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KK Paradise v Tepi [2010] PGNC 33; N3979 (31 March 2010)

N3979

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA NO 357 OF 2004

BETWEEN

KK PARADISE trading as KOREANE ENTERPRISES
Appellant

AND

JACK TEPI
Respondent

Mount: Makail, J
2008: 11th June &
2010: 31st March

INFERIOR COURTS - Appeals - District Court appeal - Liability - Conflicting evidence - Findings of fact - Error of.

INFERIOR COURTS - Appeals - District Court appeal - Conflicting affidavits - Facts substantially disputed - Power of court to call deponents to give evidence on oath - Exercise of discretion -Evidence Act, Ch 48 - Section 35(3).

EVIDENCE - Evidence by affidavits - Conflicting evidence - No cross-examination of deponents - Findings of fact - Evidence Act, Ch 48 - Section 35(3).

Cases cited in this judgment:

Papua New Guinean cases cited
Charlie Kipit -v- Elizabeth Chongahan [1994] PNGLR 274; (1994) N1202
Director of Administration -v- Custodial of Expropriated Property (Re Wangaramut) (No.2) [1969-70] PNGLR 410
Rimbink Pato -v- Umbu Pupu [1986] PNGLR 310
The State -v- Jacob Roy Duruga (2007) N3137
Francis Wandaki & Ors -v- Wini Henao & The State (2009) N3676
Samson Pulube -v- Herepe Wapia [1996] PNGLR 293

Overseas cases cited:
Mechanical and General Inventions Co Ltd -v- Austin [1935] AC 346

Facts

The appellant operated a gaming shop in the town of Mt Hagen of the Western Highlands Province. The respondent dropped in one night to play pokies and used poker machine no 16. It gave him a total of 400,000 credits which was equivalent to K20,000.00. The appellant paid K10,000.00 to the respondent but refused to pay the balance. It claimed that the poker machine was malfunctioned. The respondent sued the appellant for the balance at Mt Hagen District Court. Trial was purely by affidavits and none of the deponents were called for cross-examination despite conflicting evidence in relation to the malfunction of the machine. The learned magistrate in the District Court relying on the affidavits accepted the evidence of the respondent and his two witnesses and found that the machine was functioning that night. He entered judgment on liability against the appellant and ordered it to pay the balance to the respondent. The appellant appealed that decision citing inter-alia that the learned magistrate erred when he failed to find that there was sufficient evidence establishing that the poker machine was malfunctioned. The Court should set aside the decision and dismiss the action. Alternatively, if the Court is unable to reach its own conclusions because of the conflicting evidence in relation to the malfunction of the poker machine, it should remit the matter to the District Court for re-trial where the deponents of the affidavits should be called for cross-examination in relation to the malfunction of the poker machine.

Held:

1. An appellate Court must be slow to disturb the findings of fact by a trial Court unless it is satisfied on the facts that the findings could not be reasonably reached.

2. Where a trial is conducted purely by affidavits and the evidence is conflicting, regardless of whether or not lawyers for the parties have called for the deponents for cross-examination, the Court has the ultimate discretion to decide whether or not to call them for cross examination under section 35(3) of the Evidence Act, Ch 48.

3. In the instant case, the trial was conducted purely by affidavits and there was substantial factual dispute in relation to the malfunction of the poker machine which was the critical issue between the parties.

4. As there was conflicting evidence in relation to the malfunction of the poker machine, it was not easily ascertainable if it was functioning purely on the affidavits of witnesses.

5. The learned magistrate fell into error when he did not call the deponents of the affidavits for cross examination in respect of the malfunction of the poker machine.

