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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) No. 18 OF 2017
BETWEEN
ATLAS CORPORATION LIMITED
Plaintiff
AND
DR KEN NGANGAN, in his capacity as Departmental Head responsible for finance matters within the terms of the Claims By and Against the State Act
First Defendant
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant
Waigani: Gavara-Nanu J.
2017: 17 November
2018: 13 & 20 August & 29 November
JUDICIAL REVIEW- Application for judicial review – Relief sought – Declarations and mandamus – Application to enforce a Certificate of Judgment – Original judgment debt amounting just over K1.6m – Accrued interest over about 13 years amounting over K75m.
JUDICIAL REVIEW – Application for judicial review – Certificate of judgment – Endorsement by Solicitor General – State paying part of the principal amount – Judgment debt just over K1.6m – The State through Secretary for Department of Finance not paying interest – Over 13 years of accumulated interest – Whether mandamus would lie against Secretary for Finance.
JUDICIAL REVIEW – Statement in Support – Order 16 r 3 (2) (a) and (b) – Verified facts – Affidavit verifying – Verified facts carry weight – A Statement of Claim distinguished.
Cases cited:
Azzam El Cheikh v. Rimbink Pato (2017) N6879
Gabriel Yer v. Peter Yama (2009) SC996
GaKumiye & 5 Others v. The Independent State of Papua New Guinea & Ors (2018) SC1693
John Momis v. Attorney General [2000] PNGLR 109
Luke Tai v. ANZ Banking Group (PNG) Limited (2018) SC1681
Luke Yaluma v. The State (2010) N4088
NCDC v. Yama Security Service Pty Ltd (2003) SC707
Sam Koim v. Hon. Peter O'Neil (2014) N5694
Steven John Rose v. The State (2007) N3241
The Independent State of Papua New Guinea & Ors v. Toka Enterprises Limited (2018) SC1746
Counsel:
M. Goodwin, for the Plaintiff
F. Barton, for the Defendants
29th November, 2018
1. GAVARA-NANU J: On 17 November, 2017, this application was heard ex-parte of the State following failure by State’s lawyers to appear and defend the application despite being served with the Notice of Trial.
2. On 20 August, 2018, second hearing was convened by the Court because of its view that it needed assistance from the State on some pertinent issues. At that hearing the State was represented by the Solicitor General, Ms. Barton, following a direction by the Court. At the hearing the Court informed counsel that the Solicitor General was directed to appear to clarify issues regarding the interest component of the amount claimed in the Certificate of Judgment which the plaintiff is seeking to enforce against the State.
3. Ms Barton made submissions but only briefly because Mr. Goodwin, counsel for the plaintiff objected to her being heard. He argued that the issues the Court was concerned about had already been argued at the ex-parte hearing and were fully clarified by the documentary evidence already before the Court. Mr. Goodwin also submitted that the Court having heard arguments on the issues at the ex-parte hearing those issues have been fully litigated and the Court should proceed and give its decision.
4. It should be noted that the Solicitor General was directed by the Court to appear because the Court was of the view that the State should be given an opportunity to be heard on over K75m in accrued interests the plaintiff is claiming from the initial judgment debt of just over K1.6m adjudged by the National Court in 2005.
5. After considering submissions by counsel, I have decided that I should decide the application only on the arguments presented by the plaintiff at the ex-parte hearing on 17 November, 2017. I have come to this decision given that the trial had been concluded on 17 November, 2017. I have also for that reason disregarded the materials adduced by the State, including brief submissions by the Solicitor General.
6. The plaintiff’s application is made pursuant to a Notice of Motion filed under Order 16 r 5 (1) of the National Court Rules on 8 January, 2017. The plaintiff relies on two affidavits of Mathew Thomas Trnka, respectively sworn on 30 June, 2017 and 25 January, 2017. The latter is titled “Affidavit Verifying Statement pursuant to Order 16 r 3 (2) (a)”, although it contains supporting evidence. Then there are two affidavits of Michael Goodwin respectively sworn on 21 January, 2017 and 26 April, 2017.
