Keitinga Ltd v Ane [2024] PGSC 44; SC2577 (23 May 2024)

SC2577

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 36 OF 2022

BETWEEN:
KEITINGA LIMITED
-First Appellant-

AND:
KUNAI TOMBA, in the capacity as the Director of the First Appellant
-Second Appellant-

AND:
ALA ANE, in his capacity as the current Acting Registrar of Tiles
-First Respondent-

AND:
BENJAMIN SAMSON, in his capacity as the current Secretary for Department of Lands &Physical Planning
-Second Respondent-

AND:
JOHN ROSSO, in his capacity as the current Minister for Department of Lands & Physical Planning
-Third Respondent-

AND:
NATIONAL CAPITAL DISTRICT COMMISSION
-Fourth Respondent-

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUNIEA
-Fifth Respondent-

Waigani: Yagi J, Numapo J, Narokobi J
2023: 28th September
2024: 23rd May

NEGLIGENCE – duty of care – whether public authorities exercising statutory functions owed a duty of care to the public at large in the circumstances.

Facts

The appellants challenged the cancellation of its title to property (held by the first appellant) through a separate judicial review proceeding. The cancellation of title was successfully overturned in the National Court following a successful judicial review. Parties in the judicial review proceedings were the appellants and all the respondents except the fourth respondent. During the subsequent development of the property the fourth respondent stopped them as part of the property was for road drainage. The appellants then sued all respondents for negligence in the National Court. After trial the primary judge dismissed the claim on the basis that public authorities owe no duty of care to the public at large. The appeal now is from the decision dismissing the claim.

Held:

(1) The court having considered that the case of Caparo Industries Ltd v Dickman [1990] UKHL 2, although of persuasive value, was relevant to the circumstances of Papua New Guinea, adopted the following tests to determine whether a duty of care exists in a case premised on breach of public duty claiming economic loss:

• Foreseeability of damage – this is to ask whether it was foreseeable that the defendant’s actions could have caused the harm suffered by the plaintiff.
• Proximity of relationship – the test is to see whether there is a sufficient prior relationship between the plaintiff and the defendant.
• Fair, just and reasonable - whether it is fair, just and reasonable to create a duty of care between the plaintiff and the defendant.
  

(2) In the circumstances of this case, whilst it was foreseeable that the appellants would suffer damages from the actions of the respondents, and there was sufficient proximity of relationship, the third requirement was however, not satisfied as it would be unfair, unjust and unreasonable to impose a duty of care on the respondents for public policy reasons.

(3) The appeal is accordingly dismissed with costs in favour of the fourth respondent as there was no appearance from the other respondents.

Cases Cited:

Papua New Guinean Cases
Albright Ltd v Mekeo Hinterland Holdings Ltd (2017) N8335
Amaiu v Yalbees (2020) SC2046
Goma v Protect Security & Communication Ltd (2013) SC1300
Kolta Development Pty Ltd v PNG Defence Force [1997] PNGLR 585
Bean v. Bean [1980] PNGLR 307
Curtain Brothers (PNG) Ltd v UPNG (2005) SC788
Rupundi Maku & Ors v. Steven Maliwolo, Police & The State (2011) SC1171
Telikom PNG Limited vs. ICCC (2008) SC906
Catholic Diocese Wabag Board of Trustees v Enga Provincial Government (2011) N4562

Overseas Cases
Alcock v Chief Constable of South Yorkshire Police [1991] UKHL 5
Caparo Industries Ltd v Dickman [1990] UKHL 2; [1990] 2 AC 605
Donoghue v Stevenson [1932] AC 562
Marc Rich & Co v Bishop Rock Marine Co Ltd [1995] UKHL 4; [1996] AC 211
Stovin v Wise [1996] UKHL 15

Statutes Cited
Land Registration Act 1981
Physical Planning Act 1989

Counsel

J.Topo, for the Appellants
M Tusais, for the Fourth Respondent
No appearance for the First, Second, Third and Fifth Respondents

23rd May 2024

1. BY THE COURT: The appellants, who were the plaintiffs in the National Court appeal the decision of the primary judge who dismissed their claim against the respondents on the basis that the respondents, who were the defendants, owed no duty of care to the appellants.
   