6. The appeal was upheld and re-trial at the District Court was ordered.

Counsel:

Mr P Kak, for the Appellant
Mr K Peri, for the Respondent

JUDGMENT

31st March, 2010

1. MAKAIL, J: In this appeal, the appellant operated a gaming shop at allotment 1, section 50 in the town of Mt Hagen of the Western Highlands Province. On the night of 26th February 2002, the respondent dropped in to play pokies and used poker machine number 16. It gave him a total of 400,000 credits which is equivalent to K20,000.00. The appellant paid K10,000.00 to the respondent but after an investigation, discovered that the poker machine was malfunctioned and refused to pay the second lot of K10,000.00 to the respondent.

2. On 03rd May 2002, the respondent commenced proceedings at the Mt Hagen District Court to recover the K10,000.00. After a trial by way of affidavits, on 12th July 2004 the District Court found that the machine was functioning and held the appellant liable. It entered judgment in favour of the respondent for K10.000.00. On 12th August 2004, the appellant filed this appeal and sought to have the National Court re-look at the decision of the Mt Hagen District Court on the following grounds as per its notice of appeal:

"1. The Presiding Magistrate erred in law and in fact in that he did not properly consider the evidence from the defendants witnesses, which if properly considered would affect the outcome of the decision.

2. The Presiding Magistrate erred in law in making the decision against the defendants as there was no evidence to establish liability against the defendants.

3. The Presiding Magistrate incorrectly applied the law to the facts, as there was sufficient evidence to show that the machine was malfunction."

3. In my view, all these grounds of appeal raise first the issue of whether or not there was sufficient evidence before the learned magistrate to establish that the poker machine was functioning at the time the respondent used it. This is a question of fact as it is decided on the evidence before the learned magistrate. Evidence from witnesses who saw it functioning and vise versa must be called. In a case where an appellate Court is asked to disturb a finding of fact of a trial Court, it has been held that an appellate Court must be slow in overturning a trial Court’s finding of fact unless it is satisfied on the facts that the finding could not be unreasonably reached: See the observations by Doherty, J in Charlie Kipit -v- Elizabeth Chongahan [1994] PNGLR 274; (1994) N1202.

4. This is because a trial judge or magistrate is in a better position to asses the evidence presented and determined what evidence is credible and what is not. A trial judge or magistrate sees the witnesses and observes their demeanour and general attitude in Court, which opportunity, an appellate Court does not have. Therefore, an appellate Court should always be very slow to interfere with a trial judge or magistrate's findings of fact. In Mechanical and General Inventions Co Ltd -v- Austin [1935] AC 346 at 373-374, per Lord Wright said:

"For the appellate court to set aside the verdict of a jury as being against the weight of evidence, merely because the court does not agree with it, would, in my judgment, be to usurp the functions of the jury and to substitute their own opinion for that of the jury; that would be quite wrong."

5. These words were quoted with approval and applied with necessary modification in the pre-independence case of Director of Administration -v- Custodial of Expropriated Property (Re Wangaramut) (No.2) [1969-70] PNGLR 410 at 438. Subsequently, well after independence, the Supreme Court in Rimbink Pato -v- Umbu Pupu [1986] PNGLR 310 at 316-317, per Wilson J discussed that principle in these terms:

"[A]ppellate courts will normally show deference to the assessment of credibility made by the trial judge. This has traditionally been explained in terms of the advantage, which the trial judge has in assessing credibility from seeing and hearing the witnesses. Lately, psychological and other research has tended to cast doubt upon this rationalisation of deference to the trial judge's assessment: see L Re, 'Oral v Written Evidence: The Myth of the "Impressive Witness"' (1983) 57 ALJ 679. In Voulis v Kozary [1975] HCA 44; (1979) 50 ALJR 59; 7 ALR 126, the High Court of Australia referred to the special advantages of a primary judge over an appellate court on matters of fact. Particularly, the court referred to the advantages involved in evaluating conflicting oral testimony and the credibility of witnesses. Nevertheless, in that case, the court disturbed the conclusion of the trial judge, and the decision of the majority of this Court. It held that the judge's findings were necessarily outweighed by the compelling inferences to be drawn from the conduct of witnesses. Accordingly, it set aside his decision. ..."

