Agwi v Kallon [2025] PGSC 1; SC2678 (6 January 2025)

SC2678

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REV NO 22 OF 2022

BRIGADIER-GENERAL FRANCIS AGWI, COMMANDER,
PAPUA NEW GUINEA DEFENCE FORCE
First Applicant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Applicant

V

LAKI KABAIK KALLON FOR HIMSELF AND ON BEHALF OF
65 OTHER DISCHARGED MEMBERS OF THE
PAPUA NEW GUINEA DEFENCE FORCE
First Respondent

JACK LUVIANA FOR HIMSELF AND ON BEHALF OF
38 OTHER DISCHARGED MEMBERS OF THE
PAPUA NEW GUINEA DEFENCE FORCE
Second Respondent

WAIGANI: CANNINGS J, DOWA J, CAREY J
17 DECEMBER 2024; 6 JANUARY 2025

JUDGMENTS AND ORDERS – review of orders of the National Court that concluded civil proceedings by finding the State liable for payment of total sum in excess of K69 million – service entitlements of former Defence Force members – orders made in accordance with National Court’s directions to parties to settle proceedings – absence of trial – whether National Court orders made in accordance with law – whether members of Defence Force were unlawfully discharged – whether orders of National Court granted relief that was not sought by plaintiffs – whether arguments raised by applicants in Supreme Court were raised in the National Court – whether applicants resisted orders of the National Court.

The applicants, the Commander of the Defence Force and the State, applied for review of a series of four orders of the National Court that concluded civil proceedings commenced against them by the respondents, 105 discharged members of the Defence Force. The National Court found the applicants liable for payment to the respondents of a total sum in excess of K69 million. The applicants argued that the National Court erred in law in numerous respects, for example by finding that the respondents had been unlawfully discharged, ordering their reinstatement to continue for periods extending beyond the dates of mandatory retirement of the respondents, granting relief that was not sought by the applicants, disregarding the fact that the respondents had already been paid their lawful entitlements, ordering substantive relief without a trial or adherence to the National Court Rules and without giving reasons and making specific orders as to the timing and method of payment for satisfaction of the judgment contrary to ss 12 and 13 of the Claims By and Against the State Act.

Held:

(1) The fact that there was no trial was inconsequential as there is no rule, law or practice requiring that orders of the National Court be made following a trial.

(2) The four orders were made over a 10-month period and emanated from directions of the Court, given at a hearing at which the applicants were legally represented and the applicants did not oppose those directions.

(3) The four orders were each made at a hearing at which the applicants were legally represented or of which the applicants were given notice.

(4) At only one of the hearings did the applicants resist the orders proposed by the respondents but at that hearing the applicants’ lawyer was unprepared and attempted to make submissions without evidence and the submissions were properly rejected by the primary judge.

(5) During the 10-month period from the date of the directions to settle to the date of the final order of the National Court, no application to set aside or quash any of the orders was made by the applicants to the National Court or the Supreme Court.

(6) The four orders of the National Court were not attended by any element of procedural unfairness to the applicants.

(7) Despite the ostensible merit of many of the grounds of review, none of the applicants’ arguments were raised in the National Court and could not, with one exception, be relied on in the Supreme Court to challenge the correctness of the orders of the National Court.

(8) The exception was that some parts of the final order of the Court made specific orders as to the timing and method of payment for satisfaction of the judgment debt, which is contrary to s 12(2) of the Claims By and Against the State Act. This is an error of law on the face of the record of the National Court, which must be corrected.

(9) The application for review was refused and the orders of the National Court were affirmed subject to correction of those parts of the final order that were errors of law on the face of the record.

Cases cited

Fly River Provincial Government v Pioneer Health Services Limited (2003) SC705
The Papua Club Inc v Nusaum Holdings Ltd (2005) SC812
Van Der Kreek v Van Der Kreek [1979] PNGLR 185

Counsel

A Manase & I Opahi for the applicants
C Kup-Ogut for the second respondent

1. BY THE COURT: The applicants, the Commander of the Papua New Guinea Defence Force (PNGDF) and the State, apply for review of a series of four orders of the National Court that concluded civil proceedings, WS No 383 of 2001, commenced against them by the respondents, 105 discharged members of the Defence Force, by finding the applicants liable for payment to the respondents of a total sum in excess of K69 million.

