SC1229

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC APP NO 1 OF 2013
SCA NO 9 OF 2013

DR NICHOLAS MANN, SECRETARY, DEPARTMENT OF HEALTH
First Appellant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Appellant

V

ALPAR TRADING LIMITED
Respondent

Waigani: Davani J, Cannings J, Collier J
2013: 30 April, 3 May

PRACTICE AND PROCEDURE – application for extension of time in which to lodge notice of appeal – Order 7, Rule 2, Supreme Court Rules 2012 – meaning of "heard" – whether appellants acted promptly to file application for extension of time – whether explanation for delay adequate – whether grounds of appeal have merits.

PRACTICE AND PROCEDURE – notice of objection to competency of appeal – whether notice of appeal filed within extended time to appeal.

After the National Court delivered judgment for the respondent in the sum of approximately K30 million the appellants filed an application for extension of time in which to appeal. There was confusion as to whether the application had been granted by a single judge of the Supreme Court so the application was brought to the full court of the Supreme Court for determination. The respondent opposed the application. The appellants also filed a notice of appeal against the judgment of the National Court. The respondent filed a notice of objection to the competency of that appeal on the ground amongst others that it was filed out of time.

Held:

(1)	The application for extension of time had not in fact been determined, so it was necessary to hear and determine it.

(2)	The application for extension of time was granted.

(3)	The objection to competency of the appeal was upheld as the notice of appeal had been filed late and without an extension of time having been granted.

Cases cited

The following cases are cited in the judgment:

Avia Aihi v The State (No. 1) [1981] PNGLR 81
Bakani v Daipo [2001] PGSC 19
Bakani v Daipo [2002] PGSC 14
Green v Lord Penzance (1881) 6 App Cas 657 at 678
Karingu v Henao [1994] PGSC 2
Nerau v Solomon Taiyo Ltd [1993] PNGLR 395
Small Business Development Corporation v Totamu [2010] PGSC 44
State v James Robert Colbert [1988] PNGLR 138
Toale Hongiri Incorporated Land Group v Wolotou Incorporated Land Group [(2012) SC1201
Was Neimari and Others v Maria Iapential and Joseph Romen 02.10.08 (unreported)

APPLICATION AND OBJECTION 

This was an application for an extension of time to appeal against a judgment of the National Court and an objection to competency of an appeal against the same judgment. 

Counsel

E Geita & W Mapiso, for the appellants
M Kokiva, for the respondent

3rd May, 2013 

1. BY THE COURT: On 18 December 2012 Kirriwom J ordered that the defendants in National Court proceeding WS 568 of 2007, being the appellants before this Court, pay damages to the respondent Alpar Trading Limited in the sum of K30,351,788.50, such sum to be apportioned equally between the appellants.

2. On 23 January 2013 the appellants filed an application for an extension of time in which to lodge a Notice of Appeal against his Honour's orders. That application is opposed by the respondent in this case.

3. Further, on 8 February 2013 the second appellant, the State, filed a separate Notice of Appeal against his Honour's orders. On 19 March 2013 the respondent filed a Notice of Objection to Competency in relation to the appeal.

4. Both the application for an extension of time and the Notice of Objection to Competency have now come before the Full Bench of this Court. This case has been attended by procedural irregularities, which in themselves form grounds for objection by the respondent. Before turning to matters of substance it is helpful to outline the background facts and the chronology of events, which assist in explaining the confusion which appears to have arisen in this case.

BACKGROUND

5. Relevant background facts as found by the trial judge are set out in his Honour's findings in respect of liability, provided to the parties on 13 August 2010 and reiterated in his Honour's judgment of 18 December 2012. In summary, his Honour found relevant facts as follows:

•	In or about 2004 a project was developed by the National Department of Health ("the Department") under the direction of the first appellant ("Dr Mann"), in consultation with Mr Ron Seddon of Rotary Against Malaria ("RAM"). This project concerned the supply of treated mosquito nets of a particular brand – PermaNet – approved by the World Health Organisation, to certain parts of Papua New Guinea, in order to minimise the spread of malaria.

•	The project was funded for several years by Global Fund, an international body involved in the fight against malaria. The co-ordination of the donor funding of the project in Papua New Guinea was monitored by a Central Monitoring Committee established by the Department of Health, namely the Technical Evaluation Committee, chaired by Dr Mann, and of which Mr Seddon was deputy chair.

•	For two years, under Global Fund financing arrangements, PermaNet treated mosquito nets were supplied by the Department of Health and RAM to districts in Papua New Guinea.

•	The Central Supply and Tenders Board ("CSTB") then placed the project on public tender. Bidders included RAM and the respondent to the current proceeding.

•	The CTSB awarded the contract for the project to the respondent, whose bid was in the vicinity of K9 million. On 23 August 2006 the respondent entered into a contract with the CTSB on behalf of the Independent State of Papua New Guinea.

•	Dr Mann and RAM protested to the CTSB the decision to award the contract to the respondent. The Ombudsman Commission investigated the award of the contract to the respondent, however identified no evidence of irregular conduct.

