SC1894

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 34 OF 2019

BETWEEN:
KUSO MAILA ANDA LIMITED
Appellant

AND:
UNITED PACIFIC CORPORATION LIMITED
Respondent

Waigani: Yagi J, Kariko J & Polume-Kiele J
2019: 17th & 20th December

CIVIL APPEAL – Practice & Procedure – application to dismiss for want of prosecution – order preventing a party to take further steps unless payment for fixed cost is made - party denied right to be heard on application seeking dismissal of proceedings commenced by the party

Cases Cited:
Papua New Guinea Cases

Peter Sharp v Warwick Andrew (2016) SC1797
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC837
Gibson Nad v Bank South Pacific Limited (2010) SC1278
Vanimo Forest Products Ltd v Ossima Resources Ltd (2013) SC1275
Jimmy Mostata Maladina v Posain Poloh (2004) N2568
Rakatani Mataio v Jack Avu August (2014) SC1361

Overseas Cases

Kioa v West (1985) 159 CLR 550

Counsel:

Mr. J. Aku, for the Appellant
Mr. N. Pilamb, for the Respondent

DECISION

20th December, 2019

1.	BY THE COURT:	This is an appeal against a decision of the National Court in Waigani delivered on 15 March 2019 in proceedings WS No. 799 of 2018. The decision arose from an interlocutory application and resulted in a final order dismissing the proceedings for want of prosecution. It is therefore an appeal as of right pursuant to s. 14(3)(b)(iii) of the Supreme Court Act where leave is not required.

2.	An attempt to dismiss the appeal by way of objection to competency was heard and dismissed before the substantive hearing of the appeal. 

Background Facts

3.	After the close of pleadings in the National Court on 3rd September 2018, the respondent on 25th January 2019 filed an application seeking to dismiss the proceedings for want of prosecution. 

4.	The application was listed for hearing on 6th March 2019. At the hearing the Court adjourned the matter to 14th March 2019 and, amongst others, made orders for the appellant to pay to the respondent K750.00 as cost of the adjournment and further that the appellant pay the cost before taking any further step in the proceedings. The orders made were in these terms:

1.	The Notice of Motion of the Defendant filed on 25th January 2019 is adjourned to 14th March 2019 at 9.30 am.

2.	This is the last adjournment.

3.	The Plaintiff shall pay the Defendant’s cost of this adjournment. These costs are fixed at K750.00. The security sum of K750.00 shall be paid by the Plaintiff to the Defendant before the Plaintiff can take any further steps in this proceeding.

4.	Time is abridged.	[Our emphasis]

5.	When the matter returned before the Court on 14th March 2019 the appellant had not paid to the respondent the cost of K750.00 as ordered previously. Despite appearance being made by counsel on behalf of the appellant, the court refused to hear him on the respondent’s application based on the order of 6th March 2019. The primary judge considered the appearance by counsel amounted to taking “a further step in the proceeding”.

6.	The Court therefore proceeded to hear the respondent’s application ex parte and consequently determined the proceedings including awarding costs against the appellant. The decision was delivered on 15th March 2019.

7.	It is that decision that is now being appealed against.

Grounds of appeal

8.	There are 8 grounds relied upon by the appellant in the appeal. It is not necessary for the present purpose to set out all the grounds, suffice to say they fall into two broad categories:

1.	Breach of natural justice or denial of the right to be heard under sections 37 and 59 of the Constitution. 

2.	Errors pertaining to the merits of the application for dismissal of proceeding for want of prosecution.

Issues for determination 

9.	Based on the grounds of appeal there are essentially two issues that we are required to consider and determine. These are:

1.	whether there was a breach of the principles of natural justice in that the appellant was denied the right to be heard, and

2.	whether the primary judge erred in the exercise of his discretion in ordering a dismissal of the proceedings.

Issue 1 – breach of natural justice

10.	The appellant relies on sections 37(1) and 59 of Constitution in asserting a breach of the right to be heard. These two provisions in the Constitution state as follows:

37.	Protection of the law.

(1)	Every person has the right to the full protection of the law, and the succeeding provisions of this section are intended to ensure that that right is fully available, especially to persons in custody or charged with offences.

59.	Principles of natural justice.

(1)	Subject to this Constitution and to any statute, the principles of natural justice are the rules of the underlying law known by that name developed for control of judicial and administrative proceedings.

(2)	The minimum requirement of natural justice is the duty to act fairly and, in principle, to be seen to act fairly.

11.	Section 37 of the Constitution provides a guaranteed right to full protection of the law. It means that every person (natural person and corporate body) are guaranteed by the Constitution to have the full protection of the law. 

