SC1639
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA No. 156 of 2015

BETWEEN:
THOMAS BARRY as the Executive Chairman of the Highlands Highway Landowners Association Inc. and 3227 others
Appellant

AND:
JOEL LUMA IN HIS CAPACITY AS SECRETARY FOR DEPARTMENT OF WORKS
First Respondent

AND:
MARK GUNUA AS SIMBU PROVINCIAL WORKS MANAGER
Second Respondent

AND:
GRAND CHIEF SIR MICHAEL. T. SOMARE AS PRIME MINISTER
Third Respondent

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Respondent

Waigani: Kirriwom J, Yagi & Ipang, JJ
2017:  28th August & 3rd November

SUPREME COURT APPEAL – Appeal against the National Court decision refusing to set aside its own ex-parte decision – Ex-parte decision dismissing
the proceedings.

SUPREME COURT APPEAL – the order by the National Court is a final 
order – it cannot be set aside by Notice of Motion.

Facts

This is an appeal against a decision of a primary Judge refusing to hear and determine a notice of motion filed by the appellants to set aside an ex-parte order. 

In proceedings WS No. 1168 of 2009 filed in the National Court, the appellants claim, amongst others, compensation of K68.7 million for alleged damage to structural improvements and other properties as a result of road re-construction works carried out under the National Government’s Highlands Highway Rehabilitation Program. The appellants claim they are customary landowners of the Simbu Section of the Highlands Highway road corridor. 

The respondents had obtained an ex parte order dismissing the entire proceeding. Consequently the appellants filed a notice of motion under Order 12 Rules 8(1), (2) and (3) of the National Court Rules seeking an order to set aside the ex parte order. When the appellants attempted to move their motion the primary Judge refused to hear their application citing lack of jurisdiction.

Held:

The ex-parte order dismissing the National Court proceedings for disclosing no reasonable cause of action is a final order and cannot be set aside by way of notice of motion made pursuant to Order 12 Rule 8 of the National Court Rules.

Cases Cited

Steven Punagi v Pacific Plantation Timber Ltd (2011) SC1153
James Aiwasi v Monty Derari – Oro Provincial Administrator & Ors (2017) N6602
Richard Dennis Wallbank & Jeanette Minifie v Independent State of PNG [1994] PNGLR 78
Christopher. M. Smith v Ruma Constructions (2002) SC695
Thomas Rangip v Peter Loko - City Manager, NCD & Others (2009) N3714
Peter Malt v. Dean Queen & Christian Union Mission Inc. (2009) N3577
Harry Tovon v Carl Malpo (2016) N6240
Rea Joseph v Manau Sereva & Ors (2011) SC1152

Counsel

G. Kaore, for the Appellant
W. Mapiso, for the Respondent

1.	BY THE COURT – This is an appeal against the whole judgment of the National Court given on the 11th of November 2015, in refusing to set aside ex-parte orders on application made pursuant to notice of motion filed on the 15th of June 2015. Leave to appeal was granted on 11th of May 2016.  

2.	We heard the appeal on 28th of August 2017 and reserved our decision and this is our decision. A summary of the decision was delivered orally in Court on 03rd November 2017 and the parties were informed that we will provide the full written reasons shortly thereafter and have the judgment published.

GROUND OF APPEAL

3.	The notice of appeal filed on the 13th May 2016, contained only one ground of appeal. It states;

“Whether an ex-parte Order dismissing the Appellant’s proceedings under Order 12 Rule 40 and Order 8 Rule 27 of the National Court Rules is a final Order that it cannot be heard by a motion to reinstate the proceedings again in the National Court.”

ISSUE

4.	Whether the National Court has the jurisdiction to set aside an ex-parte order dismissing a matter for not disclosing a reasonable cause of action in law and for being frivolous and vexatious pursuant to Order 8 Rule 27(1) and Order 12 Rule 40(1) of the National Court Rules.

BACKGROUND

5.	(i)  By way of brief background, in or about 2006 the National Government re-initiated the project known as Highlands Highway Rehabilitation Program (HHRP) which was aimed at widening and improving the conditions of the Highlands Highway. The appellants are the customary landowners from Chimbu Province who live along the 40 meter corridor of the Highlands Highway of the Chimbu Section. So, in order to implement this rehabilitation project, the Government allocated funding by way of gratuitous payment to landowners for the removal of plants and structures along the corridor of the Highway to avoid unnecessary disturbances and interferences.