•	The Vietnamese supplier of PermaNet mosquito nets informed the appellants, who in turn informed the respondent that the supplier had entered into an exclusive arrangement for the supply of PermaNet to RAM, and would not deal with any other supplier in Papua New Guinea (including the respondent).

•	The respondent then secured a supply arrangement of a substitute brand of mosquito net, Olyset, from a Japanese supplier.

•	The respondent required a letter of guarantee from the Technical Evaluation Committee that payment for the substituted mosquito nets was available through the Global Fund arrangement in order to finalise the contract with the Japanese supplier. A letter of guarantee was not provided.

•	Global Fund withdrew funding for the project, and informed relevant parties that it intended to directly supply mosquito nets in Papua New Guinea. It appears then that Global Fund subsequently awarded a contract to RAM for the supply of mosquito nets, and that RAM received the benefit of a contract with Global Fund subsisting over a number of years worth about K30 million.

6. The respondent commenced action against Dr Mann and the State for breach of contract. The trial judge found that:

•	An inference could be drawn that the Vietnamese supplier had acted in the manner described at the instigation of Dr Mann and RAM.

•	Dr Mann was the only person with authority on whose discretion rested the progress of this contract from the time of its execution to the next level. Subordinates of Dr Mann in the Department had no relevant discretion.

•	Dr Mann had no intention of allowing the respondent to enjoy the benefit of the contract with the CTSB.

•	The State, through CTSB, had entered into a legally binding contract, but the successful tenderer could not perform the contract because of impediments placed in its path by, primarily, Dr Mann, who wanted the contract to be given to RAM.

•	Dr Mann breached the duly-executed contract between the respondent and the State when he refused to support and co-operate with the respondent to implement it, and is liable to the respondent in damages.

•	There was no evidence that Dr Mann was acting in his own personal and private interest.

•	The State is vicariously liable for the actions of Dr Mann.

•	The appellants argued that the inability of the respondent to perform the contract was due to the funding for the project being withdrawn, and that this was an act outside the parties' control. His Honour found, however, that the appellants needed to establish that they had done everything within their power to defend the contract and perform it, and that the Global Fund had "pulled the rug" under them.

•	In this case no evidence was given on behalf of the Global Fund. His Honour observed:

[47] …. Global Fund is merely a scapegoat in my view to bear the blame of deliberate and calculated decision taken by the First Defendant to defeat the Plaintiff was performing this contract.

•	The contract was "just a farce" (at [52]) and unlawfully terminated by Dr Mann for selfish reasons and not in the best interests of either the Department or the State.

•	The respondent was an innocent party induced to bid pursuant to the advertisement of an open public tender.

•	There was no amendment to the contract. The only issue arising was the description of the product that was sought to be substituted for the one contracted for.

•	Dr Mann had not conducted himself properly in accordance with proper business ethics, and had breached his fiduciary duty to the Department in aligning himself with RAM in its bid for the public tender.

•	It was the fault of Dr Mann and, through him, the State that the respondent was unable to perform the contract.

•	The contract did not lapse because of frustration.

7. As we have already observed, his Honour assessed damages payable to the respondent as being K30,351,788.50 against the appellants, to be borne in equal portions.

PROCEDURAL HISTORY

8. Order 7, Rule 1 of the Supreme Court Rules 2012 requires a person who desires to make an application for a further period in which to lodge a Notice of Appeal to apply within 40 days after the date of the judgment in question. It is not in dispute that, in relation to the judgment awarding damages against the appellants on 18 December 2012, the appellants were required to lodge a notice of appeal or an application for an extension of time in which to lodge a notice of appeal by 27 January 2013. There is an issue in dispute concerning the timetable for the filing of a notice of appeal against his Honour's findings of liability, to which we will shortly turn.

9. The appellants filed an application for extension of time in which to lodge an appeal on 23 January 2013. On 25 January 2013 Davani J made the following orders:

1	The requirement for service of this Application is dispensed with.

2	Subject to clause 4 herein, the Applicant is given an extension of time to appeal.

3	Subject to clause 4 herein, WS 568 of 2007 and any enforcement proceedings arising therefrom are stayed.

4	Both the stay orders and extension of time orders are to be made returnable and argued before a Supreme Court Motions Judge on 8 February 2013 at 9.30 am.

5	All documentation filed in this proceeding including these Orders, will be served upon the Respondents three (3) clear days before 8 February 2013.

6	Time is abridged to the time of settlement to take place forthwith.

10. On 8 February 2013 Davani J made further orders:

1	The orders of 25 January 2013 are extended to Monday 11 February 2013 at 9.30 am.

2	Matter returns to court on Monday 11 February 2013 at 9.30 am.

11. On 11 February 2013 Gavara-Nanu J made the following orders:

1	The Stay Orders issued by Davani J and extension of time for appellants to appeal on 8 February 2013 are extended to Monday 25 February 2013 at 9.30 am.

2	Time is abridged.

3	Costs in the cause.

4	Mr Tanuvasa to take out orders and serve orders on the other parties.

12. On 20 February 2013 the matter came before the Chief Justice, who made the following Directions:

1	The Application for extension of time for the appeal was filed within time pursuant to Section 17 of the Supreme Court Act and O7 r2 of the Supreme Court Rules.

