SC1382
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
 
SCA NO. 48 OF 2013

BETWEEN:

DR NICHOLAS MANN – SECRETARY FOR DEPARTMENT OF HEALTH
First Appellant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Appellant

AND:

ALPAR TRADING LIMITED
Respondent

Waigani: Davani .J, Kassman &Logan JJ
2013: 16th December,
2014: 12th September,

PRACTICE AND PROCEDURE – Civil appeal – application for summary dismissal for failure to comply with directions – satisfactory explanation for default and related delay provided by the appellants by affidavit served on the respondent applicant in advance of hearing of application – earlier conclusion by the Court in granting extension of time within which to appeal that the appellants had an arguable case in respect of the proposed appeal.

Held:

Application for summary dismissal is dismissed.

Cases cited: 

Dr Ncholas Mann and 1 other v. Alpar Trading Limited, SCAPP No. 1 of 2013; SCA NO. 9 of 2013 unnumbered and dated 3rd May, 2013
Toale Hongiri Incorporated Land Group v. Wolotu Incorporated Land Group [2012] PGSC 34 SC 1201
Richard Naringa v. Rural Development Bank Ltd [2008] PGSC 5: SC908
PNG Namba Wan Trophy Ltd v. Dynasty Holdings Ltd trading as Pacer Computers and Timothy and Felicia Lim trading as Samuel Carris & Co. (2005) SC 811
 
Counsel:
No appearance for the appellants (respondent to the application)
 M. Kokiva, for the respondent/applicant

DECISION
12th September, 2014
 
1.	THE COURT: Alpar Trading Limited ('Alpar'), the Respondent, applied for dismissal of the appeal for non-compliance with directions of the court of 8th July, 2013, and alternatively for want of prosecution of the appeal by Dr Nicholas Mann and the State ('the Appellants). We heard all counsel and reserved for decision.

2.	Before considering the application, we set out a brief background of this matter.

Background

3.	On 18th December, 2012, the respondent company, Alpar Trading Limited (Alpar) secured in the National Court, proceeding WS 568 of 2007, after a trial on the merits of its claim for damages, a judgment in the sum of K30, 351,788.50, inclusive of interest up to judgment. That award was apportioned by the National Court's order equally as between the first and second appellants such that each became liable to Alpar in the sum of K15,175, 894.25. The appellants were also ordered to pay Alpar's costs, to be taxed on a solicitor-client basis.

4.	The occasion for that judgment and the confusion and delay which attended the disposition on the part of the appellants to challenge that judgment, are described in a judgment of the Supreme Court delivered on 3rd May, 2013, at an earlier interlocutory stage: Nicholas Mann and 1 other v. Alpar Trading Limited SCAPP No. 1 of 2013 and SCA No. 9 of 2013, unnumbered, and dated 3rd May, 2013. It is not necessary to repeat here, those facts. Instead, we incorporate by reference the description given in the earlier judgment of the Court.

5.	The upshot of the orders made by the Court at the earlier interlocutory stage was:

(a) Alpars objection to competency in respect of an appeal separately and purportedly instituted by the second appellant, the State, was upheld and that appeal SCA No. 9 of 2013 was dismissed.

(b) The appellants, i.e. the first appellant, Dr Mann and the second appellant, the State were granted, on their joint application, an extension of time within which to appeal. The appellants were ordered to file their notice of appeal on or before 17th May, 2013. At the same time, the Court ordered that the judgment given against the appellants in the National Court be stayed, pending the determination of the appeal. These orders were made in the application proceeding SCAPP No. 1 of 2013.

6.	The appellants filed their notice of appeal on 16th May, 2013. It was thus filed within the time allowed by the Court when granting leave to appeal. The respondent, Alpar, filed an objection to competency on 31st May, 2013.

7.	As occurs perhaps too often in this jurisdiction, the filing of the objection to competency took the progression of the appeal instituted by the appellants down a separate path. The direction of that path was the progression of the case towards the hearing and determination of the objection to competency, rather than immediately towards the hearing and determination of the appeal itself. Such an objection, will be misconceived if it challenges not the competency of the appeal itself, on the basis that the Court has no jurisdiction to entertain it but only some of the grounds of appeal; (see Toale Hongiri Incorporated Land Group v. Wolotou Incorporated Land Group [2012] PGSC 34 at [12]). Some of the Alpar's prolix grounds of objection may well exhibit this failing. It is unnecessary for the present to dwell on that subject.

