SC2555

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 200 OF 2022

BETWEEN:
ELIAS WATCHI in his capacity as the Managing Director 
of the Simberi Pit Owners Limited
First Appellant

AND
SIMBERI PIT OWNERS LIMITED
Second Appellant

AND
SIMEON SAKI
Respondent

Waigani: Murray, Geita & Wood JJ
2024: 29th February 
2024: 17th April

SUPREME COURT – Hearing of Notice of Objection to Competency – grounds 3(a), (b) and (c) of the Notice of Appeal were pleaded as errors of law, when they were actually alleged errors of mixed fact, and should have been pleaded as such, and so they failed to comply with section 14(1)(b) of the Supreme Court Act.

SUPREME COURT - Appeal Grounds 3(a), (b), (c) and (e) did not comply with Order 7 Rule 10 of the Supreme Court Rules as they failed to specify with particularity how the trial Judge erred.  Those grounds also failed to demonstrate how certain findings of the trial Judge, as referred to in the Notice of Appeal, were against the evidence and the weight of the evidence.

SUPREME COURT - Appeal Grounds 3(a), (c) and (d) pleaded matters that were previously determined in February 2020 in an earlier decision in the same National Court proceeding, and therefore the 40-day time limit to appeal had lapsed.  

Held:

All grounds of the Notice of Appeal were incompetent. Appeal is dismissed.

Cases Cited:
Papua New Guinean Cases

Henganofi Development Corporation Ltd v Public Officers Superannuation Fund Board [2010] PGCS 27, SC1025 (3 May 2010)
Dillingham Corporation of New Guinea Pty v Constantino Alfredo Diaz [1975] PNGLR 262

Counsel

No appearance on behalf of the Appellants
J. Marubu, for the Respondent

17th April 2024

1.	BY THE COURT: (Preliminary issue): The hearing of the Notice of Objection to Competency filed on 17 May 2023 (the Objection to Competency) was scheduled for hearing before the Supreme Court at 9.30 a.m. on 29 February 2024.  When the matter was called that morning shortly after 9.30 a.m., there was no appearance by the lawyer for the appellants.  

2.	Ms Marubu appeared for the respondent.  The Court then inquired of 
Ms Marubu whether she knew of the whereabouts of the lawyer for the appellants.  Ms Marubu stated that the appellants’ lawyer was not in court.

3.	Ms Marubu then took the Court to the affidavit of Dominic Marubu that was sworn and filed on 13 February 2024 (court document 21), in which Mr Marubu deposes that he served the Notice of Hearing on the office of the appellants’ lawyers on 1 December 2023.  In the same affidavit, Mr Marubu deposes that on 12 December 2023 he served the Court Order filed on 8 December 2023 on the office of the appellants’ lawyers.  The Court also noted that the above-mentioned Notice of Hearing and the Order referred to the Objection to Competency being scheduled for hearing at 9.30 a.m. on 29 February 2024.  

4.	Having heard from Ms Marubu and having read the above-mentioned affidavit of Dominic Marubu, the Court was satisfied that the appellants’ lawyer had been notified of that morning’s hearing and granted leave to the respondent to proceed with the hearing of the Objection to Competency.  It was also noted that the appellants had not complied with the orders made on 16 November 2023, which was that the parties were to file Extracts of Submissions by close of business on 15 February 2024.  In other words, no such Extracts of Submissions had been filed by the appellants.

Background

5.	The Notice of Objection was filed in response to the Notice of Appeal that was filed by the appellants on 8 December 2022 (the Notice of Appeal).  The Notice of Appeal contains five grounds relating to the judgment of his Honour, Justice Yagi in National Court proceeding WS No. 1003 of 2015 (the National Court proceeding), which judgment was delivered on 31 October 2022.  The judgment of Yagi J related to judgment on the assessment of damages (the second Judgment), in circumstances where his Honour, Justice Kangwia had first delivered his judgment in the National Court proceeding on liability in favour of the plaintiff (now the respondent) on 19 February 2020 (the first Judgement).
 