2	The time for making the application was extended by Davani J on 8 February 2013 to 11 February 2013 and extended further to 25 February 2013 by Gavara-Nanu J.

3	The two extensions are consistent with O7 r2 of the Supreme Court Rules with regard to the hearing of the application remains to be argued before the Judge dealing with the extension of time.

4	The Application for extension of time is fixed for hearing on 25 February 2013 at 9.30 am.

5	The Application for extension of time shall be included in the Supreme Court Hearing List for the February sittings.

6	Costs of today's appearance shall be in the cause.

13. It then appears that the State filed a notice of appeal separately to the application for an extension of time which had been the subject of earlier orders. This action appears to have been a surprise to the respondent and its lawyer, as is clear from the affidavit of Ms Kokiva for the respondent sworn on 7 March 2013.

14. The explanation for the conduct of the State in filing a separate notice of appeal of the trial judgment can be found in the affidavit of Mr Tauvasa Tanuvasa of the Solicitor General's Office sworn on 21 March 2013. In that affidavit Mr Tanuvasa deposes, inter alia, that in light of the findings and orders of the trial judge, the State had concluded that there was a potential conflict of interest between Dr Mann and the State, and that it was appropriate for the State to lodge its own appeal.

15. The matter returned for mention before the Chief Justice on 5 March 2013. No transcript of that hearing is before this Court, however materially Mr Tanuvasa deposes in his affidavit of 21 March 2013:

39. I proceeded on with the appellants application. I submitted that based on the Supreme Court Judgment of ToRobert v ToRobert (2011) SC 1130 that there were only two (2) requirements for a Supreme Court application. Firstly whether the application had been made promptly and secondly explanation for delay. The Court was satisfied that these two requirements had been met. His Honour took the view that there was a third requirement which was that proposed grounds of appeal needed to be demonstrated that were serious or substantial or meritorious. I tried my best to satisfy this requirement by submitting some possible grounds of appeal but I was not sufficiently prepared to assist the Court.

40. His Honour adjourned the matter to Thursday 7 April 2013 at 1.30 pm as a part-heard matter. The Chief Justice directed me to serve a proposed draft Notice of Appeal to the Respondent's Lawyer by 12.00 noon on Wednesday 6 March 2013 and also provide the Court and the Respondent copies of the transcripts that I had recently received by 12.00 noon on Wednesday 6 March 2013.

41. I was directed to notify the respondent of two proposed grounds of appeal (one on liability and one on assessment) that I would make submissions on, on behalf of the appellants as being meritorious to persuade the Supreme Court to exercise its inherent discretion to grant the appellants application for extension of time.

16. Mr Tanuvasa deposes further that he complied with the directions of the Chief Justice (paragraphs 42-45). The matter returned before the Chief Justice on 7 March 2013. His Honour made the following orders:

1	The applicant in SCA 9/13 shall serve the notice of appeal on the respondent through its counsel, Ms Kokiva and file an affidavit of service forthwith.

2	The respondent shall if it so desires, file and serve a notice of objection to competency of the application in SCA 9/13 within 14 days from the date of service of the notice of appeal.

3	The hearing before this Court on SCAPP 1/13 is vacated and the matter referred to the full Court to be heard and determined.

4	The appellant in SCA 1/13 shall pay the respondent's costs of the proceedings before this Court on 18/02/13, 20/02/13 and 4/03/13 on a solicitor client bases amount to be agreed if not to be taxed.

5	The matter is adjourned to 22/03/13 at 9.30 am for directions to list the application in SCAPP 1/13 and the objection to competency in SCA 9/13 before the Full Court in the April sittings of the Supreme Court.

RELEVANT APPEAL DOCUMENTS

17. A Notice of Appeal in this proceeding on behalf of the State as second appellant alone was filed on 8 February 2013 in matter SCA No 9/2013. It states as follows:

NOTICE OF APPEAL

1	Pursuant to the orders of the Supreme Court in SCAPP No 1 of 2013 ordered 25 January 2012 and filed 28 January 2013 granting extension of time to the second appellant to appeal:

(a)	The whole of the judgment of the National Court (constituted by Kirriwom J) on liability given on 13 August 2010 in proceedings WS No 568 of 2007 (extending the orders of the Supreme Court in SCAPP No 13 of 2010 ordered 20 September 2010); and

(b)	The whole of the judgment of the National Court (constituted by Kirriwom J) on assessment of damages in the same proceedings (WS No 568 of 2007) given on 18 December 2012.

2	THE APPEAL lies without leave pursuant to Section 14(1) of the Supreme Court Act Ch No 37 in that they are from final judgments of the National Court on questions of law or on questions of mixed fact and law.

3	GROUNDS

(a)	The learned trial judge erred in mixed fact and law in finding that the appellants were in breach of contract.

(b)	The learned trial judge erred in mixed fact and law in finding that it was a term of the contract that the appellants were to provide the plaintiff with a certificate or letter of guarantee or undertaking that payment was available through the Global Fund.

(c)	The learned trial judge erred in mixed fact and law in finding that the appellants breached the contract by failing to cooperate or support the plaintiff in the implementation of the contract.

