SC2563

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 118 OF 2022 [IECMS]

BETWEEN:
NOKO YUKU DEVELOPMENT CORPORATION LIMITED
Appellant

V
HELA PROVINCIAL GOVERNMENT
First Respondent

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Respondent

Waigani: Gavara-Nanu, J, Anis, J & Narokobi, J
2024: 28th March, 30th April

SUBSTANTIVE APPEAL – Appeal against exercise of discretionary power by the trial judge in dismissing proceeding – trial judge grants primary relief sought in the notice of motion and sets aside ex-parte interim orders – trial judge proceeds further and also grants the alternative relief sought – alternative relief sought was to dismiss the proceeding – Order 12 Rule 40(1)(a)(b) and (c) – National Court Rules – transcript of proceeding shows that first respondent had abandoned the primary relief and had only pursued the alternative relief – decision of the Court shows that the Court had also considered and made a determination on the primary relief – whether error by trial Judge fatal to the outcome – consideration - ruling

Cases Cited:

Davis v. Baker [1977] PNGLR 387
Curtain Bros (PNG) Limited v. UPNG (2005) SC788

Counsel:

N Yalo, for the Appellant
J Wohuinangu, for the First Respondent
R Uware, for the Second Respondent

30th April 2024

1.	BY THE COURT:  The appellant appeals against a decision of the National Court in proceeding OS No. 11 of 2022 – Noko Yuku Development Corporation Limited and Ors v. Hela Provincial Government and 1 Or (OS 11 of 2022) made on 2 August 2022.  The appellant was the first plaintiff, and the respondents were defendants, in the said proceeding.  

2.	On 2 June 2022, the trial Judge heard a notice of motion (NoM) filed by the first respondent.  The NoM is located at Tab 10 of the Appeal Book (AB).  The main relief sought therein which were granted were terms 3 and 4 which were in the following terms:

3.	Pursuant to Order 12 Rule 8(4) and (5) of the National Court Rules, the interim orders granted on 08 February 2022, by Kandakasi DCJ, be set-aside or discharged forthwith.

4.	In the alternative, pursuant to Order 12 Rules 1 and 40(a), (b) and (c) of the National Court Rules this proceeding be dismissed for:

(1)	Showing no reasonable cause of action; or
(2)	Being frivolous or vexatious; or
(3)	Being an abuse of the process of the Court.

3,	On 2 August 2022, Her Honour delivered her written decision [at pp.282 of the AB].  The final orders read:

i)	The injunctive orders granted on 4 February 2022 are dissolved and set aside.

ii)	These proceedings are therefore dismissed in its entirety.

iii)	The Plaintiffs shall each meet the Defendants’ costs on a solicitor client basis for mounting proceedings that are a sham.

4.	Briefly, OS 11 of 2022 was initially commenced by the appellant on 31 January 2022.  Five (5) additional plaintiffs were added thereafter including the second plaintiff company called HGCP Holdings Limited.  The appellant, together with other landowner companies in Hela Province, submitted various proposals for various projects to a committee called Expenditure Implementation Committee (EIC).  EIC is established within the Department of Petroleum and Energy (DPE).  The appellant’s proposed project is to build a Rural Hospital in Hedemari village which is situated in South Koroba LLG in Hela Province.

5.	The project proposals which the appellant was a part of, concerns or was limited to the affected areas at where Petroleum Development License No. 1 (PDL1) is situated.  A total of 353 companies submitted their various project proposals first to a separate screening committee within the DPE called Project Screening Committee (PSC).  The PSC considered the appellant’s project proposal together with the others and made recommendations to the EIC.  In regard to the appellant’s proposal, the PSC recommended to EIC to reject it.  The PSC’s reasoning was that the appellant’s proposed project was intended on areas that were outside the affected or designated areas of PDL1.  

6.	The appellant learnt of the negative recommendation by PSC against its project proposal and was aggrieved.  It also learnt that the second respondent had on 12 January 2022 paid K30 million to the first respondent.  The appellant was of the view that the K30 million was paid by the second respondent as Infrastructure Development Grants (IDG) that were for infrastructure developments within the affected areas of PDL1.  It was also of the view, amongst others,  that the first appellant should not have any direct access or control over the fund.

7.	So, on 30 January 2022, the appellant filed OS 11 of 2022.  It sought various declaratory relief [refer to pp. 14 and 36 in the AB].  It also filed a notice of motion where it had sought interim restraining orders against the use of the K30 million that was paid by the State to the first respondent.  On 4 February 2022, His Honour Kandakasi DCJ granted ex parte restraining orders against the use of the K30 million.  That later led to, amongst others, the NoM where Her Honour heard and eventually dismissed OS 11 of 2022.