2. The applicants argue that in making those orders the National Court erred in law in numerous respects, for example by:

• finding that the respondents had been unlawfully discharged;
  
• ordering their reinstatement to continue for periods extending beyond the dates of mandatory retirement of the respondents;
  
• granting relief that was not sought by the applicants;
  
• disregarding the fact that the respondents had already been paid their lawful entitlements;
  
• ordering substantive relief without a trial or adherence to the National Court Rules and without giving reasons;
  
• making specific orders as to the timing and method of payment for satisfaction of the judgment contrary to ss 12 and 13 of the Claims By and Against the State Act.
  

3. The applicants ask that the four orders of the National Court be quashed or set aside and that the National Court proceedings be dismissed on the basis that:

• the alleged breach of the Defence Force Manual of Personnel Administration, on which liability was established, is unenforceable in law;
  
• the respondents’ claims that were pleaded in the statement of claim have been fully settled by the applicants;
  
• the National Court granted relief that was never pleaded by the respondents, who only ever claimed for entitlements in respect of a two-year reengagement period up to 15 February 2001.
  

4. There are two respondents:

• the first respondent, Laki Kabaik Kallon, for himself and on behalf of 65 other discharged members of the PNGDF; and
  
• the second respondent, Jack Luviana, for himself and on behalf of 38 other discharged members of the PNGDF.
  

5. The first respondent made no appearance at the hearing of the review. He was represented in the National Court by Amet Lawyers. The second respondent was represented at the hearing of the review by Mr Kup-Ogut of Kup Lawyers, who had represented him in the National Court.

THE FOUR ORDERS

6. The orders were made on 16 December 2020, 25 June 2021, 27 July 2021 and 29 September 2021. Kandakasi DCJ made the first three orders while Tamade AJ made the final order of 29 September 2021. The case was commenced in 2001. When the first of the four contentious orders was made on 16 December 2020, it had been proceeding for 19 years. We have not been made aware of the reasons for the extraordinarily prolonged litigation but that feature of the case cannot be ignored in our determination of this review.

7. To put the first order, of 16 December 2020, in context it is necessary to explain what happened on 6 November 2020.

6 November 2020

8. The case was mentioned in the National Court before Kandakasi DCJ on 6 November 2020. Mr Amet of Amet Lawyers appeared for the first respondent (the first plaintiff in the National Court). There was no appearance for the second respondent. Mr Lains of Hardy and Stocks Lawyers appeared for the applicants (the defendants in the National Court).

9. It was noted that the case had been last mentioned before Polume-Kiele J on 12 October 2020 but her Honour had disqualified herself from dealing with the matter, so it was being mentioned before Kandakasi DCJ. His Honour was about to assign the case to another judge to have carriage of the matter until final disposal when Mr Lains interposed and said that he had instructions to “settle”. He requested that the case remain with Kandakasi DCJ so it could be progressed by settlement.

10. Mr Amet was agreeable with that suggestion and his Honour proceeded to consult counsel on the terms of an order that would resolve the case without trial. Then the following order was made:

1. This matter is adjourned to return on 15th December 2020 at 9:30 am or soon thereafter.
   
2. Upon the indication of the counsel for the Defendant that they will explore settlement, the Court directs the parties to have this matter resolved by their direct negotiations and failing that by mediation.
   
3. For the purpose of settlement, the Plaintiff shall forward a settlement proposal by 9 November 2020, to which the Defendants shall respond by 30 November 2020.
   
4. Parties shall meet in settlement conference by 4 December 2020, discuss the matters in dispute between them, have those resolved and incorporate the terms of settlement into a draft consent order for the Court's consideration and endorsement.
   
5. Failing settlement, the parties shall settle upon a statement of the relevant facts and issues and come ready to address the Court on the matter in dispute between them for the Court to consider and issue a binding opinion or refer the matter for resolution by mediation.
   
6. For the purposes of any mediation order, the parties shall come with a draft consent order for mediation with agreements on the mediator to be appointed, payment of the mediator's fees and all other fees required to be paid, dates for the various steps to be taken including the actual mediation conference dates.
   
7. The time for entry of these orders is abridged to take place forthwith upon the Court signing them.
   

16 December 2020

11. The next mention was on 16 December 2020. Mr Amet appeared for the first respondent and Mr Kup-Ogut appeared for the second respondent. Mr Lains appeared for the applicants. Mr Amet informed Kandakasi DCJ that the parties had met in a settlement conference in terms of order 4 of 6 November 2020 and had agreed on a draft consent order, which was handed up to his Honour. When his Honour checked that all parties were agreeing to the draft consent order, Mr Lains responded:

Your Honour, this should be in consent terms but unfortunately, your Honour, this will be going towards settling the substantive relief sought in the claim that as per several decisions of the higher court as well as this court, your Honour, we the instructed lawyers, although we have been given clear instructions as to progressing this matter for signing consent orders to actually settle substantive relief would be coming from the Attorney-General, given the political impasse we are going through at this stage, your Honour, I am unable to get that authority or this consent signed by the Attorney-General and that is the dilemma that I am facing at the moment, your Honour. Otherwise, we are in agreement to settle these proceedings, your Honour.