(d)	The learned trial judge erred in mixed fact and law in finding that it was a term of the contract that the appellants were to pay 50% of the contract price upfront to the respondent.

(e)	The learned trial judge erred in mixed fact and law in finding that the contract between the respondent and the second appellant was amended or varied after its execution by the parties.

(f)	The learned trial judge erred in law in admitting the respondent's evidence and failing to uphold the appellants' objections to the admission of that evidence.

(g)	The learned trial judge erred in mixed fact and law in finding that the second appellant was vicariously liable for the actions of the first appellant.

(h)	The learned trial judge erred in mixed fact and law in finding that the contract was not frustrated.

(i)	The learned trial judge erred in mixed fact and law in finding that that respondent was able to comply with its contractual obligations prior to the termination of the contract.

(j)	The learned trial judge erred in mixed fact and law in finding that the contract was unlawfully terminated by the second appellant.

(k)	The learned trial judge erred in mixed fact and law in finding that the appellants unlawfully prevented the respondent from performing the contract.

(l)	The learned trial judge erred in mixed fact and law in finding that the respondent had a reasonable expectation of an extension of the contract.

(m)	The learned trial judge erred in mixed fact and law in the award of any damages to the respondent.

(n)	The learned trial judge erred in mixed fact and law in awarding the entire contract price as loss of bargain damages to the respondent.

(o)	The learned trial judge erred in mixed fact and law in awarding speculative loss damages to the respondent.

(p)	The learned trial judge erred in mixed fact and law in awarding solicitor-client costs against the appellants.

(q)	The learned trial judge erred in mixed fact and law in awarding pre-judgment interest to the respondent.

(r)	The learned trial judge erred in mixed fact and law by being biased in favour of the respondent and committed to his decision regarding damages before any evidence had been presented.

(s)	Such further and other grounds that may arise upon perusal of the Transcripts of the proceedings and the second appellant reserves its right to amend its grounds of appeal accordingly.

18. The State as second appellant sought orders including that the appeal be allowed and upheld, the orders and judgments of the trial judge be set aside, and that the respondent pay the State's costs.

19. On 6 March 2013 a supplementary affidavit in support sworn by Mr Tanuvasa the same date was filed in "SC APP/SCA 01/2013" annexing a draft notice of appeal naming both appellants. Mr Tanuvasa deposes in that affidavit that the draft notice of appeal highlights the proposed grounds of appeal for both appellants (at paragraph 4 of the affidavit).

20. In an affidavit in support sworn by Dr Mann on 28 March 2013 and filed on the same date, he deposes:

15. I refer to the draft grounds of appeal annexed to the supplementary affidavit in support sworn by Mr Tauvasa Tanuvasa on 6 March 2013 and filed on 6 March 2013 in SCAPP No 01 of 2013 and state that the draft grounds of appeal reflects the reasons for my grievance and my decision to seek an extension of time to appeal the decision on liability and assessment of damages.

21. Dr Mann also expresses concern that there is doubt as to the validity of the stay of enforcement of the decision at first instance (paragraph 17).
Significantly, the terms of the draft notice of appeal annexed to Mr Tanuvasa's affidavit of 6 March 2013 are different from the terms of the notice of appeal already filed. The draft notice of appeal is as follows:

NOTICE OF APPEAL

1	The first appellant and the second appellant appeal:

(a)	The whole of the judgment of the National Court (constituted by Kirriwom J) on liability given on 13 August 2010 in proceedings WS No 568 of 2007; and

(b)	The whole of the judgment of the National Court (constituted by Kirriwom J) on assessment of damages in the same proceedings (WS No 568 of 2007) given on 18 December 2012.

2	THE APPEAL lies without leave pursuant to Section 14(1) of the Supreme Court Act Ch No 37 in that they are from final judgments of the National Court on questions of law or on questions of mixed fact and law.

3	GROUNDS

A.	LIABILITY

(a)	The Learned Trial Judge erred in mixed fact and law in finding that the appellants were in breach of contract.

(b)	The learned trial judge erred in mixed fact and law in finding that it was a term of the contract that the appellants were to provide the plaintiff with a certificate or letter of guarantee or undertaking that payment was available through the Global Fund.

(c)	The learned trial judge erred in mixed fact and law in finding that the appellants breached the contract by failing to cooperate or support the plaintiff in the implementation of the contract.

(d)	The learned trial judge erred in mixed fact and law in finding that it was a term of the contract that the appellants were to pay 50% of the contract price upfront to the respondent.

(e)	The learned trial judge erred in mixed fact and law in accepting the evidence of the respondent that it had the financial capacity and resources and complied with the technical specifications provided for in the contract when the evidence did not support such finding.

(e)	[SIC] The learned trial judge erred in mixed fact and law in finding that the contract between the respondent and the second appellant was amended or varied after its execution by the parties.

(f)	The learned trial judge erred in law in not handing down a decision on objections raised by the appellants and the respondent to the affidavit evidence filed by both parties when handing down the decision on liability.

(g)	The learned trial judge erred in law in admitting the respondent's evidence and failing to uphold the appellants' objections to the admission of that evidence.

(h)	The learned trial judge erred in mixed fact and law in finding that the first appellant was party to the contract.