6.	In the first Judgment by Kangwia J, his Honour held that there was a written agreement between the respondent and the first appellant, whereby the respondent provided catering services for employees of the second appellant.  The catering services were initially provided under a verbal agreement in March 2014, following which on 27 September 2014, the respondent and the second appellant entered into a written agreement to provide the catering services for 12 months.  Kangwia J held that on 28 November 2014, the second appellant terminated the written agreement.  

7.	In the first Judgment, Kangwia J also held that on 7 December 2014, pursuant to an oral agreement, the appellants moved into the respondent’s property and rented the catering facility in the amount of K10,000 per month and rented the respondent’s shop in the amount of K5,000 per month.      

8.	In the second Judgement, Yagi J referred to the fact that Kangwia J had conducted the trial on the issues of both liability and damages and that 
Kangwia J had found in favour of the plaintiff (now respondent), in part, which was that while Kangwia J had held that there was a breach of the written contract, the defendants (now appellants) had paid all claims arising from that breach.  In the first Judgement, Kangwia J also held that the appellants were liable for the breach of the verbal agreement, but ordered that damages be assessed at a later time.

9.	In the second Judgement, Yagi J awarded rental arrears for the kitchen and mess areas (otherwise known as the ‘catering facility’) in the amount of K790,000.  In the second Judgement in relation to the rental arrears for the shop (which was also referred to as the ‘liquor shop’), Yagi J awarded damages in the amount of K395,000.

10.	In the second Judgement, Yagi J also awarded interest on the award of the damages and that the appellants pay the respondent’s costs of the proceeding.

The Notice of Appeal

11.	 The grounds of the Notice of Appeal, as stated in paragraph 3 of that document are as follows:

3.  GROUNDS 

a)	His Honour erred in law in awarding damages of totalling K1,185,000.00 plus interest of K311, 062. 50, being a total judgement of sum K1,496,062.50 in respect of the rental arrears commencing 07 of December 2014 in respect of a verbal/oral agreement by the applicant in circumstances which the relevant claim by the respondents was not particularly pleaded and no evidence were adduced into evidence to substantiate its claim for rental areas to date of trial.

b)	His Honour erred in law in awarding damages of K1,496.062.50 when the evidence was in consistent with the pleadings in particular paragraphs 
14-19 of the Statement of claim endorsed on the Writ of Summons and calculate to date damages in terms of arrears of rentals commencing 14 December 2014 to date of trial (07 July 2021), for both kitchen and messing facilities and rental arrears for a liquor shop respectively.

c)	His Honour erred in law and brought about a denial of nature justice in awarding damages by reference to claim for damages which he has not being verbally agreed to and not being properly pleaded and or litigated. 

d)	His Honour erred in law or in mixed fact and law in stating that the Respondent has evidence that it was agreed between parties that the Appellants would pay K10,000.00 per month for the use of the kitchen and messing facilities and K5,000.00 per month for the liquor shop in circumstances which:

i.	The value of rental arrears could only be determined in conjunction with credible evidence as to the continuous physical occupation and the use of the respondent’s facilities and in the absence of physical presence of the respondent since 14 December 2014 to the date of trial to confirm the respondent’s use of facilities aforesaid in Simberi Island in New Ireland Province.

ii.	The evidence that was given at trial on this topic incorrectly assumed there was a verbal agreement for rental for a liquor shop and catering facility initially intended for 12 months after the lapsed of the agreed period the Appellant continue to occupy and use the facilities up to and including the date of trial have defaulted in paying the rental monies. And in such circumstances the appellants are deemed to renting the facilities on a monthly basis although there is evidence by the appellants stating they no longer occupy and use the facilities since 14 December 2014 and thus the appellant do not owe the Respondent any outstanding rent.

e)	His Honour erred in law or in mixed fact and law in failing to take into account the fact in paragraph 14-19  of the Statement  of Claim endorsed in the Writ of Summons, the respondents’ alleged  non payments of rentals which were denied outright in the Defence dated  14  September 2016 at paragraph 4,5 and 6.  The pleading did not particularise or establish adequately or at all matters that could justify an award of deemed  and assumed  outstanding rental arrears in which  facilities were not occupied and used by the Appellants.

