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Pruaitch v Nelson [2014] PGSC 24; SC1349 (10 June 2014)

SC1349

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 37 OF 2014

BETWEEN

PATRICK PRUAITCH, MP, MINISTER FOR FORESTS
First Applicant

AND

THE NATIONAL FOREST BOARD OF PNG, FOREST AUTHORITY
Second Applicant

AND

NATIONAL EXECUTIVE COUNCIL
Third Applicant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Applicant

AND

DAVID S. NELSON
Respondent

Waigani: Makail, J
2014: 05th & 10th June

PRACTICE & PROCEDURE – Application for leave to appeal – Proposed appeal against refusal to dismiss proceedings for want of prosecution and failure to comply with Court order – Interlocutory judgment – Leave required – Discretionary – Whether discretion manifestly unreasonable or exercised on wrong principle – Whether proposed grounds are arguable – Substantial injustice – Supreme Court Act – s. 14(3)(b) – Supreme Court Rules – O 7, rr. 1, 2, 3 & 4.

Cases cited:

Matiabe Oberia v. Chief Inspector Michael Charlie & The State (2005) SC801

Counsel:

Mr D Mel, for Applicants
Mr A Jerewai, for Respondent

RULING

10th April, 2014

1. Makail, J: The respondent Mr David Nelson was the Managing Director of the National Forest Authority until his termination on 16th October 2003 for cause by the third applicant the National Executive Council ("NEC"). He filed an application for judicial review to review the decision and sought an order for reinstatement. The National Court constituted by Los J upheld it and found that the decision to terminate Mr Nelson was unlawful. It did not order his reinstatement but ordered the applicants to pay damages to him based on the unexpired term of his contract of employment. The applicants appealed that decision to the Supreme Court and the Court upheld the appeal in part. It ordered among others, that the parties enter into negotiations and if no agreement was reached by 03rd June 2009, Mr Nelson was to file and serve a statement of claim for assessment of damages.

2. Parties failed to reach an agreement by 03rd June 2009 and Mr Nelson filed and served a statement of claim on the applicants on 22nd June 2010. On 24th August of the same year, the applicants filed a conditional defence. After that, Mr Nelson took no further steps to progress the claim to trial although he was still negotiating with the applicants, particularly the first applicant for an out of court settlement. Almost a year later, on 12th July 2011, the applicants informed Mr Nelson of their intention to apply to dismiss the claim for want of prosecution within seven days. They did not take that action until seven months later, this was on 14th February 2012 when they lodged with the Court Registry the notice of motion and supporting affidavit for filing. The documents were not sealed and returned to their lawyers and after a further six months of receiving no news from the Court Registry, on 16th August, the applicants' lawyers followed-up with the Court Registry. A further twelve months went by and the position did not improve until 09th October 2013 when Mr Nelson's lawyers received a letter from the Court Registry advising them of the matter being fixed for directions hearing on 17th October 2013 at 9:30 am. This presented an opportunity for the applicants to file a fresh notice of motion to dismiss the claim. The notice of motion was filed on 13th November 2013. It sought to firstly dismiss the claim for want of prosecution and secondly, to strike it out for failure to comply with the directions of the Supreme Court, particularly failure to seek extension of time to continue negotiations or variation.

3. On 14th February 2014, Kariko J heard it and dismissed it on the grounds that:

1. The application was belated.
   
2. The applicants did not take steps to challenge the statement of claim until after Mr Nelson's request for the matter to be placed on the directions hearing list.
   
3. The only prejudice to the applicants is the proceedings hanging over their heads.
   
4. In the interest of justice, damages should be assessed.
   

5. But his Honour found that firstly, there was a delay in the prosecution of the claim, secondly the delay was inordinate and finally, there was no reasonable explanation for the delay, particularly, the out of court settlement negotiations between the applicants and Mr Nelson after the dead line of 03rd June 2009. As the application was dismissed, the proceedings are pending directions hearings. As it is an interlocutory judgment, leave is required and the applicants firstly seek leave to appeal that decision pursuant to s. 14(3)(b) of the Supreme Court Act and O 7, rr. 1, 2, 3 and 4 of the Supreme Court Rules and secondly, to stay the proceedings pending the appeal, if leave is granted.

6. The decision by his Honour not to dismiss the claim was an exercise of discretion and an appellate Court should not unnecessarily interfere with the exercise of discretion unless it can be shown among others, that the exercise of discretion was manifestly unreasonable, exercised on a wrong principle or a mistake of fact: Matiabe Oberia v. Chief Inspector Michael Charlie & The State (2005) SC801. In an application for dismiss for want of prosecution, one of the applicable principles is delay. If the delay is inordinate, the Court would require an explanation from the defaulting party and it must be reasonable. There is no issue that there has been a delay in prosecuting the claim following the decision of the Supreme Court. Similarly, the delay is inordinate and no reasonable explanation for it. His Honour correctly applied these principles and further correctly found in favour of the applicants.