7. In the Notice of Motion, the plaintiff seeks following reliefs:
(i) A declaration that the time which has lapsed from receipt of the Certificate of Judgment in matter SCA No. 6 of 2003, dated 13 March, 2012, endorsed by the Solicitor General on 27 July, 2016, and delivered to the first defendant, exceeds the reasonable time referred to in s. 14 (3) of the Claims By and Against the State Act, in which the first defendant should make payment in satisfaction of the judgment.
(ii) A declaration that the action of the first defendant in failing, refusing or neglecting to satisfy the judgment in matter SCA No. 6 of 2003, dated 13 March, 2012, within a reasonable time with the meaning of s. 14 (3) of the Claims By and Against the State Act, is unreasonable in the circumstances.
(iii) A declaration that the actions of the first defendant in failing, refusing or neglecting to satisfy the judgment in matter SCA No. 6 of 2003, dated 13 March, 2012, within a reasonable time is unlawful and a breach of the first defendant’s duty under s. 14 (3) of the Claims By an Against the State Act.
(iv) An order be issued requiring the first defendant to forthwith satisfy the judgment in matter SCA No. 6 of the 2003, dated 13 march, 2012, in favour of the plaintiff, which was endorsed by the Solicitor General as fit for payment on 27 July, 2016, and served on him immediately thereafter.
(v) A declaration that the actions of the first defendant in failing, refusing or neglecting to satisfy the judgment in a reasonable time in SCA No. 6 of 2003, dated 13 March, 2013, in favour of the plaintiff which was endorsed by the Solicitor General as fit for payment on 27 July, 2016, and served on him, is unlawful and a breach of the first defendant’s duty pursuant to s. 14 (3) of the Claims By and Against the State Act, and a breach of his duty under the Public Finance Management Act, to safeguard public monies and avoid waste, by permitting Court Ordered interest to continue to accrue for an reasonable period.
(vi) An order be issued requiring the first defendant to appear before the National Court and show cause why an Order of the nature of Mandamus should not be issued against him requiring him to forthwith satisfy the Certificate of Judgment in matter SCA No. 6 of 2003, dated 13 March, 2012, in favour of the plaintiff.
(vii) An order that the plaintiff’s costs of this application be paid by defendants on a Solicitor/Client or indemnity basis.
(viii) Such further or other Orders as this Honourable Court deems fit.
8. It is convenient to note that leave was granted on 19 June, 2017 for the plaintiff to apply for judicial review of a purported refusal, failure or neglect by the first defendant to satisfy a Certificate of Judgment issued in favour of the plaintiff by the Registrar on 13 March, 2017, in respect of proceeding SCA No. 6 of 2003.
9. It should be noted that requirements for a review book has been dispensed with by an order of the Court. Thus there is no review book.
10. The Certificate of Judgment, the subject of this application was endorsed by the Solicitor General on 27 July, 2016 and was subsequently forwarded to the first defendant for the State to pay the amount claimed within a reasonable time pursuant to the requirements of s. 14 (3) of the Claims By and Against the State Act 1996.
11. The genesis of this application can be traced back to 3 December, 1991, when the plaintiff issued proceedings against the State for an alleged failure by the State to settle an amount owing to the plaintiff under an agreement entered into between the plaintiff and the State in 1985. The agreement related to sealing of the Magi Highway by the plaintiff.
12. These brief background facts are contained in a transcript of proceedings relating to SCA No.6 of 2003, which is in evidence.
13. Clause 60 of the agreement provided that interest on any outstanding claims made by the plaintiff under the agreement were to be based on the then PNGBC prime lending interest rate.
14. The plaintiff sued the State for its outstanding payments under the agreement. The plaintiff was as a result awarded K1, 692,235.72. However, the National Court in its decision given on 22 December, 2002, refused to award interest at the then PNGBC prime lending rate, it instead awarded interest at 8%.
15. The plaintiff appealed the decision. The appeal was referenced “SCA No. 6 of 2003”, it was heard by a three member Supreme Court bench comprising Hinchliffe J, Los and Kirriwom JJ. According to the transcript, the Supreme Court was not able to give its decision because of the death and retirement of two of the judges respectively, viz; Hinchliffe and Los JJ. Notwithstanding the Supreme Court not giving its decision, the plaintiff claims there were Orders given by the Supreme Court. The purported Orders are reproduced in Mathew Thomas Trnka’s affidavit sworn 30 June, 2017 and in the plaintiff’s written submissions. The same purported Orders are pleaded in the Statement in Support. The transcript indicates that the purported Orders were given on 19 October, 2004, in a brief oral ruling. The ruling has not been produced to this Court. This appears to be the reason the transcript also indicates that the Supreme Court did not give a decision.