6. In that case, the Supreme Court set out the following guidelines or principles to be followed when a call is made to re-assess and interfere with the trial Court's treatment of the evidence on appeal has is done here. Those principles are best summarized and set out in the head notes to that judgment in these terms:

1. The Court may draw its own inference from undisputed facts and facts established by the trial judge’s findings;

2. Allowance should be made for the trial judge’s advantage in evaluating conflicting oral testimony and the credibility of witnesses; and

3. In assessing circumstantial evidence, the Court must rely upon reasonable inference and definitive inferences, not conjecture, speculation and guess work.

7. Applying the above principles to the instant case, it cannot be said that the learned magistrate was in a better position to evaluate the conflicting evidence of the witnesses in respect of the malfunction of the poker machine and the credibility of the witnesses. This is because the trial was conducted purely by affidavits and none of the deponents were called for cross-examination. So what was the basis for the learned magistrate to reject the evidence of the appellant and in turn accepted the evidence of the respondent that the poker machine was functioning and found in favour of the respondent? From my perusal of the written decision of the learned magistrate found at pp 17-21 of the appeal book, I deduce that, first the learned magistrate rejected the evidence of the appellant and accepted the evidence of the respondent on the basis that the evidence of the appellant was inconsistent and contradictory. He found that because Alois Lavuvur had not stated in his affidavit that he received a call from Luke Takoin in relation to the malfunction of the poker machine, and that Luke Takoin had not stated in his affidavit that he called and spoke to Alois Lavuvur regarding the malfunction of the poker machine, it showed that these two witnesses contradicted each other such that, they were unreliable witnesses.

8. Secondly, Luke Takoin had not stated in his affidavit that he saw Sergeant John Noki at the gaming site that night. This showed that this witness’s evidence is inconsistent with the evidence of the respondent and his witnesses. This missing piece of evidence made his evidence doubtful and unreliable. Thirdly Alois Lavuvur had not stated in his affidavit when and where he investigated the alleged malfunction of the said poker machine hence, his evidence is vague and also unreliable. Fourthly, since Alois Lavuvur had not stated in his affidavit that he received a call from Luke Takoin in relation to the malfunction of the poker machine, it meant that Luke Takoin had never called Alois Lavuvur hence, it meant that or the inference is that, the poker machine had been functioning. He also drew an inference that since Luke Takoin had not named the person at the Gaming Board office in Port Moresby to whom he spoke to regarding its malfunction that night, it meant that or the inference was that, it had been functioning.

9. Fifthly, he said that since the appellant had not given evidence in relation to the malfunction and that there had been a delay of about a week before the respondent had been informed of the malfunction, it was fatal to the appellant’s case because there was no other eyewitness for the appellant to corroborate the evidence of Luke Takoin that the poker machine had been malfunctioned that night. Finally, he seemed to say that as the respondent had more than one witness corroborating his evidence that the poker machine had been functioning that night, there was overwhelming evidence establishing the fact that it had been functioning. He made reference to the last point at pp 4-5 of his written decision which may be also found at pp 19-20 of the appeal book in this way:

"The two (2) affidavits also depend in the affidavit of one or both defendants. What action they took soon after they received the 400,000 credit (sic). Their explanation as to the malfunction and the delay in paying the K10,000.00 and not the other K10,000.00. There are no such affidavit and so the evidence of the defendant does not bear much weight.

Her Honour Davani J, in the case of Wama Kints and others -v- Sc Pius Nokondi 2001 No.2112 said that there need to be other affidavit to support or confirm the others affidavits. Her Honour went on to say Defendant’s claim that plaintiff claim was bogus but defendant had no evidence to prove bogus claim was false.