The Objection to Competency

12.	 The grounds of the Objection to Competency are as follows:

OBJECTION is made on the following grounds.

1.	The Notice of Appeal filed on 8th of December 2022(‘Notice of Appeal’), as filed, fails to comply with order 7 Rule 9(e)of Supreme Court Rules (Miscellaneous Amendment Rules 2022(‘the Supreme Court Rules’).

2.	The Appellants’ have yet to serve to Notice of Appeal has yet to be served pursuant to Order 7 Rule 13 (a) and (b) of the Supreme Court Rules.

3.	The Notice of Appeal, at paragraph 3 Grounds 3(a), (c) and (d), as pleaded,

a.	Raise questions of facts for which leave is required and for which leave has not been sought and granted.

b.	do not specify with particularly, the grounds relied on to demonstrate that it is against the law of evidence and the weight of the evidence and the specific reasons why it is alleged to be wrong in law, other than the general statements therein.

4.	The Notice of Appeal, at paragraph 3 Grounds 3(a), (c) and (d), as pleaded, plead matters which have been previously heard and determined by the National Court on 20 February 2020 and for which the Appellant is out of time to file appeal against said decision and orders of the National Court made on 20 February 2020.

13.	 Of the four (4) grounds of objections, we propose to deal with grounds 3 and 4 first.  If we uphold them, it will not be necessary for us to consider the first 2 grounds. 

Relevant provisions of the Supreme Court Act and the Supreme Court Rules

14.	 Section 14 of the Supreme Court Act provides as follows:

‘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.
(2) An appeal does not lie from an order of the National Court made by consent of the parties.
(3) No appeal lies to the Supreme Court without leave of the Supreme Court–
(a) from an order allowing an extension of time for appealing or applying for leave to appeal; or
(b) from an interlocutory judgement made or given by the National Court except–
(i) where the liberty of the subject or the custody of infants is concerned; or
(ii) in cases of granting or refusing an injunction or appointing a receiver; or
(iii) in such other cases prescribed by the Rules of Court as are in the nature of final decisions; or
(c) from an order of the National Court as to costs only that by law are left to the discretion of the National Court.
(4) An order refusing unconditional leave to defend an action shall not be deemed to be an interlocutory judgement.’

15.	 Section 17 of the Supreme Court Act provides as follows:

‘17.	TIME FOR APPEALING UNDER DIVISION 2.
Where a person desires to appeal to or to obtain leave to appeal from the Supreme Court, he shall give notice of appeal, or notice of his application for leave to appeal, as the case may be, in the manner prescribed by the Rules of Court within 40 days after the date of the judgement in question, or within such further period as is allowed by a Judge on application made to him within that period of 40 days.

16.	 Order 7 Rules 9 and 10 of the Supreme Court Rules provide as follows:
‘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.’

Objection Ground 3 (a) - objections to grounds 3(a), (c) and (d) of the Notice of Appeal as pleading facts to which leave is required but not obtained.
Respondent’s submissions 

17.	 As per paragraph 3(a) of the Objection to Competency, the respondent’s lawyer submitted that grounds 3(a), (c) and (d) of the Notice of Appeal raise questions of fact for which leave is required.  

18.	 In this regard, the Court notes that ground 3(a) of the Notice of Appeal pleads that the trial Judge (in the second Judgement) erred in law in awarding damages, plus interest in relation to the verbal (oral) agreement in circumstances where the relevant claim by the respondent was not properly pleaded and no evidence was adduced into evidence to substantiate its claim for rental arrears.  