(i)	The learned trial judge erred in mixed fact and law in finding that the second appellant was vicariously liable for the actions of the first appellant.

(j)	The learned trial judge erred in mixed fact and law in finding that the contract was not frustrated as pleaded by the appellants.

(k)	The learned trial judge erred in mixed fact and law in finding that the respondent was able to comply with its contractual obligations prior to the purported termination of the contract.

(l)	The learned trial judge erred in mixed fact and law in finding that the contract was unlawfully terminated by the second appellant.

(m)	The learned trial judge erred in mixed fact and law in finding that the appellants unlawfully prevented the respondent from performing the contract.

(n)	The learned trial judge erred in mixed fact and law in finding that the respondent had a reasonable expectation of an extension of the contract.

B.	ASSESSMENT OF DAMAGES

(o)	The learned trial judge erred in mixed fact and law in not handing down a decision on objections raised by the parties on the affidavit evidence relied upon at the hearing on assessment of damages.

(p)	The learned trial judge erred in mixed fact and law in awarding the damages under the different heads to the respondent when the evidence did not support such finding.

(q)	The learned trial judge erred in mixed fact and law in awarding the entire contract price as loss of bargain damages to the respondent when the evidence did not support such finding.

(r)	The learned trial judge erred in mixed fact and law in awarding speculative loss damages to the respondent when the evidence did not support such finding.

(s)	The learned trial judge erred in mixed fact and law in awarding solicitor-client costs against the appellants when the evidence did not support such finding.

(t)	 The learned trial judge erred in mixed fact and law in awarding pre-judgment interest to the respondent when the evidence did not support such finding.

(u)	The learned trial judge erred in mixed fact and law by being biased in favour of the respondent and committed to his decision regarding damages before any evidence had been presented.

(v)	Such further and other grounds that may arise upon perusal of the transcripts of the proceedings and the second (SIC) appellant reserves its right to amend its grounds of appeal accordingly.

22. The appellants in SCA No 1/2013 seek orders whereby, inter alia, the appeal be allowed, the orders and judgments of the trial judge be set aside and judgment be entered in the National Court proceedings for the appellants.

CONFUSION AND MISCONCEPTIONS

23. This case evinces considerable confusion and a number of misconceptions. Substantial responsibility for the confusion must lie at the feet of the State.

24. First, we note that there now appear to be two separate Supreme Court matters listed in relation to an appeal by the unsuccessful defendants to the proceeding before Kirriwom J. The first is SC APP No 1 of 2013, which relates to the application for an extension of time for both appellants to file a notice of appeal against the decision of Kirriwom J. The second is SCA No 9 of 2013, which relates to a notice of appeal filed by the State alone against the same decision of Kirriwom J.

25. Second, we note that while both appellants had failed to file a notice of appeal within the time prescribed by the Supreme Court Rules, they properly sought to comply with the Rules by filing an application for an extension of time within time. However we note that – somewhat unexpectedly – the State then, on 8 February 2013 at a time when a hearing of the application for extension of time by both appellants was pending, and without explanation to the respondent or in accordance with an order of the Court, filed a separate notice of appeal pleading its own separate case. The reasons for this conduct were explained by Mr Tanuvasa in his affidavit of 21 March 2013, however the circumstances surrounding the conduct (including the failure of the appellants to communicate with the respondent or its lawyer, or the absence of a proper application to the Court) were not.

26. Third, we note that subsequently the State, through the affidavit of its lawyer Mr Tanuvasa sworn on 6 March 2013, presented to the respondent and the Court another appeal document, being draft notice of appeal purporting to be on behalf of both appellants in SCA 1 of 2013. The appellants seek orders permitting the filing of a notice of appeal in terms of that document pursuant to the application for an extension of time, because in the absence of such order an appeal by both appellants is not on foot (in light of the fact that the document filed on 8 February 2013 relates only to the State). The affidavit of Dr Mann supports the inference that the draft notice of appeal annexed to Mr Tanuvasa's affidavit also represents his case. We note that the terms of the filed notice of appeal and the draft notice of appeal are not identical.

27. Fourth, the material before the Court indicates that the appellants assumed that the Court had, at some time, granted an extension of time in which they could file a notice of appeal. Unfortunately, as was pointed out from the Bench at the time of the hearing of this matter, no transcripts of any of the hearings at which the Court has made orders in this matter were presented to the Court, annexed to affidavits or otherwise. As a result, the context in which the Court has made directions in this matter since January 2013 is not before this Court. However on close examination of the orders made, it becomes clear that at no time has an unequivocal order been made by the Supreme Court granting the appellants an extension of time in which to file a notice of appeal. Indeed:

•	 Both Davani J and Gavara-Nanu J clearly made only interim orders pending proper argument by the parties before a Judge of this Court.

•	The Chief Justice accepted that the application for an extension of time in which to file a notice of appeal had been lodged by the appellants within time, and fixed the hearing of the application for extension of time to take place on 25 February 2013.

•	When the matter eventually came on for hearing before the Chief Justice on 5 March 2013, it appears (from evidence of Mr Tanuvasa) that his Honour indicated that the appellants were required to make submissions concerning the merits of the proposed appeal in support of their application. Accordingly, his Honour made relevant directions.

