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Shelley v PNG Aviation Services Pty Ltd [1979] PNGLR 119 (4 May 1979)

Papua New Guinea Law Reports - 1979

[1979] PNGLR 119 - Shelley v PNG Aviation Services Pty Ltd

[1979] PNGLR 119

SC149

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SHELLEY

PNG AVIATION SERVICES PTY. LTD.

Waigani

Prentice CJ Raine DCJ Pritchard J

28-29 March 1979

4 May 1979

APPEALS - Leave to appeal - When required - Interlocutory judgment - Striking out defences and counterclaim - Not final judgment - Leave to appeal required - Supreme Court Act 1975, s. 14(3)[xcix]¹.

JUDGMENTS AND ORDERS - Nature of - Order granting leave to enter final judgment - Order directing entry of final judgment - Neither orders refusing unconditional leave to defend - Supreme Court Act 1975, s. 14(4) - National Court Rules, O. XVIII, r. 1 and O. XXII, r. 31[c]².

Section 14 of the Supreme Court Act 1975 provides inter alia:

“(3) No appeal lies to the Supreme Court without leave of the Supreme Court ...

(b) from an interlocutory judgment made or given by a Judge of the National Court except ...

(4) An Order refusing unconditional leave to defend an action shall not be deemed to be an interlocutory judgment.”

On appeal (no leave to appeal being sought) against a decision of the National Court striking out a defence and counter claim as disclosing neither a defence nor a ground for counter claim, and giving leave to enter judgment (the original proceedings being brought on summons pursuant to O. XVIII r. 1 of the National Court Rules):

Held

(1) An order striking out a defence and counter claim, though final in its effect, is not an interlocutory judgment within the meaning of s. 14(3) of the Supreme Court Act 1975.

Hunt v. Allied Bakeries Ltd., [1956] 1 W.L.R. 1326;

Salter Rex & Co. v. Ghosh, [1971] 2 Q.B. 597, at p. 600; and

Dudgeon v. Chie [1955] HCA 42; (1955), 92 C.L.R. 342, referred to.

(2) Orders granting leave to enter final judgment under O. XVIII r. 1 of the National Court Rules and orders directing entry of judgment under O. XVII r. 31 are not orders refusing unconditional leave to defend within the meaning of s. 14(4) of the Supreme Court Act 1975.

(3) Accordingly, no leave having been sought, the appeal should be dismissed.

Appeal

These were proceedings in which the appellant appealed (without seeking leave) against a decision of the National Court (made on summons pursuant to O. XVIII r. 1 and O. XXII r. 31 of the National Court Rules), striking out a defence and counterclaim as disclosing neither a defence nor a ground for counterclaim and giving leave to enter final judgment.

Counsel

J. A. Griffin and A. L. Cassells, for the appellant.

M. J. Wright, for the respondent.

Cur. adv. vult.

4 May 1979

PRENTICE CJ: Appeal is brought to this court against a decision of the National Court whereunder, on summons by virtue of O. XVIII r. 1 and O. XXII r. 31 of the National Court Rules, a statement of defence and counter claim were struck out as disclosing neither a defence nor a ground for counter claim and leave was given to enter judgment. The National Court order was dated 30th October, 1978. The appeal was brought without seeking leave. Section 16 of the Supreme Court Act 1975 provides that notice of appeal or of application for leave to appeal in the case of a civil appeal, must be filed within forty days of judgment or such further time as is allowed upon application made within that forty days. Section 14 of that Act provides (so far as is relevant to this appeal), that:

“(3) No appeal lies to the Supreme Court without leave of the Supreme Court ...

(b) from an interlocutory judgment made or given by a Judge of the National Court except ...

(i) none of the exceptions are applicable

(ii) none of the exceptions are applicable

(iii) none of the exceptions are applicable

(4) An Order refusing unconditional leave to defend an action shall not be deemed to be an interlocutory judgment.”

Setting aside for the moment s. 14(4), it seems clear that an order of the kind made by the National Court in this case, though it may be final in its effect, is an interlocutory judgment within the meaning of s. 14(3). In Hunt v. Allied Bakeries Ltd.[ci]³ Lord Evershed M.R. had this to say:

“... I am left in no doubt at all that, rightly or wrongly, orders dismissing actions — either because they are frivolous and vexatious, or on the ground of disclosure of no reasonable cause of action — have for a very long time been treated as interlocutory. In ... [Re Page[cii]⁴] that is stated already as having been the fact in 1910; and since then, of course, another forty-six years have gone by.