12. Faced with that explanation from Mr Lains as to why the draft consent order was not signed on behalf of the applicants (it needed to be signed by the Attorney-General but because of some “political impasse” Mr Lains was unable to get that done) and given the indication by Mr Lains that the draft consent order represented the agreement of the parties as to how the case ought to be settled, his Honour suggested that he could make an order in terms of the draft consent order “as orders of the Court”.

13. Both Mr Amet and Mr Kup-Ogut expressly agreed with that suggestion. Mr Lains impliedly agreed, as he said nothing in opposition to his Honour’s suggestion and made suggestions only about the return date to be included in the order. Then the following order was made:

1. The discharges of the First and Second Plaintiffs was contrary to the Papua New Guinea Defence Force Manual of Personnel Administration, and therefore contrary to the Defence Act.
   
2. The discharges of the First and Second Plaintiffs from the Papua New Guinea Defence Force was unlawful, and consequently such discharges are null and void, and are set aside forthwith.
   
3. The First and Second Plaintiffs shall be reinstated to the Papua New Guinea Defence Force, in the following manner-
   
   1. Each Plaintiff is reinstated to the Rank he held, at the time of his removal from the payroll;
   2. Each Plaintiff is reinstated to the Papua New Guinea Defence Force Payroll with effect from pay period number nine (9) of 2001;
   100. Each Plaintiff shall be paid his salaries backdated to the time of his removal from the payroll;
   4. Each Plaintiffs shall be paid his service entitlements backdated to the time of his removal from the payroll.
      
4. The First and Second plaintiffs are discharged with effect from 31 December 2020.
   
5. Consistent with the Discharge Administration procedure as prescribed under the PNGDF Manual of Personnel Administration, and paragraph s 3(a), (b), (c) and 4 of these Orders, the salaries of each Plaintiff shall be calculated up to 31 December 2020.
   
6. Consistent with the Discharge Administration procedure as prescribed under the PNGDF Manual of Personnel Administration, and paragraph 3(a), (b) (d) and 4 of these Orders, the service entitlements of each plaintiff shall be calculated up to 31 December 2020.
   
7. The Defendants shall, by 17 December 2020, respond to the Plaintiffs’ calculations on salaries and service entitlements, by forwarding to the Plaintiffs, the Defendants’ calculations on backdated salaries and service entitlements owed to the Plaintiffs.
   
8. For the purposes of calculations of the Plaintiffs' salaries and service entitlements as envisaged by paragraphs 3(a), (b), (c), (d), 4, 5 and 6 of these orders, the total number of fortnights to be taken into account and relied upon, is five hundred and twenty (520).
   
9. Parties shall return to the National Court on Tuesday 2 February 2021 with terms of settlement setting out-
   
   1. the total salaries payable to each Plaintiff as ordered by paragraphs 3(c), and 5 of these Orders; and
      
   2. the method by which the plaintiffs shall be paid their salaries as ordered by paragraphs 3(c) and 5 of these Orders; and
      
   100. the total-service entitlements payable to each Plaintiff as ordered by paragraphs 3(d) and 6 of these Orders; and
        
   4. the method by which the plaintiffs shall be paid their service entitlements as ordered by paragraphs 3(d) and 6 of these Orders; and
      
   5. the timeframe for the Defendants to pay to the Plaintiffs, the backdated salaries and service entitlements payable to each Plaintiff as ordered by paragraphs 3(c), 3(d), 5 and 6 of these Orders; and
      
   6. specific orders for clearance by Departments of Finance, Treasury and the Bank of Papua New Guinea of payments of the Plaintiffs' salaries and service entitlements, to enable the Plaintiffs to have expedited and immediate access to their salaries and service entitlements once such salaries and service entitlements are paid to the Plaintiffs by the Defendants; and
      
   7. timeframes for the plaintiffs’ lawyers to file affidavits setting out payments received in accordance with their instructions, and payments made to their clients in accordance with their instructions.
      
