SC2852

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

SCA NO. 59 OF 2025

BETWEEN:
HENIMBA LIMITED
Appellant

AND
VANILLA INTERNATIONAL (PNG) LIMITED
Respondent

WAIGANI: HARTSHORN J, KANGWIA J, WOOD J
24 NOVEMBER 2025; 24 FEBRUARY 2026

SUPREME COURT – APPEAL – notice of appeal – grounds of appeal – consideration of – appeal upheld – judgment of trial judge quashed - matter remitted to National Court for rehearing before another judge

Cases cited

Sharp v Andrew [2016] SC1797

Counsel

Mr S G Dewe for the appellant 
Mr L Baida for the respondent

1.	BY THE COURT:  The Notice of Appeal filed on 25 April 2025 (the Notice of Appeal) relates to the orders made by the trial Judge on 6 November 2024 in National Court proceeding WS No. 866 of 2021 between Vanilla International (PNG) Limited (the plaintiff, now respondent) and Henimba Limited (the defendant, now appellant) (the National Court proceeding).

2.	The relevant issues were that the defendant filed a Notice of Motion on 18 June 2024 (the Notice of Motion), which sought the dismissal of the National Court proceeding on the basis that it was contended the proceeding did not disclose a reasonable cause of action, it was frivolous and vexatious and that the proceeding should be dismissed for want of prosecution.  The evidence before the trial Judge relating to the Notice of Motion was that:

a)	on 23 May 2018, the plaintiff was de-registered from the Register of Companies;

b)	by 18 October 2022, the plaintiff had been restored to the Register;

c)	between de-registration and restoration to the Register, by a contract dated 25 May 2018, which was executed by the Registrar of Companies on behalf of the plaintiff as vendor and the defendant, the land described as Portion 435, Milinch Muschu, Wewak and contained in State Lease Volume 18, Folio 36 (the Land) was sold to the defendant;

d)	on 2 July 2018, a notice dated 2 July 2018 by the Registrar of Titles for the issuance of an official copy of the State Lease for the Land was published in National Gazette no. G431, which was also dated 2 July 2018.

3.	In the evidence in the National Court proceeding, the trial Judge held that the contract for the sale of the Land was executed during the period when the defendant was de-registered from the Register.  For the vendor, the contract was executed pursuant to the powers of the Registrar of Companies under sections 373(1) and 373(5) of the Companies Act 1997.  In the National Court proceeding, the plaintiff seeks to recover title to the Land, in which it alleges that the transaction relating to the contract was perpetrated by fraud.

4.	We have extracted below 14 to 24 of the trial Judge’s judgment in the National Court proceeding as follows:

14.	‘Fraud being a serious allegation and having regard to the two forms 
of it, the plaintiff is required to provide sufficient particulars so that it is clear to the defendant and the court the claim is based on one or both forms of fraud.  In a case such as this where the transaction is regulated by statute and approved forms are part of the process, the particulars pleaded should enable or disclose their connection to an alleged breach of such statutory requirement, illegality or fraud.

15.	Although the claim and its particulars are not pleaded in that fashion, I am not persuaded that no reasonable cause of action is disclosed or that the claim is frivolous or vexatious as these terms are defined or explained in Mount Hagen Urban Local Level Government vs Sek No. 15 Limited (2019) SC1007, based on the particulars pleaded, including, that:

15.1  the plaintiff was informed of the intent by the Registrar of Companies to sell the Land.  This is referable to a breach of action 367(1)(a) and (c) and section 368(1);

15.2  the officer from the office of the Registrar of Companies who executed the contract on the part of the vendor was not the Registrar of Companies and thus did not have the authority to exercise the powers under section 373; and

15.3  the Land was sold for K1, effectively as a gift contrary to its market value.

16.	For these reasons, I refuse the relief for dismissal on the basis that no reasonable cause of action is disclosed or that the claim is frivolous or vexatious.

17.	As regards the application for dismissal on the ground for want of prosecution, the affidavits read in support of the motion do not depose to any matter to support it. 

18.	The court file discloses activity on the part of the plaintiff in progressing the file up until 2022.  It was during 2023 that there is no record of activity on the court file.  Whilst the defendant argues in its submissions that the plaintiff has not requested the Assistant Registrar to list this proceeding for it to be progressed, the defendant too could also have but did not do so.  Although the responsibility primarily lies on the plaintiff, a defendant has the responsibility to urge the plaintiff to prosecute the proceedings.  It is not suggested that the defendant has taken steps to urge the plaintiff to list and prosecute the proceedings.  Thus, such period of inaction cannot be attributed solely to the plaintiff.  Significantly, to date, the defendant has not filed a defence.  Yet, the motion under consideration is the second which the defendant has filed in seeking to dismiss this proceeding on the grounds earlier refused in these reasons.