The judgment of Buckley L.J. upon this matter is particularly worth looking at because it is plain that he felt a little difficulty, at any rate in the logic of the matter, since beyond a peradventure, if the present order stands, it is an end altogether of the case. ‘To my mind’ says Buckley L.J., ‘it would be reasonable to say that that is a final order’ [Re Page[ciii]⁵]; but then he defers to the view of his brethren. He says, and this is the passage which seems to me to be important[civ]⁶:

‘I am not prepared to differ from the view taken by the other members of the court. I yield my judgment to theirs without saying that I am completely satisfied with the reasons given for the view that this is an interlocutory order. A decision to that effect is certainly the more desirable, because if the order is reversed the action will have to go on, and if it is to go on it ought to go on at once.’

That argument, I think, is of considerable force in considering this kind of case.

I have said that Re Page[cv]⁷ was a case in which the statement of claim was struck out as being frivolous and vexatious. I observe, however, that Cozens-Hardy M.R. in his judgment regarded as governing the case another decision referred to by him [Stewart v. Royds[cvi]⁸] where the order had been made for striking out the claim on the ground that an order for security for costs had not been complied with. Furthermore ... [on May 19th, 1953, in Arnot v. Amber Chemical Co. Ltd.[cvii]⁹], this court (consisting of Singleton L.J., Jenkins L.J., and Morris L.J.), held that the same principle and the same rule applied in the case of an action dismissed for want of prosecution.

When these matters are added together, and it is also recalled that [R.S.C.] Ord. 25, r. 4, covers both the case of dismissal for want of showing a reasonable cause of action and also for being frivolous and vexatious, it is, to my mind, perfectly plain that we are now bound to hold that this order was interlocutory ...”

Again, in Salter Rex & Co. v. Ghosh[cviii]¹⁰, Lord Denning M.R. stated (emphasis mine):

“There is a note in the Supreme Court Practice 1970 under R.S.C. O. 59, r. 4, from which it appears that different tests have been stated from time to time as to what is final and what is interlocutory. In Standard Discount Co. v. La Grange[cix]¹¹ and Salaman v. Warner[cx]¹² Lord Esher M.R. said that the test was the nature of the application to the court: and not the nature of the order which the court eventually made. But in Bozson v. Altrincham Urban District Council[cxi]¹³ the court said that the test was the nature of the order as made. Lord Alverstone C.J. said that ‘... the test is whether the judgment or order as made finally disposed of the rights of the parties.’ Lord Alverstone was right in logic but Lord Esher was right in experience. Lord Esher’s test has always been applied in practice. For instance, an appeal from a judgment under [R.S.C.] O. 14 (even apart from the new rule) has always been regarded as interlocutory: and notice of appeal had to be lodged within fourteen days. On an appeal from an order striking out an action as being frivolous or vexatious, or as disclosing no reasonable cause of action, or dismissing it for want of prosecution — every such order is regarded as interlocutory: see Hunt v. Allied Bakeries Ltd.[cxii]¹⁴.

So I would apply Lord Esher’s test to an order refusing a new trial. I look to the application for a new trial and not to the order made. If the application for a new trial were granted, it would clearly be interlocutory. So equally when it is refused, it is interlocutory. It was so held in [an unreported case] Anglo-Auto Finance (Commercial) Ltd. v. Dick[cxiii]¹⁵, and we should follow it today.”

In similar vein, the High Court of Australia in Dudgeon v. Chie[cxiv]¹⁶, unanimously decided that an order whereby an appearance and particulars of defence in ejectment were struck out and leave given to enter judgment for recovery, was an interlocutory, not a final, order — and required leave to appeal.

It was nevertheless submitted strongly in this court that the National Court’s order in this instant case amounted inferentially to a refusal of “unconditional leave to defend an action”, and that therefore leave was not required (s. 14(4) Supreme Court Act).