10. The Defendants shall pay the plaintiffs’ costs of and incidental to the entire proceedings, to be taxed if not agreed.
    

14. This was the order that determined the liability of the applicants for the unlawful discharge of the respondents from the Defence Force as being contrary to the PNGDF Manual of Personnel Administration and thereby the Defence Act. It was thus ordered that:

• the discharges were null and void;
• the respondents were reinstated with effect from the date of payroll No 9 of 2001;
• the respondents were deemed to be discharged on 31 December 2020;
• the respondents were entitled to be paid salaries and other service entitlements backdated to the date of their removal from the payroll (payroll No 9 of 2001);
• the applicants respond to the respondents’ calculations of the amounts due and payable to the respondents by 17 December 2020;
• the parties return to Court on 2 February 2021 with terms of settlement.
  

25 June 2021

15. The case was due to return before Kandakasi DCJ on 2 February 2021 but that did not happen until 25 June 2021. The reasons for the delay are unclear but we note from the review book that a notice of change of lawyers for the applicants was filed on 18 May 2021 by the applicants’ present lawyers, Manase & Co.

16. The only appearance by counsel at the hearing on 25 June 2021 was by Mr Amet, who announced that he represented “the first and second plaintiffs”. Mr Amet stated that the respondents had complied with the orders of 16 December 2020 by putting their calculations of what was due to them to the applicants, but the applicants had not complied with the orders.

17. Mr Amet referred to the formulae used by the respondents and explained that the total sum of backdated salaries was calculated to be K37,887,132.00. Mr Amet summarised other terms of the orders he was proposing to expedite conclusion of the case. His Honour accepted the terms proposed and made the following order:

1. Pursuant to Order 10 rule 9A(15)(2)(c) of the National Court Rules, and term 3 of the Orders of 1 June 2021, and relevant case law on point being the Supreme Court judgment in John Wasis & Others v Margaret Elias & State (2016) SC1485, the Court orders that the calculation of the First and Second plaintiffs’ backdated salaries and service entitlements shall be in accordance with paragraphs 8 and 9, and Annexures D and E of the Affidavit of Laki Kallon sworn 31 May 2021 and filed 1 June 2021 in these proceedings.
   
2. Unless the Defendants appear in Court on the next return date and demonstrate to the Court, by appropriate evidence, as to why the First and Second Plaintiffs' claims should not be assessed in the terms of the calculations submitted to the Defendants under cover of letter dated 27 May 2021, the Court will have the First and Second Plaintiffs' calculations of their backdated salaries and service entitlements assessed in accordance with those calculations.
   
3. The matter is adjourned to 27 July 2021 at 3:30 pm subject to any Supreme Court listing.
   
4. Time for the entry of these orders is abridged to the time of settlement by the Registrar which shall take place forthwith.
   

27 July 2021

18. The case returned before Kandakasi DCJ in accordance with the order of 25 June 2021 on 27 July 2021. Mr Amet made an appearance for the first respondent and Mr Kup-Ogut appeared for the second respondent. Mr Levy of Manase & Co Lawyers appeared for the applicants.

19. Mr Levy conceded that the applicants had not complied with the order of 25 June 2021, in that they had no evidence that the respondents’ claims should not be assessed in accordance with the terms of the calculations submitted to them under cover of a letter dated 27 May 2021. Mr Levy attempted to explain why there had been non-compliance with the order but had no affidavit to support the explanation and failed to persuade his Honour that the Court should not proceed to assess the respondents’ entitlements in accordance with the order of 25 June 2021, which was regarded as a self-executing order. Mr Levy also submitted that the second respondent and the persons he represented had been fully paid. Again, however, there was no evidence put to the court in support of that submission.

20. After hearing from all counsel as to the appropriate course of action, the transcript reveals that his Honour ruled as follows:

All right, I have gone to and fro sufficiently so I will come to that decision based on term 2 of the orders of 25 June 2021. As Mr Kup-Ogut emphasised in his submissions, this is a 2001 proceeding. Almost 20 years and we are still here. That is an indictment against the Independent State of Papua New Guinea and more so the Department of Defence or Defence Force. These are claims by ex-servicemen. In the absence of any evidence to the contrary, these men would have rendered their youth, their life to the service of the country and one comes to retirement and discharge, this should be an expeditious process which is in a way saying thank you, thou hath, good and faithful servant, go and enjoy retirement.