GROUNDS OF APPEAL

8.	The appellant pleads a total of 10 grounds of appeal in its Notice of Appeal filed 12 August 2022 [pp. 6 to 12 in the AB].  We will summarise them as follows:

(i)	the trial Judge erred in law and mixed fact and law in not dismissing the NoM because, (i), the appellant had standing, (ii), the appellant had a serious and not speculative case, (iii), the NoM was incompetent, improper and an abuse of process, and (iv) the defence of res-judicata did not apply to the substantive relief sought in OS 11 of 2022 [grounds 4.1, 4.2, 4.4 and 4.10];

(ii)	the trial Jude erred in law and mixed fact and law in (i), rejecting a crucial evidence of the appellant, namely, copy of a purported letter by EIC dated 1 December 2021, as admissible evidence, and (ii), rejecting a purported discussion had between Mr Pami and Mr Tango where they had stated that the appellant’s project proposal had been vetted and approved for IDG and should be formally endorsed by EIC [grounds 4.3, 4.5, 4.6 and 4.7];

(iii)	the trial Judge erred in law and mixed fact and law in not distinguishing but instead following the decision of Polume-Kiele J, in OS 196 of 2013 – Makai and Ors v. Agiru and Ors and the State (2018) regarding disbursement of IDG funds by the National Government to a responsible or host provincial government including the first respondent for the PNG-LNG projects [grounds 4.8 and 4.9].

PRELIMINARY

9.	At the appeal hearing, we raised a question with both counsel concerning whether the National Court, after granting the primary relief, could proceed to also consider and grant the alternative relief, sought in the NoM.

10.	In addressing the matter, we sought guidance from both counsel to draw our attention to the transcript of the proceeding or the trial Court’s decision where the Court had addressed the issue.  Both counsel were unable to assist in that regard, which had caused us to form a view that perhaps the matter was not addressed by the parties or the trial Judge.

11.	However, having perused the AB, we note that the issue was in fact addressed by the then counsel for the appellant Late Justin Haiara, the Court, and counsel for the first respondent Mr Wohuinangu.  Evidence of that is captured in the transcript of proceeding at line 20, pp. 309 to line 20 at pp. 310 of the AB.  At pp. 309 and 310, the transcript reads in part:

MR HAIARA:  Thank you, your Honour.  Your Honour, before I reply to the submission, I just want to get an indication from my learned friend whether he has prosecuted the entire notice of motion or only the application to set aside the interim injunction..

HER HONOUR:  He is seeking for a dismissal, right, so does it do to…

MR HAIARA:  Term 3 of the notice of motion because as I read from my learned friend’s submission he has only addressed the issues in relation to setting aside the interim injunction.  So, I just want to get an indication from my learned friend.

HER HONOUR:  Mr Wohuinangu, I take it the application is for a dismissal?

MR WOHUINANGU:  Yes, your Honour.

HER HONOUR:  Mr Haiara?

MR HAIARA:  I raised the question because my learned friend’s submissions did not address any aspect of the reasons why the proceeding should be dismissed but he canvassed submissions on the principles of grant or refusal of interim injunction.  That is what is set out in his submissions that my learned friend produced and my response to that your Honour is…

HER HONOUR:  The confusion should be on this side, right.  This is my understanding.  I take it that the application is for a dismissal.

MR HAIARA:  Dismissal.

HER HONOUR:  This is term 3 or term 4 of the notice of motion, Mr Wohuinangu?  Can you clarify that for the record, if you are moving term 4 of the notice of motion?

MR WOHUINANGU:  Yes, I am.

HER HONOUR:  Yes, And I have been hearing those submissions and this is my understanding, but it is for a dismissal and if it goes through, any other injunctive orders that has been granted, that goes with it.

MR HAIARA:  I just want to clarify myself, your Honour.

HER HONOUR:  Very well.

12.	With this clarity, we draw our attention now to the trial Judge’s decision and ask ourselves whether Her Honour proceeded on that premise in her written decision.  Her Honour’s decision is contained at pp. 281 of the AB.  It was delivered on 2 August 2022.

13.	We make various observations which are summarized herein:

(i)	There is nothing in the written decision where Her Honour said that the Court was going to deal with relief 4 only.

(ii)	Her Honour [ at line 20 at pp. 291 of the AB] proceeded to deal with and decided on relief 3, which was contrary to the consensus had between the parties and the Court on 2 June 2022, which was that the first respondent was only pursuing and had moved the Court on relief 4 of its NoM.

(iii)	In so doing, Her Honour (at line 40 at pp.294] stated at the end of her decision and we quote, “It follows that the interim injunctive orders granted on 2 February 2022 and entered on 8 February 2022 is dissolved and set aside.”