•	On 7 March 2013 the Chief Justice – without endorsing the filing of that document – ordered the State to serve its notice of appeal in SCA 9/13 on the respondent, and (not surprisingly in light of the history of this matter) referred the application for an extension of time in SCA 1/13 to the Full Bench.

28. It follows that this assumption of the appellants that they had been granted an extension of time in which to file a notice of appeal was, accordingly, erroneous.

29. At the hearing before the Full Bench, because of the erroneous belief concerning whether an extension of time had been granted, the appellants did not believe that they needed to press their application for time to be extended to lodge a notice of appeal. However it is now clear that consideration of this application for extension of time is necessary in order to properly determine the matters before us. Helpfully, counsel for both parties have provided the Court with extensive written submissions, as well as oral submissions, in relation to both the application for an extension of time by the appellants and the notice of objection to competency of the State's notice of appeal. It is now appropriate to turn to the applications before the Court.

SC APP 1/2013: APPLICATION FOR EXTENSION OF TIME IN WHICH TO LODGE A NOTICE OF APPEAL

Submissions of the parties

30. The case of the appellants in support of their application for an extension of time in which to lodge a notice of appeal may be summarised as follows:

1	The reasons for the lateness of the lodgement of the notice of appeal were that instructions were withdrawn from the appellant's lawyers after his Honour's decision of 18 December 2012, there were logistical issues associated with transferring the files from the previous lawyers to the Office of the Solicitor-General, and the time of year meant that many lawyers and government officials were not available.

2	Both the State's notice of appeal in SCA 9 of 2013 and the draft notice of appeal the subject of this application raise meritorious grounds. In particular:

•	The trial judge made findings in the face of evidence before the Court.

•	The trial judge did not make proper rulings on objections by the appellants to admissibility of evidence.

31. The respondent opposes the application for extension of time on the following grounds:

1	Order 7, Rule 2 of the Supreme Court Rules mandates that an applicant must have the application filed, served and heard by the Court within 40 days of the judgment in question. In this case the 40 day period expired on 27 January 2013. Although the order of Davani J that the application be heard on 8 February 2013 was within the 40 day period, subsequent orders of Davani J and Gavara-Nanu J were not. Extensions of time granted on 8 February 2013 and 11 February 2013 were inconsistent with the Rules. The respondent relied on Bakani v Daipo [2001] PGSC 19, affirmed [2002] PGSC 14 in support of this proposition.

2	Procedural irregularities attend the application, including:

•	It is not in Form 4 as prescribed by the Supreme Court Rules.

•	It does not contain the grounds for the application.

•	The affidavits of Mr Tanuvasa and Dr Mann were filed outside the 40 day period.

The respondent relied on Nerau v Solomon Taiyo Ltd [1993] PNGLR 395.

3	The application was not made promptly, and the reasons claimed by the appellants for failure to file the notice of appeal within the 40 day period are inadequate.

4	The proposed grounds of appeal do not disclose how the trial judge erred in fact or in law. Further, the appellants did not make submissions to the trial judge concerning remedies, and therefore cannot raise issues concerning quantum of damages before the Supreme Court: Karingu v Henao [1994] PGSC 2.

Consideration

32. The appellants' application for an extension of time in which to lodge an appeal ought be granted, and the enforcement of the orders of Kirriwom J stayed pending determination of the appeal. We so find for the following reasons.

Order 7, Rule 2

33. First, Order 7, Rule 2 of the Supreme Court Rules needs to be read with Section 17 of the Supreme Court Act, which provides as follows:

Where a person desires to appeal to or to obtain leave to appeal from the Supreme Court, he shall give notice of appeal, or notice of his application for leave to appeal, as the case may be, in the manner prescribed by the Rules of Court within 40 days after the date of the judgement in question, or within such further period as is allowed by a Judge on application made to him within that period of 40 days. (emphasis added)

34. The key point arising from reference to Section 17 is that the application must be made to a Judge within the 40 day period. Further, we are not persuaded that the term "heard" in Order 7, Rule 2 should be interpreted as meaning "determined", which appears to be the interpretation proposed by the respondent. As Lord Blackburn explained in Green v Lord Penzance (1881) 6 App. Cas. 657 at 678:

…It says that the proceedings shall be taken in an Ecclesiastical Court, namely, the Chancery Court of York, and shall be taken before "the Judge" who has now become the Official Principal of that Court; he shall hear the matter at Westminster if he is so directed by the Archbishop. Now comes the question, what does "hear" mean? It was disclaimed, and no doubt justly disclaimed, that it was ever intended to argue that it only meant to hear what was said, and that it did not include determining. Unless there be something which by natural intendment, or otherwise, would cut down the meaning and intention of the Legislature and make it less, I apprehend there can be no doubt that the Legislature, when they direct a particular cause to be heard in a particular Court, mean that it is to be heard and finally disposed of there. And further, when they say that it is to be heard (meaning heard and finally disposed of) in a particular Court, they mean, unless there is something in the context which either by natural interpretation or by necessary implication would cut it down, that in all matters which are not provided for that Court is to follow its ordinary procedure. (emphasis added)

35. Clearly while it is desirable that any matter which comes before the Court be determined as expeditiously as possible, practicalities may in any particular case force an adjournment. Further, it is not within the power of parties to require the Court to determine an application within 40 days of the application being lodged. To that extent the "natural intendment" of Order 7, Rule 2 is that an application for extension of time for lodgement of a notice of appeal must be brought before the Court within 40 days of the decision the subject of the appeal.