(ii)  The valuation and assessment of the plants and structural improvements were done prior to the removal of the improvements and the commencement of the work.

(iii)  Based on the assessment and the evaluation reports, the National Government paid total of K54 million to the Landowners in the Simbu Province alone.

(iv) The HHRP was put to stop because of allegation that various bureaucrats in Waigani and Simbu conspired to defraud the State of the money and that most landowners missed out on the payments.

(v) On the 15th September 2009, the appellants filed proceedings in the National Court claiming compensation that their planted and structural improvements were valued and assessed at K68.7 million. However, they were not paid. They then issued the proceedings to recover the assessed amount of K68.7 million.

(vi)  On 28th April 2015, the respondents filed an application under Order 12 Rule 40(1) and Order 8 rule 27(1) of the National Court Rules to dismiss the entire proceedings (WS. No. 1168 of 2009) on the grounds that the proceedings did not disclose a reasonable cause of action based on law and, moreover, the proceedings are frivolous and vexatious.

(vii)	On the 06th June 2015 the National Court heard the application ex-parte and upheld the application and dismissed the entire proceedings.

(viii)	On the 11th June 2015, the appellants filed a notice of motion to set aside the dismissal order.

(ix)	On the 11th November 2015, the trial judge relying on Order 12 Rule 8 (4) of the National Court Rules refused to hear the application on the basis that the rule does not grant power to the National Court to set aside an order for the dismissal of proceedings.

Appellants’ Argument

6.	The appellants’ argued that their motion filed on the 11 June 2015, to set
aside the ex-parte order of 6 June 2015 was never heard because the primary Judge was of the view that the facts of the case and the law fell within all fours in respect to a decision made in a similar case, namely, James Aiwasi v Monty Derari – Oro Provincial Administrator & 2 Ors - W.S No. 1291 of 2007, (now published and numbered N6602) where the plaintiff in a similar situation unsuccessfully sought to reinstate the case that was dismissed for want of prosecution. So based on the James Aiwasi case (supra), the primary Judge dismissed the appellants’ motion under Order 12 Rule 8 (4) of the National Court Rules.

7.	Counsel for the appellants relied on the decision of Hartshorn J in Thomas Rangip v Peter Loko - City Manager, NCD & Others (2009) N3714 to argue that the primary Judge was wrong in law in refusing to hear the appellants’ application to set aside the ex parte order. It is submitted the decision in Thomas Rangip (supra) is correct law in terms of the power of the National Court under Order 12 Rule 8 to set aside an ex parte order dismissing the proceeding.

Respondents’ Argument

8.      The Respondents argued that this appeal should be dismissed for being incompetent and without merit. Thus, the Respondents argued that:  

(i)	The Notice of Appeal does not plead the ground of appeal in a cause of action on appeal. They therefore argued the appeal is not properly before the Supreme Court. Respondents relied on Order 7 Rule 9 (c) (e) and Rule 10 of the Supreme Court Rules and PNGBC v Jeff Tole (2002) SC 694 and Anderson Agiru, Electoral Commission & The State (2002) SC 687.

(ii)	Secondly and most importantly, the respondents argued that the 
National Court has no jurisdiction to set aside its own order which dismisses proceedings in its entirety or an order which determines the merits of the claim. The Respondents relied on the case of James Aiwasi (supra).

(iii)	The Respondents further argued that where a proceedings is  
dismissed in its entirety irrespective of the dismissal order being ex-parte, the life of the proceedings is at an end. Respondents argued that a notice of motion has no life of its own, and therefore cannot be used to set aside a concluded proceedings. They argued that the appellant should file fresh proceedings or appeal to the Supreme Court. Again they rely on the case of James Aiwasi (supra).

Court Analysis

9.     It is abundantly obvious that the primary Judge followed Peter Malt v. Dean Queen & Christian Union Mission Inc. (2009) N3577 as a case on point where the plaintiff applied unsuccessfully to set aside an ex parte order dismissing the proceeding for want of prosecution. The primary Judge in this case did not hear the appellants’ motion having taken an unwavering view on his earlier ruling in James Aiwasi (supra) and consequently dismissed the motion. It may appear on the face of the record that the appellants’ right to be heard may be denied in the circumstance and hence a breach of natural justice, however, this is not a ground of appeal and we are  at a complete loss as to why this important legal point was swept under the carpet. The counsel for the appellants was unimpressive in his advocacy before Court having difficulty in putting together a coherent and well reasoned argument as he occasionally stumbled in his presentation. Be that as it may, this is not a point of contention before this Court and we will labour no more on the issue.

