Isas Ltd v Nutley [2025] PGSC 23; SC2712 (21 March 2025)

SC2712

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

SCA NO. 48 & 49 OF 2023 (IECMS)

BETWEEN:
ISAS LIMITED
Appellant

AND:
SIMON NUTLEY
First Respondent

AND:
PETER LOWING
Second Respondent

AND:
STEPHEN LEWIN
Third Respondent

AND:
MICHAEL SULLIVAN
Fourth Respondent

AND:
JOHN LEAHY
Fifth Respondent

WAIGANI: SALIKA CJ, CAREY J, CARMODY J
27 NOVEMBER 2024; 21 MARCH 2025

SUPREME COURT APPEAL – appeal against dismissal in the National Court – contractual entitlement – appeal against the dismissal of a professional negligence claim in the National Court

SUPREME COURT APPEAL – appeal on grounds of errors in fact and law – professional negligence – claim against lawyer for professional negligence – duty of care – claims that failure of the respondents to prosecute the plaintiff’s claim leading to dismissal.

Facts
This is the judgment of two (2) related proceedings styled SCA 48 of 2023 (IECMS) and SCA 49 of 2023 (IECMS). Both appeals are from the National Court proceeding styled WS No. 800 of 2016. The Appellant appealed against the dismissal of its claim against the Respondents for damages for negligence.

Held

1. Both appeals (SCA 48 and 49 of 2023) be dismissed in their entirety.
2. The appellant shall pay the Respondents’ costs, to be taxed if not agreed.
   

Cases cited
The following cases are cited in the judgment.
Akai v Reeves [2014] SC1393
Curtain Bros (PNG) Limited and Curtain Bros (Qld) Pty Limited v University of Papua New Guinea [2005] SC788
Don Pomb Pullie Polye v Jimson Sauk Papaki and Electoral Commission of Papua New Guinea [2000] SC637
Fage UK Ltd v. Chobani UK Ltd [2014] EWCA Civ 5
Henderson v. Foxworth Investments Ltd [2014] UKSC 41
Issac Minicus v Telikom (PNG) Ltd [2017] SC1652

Counsel
R. Bradshaw with counsel assisting W.Mininga, for the appellant
R. Webb with counsel assisting L. Damien, for the respondents

JUDGMENT

1. BY THE COURT: This is the ruling of the substantive appeal for both Supreme Court appeals (SCA 48 & 49 of 2023).
   
2. In SCA 48 of 2023, Isas Limited (the Appellant) appeals against the whole decision of the National Court made on 29^th March 2023 in WS No. 800 of 2016 (the Proceeding), where His Honour dismissed the proceeding in its entirety.
   
3. In SCA 49 of 2023, the Appellant claims the learned trial judge erred in fact by finding directional orders of 2^nd September 2008, 16^th November 2011, and 23^rd October 2012, or their minutes were not in evidence before the Court.
   

BACKGROUND

4. The Appellant filed this appeal against Simon Nutley (the First Respondent), Peter Lowing (the Second Respondent), Stephen Lewin (the Third Respondent), Michael Sullivan (the Fourth Respondent) and John Leahy (the Fifth Respondent), collectively, (the Respondents) for damages for negligence.
   
5. The Respondents were lawyers for the Appellant in the matters WS 705 of 2007 and SCA 36 of 2013 together, (the Proceedings) which were both dismissed for want of prosecution.
   
6. The Appellant is of the view that the Respondents were negligent and breached their duty of care with respect to their conduct in the proceedings.
   
7. There was one ground of appeal in SCA 48 of 2023 and nine grounds of appeal in SCA 49 of 2023.
   
8. The Appellant made submissions on the one ground of appeal in SCA 48 of 2023 and five grounds abandoning four grounds in the appeal of SCA 49 of 2023.
   

APPEAL GROUNDS

(a) The trial judge erred in finding the directional orders or their minutes were not in evidence.