19.	And, it is not suggested that a fair trial will not be possible or how the defendant has or is likely to be prejudiced.  The evidence suggests that the defendant is aware that the Land is not vacant.

20.	For these reasons, the defendant has not made out the ground for want of prosecution.

21.	It follows from these reasons that the relief sought in para. 4 of the motion is premature as the validity of the defendant’s title to the Land is being challenged, and so that relief is refused.

22.	The relief sought in the motion should be refused with costs to the plaintiff.

23.	There is a matter that needs to be addressed, namely, the preservation of the interests based on the Title Deed and as claimed by the plaintiff.  This proceeding concerns the Land and issus, in whom does the interest of the registered proprietor lie.  Under Order 14 rule 10, this court may make preservation orders.  Such orders are necessary for the court to perform its role efficiently and to protect its jurisdiction, integrity and dignity by ensuring that its jurisdiction is not defeated .  Any step by the defendant based on its Title Deed to dispose of or encumber any interest of the registered proprietor in the Land may threaten that jurisdiction and integrity of the process.  Although such an order has not been has not been sought, I consider that such a relief is appropriate so that the possibility of third-party interests becoming involve is avoided to ensure the efficient disposition of this proceeding.  For these reasons, I will make orders having regard to these considerations with liberty to parties to have such orders reviewed.

24.	These orders are:

	24.1  The relief sought in the notice of motion filed on 18 June 2024 
are refused;

	24.2  The defendant shall pay the plaintiff’s costs of the motion;
	
24.3  The defendant shall not in any way attempt to take any step to dispose of or encumber any interest in the Land until further order;

	24.4  The defendant shall produce to the Registrar of the National Court the original of its Owner’s Copy of the Title Deed for the Land within 14 days of these orders;

	24.5  Each party is at liberty to apply by notice of motion if it intends to seek a variation or discharge of Orders 3 and 4 hereof;
	
24.6  The plaintiff shall serve a minute of these orders of the Registrar of Titles and Secretary to the Department of Lands & Physical Planning;

	24.7  The Registrar of Titles shall register on the Registrar of Titles’ Office copy of the Title Deed an entry of these orders;

	24.8  Time is abridged.

	24.9  Matter adjourned to 18 February 2025 for Directions Hearing.’

Ground of appeal

5.	 There are numerous grounds that are detailed in the Notice of Appeal.  
Ground ‘g’ of paragraph 3.8 of the Notice of Appeal states as follows:

‘g)	ERRED IN BOTH FACT AND LAW IN THE EXERCISE OF DISCRETION IN MAKING ORDERS IN THE ABSENCE OF A FORMAL APPLICATION

‘3.8  The learned judge further erred in law and in the exercise of his discretion by issuing the orders in Terms 3 to 24.7 of the Judgement which prejudiced the Appellant’s exclusive ownership rights preserved by section 33 of the Land Registration Act and the right to a fair hearing under section 59 of the Constitution, when;

3.8.1	The Appellant acquires exclusive ownership right the Land under section of the Land Registration Act.

3.8.2	The Appellant’s Title Deed is further protected by section 381 of the Companies Act unless voided by the Court.

3.8.3	The Title Deed of the land remains the private property of the Appellant.

3.8.4	The orders infringe or interfere with the Appellants legal rights protected under section 381 of the Companies Act and Land Registration Act.

3.8.5	There was no proper application made before the learned judge for the impugned orders to be issued.

3.8.6	The Respondent merely has an equitable interest in the property which is not capable of being protected or preserved by the impugned orders of the court.

3.8.7	The Appellant was not given the fair opportunity to be heard before the impugned orders were issued.

3.8.8	The circumstances of the case, there was no reason or Likelihood of dealing with the property or Title Deed which would reasonably warrant the grant of the impugned orders.

3.8.9	The voluntary exercise of discretion by the learned judge in making the impugned orders in an attempt to preserve status quo was in principle irregular and unjustified in the circumstances wherein it interfered with the primary rights of the Appellant as registered owner and infringes on the principles of natural justice.’

Principles of natural justice

6.	Section 59 of the Constitution provides as follows:

‘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.’

7.	As part of our consideration on the issue as to whether the defendant was afforded a fair hearing on the matters before the trial Judge, which resulted in him making the Orders that are referred to in paragraph 4 above, we consider it necessary to recite part of the reasoning in the Supreme Court Judgment in 
Sharp v Andrew [2016] SC1797, where Hartshorn and Yagi JJ stated the following at paragraphs 7 to 14 on the issue of procedural fairness:

‘7. Grounds of appeal A and B relate directly to the principle of natural justice whilst the other grounds concerns issues that go to the merits of the application in the Court below.