2. The appeal turns on the question of whether the respondents owed a duty of care to the appellants. If they do not, then the appeal will be unsuccessful.
   

Background

3. The circumstances surrounding the cause of action initiated by the appellants in the National Court related to claims for negligence against the respondents in the manner they attended to the appellants as the registered proprietor of a property described as State Lease Volume 25, Folio 134, Allotment 35, Section 137, (Waigani) Hohola, NCD (“the land”).
   
4. The first appellant is the current registered proprietor of the land. It was granted the State Lease in 2001.
   
5. The respondents are - first respondent Ala Ane, as the acting Registrar of Titles, the second respondent is Benjamin Samson, the Secretary for Department of Lands and Physical Planning (Lands Department), the third respondent is John Rosso, the Minister for Lands and Physical Planning, the fourth respondent is the National Capital District Commission and the fifth respondent, is the Independent State of Papua New Guinea.
   
6. The land was issued to the first appellant in 2001 by the Registrar of Titles, six years after it was the successful tenderer. It had applied for the land in 1995.
   
7. The appellants after obtaining the title, applied to the National Capital District Physical Planning Board (Planning Board) in 2004 to rezone the area into a commercial space, but it was refused for the following reasons:
   
   • The site was unsuitable due to flood risks; and
   • The site should be retained as open space and for public utilities (as included part of the main drainage reserve.
     
8. After the refusal, the appellants lodged an appeal (also in 2004) with the Papua New Guinea Physical Planning Appeal Tribunal (Appeal Tribunal). The Appeal Tribunal requested a statement from the Planning Board. In the statement they provided, the Planning Board set out the reasons for the refusal.
   
9. In February 2010, the Planning Board advised the appellants to submit a new application to subdivide its lease with the objective of separating the drainage area to reserve and for the remaining area to be made commercial so that the state lease for the land would be consistent with existing zoning requirements.
   
10. Sometimes in March 2010, the Department of Lands through the Registrar of Titles, cancelled the first appellant's title pursuant to section 160 and 161 of the Land Registration Act on the basis that the State Lease was issued in error as the subject land contains part of the drainage reserve.
    
11. In 2013, the appellants challenged the cancellation of their title to the land in a judicial review proceedings (OS (JR) No. 83 of 2013: Keitinga Limited and Kunai Tomba v Benjamin Samson & Ors), Department of Lands and Physical Planning , the State and others). National Capital District Commission and the Planning Board were not named as parties in the judicial review proceeding.
    
12. On 21 April 2017, the National Court ruled in favour of the appellants finding that Registrar of Titles acted beyond his powers when purporting to cancel the title and consequently found that the cancellation of the first appellant's title null, void and of no legal effect. The National Court ordered the Registrar of Titles and Secretary for Lands to correct the entries on the Register of Titles and restore the name of the first appellant as the registered proprietor of the land.
    
13. A claim for economic losses against the respondents on the basis of negligence was than filed against the respondents after they succeeded in their judicial review. This is basically the brief of the proceeding WS No. 1504 of 2019 (CCI)- Keitinga Limited and Kunai Tomba v Ala Ane, Benjamin Samson, Hon. John Rosso, NCDC and The State that the National Court dismissed and they now appeal.
    

Decision of the National Court

14. The primary judge decided that public officers in the discharge of their duties did not owe a common law duty of care to the public at large. Liability for negligence was not consequently established and the action which was based on negligence was as a result dismissed. The primary judge held, and we quote:
    
    1. A public officer owed no duty of care to the public at large in the discharge of duties.
    2. By virtue of the State Lease, the First Plaintiff held an indefeasible title. It remains valid until such time as it is set aside. If the Plaintiffs have been deprived of possession of the land the right to quiet enjoyment, it is a separate matter for them to pursue.
    3. For now, the cause of action the Plaintiffs have maintained against the Defendants does not support the relief sought because the Defendants owe no duty of care to them. In other words, the Plaintiffs have relied on the wrong cause of action.
    4. Liability has not been established and the proceedings is dismissed with costs.
       
