N615

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

V

PHILIP KAPAL ON BEHALF OF HIMSELF AND FOR AND ON BEHALF OF 
THE WESTERN HIGHLANDS PROVINCIAL GOVERNMENT AND FOR AND 
ON BEHALF OF THE WESTERN HIGHLANDS PROVINCIAL GOVERNMENT IN SUSPENSION

Rabaul
Hinchliffe J

11 September 1987
14-15 September 1987

PRACTICE - Judgments and orders - Stay of execution - Stay pending appeal - National Court - Discretionary power - Relevant considerations - Need for special or exceptional circumstances - Declaration that suspension of Provincial Government void - Stay refused - National Court Rules, O 13, r 21.

The National Court Rules, O 13, r 21, provides that the Court may, on terms, stay execution of a judgment or order.

Held:

(1) The power of the National Court to grant a stay of proceedings pending an appeal to the Supreme Court is an unfettered one to be exercised according to the requirements of justice in the particular case; such a stay should only be granted if there are special or exceptional circumstances which must be deposed to by affidavit unless the application is made at the hearing. In the exercise of its discretion the court may weigh such considerations as the balance of convenience and the competing rights of the parties and may in an appropriate case make some preliminary assessment as to whether there is an arguable case on appeal.

Barker v Lavery (1885) 14 QBD 769, Attorney-General v Emerson (1889) 24 QBD 56 and Becker v Earls Court Ltd (1911) 56 Sol Jo 206, followed.

Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685, considered and distinguished.

(2) That a party may wish to consider the advisability of appealing is not a special circumstance.

Webber v London, Brighton & South Coast Railway Co (1881) 51 LJQB 154, followed.

(3) That there has been a misdirection in the trial of the proceedings in respect of which the stay is sought is not a special circumstance.

Monk v Bartram [1891] 1 QB 346, followed.

(4) Accordingly, that a stay of execution of an order declaring that the suspension of the Western Highlands Provincial Government by the National Executive Council on or about 19 March 1987 was void and of no effect, should not be granted pending an appeal to the Supreme Court as there were no special or exceptional circumstances justifying the granting of the stay and as to grant the stay would be denying the people of the province their Constitutional rights.

Cases Cited

The following cases are cited in the judgment:

Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685.
Annot Lyle, The (1886) 11 PD 114.
Attorney-General v Emerson (1889) 24 QBD 56.
Barker v Lavery (1885) 14 QBD 769.
Becker v Earls Court Ltd (1911) 56 Sol Jo 206.
Ferris v Lambton (1905) 22 WN (NSW) 56.
Monk v Bartram [1891] 1 QB 346.
Tringali v Stewardson Stubbs & Collett Pty Ltd (1966) 66 SR (NSW) 335.
Webber v London, Brighton & South Coast Railway Co (1881) 51 LJQB 154.

Application for stay of proceedings

Following the making of a declaration that the suspension of the Western Highlands Provincial Government by the National Executive Council on or about 19 March 1987 was void and of no effect, the defendant in those proceedings sought a stay of proceedings pending an appeal to the Supreme Court.

Counsel:

A Robinson, for the applicant.
S Tidor, for the respondent.
Cur adv vult

15 September 1987

HINCHLIFFE J: On Friday, 11 September 1987 I made the following Declaration: "The suspension of the Western Highlands Provincial Government by the National Executive Council on or about 19th March 1987 is void and of no effect." That was a result of proceedings brought by Phillip Kapal against the Independent State of Papua New Guinea.

Late in the day on 11 September the defendant made application to me to stay the declaration because it intended to appeal my decision to the Supreme Court. At that time no appeal papers had been lodged at Waigani. I refused that application because Mr Tedor needed to obtain instructions from his client in Mt Hagen. I then adjourned the application to 14 September.

Mr Robinson appeared for the applicant and he submitted that the stay order was being sought pursuant to O 13, r 21 of the National Court Rules. At that time I assumed that no appeal papers had been lodged otherwise the matter would be out of the control of the National Court and into the jurisdiction of the Supreme Court. A later telephone inquiry to the Supreme Court, Waigani enlightened me to the fact that the applicant had been given a Supreme Court appeal number but as late as yesterday still no appeal papers had been lodged. It seems therefore that until appeal papers are lodged, the matter is still within this Court’s jurisdiction.

