SC2762

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

SCA NO. 43 OF 2024

VAILALA AND PURARI INVESTMENTS LIMITED
Appellant

-V-

FRONTIER HOLDINGS LIMITED
First Respondent 

JAMES LAU in his capacity as the Manager of Frontier Holdings Limited 
Second Respondent

NATIONAL FOREST AUTHORITY 
Third Respondent

JOHN MOSORO in his capacity as the Managing Director of National Forest Authority 
Fourth Respondent

WAIGANI: KARIKO J, ANIS J, CARMODY J
      29 SEPTEMBER, 23 OCTOBER 2025 

APPEAL – application for contempt – alleged breach of court orders – application dismissed for being statute-barred – insufficient reasons for decision – whether trial judge erred in applying the Statute of Frauds and Limitations Act

The plaintiff filed contempt proceedings in the National Court against the defendants alleging that they failed to comply with previous court orders. Upon motion by two of the defendants, the Court dismissed the proceedings for being statute-barred pursuant to s 16 of the Frauds and Limitations Act 1988. The plaintiff appealed the decision claiming the primary judge erred in fact and law in applying the Act to dismiss the proceedings. 

Held

1.	Section 16 of the Frauds and Limitations Act 1988 addresses different actions and the time-limitation applicable to them. 

2.	It is necessary when considering the question of time bar in any proceedings, to first identify the cause of action and then determine whether there is a statutory time limit for commencing the action.

3.	The omission or failure by the primary judge to refer to and discuss arguments by parties relating to relevant case authority on the issue before the court constituted an error in law. 

4.	It is trite law that a court has a duty to give adequate or sufficient reasons for decision.

5.	(Obiter) Where the nature of a scheduled hearing is changed by the court and proceeds without the other party or parties being made aware or being present, that is in breach of the principles of natural justice and the duty to act fairly; s 59(2) of the Constitution.

6.	Appeal upheld.

Cases Cited
Atlas Corporation Limited v Dr Ngangan & Ors (2020) SC1995
Rage v Rageau (2020) SC1971 
Soakofa Trading Limited v BSP (2021) SC2068 

Counsel
J Sasingian for the appellant
W Frizzell for the first and second respondents
G Kogora for the third and fourth respondents

1.	KARIKO J and CARMODY J: This is an appeal from the decision of the National Court at Waigani given on 9 April 2024 in proceedings OS No. 183 of 2023 whereby the primary judge dismissed the proceedings for being statute-barred pursuant to s 16 of the Frauds and Limitations Act 1988 (the Frauds Act).   

2.	The proceedings constituted an application by the appellant (then the plaintiff) to have the respondents (then the defendants) charged with and punished for contempt of court. 

3.	The originating summons was filed on 3 July 2023.

4.	The contempt charge was based on the allegation that the respondents had failed to comply with previous court orders issued in earlier proceedings WS No. 820 of 2003. 

NATIONAL COURT PROCEEDINGS

5.	The transcription of proceedings confirms that OS No. 183 of 2023 returned to court before the primary judge on 9 April 2024 at 9.30am for directions hearing. 

6.	When the case was called, only Mr Unua of counsel for the third and fourth respondents was present.
 
7.	Mr Unua mentioned that the matter was returning for directions hearing and added that his clients had a pending motion to have the proceedings summarily dismissed and he requested for a hearing date for the motion.

8.	The motion to dismiss was based on two grounds:

(1)	That the proceedings were frivolous and vexatious and did not disclose a reasonable cause of action; O12 r 40, National Court Rules; and

(2)	That the action was statute-barred; s 16, the Frauds Act. 

9.	The primary judge stated that he would hear the motion then and invited Mr Unua to move his clients’ application. During Mr Unua’s submissions, his Honour requested counsel to just cite the case authorities relied upon in support of the motion. Mr Unua referred to these cases:

•	regarding O12 r40 - Lerro v Stagg (2006) N3050, Philip Takori v Simon Yagari (2008) SC905 and Toap v The State [2004] PNGLR 191.

•	regarding s 16 - Soakofa Trading Limited v BSP (2021) SC2068 and Atlas Corporation Limited v Dr Ngangan & Ors (2020) SC1995. 

10.	As Mr Unua completed his submissions, other counsel arrived and were requested by the primary judge to advise of their clients’ respective positions regarding the motion being heard. 

11.	Mr Frizzel for the first and second respondents informed the court that his clients had filed a similar motion, and they supported the motion by the third and fourth respondents.

12.	Mr Sasingian for the appellant opposed both motions. He relied on his filed written submissions and referred to the Supreme Court case authority of Atlas Corporation Limited v Dr Ngangan & Ors (supra) to contend that there is no time-limit for filing enforcement proceedings in this jurisdiction.

13.	The primary judge delivered a short ex tempore decision in favour of the motion.

APPEALED DECISION

14.	It is helpful to set out the appealed decision which is found in the transcription of proceedings (pp 312-313 of the Appeal Book). We quote the relevant passages for purposes of this appeal. 