15. At paragraph 14 the primary judge set out to explain his reasons for finding that there was no duty of care owed by a public official:
    

The cases including Donoghue v Stevenson cited by counsel for the parties in their written submissions are of general application. None of them directly address the issue of whether a public officer owes a duty of care to the public at large. It would appear that under common law a public official owes no duty of care to the public at large in the discharge of his duties for it would be against public policy and good administration.

16. The primary judge then went on to say at paragraph 15:
    

Significantly, it would not be an accurate representation of the relationship between the public official and the public at large to equate a public officer to the level of a doctor or lawyer because in the latter cases, there exists a special relationship between a doctor and patient and lawyer and client respectively for which a duty of care exists. Amongst others, one of the duties is to be diligent and act in the best interest of the patient or client. Such duty of care does not extend to or exists between a public officer and a member of the public.

17. At paragraph 16 the primary judge referred to the duty of care of a public officer:
    

In the discharge of his duty, a public officer should be judged at the same standard as a member of the police who fails or refuses to stop a fight or robbery taking place. In one case, the allegation that members of the police failed to stop a tribal fight was rejected by the Supreme Court for public policy reasons: see Rupundi Maku & Ors v. Steven Maliwolo, Police & The State (2011) SC1171.

18. The primary judge then dismissed the claim and ordered costs against the appellants in the National Court.
    

Appeal Grounds

19. The appellants have raised five appeal grounds. Appeal ground one, stated as 5.1 in the notice of appeal sets out the main issue behind the grievance of the appellants, and we state it hereunder to appreciate the gist of the appellants’ contention:
    

5.1 The trial judge erred in fact and in law when dismissing the appellants claim for damages in its entirety, especially when:

(i) His Honour (hereafter will be referred to as the trial judge) considered and determined that the Appellants (Plaintiffs in the Lower Court Proceeding) do not owe a duty of care to the Appellants.
(ii) The Appellants are specific individuals and/or persons as opposed to general public and as such the Respondents do owe a duty of care to the Appellants in the discharge of their respective official duties.
(iii) The Respondents being custodians of all state lands and its records, they have a duty of care to the general public to ensure that all matters or particulars concerning a specific area of land is accurate before it is placed on public tender which it had done for the subject land which is owned by the Appellants. Based on the accurate description of the subject land, the Appellants had applied and were successful in obtaining a commercial lease over the subject land and had commenced taking action to develop this land for its intended purposes but were prevented thereby suffering loss and hardship.
(iv) All public officers owe a duty of care to the general public to ensure that in the discharge of their respective official duties, whatever actions and/or inactions that they perform, they are doing it with due care and diligence so that the general public do not suffer as a result of their actions and/or inactions.
(v) The trial judgement that public officers do not owe a duty of care to the general public and to the Appellants is misleading and wrong as this will open the floodgate for all public officers to do as they please without considering the legal consequences of their actions and inactions which will in turn result in public offices being in chaos as public officers will rely on this case precedent to dismiss any claims that are brought or instituted against them for failure in discharging of their respective official duties.
(vi) Instead of specifically addressing the issue of duty of care owed to the appellants as individual persons (and not general public) by the Respondents, the trial judge made a general ruling on the claim and dismissed the Appellants claims.

20. In the interest of brevity and clarity we do not repeat all the appeal grounds but only state this ground as emblematic of the gist of the appeal.
    

The Issue in the Appeal

21. The main issue we must determine is whether the respondents owed a common law duty of care to the appellants? The appellants contend that the respondents owed a duty of care to them. The fourth respondent argue otherwise. Finding the existence of a duty of care is a necessary precondition to holding the respondent negligent, and thereby entitling the appellants to damages. At paragraph 85, in Amaiu v Yalbees (2020) SC2046 the Supreme Court adopted this statement from the United Kingdom, which we find applicable to the circumstances of the present case and similarly adopt:
    

It is essential in English law that the duty should be established: the mere fact that a man is injured by another’s act gives in itself no caution of action: if the act is deliberate, the party injured will have no claim in law even though the injury is intentional so long as the other party is merely exercising a legal right: if the act involves a lack of due care, again no case of actionable negligence will arise unless the duty to be careful exists.” (Lord Wright in Grant v Australian Knitting Mills Ltd [1936] AC 85 at 103).

