SC973

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 8 OF 2003

BETWEEN
DALE CHRISTOPHER SMITH
Appellant

V

MINISTER FOR LANDS
First Respondent

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Respondent

NCD WATER & SEWERAGE LIMITED TRADING AS EDA RANU
Third Respondent

Waigani: Injia CJ, Mogish J, Cannings J
2008: 25 November, 
2009: 1 June

JUDICIAL REVIEW – decision-making process of the National Court – duty of trial judge to clearly and separately address grounds of review and remedies.

APPEALS – decision-making process of appellate courts – duty of appellate court to separately address grounds of appeal and consequential orders – Supreme Court Act, Section 16.

The appellant’s land was compulsorily acquired by the State under the Land Act 1996. In the National Court he applied for judicial review of the decisions of the Minister for Lands that led to the compulsory acquisition. He relied on three grounds of review and sought orders in the nature of certiorari quashing the Minister’s decisions and declarations that the compulsory acquisition was unlawful and that he was still the registered proprietor of the land. The National Court appeared to uphold the grounds of review but failed to grant the relief sought by the appellant, instead ordering that he be paid compensation. He appealed to the Supreme Court principally on the ground that the trial judge erred by ordering compensation and not granting him the relief that he sought; and asked the Supreme Court to quash the National Court’s decision and make the orders that he had sort in the National Court.

Held:

(1)	When the National Court hears an application for judicial review the judgment of the trial judge should convey two discrete decisions, and the reasons for them. First, whether the grounds of judicial review are upheld. Secondly, if one or more are upheld, whether the remedies sought by the applicant are, in the exercise of the court’s discretion, granted (Mision Asiki v Manasupe Zurenuoc (2005) SC 797 considered).

(2)	A similar principle applies to appeals. The appellate court first decides whether one or more of the grounds of appeal are upheld. If yes, it proceeds to exercise its discretion as to what relief, if any, should be granted.

(3)	In a civil appeal to the Supreme Court, the Court’s discretion as to what relief, if any, should be granted, is exercised under Section 16 (decision etc on appeal) of the Supreme Court Act, which states:

On the hearing of an appeal, the Supreme Court shall inquire into the matter and may—

(a)	adjourn the hearing from time to time; or
(b)	affirm, reverse or modify the judgement; or
(c)	give such judgement as ought to have been given in the first instance; or
(d)	remit the case in whole or in part for further hearing; or
(e)	order a new trial.

(4)	In the present case, the trial judge erred in law by not making a clear decision on whether the grounds of review were upheld and by not clearly and separately addressing the issue of what the appropriate remedy was.

(5)	The appeal was accordingly upheld and the Supreme Court in the exercise of its discretion under Section 16(e) of the Supreme Court Act ordered a new trial.

Cases cited

The following cases are cited in the judgment:

Isaac Lupari v Sir Michael Somare (2008) N3476
Island Helicopter Services Ltd v Wilson Sagati (2008) N3340
Jeffrey Afozah v The Police Commissioner (2008) N3300
John Joe Nemambo v Peter Peipul (1994) SC475
Koitachi Ltd v Walter Schnaubelt (2007) SC870
Mision Asiki v Manasupe Zurenuoc (2005) SC797
Nancy Tambe v Linda Tamsen (2004) N2714
Paul Asakusa v Andrew Kumbakor (2008) N3303
Paul Saboko v Commissioner of Police (2006) N2975
Ramu Nickel Limited v Dr Puka Temu MP (2007) N3116

APPEAL

This was an appeal against orders of the National Court made in an application for judicial review.

Counsel

B Frizzell, for the Appellant
R Thompson, for the Third Respondent

1 June, 2009

1.      BY THE COURT: Dale Christopher Smith, the appellant, is appealing against the orders made by the National Court in an application for judicial review.

2.     Mr Smith was the applicant in the National Court. He was the registered proprietor of a 78-hectare parcel of land in the Nine Mile area on the outskirts of Port Moresby. In February 2000, 14.79 hectares of his land was compulsorily acquired by the State under the Land Act 1996. It has since been developed by Eda Ranu, the third respondent, and is now the site of a pumping station and other facilities that are part of the Port Moresby water supply system.