8. The appellant relied on a number of overseas cases which stand for the proposition that a denial of a right or opportunity by a party to present his submissions constitutes an error of law. The first is a High Court of Australia decision in Kioa v West [1985] HCA 81; (1985) 159 CLR 550 in which the following statement of principle was made:

“It is a fundamental rule of the common law doctrine of  natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it.”

9. The other cases cited dealing with similar principles are RG v DG [2013] NTSC 66, a decision of the Supreme Court of the Northern Territory of Australia which applied the decision of the High Court in Kioa v West (supra) and a decision of Lord Justice Tucker in Russell v Duke of Norfolk [1949] 1 All ER 109.

10. In our view, it is not necessary to look beyond this jurisdiction to find sufficient case authority on the relevant principles of natural justice.

11. In Gibson Nad v Bank South Pacific Limited (2010) SC1278 the Supreme Court held that a failure to provide an opportunity to a party to be heard constitutes a procedural irregularity and a substantial miscarriage of justice. That case involved the failure by the trial judge to accord the parties an opportunity to be heard orally after the filing of written submissions at the conclusion of the trial. The Supreme Court in that case approved and endorsed the National Court decision in Jimmy Mostata Maladina v Posain Poloh (2004) N2568 which was essentially decided on the same principle. In that case a Committal Magistrate failed to give an opportunity to a defendant to be heard orally after the filing of written submissions.

12. The Supreme Court in Gibson Nad (supra) also referred to the Supreme Court decision in Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC 837. In that case the Court found a breach of natural justice based on very similar facts and circumstances. The Court cited with approval the following passage of the Court in Kumagai Gumi (supra) in circumstances where the appellant was denied a right to be heard after the hearing on the evidence at trial:

"......... that there was a denial of natural justice to both parties, in particular the Appellant, in that they were denied the opportunity to address on the evidence. The right to be heard on the evidence before the Court considers the evidence is a fundamental requisite of the judicial process and the Court’s failure to afford this right to the parties is a fundamental error."

13. In a joint decision of the Supreme Court in Clive Namuesh, an infant, by next friend Anton Namuesh v Dr. Kisomb & 4 Others SCA No. 80 of 2011 and Clive Namuesh, an infant, by next friend Anton Namuesh v Martin Ferry & Another SCA No. 81 of 2011, unreported and unnumbered, delivered in Waigani, dated 30th August 2013, a decision of the trial Judge was set aside and a retrial ordered as the appellant was denied natural justice in not being given an opportunity to be heard before a decision was made against him. Amongst others, the decisions in Kumugai Gumi and Jimmy Mostata Maladina were cited in that case.

14. In a more recent decision of the Supreme Court in Vanimo Forest Products Ltd v Ossima Resources Ltd (2013) SC1275 the Court endorsed the principles of law approved in Gibson Nad (supra) and the line of case authorities referred to in that decision.’ 

8.	We note the provisions of section 59 of the Constitution, as well as those requirements of natural justice, which are referred to in the judgment of 
Sharp v Andrew (supra).  In consideration of these matters, we note that in the transcript of the National Court proceeding on 21 October 2024, which related to the hearing of the Notice of Motion, there was no mention made by the trial Judge that he was contemplating making the Orders which are contained in paragraphs 24.3, 24.4. 24.6 and 24.7 of the Judgment delivered on 6 November 2024, and which are reflected in paragraphs 3, 4, 6 and 7 of the Orders made on 6 November 2024 and filed on 12 November 2024.

9.	Furthermore, the defendant had not sought the four above-mentioned Orders in the Notice of Motion, nor had the parties raised those issues at the hearing on 21 October 2024 or been requested to make submissions on the issues.   Based on the above matters, we consider that the trial Judge erred in law in making the four Orders which are contained in paragraphs 24.3, 24.4. 24.6 and 24.7 of the Judgment delivered on 6 November 2024, whereby there was a denial of natural justice afforded to the appellant on this issue.  For these reasons, we uphold ground ‘g’ of the Notice of Appeal.

10.	  Because we have upheld ground ‘g’ of the Notice of Appeal, it is not necessary for us to consider all the other grounds of appeal.  Notwithstanding this, we do not agree with the appellant that the National Court proceeding be dismissed.

Orders

11. In the circumstances we make the following orders:

1.	The Judgment of the trial Judge delivered on 6 November 2024 in National Court proceeding WS No. 866 of 2021 is quashed.

2.	The matter is remitted back to the National Court before another Judge, including for the plaintiff to seek leave to make any amendments to its claim if necessary or for the parties to make any joinder applications if they so intend. 

3.	The respondent shall pay the appellant’s costs of and incidental to the appeal, with those costs to be taxed if not agreed.

Lawyers for the appellant: Dewe Lawyers
Lawyers for the respondent: Nelson Lawyers