(b) The trial judge erred in fact and law by finding that the Appellant had failed to establish that the Respondents had breached the duty of care as pleaded under paragraph 20(a) of the Appellant’s Statement of Claim (the SoC) in the proceeding.

(c) The trial judge erred in fact and law by finding that the Appellant had failed to establish the breach of duty pleaded under paragraph 20(b) of the SoC.

(d) The trial judge erred in fact and law by finding the Appellant had failed to establish the breach of duty of care pleaded under paragraph 20(c) of the SoC.

(e) The trial judge erred in fact and law by finding that the transcript of proceedings (in the Proceeding) was required to determine the breach of duty of care pleaded under paragraph 20(e) of the SoC.

(f) The trial judge erred in fact and law by failing to find that the Appellant had established the breach of duty pleaded under paragraph 20(e) of the SoC as from the whole of the Appellant’s evidence.

DETERMINATION
SCA 49 of 2023

9. The Appellant avers that the trial judge erred in finding the direction orders or their minutes were not in evidence.
   
10. The Respondents accept that the trial judge did make an error of fact when he found that that sealed copies or minutes of the three direction orders were not in evidence.
    
11. In Issac Minicus v Telikom (PNG) Ltd [2017] SC1652 it states:
    

“17. It is settled law that an appellate court should be slow to interfere with the exercise of discretion by the lower court unless the appellate court is satisfied that the court below clearly erred in its decision.

18. It is also trite law that an appeal may be allowed under two broad principles, first; where there is a clear or identifiable error by the trial judge, second; although there is no clear or identifiable error, the judgment is so unreasonable or plainly unjust on the facts that the appellate court may infer that a substantive error had occurred in the exercise of discretion by the trial judge.”

12. In the United Kingdom Supreme Court case of Henderson v. Foxworth Investments Ltd [2014] UKSC 41, Lord Reed held at [67] that:
    

“... in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified”.

13. Further, this Court notes that even if the 3 direction orders were in evidence, it is clear that the trial judge could not have made any finding adverse to the Respondents. As noted by His Honour at paragraph 38:
    

...Where can I find the claim by the plaintiff of the actions or inactions of the defendants that had fallen short of their duties as its lawyers in regard to complying with the 3 directional orders? Where are the pleadings for these claims?...

14. At paragraphs 40 and 41 His Honour again raises the issue of the absence of pleadings particularising the alleged failure by the Respondents:
    

40....I need to be guided by the pleadings which should contain particulars of where, when and how the defendants allegedly failed. For example, whether the defendants had failed to forward a draft affidavit in time to the plaintiff to sign and return to comply with term 1 of a particular order....I notice that there are no explanations or evidence provided in that regard...I observe that there is no specific pleadings and evidence that alleges any faults or failures on the part of the defendants in regard to the 3 directional orders...

41. I therefore find that the plaintiff has failed to establish these allegations against the defendants.

15. The outcome of the proceedings would not have been vitiated by this identifiable error.
    
16. The appeal Court will only disturb a finding of fact if it was a conclusion which no reasonable judge could or should have reached.
    
17. It is the duty of this Court to evaluate the rationality and coherence of the decision-making process of the trial judge while not carrying out a rehearing of the case.
    
18. We are not persuaded that the trial judge’s decision was unjust or unreasonable as this error of fact did not impact the dismissal of the negligence claim against the Respondents.
    

SCA 48 of 23

19. The Appellant argued that the trial judge erred in fact and law in failing to establish that the Respondents breached their duty of care in failure to prosecute the case.
    
20. The evidence indicates that Mr. Fancy, the Director of the Appellant, failed to do what was required to get the matter ready for trial.
    
21. The affidavits relied upon and the transcript of the trial proceedings were replete with examples of the Respondents’ requests to Mr Fancy to attend to certain matters in preparation for the trial. Mr Fancy failed to do so. The Respondent lawyers were placed in the invidious position of trying to prepare a matter for trial in the face of a client who refused to comply with their requests or insisted that they comply with his directions.
    
