Unagi v Evangelical Lutheran Church of Papua New Guinea [2024] PGSC 83; SC2614 (22 August 2024)

SC2614

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 87 OF 2021

BETWEEN
FELIX UNAGI
First Appellant

AND
NFS CONSULTING
Second Appellant

AND
EVANGELICAL LUTHERAN CHURCH OF PAPUA NEW GUINEA
Respondent

Waigani: Makail J
2021: 7^th October
2024: 22^nd August

SUPREME COURT – PRACTICE & PROCEDURE – Application for security for costs – Application for payment of money into Court – Power of Court to order payment of money into Court – Principles for exercise of power – Whether application made out – Supreme Court Rules – Order 2 rule 1(f) – National Court Rules – Order 4, rule 44

Cases Cited:

Osprey Industries v. Hallam [1992] PNGLR 557
Parry Zeipi v. Gabia Gagarimabu & The Electoral Commission (1999) SC611
Stephen John Rose v. The State (2009) SC1045
Daniel Tulapi v. Gabriel Yer & Ors (2012) SC1212

Counsel:

First Appellant, in person
Mr B Yagi, for Second Appellant
Mr S Gor, for Respondent

RULING

22^nd August 2024

1. MAKAIL J: This is a contested application for payment of money into Court pending the determination of the appeal pursuant to Order 3, rule 2(a) and (b) and Order 13, rule 14(1) and (4) of the Supreme Court Rules and Section 155(4) of the Constitution.

Brief Facts

2. The facts as briefly stated are that the appellants alleged that the respondent failed to pay their fees for organising a subdivision of a property described as Portion 36, Milinch of Erap, Fourmil Markham, Morobe Province. It is a large piece of land. Next to it is Bumayong Lutheran Secondary School in Lae.

3. The respondent decided to subdivide Portion 36. It engaged two previous law firms to undertake the process of subdivision with the appropriate Government agencies, but it was incomplete. The respondent struggled to find money to maintain its operations including running the Bumayong School (“School”).

4. The Head Bishop instructed the Board of Governors of the School to complete the subdivision of Portion 36. That instruction was later reduced in writing by way of a power of attorney and signed by the Head Bishop.

5. Pursuant to the power of attorney, the Head Bishop on behalf of Board of the School signed a consultancy agreement with the appellant. It was agreed between the parties that the appellants undertake and complete the division of Portion 36. As the respondent or the School had no money to pay the appellants for their services, it was further agreed that upon a successful subdivision of Portion 36, the respondent will pay 20% of the proceeds of the sale of the subdivided land of Portion 36 to the appellants.

6. The appellants successfully organised the subdivision of Portion 36. Portion 36 was subdivided into four portions. The appellants delivered the titles to three of the portions and retained the title of the fourth one. The fourth portion is described as Portion 543.

7. A new administration took office and decided to engage new lawyers and sell Portion 543. The new lawyers demanded the appellants to deliver up the title to Portion 543 but the latter refused on the ground that they had a lien on the title because of the work done and remained unpaid. Parties were unable to reach an agreement.

8. The dispute was litigated and after a trial, on 30^th July 2021 Thompson J (as she then was) ruled and ordered the appellants to surrender the title to Portion 543 to the respondent because there was no agency relationship between the respondent and Board of the School.

Appellants’ Submissions

9. The appellants’ submissions came down to one major point. They argued that they acted on the representation of the respondent to their detriment in that they organised Portion 543 to be subdivided and was completed, but they were not paid for their services. The respondent is impecunious because it is unable to settle their fees. They are exercising their right of lien over the title until their fees are settled by the respondent.

10. If the respondent wants to sell Portion 543, it must pay a sum of money into Court pending the determination of the appeal. They proposed a sum of K180,000.00. This sum is 20% of K900,000.00 which is the purchase price for Portion 543. They invited the Court to adopt the same principles applied for security for costs in Osprey Industries v. Hallam [1992] PNGLR 557, Parry Zeipi v. Gabia Gagarimabu & The Electoral Commission (1999) SC611, Stephen John Rose v. The State (2009) SC1045 and Daniel Tulapi v. Gabriel Yer & Ors (2012) SC1212 and order the respondent to make payment into Court.