19.	In Henganofi Development Corporation Ltd v Public Officers Superannuation Fund Board [2010], the Court stated at paragraph 37 as follows:

37. An appeal raising questions of fact requires leave of the Supreme Court pursuant to sections 4(2)(c) and 14(1)(c) of the Supreme Court Act. What is a question of fact? In the Supreme Court case of Wahgi Savings and Loan Society Ltd -v- Bank of South Pacific Ltd (1980) SC185, per Kearney DCJ, answered this question in this way:

"What are questions of fact and law are difficult to determine. On this question Lord Denning said:
"On this point it is important to distinguish between primary facts and the conclusions from them. Primary facts are facts which are observed by witnesses and proved by oral testimony, or facts proved by the production of a thing itself, such as an original document. Their determination is essentially a question of fact for the tribunal of fact, and the only question of law that can arise on them is whether there was any evidence to support the finding. The conclusions from primary facts are, however, inferences deduced by a process of reasoning from them. If and in so far as those conclusions can as well be drawn by a layman (properly instructed on the law) as by a lawyer, they are conclusions of fact for the tribunal of fact and the only questions of law which can arise on them are whether there was a proper direction in point of law and whether the conclusion is one which could reasonably be drawn from the primary facts. ... If and so far, however, as the correct conclusion to be drawn from primary facts requires, for its correctness determination by a trained lawyer - as, for instance, because it involves the interpretation of documents, or because the law and the facts cannot be separated, or because the law on the point cannot properly be understood or applied except by a trained lawyer - the conclusion is a conclusion of law on which an appellate tribunal is as competent to form an opinion as the tribunal of the first instance."

(our emphasis added)

20.	 In Dillingham Corporation of New Guinea Pty v Constantino Alfredo Diaz [1975] PNGLR 262, the Court stated at 270 as follows:

"Where primary facts are found (which cannot be challenged on appeal except by leave of the court) the question of law is what is the proper conclusion to be drawn from those facts. It has been shown in decided cases that where inferences or conclusions are drawn from these primary facts which cannot reasonably be drawn, then this is an error of law. See Edwards (Inspector of Taxes) v. Bairstow and Another (1956) A.C. 1413; Instrumatic Ltd. v. Supabrase Ltd. (1969) 1 W.L.R. 51914. I cannot see anything in the circumstances of this country that would render these principles inapplicable. I adopt them as part of the underlying law (Schedule 2:2 of the Constitution)."

(our emphasis added)

21.	 We also note in Henganofi’s case (supra), the Court stated at paragraphs 39 and 40 as follows:

39. We have also had the benefit of reading the learned trial judge's decision of 30th April 2009 which may be found at annexure "N" and also pp 273-281 of the affidavit of Mr Kenneth Frank sworn on 11th November 2009 and filed on 12th November 2009 and deduce that the principal issue in the appeal relates to whether the preferential share agreement was breached by the appellant when it failed to pay K1,053,164.38 to the respondent as 13% cumulative dividend accrued in clause 3.2(a) of the preferential share agreement. We have perused the proposed grounds of appeal in the application for leave to appeal and they are centered on this very issue. For example, the learned trial judge found that the appellant breached the preferential share agreement and ordered the appellant to pay 13% interest of K1,053,164.38 and refused the appellant's cross claim.

40. Given these findings, we are of the view that the proposed grounds of appeal raise questions of mixed fact and law because the Court is being asked to ascertain whether there was evidence to support the findings of fact in relation to award of K1,053,164.38 and the interpretation of the relevant constitution of the appellant and the preferential share agreement where leave is not required under section 14(2)(b) of the Supreme Court Act. Therefore, the proposed grounds of appeal are incompetent.