16. The purported Orders (brief oral ruling of the Supreme Court), as reproduced by the plaintiff are in these terms:
in proceedings WS No. 895 of 1991 is quashed.
the respondent to the appellant.
17. According to Mr. Goodwin, the initial Certificate of Judgment was issued by the Deputy Registrar, Supreme Court on 18 January, 2005. That appears to be the reason they have been referred to as “2005 Orders”. Mr. Goodwin argued the Certificate of Judgment reflected the purported brief ruling of the Supreme Court which he said included interest calculated up to 19 October, 2004; viz; the day of the purported brief oral Supreme Court ruling. However, in the reproduced Orders, no amount is stated for interest. The Minute of the purported 2005 Orders, if taken out has also not been produced to this Court.
18. It is also significant to note that the initial Certificate of Judgment issued by the Deputy Registrar on 18 January, 2005 has not been produced to this Court.
19. An amount of K22, 802,000.81 in purported accrued interests appears in paragraph 16 of the transcript of the proceedings relating to SCA No. 6 of 2003. However, it is important to bear in mind that this amount was determined by the Deputy Registrar, Supreme Court, purportedly based on the then PNGBC prime lending interest rate, when issuing the initial Certificate of Judgment on 18 January, 2005. The amount was also based on the affidavit evidence of one Mr. Spence.
20. Notably, when the initial Certificate of Judgment was served on the Solicitor General for endorsement, the Solicitor General refused to endorse it because the interest component of the amount claimed in the Certificate of Judgment was disputed.
21. Page 16 of the transcript is pertinent and is reproduced below -
“For those reasons, your Honours, we say that the judgment of the court which appears in the review book, firstly, at gage 11 where the court had said in the second paragraph in the appeal, the sole issue was on the failure to assess and grant full damages on the claim before the court and application of a wrong interest rate and granting it on the amount of damages. That is contained in the reasons although they are brief and the orders made paragraph 3 are beyond doubt, in our submission. The interest be paid pursuant to clause 60 of the terms and conditions of the contract. As I said, your Honours, that clause appears – the whole of the contract appears in volume one of the appeal book. At clause 60 it starts at page 4-1 of volume 1 and the relevant clause is at page 44 concerning interest rate on overdue payments and for those reasons we say that – in the submission of the appellant that the calculation of the interests; the Papua New Guinea Banking Corporation prime lending interest rate to the outstanding sums as calculated and referred to in the affidavit material of Mr Spence and as entered at that time by the Deputy Registrar in the judgment, copy reflects the order made by the court. And that is that the interest on the sum K1,692,235.72, which is the amount found to be outstanding under the contract which have not been paid, that interest accrues on that amount at the rate in the contract. So that the calculation under clause 60 has been accepted by the Deputy Registrar and at the time the judgment was entered by the registrar (sic.), the interests in the certificate of judgment under the seal of the court on 18 January, 2005, the registrar (sic.) says that the appellant obtained the judgment of Supreme Court, judgment in the sum of K22, 802,000.81 to get the interest on that sum – interest at that sum at the indicator lending rate until paid. That was the calculation at the time the judgment was entered.
And in those circumstances, it is our submission that the judgment as entered by the court correctly reflects the decision that the court made. It is unfortunate that the interest far outweighs the original claim. But with respect to my friend, all the State had to do was to pay the original claim which it refused to do. So the volume of it is not the – what is before your Honours. It is the fact that the calculation and the application of it correctly reflects the judgment of the court. And for those reasons, it is our submission that the judgment correctly reflects what the court’s decision was. Thank you.” (my underlining).
22. So the transcript clearly affirms that amount of K22, 802, 000.81 in purported accrued interests for period up to 19 December, 2004, was determined by the Deputy Registrar, Supreme Court, not by the Supreme Court.