7. But proof of these principles in a given case does not automatically render the proceedings liable to be dismissed. Given that the power to dismiss is discretionary, the Court may and it is open to it to consider whether it is in the interests of justice that the proceedings be dismissed. The term interests of justice encompasses a wide range of matters and may include prejudice to the interests of the opposing party, arguable case, conduct of the parties, etc.

8. When the background facts of the case is considered together with the application to dismiss, one matter that stands out clearly is that, the assessment of damages was and is still outstanding. It was supposed to be settled through negotiations between the parties as directed by the Supreme Court but that did not happen and it must be decided by the Court. The issue of liability has been determined by the Court when it found the decision to terminate Mr Nelson unlawful and upheld the application for judicial review. All it required was for Mr Nelson to progress the assessment of damages to trial.

9. After filing and serving the statement of claim and the applicants filing a conditional defence, Mr Nelson did not immediately request for it to be fixed for directions hearing. Despite this, the applicants did not apply to dismiss it. It was not until 12th July 2011 when the applicants informed Mr Nelson of their intention to dismiss the claim for want of prosecution. Taking that date as the time the applicants expressed their desire to dismiss the claim to 13th November 2013 when they actually filed the application is a period of two years and four months. By the time they filed the application, the matter was listed for directions hearing. Whether it was listed at the request of Mr Nelson or the Court Registry is not that important because from his Honour's reasons, he was concern about the applicants not moving the application for dismissal of the claim after the filing of the conditional defence. That is why he held that the application was belated.

10. Similarly, it may well be that the applicants had earlier on lodged the application but for some reason, the documents were not sealed and returned. Be that as it may, there was no application formally before the Court at the earliest. This was a further reason why his Honour held that the application was belated. Considering this with the prejudice that the applicants may suffer if the claim was allowed to go to trial, it was minimal. His Honour held that the only prejudice to the applicants was the proceedings hanging over their heads. Associated with Court proceedings are costs and interests that maybe incurred along the way to trial but these are part and partial of prosecuting or defending a claim in Court and parties must expect them.

11. At the end of the day, the outstanding matter is the assessment of damages. Based on the statement of claim and the conditional defence, the various heads of damages have been identified and these are more or less various heads of entitlements under Mr Nelson's contract of employment such as base salary, gratuity, housing allowance, motor vehicle allowance, etc. All it requires is an assessment of the appropriate amounts per head of damages to arrive at the total sum due and payable to Mr Nelson. To dismiss the claim without a trial on assessment of damages would deny Mr Nelson justice and substantial injustice would occur. That is why his Honour held that in the interests of justice, damages should be assessed. I am not satisfied that firstly, his Honour's exercise of discretion was manifestly unreasonable and secondly that it was exercised on a wrong principle of law such that there is an arguable or prima facie case.

12. As to the alternative ground to strike out the claim, according to transcripts of the proceedings in the National Court, the applicants made the same submissions in support of this ground. The application is based primarily on Mr Nelson's failure to seek extension of time to negotiate an out of Court settlement or apply for variation of the Supreme Court orders. His Honour canvassed the application and their submissions in his decision when he noted their submission that Mr Nelson did not file the statement of claim within time. There is no dispute that Mr Nelson filed and served a statement of claim a little over a year after the dead-line of 03rd June 2009 for parties to reach an agreement to settle the claim expired. But as correctly conceded by the applicants, the Supreme Court did not fix a dead-line for the filing and serving of the statement of claim if parties did not reach an agreement by 03rd June 2009. While Mr Nelson did not apply to the Supreme Court to extend time to comply with the orders of the Supreme Court or apply to vary them, for the same reason, his Honour was concern about the delay in the applicants bringing the application to dismiss in light of the claim being listed for directions hearing. In other words, had they applied to dismiss the claim on this ground immediately after 03rd June 2009, it would have given weight to their submission and case that Mr Nelson failed to comply with the Supreme Court orders. I am not satisfied that this ground is arguable.

13. For these reasons, the application for leave to appeal is refused and the whole proceedings are dismissed with costs. This decision renders the application for stay unnecessary and it is also dismissed.

Ruling and orders accordingly.

____________________________________

Steeles Lawyers: Lawyers for Applicants
Jerewai Lawyers: Lawyers for Respondent