2.     In the National Court, Mr Smith argued that various decisions of the Minister for Lands, the first respondent, which resulted in his land being compulsorily acquired, were made contrary to the Land Act. He sought orders in the nature of certiorari quashing the Minister’s decisions. He also sought declarations that the compulsory acquisition was unlawful and that he is still the registered proprietor of the land.

3.     Mr Smith’s application for judicial review, OS No 402 of 2002, was heard by Sheehan J who, on 20 December 2002, ordered that Mr Smith be compensated with the sum of K370,000.00 for the compulsory acquisition of his land. Mr Smith is aggrieved by that decision. He says that he does not want compensation. He wants his land. He wants a declaration that his land was unlawfully acquired by the State and that he is still the registered proprietor. He says that he did not ask for compensation in the National Court and that the trial judge misconstrued concessions made by his counsel and erred in law.

4.     The issues we have to determine are:

1	Did the trial judge misconstrue concessions made by the appellant’s counsel at the trial?

2	Did the trial judge uphold the appellant’s grounds of judicial review?

3	Did the trial judge err in law by ordering compensation?

4	If the trial judge erred, what orders should the Supreme Court make?

1	DID THE TRIAL JUDGE MISCONSTRUE CONCESSIONS MADE BY THE APPELLANT’S COUNSEL AT THE TRIAL?

5.     Mr Frizzell, for the appellant, submits that the trial judge was led into error because he misconstrued the appellant’s concession, made at the trial, that the State did have the power to compulsorily acquire the land. Mr Frizzell submits that the concession was only made in general terms. It was conceded that the power was available under the Land Act, Section 13, but it was not conceded that the power was properly exercised in this case.

6.     Mr Frizzell points to the following passage from the trial judge’s judgment:

Since commencement of the proceedings the plaintiff has conceded the power of the State to compulsorily acquire the land. The compass of the dispute now resolving to one issue namely the fair compensation to be paid for the land acquired.

7.     Mr Frizzell submits that the first proposition – that the appellant conceded the power of the State to compulsorily acquire the land – was, in general terms, correct. But the second proposition – that the issue before the court was about compensation – was not correct. He concedes that at the trial there was evidence about compensation but stresses that the appellant never resiled from his argument that the appropriate relief was certiorari to quash the Minister’s decisions and declarations that the acquisition was null and void and that the appellant was still the registered proprietor.

8.     Ms Thompson, for Eda Ranu, the third respondent, did not effectively counter these arguments and we find them to have considerable merit.

9.    We have examined the originating summons and the statement filed under Order 16, Rule 3(2)(a) of the National Court Rules. That statement is a critical document. It sets the parameters of a judicial review proceeding (John Joe Nemambo v Peter Peipul (1994) SC475; Koitachi Ltd v Walter Schnaubelt (2007) SC870; Nancy Tambe v Linda Tamsen (2004) N2714; Paul Saboko v Commissioner of Police (2006) N2975; Paul Asakusa v Andrew Kumbakor (2008) N3303). It sets out the grounds on which the applicant for judicial review challenges the decision being reviewed and the remedies being sought. Once leave for judicial review is granted, an applicant is not permitted to deviate from the grounds relied on or remedies sought without the leave of the court (see Order 16, Rules 6(1) and (2) of the National Court Rules). In this case there were three grounds relied on, and they were all concerned with alleged breaches of Section 13(6) of the Land Act by the Minister for Lands. The relief sought was confined to certiorari and declarations. There was no mention of compensation. Leave was neither given nor sought to amend the Order 16, Rule 3(2)(a) statement.

10.     We have examined the transcript of the proceedings in the National Court. We agree with Mr Frizzell (who was the appellant’s counsel in the National Court as well as before us) that it contains no evidence of any concession by the appellant that his land was lawfully acquired by the State. Nor is there any indication by the appellant’s counsel that the relief sought by the appellant was being switched from what was in the Order 16, Rule 3(2)(a) statement to compensation.

11.     We therefore uphold the grounds of appeal which assert that the trial judge erred by misconstruing concessions made by the appellant at the trial. 