(our emphasis added)

22.	 In the case before us, having had regard to the cases cited above and the propositions they stand for, we do not agree with Ms Marubu that, ground 3(a) raises question of facts alone for which leave is required. We are rather of the view that, it is actually a question of mixed fact and law.  This means that the appellants failed to specify that the ground was based on a question of mixed fact and law, as required pursuant to section 14(1)(b) of the Supreme Court Act. Accordingly, ground 3(a) is incompetent on that basis.

23.	  In relation to ground 3(c) of the Notice of Appeal, the appellant pleads that the trial Judge (in the second Judgment) erred in law and brought about a denial of natural justice in awarding damages by reference to a claim for damages, which had not been verbally agreed to and not been properly pleaded and or litigated.  While the respondent submits that this ground is a question of fact, the issue of a denial of natural justice is actually a question of mixed fact and law. We find that ground (c) is incompetent on that basis as well as it failed to state that the trial Judge erred in mixed fact and law, as is required by section 14(1)(b) of the Supreme Court Rules.

24.	 In relation to ground 3(d) of the Notice of Appeal, the appellant pleads that the trial Judge erred in law or in mixed fact in law in stating that the respondent has evidence that it was agreed between the parties that the appellant would pay K10,000 per month for the use of the kitchen and messing facilities and K5,000 per month for the liquor shop, in circumstances where:

a)	the value of rental arrears could only be determined in conjunction with credible evidence; and
b)	the evidence given at trial incorrectly assumed there was a verbal agreement.

25.	 In relation to the reasoning referred to in paragraphs 18 and 19 above, we do not agree with the respondent’s submission that ground 3(d) of the Notice of Appeal is a question of fact only, for which leave to appeal is required pursuant to section 14(1)(c) of the Supreme Court Act.  This is because the matters contended in ground 3(d) raise alleged errors of mixed fact and law.  However, we deal further with ground 3(d) of the Notice of Appeal below. 

Objection Ground 3 (b) – objections to grounds 3(a), (c) and (d) of the Notice of Appeal for non-compliance with Order 7, Rule 10 of the Supreme Court Rules  

26.	 As per paragraph 3(b) of the Objection to Competency, the respondent’s lawyer also submitted that grounds 3(a), (c) and (d) of the Notice of Appeal ‘... do not specify with particularity, the grounds relied on to demonstrate that it is against the law of evidence and the weight of the evidence and the specific reasons which it is alleged to be wrong in law, other than the general statements therein’.   

In this regard, we consider grounds 3(a) and (c) of the Notice of Appeal also fail to comply with Order 7 Rule 10 of the Supreme Court Rules as follows:  

a)	ground 3(a) fails to specify with particularity how the trial Judge erred in awarding damages and interest in circumstances where the appellant contends the claim was not properly pleaded and there was no evidence.  This ground also fails to demonstrate how it was against the evidence and the weight of the evidence; and

b)	ground 3(c) fails to specify with particularity how the trial Judge’s actions brought about a denial of natural justice in awarding damages, which it was claimed by the appellant was not verbally agreed.  This ground also fails to demonstrate how it was against the evidence and the weight of the evidence.

Objection Ground 4 – objections to grounds 3(a), (c) and (d) of the Notice of Appeal as pleading matters not properly before this Court.  

27.	 We note that paragraph 4 of the Objection to Competency states that grounds 3(a), (c) and (d) plead matters that were previously determined by the National Court in the first Judgement.  We agree with what is asserted in paragraph 4 of the Objection to Comptency in circumstances where Kangwia J held that there was an oral agreement, whereby the appellants moved into the respondent’s property and rented the catering facility in the amount of K10,000 per month and rented the respondent’s shop in the amount of K5,000 per month.  In other words, all three grounds attempt to challenge in whole, or part, the existence of the oral and written agreements, the existence of which were decided in the first Judgement in February 2020.  In accordance with section 17 of the Supreme Court Act, the time for the appellants to file an appeal against those findings, was 40 days from the date of the first Judgement.  For this reason, grounds 3(a), (c) and (d) of the Notice of Appeal are also incompetent on this basis.