Unfortunately, former public servants, former police officers, former defence force personnel and others continue to wait, continue to chase their entitlements causing them in some cases like as Mr Levy points out, some of these plaintiffs have died. Government should take responsibility. That is, the defendants should take responsibility for their failure to attend to this matter as a matter of priority and have it resolved long before.

The deaths, consequences, that is something the defendants should bear rather than asking this court, what shall we do with them? They should be proactive. There are supposed to be next of kin and whatever else that the records have. They should be able to calculate and pay to their next of kin. I do not need to tell them what to do or if there is a need for appointment of a deceased estate administrator, well, that is something - whose mobile phone is it? I am just being interrupted in my chain of decision making. Who is it? Please, stand up, please. Whose phone, is it? Stand up with it. What are you doing in this courtroom with a phone that goes off? You see, you have just interrupted the court from proceeding to come to a decision. Next time, do not come with a phone like that, all right. You will be not spoken to kindly like this. You might sit somewhere else. All right, learn a lesson and not repeat. Thank you.

Let me pick up from where I left off or where I was interrupted. Yes, the deceased. Plaintiffs who have died. State, the defendants should take responsibility, full responsibility for their failure to have these proceedings attended to and concluded expeditiously instead of dragging it around as we have been up to this point. Then the last of the orders the court made was that of 25 June. The calculations were made, State was not engaging in meaningful discussions to finalise the calculations. Calculations is what the word suggests, it is calculating what is due to each of the plaintiffs. And if anyone has been paid then that will have to be offset against payments made and the balance becomes payable. It is not a final process.

Instead of engaging in meaningful conversation, counsel for the defendants comes to this court without any affidavit material against rulings of counsel. Not to address this court on matters of fact without an affidavit, still carries on, trying to explain the defendants’’ failure to comply with court orders basically, suggesting records locked up or inaccessible as the case might be, but there is no satisfactory explanation as to why this could not be communicated to the plaintiffs and what other remedial steps the defendants could take.

Leaving that aside, that is of no consequence as to the orders that will be made today, those orders will be in terms of paragraph 2. The law on such orders are clear as Mr Arnold Amet Junior points out and it is noted in term 1 of the orders of 25 June 2021.

When the court makes a self-executing order, it is a serious order and the party against whom the order is directed must comply, failing which there can be serious consequences. The Supreme Court in the matter of John Wasis and Others v Margaret Elias and The State (2016) SC1485, paragraphs 12 and 13 highlights that position of the law. Indeed, that was the law the court used to enter judgment for the plaintiffs in paragraph 1. In paragraph 2, it is instructive and I should read the full text of that order. Unless the defendants appear in court on the next return date and demonstrate to the court by appropriate evidence as to why the first and second plaintiffs' claim should not be assessed in the terms of the calculations submitted to the defendants under cover of letter dated 27 May 2021, the court will have the first and second plaintiffs’ calculations of their backdated salaries and service entitlements assessed in accordance with those calculations.

Today the counsel for the defendants draws the court's attention to affidavits filed earlier in this proceeding and which makes reference to the substantial sum of money being paid to Amet Lawyers’ trust account. And that is in the sum of one million, is it? Yes, K1,447,231.43. Mr Arnold Amet Junior submits that is separate heads of damages and not what is being covered in term 1 of these orders to the orders of 25 June 2021 whereas Mr Levy of counsel for the defendants submits otherwise. The fairest thing to do in the light of all that. I indicated, I will look at varying term 2 as a consequence of the defendants’ failure to comply with that term of the order. And that variation should be to allow for, once the calculations are ascertained, then there should be application or consideration of those who have already received any form of payment, identifying what that payment was for and if it goes down to backdated salaries and service entitlements, then those payments will have to be deducted before any additional calculation is made and paid over to the plaintiffs.

These are public funds. Public funds can only be applied to proper claims hence the need for variation rather than making an order fixing or assessing the plaintiffs’ damages in accordance with annexures D and E of the affidavit of Laki Kallon sworn on 31 May 2021 and filed on 1 June 2021. So, pursuant to the provisions of order 10 rule 9A sub (15), further sub (2), on account of the defendants' failure to comply with previous orders as well as term 2 of the orders of 25 June 2021, the court orders - sorry, I should also put in the Supreme Court decision as an authority on point as well and then make the order. The court orders that the plaintiffs' damages be assessed in terms of their calculations submitted to the defendants under cover of letter dated 27 May 2021 for the plaintiffs’ backdated salaries and service entitlements less any payments already made to anyone of the plaintiffs. And whatever the balance, if it is standing to the credit of a plaintiff, that amount shall be paid over to that plaintiff. Next order, in the light of the State not expediting this matter to a resolution in the process, unfortunately allowing for some of the plaintiffs to pass on, the defendants are restrained from taking any further unnecessary issue on account over deaths of those plaintiffs and take all the relevant steps possible under the law to have the next of kin or dependants of the now deceased plaintiffs paid over what is due to the now deceased plaintiffs.