22. At paragraph 45 of the judgment the trial judge sets out, over almost two pages, numerous examples of his findings with respect to Mr Fancy’s failure to attend to matters in a timely matter – despite frequent requests. For example:
    

There is evidence of Mr Fancy challenging the advice of the plaintiff’s lawyers where he had given contrary instructions and opinions on how the plaintiff should run the trial and who should be called in as expert witnesses or otherwise to give evidence for the plaintiff;

On 8^th January 2013, which was the due dates for the parties to file their respective witness statements, Mr Fancy had not provided his statements to Mr Nutley;

By the 10^th January 2013, email evidence shows Mr Fancy still trying to amend his draft statement which was supposed to have been filed by consent of the parties and as per the court directions, before or by 8^th January 2013; other witness statements forwarded too were not ready at that time;

Evidence adduced including the many various email exchanges, shows that the plaintiff had many opportunities to gather its evidence since 27^th November 2007; evidence adduced shows that after 4 years and 3 months, the plaintiff was still not ready with its evidence; evidence shows that on the trial date, the plaintiff was not ready with its evidence...

23. His Honour concluded, at paragraph 46: “...I find that the plaintiff’s lawyers, including the defendants, had taken all reasonably [sic] steps to assist the plaintiff at the material times(s).”
    
24. In Akai v Reeves [2014] SC1393 it is stated that:
    

“...to succeed on a negligence claim it must be proven that:

• The defendants (respondents) owed him a duty of care,

• They breached that duty,

• The breach caused him damage,

• The type of damage was not too remote, and

• He did not contribute to his own loss and detriment, by being contributory negligent or voluntarily assuming the risk.”

25. We are not convinced that the Appellant did not contribute to his own loss and detriment, and this further conflates this ground of the appeal for the court to accept the Appellant’s submission in this regard.
    
26. In the Professional Conduct Rules, it states in Rule 8 that:

“(1) A lawyer shall treat a client fairly and in good faith, giving due regard to–

(a) the dependence by the client upon him and his special training and experience; and

(b) the high degree of trust which the client is entitled to place in him.

(2) A lawyer shall always be frank and open with his client and with all others so far as his client’s interest may permit and shall at all times give his client a candid opinion on any professional matter in which he represents that client.

(3) A lawyer shall take such legal action consistent with his retainer as is necessary and reasonably available to protect and advance his client’s interests.

(4) A lawyer shall at all times use his best endeavours to complete any work on behalf of his client as soon as is reasonably possible.

(5) If a lawyer receives instructions from a client and it is or becomes apparent to him that he cannot do the work within a reasonable time, he shall so inform his client.

(6) A lawyer shall not–

(a) take unnecessary steps or do his work in such a manner as to increase his proper costs to his client; or

(b) accept instructions which are beyond his competence.

(7) A lawyer shall, when in his client’s best interests, seek his client’s instructions to endeavour to reach a solution by settlement out of court rather than commence or continue legal proceedings.”

27. Upon examination of paragraph 26, and in line with the evidence before this Court, we do not accept the Appellant’s argument that the trial judge erred in fact and law that the Appellant had failed to establish the breach of duty by the Respondents which resulted in the respondents being determined not negligent.
    
28. The argument that the Respondents “failed to take reasonable steps to vacate the trial dates..” does not correlate to the trial judge erring in fact and law by the finding the Appellant had failed to establish the breach of duty of care.
    
29. The Respondents contend that this line of argument is an attempt by the Appellant to argue its claim under the guise of an appeal against the decision of the trial judge when there is no relevance.
    
30. We accept the Respondents’ submission on this ground.
    
31. The Appellant indicates that the trial judge erred in fact and law when he determined that the transcript of proceedings was required to determine the breach of duty of care by the Respondents.
    