23. Following refusal by the Solicitor General to endorse the initial Certificate of Judgment, the plaintiff filed an Application to the Supreme Court seeking orders to confirm the amount of interest stated in the initial Certificate of Judgment. The Application had the same reference as the earlier Supreme Court Appeal viz; “SCA No. 6 of 2003”. The three member Supreme Court bench that heard the Application was comprised of Kirriwom J, Hartshorn and Kawi JJ (the second Supreme Court).
24. The transcript (of proceedings) referred to in this judgment relates to the hearing of the plaintiff’s Supreme Court Application before the second Supreme Court bench.
25. The plaintiff’s Supreme Court Application is not before this Court. However, the written decision of the Supreme Court given on 25 May, 2011, has been made available to this Court by the plaintiff. The Supreme Court in its ruling among other things said:
“The appellant Atlas Corporation Limited (in voluntary liquidation) (Atlas), makes application for this court to confirm that it’s orders of 17th January, 2005 (2005 Orders) correctly express the intention of the court and contain no errors, mistakes, slips or omissions. The respondent, the Independent State of Papua New Guinea (State) opposes the application.
At the hearing the State, by its counsel, made an oral application for this court to invoke its inherent jurisdiction or to rely upon s. 155 (4) Constitution to reduce the amount that the State owes to Atlas under the 2005 Orders. The grounds relied upon are that sufficient reasons were not given by this court for the 2005 Orders and that the award of interest in the 2005 Orders was unjust, unfair and not in the National interest.
Atlas’s application
Atlas’s application is reliant upon s. 8 (1) (e) and s. 16 Supreme Court Act. As to s. 8 (1) (e), it provides for this court to exercise any of the powers that may be exercised by the National Court on appeals or applications. Atlas submits that this court can review and alter a judgment before it is formally entered as a consequence of Order 12 Rule 16 National Court Rules. This rule provides that a minute of judgment or order can be reviewed in certain circumstances and directions are able to be given to vary the form and content of the minute.
Without considering whether this court has the power to review and alter its judgment as submitted by Atlas, we note that Atlas does not seek to question the 2005 Orders or to have the 2005 Orders reviewed. Indeed, Atlas seeks to have the 2005 Orders confirmed. Even if this court does have the jurisdiction as submitted by Atlas in respect of which we do not give any opinion, this does not assist Atlas as Atlas does not wish to review and alter the 2005 Orders. Similarly, Atlas is not able to successfully rely upon Order 2 Rule 18 National Court Rules which provides for the National Court to review an act or decision of the Registrar, as Atlas is not seeking to have any act or decision of the Registrar concerning the 2005 Orders, reviewed.
As to Atlas’s reliance upon s. 16 Supreme Court Act (sic.), the two references to “judgment” in our view refer to the judgment of the National Court being appealed, notwithstanding the definition of “judgment” in s. 1 (1) Supreme Court Act. This is so as s. 16 Supreme Act is concerned with the jurisdiction of this court on the hearing of an appeal. Atlas is unable to rely upon this section for the relief that it seeks.
Consequently the relief sought by Atlas should be refused.
State’s application
The oral application by counsel for the State was for this court to invoke its inherent jurisdiction or to rely upon s. 155 (4) Constitution to reduce the amount that is owed by the State to Atlas. The grounds relied upon are that sufficient reasons were not given by this court for the 2005 Orders and that the award of interest in the 2005 Orders was unjust, unfair and not in the National Interest. As to the amount of interest owing, if this is a concern to the State as submitted, and in our view it should be, we note that s. 16 (6) Frauds and Limitations Act 1988 was not raised before us and so we do not consider it.
No notice of the State’s application was given to Atlas and no written submissions were filed. The application should be rejected for these reasons alone. As to reliance upon s. 155 (4) Constitution, this court has said on numerous occasions that. 155 (4) Constitution can only be relied upon to enforce a primary right. In this instance the State no longer has a primary right. All rights both parties were exhausted when this court determined the appeal and delivered the 2005 Orders.
As to invoking this court’s inherent jurisdiction, we have grave doubts that this court has such a jurisdiction to vary or alter its judgment delivered following a defended appeal on the ground that it’s decision as unfair and unjust and not in the National Interest. We are not minded to consider the application further given the circumstances of its making. We note that as to the court not giving sufficient reasons, no application has ever been made by the State pursuant to the Slip Rule. The State’s application is refused.