Next order, the matter will next return to the court for parties to confirm resolution of this matter in accordance with the foregoing orders. The next return date shall be 8 September 2021. Costs of today against the State to be ascertained by agreement, if not by taxation. And the time abridgement is the last and final order there. Thank you.
21. The following order was then made:

1. The Plaintiffs’ damages shall be assessed in terms of the calculations submitted to the defendants under the cover of letter date 27 May 2021 for the Plaintiff’s backdated salaries and service entitlements less any payment made to any one of the plaintiffs, and the balance standing to the credit of any of the Plaintiffs to be paid by the Defendants.
   
2. The Defendants are restrained from taking any further unnecessary issue on account of the death of those Plaintiffs and take all the relevant steps possible under the law to have the next of keen [sic] or dependents of the now deceased Plaintiffs paid what is due and owing to the now deceased Plaintiffs.
   
3. Costs of today is awarded against the State to be ascertained by agreement if not, by taxation.
   
4. The matter will next return 8 September 2021 at 9.30 am for the parties to confirm compliance of the foregoing orders and conclusion of the orders.
   
5. The time for entry of these orders is abridged to take place forthwith upon the court signing the orders.
   

29 September 2021

22. The case was due to return before Kandakasi DCJ on 8 September 2021 but that did not happen. There was apparently a hearing before his Honour on 23 September 2021 at which he ordered that the parties hand up orders confirming the conclusion of the matter. Then the case returned before Tamade AJ on 29 September 2021.

23. The applicants were represented by Mr Levy. The respondents were represented by Mr Amet.

24. Mr Amet handed up a draft order for endorsement. When her Honour enquired with Mr Levy whether the applicants consented to the orders, he explained that the substantive orders were binding on the applicants as no steps had been taken to challenge any of the previous orders of the Court. He raised no objection to her Honour endorsing the order handed up by Mr Amet so her Honour endorsed the order in the following terms:

1. The total backdated salaries payable to the First Plaintiffs is K37,887,132.68 and this is itemised in Schedule 1 hereto.
   
2. The total service entitlements payable to the First Plaintiffs is K4,510,720.26 and this is itemised in Schedule 2 hereto.
   
3. The total backdated salaries payable to the Second Plaintiffs is K24,600,135.00 and this is itemised in Schedule 3 hereto.
   
4. The total service entitlements payable to the Second Plaintiffs is K2,709,814.07 and this is itemised in Schedule 4 hereto.
   
5. The Defendants, through the Department of Treasury and Department of Finance, shall immediately raise a cheque in the sum of K10,000,000.00 payable to Amet Lawyers Trust Account, forthwith and such cheque shall be ready for collection and deposit by Amet Lawyers no later than 1:00 pm on 1 October 2021.
   
6. The Defendants, through the Department of Treasury and Department of Finance, shall immediately raise a cheque in the sum of K10,000,000.00 payable to Kup & Co Lawyers Trust Account, forthwith and such cheque shall be ready for collection and deposit by Kup & Co Lawyers no later than 1 pm on 1 October 2021.
   
7. The Defendants, through the Department of Treasury and Department of Finance, shall ensure that the payment of K10,000,000.00 made in accordance with paragraph 5 of these orders is cleared no later than 4 October 2021 by the Bank of Papua New Guinea such that the amount of K10,000,000.00 sits as available funds in Amet Lawyers Trust Account by or before 9:00 am on 4 October 2021.
   
8. The Defendants, through the Department of Treasury and Department of Finance, shall ensure that the payment of K10,000,000.00 made in accordance with paragraph 6 of these orders is cleared no later than 4 October 2021 by the Bank of Papua New Guinea such that the amount of K10,000,000.00 sits as available funds in Kup & Co Lawyers Trust Account by or before 9:00 am on 4 October 2021.
   
9. In addition to paragraph 5 of these orders, the Defendants, through the Department of Treasury and Department of Finance shall pay the sum of K10,000,000.00 to Amet Lawyers Trust Account on the first working day of each month commencing 1 November 2021 and ending 12 January 2022, with the final payment of K2,397,852.94 to be made on 1 February 2022 to Amet Lawyers Trust Account.
   
