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Pang v Seeto [2024] PGSC 57; SC2589 (27 May 2024)

SC2589

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCREV 28 OF 2023

APPLICATION FOR LEAVE TO REVIEW PURSUANT TO CONSTITUTION SECTION 155(2)(b)

BETWEEN:
JAMES JOSEPH PANG
First Applicant

AND:
RICHARD WONG
Second Applicant

AND:
IRENE WAN XIA SEETO
Respondent

Waigani: Hartshorn J.
2024: 16^th April, 27^th May

SUPREME COURT – PRACTICE AND PROCEDURE - Application for leave to review pursuant to s. 155(2)(b) Constitution

Cases Cited:
Avia Aihi v. The State (No. 2) [1982] PNGLR 44
Application by Anderson Agiru (2002) SC686
Application by Herman Leahy (2006) SC855
Application by John Maddison and Bank of South Pacific Ltd (2009) SC984
Alphonse Tay v. Newcombe Gerau (2011) SC1097
Benjamin Sengi v. The State (2015) SC1425
Southern Highlands Provincial Government v. Ronald Kalu (2016) SC1568
Motor Vehicles Insurance Ltd v. Fura Opeta (2020) SC1954

Counsel:

Mr. J. Wohuinangu and Ms. L. Akane, for the Applicants
Ms. E. Parua and Ms. L. Damien, for the Respondent

27^th May 2024

1. HARTSHORN J: This is a decision on an application for leave to review a decision of the National Court, brought pursuant to s. 155(2)(b) Constitution.

Background

2. The applicant seeks to review a decision of the National Court made on 4^th July 2022 (Decision). In the Decision the primary Judge granted the substantive relief claimed in the Summons and made other orders concerning Viva No. 65 Limited (Viva 65)

Law

3. Leave is required as the right of appeal was not exercised in the time permitted by statute: Order 5(1) Supreme Court Rules and Avia Aihi v. The State (No. 2) [1982] PNGLR 44; Application by Anderson Agiru (2002) SC686; Application by Herman Leahy (2006) SC855; Application by John Maddison and Bank of South Pacific Ltd (2009) SC984; Alphonse Tay v. Newcombe Gerau (2011) SC1097 and Benjamin Sengi v. The State (2015) SC1425; Motor Vehicles Insurance Ltd v. Fura Opeta (2020) SC1954

4. Where a right of appeal has not been exercised, three criteria must be satisfied before leave can be granted (I refer to the cases cited above). These are:

a) it is in the interests of justice to grant leave; and

b) there are cogent and convincing reasons and exceptional circumstances, eg. some substantial injustice is manifest or the case is of special gravity; and

c) there are clear legal grounds meriting a review of the decision.
5. In Southern Highlands Provincial Government v. Ronald Kalu (2016) SC1568, Injia CJ (as he then was) said at [5]:

"The criteria for grant of leave for review is settled in various decisions of this Court: Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120, State v Toka Enterprises Ltd (2013) SC1266, Luke Marano v Jack Nouari (2013) SC 1307. The applicant must have standing to bring the application. If the applicant is a party in the proceedings of the court below from which the judgment under review was given, the question of standing does not arise. The applicant must offer a reasonable explanation as to why an appeal against the judgment was not filed within time. The application for leave for review must not be delayed. If there has been a delay in lodging the application, a reasonable explanation must be given. The application must be prosecuted promptly. If there has been a delay in prosecuting the application, a reasonable explanation must be offered. If the court finds that there has been a delay and no reasonable explanation has been offered for the delay in lodging and prosecuting the application, the court may, nonetheless, grant leave for review if there are exceptional circumstances showing manifestation of substantial injustice that give rise to serious issues of facts or law that warrants a full review of the judgment. It is also necessary for the applicant to demonstrate that it is in the interest of justice to warrant a review of the judgment."

Consideration

6. In determining whether there are cogent and convincing reasons, the first consideration is the reason for not filing an appeal within time. The first applicant deposes that the applicants were made aware of the final orders on 8^th July 2022. The first applicant further deposes that he was not informed of the right to appeal within 40 days of the Decision and that from 4^th July 2022 to the date of his affidavit, 3^rd November 2023, the parties were involved in attempts to resolve the matter and in attending to various interlocutory, directional and contempt matters. The second applicant does not specifically depose as to the reasons why an appeal was not filed within time and deposes that he was overseas and not aware of the proceedings.

7. It is submitted that the applicants were engaged in discussions to purchase the respondent’s shares, it did not occur to the applicants to appeal and it was only in March 2023 that they were advised of their appeal rights by their new lawyers.