At the hearing of the summons, an affidavit by the defendant’s solicitor was read, in which it was conceded that the defence and counter claim filed were in effect bogus. No application had been made for further time to draw a defence until at the hearing defence counsel sought to make an application for time to be extended in which to deliver a defence. His Honour was of the view that such an application could not be entertained as a defence had been delivered, and it was necessary for him to deal with the summons to strike it out.

The applicant contends that when an order is made granting leave to enter final judgment, the court is therein “refusing unconditional leave to defend” within the meaning of s. 14(4) Supreme Court Act. That this is not so is I think reflected in the grant of two separate discretionary powers to the judge on motion under O. XVIII; (a) to give leave to enter final judgment, and (b) to give leave to defend unconditionally or conditionally. The judgment of the National Court would seem to indicate that when the time came to make any order under O. XVIII r. 1, no application such as could have been made under O. XVIII r. 6, was in fact made to it.

The true position would seem to have been that, in so far as defences had been filed, the application ought properly to have been brought under O. XXII r. 31, rather than under O. XVIII r. 1. It was, under O. XXII r. 31, open to the court to order that defences be struck out and judgment be entered for want of pleading. In the result the National Court made orders appropriate to both O. XVIII r. 1 and O. XXII r. 31 by striking out defences and counter claim and giving leave to enter judgment (rather than entering judgment). The order cannot in my opinion be construed as a refusal to give unconditional leave to defend. That being so, leave is required before appeal may be brought against it. Leave has not been sought. I consider therefore that the appeal has to be struck out.

RAINE DCJ: The facts, the relevant sections and rules and extracts from the leading judgments on the meaning of “interlocutory judgment” are all set out in the judgment of the Chief Justice which I have read in draft.

Before coming to s. 14(4) of the Supreme Court Act I will deal with s. 14(3)(b). I am strongly of opinion that what his Honour did in the National Court was to make an interlocutory order. I respectfully adopt what Lord Denning M.R. said in Salter Rex & Co. v. Ghosh[cxv]¹⁷ when his Lordship said: “If the application for a new trial were granted, it would clearly be interlocutory. So equally when it is refused, it is interlocutory.”

Section 14(4) is the more difficult matter to resolve.

I take a slightly different view of what the judge did than does the Chief Justice. I imagine that what his Honour had in mind was O. XVIII r. 1, but what he in fact did was to act under O. XXII r. 31 because the initial order was “that the defence delivered by the defendant be struck out”. And his Honour did the same in relation to the counterclaim. It is true that his Honour concluded “I order that liberty be granted to enter judgment against the defendant”, the proper order under O. XXII r. 31 being “I order that judgment be entered ... etc.” I treat what his Honour did as being, as a matter of reality, an entry of judgment. This cannot amount to a refusal to give unconditional leave to defend. I would therefore dismiss the appeal, leave to appeal not having been sought.

The so called defence and counterclaim, put on, very mistakenly as a holding device, were bogus, as the Chief Justice has observed. One trusts that we will see no more of this. It was really a breach of process, and, in addition, led his Honour to believe that he was disqualified from granting the defendant’s counsel the relief he sought.

In conclusion I might add, that had I come to a different conclusion on the leave point I feel that the defendant would have been hard put to succeed. His Honour took into account, assuming it was an O. XVIII r. 1 application, all the principles that apply in such applications were applied and it did not produce a result so obviously wrong as to lead an appeal court to conclude that although error could not be pointed to that nevertheless error there must have been.

PRITCHARD J: I have had the benefit of reading the judgments of my brothers and I agree with the reasons advanced by them and the orders proposed.

Appeal dismissed. Judgment and order confirmed.

Solicitors for the appellant: Young & Williams.

Solicitors for the respondent: Craig Kirke & Wright.

ence>[xcix][c]The effect of these rules is set out infra at p. 133.

[ci] [1956] 1 W.L.R. 1326, at p. 1328; [1956] 3 All E.R. 513, at p. 514.

[cii][1910] 1 Ch. 489.

[ciii][1910] UKLawRpCh 24; [1910] 1 Ch. 489, at p. 494.

[civ][1910] UKLawRpCh 24; [1910] 1 Ch. 489, at p. 494.

[cv][1910] 1 Ch. 489.

[cvi](1904) 118 L.T.J. 176.

[cvii] (1953) The Times, 20th May, 1953.