8.	Alpar separately filed, on 24th May, 2013 what it termed "a slip rule application", seeking that the Court "recall and review" the orders made in the earlier interlocutory judgment. This became proceeding SCAPP No. 18 of 2013. Whether this application has any merit is not for present determination. It is however, a noteworthy feature of Alpar's grounds of objection to the competency of the appeal, that some of the grounds of objection intersect with this slip rule application in the sense that is said that the appeal is not competent because, though there was an extant order of the Court made on 2nd May, 2013, granting leave to appeal, the notice of appeal ought nonetheless not to have been filed, because the "slip rule application" had not by then been determined. Ironically and inconsistently, another of Alpar's grounds of objection to competency, and a perhaps misconceived one at that, is an allegation that the appeal instituted by the notice of appeal is incompetent because it said not to have been served on the associate to the primary judge without delay.

9.	The separate hearing of a carefully drawn and apt objection to competency can sometimes obviate the need for the hearing of what is, if the objection to competency is not misconceived, an appeal which the Court has no jurisdiction to entertain, thereby saving valuable court time in the hearing of that appeal and the parties the expense of preparing for and appearing on that appeal. On other occasions, all that the separate hearing of an objection to competency can do is to delay the final hearing and determination of the appeal itself, thus delaying finality in respect of the judicial resolution of a controversy, with all of the public and private benefits that can entail. For, if the objection fails, the appeal will be yet to be determined. Further, in considering some objections to competency, the Court will, to some extent at least, have to delve into the merits of the grounds of appeal. For these reasons, there will be occasions, and the present may well be one, where it is preferable for the objection to competency to be heard at the same time as the appeal proper. But of course, each case is different and ought to be given that special consideration.

10.	On 8th July, 2013, there was a directions hearing in respect of the objection to competency and the appeal itself. Both appellants and Alpar were represented by their respective lawyers at this directions hearing. Directions were then made in respect of filing of the Objection Book and the drafting and settling of an index for and the compiling and certification of the Appeal Book. Materially, the appeal was directed to be returned for further direction on 2nd September, 2013, in anticipation of the filing by then of a certified Appeal Book. The "slip rule application" was not dealt with on this occasion.

11.	On 22nd July, 2013, the objection to competency was again the subject of a directions hearing. On this occasion, the hearing of the objection was adjourned, pending the hearing and determination of the "slip rule application". In the meantime, the appellants served a draft index for the appeal book on Alpar and sought its comments in respect of the same. These were conveyed to the appellants via a letter delivered to the Solicitor General's chamber, the appellant's lawyers, on 18th July, 2013.

12.	In accordance with the direction made on 8th July, 2013:

(a) the index to the Appeal Book should have been filed by the appellants on or before 22nd July, 2013; and

(b) the Appeal Book itself should have been served on Alpar by the appellants by 19th August, 2013, not 18th August, 2013, as is stated in an affidavit of Alpar's Managing Director, Mr Alphonse Parpa, read in support of the dismissal application, but correctly identified in Alpar's extract of submission.

13.	These are the directions wich Alpar argues the appellants failed to comply with.

14.	The parties did not return for further directions on 2nd September, 2013. In light of this non-compliance, Alpar filed and served on the appellants on 9th September, 2013, an application for the summary dismissal of the appeal pursuant to Order 7, Rules 48 and 49 of the Supreme Court Rules 2012. There is no evidence that, prior to the filing of this application, those acting for Alpar contacted the Solicitor General's chamber to ascertain what might be the cause of the non-compliance.

15.	On its service, the application drew an affidavit in response from the appellants, which was made by Mr E'ava Geita, lawyer in the Solicitor-General's chambers, who had assumed carriage of the appeal on behalf of the appellants. Though Mr Geita had, with another, appeared for the appellants, then applicants, on the hearing of the application for leave to appeal, he deposed that he had but recently assumed the carriage of the appeal after a member of the office who had but recently had that responsibility, had abruptly left the office in August, 2013. He further deposed that, in response to the draft index which the appellants had served on it, Alpar, by its lawyer had proposed the incorporation into the Appeal Book of 15 Exhibits, with numbers to be identified. He further deposed, and, viewed in conjunction, there is no reason to doubt:

"Much of the recommendations required more time to obtain transcripts and go through and identify exhibits as well as to locate and include additional documents required by the respondents [sic]"

16.	Mr Geita further deposed:

"We have been able to compile the draft Appeal Book although outside the short time we were given by the Court, which incorporates the suggestions by the respondents…"

17.	Mr Geita deposed that the draft appeal book consisted of (5) books and was ready for perusal and comment by Alpar.

18.	Mr Geita's affidavit was, having regard to its last paragraph, evidently made in anticipation that it would be read in support of an application for the extension of the times previously fixed by direction in relation to the preparation of the Appeal Book. No such application was filed.

