2003) SC710
Kala Rawali v. Paias Wingti; Tom Olga v. Paias Wingti (2009) SC1033
Rose v. State (2009) SC1045
PNG Tropical Wood Products Ltd v. Manuel Gramgari (2013) SC1145
Nikint Investment Ltd v. Niganu (2020) SC1919

Counsel:
Ms. V. Rambua, for the Appellant
Mr. C. Joseph, for the Respondent

18^th March 2024

1. HARTSHORN J: This is a decision on a contested application by the respondent for security for costs. Reliance is placed amongst others, upon s. 18(1) Supreme Court Act.

Background

2. The appellant commenced a proceeding in the National Court seeking damages for personal injury and negligence. The proceeding was dismissed as being statute barred. The appellant now appeals.

3. The respondent applies for security for costs on the grounds that the appellant does not reside in Papua New Guinea and does not have any assets in Papua New Guinea; there is a high possibility that the appeal will be dismissed; the application has been made promptly with prior notice given to the appellant and the respondent is not using this application oppressively.

4. The appellant opposes the application on the grounds that the appellant attempted to settle the dispute before commencing proceedings; the appeal is not without merit and is not a sham; the appellant has the capacity to pay costs; this application is being used oppressively and it is not in the interests of justice that an order for security for costs be made.

Consideration

5. The appellant submits that in considering whether security for costs should be ordered the ultimate test is whether it is in the interests of justice. Reliance is placed upon Rose v. State (2009) SC1045 and “Lambu v. Ipatas (No. 3) [1997] PNGLR 2007” which is cited as such and referred to in Rose v. State (supra).

6. The judgment of the full Supreme Court reported in Lambu v. Ipatas [1999] PNGLR 207 is the judgment concerning an application for security for costs. The application was made pursuant to s. 155(2)(b) Constitution as the subject proceeding was a review and not an appeal. In that judgment the Court refers to security for costs pending an appeal being regulated by s.18 Supreme Court Act, that the provisions of the Supreme Court Act are not applicable to a review under s. 155(2)(b) Constitution and that it follows that s. 18 Supreme Court Act is not directly applicable.

7. The application before this court is made under s.18 Supreme Court Act. The judgment in Lambu v. Ipatas [1999] PNGLR 207 is not directly applicable to this application as the judgment in that proceeding concerned a review, not an appeal and the application before that Court was under s. 155(2)(b) Constitution and not s. 18 Supreme Court Act.

8. In regard to the Court considering the interests of justice and under s. 158(2) Constitution, there are numerous Supreme Court opinions to the effect that “justice” is to be interpreted as “justice according to law”: Electoral Commission v. Pila Niningi (2003) SC710; Kala Rawali v. Paias Wingti; Tom Olga v. Paias Wingti (2009) SC1033; PNG Tropical Wood Products Ltd v. Manuel Gramgari (2013) SC1145; Nikint Investment Ltd v. Niganu (2020) SC1919. The relevant law in this instance is s. 18 Supreme Court Act.

9. Section 18(1) Supreme Court Act is as follows:

“The Supreme Court or a Judge may, in special circumstances, order that just security be given for the costs of an appeal or an application for leave to appeal and, if an application is granted, for the prosecution of the appeal.”

10. The judgment of the Supreme Court which is on point is of the full Court in Brinks Pty Ltd v. Brinks, Incorporated [1996] PNGLR 75. In that judgment, in considering s. 18(1) Supreme Court Act and the reference to “special circumstances” the Court said:

“In determining the nature of what these “special circumstances” are, we think it is relevant to have regard to the circumstances upon which the National Court may order security for costs set out under O 14 r 25 of the National Court Rules. We say these Rules are relevant because they seek to protect a defendant’s costs in the event that he is successful in an action. By analogy, the position is the same in an appeal. A respondent may be protected by an order for security for costs of the appeal in the event that he is successful in the result of an appeal. The difference is that in the National Court Rules, the circumstances upon which an order for costs may be made are particularised, whereas, under the Supreme Court Act, the circumstances are simply referred to as “special circumstances”. It is within the discretion of the Court to determine what these “special circumstances” are.