It goes to show that a party need to file other affidavits to support and confirm the first or earlier affidavits or vice versa. Defendant claim machine 16 was malfunctioning. Why didn’t he advise complainant on the spot? Why did she wait for a week and pay half (1/2) and not the other without explanation. (sic). Injia. (as he than said was(sic) ) in a criminal case of Anderson Limanua -v- Inspector Jacob Yansuan CR No 1416 was discussion (sic) the effect of affidavit and said at p 4. ‘This court is given the ultimate discretion under sec 35(2) to allow or disallow the use of an affidavit or any part of the affidavit or to attach weight as it sees fit on the matter disposed (sic) to in the affidavit’

This case before this court is a civil case and the standard of evidence is on the balance of probability. I said earlier that defendant’s affidavit do not bear much weight without defendant herself or themselves giving their evidence by affidavits."

10. Having regard to the manner in which the learned magistrate evaluated the conflicting evidence, I must say with respect that it is not entirely correct. In a case where there is conflicting evidence such that making a finding of fact is not easily ascertained from the affidavits, deponents of the affidavits must be called for cross-examination to enable the Court to assess their credibility based on their demeanour and oral evidence. In my view, therefore, it is not sufficient to rely on the affidavits and evaluate which party’s evidence should be accepted and which should not. While it is proper and the learned magistrate was entitled to evaluate the evidence of the witnesses purely on the affidavits, it would have been fair and proper in the light of the conflicting evidence in relation to the malfunction of the poker machine to call the deponents for cross-examination. For, not to do so would be doing injustice to the parties. In the present case, I have read the affidavits of all the witnesses that were tendered by consent before the learned magistrate. They were:

1. Affidavit in support of Sergeant John Noki sworn on 14th September 2002 and filed on 23rd September 2002 (pp 62-64 of appeal book);

2. Affidavit in support of Jack Tepi sworn on 20th September 2002 and filed on 26th September 2002 (pp 65-67 of appeal book);

3. Affidavit in support of Paul Akel sworn on 26th September 2002 and filed on 08th October 2002 (pp 68-70 of appeal book);

4. Affidavit of Luke Takoin sworn and filed on 15th January 2003 (pp 71-73 of appeal book); and

5. Affidavit of Alois Lavuvur sworn and filed on 15th January 2003 (pp 74-76 of appeal book).

11. From my perusal of these affidavits, most of the facts are not disputed. The appellant do not dispute that the respondent had gone in to play at its gaming site on the night of 26th February 2002 and that the respondent played on poker machine no 16. It is also not disputed that the respondent won 400,000 credits from the poker machine which was equivalent to K20,000.00. Finally, it is not disputed that the appellant paid K10,000.00 to the respondent and refused to pay the balance. The only disputed fact is the malfunction of the poker machine at that time. The appellant relied on section 62 of the Gaming Board Act, 1993, and refused payment of the balance because it claimed that the poker machine was malfunctioned. Section 62 states:

"Shortpay" means payment made to a gamming machine player of an amount to which the player is entitled and which would except for a malfunction of the machine have been paid to the player of the machine. "

12. In my view, the appellant was entitled to refuse payment of the balance based on the defence under section 62 above. The critical issue before the learned magistrate therefore was, whether the poker machine was malfunction. The evidence of its malfunction came from two technicians, one from Mt Hagen and the other from Port Moresby. The one from Mt Hagen Luke Takoin said that he was present when the respondent won 400,000.00 credits. He said that the poker machine giving the credit was wrong and had to ring Port Moresby to verify it and that same night, he played the poker machine and found it to be malfunctioning. He advised the appellant of the malfunction. The second technician Alois Lavuvur based in Port Moresby was asked to verify the technical malfunction at the appellant’s gaming site at Mt Hagen. He was able to verify one 200,000 credit but not the other 200,000 credit. So he accordingly advised the appellant of the malfunction.