19.	Notwithstanding the receipt of Mr Geita's affidavit, Alpar chose to file this application to dismiss the appeal on 9th September, 2013, then chose to prosecute its application for summary dismissal. In this instance, Alpar concedes the Appellants filed and served the draft index to the appeal book on 15 July 2013 and that the draft index was detailed. Alpar also say they responded with detailed comments on the draft index to the appeal book but have not heard any further from the Appellants. Perhaps its resolve to file the application for summary dismissal was forfeited by failure on the part of the appellants, as respondents to the application for summary dismissal, at a direction hearing in respect of that application, held on 3rd December, 2013. On this occasion, each party was represented by their respective lawyers. The application for summary dismissal was then listed for hearing on 16th December, 2013. However, prior to that, from perusal of the copy of the draft index relied on by Alpar, although the draft index filed by the Appellants had the date for settlement of the index as "the 22nd day of July 2013", the Registrar did not insert the time for settlement of the index and the Registrar did not endorse or sign the draft index. This was not queried by Alpar in its detailed response. At the end of its letter in response dated 16 July 2013, Alpar said "When you have made the amendments please provide us a copy for settlement before the Registrar as directed. It would assist us if you bring with you a copy of the full set of documents at settlement." 

Should the appeal be dismissed?

20.	So it is that, after this lengthy preamble, we come to the occasion for this judgment. Should the appeal be dismissed for want of prosecution on the basis of the failure to comply with directions?

21.	It is a noteworthy and lamentable feature for the hearing of the application that the appellants chose for some unexplained reason not to appear to respond to it. Alpar read two affidavits in support of its application – an affidavit of Mr Parpa filed with the application and a further affidavit of that gentleman filed in reply to that of Mr Geita. Mr Geita's affidavit was not expressly read by Alpar but one cannot make sense of the reply affidavit filed by Alpar, without having regard to it. Further, Alpar's extract of argument engages with facts stated in this affidavit. The interests of justice therefore require that it be considered. It contains within it an explanation by the appellants, related above, for non-compliance.

22.	The principles to be applied are not in doubt. A failure by an appellant to take a step required by the rules or by court direction enlivens a discretion on the part of the Court to dismiss the appeal for want of prosecution, not a right on the part of a respondent to have the appeal dismissed; see, for example, Richard Naringa v. Rural Development Bank Ltd [2008] PGSC 5; SC 908 and PNG Nambawan Trophy Ltd v. Dynastry Holdings Ltd trading as Pacer Computers and Timothy and Felicia Lim trading as Samuel Carris & Co. (2005) SC 811. Where a respondent has given any explanation for the default of delay and, if so, whether that explanation is acceptable, is always relevant. So, too, are the prospective merits of the appeal. These two considerations can interplay in the sense that the more compelling an appeals prospects of success appear, the more inclined the Court will be to excuse the default, even if the explanation given for it is not especially strong (and vice versa, in some cases).

23.	The merits of the appeal were sufficiently arguable by the Court on the occasion of the earlier interlocutory judgment, to warrant the granting to the appellants of an extension of time. This fact and the need for the Court to consider that subject on the hearing of its application for summary dismissal, seems to have escaped Alpar and those advising it. It is a noteworthy feature of its extract of argument that it engages, not at all, with the prospective merits of the appeal. Its oral submissions on the hearing of its application offered no reason for us to do other than acknowledge and adopt a conclusion earlier reached by the Court. Indeed, we consider that, in the circumstances, it would be inappropriate on our part to do other than that.

24.	When noting that the appellants' case has been regarded as arguable it is also to be recalled that what is regarded as arguable (and it must be put no higher than that, for the merits of the argument are for another day) liable to be overturned on appeal, is a judgment for a very large sum of money. The present judgment debtors are the State and an officer of the State. Interest is running in respect of the judgment debt. While it is necessary for sums to be apportioned by Parliament for the meeting of such a judgment, Alpar is nonetheless in a different position, so far as likelihood of satisfaction is concerned, to judgment creditors who must chance their hand on the worth of a private individual or corporation.

25.	As to the default and related delays, it is to be remembered that the judgment under appeal followed a complex trial in which much evidence was led. There are many grounds of appeal. In hindsight certainly, the preparation of the Appeal Book was always going to take longer than allowed. Moreover, that was even likely in prospect and a fact that legally represented parties, who were the ones best placed to know, acting responsibly and co-operatively in the interest of the administration of justice, ought to have drawn to the Court's attention when the shorter time frames were proposed for direction at the directions hearing on 8th July, 2013.

Directions hearings and directions issued

26.	Alpar says a search of the court file conducted on 23 August revealed the index was not settled and the appeal book was not filed. The evidence also shows the Appellants and Alpar failed to return for further directions on 2 September 2013. Alpar says they attended court on that day but the matter was not listed for further directions.