10. In addition to paragraph 6 of these orders, the Defendants through the Department of Treasury and Department of Finance shall pay the sum of K10,000,000.00 to Kup & Co Lawyers Trust Account on 1 November 2021 with the final payment of K7,309,949.07 to be made on 1 December 2021 to Kup & Co Lawyers Trust Account.
    
11. Amet Lawyers shall, within seven (7) days of receipt of each payment made by the Defendants, pay such monies to the First Plaintiffs in accordance with the instructions of the First Plaintiffs.
    
12. Amet Lawyers shall, subsequent to its payment to the First Plaintiffs every month, file an Affidavit attaching –
    

(a) confirmations of payments made to each Plaintiff; and
(b) a spreadsheet summarising each payment; and
(c) a statement of account of each Plaintiff it represents.

13. Kup & Co Lawyers shall, within seven (7) days of receipt of each payment made by the Defendants, pay such monies to the Second Plaintiffs in accordance with the instructions of the Second Plaintiffs.
    
14. Kup & Co Lawyers shall within seven (7) days of receipt of each payment made by the Defendants, file an Affidavit attaching –
    

(a) confirmations of payments made to each Plaintiff; and

(b) a spreadsheet summarising each payment; and
(c) a statement of account of each Plaintiff it represents.

15. A sealed copy of these Orders shall be served on the Solicitor-General.
    
16. The Solicitor-General shall, immediately upon receipt of these Orders, issue to the Departments of Finance and Treasury, such clearances as are necessary to ensure these orders are implemented.
    
17. Time for the entry of these orders is abridged to the time of settlement by the Registrar which shall take place forthwith.
    

GROUNDS OF REVIEW

25. The numerous grounds of review set out in the application for review can be put into two categories. First, those that allege procedural unfairness and irregularity. Secondly those that allege errors of law in the National Court’s orders as to determination of liability and assessment of the amounts due to the respondents.

Procedural unfairness and irregularity

26. The applicants argue that the order of 16 December 2020, which determined that the respondents had been unlawfully discharged and that the applicants were liable in damages, was made in error as:

• the case was listed only for a directions hearing on that day;
• there was no proper trial by parties calling evidence and making submissions;
• the case was rushed and dealt with in a summary manner without regard to the public interest in safeguarding public finances.
  

27. The applicants argue that the order of 25 June 2021 was made in error as:

• there was no proper trial at which the applicants were provided with an opportunity to properly challenge the calculations of each respondent.
  

28. The applicants argue that the order of 29 September 2021 was made in error as:

• no reasons were given for the decision to make the order.
  

29. It is not correct to say that the hearing on 16 December 2020 was only a directions hearing. It was a hearing at which the parties were to notify the Court, in accordance with indications given by all parties on 6 November 2020, whether they could settle the matter. The applicants were represented by counsel Mr Lains both on 6 November and 16 December 2020. The order determining liability on 16 December 2020 was made with the acquiescence of counsel for the applicants.

30. The fact that there was no trial is inconsequential. There is no rule law or practice requiring that orders of the National Court be made following a trial.

31. The order of 25 June 2021 was made in the absence of the applicants but there is no evidence or argument that the applicants were not given notice of that hearing.

32. There was no need for Tamade AJ to give reasons for her decision to make the final order of 29 September 2021. It was a simple case of handing up a draft of an order that would finally determine the matter. The applicants were represented by Mr Levy and her Honour enquired with him whether the applicants consented. Mr Levy conceded that the applicants were bound by previous orders and offered no opposition to her Honour’s endorsement of the draft order.

33. The four orders were made over a 10-month period and emanated from directions of the Court, given at a hearing at which the applicants were legally represented and did not oppose the directions of the Court

34. At only one of the hearings – the hearing of 27 July 2021 – did the applicants resist the orders proposed by the respondents but at that hearing the applicants’ lawyer, Mr Levy, was unprepared and attempted to make submissions without evidence and the submissions were properly rejected by the Court.

35. During the 10-month period from the date of the directions to settle (6 November 2020) to the date of the final order of the National Court (29 September 2021), no application to set aside or quash any of the orders was made by the applicants to the National Court or the Supreme Court.

36. The four orders of the National Court were not attended by any element of procedural unfairness. We reject all grounds of review alleging procedural error by the National Court.