2	DID THE TRIAL JUDGE UPHOLD THE APPELLANT’S GROUNDS OF JUDICIAL REVIEW?

12.     Land can be compulsorily acquired in three ways under the Land Act:

•	the Minister gives a notice to treat to the owner of the land and a period of two months lapses after service of the notice (Sections 12(1)(a) and 13(1) to 13(5));

•	the owner of the land cannot be located (Section 12(1)(b));

•	the Minister certifies that there are special reasons why the notice to treat provisions of Section 13 should not apply (Sections 12(1)(c) and 13(6)).

13.     Once land is compulsorily acquired, it is vested in the State and freed and discharged from all interests (Section 12(2)).The interest of every person in that land is converted into a right to compensation (Section 14).

14.     In the present case the Minister used the third method of compulsory acquisition by publishing a ‘certificate of non-application under Section 13(6)’ in the National Gazette No G17 of 24 February 2000 in the following terms:

Land Act 1996

CERTIFICATE OF NON-APPLICATION UNDER SECTION 13(6)

I, Dr Fabian Pok, Minister for Lands, by virtue of the powers conferred by Sections 13(6) of the Land Act 1996, and all other powers me enabling, hereby certify that there are special reasons why Section 13 of that Act relating to the acquisition of land by compulsory process should not apply to the land described in the Schedule hereto namely that the land is required by NCD Water and Sewerage Limited for the construction and commissioning of a new water treatment plant, pumping facilities and purposes ancillary thereto given that the topography of the land adjoining the existing Mount Eriama water treatment plant located within the adjoining Portion 2439, Milinch Granville, Fourmil Moresby, National Capital District, is topographically difficult and not suitable for the purpose, given that NCD Water and Sewerage Limited’s documented endeavours to negotiate with the leaseholder the purchase of the required land out of Portion 1435, Milinch Granville, Fourmil Moresby, National Capital District, have not resolved a sale/transfer of the land at a consideration deemed appropriate, and given that Section 4 (“Powers of the Company”) of the National Capital District Water Supply and Sewerage Act 1996 does, where necessary and justified, authorise NCD Water and Sewerage Limited to access and utilise the powers of the Land Act 1996 in order to effect the acquisition of land within the National Capital District required for water and/or sewerage and ancillary purposes.

15.     In the same edition of the National Gazette the Minister published a notice of ‘acquisition of land by compulsory process’, which stated:

Land Act 1996

ACQUISITION OF LAND BY COMPULSORY PROCESS

I, Dr Fabian Pok, Minister for Lands, by virtue of the powers conferred by Section 12(1)(c) of the Land Act 1996 and all other powers me enabling, hereby declare that the land referred to in the Schedule is acquired by compulsory process for public utility purposes being the construction and commissioning of a new water treatment plant, pumping facilities and purposes ancillary thereto.

16.     In his Order 16, Rule 3(2)(a) statement filed in the National Court, the appellant pleaded three grounds of judicial review of the Minister’s decisions:

A	At all material times the special reasons referred to by the second defendant being the reasons referred to in gazettal 24th of February 2000 purportedly in pursuance of Section 13(6) of the Land Act are not bona fide in so far as it was said there was negotiation for sale of the land between NCD Water & Sewerage Ltd and the plaintiff.

B	The said negotiation was at no time carried out in a bona fide manner and the real purposes of the Minister exercising powers under Section 13(6) of the Land Act were to avoid NCD Water & Sewerage Ltd having to purchase the said land at its real value. The Minister in exercising his powers under Section 13(6) of the Land Act failed to take into account matters relevant to the exercise of his discretion.

C	No reasonable person considering relevant grounds could have come to the decision which the Minister did in respect of special reasons purportedly advanced for the exercise of his powers under Section 13(6) of the Land Act.

17.     Mr Frizzell asserts that these grounds of review were in effect upheld by the trial judge when he stated in his written judgment that:

The Court is completely satisfied that the plaintiff’s account of the history of this acquisition is wholly accurate, that there had indeed been no true negotiation by the defendant Eda Ranu to establish a fair price. There had only been a take it or leave it counter-offer to the plaintiff’s own offer.

18.     Mr Frizzell submits that the National Court found as a consequence that there was no proper legal basis for the acquisition and upheld the three grounds of judicial review.