27.	The steps to be taken once an appellant files and serves its notice of appeal are governed by the Supreme Court Rules. These rules provide for the following steps. The registrar inserts in the notice of appeal the date and time for parties to attend before the registrar for settlement of the appeal book and this is provided for at the end of the prescribed Form 8. Prior to the appointment before the registrar, the appellant must prepare a draft index to the appeal book and forward same to the respondent or respondents for comment. On receipt of comments on the draft index from the respondent, the appellant incorporates any changes agreed and enters into further communication with a view to clarifying respective positions where there is issue raised to documents proposed to be included or excluded. Any outstanding issues should be raised before the registrar who is tasked to settle the index at the appointed time. The appellant produces the draft index which is then endorsed by the Registrar with the date and time for the parties to attend before the Registrar for settlement of the index. Following settlement of the index by the Registrar, the appellant compiles the appeal book which is delivered to the respondent for certification. Once the appeal book is certified by the respondent, it should then be returned to the appellant for filing and service of sealed copies on all parties. The parties may then take steps to have the appeal listed for hearing. At all times, the rules provide that the parties may return to court for further directions as to the steps taken or to be taken to prepare the appeal book for listing and hearing. 

28.	The directions of the court of 18 July 2013 were the normal directions issued after a Notice of Appeal is filed and served. The first direction required the appellant to file and serve the draft index to the appeal book by 15 July 2013. The Appellant complied with this direction and this is confirmed by Alpar. The next direction required both parties attend before the Registrar for settlement of the draft index by 22 July 2013. There is no evidence as to whether a date for settlement was allocated by the Registrar. Neither is there evidence as to whether the appellant or Alpar requested from the Registrar a date for settlement of the index. 

29.	The court reminds itself that this application was heard in the absence of the Appellants and evidence of the alleged non-compliance by the Appellants with directions of the court was received by this court without being tested by the Appellants.

Conclusion

30.	Obviously, Alpar failed to attend settlement of the draft index. Alpar rushed into Court with this application to dismiss. The evidence shows that Alpar did not correspond with the appellants and the Registry to secure a fresh date and time for settlement of the draft index.

31.	Alpar claims the appellants have not prosecuted the appeal with due diligence. However, clearly, the evidence above shows that Alpar has not made out a case of lack of diligence by the appellants. A draft index has been filed. All that was required was, after the index was settled, for the parties to relist the matter for further directions and to secure a fresh date and time for settlement of the index.

32.	The Supreme Court has said on numerous occasions, cases referred to and cited in submissions by Alpar, that the power to dismiss an appeal is discretionary. Even if this was a case of delay or lack of diligence in prosecuting an appeal, it remains a matter of discretion and the Court can exercise its discretion not to dismiss an appeal if for some exceptional reason, it would not be in the interests of justice to do so. The consequences of dismissal is one such consideration, was held as in The State v. Raymond Turu (2008) SC904. In this case, this is an appeal from an order of the National Court that the State pay Alpar damages assessed at over Thirty Million Kina. That is a substantial sum and, as such, the loss to the State would be substantial in the event the appeal is dismissed on a technicality without hearing the merits of the appeal.

33.	This is a case where an appellant has provided an explanation and which explanation we find, is an acceptable one, In the face of the explanation it had and the knowledge it had, that the Court had already concluded that this significant award of damages was arguably impeachable on the appeal, this was always a bold application for Alpar to prosecute. To shut out the appellants without a hearing on the merits of the appeal and, if Alpar is disposed further to prosecute them, of the objection to competency and the "slip rule application" would not do justice in this case. That is not to say that we are unmindful of Alpar's desire to enjoy the fruits of the judgment it obtained. The prosecution of this unmeritorious application has not assisted it in that regard.

34.	There is an obvious need for the appellants to put their house in order and to do so promptly. Alpar and the Court are each entitled to expect better from the State in the conduct of its litigation.

35.	Our inclination is that the most expeditious way of resolving the controversy between the parties is for the appeal itself, the objection of competency and the "slip rule application" to be heard together. We suspect, strongly, that any other course is likely only further to delay the final resolution of the controversy. That is not, however, a subject on which the parties have been heard. It is, therefore best left to the Supreme Court Directions Judge, to ascertain and determine, after hearing parties on the way forward, and to issue appropriate Directions.

36.	For the present, we will refuse the application to dismiss the appeal and will refer the matter to the Supreme Court Directions Judge, to issue the necessary directions, which will be a reflection of all we have said above.

Orders;

37. The orders of the Court are:

1. The application for summary dismissal filed by the respondent is dismissed;

2. The matter is referred to the first directions hearing in October, 2014, when both the appellants and the respondents must appear, to assist the Court in ascertaining and confirming the status of the matter which will include all applications that are pending and whether they will be moved and for the Court to issue appropriate directions on the hearing of those applications; 

3. Subject to the directions to be issued in relation to the pending applications, the Directions Judge may also issue appropriate Directions on the expedited hearing of the appeal;

4. There are no orders as to costs in respect of the application for summary dismissal
____________________________---____________________________________
Solicitor-General's Office: Lawyers for the Appellants (respondents to the application) 
 Martha & Associates Lawyers: Lawyers for the Respondent/Applicant