Orders
(a) the relief sought in the application of the appellant filed 21st June, 2005 is refused.
- (b) the oral application for the respondent made on 28th April, 2011 is refused.
(c) Each party is to pay its own costs. (my emphasis).
26. So the Supreme Court refused to confirm that the purported 2005 Orders correctly expressed the intention of the Supreme Court and that it contained no errors, mistakes, slips or omissions. In my view, the decision does not assist the plaintiff.
27. I have taken into account the relevant background facts because in my opinion that is the proper approach for the Court to take given that mandamus is sought as a relief.
28. It was submitted by Mr. Goodwin during the brief hearing on 20 August, 2018 that the Court should only look at the Certificate of Judgment, that is the subject of this application, and if it is in order, mandamus and other reliefs sought should be granted. I do not think that is the approach I should take because it is important for me to consider and appreciate the background of the case so that I understand how the amount in the Certificate of Judgment is claimed. I also have to be convinced that the amount claimed is correct and valid in law. See, GaKumiye & 5 Others v. The Independent State of Papua New Guinea & Ors (2018) SC1693. In that case, the plaintiffs applied for a default judgment against the defendants after the defendants failed to file and serve their Notice of Intention to Defend and Defence within the statutory period. The trial judge held that, whilst the plaintiff's were prima facie entitled to a default judgment, the Court should not blindly order default judgment, it should satisfy itself first that the plaintiffs had a reasonable cause of action and that the claim was properly grounded in law. The plaintiffs were survivors of a serious accident caused by a head-on collision between two PMV buses travelling along the Markham road in Morobe Province. They claimed damages against the defendants for the poor condition of the road where the accident occurred. But the Court found that the actual cause of the accident was from two PMV bus drivers travelling at a high speed and their failure to negotiate the potholes on their respective sides of the road. The trial judge dismissed the entire proceeding. The plaintiffs appealed the decision but the appeal was dismissed by the Supreme Court, affirming the trial judge’s ruling. To me the approach taken by the trial judge was not only sensible, it was also correct in law. The ruling reflected a sound principle of law that every claim must have a reasonable cause of action and is legally valid.
29. In my view, even if the Supreme Court had in its decision of 25 May, 2011, confirmed the purported 2005 Orders, the decision would still not assist the plaintiff because the actual Supreme Court Orders or ruling have not been made available to this Court. So the Court can properly infer that the first Supreme Court bench did not make a decision. And even if it did, it would not have made any difference because the decision would not have had the reasons for the decision because it was a brief oral ruling.
30. It follows that the purported 2005 Orders, if given, were void of any legal effect. In this regard, it is noted that the plaintiff also in its Statement in Support in paragraph 2 (f), in referring to the first Supreme Court hearing states:
“The application was heard on 31 August, 2005, but due to the passing of his Honour, the late Justice Hinchliffe and the retirement
of his Honour Justice Los, no decision was able (sic) to be handed down.”
31. This statement of facts is significant because the facts are verified by an affidavit as true and correct as required under
Order 16 r 3 (2) (a) and (b) of the National Court Rules. So the verified facts confirm that the Supreme Court did not make any orders or a ruling. Such verified facts are more than allegations
such as those in a Statement of Claim in an ordinary civil suit. Verified facts in a Statement in Support in a judiciary review proceeding
in my opinion constitute a prayer for the reliefs sought. So a relief is sought upon the facts so verified by a sworn affidavit. The verified facts therefore have
weight.
32. Having regard to the above principles, in this case the effect of paragraph 2 (f) of the Statement in Support is that the purported 2005 Orders are not reflective of any actual Orders or ruling of the Supreme Court. See, Steven John Rose v. The State (2007) N3241.
33. Also the fact that the purported amount of K22, 802,000. 81 in accrued interests in the initial Certificate of Judgment was determined by the Deputy Registrar, Supreme Court and not by the Court, renders the initial Certificate of Judgment void of any legal effect. This anomaly had the overall effect of rendering the claims made by the plaintiff in all the subsequent Certificates of Judgment, including that which is the subject of this application, invalid and unenforceable.