8. That discussions may have been ongoing between the parties does not alleviate the requirement to file an appeal within time. Did the applicants then lawyers advise them of their appeal rights? There is no evidence on this point. Further, there is no evidence of an application for an extension of time to file an appeal being made. I am not satisfied that a reasonable explanation has been given for not filing an appeal within time.

9. The next consideration is whether there has been a delay in filing the application for leave to review and if so, has a reasonable explanation been given. Here, the application for leave to review was filed over one year and four months after the Decision. By comparison, this period of time is over 11 times the period of time permitted by statute to file an appeal. In my view this constitutes a significant period of delay which requires an explanation. There is no explanation for this delay in evidence and in such absence, I am not satisfied that a reasonable or any explanation has been given.

10. Having found that a reasonable explanation for not filing an appeal within time has not been given and that a reasonable explanation for the period of time taken for the leave application to be filed has not been given, as occurred in Kalu's case (supra), this court may nevertheless consider whether there, "are exceptional circumstances showing a manifestation of substantial injustice that gives rise to serious issues of fact or law that warrants a full review of a judgment": Kalu's case (supra) at [5]; and further, whether it is in the interests of justice that a review of the Decision is warranted.

11. As to the merits of the case sought to be argued by the applicants, from a perusal of the evidence including the transcript of the hearing at the conclusion of which the Decision was made it is arguable amongst others, that:

a) counsel for the parties appeared for a status conference to prepare the matter for trial and were not prepared to reach a negotiated settlement of the substantive claim or to argue the substantial claim. Further, counsel were not prepared for final orders of the substantive claim to be made;

b) the primary judge fell into error in the appointment of Ms. Suzaan Zannie Theron as the auditor to conduct the subject audit. This is because there was no evidence before the Court that Ms. Theron was registered as required by s. 220(2)(b) and s. 193(1) Companies Act to enable the primary judge to make the appointment. That the respondent did not object to the appointment on this basis does not relieve the primary judge of the obligation to ensure that a statutory requirement has been complied with;

c) the respondent does not seek any relief in the summons concerning the liquidation of Viva 65 and the issue of liquidation or “wind-up” of Viva 65 was never raised before the primary judge. The primary judge of his own volition made the orders concerning “wind-up”;

d) the orders concerning “wind-up” or liquidation, notwithstanding that they are conditional upon the provision of a complete audit report, order the parties, being Viva 65 and Ms. Seeto - a director and a shareholder, to make a decision on a voluntary “wind-up” and distribution of assets. This is contrary to s. 291(2)(a) and (b) Companies Act. Section 291(2)(a) and (b) Companies Act provide that a liquidator may be appointed by a special resolution of the shareholders and by the board of a company in certain circumstances. The National Court does not have the power in respect of the appointment of a liquidator to a company other than the power conferred by s. 291(2)(c) Companies Act. To direct Viva 65 and a director/shareholder of Viva 65 to make a decision on a voluntary liquidation is also contrary to s. 291(2)(a) and (b) Companies Act as it does not include the board of Viva 65 and the other shareholders of Viva 65. It may be argued that the primary judge has acted contrary to the provisions of the Companies Act concerning the appointment of a liquidator by requiring the action to be taken and further, by requiring the specific action in the order to be taken.

12. In the above circumstances, I am satisfied that exceptional circumstances have been shown to exist. This is because the applicants have an arguable case that amongst others, the primary judge made final orders without hearing substantive argument. Those final orders included orders which were not sought by any party, which were made without jurisdiction, which are contrary to the Companies Act, which concern the liquidation of Viva 65 and which concern the applicants as directors and shareholders who were not parties to the proceeding.

13. As to the interests of justice, I am satisfied that it is not in the interests of justice for a judge to make final orders without conducting a trial or without hearing substantive argument of counsel unless the parties expressly consent to the final orders. Further, it is not in the interests of justice for a judge to make orders concerning the liquidation of a company when no party has sought such orders and when all directors and shareholders who are entitled to participate in the appointment of a liquidator are not parties to the proceeding. Finally, it is not in the interests of justice for a judge to make orders which are contrary to or which are not in compliance with a statutory provision.

14. Consequently I am satisfied that the application for leave to review should be granted. Given this it is not necessary to consider the other submissions of counsel.

Orders

a) The application for leave to review filed 15^th November 2023 is granted;

2. The costs of and incidental to the said application for leave to review shall be costs in the substantive review.

__________________________________________________________________
SLM Legal Practice: Lawyers for the Applicants
Leahy Lewin Lowing Sullivan: Lawyers for the Respondent