Having regard to the National Court Rules and the need to protect the interest of the respondent’s costs, we would adopt the circumstances set out in the National Court Rules as coming within the meaning of “special circumstances” upon which the Court may exercise its discretion to order security for costs of an appeal, namely:

(a) that an appellant is ordinarily resident outside Papua New Guinea;

(b) that there is reason to believe that the appellant will be unable to pay the costs of the respondent if ordered to do so;

(c) that the address of the appellant is not known;

(d) that the appellant has changed address after the appeal is instituted with a view to avoiding the consequences of the appeal.

As we have stated before, this list is not exhaustive. There may be other circumstances which may come within the words “special circumstances”.”

11. As to the first circumstance, that the appellant is ordinarily resident outside of Papua New Guinea, it is not in dispute that the appellant is a citizen and resident of Northern Ireland and does not ordinarily reside in Papua New Guinea. In regard to the other three factors listed in Order 14 Rule 25 National Court Rules, they are not relevant apart from the appellant submitting that she has not changed her address and that she is able to pay costs.

12. As to other circumstances which may come within “special circumstances”, as referred to in Brinks v. Brinks (supra), the “Rules” seek to protect the costs of a defendant and by analogy in an appeal, the costs of a respondent. Consequently, whether a plaintiff/appellant has assets within Papua New Guinea which may be attached within Papua New Guinea in the event of an order against the appellant for costs, in my view is a special circumstance. In this instance, there is evidence that the appellant does not have assets in Papua New Guinea.

13. The appellant submits that a ground to be considered by this court to refuse the application is that the appellant attempted to settle the dispute but that there was no meaningful correspondence from the respondent. That there was an unsuccessful settlement attempt in my view, is not a factor to which the court would give major consideration in the context of the Rules referred to in Brinks v. Brinks (supra) which seek to protect a defendant’s costs.

14.As to the merits of the appellants claim, I proceed on the basis that the appellant has an arguable case. I do not consider the merits of the appeal.

15. The appellant submits that a further factor for consideration is that the appellant has the financial capacity to pay costs. This is demonstrated by the appellant paying K70,000 as security in the National Court proceeding. There is evidence that the appellant has multiple sources of income. Further, the respondent does not dispute the appellant’s capacity to pay costs and has not demonstrated that the appellant will escape the responsibility to pay costs if ordered to. Reference is made to Rose v. State (supra) in which the Court reasoned that despite living overseas the appellant in that case intended to actively pursue the case to its finality and that it was in the interests of justice that the appellant’s rights should not be hampered by an order for security for costs.

16. In Rose v. State (supra), the appellants had a judgment in their favour which was referred to amongst others, as not likely to be disturbed on appeal. To my mind, the statements of the Court in Rose v. State (supra) concerning and determining the interests of justice should be considered in that context.

17. The appellant further submits that this application is being used oppressively by the respondent as the respondent is aware that the appellant will have difficulty putting together a substantial fund within a short period of time. The respondent submits however, that it is the appellant who has acted oppressively by commencing the National Court proceeding after a period of more than six years, resulting in the respondent having significant difficulty in preparing to defend the proceeding.

Conclusion

18. It is not in dispute that the appellant is ordinarily resident outside of Papua New Guinea and does not have any assets in Papua New Guinea which may be attached. In the context of Order 14 Rule 25 National Court Rules being a Rule that seeks to protect the defendant’s costs in the event that he is successful in an action and by analogy, in an appeal: Brinks v. Brinks (supra), these circumstances are the primary special circumstances to be considered in an application under s. 18(1) Supreme Court Act as applied in Brinks v. Brinks (supra).

19. I am not satisfied that the other factors referred to by the appellant may be considered as special circumstances. If however, they may be considered to be special circumstances, it has not been established in my view that their merits are such that an order for security for costs should not be made.

20. The respondent has provided the required evidence of the likely costs and outlays of defending the appeal.

21. Given the above it is not necessary to consider the other submissions of counsel.

Orders

22. The Court orders that:

1. The application for security for costs filed 29^th January 2024 is granted in terms of paragraph 1.
   
2. The appellant shall pay the sum of K55,000.00 as security by 19^th April 2024.
   

100. The costs of and incidental to the application for security for costs are costs in the appeal.

________________________________________________________________________
Leahy Lewin Lowing Sullivan: Lawyers for the Appellant
Ashurst PNG: Lawyers for the Respondent