32. The Respondents avers this ground should be dismissed because there was no identifiable error by the trial judge based on the reason that this determination was related not just to establish whether an affidavit had been filed but to confirm what was treated as evidence and what submissions were made relating to this evidence.
    
33. In Curtain Bros (PNG) Limited and Curtain Bros (Qld) Pty Limited v University of Papua New Guinea [2005] SC788 it is proffered that:
    

“The appellate Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction, except where the exercise of that discretion is clearly wrong. A discretionary judgment may set be aside if an identifiable error occurred in the exercise of discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is “unreasonable or plainly unjust” and such that an error can be inferred. These principles are well established.”

34. We accept that the trial judge exercised his discretion without an identifiable error on this ground.
    
35. The appeal ground by the Appellant which indicates that the trial judge erred in fact and law by failing to find that the Appellant had established the breach of duty pleaded does not provide any reasoning for which an affirmative determination can be made in favour of the Appellant.
    
36. It is not clear to this court how the Respondents breached a duty of care to produce a letter or affidavit to explain the delay, which, from the evidence before the trial judge, was a delay caused by the Appellant.
    
37. As such, there is no identifiable error by the trial judge in his arriving at the conclusion for which this ground of appeal has been filed.
    
38. We note in Don Pomb Pullie Polye v Jimson Sauk Papaki and Electoral Commission of Papua New Guinea [2000] SC637 that it states:
    

“Further, the Court has also authority over counsel as Officers of the Court.”

39. This provides clarity into the relevance and supervisory role that the court has with respect to lawyers in Papua New Guinea.
    
40. Claims related to negligence and breach of duty of care are carefully examined when adjudicated in the court so as to ensure that the legal profession is not brought into a state of disrepute and the public is protected from unscrupulous persons.
    
41. Notwithstanding the role of the Papua New Guinea Law Society and in particular, the Lawyers Statutory Committee established by section 48 of the of the Lawyers Act 1986, which in s. 52. states: “Functions of the Committee - (1) The function of the Committee is to enquire into complaints against a lawyer of improper conduct as a lawyer”, the court is also able to assist the public where there are legitimate matters related to the breach of duty of care by lawyers.
    
42. While the Appellant in this case has not successfully led the court to favorably consider its appeal grounds, it is noteworthy that such cases are necessary and encouraged to ensure that the legal profession and those who practice law collectively and individually are assured that there are accountability mechanisms in the practice of law which the Courts will determine and make decisions thereto as required.
    
43. In Fage UK Ltd v. Chobani UK Ltd [2014] EWCA Civ 5 at [114] it states that:
    

“Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so ... The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed. The trial is not a dress rehearsal. It is the first and last night of the show. Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case. In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island-hopping”.

44. We are not inclined to interfere with the decision of the trial judge given the totality of the arguments proffered by the Appellant and in line with the role of this Court to make a determination on identifiable errors of fact and law which no reasonable judge could or should have reached, and in our view this appeal has not led us to a conclusion that warrants setting aside the judgment in the National Court.
    

CONCLUSION

45. The submissions by counsel were helpful in assisting the Court in arriving at this decision.
    
46. We are encouraged by the advocacy in this case and the attention to detail as demonstrated in the relevant documents which required a considerable amount of time by the court to review and consider.
    
47. In sum, it should be noted that the reasoning of the trial judge indicates that there was consideration to the negligence claims raised by the Appellant against the Respondents and in so doing while the decision was not favourable for the Appellant it does not attract or elicit any conclusion of errors that are identifiable which would render the decision unsafe.
    

ORDERS OF THE COURT

1. Both appeals (SCA 48 and 49 of 2023) be dismissed in their entirety.
2. The Appellant shall pay the Respondents’ costs, to be taxed if not agreed.

_______________________________________________________________
Lawyers for the appellant: Bradshaw Lawyers
Lawyers for the respondent: Leahy Lewin Lowing Sullivan Lawyers