HIS HONOUR:  ….. I was going to give a decision based on one submission because the other parties, through their counsel, through their own fault, not the fault of the court.  What is relevant here is in the interests of justice, all parties have been able to put their positions forward…..  I moved from directions straight into motions because my job is to dispose of cases in a quick and efficient manner…..

The submission from the third and fourth defendant’s counsel – through counsel is straight forward, it is simple.  They are seeking, pursuant to section 16 of Frauds and Limitation Act, that the whole proceedings be dismissed for being statutorily time barred.  There are other things, order 12 rule 40.  I will not get into that. Because once a decision is made with regard to one hurdle that cannot be crossed, there ends the matter. This court does not have the power to overrule statute…...

….. this matter is now in its 14th year and 7 months since 2009 when the deed would have been entered into…..  Therefore, that is the first fact.  The second fact is there is a precedent that binds this court.  That means I have no discretion; Supreme court case, Soakofa Trading Limited v Bank of South Pacific (2021) ….. I quote at paragraph 13: “It is trite law that a plaintiff’s cause of action must be commenced within the limitation period which applies to that cause of action.”  That is the Supreme Court case that binds this court.  There is no discretion in this.  So, the orders of the court are very straight forward.  Pursuant to section 16 of the Frauds and Limitation Act, this proceeding is dismissed for being statutorily time barred.
(Emphasis added)

GROUNDS OF APPEAL

15.	The appellant pleads five grounds of appeal which raise one fundamental question: Did the primary judge err in fact and in law in dismissing the proceedings for being time-barred pursuant to s 16 of the Frauds Act?

SUBMISSIONS

16.	The appellant essentially repeats his submissions from the National Court – that there is no time-limit for commencing enforcement proceedings in this jurisdiction. 

17.	While counsel for the respondents filed written submissions which argue that the primary judge committed no errors as alleged in the notice of appeal, they accept several key points raised by the Court that lend support to the appellant’s main contention that the primary judge did not properly consider the application of s16 of the Frauds Act.

CONSIDERATION

18.	In our view, there are several aspects of the decision of the primary judge to be addressed. 

19.	First, the primary judge did not identify the cause of action to which he applied s 16 of the Frauds Act. This provision addresses different actions and the time-limitation applicable to them. We summarise the provisions:

•	s 16(1): action founded on simple contract or on tort; to enforce a recognisance; to enforce an award not under seal; to recover monies recoverable under an enactment not being penalties or forfeiture – 6 years from when action accrued.
 
•	s 16(2): action on account – 6 years 

•	s 16(3): action upon a specialty – 12 years from when action accrued, subject to any time limitation provided in any other Act (s 16(4).

•	s 16(5): action upon any judgement – 12 years from the date the judgement became enforceable.

•	s 16(6): arrears of interest in respect of a judgment debt – 6 years from when the interest became due. 

•	s 16(7): action to recover penalty or forfeiture recoverable under an enactment - 2 years from when action accrued.

•	s 16(8): “penalty” in s 16(7) does not include a criminal fine.

20.	His Honour failed to cite the specific provision in s 16 he applied to find the proceedings to be time barred. 

21.	Furthermore, his Honour seemingly based his decision on a deed which he did not describe in any detail except to say it was executed in 2009. His Honour however did not discuss the interplay between the deed and s16 of the Frauds Act which rendered the contempt application before him statute barred. 

22.	Second, the judgement in Soakofa Trading Limited v BSP (supra) which the primary judge applied to reach his decision concerned a cause of action in negligence and s 16(1) of the Frauds Act was the relevant provision under consideration. In the present case, the cause of action is a contempt application which is an enforcement proceeding and s 16(5) is relevant to consider. 

23.	Third, the quoted passage from the Soakofa Trading case is relevant to the appellant’s case. The full statement in the passage stresses that a cause of action must be filed within any applicable statutory time limitation; otherwise, it stands to be dismissed.

24.	It is necessary therefore when considering the question of time bar in any proceedings, to first identify the cause of action and then determine whether there is a statutory time limit for commencing the action. This, the primary judge did not do. 

25.	Fourth, the primary judge did not mention Atlas Corporation in his decision. This case authority was the main precedent relied upon by the appellant in opposing the dismissal application. The appellant’s argument was that contempt as an enforcement action did not attract any time limitation. The respondents also referred to the same case authority but argued the contrary. With respect, we find the omission or failure by the primary judge to refer to and discuss the arguments by the parties relating to this relevant case authority on the issue before the court constituted an error in law. 

26.	The Atlas Corporation case stands for the proposition that in this jurisdiction, there is no time limitation to commencing enforcement proceedings. In that case, the Supreme Court discussed the interpretation and application of s 16(5) of the Frauds Act which states:

An action shall not be brought upon any judgment after the expiration of 12 years commencing on the date when the judgment became enforceable. 
	(Emphasis added)

27.	The leading opinion was delivered by Logan J (with whom Salika CJ and Thompson J agreed). His Honour concluded at [59]:

… s 16(5) does not apply to enforcement or execution measures. In the absence of any statutory limit on the period of time in which a judgment creditor must enforce a judgment debt, there is no local time limit on the taking of enforcement measures.
	(Emphasis added)

28.	In the circumstances, the primary judge was obliged to consider the submissions on s 16(5) and rule on the issue. His Honour thereby fell into error in failing to do so.