14.	This Court, in Davis v. Baker [1977] PNGLR 387, and later in other cases including Curtain Bros (PNG) Limited v. UPNG (2005) SC788, sets out the scenarios where an appellant Court may uphold an appeal against an order of the National Court that involves exercise of judicial discretion.  The Supreme Court held:

(1) (Per Prentice Dep. C.J. with whom Frost C.J. agreed.) The appeal, being an appeal against the exercise of a discretion, in order for the Appellate Court to substitute its discretion for that of the Judge appealed from (if it has the material for doing so) it must be shown that the Judge appealed from exercised his discretion upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or did not take into account some matter for consideration; (Lovell v. Lovell [1950] HCA 52; (1950) 81 C.L.R. 513 at p. 518, House v. The King (1936) 55 C.L.R. 499 at p. 504) and it being clearly wrong in its decision; (Australian Coal and Shale Employees Federation v. The Commonwealth and Others [1953] HCA 25; (1953) 94 C.L.R. 621, or it appearing that otherwise injustice might be done; (Evans v. Bartlam [1937] A.C. 473 at p. 480.)

15.	With respect, there appears to be a clear error committed in the exercise of the Court’s discretion, that is, when Her Honour considered and determined relief 3 where she set aside the interim ex parte orders of 4 February 2022.

16.	We also note that Her Honour’s findings under relief 3 also directly influenced the outcome of her decision in granting relief 4, that is, in dismissing the entire proceeding premised on want of merit or arguable case.  At pp. 15 and 16 in Her Honour’s written decision [line 10, pp. 295 and line 10, pp. 296], Her Honour stated:

34.…  Having found that the Plaintiffs do not have a serious question to be tried before this Court in the first leg of Mr Wohuinangu’s application in regard to the continuity of the injunctive orders granted on 4 February 2022, having also found that the Plaintiffs do not have a right to be protected in these proceedings, it, therefore, amounts to the Plaintiffs failing to have a cause of action arguable before this Court.  They have mounted a claim that is misleading and deceptive in my firm view as they do not have by any evidence and or right on any approved funding for any of their projects from EIC.”

….

37.  These proceedings are a more than farcical, they are a sham and should be dismissed.  There is therefore no arguable or meritorious case before this Court.  This proceedings shall be dismissed accordingly.

CONSIDERATION

17.	Premised on the above observations, what is clear to us is that the trial Judge had addressed the NoM outside what had been agreed upon by the parties and the Court on 2 June 2022.  That being the case, Her Honour considered, amongst others, the issue of arguable case and decided that in favour of the respondents.  And premised on the finding on want of arguable case, which was the fundamental consideration, Her Honour proceeded to dismiss the proceeding by granting relief 4 of the NoM.

18.	As such, it is obvious to us that we must uphold the appeal, and we do so accordingly.  The trial Judge’s decision in the first instance was irregular.  We also find that Her Honour’s consideration and ruling on relief 3 of the NoM had, in our view, tainted her exercise of judicial discretion in general or entirely.

SUMMARY

19.	In summary, we will uphold the appeal and in so doing, reinstate OS 11 of 2022.  

20.	We take into account the circumstances of this case, and in our view, the appropriate additional orders would be to reinstate the interim restraining order of 4 February 2022, direct the first respondent to file a fresh notice of motion to set aside the interim orders of 4 February 2022 within 7 days from the date of this order, and for the matter to return before the relevant Court for directions and hearing of the interlocutory application that is to be filed by the first respondent.

COST

21.	We will order cost to follow the event to be taxed if not agreed.

ORDERS OF THE COURT

22.	We make the following orders:

1.	The appeal is upheld.

2.	The National Court Order made on 2 August 2022 that (i) set aside the ex parte order of 4 February 2022 and (ii) dismissed proceeding OS 11 of 2022, are quashed.

3.	Proceeding OS No. 11 of 2022 - Noko Yuku Development Corporation Limited and Ors v. Hela Provincial Government and 1 Or is reinstated before the National Court.

4.	The ex parte interim orders of 4 February 2022 are reinstated and restored forthwith in the interim.

5.	The first respondent is at liberty to and may file a fresh application to set-aside the ex parte court order of 4 February 2022, that is, within 7 days from the date of this Order.

6.	Proceeding OS No. 11 of 2022 - Noko Yuku Development Corporation Limited and Ors v. Hela Provincial Government and 1 Or shall return before the National Court for directions hearing where the Court may set down for inter-partes hearing whether to extend the ex parte restraining orders of 4 February 2022 provided an application is filed in compliance with term 5 of the order of this Court.

7.	The respondents shall pay the appellant’s cost of the appeal which may be taxed if not agreed.

8.	Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the Supreme Court which shall take place forthwith.
________________________________________________________________
Nemo Yalo Lawyers: Lawyers for the Appellant
Gileng & CO Lawyers: Lawyers for the First Respondent
Solicitor General: Lawyer for the Second Respondent