22. The issue we therefore consider is whether there was a duty of care between the appellants and the respondents. If there was, then the appeal would be successful.
    

Principles in Deciding Appeals

23. In an appeal the Supreme Court is guided by the following principles when deciding whether the appeal should be upheld. The appeal court should be slow to interfere with the exercise of a discretionary power by the lower court unless it is satisfied that the court below:
    

a) acted upon a wrong principle; or

b) gave weight to extraneous or irrelevant matters; or

c) failed to take into account relevant considerations; or

d) made a mistake as to the facts,

5. and even where there is no identifiable error, the appellate court can infer such an error if the resulting judgement is "unreasonable or plainly unjust.
   

24. Leading case authorities establishing these principles include Bean v. Bean [1980] PNGLR 307; Curtain Brothers (PNG) Ltd v UPNG (2005) SC788; and Telikom PNG Limited vs. ICCC (2008) SC906.
    

Considerations

25. The question of how to determine the existence of a common law duty of care is an important question as it underpins the finding of negligence. The case of Donoghue v Stevenson [1932] AC 562 answers it by looking at the proximity of the relationship between the parties. Related to this assessment is to ask whether the alleged tortfeasor would have contemplated that either their actions or omissions would lead to the plaintiff suffering some kind of harm and therefore entitled to damages. Knowledge of who the victim is, according to Donoghue v Stevenson is immaterial, as the duty of care is owed to the world at large.
    
26. The case of Donoghue v Stevenson has been adopted as part of the underlying law of Papua New Guinea. Numerous cases in this jurisdiction (see Kolta Development Pty Ltd v PNG Defence Force [1997] PNGLR 585) have referred to the time-honoured test of Lord Atkin to determine whether a defendant owed a duty of care to the plaintiff:
    

You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being affected when I am directing my mind to the acts or omissions which are called in question (at 580).

27. Since Lord Atkin’s statement in 1932 on duty of care, the tests developed in Caparo Industries Ltd v Dickman [1990] UKHL 2; [1990] 2 AC 605 has increasingly been referred to by the courts in the United Kingdom (see Marc Rich & Co v Bishop Rock Marine Co Ltd [1995] UKHL 4; [1996] AC 211). The appellants relied on this case to submit that the respondents owed them a duty of care. In Maku v Maliwolo (2011) SC1171 the Supreme Court referred to Caparo Industries PLC -v- Dickman. The court held in that case that a firm of accountants who prepared an audit report on the financial affairs of a company did not owe a duty of care to persons who relied on their report to make financial decisions. The court noted that such reports were prepared to fulfill a statutory requirement and was not made for a specific audience. The court moved away from the neighbour principle in Donoghue v Stevenson and developed three tests to determine whether a duty of care is owed to the plaintiff. These tests are:
    
    • Foreseeability of damage – this is to ask whether it was foreseeable that the defendant’s actions could have caused the harm suffered by the plaintiff.
    • Proximity of relationship – the test is to see whether there is sufficient prior relationship between the plaintiff and the defendant (Alcock v Chief Constable of South Yorkshire Police [1991] UKHL 5).
    • Fair, just and reasonable - whether it is fair, just and reasonable to create a duty of care between the plaintiff and the defendant (Marc Rich & Co v Bishop Rock Marine Co Ltd).
      
28. The appellants submit that applying these three tests, the respondents owed them a duty of care. That is, damages were foreseeable from the actions of the respondents; the parties knew each other; and that it was fair, just and reasonable to find that there was a duty of care between the appellants and the respondents.
    
29. Although Caparo Industries PLC -v- Dickman is a post-independence decision, and therefore not binding, we say that it is of persuasive value. We note that the National Court in Catholic Diocese Wabag Board of Trustees v Enga Provincial Government (2011) N4562 adopted Caparo Industries PLC -v- Dickman and the Supreme Court in Etepa v Baki (2015) SC1502 followed that National Court decision (see also Albright Ltd v Mekeo Hinterland Holdings Ltd (2017) N8335 which makes this point). Case law on the law of negligence in this jurisdiction for breach of public duties is not common. Much of the negligence claims are for personal injuries where a duty of care is most often, if not readily found. This was the point made by the primary judge in distinguishing the facts of this case from personal injuries, and professional and medical negligence cases. We take the view that the principles of Caparo Industries PLC -v- Dickman whilst not a definitive statement on the elements of duty of care, would enable the courts in this jurisdiction to accommodate cases for breach of public duty claiming economic loss to determine if a duty of care exists. We therefore consider that Caparo Industries PLC -v- Dickman is relevant to the circumstances of Papua New Guinea.
    