12.	Section 59 of the Constitution is a right based on the principles of natural justice which imposes a minimum duty to act fairly. The duty applies to decision making processes in an administrative or judicial proceeding. 

13.	The Courts have regarded this constitutional principle of natural justice to be a very significant right to the extent that where a breach of this right is committed in a judicial proceeding the breach amounts to procedural irregularity and is an appellable error. This principle entails due process and procedural fairness is observed in the dispensation of justice. There are ample case law authorities that support this statement of the law. 

14.	In Peter Sharp v Warwick Andrew (2016) SC1797 the Supreme Court by majority (Hartshorn J and Yagi J) held that a denial of a right to be heard constitutes an appellable error of law and would vitiate any decision resulting therefrom. That was a case where the primary judge in the course of hearing a notice of motion dealt with it on a piece meal basis. The primary judge heard a preliminary issue and adjourned the balance of the motion to another occasion. However, the primary judge when delivering his ruling on the preliminary issue went further to determine the entire notice of motion without hearing the parties. The majority in holding that a breach of natural justice had occurred stated:

It is clear in our view that the appellant was denied natural justice in that he or his counsel were not given the opportunity to fully argue the merits of the application after the primary judge had found that the respondent was a non-resident. We concur with the submissions of Counsel for the appellant that this denial constitutes an appealable error of law and vitiates the decision of the primary judge in the court below, even if that decision was made pursuant to a discretion conferred upon the primary judge with respect to a matter of practice or procedure: Conroy v. Conroy (1917) 17 SR NSW 681, at 682-683; RG v. DG [2013] NTSC 66 at [17]-[24]. Consequently an identifiable error has occurred in the exercise of the primary judge’s discretion: Curtain Bros (PNG) Ltd v. University of Papua New Guinea (2005) SC788. [Our emphasis]

15.	We note that the judgment in Peter Sharp (supra) also considered several other Supreme Court decisions dealing with the same issue of right to be heard including Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC837, Gibson Nad v Bank South Pacific Limited (2010) SC1278 and Vanimo Forest Products Ltd v Ossima Resources Ltd (2013) SC1275. The Court also cited with approval the High Court of Australia decision in Kioa v West (1985) 159 CLR 550 and the National Court decision in Jimmy Mostata Maladina v Posain Poloh (2004) N2568. Another Supreme Court decision on this point is the case of Rakatani Mataio v Jack Avu August (2014) SC1361.

16.	The respondent submits that the primary judge acted fairly by according counsel for the appellant the opportunity to be heard in relation to the non-payment of cost earlier ordered, and in that respect, the appellant was not denied the right to be heard.
17.	With respect we reject this submission as misconceived. The transcript is very clear. The appellant was refused the opportunity to be heard on the respondent’s application in which the appellant stood to lose its entire claim in the proceeding. In our respectful opinion, denying the appellant the right to be heard in these circumstances amounted to an error of law that vitiates the primary judge’s decision of 15th March 2019.

18.	With respect, we also disagree with the primary judge’s view that appearance by the appellant amounted to taking a further step in the proceedings. The appellant was forced to defend, as it were, an application which had the potential to terminate his claim. But even if the primary judges’ view was correct, the order that his Honour relied upon cannot override the mandated or guaranteed constitutional right to be heard.

Conclusion

19.	We are satisfied that the appeal must succeed on the ground of breach of natural justice. In the circumstances, we think it is unnecessary to decide whether the primary judge correctly exercised his discretion in deciding the respondent’s application.

Orders

20.	The Supreme Court Act, s. 16 grants this Court powers to order a range of relief in an appeal. The powers include remitting a case for rehearing which we consider is appropriate to do in the present case. As the primary judge has already decided on the facts, issues and the outcome of the respondent’s application, we consider that the matter should be reheard by another judge.

21.	Accordingly, the following will be the orders of the Court:

1.	The appeal is upheld.
2.	The orders of the National Court made on 15th March 2019 in proceedings WS No. 799 of 2018 is forthwith quashed.
3.	The National Court proceedings WS No. 799 of 2018 is forthwith reinstated.
4.	The respondent’s notice of motion filed in the National Court on 25th January 2019 is reinstated for hearing in the National Court before another judge.
5.	The Deputy Registrar – National Court is to fix a fresh hearing date and advise the parties in writing accordingly.
6.	The respondent shall pay the appellant’s costs in this appeal (including the objection to competency) on party-party basis, to be taxed, if not agreed.
_________________________________________________________________
Manase & Co Lawyers:  Lawyers for the Appellant
Mel & Hennry Lawyers:  Lawyers for the Respondent