36. The decisions of Bakani v Daipo [2001] PGSC 19 and Bakani v Daipo [2002] PGSC 14 upon which the respondent relies are distinguishable from the facts of this case. In Bakani v Daipo it was clear that the application was dismissed because it was filed outside the prescribed 40 days time limit. Indeed, the full bench of the Supreme Court cited State v James Robert Colbert [1988] PNGLR 138 and Avia Aihi v The State (No 1) [1981] PNGLR 81 as authority for the proposition that the Supreme Court has no discretionary power to extend time for an application which is made outside the same 40 days time limit. In this case the application for an extension of time was filed, served and heard by Davani J on 25 January 2013. Her Honour made orders, and the application has been the subject of subsequent orders of this Court. Court lists and the practicalities of litigation can require the adjournment of a matter on one or more occasions. In our view the events in this case have not taken the matter outside the parameters of Order 7, Rule 2 of the Supreme Court Rules.

Procedural irregularities

37. Second, the respondent refers to the decision in Nerau v Solomon Taiyo Ltd [1993] PNGLR 395 where this Court observed:

If a party omits important steps and fails to comply with the rules, that is the end of the matter.

38. We do not resile from this observation. However, the remark must be looked at in context, including that the remark of the Supreme Court in Nerau was in a case where the notice of appeal included questions of fact alone, and the Supreme Court Rules specified that leave was required. The appellant had not sought the leave of the Court. In that respect, their Honour's observation related to an issue critical to the validity of grounds of appeal pleaded, and where the failure to seek leave was, as their Honours noted, "an important step" in validating those grounds. In this case the respondent contends that the appellants' application for an extension of time to lodge a notice of appeal was attended by procedural irregularities. 

39. While clearly improper, we note that procedural irregularities have been substantially addressed by directions already made by the Chief Justice concerning proper service of material and costs orders against the appellants. In our view such irregularities are not grounds for refusing the application for an extension of time by the appellants.

Promptness of application

40. Third, we are satisfied, in the circumstances of this case where judgment was delivered the week prior to Christmas and the appellants were in the process of engaging new lawyers, that:

•	the appellants acted promptly to file the application for an extension of time to lodge the appeal, 

•	the application was lodged within the prescribed 40 day period, and

•	the explanation of the appellants for the delay in lodgement is adequate. 

Merits

41. Finally, in relation to the merits of the proposed appeal we do not accept the submission of the respondent that the appellants do not show any merits of an appeal in their application but merely say that they need more time to consider the prospects of an appeal. The draft notice of appeal sets out 23 grounds of appeal, specific to the decision of his Honour. Further, we note the comments of the Supreme Court in SCA No 9 of 2005, Was Neimari and Others v Maria Iapential and Joseph Romen (unnumbered and unpublished judgment of Sevua J, Batari J and Lay J dated 2 October 2008) to which Injia CJ referred recently in Small Business Development Corporation v Totamu [2010] PGSC 44 at [32]:

Consideration of the merits of the case in a preliminary way does not determine any issue on the substantive action. However that consideration is made for the very good reason that the court should not exercise its discretion in favour of a party whose case is obviously hopeless at a glance. The case has to be at least arguable. 

In our view the same principles should apply when an application to extend time to appeal is made under s 231 of the District Courts Act. The delay may be very short and the reasons for it compelling. However, the court's discretion should not be exercised solely on that ground in favour of the applicant, if the grounds of appeal are clearly unarguable. 

Conversely, where an applicant's case appears to be exceptionally strong, for example, where as a matter of law on undisputed facts the result in the District Court was wrong; or where there has been some blatant breach by the respondents of the applicant's constitutional right to a fair hearing, the merits may outweigh an unsatisfactory explanation for delay.

42. Injia CJ observed further in Small Business Development Corporation v Totamu at [33]

In Was Meimari, this Court was dealing with an appeal from a decision of the National Court refusing to extend time to appeal under s 231 of the District Court Act but the principle in that case is also applicable to an application to extend time made under O7 r5 and I adopt it in this case.

43. We similarly adopt these views. In this case it cannot be said that the issues raised by the appellants lack merit. This is not a case where the appellants have raised issues which are frivolous or obviously "hopeless at a glance".