Order 13, r 21 of the said Rules provides:

"The Court may, on terms, stay execution of a judgement or order."

It was argued in light of Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685, that the Court may grant a stay of proceedings where the applicant demonstrates a reason or an appropriate case to warrant the exercise of the discretion in its favour; it is not necessary that special or exceptional circumstances should be made out.

In that case the New South Wales Court of Appeal was dealing with Pt 51, r 10 of the Supreme Court Rules 1970 (NSW) which provides relevantly as follows:

"10. An ... appeal to the Court of Appeal shall not:—

(a) operate as a stay of execution or of proceedings under the decision of the court below;

(b) invalidate any intermediate act or proceeding, except so far as the Court of Appeal may direct or, subject to any direction of the Court of Appeal, as the Court below may direct."

Instantly it can be seen that the court was not dealing with an order similar to our O 13, r 21, but needless to say, Mr Robinson argued that what was stated by the court was relevant to the argument before me. The New South Wales Court of Appeal gave three reasons why it was appropriate to reconsider the declaration of the test for the grant of stays pending appeals. The former test which has been followed over many years is that an applicant must show "special" or "exceptional" circumstances before a stay will be granted. The court referred to a number of cases relating to the traditional test including Monk v Bartram [1891] 1 QB 346 and The Annot Lyle (1886) 11 PD 114. The cases referred to by the court were also it seems, concerning judgment creditors as also was Alexander v Cambridge Credit Corporation Ltd.

Certainly the traditional view has been that the court has an absolute and unfettered discretion as to the granting or refusing of a stay and ... as to the terms upon which it will grant it: see Attorney-General v Emerson (1889) 24 QBD 56; Becker v Earls Court Ltd (1911) 56 Sol Jo 206. As stated it will as a rule only grant a stay if there are special circumstances, which must be deposed to on affidavit unless the application is made at the hearing: see Barker v Lavery (1885) 14 QBD 769. There is no dispute that affidavits have not been filed in this application and Mr Tidor had good reasons for complaint. The case of Alexander v Cambridge Credit Corporation Ltd seems quite particular to New South Wales where appeals particularly in the commercial area, come at a great rate and I would not be anxious to break away from the traditional view and follow New South Wales. It seems to me that the new course taken by the Court of Appeal is not necessarily suitable for Papua New Guinea.

The traditional view again is that although the power to stay is not confined to closed categories of cases and is exercisable in any situation where the requirement of justice demands it, and although the court in its endeavour to ensure that the pursuit of the ordinary procedures by litigants does not lead to injustice, a stay of proceedings should not be lightly granted: see Tringali v Stewardson Stubbs & Collett Ltd (1966) 66 SR (NSW) 335 at 344; Ferris v Lambton (1905) 22 WN (NSW) 56.

Returning to Alexander v Cambridge Credit Corporation Ltd (at 694) I agree with the Court when it said, inter alia:

"There are other principles to be kept in mind. The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties: ... The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears: ... The Court has a discretion whether or not to grant the stay, and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it...."

And at 695:

"... although Courts approaching applications for a stay will not generally speculate about the appellant’s prospects of success, given that argument concerning the substance the appeal is typically and necessarily attenuated, this does not prevent them considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties, from making some preliminary assessment about whether the appellant has an arguable case."

Mr Robinson’s main concern was that if the stay was not granted then the Western Highlands Provincial Government would be reinstated and possibly commence legislating. In the event that an appeal was heard in two weeks time and the decision of this Court was reversed then problems would arise as to the legitimacy of the new legislation. He was also concerned that the people of the Western Highlands could be in a situation where after having no provincial government since 20 March of this year they could well have a provincial government for two weeks or so and then return to not having a provincial government. That, he submitted would be unsettling for the people. I cannot agree with Mr Robinson on that point.