10.     We have had the benefit of the Supreme Court decision in Steven Punangi v Pacific Plantation Timber Limited (2011) SC1153. It was held in that Supreme Court case that a dismissal of an appeal for want of prosecution, is not an interlocutory judgment within the meaning of s. 14 (3)(b) of the Supreme Court Act, as it finally determines the issue between the parties.

11.      The Supreme Court in Steven Punangi case stated and we quote;

“ 8.  In our jurisdiction, there have been decisions of this court that favour both approaches, The Supreme Court in Shelley v PNG Aviation Services Pty Ltd [1979] PNGLR 119 and The Ship ‘Federal Huron’ v Ok Tedi Mining Ltd [1986] PNGLR 5, favored the application approach. Other decisions have applied both approaches, for example: National Capital District Commission v PNG Waterboard Ltd & Ors (1999) SC624; PNG Forest Authority v. Securimax Security Pty Ltd (2003) SC 717 and Alfred Alan Daniel v Pak Domoi Ltd (2004) SC736. By far the majority of decisions however, have favoured the order approach. Some of those decisions are: Provincial Government of North Solomons v Pacific Architecture Pty Ltd [1992] PNGLR 145; L. A. Jarden Collector Agency Pty Ltd & Anor v Masket Iangalio & Anor (1998) SC597; Philip Takori & Ors v. Simon Yagari & Ors (2008) SC905; Oio Aba v Motor Vehicles Insurance Ltd [2005] SC779; Raymond Liu & Anor v Daul Emoto & Ors (2009) SC1032; Peter Yama v PNGBC Ltd (2008) SC922; NCDC v Namo Trading Ltd (2001) SC663 and Application by John Maddison & Anor (2009) SC984

9.  The order approach has been described as right in logic: Slater Rex & Co v Ghosh [1971] 2 Q.B. 597, and as being the sound and convenient text by the Privy Council in Haron bin Mohd Zaid v Central Securities (Holdings) Bhd [1982] 2 AII ER 481

10.  Following a review of the various authorities, we are satisfied that the order approach is the one that should be continued to be adopted in this jurisdiction. We agree with the comment of this court in Oio Aba (supra) that the decision in Shelley’s case (supra) does not continue to be good law.”

12.     The earlier Supreme Court case of Christopher M Smith v Ruma Constructions (2002) SC695 reinforced the view that the National Court did not have the jurisdiction to review its own decision in the guise of an application to set aside an ex-parte order. Thus, further emphasizing the point that a court has decided on an issue, it cannot rehear the matter save only on appeal or review before the Supreme Court.

13.        We note that the primary Judge refused to hear the application by the appellants on the basis of Order 12 Rule 8(4) of the National Court Rules where his Honour formed the opinion that the National Court is devoid of power in setting aside a substantive proceeding which had been finally determined or disposed off. It is therefore necessary that we give consideration to this particular Rule.

14.      It is convenient that the entire Rule 8 of Order 12 be reproduced at the outset. It is stated in these terms:

“8.	Setting aside or varying judgement or order. (40/9)
(1)	The Court may, on terms, set aside or vary a direction for entry of judgement where notice of motion for the setting aside or variation is filed before entry of the judgement.

(2)	The Court may, on terms, set aside or vary a judgement —
(a)	where the judgement has been entered pursuant to Order 12 Division 3 (default judgement); or
(b)	where the judgement has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or
(c)	when the judgement has been entered in proceedings for possession of land pursuant to a direction given in the absence of a person and the Court decides to make an order that the person be added as a defendant.

(3)	The Court may, on terms, set aside or vary an order —
(a)	where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or
(b)	where notice of motion for the setting aside or variation is filed before entry of the order.

(4)	In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgement) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.

(5)	This Rule does not affect any other power of the Court to set aside or vary a judgement or order.” [Emphasis added]

15.      It is clear from a reading of the whole of the provisions of Rule 8 that there is general power, albeit discretionary, vested in the National Court to set aside or vary a direction for entry of judgment or order. It is, however, also important to note that such power can be exercised only when an application (notice of motion) is filed “before entry of judgment” but this requirement may be dispensed with in appropriate circumstances under Order 1 Rule 7. Where the relief under Order 1 Rule 7 is not sought and or granted, there is no power to be exercised.