34. During the hearing of the plaintiff’s Application in 2011, the Supreme Court was critical of the State for not challenging the purported 2005, Orders or ruling by a slip rule application. With great respect, I do not think the criticism of the State by the Supreme Court was fair because the State could not possibly make a slip rule application against the 2005 Orders or ruling because essentially there was no ruling by the Supreme Court. And even if there was a ruling, it was brief and made orally. Obviously, no slip rule application could be possible because the decision would have also been without reasons for the decision.
35. It is a fact that there is no Minute of the purported 2005 Orders. At least none has been produced to the Court. So one is entitled to ask us to how and where the purported 2005 Orders reproduced by the plaintiff for the purposes of this application were obtained. This also raises the issue that the plaintiff’s claims appear to be statute barred.
36. I also note from the documents before the Court that there were Orders purportedly made by me on 8 June, 2016, in respect of proceeding OS (JR) No. 389 of 2015, which formed the basis of a Certificate of Judgment. Those purported Orders were endorsed by the Registrar and entered on 22 June, 2016. Notably, the orders are substantive in nature. I have checked my own notes of the hearing of the plaintiff’s application on 8 June, 2016. They indicate that my ruling was on an interlocutory application, which means substantive reliefs could not be granted. In that regard, the Orders produced to this Court would be an abuse of process. See, John Momis v. Attorney General [2000] PNGLR 109; Luke Yaluma v. The State (2010) N4088; NCDC v. Yama Security Services Pty Ltd (2003) SC707; Gabriel Yer v. Peter Yama (2009) SC996 and Sam Koim v. Hon. Peter O'Neil (2014) N5694. But be that as it may, those Orders are now in serious doubt as to their validity because they derived from the purported 2005 Orders, for which actual orders or ruling of the Supreme Court have not been produced to the Court.
37. Therefore, having carefully considered submissions by counsel for the plaintiff and the supporting documentary evidence, I affirm my view that the application should be refused. The decision is based on the following grounds:
(i). the initial amount of K22, 802, 000.81 purportedly in accrued interests was determined by the Deputy Registrar, Supreme Court and not by the Supreme Court. Thus the initial Certificate of Judgment and all subsequent Certificates of Judgment including that which is the subject of this application were void of any legal effect and are unenforceable. See, Steven John Rose v. The State (supra).
(ii). the purported 2005 Orders are void of any legal effect because they do not reflect or are based on any decision or judgment of the Supreme Court.
(iii). there is a serious issue as to whether the amount claimed by the plaintiff in the Certificate of Judgment, the subject of this application is affected by s. 16 of Frauds and Limitations Act, 1988, and is therefore time barred.
(iv). the plaintiff is guilty of an inexcusable delay in bringing this application, especially in respect of the order for mandamus. The plaintiff had a duty to prosecute this application expeditiously so `that it could be heard within a reasonable time and bring litigation to finality. See, Azzam El Cheikh v. Rimbink Pato (2017) N6879; The Independent State of Papua New Guinea v. Toka Enterprises Limited (2018) SC1746 and Luke Tai v. ANZ Banking Group (PNG) Limited (2018) SC1681.
38. In Azzam El Cheikh the National Court in stressing the principle that an application seeking mandamus must be brought within a reasonable time said:
“...the plaintiff must show that there is no delay from the date of the decision to the date leave is sought. Where certiorari is sought as a substantive relief, the period prescribed under Order 16 r 4 (2) of the NCR within which the application must be made is four months. If there is delay, the plaintiff should provide a reasonable explanation for such a delay. But in a case where mandamus is sought as a substantive relief, the pertinent questions for the Court are whether the application is made within a reasonable time and whether it is in the overall interest of justice to grant leave. The relevant issues for the Court to consider and take into account among others are undue delay, hardship, good administration and prejudice to the rights of others, these are stated under Order 16 r 4 (1) (b). Innovest Limited v. Hon. Patrick Pruaitch, Minister for Forests and Climate Change & Or (supra). (my underlining).
39. The National Court made these observations when deciding leave in a judicial review application. However, the principle has a general application and is relevant in any application seeking an order for mandamus. The observations were adopted with approval by the Supreme Court in The Independent State of Papua New Guinea v. Toka Enterprises Limited (supra).
40. The application is for the foregoing reasons refused.
__________________________________________________
O’Briens Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyers for the Defendants
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