It is clear that as late as yesterday afternoon there had been no appeal papers lodged at Waigani. Therefore there has been no date fixed for an appeal whether it be in two weeks or in two months. The respondent is entitled to the benefit of the declaration obtained by him and is entitled to commence with the presumption that the decision of the Court is correct.

The people of the Western Highlands have been without their provincial government for the last six months and I would have thought that the sooner their Constitutional rights are returned to them, the better. It is clear that our Constitution provides for provincial governments and it was the clear intention of the Constitutional Planning Committee that all people have the benefit of a provincial government. The people have for the last six months, I consider, been without a provincial government which they should not have lost in the first place. I would have thought to some extent, they must feel like second class citizens. Therefore it is imperative that this right be returned forthwith: once again, in the spirit of the Constitution.

Mr Robinson was clearly in some difficulty because I am satisfied that his instructions were not all that clear to him. He certainly had no information as to the grounds of the proposed appeal and I suspect that one of the reasons for the application is to have more time to consider an appeal. In Webber v London, Brighton & South Coast Railway Co (1881) 51 LJQB 154, it was found that it was not a special circumstance in relation to a stay that a party wished to consider the advisability of appealing.

If a ground of appeal will be that there was a misdirection in the trial then Monk v Bartram says that that also is not a special circumstance.

I have also been asked to consider the matter in the interests of justice and the balance of convenience.

In the interests of justice it seems to me that the declaration should stand unless there are special or exceptional circumstances or even if I agreed with Mr Robinson — "if a reason is demonstrated or an appropriate case submitted to exercise my discretion". I see no reason why the declaration should not stand.

Rather than arguing about the balance of convenience it may have been more to the point if the matter of inconvenience was discussed. It certainly would be inconvenient to the respondent in this application to have the declaration stayed and he certainly opposes such as order. Naturally a stay order would be convenient to the applicant.

I have also been asked to consider the novelty of the matter and in effect realise that an appeal was bound to occur no matter which way the decision went and therefore a stay of the order would not affect or surprise the parties. I do not agree with that submission. The matter was commenced by the issuing of an originating summons seeking a declaration: nothing unusual. The fact that the declaration affects so many people in the Western Highlands, to my mind, is a valid reason for being extremely cautious before taking any action on the declaration. If an appeal is lodged then so be it. Let the appeal process take its course and then no matter what the final decision is the people will see that justice has been done. It seems to me that I would not be acting in the interests of justice if I did stay the declaration.

Touching on the novelty aspect also was the submission of the importance, seriousness and overwhelming effect of the decision. It may well be asked then why this application was not made after I read my judgment. The applicant was represented by a lawyer and he obviously was not instructed to make the application if the decision went against the State. If the State considered it to be so important I would have thought it elementary that such instructions would have been relayed to the lawyer. But that was not so. It was some seven hours later that the application was made, late on a Friday afternoon with only very little notice given to the respondent’s lawyer.

When one looks at the trial itself I wonder how seriously it was taken by the State. On 15 June it was clear to everyone that the affidavit material was not adequate and some deponents would need to be called not only to clarify points in the affidavits but also to be cross-examined. The plaintiff had filed a considerable amount of affidavit material and in the nine weeks available after 15 June arranged for a number of his deponents to travel from the Western Highlands to give evidence at Waigani. It could be said that the plaintiff had a well prepared case.

On the other hand the defendant, in what it considered to be such an important case, filed three affidavits. It did not call anyone to give evidence.

Finally, I say that we are not dealing with a commercial matter here such as Alexander v Cambridge Credit Corporation Ltd we are dealing with people’s rights and expectations under the Constitution of the country. To take that right from them is an enormous thing to do but to then turn around and halt their constitutional rights, pending an appeal, after it has been returned to them, is even more enormous and quite frankly I believe most improper.

For those reasons the application is refused.

I order that the applicant pay the respondent’s costs of this application, including 11 September 1987, to be taxed.

Stay refused

___________________

Lawyer for applicant/defendant: Tomarum Konilio Secretary for Justice.
Lawyer for respondent/plaintiff: Sialis Tidor.