SCA 9/2013: NOTICE OF OBJECTION TO COMPETENCY

44. This Court has in recent times specifically considered principles associated with notices of objection to competency of appeals. In Toale Hongiri Incorporated Land Group v Wolotou Incorporated Land Group (2012) SC1201 the Supreme Court observed:

19. A proper ground of objection to competency of an appeal is one that draws the Court's attention to a question of jurisdiction: Waghi Savings and Loan Society Ltd v Bank of South Pacific Ltd (1980) SC185; Jeffrey Turia v Gabriel Nelson (2008) SC949 at [7]; Talibe Hegele v Tony Kila (2011) SC1124 at [6]-[7]. Principles relevant to the approach taken by the Court in considering a notice of objection to competency of an appeal were recently reiterated by this Court in Coca Cola Amatil (PNG) Ltd v Yanda (unreported, Supreme Court of Papua New Guinea, 31 August 2012; Lenalia, Kawi and Logan JJ). In particular, at [25] their Honours said as follows:

[25] Considerable care needs to be taken in deciding whether or not to give notice of an objection to competency. The decision calls for an understanding of the true nature and purpose of an objection to competency and the making of a discriminating choice by a practitioner based on that understanding. If, truly, the court lacks jurisdiction because, for example, the appeal is only on a question of fact and leave to appeal has not been obtained, it would be an imprudent respondent who did not object to the competency of the appeal. If, though, by reference to one at least of the grounds of appeal, it can be seen that the court's jurisdiction has validly been invoked, the case is not one for an objection to competency. All that the taking of a misconceived objection to competency by a respondent does is to delay the hearing of the appeal on the merits. (emphasis added)

20. It follows that a key question is whether there is at least one ground of appeal which has substance, because if that is the case the objections to competency should be dismissed.

45. A comprehensive and detailed notice of objection to competency to the State's notice of appeal filed on 8 February 2013 was filed by the respondent on 22 March 2013. Helpfully, the respondent's lawyer has framed her written submissions in such a manner as to group the grounds of appeal in that notice of appeal to which the respondent objects. As counsel for the appellants directed his submissions to those of the respondent, it is convenient to similarly adopt that approach in dealing with the objections to competency.

Ground 1

46. The respondent contends, in summary, that the notice of appeal was incompetent because it was erroneously expressed to be "pursuant to the orders of the Supreme Court in SCAAP No 1 of 2013 ordered 25 January 2013 and filed 28 January 2013 granting extension of time to the second appellant to appeal the whole of the judgment of the National Court (constituted by Kirriwom J) on 13 August 2010 in proceedings WS No 568 of 2007 and on 18 December 2012". 

47. As we have already observed, the appellants (including the State) were in error in assuming that an extension of time had been granted to lodge a notice of appeal. It follows that ground 1 of the notice of objection to competency is upheld.

Ground 2

48. The respondent contends that the notice of appeal is further incompetent in that it was filed outside the 40 day period in breach of Section 17 of the Act.

49. We uphold this ground of objection. Whilst the notice of appeal was accepted for filing by the Supreme Court Registry on 8 February 2013, it is clear that the notice was filed outside of time and without the leave of the Court. It is not appropriate in our view to treat that notice as a draft notice of appeal contemplated by the appellant's application for an extension of time – this description applies only to the draft notice annexed to the supplementary affidavit in support sworn by Mr Tanuvasa on 6 March 2013 and filed on the same day.

50. Ms Kokiva for the respondent submits that satisfaction of grounds of objection 1 and 2 are sufficient to warrant an order of this Court finding in favour of the respondent in relation to its objection to competency of the notice of appeal. We uphold this submission, and accordingly it is not necessary for us to consider the remaining grounds of objection raised by the respondent.

CONCLUSION

51. The Court will order an extension of time for the appellants to lodge an appeal. It is appropriate to also order a stay of enforcement of his Honour's judgment pending determination of the appeal. The respondent's objection to competency in respect of SCA No 9 of 2013 will be upheld.

COSTS

52. The respondent has been successful in relation to its objection to competency and is entitled to costs of the appeal on a party-party basis, to be paid by the State, subject to any other order for costs already made in SCA No 9/2013.

53. In relation to the application for an extension of time, the appellants have been successful in relation to this claim and ordinarily would be entitled to the costs of the application. However, as we have already noted considerable fault can be attributed to the appellants (in particular the State) for the confusion which has led to the necessity for this application and its prosecution. The appropriate order is that each party bear its own costs of the application for an extension of time in which to lodge the appellants' notice of appeal.

ORDER 

(1)	Pursuant to Section 17 of the Supreme Court Act the appellants in SC APP No 1/2013 are granted an extension of time until 17 May 2013 in which to file a notice of appeal against findings and orders of the National Court in respect of liability and quantum in WS No 568 of 2007.

(2)	The orders of the National Court in WS No 568 of 2007 made and entered on 18 December 2012 are stayed pursuant to Section 19 of the Supreme Court Act pending determination of the appeal, which will be filed by 17 May 2013, as referred to in order (1).

(3)	The objection to competency of the appeal in SCA No 9/2013 is upheld.

(4)	The appeal in SCA No 9/2013 is dismissed.

(5)	The State pays the costs of the respondent to the appeal in SCA No 9/2013 on a party-party basis, subject to any other order for costs already made in SCA No 9/2013, to be taxed if not otherwise agreed.

(6)	In respect of SC APP No 1/2013 the parties bear their own costs.

(7)	The time for entry of these Orders is abridged to the time of settlement by the Registrar, which shall take place forthwith.

Judgment accordingly.
_________________________________________________________
Solicitor-General: Lawyer for the Appellants 
Martha & Associates Lawyers: Lawyers for the Respondents