Determination of liability and assessment of the amounts due to the respondents

37. As to the merits of the four orders under review, the applicants argue that the National Court erred in law in numerous respects, for example by:

• finding that the respondents had been unlawfully discharged;
  
• ordering their reinstatement to continue for periods extending beyond the dates of mandatory retirement of the respondents;
  
• granting relief that was not sought by the respondents;
  
• disregarding the fact that the respondents had already been paid their lawful entitlements;
  
• making specific orders as to the timing and method of payment for satisfaction of the judgment contrary to ss 12 and 13 of the Claims By and Against the State Act.
  

38. The applicants argue that:

• the alleged breach of the Defence Force Manual of Personnel Administration, on which liability was established, is unenforceable in law;
  
• the respondents’ claims that were pleaded in the statement of claim have been fully settled by the applicants;
  
• the National Court granted relief that was never pleaded by the respondents, who only ever claimed for entitlements in respect of a two-year reengagement period up to 15 February 2001;
  
• the amounts awarded to the respondents, some of whom are deceased, are grossly excessive, unjustified and without any lawful basis.
  

39. Despite the ostensible merit of many of these grounds of review, none of the arguments underpinning them were raised, or at least raised properly, in the National Court. The only resistance to any of the orders was on 27 July 2021 when Mr Levy made his first appearance and tried to persuade the Court that the second respondent and the 38 other persons represented by the second respondent had already been paid. However, Mr Levy was unprepared and came with no evidence to explain the position that he was trying to put to the Court, and no evidence to explain why he was unprepared. The learned primary judge properly rejected Mr Levy’s attempt to revisit the question of liability.

40. The general rule that a party cannot argue in an appeal or a review before the Supreme Court, arguments that were not raised in the National Court, prevents the applicants from being able to rely on most of the grounds of review (Van Der Kreek v Van Der Kreek [1979] PNGLR 185, Fly River Provincial Government v Pioneer Health Services Limited (2003) SC705, The Papua Club Inc v Nusaum Holdings Ltd (2005) SC812). The applicants are in effect estopped by their conduct of the National Court proceedings from relying on their grounds of review as a basis for overturning the orders of the National Court.

41. Though the amount of public money involved is very large, by the time the question of liability was determined on 16 December 2020, the case had been proceeding for 19 years. By the time of the final order, the litigation was 20 years old. The applicants must bear responsibility for this extraordinary delay.

42. This was not a case of the applicants being forced into settlement by the Court. It was a case of the applicants taking the initiative at the hearing on 6 November 2020 and indicating their strong desire to settle. All directions and orders made from then on were made with the consent of the applicants or without any effective opposition by them.

43. The general principle that a party is bound by the conduct of their lawyers must be applied in this case. When one of the applicants is the State, that principle is particularly pertinent. The State was at all material times represented by learned counsel. The question of whether the State was ably and competently represented is not before us.

44. With one exception, the applicants’ grounds of review relating to the merits of the orders of the National Court are rejected.

45. The exception relates to those parts of the final order of the Court made on 29 September 2021 that give specific directions as to the timing and method of payment for satisfaction of the judgment debt. We refer here to order Nos 5 to 16. These particular orders offend against s 12(2) of the Claims By and Against the State Act, which states:

Notwithstanding anything in the National Court Rules, a court giving judgment against the State may not include any order as to time or method of payment for satisfaction of the judgement.

46. This is an error of law on the face of the record of the National Court, which must be corrected.

CONCLUSION

47. The application for review will be refused and the orders of the National Court will be affirmed subject to correction of those parts of the final order that were errors of law on the face of the record.

48. As to costs, the first respondent did not appear at the hearing of the review. The second respondent, though legally represented at the hearing, did not comply with directions regarding filing and service of written submissions. In these circumstances it is not appropriate that the applicants, though they have not succeeded, be ordered to pay the respondents’ costs. The parties will bear their own costs.

ORDER

(1) The application for review of orders of the National Court in WS 383 of 2001 dated 16 December 2020, 25 June 2021, 27 July 2021 and 29 September 2021, is dismissed.

(2) The orders of the National Court are, with the exception of the order of 29 September 2021, affirmed.

(3) Order Nos 1 to 4 of 29 September 2021 are affirmed; Order Nos 5 to 16 of the order of 29 September 2021 are set aside.

(4) All orders of the Supreme Court including the order of 10 August 2023 staying or otherwise avoiding compliance with the orders subject to review, are dissolved.

(5) The parties shall bear their own costs of the proceedings.

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Lawyers for the applicants: Manase & Co Lawyers
Lawyers for the second respondent: Kup Lawyers