Respondent’s Submissions

11. The respondent opposed the application and submitted that the appellants failed to produce evidence to show that it is impecunious. On the other hand, it argued that it is not sufficient for the Court to rely on a mere assertion that it is impecunious. For these reasons, it is open to the Court to accept that the respondent is a substantial corporation with financial capacity to settle the appellants’ fees and it should not be prevented by the appellants from having its title to Portion 543 returned and sell the land.

Consideration

12. It is important to note that the appellants rely on Order 3, rule 2(a) and (b) and Order 13, rule 14(1) and (4) of the Supreme Court Rules and Section 155(4) of the Constitution to seek the order for payment of money into Court. As to how the power of the Court is to be exercised, they rely on the principles for security for costs applied in cases referred to at [10] supra.

13. However, the power of the Court under Order 3, rule 2(a) is limited to “a direction not involving a final decision upon the proceedings” and has no application to payment of money into Court. Similarly, the power of the Court under Order 3, rule 2(b) is limited to “an interim order to prevent prejudice to the claims of the parties.” The type of order that may be granted by the Court under Order 3, rule 2(b) is limited to a stay of the order of the National Court and interim injunction to “prevent prejudice to the claims of the parties.” On the other hand, I am not aware of any decided cases by a single judge of the Supreme Court exercising Order 3, rule 2(b) power to order a respondent to pay money into Court.

14. Even Order 13, rule 14(1) and (4) of the Supreme Court Rules apply to urgent applications for stay or other urgent interlocutory applications accompanied by an explanation to the Registrar why the application is urgent and requires an urgent hearing. As a last resort, Section 155(4) of the Constitution may be invoked where there is no expressed power conferred on a single judge of the Supreme Court or the Supreme Court to grant such an order.

15. It is not necessary for the appellants to invoke Section 155(4) power because that power may be derived from Order 2, rule 1(f) of the Supreme Court Rules. Order 2, rule 1(f) states:

“The following Rules of the National Court shall apply as if they were, with necessary modifications, Rules of the Supreme Court with regard to –

(a) ........
(b) .......
(c) .......
(d) .......
(e) ......
(f) Funds in court Order 2 Division 7
(g) ......
(h) .......”

16. Applying Order 2, rule 1(f), the power of a single judge of the Supreme Court to order payment of money into Court is derived from Order 4, rule 44 of the National Court Rules, which states:

“44. Deposit

(1) Subject to Rule 47, where money is paid into Court, the Registrar shall, within two days after the date of payment into Court, deposit the money to the credit of an account appointed by the Minister for Justice.

(2) Money deposited under Sub-rule (1) shall not be withdrawn or paid from the account except by the authority of these Rules or of a judgement or order.”

17. A payment of money into Court applies where there is a dispute to an entitlement to money and a party has the propensity to move money away from the reach of the other party. It is distinct from security for costs and the principles for security for costs in Osprey Industries v. Hallam (supra), Parry Zeipi v. Gabia Gagarimabu & The Electoral Commission (supra), Stephen John Rose v. The State (supra) and Daniel Tulapi v. Gabriel Yer & Ors (supra) are irrelevant.

18. In this case, the dispute between the parties is over money that will be derived from the sale of Portion 543. However, there is no evidence that the respondent has the propensity to move money away from the reach of the appellants or anyone for that matter. The sole concern of the appellants is that the respondent lacked funds to settle their fees. But that is not the same thing as propensity to move money away from the reach of the appellants.

19. Also, unlike a claim for money in proceedings in the National Court where no judgment is given, against the appellants is a National Court judgment that the respondent owes no money to them, and they deliver up the title to Portion 543 to the respondent. Until it is set aside by the Supreme Court, the respondent is entitled to the fruits of that judgment. This means the appellants must deliver up the title to Portion 543 to the respondent forthwith while they progress the appeal to its completion.

Conclusion

20. For these foregoing reasons, the appellants have failed to establish the application.

Order

21. The orders are:

1. The application for payment of money into Court is refused.
   
2. The appellants shall pay the costs of the application.
   
3. Time for entry of these orders shall be abridged to the date of settlement, by the Registrar, which shall take place forthwith.
   

________________________________________________________________
First Appellant : Self-Represented
Unages Lawyers : Lawyers for Second Appellant
Fiocco & Nutley Lawyers: Lawyers for Respondent