30. Whilst we agree that there is foreseeability of damage from the actions of the respondents and there existed a sufficient proximity of relationship between the parties, we take the view that it is unfair, unjust and unreasonable, to impose a duty of care on the respondents.
    
31. One of the main reasons we take this view is from the court’s discussions in the case of Maku v Maliwolo where the Supreme Court stated at paragraph 24:
    

At common law, the police owe no duty of care to the public at large. Further, there will be no duty of care if it is against public policy and contradicts wider policy issues, such as where it may adversely affect the way in which the police carry out their duties for fear of litigation.

32. We take the view that to create a duty of care on the respondents would be contrary to public policy. If we did find a duty of care, it would create two potential scenarios that would place an unnecessary strain on public resources and negatively impact on the performance of duties by public officials.
    
33. Firstly, it will be taxing on the government if they would be liable for negligence in-addition to every time their decisions are overturned by judicial review. It will open the floodgates to all manner of lawsuits being mounted against public authorities for negligence whenever a person succeeds in their judicial review. The government will be faced with never-ending claims for damages. This would be clearly contrary to public policy. We, however, make an important distinction from cases emanating from cases pleaded on breach of specific statutory duties as this court found in Goma v Protect Security & Communication Ltd (2013) SC1300. Here the claim is for economic loss from common law (underlying law) negligence.
    
34. The second scenario is the adverse effect it will have on public authorities in the discharge of their duties. The application of the principle of the rule of law means that their decision is already subject to judicial review. But if they are going to be sued for negligence for every decision they make that is contrary to statute, it will impede them from effectively performing their functions for fear of litigation.
    
35. We could not find any specific case authority that supported the appellants’ contention. We did come across a United Kingdom case that is of some relevance to the present case. In Stovin v Wise [1996] UKHL 15 a car accident occurred at a place that needed to be repaired which the responsible authorities knew about but did not repair. The issue was whether the local authority owed a common law duty of care for failing to fulfil its public obligation. The House of Lords held that to create a duty of care would be financially constraining on the local authority.
    
36. In this case there are two different state instrumentalities involved. In so far as the Lands Department is concerned, the decision to cancel the title of the first appellant was done through its statutory power in the Land Registration Act 1981. The Lands Department’s decision was challenged, and their title was restored. If the court were to place a duty of care on the Lands Department, an additional burden would be placed on the department and the two scenarios that we envisage will become a real likelihood.
    
37. For the National Capital District Commission, they also acted under law (Physical Planning Act 1989) to stop the appellants. Their reason to issue a stop work notice was that the land was zoned for public purpose, and not for commercial use, as it was in an area where flooding regularly occurs whenever there is a heavy downpour. The first difficulty to creating a duty of care against them was as we discussed earlier. The second difficulty is that they were not a party to the appellants judicial review proceedings against the Lands Department. They acted based on their legislative power under Physical Planning Act to stop the development on the land. To demand a duty of care from them would be unfair, unjust and unreasonable.
    

Conclusion

38. For the reasons discussed we find that the trial judge made no error of law, as the respondents did not owe the appellants a duty of care and the appeal should be dismissed and the appellants pays the costs of the National Capital District Commission as it was the only respondent that appeared in the appeal, such costs to be taxed if not agreed.
    

Orders

39. The formal orders of the court are as follows:
    
    1. The appeal is dismissed and the orders of the National Court in WS No 1504 of 2019 on 11 March 2022 are confirmed.
    2. The appellants pay the costs of the fourth respondent in the appeal, such costs to be taxed if not agreed.
    3. The time for the entry of these orders is abridged to the date of settlement, which shall take place forthwith before the Deputy Registrar, Supreme Court.
       

Judgment and orders accordingly

Emunah Legal: Lawyers for the Appellants
National Capital District Commission In-house Counsel: Lawyers for the Fourth Respondent