19.     We do not agree with that submission. The trial judge did not expressly find that there was no proper legal basis for the acquisition. His Honour was critical of the way that the acquisition was effected and was of the view that the third respondent, Eda Ranu, had not acted bona fide. He appeared to be of the view that the three grounds of review should be upheld but did not actually address them in his judgment.

20.     We are of the view that, with respect, the learned trial judge erred in law by not making a clear determination of the grounds of review pleaded by the appellant in the Order 16, Rule 3(2)(a) statement.

3	DID THE TRIAL JUDGE ERR IN LAW BY ORDERING COMPENSATION?

21.     This is the most significant part of the appeal. Mr Frizzell again drew our attention to the originating summons and the Order 16, Rule 3(2)(a) statement, which make no mention of the appellant seeking compensation, and the transcript, which contains no record of any switch in the relief sought by the appellant.

22.     Ms Thompson submits that the transcript does in fact reveal that the trial judge acknowledged that the Minister’s decisions could be quashed but went on to say that it would not be in the interests of good governance to do that. She submits that the trial judge found that to grant certiorari would serve no purpose as the parties would be put back in the same position by having to determine the fair value of the land. Further, that his Honour found that it was in the interests of all parties to call evidence and assess the fair value of the land, so that the issue could be determined in the same way as if the Minister’s decisions had been validly made.

23.     We agree with Ms Thompson that his Honour appeared to express those views in exchanges with counsel during the trial. The problem is that those views did not find their way into his Honour’s judgment. We are determining an appeal against the orders of the National Court and in doing so we must focus on the reasons for the decision to make those orders expressed in the written judgment of the court. If there is no written judgment, the Supreme Court will focus on the reasons expressed orally when the trial judge pronounces the orders of the National Court.

24.     Here, there is a written judgment dated 20 December 2002. It is the orders pronounced through that judgment and the reasons for making those orders expressed within the judgment that we must focus on. When we do that, we find ourselves agreeing with Mr Frizzell that the learned trial judge did not adequately explain why he was assessing compensation when the appellant did not seek compensation. Having expressed the view, albeit tacitly, that the Minister’s decisions were affected by error of law, his Honour should have proceeded to exercise his discretion, carefully and methodically, as to what remedies, if any, should be granted. As the Supreme Court pointed out in Mision Asiki v Manasupe Zurenuoc (2005) SC797:

It is one thing to establish an error of law or a breach of natural justice and for the court to uphold an application for judicial review. It is another, separate, step to establish a case for a remedy. In judicial review proceedings the remedies to be granted are at the discretion of the court. As Sheehan J stated in Tohian v Geita and Mugugia (No 2) [1990] PNGLR 479, National Court:

… in judicial review, even though the court might find there has been an error, even an error affecting matters of jurisdiction, the court would not thereby be obliged automatically to quash the … proceedings. The remedies available under judicial review remain always at the discretion of the court and will only be granted to avoid injustice.

The court must therefore look at all the circumstances of the case and decide whether it is appropriate to grant a remedy; and if it is, what the remedy should be. It is not a formality. The court should generally only consider granting a remedy that has been specifically sought by the applicant for review or that would serve a useful purpose.

25.     That statement of principle in Asiki has been adopted in a number of National Court decisions, eg Ramu Nickel Limited v Dr Puka Temu MP (2007) N3116; Jeffrey Afozah v The Police Commissioner (2008) N3300; Island Helicopter Services Ltd v Wilson Sagati (2008) N3340; and Isaac Lupari v Sir Michael Somare (2008) N3476.

26.    In practical terms, the Asiki principle means that when the National Court hears an application for judicial review the judgment of the trial judge should convey two discrete decisions, and the reasons for them. First, whether the grounds of judicial review are upheld. Secondly, if one or more are upheld, whether the remedies sought by the applicant ought to be, in the exercise of the court’s discretion, granted.