13. These two technicians were witnesses of the appellant in the District Court and as I observed above, their evidence had been by way of affidavits which were tendered by consent. I am of the view that the determination of the dispute in relation to the malfunction of the poker machine is crucial to the entire action between the appellant and the respondent. It is so because if the learned magistrate had found that it had been functioning, the respondent would have been entitled to the balance but if not, the respondent would not have been entitled to the balance and that would have been the end of the case. In my view this is a substantial factual dispute, which only through cross-examination of witnesses would have helped the learned magistrate to determine the true position of the poker machine on that night. It would have helped him to determine which witnesses were telling the truth based on observations he would have made of their demeanours and responses to questions in cross examination.

14. With respect, from the conflicting evidence in the present case, I am of the view that, it is not possible to ascertain whether or not the poker machine was malfunctioned on that night purely on the affidavits of these witnesses. I cannot tell who is telling the truth here and I do not believe that the learned magistrate was entitled to decide whose evidence should be accepted purely on the affidavits. I do not believe that the omission by Alois Lavuvur in mentioning Luke Takoin in his affidavit and the omission by Luke Takoin in mentioning Sergeant John Noki on that night are reasonable inferences of these two witnesses lying about the malfunction of the poker machine. I also do not believe that because there was a delay by the appellant to inform the respondent that the poker machine had been malfunctioned was a sufficient reason for the learned magistrate to infer that it had been functioning that night.

15. Further, I do not believe that because only two witnesses had given evidence for the appellant while the respondent had more than two witnesses, in fact, three (the respondent, Sergeant John Noki and Paul Akel) is a valid basis or a reasonable inference for the learned magistrate to find that there was overwhelming evidence establishing that the poker machine was functioning on that night. For, there is no law that the Court should believe the evidence of the party who calls many witnesses. In other words, there is no rule of law that says that where two or more persons tell the same story, that story is the truth as opposed to a single witness: see The State -v- Jacob Roy Duruga (2007) N3137 and Francis Wandaki & Ors -v- Wini Henao & The State (2009) N3676.
I conclude that from the conflicting evidence in the affidavits before the learned magistrate, it is difficult to find if the poker machine was functioning that night. This is where he fell into error.

16. Given that there had been conflicting evidence before the learned magistrate, the second issue is whether this Court can make its own findings and substitute the decision of the District Court with its own. As observed above, it is difficult to rely on the affidavits of witnesses to decide which party’s evidence should be accepted, and ultimately find if the poker machine was functioning that night without calling them for cross-examination.

17. In Samson Pulube -v- Herepe Wapia [1996] PNGLR 293, the Supreme Court held that where there is considerable dispute regarding facts between parties to an action, the Court should be careful before conducting a hearing purely on affidavits filed without cross examination or calling evidence on oath. In that case, the appellant appealed a decision of the National Court which dismissed his claim that a partnership between him and the respondent be dissolved and for the assets to be distributed proportionately. The trial before the National Court was by way of affidavits and deponents of the affidavits were not called by the lawyers or the trial judge for cross examination. The Supreme Court found that there was an enormous difference between the parties on almost all the facts, which included the alleged signing of a partnership agreement in March 1984. The respondent had always maintained that there was never a partnership agreement, that he was not aware of any partnership document, and that he had not signed or left a mark on a partnership document.

18. The Supreme Court referred to section 35(3) of the Evidence Act, Ch 48 and said that the trial judge should have considered his powers under section 35(3) when determining a case where the facts were substantially in dispute. Section 35(3) states:

"(3) On application of a party or person interested or of its own motion, the tribunal may order that the subpoena be issued requiring a person who has made or intends to make an affidavit to attend before the tribunal to give evidence on oath or for cross- examination, or both."

19. The Supreme Court observed at p 295:

"We are somewhat at loss as to understand why, when there was such a wide difference of opinion on the facts that the hearing in the National Court was conducted in the way it was. We are also surprised that the lawyers from each party did not elect to cross examine the deponents to the said affidavits."

20. The Supreme Court after referring to section 35(3) of the Evidence Act, Ch 48 went on at pp 296 & 297:

"We are of the view that when parties to an action are in considerable dispute regarding the facts and in some instances the law, then they and the court should be careful before conducting a hearing purely on the affidavits filed without cross examination or calling any other witnesses. The said s 35(3) can go to rectifying the problem by calling the deponents to affidavits and would be deponents for cross-examination and give evidence on oath. We consider that that was the purpose of the said s 35(3) in the first place.