29.	The several matters discussed above emanate from the insufficient reasons for the primary judge’s decision. 

30.	It is trite law that a court has a duty to give adequate or sufficient reasons for decision. 

31.	After discussing this duty of the court with reference to relevant case authorities from here and Australia, the Supreme Court in Rage v Rageau (2020) SC1971 made these pertinent remarks at [18] which we endorse:
  
In the present matter, the trial Judge merely accepted the submissions of the respondent, while influenced by the fact that the respondent’s evidence was unchallenged. That in essence were the reasons for decision, and that clearly offends the legal principles just outlined. Plainly, a court fails in its legal duty if it simply pronounces that the plaintiff’s submissions are accepted and therefore his claims are granted. His Honour was obliged to discuss the evidence, refer to the law, and apply the law to the facts to get to his decision. The error is compounded by the fact that his Honour failed to properly discuss the submissions by counsel for the appellants…
	(Emphasis added)

CONCLUSION

32.	For the foregoing reasons, we find, with respect, that the primary judge erred in law and fact in arriving at the appealed decision. We accordingly uphold the appeal with costs in favour of the appellant. 

33.	Section 59 of the Constitution provides that regard be had to the principles of natural justice in judicial and administrative proceedings. The minimum requirement of natural justice is stipulated in s 59(2) to be “the duty to act fairly and in principle to be seen to act fairly”. 

34.	It is noteworthy that the appealed case was listed only for directions hearing and the parties were not heard on whether they were ready to argue the third and fourth respondents’ motion before the primary judge directed that the motion be heard. The transcription of proceedings also shows that the parties were given minimal time to present submissions on the motion. With respect, we consider these matters to be in breach of the principles of natural justice and the duty to act fairly. 

35.	In the circumstances, we consider it fair and just to invoke our powers under s 16 of the Supreme Court Act and set aside the appealed decision and orders; reinstate the dismissed proceedings; and direct that the respondents’ notices of motion to dismiss proceedings be listed before another judge to be fully argued. 

ORDER

36.	The terms of the Court’s Order we propose are:

1.	The appeal is upheld.

2.	The decision of the National Court of 9 April 2024 in proceedings OS No. 183 of 2023 to dismiss the proceedings for being statute-barred is set aside forthwith.

3.	The said proceedings OS No. 183 of 2023 is reinstated and remitted to the National Court to be listed before a judge other than the primary judge to hear the respondents’ notices of motion to summarily dismiss the proceedings.

4.	The respondents shall pay the appellant’s costs of the appeal, to be taxed, if not agreed.

37.	ANIS J:  I have had the benefit of reading the draft opinions of Kariko J and Carmody J, and I agree with their reasoning and orders proposed.
 
38.	I will add, as a remark, in further to their summary concerning s 59(2) of the Constitution.
 
39.	Practice and procedures dictate that where a court scheduled hearing is for ‘Directions Hearing’, or ‘Call-Over’ or ‘Motions Hearing’, the Court would convene for that purpose.  Having said that, it is not unusual where a party or the Court may decide to proceed on a matter outside of the scope or purpose of a hearing, whether it be for directions hearing, call-over or motions hearing. 
 
40.	Should a request be made or if the Court intends to for example hear a pending notice of motion on a date that is scheduled for a directions hearing, the minimum requirement, in my view and in observance of s 59 of the Constitution, is for a judge to ensure that all the parties knew that such an application would be moved on the said fixed date (i.e., to move on a notice of motion on a date that is scheduled for directions hearing etc).  If one or more of the parties in the matter is not made aware then that must, in my view, be sufficient for the Court to refrain from proceeding to deal with the motion. Court practice and procedures must be seen as user friendly, fair and not contrary to the principle of fairness or justice. 
 
41.	I do note in this case that the counsel for the appellant and the first and second respondents, both failed to appear on time for the directions hearing on 9 April 2024, and when they appeared, counsel for the third and fourth respondents was already presenting his clients’ motion to dismiss.  However, I observe that since the matter was scheduled for a directions hearing, the trial judge was duty bound to, before hearing the motion, observe and exercise the principle of natural justice in the manner as proposed herein.
 
ORDER (BY THE COURT)

42.	The Court orders that:

1.	The appeal is upheld.

2.	The decision of the National Court of 9 April 2024 in proceedings OS No. 183 of 2023 to dismiss the proceedings for being statute-barred is set aside forthwith.

3.	The said proceedings OS No. 183 of 2023 is reinstated and remitted to the National Court to be listed before a judge other than the primary judge to hear the respondents’ notices of motion to summarily dismiss the proceedings.

4.	The respondents shall pay the appellant’s costs of the appeal, to be taxed, if not agreed.

________________________________________________________________
Lawyers for the appellant: Raurela Lawyers
Lawyers for the first and second respondents: Warner Shand 
Lawyers for the third and fourth respondents: Holingu Lawyers