27.     In the present case, we have already found (in issue No (2) above) that the learned trial judge erred by not making a clear decision on whether the grounds of review were upheld. We make a similar finding regarding the question of remedies. Though he appears to have discussed the issue in exchanges with counsel during the trial, his Honour did not address in his judgment the issue of what the appropriate remedy was. He did not explain why he was not going to grant an order for certiorari regarding the Minister’s decisions (that being the primary relief sought by the appellant) or why he was not making the declarations sought by the appellant (that the Minister’s Section 13(6) certificate was null and void and that the appellant was still the registered proprietor). His Honour did not explain why he was ordering payment of compensation when, clearly, the appellant did not seek compensation. Further, there was no proper basis for an award of compensation or damages as such a remedy can only be granted if it is specifically claimed, and here it was not claimed (see Order 16, Rule 7).

28.     For those reasons we conclude, with respect, that the learned trial judge erred in law by ordering compensation.

4	IF THE TRIAL JUDGE ERRED, WHAT ORDERS SHOULD THE SUPREME COURT MAKE?

29.     Through his notice of appeal to the Supreme Court, the appellant seeks not only an order that the decision of the National Court be quashed, he seeks, in addition, the same remedies that he sought before the National Court: certiorari and declarations that the Minister’s Section 13(6) certificate was null and void and that he is still the registered proprietor.

30.    In a civil appeal, the discretion as to what order should be made is exercised under Section 16 (decision etc on appeal) of the Supreme Court Act , which states:

On the hearing of an appeal, the Supreme Court shall inquire into the matter and may—

(a)	adjourn the hearing from time to time; or
(b)	affirm, reverse or modify the judgment; or
(c)	give such judgment as ought to have been given in the first instance; or
(d)	remit the case in whole or in part for further hearing; or
(e)	order a new trial. 

31.     Mr Frizzell is asking us to invoke Section 16(c) and make the orders that should have been made by the National Court. We are not going to do that as we have not heard full argument on whether the Minister erred by issuing the Section 13(6) certificate and publishing the declaration under Section 12(1)(c) of the Land Act. Our primary focus has been on whether the trial judge erred, not whether the Minister erred.

32.     Ms Thompson submits that we should invoke Section 16(b) of the Supreme Court Act and affirm the judgment of the National Court, even though it may contain errors of law. Ms Thompson submits that not only would it serve no purpose to quash the Minister’s decisions or make the declarations sought by the appellant (relief that we have just ruled out), it would also be futile to quash the trial judge’s decision as that would set in train a course of events that would send the parties back to where they started. Inevitably, she submits, the Minister would then go through the same process of compulsory acquisition and the appellant would then, again, be entitled to compensation. The only difference would be, Ms Thompson submits, that the appellant could be worse off. The National Court already gave him the best possible outcome. If the case were to be reheard, the National Court might find that the Minister’s decisions were validly made, that the fair value of the land was significantly less than that arrived at the first time, and that the appellant was not entitled to any damages (as the trial judge included a component of K75,000.00 damages for failure to negotiate compensation in a fair and timely manner).

33.     We are not persuaded by Ms Thompson’s submissions. They are unduly speculative. We have already said that we are not in a position to determine the application for judicial review or make the sort of orders that the appellant sought in the National Court. So we cannot predict that, if the National Court were to rehear the case and quash the Minister’s decisions, the Minister would go through the same process as before and make the same decisions as before. We are not in a position to say what the result of any negotiation would be. We are certainly not able to say whether the appellant obtained the best possible outcome in the National Court. It might be that the value of the land has increased in the last seven years. Perhaps that is the underlying reason the appellant wants to pursue this appeal. Perhaps it is a matter of principle that is driving him. We do not know such things and it would be improper for us to speculate about them.

34.     What we do know is that errors of law were made by the National Court and that the best and fairest way of correcting those errors is for the matter to be reheard. We will therefore exercise our discretion under Section 16(e) of the Supreme Court Act and order a new trial.

ORDER

35.     We will order that:

(1)	The appeal is upheld.

(2)	The whole of the judgment and orders of the National Court of 20 December 2002 in OS No 402 of 2002 is quashed.

(3)	There shall be a new trial of the application for judicial review in OS No 402 of 2002.

(4)	The third respondent shall pay the costs of the appeal to the appellant on a party-party basis, to be taxed, if not agreed.

Judgment accordingly.
____________________________________________________________
Warner Shand:	 Lawyers for the Appellant 	
Young & Williams: Lawyers for the Third Respondent