If the lawyers are remiss in calling deponents for cross examination where it is blatantly obvious some or all of the deponents should be called then it is the duty of the trial judge to assess the situation and to apply the said section if he thinks it is necessary for the proper conduct of the trial and to ensure that not only is justice done but it is seen to be done. .........After saying all of that we are satisfied that this case is one where it was blatantly obvious that the deponents to the affidavits and would be deponents should have been called so that a proper and fair trial could be conducted."

21. From that decision, I consider that where a trial is conducted purely by affidavits and the evidence is conflicting, regardless of whether or not lawyers for the parties have called for the deponents for cross-examination, the Court has the ultimate discretion to decide whether it is necessary to call them for cross examination pursuant to section 35(3) of the Evidence Act, Ch 48. The Court’s exercise of discretion is dependent on whether the facts of the case are substantially in dispute. Whether the facts are substantially in dispute is a question of fact and is determine by considering the evidence of each witnesses in the affidavits. If the evidence in the affidavits disclosed facts that are substantially disputed, the Court may call the deponents for cross examination pursuant to section 35(3) above.

22. In the instant case, while it is true that the lawyers for the parties have not called for the cross examination of the deponents, I am of the view that, only cross-examination of the respondent and his witnesses more so, Alois Lavuvur and Luke Takoin would have shed more light on how the said poker machine worked, when it is malfunctioned and the cause of the malfunction. I say this because it is apparent to me that the dispute is highly technical since it concerns poker machines and only an expert in these machines would be able to explain the problem. In making these observations, I do acknowledge that at paragraph 6 of his affidavit, Luke Takoin had attempted to explain the malfunction in this way, "On the same night, I replayed the machine and verified that there was a malfunction as there were no five (5) state of origins and did not agree with the prize table. I explained the malfunction to the Complainant." Also at paragraph 5 of his affidavit, Alois Lavuvur had attempted to explain the malfunction in this way, "I could verify the malfunction in relation to the second Jackpot of 200,000 credits which is equivalent to K10,000.00. I replayed the gaming machine and noted that there was a malfunction as there were no five (5) state of origins and did not agree with the prize table."

23. While these two witnesses whom I presumed were called as expert witnesses to give evidence in relation to the malfunction of the poker machine, as I said above, the claim of malfunctioning of the poker machine is a substantial factual dispute and is not easily ascertained from just by reading the affidavits. It is no wonder the learned magistrate was at pains trying to reconcile the conflicting evidence of the parties and their witnesses in the affidavits at p 3 of his written decision which may also be found at p 18 of the appeal book where he said:

"The evidence before the court is not clear as to how the machine (machine 16) operates or is operated and the result after being operated. Evidence from both sides seems to show that they played the machine. In the case of complainant, Jack Tepi played the machine No 16 it gave 4000,000 credit while defendant Luke Takoim (sic) replayed the same machine soon after." (Underlining mine).

24. I conclude as there is conflicting evidence in relation to the malfunction of the poker machine, the appeal must be upheld but I will not dismiss the action. Instead, it must be remitted to the District Court to decide. In reaching this conclusion, it is also acknowledged that the lawyers for the parties should have called the deponents of the affidavits for cross-examination in the first place but had not. Notwithstanding their failure, I am of the view that ultimately the learned magistrate had the discretion to call them for cross-examination and when he had not, this is where he fell into error. I am therefore satisfied that the appellant has made out the grounds of appeal. The end result is, the appeal is upheld and a re-trial at the District Court is ordered. Costs shall follow the event and time abridged.

Judgment accordingly.

__________________________________
Paulus Dowa Lawyers: Lawyers for the Appellant
Warner Shand Lawyers: Lawyers for the Respondent