Grounds 3(b) and (e) of the Notice of Appeal

28.	 While the respondent did not raise any objection to the competency of grounds 3(b) and (e) of the Notice of Appeal, it is only proper that this Court review all the grounds of appeal to determine whether the remaining grounds are competent.  This is required in the interests of justice to all parties and to ensure that only competent grounds of appeal shall progress to the substantive hearing of an appeal, including to ensure that the resources of the Court are utilised properly.

29.	 Because the appellants and their lawyer did not attend the hearing on 
29 February 2024, there was no opportunity for the Court to hear any submissions on behalf of the appellants as to whether those grounds are competent.  Nevertheless, the Court should always assume an inquiring mind and ensure that only competent grounds of an appeal progress to the final stage of the appeal. 

30.	 In relation to ground 3(b) of the Notice of Appeal, we note it is pleaded by the appellants that the trial Judge (in the second Judgement) ‘... erred in law in awarding damages of K1,496,062.50 when the evidence was in consistent (sic) with the pleadings in particular paragraphs 14-19 of the Statement of Claim endorsed on the Writ of Summons and calculate to date damages in terms of arrears of rental commencing 14 December 2014 to date of trial, for both kitchen and messing facilities and rental arrears for a liquor shop respectively.’

31.	 Based on the above-mentioned reasoning in Henganofi’s case (supra) and Dillingham’s case (supra), we consider that ground 3(b) of the Notice of Appeal actually contends an error of mixed fact and law, as required pursuant to section 14(1)(b) of the Supreme Court Act.  Accordingly, we consider ground 3(b) of the Notice of Appeal is incompetent.  

32.	 We also consider that ground 3(b) fails to comply with Order 7 Rule 10 of the Supreme Court Rules, because it fails to specify with particularity how the trial Judge erred in awarding damages, in circumstances where the appellants contend the evidence was inconsistent with the pleading.  For example, no particulars were provided to show how the evidence was inconsistent with the pleadings.  This ground also fails to demonstrate how it was against the evidence and the weight of the evidence as required by Order 7 Rule 10 of the Supreme Court Rules.  For this reason also, ground 3(b) is incompetent.

33.	 As for ground 3(e) of the Notice of Appeal, which reads:  

‘His Honour erred in law or in mixed fact and law in failing to take into account the fact in paragraphs 14-19 of the Statement of Claim endorsed in the Writ of Summons, the respondents’ alleged non-payments of rentals which were denied outright in the Defence dated 14 September 2016 at paragraphs 4, 5 and 6.  The pleadings did not particularise or establish adequately or al all matters that could justify an award of deemed and assumed outstanding rental arrears in which facilities were not occupied and used by the Appellants.’

We find that it does not specify with particularity how the trial Judge erred by failing to take into account the matters pleaded in paragraphs 14 to 19 of the Statement of Claim.

34.	 Accordingly, we consider ground 3(e) of the Notice of Appeal is incompetent.  This ground also fails to demonstrate how the finding of the trial Judge on this issue was against the evidence and the weight of the evidence as required by Order 7 Rule 10 of the Supreme Court Rules. For this reason also, ground 3(e) is incompetent.

Conclusion 

35.	 In conclusion, as we have found, that all grounds of the Notice of Appeal are incompetent based on the objections raised in grounds 3 & 4 of the Notice of objection and on our own volition, the appeal is dismissed. For this reason, it is not necessary for the Court to consider the grounds in paragraphs 1 and 2 of the Objection to Competency.

     Orders:

1.	The objection to competency of the Appeal is upheld.
2.	The appeal as contained in the Notice of Appeal filed on 8 December 2022 is incompetent and is dismissed.
3.	The appellants shall pay the respondent’s costs of and incidental to the appeal, to be taxed if not agreed.

No appearance by the lawyers for the appellants
Marubu Lawyers: Lawyers for the Respondent