16.      Sub-rule (1) grants a general power; however, the conditions for the exercise of the power are specific and are provided under Sub-rule (2). There are only 3 conditions; firstly, in cases where a default judgment is entered under Division 3 of Order 12, or, secondly, in cases where a judgment has been entered ex parte, or, thirdly, in cases where judgment has been entered in proceedings relating to land.

17.   Sub-rule (4) whilst making provision for additional or supplementary powers, at the same time, provides two caveats or exceptions to the general power. It specifically says that there is no power to set aside or vary a judgment or order for “dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.”

18.      The reason in our view is simple. The process for setting aside or varying an order is without question an interlocutory process. Sub-rule (1) expressly provides for that. In the broader context and scheme of things under the Rules of Court a civil proceeding is commenced by a substantive process. These processes are provided under Order 4. Except as authorized by any other law there are only two modes of commencing a civil proceeding; by a writ of summons and by an originating summons. 

19.       A notice of motion is only an interlocutory process. It cannot be used to commence or re-commence a substantive proceeding. It can only be used, as its name suggests, whilst the substantive proceeding is current. It is intended to be used within and not without a current proceeding. Where the proceeding is brought to a finality by way of a dismissal order the currency or life of the proceedings is at end and cannot be brought back to life or resurrected, as it were, by an interlocutory process. This is made clear by virtue of Rule 4 of Order 4. It states:

“4.	Mode of proceedings in interlocutory matters.
Proceedings may be instituted by motion, only if they relate to an interlocutory application.”

20.      Rule 4 is further reinforced by Rule 37 of Order 4 where it reads:

“37.	Interlocutory or other application in proceedings. (19/1)
An interlocutory or other application, in or for the purpose of or in relation to proceedings commenced or to be commenced by writ of summons or by originating summons, shall be made by motion.”

21.     Put it in another way in the context of the present appeal the effect of Rule 4, is that, a notice of motion cannot be employed to resurrect, restore or revive a substantive proceeding that has been dismissed even on the basis of an ex parte order. The remedy for an aggrieve party does not lie in an application under Order 12 Rule 8 but through an appeal or review process in the Supreme Court. 

22.     We have read the National Court decision in James Aiwasi (supra). In the course of writing this decision we have also come across another judgment of the National Court in Harry Tovon v Carl Malpo (2016) N6240. Both are judgments of his Honour Kandakasi J. These two cases discussed, amongst others, the effect of Rule 8(4) of Order 12 and both reached the same conclusion on the very issue before us. In Harry Tovon case (supra) his Honour Kandakasi J discussed, amongst others, the scheme of the Rules and the meaning of “interlocutory” in the context of the Rules. Both of his Honour’s decisions agree with the reasoning by Makail AJ (as he then was) in Peter Malts case (supra). We are of the view that the reasoning in these 3 cases is sound in law and practice. We agree with and endorse their Honours’ reasoning and conclusion.

23.      Another most important consideration is the public policy reason. The Public Policy dictates or requires finality in litigation. There must be finality in litigation once a final decision has been arrived at. We adopt the remarks as stated in Richard Dennis Wallbank & Jeanette Miniffe v The Independent State of Papua New Guinea [1994] PNGLR 78;

“… the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that in its earlier judgment it has proceeded on a misapprehension as to the fats or the law. As this Court is a final Court of Appeal, there is no reason for it to confine the exercise of its jurisdiction in a way that would inhibit its capacity to rectify 
What it perceives to be, an apparent error arising from some miscarriage in its judgment. However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court, nor is it to be exercised simply because a party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and a misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a back door method by which unsuccessful litigants can seek to re-argue their cases.”

24.      For all the foregoing reasons and applying the order approach principle recently approved by the full Bench of the Supreme Court in Steven Punangi case (supra) an ex-parte order dismissing the proceedings for want of prosecution, and for that matter disclosing no reasonable cause of action, is in our view a final order as it finally and effectively determines the life of the substantive proceeding before the National Court.

25.      A party like the Appellants in this case who are aggrieved by an ex-parte dismissal order can only appeal to the Supreme Court as of right and leave is not required. see Rea Joseph v Manau Sereva & Ors (2011) SC1152

26.      We are therefore of the view that the appellants' appeal must fail and we dismiss it accordingly.

The order of the Court is that:

1.	The appeal is dismissed.
2.	Appellants pay the respondents costs of this appeal, to be taxed, if not agreed.

Kaore Lawyers: Lawyer for the Appellants	
Guardian Legal Services: Lawyer for the Respondent