SC1009

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 133 OF 2005

BETWEEN:

PETER TERRY GERARI, LAWRENCE JOB POLAIN & ORS
Appellants

AND:

KALIP SALO, SANTEE MARGIS & ORS
Respondents

Waigani: Lenalia, Mogish & Ellis JJ
2009: 28 October

JUDGMENT

CONTEMPT PROCEEDINGS – Failure to comply with order of the National Court – sentence of 18 months imprisonment with hard labour reduced to 12 months

ALLEGATIONS OF PERCEIVED BIAS – matters raised on appeal known at time of hearing – application should have been made in the court below

Cases Cited:

Boateng v The State [1990] PNGLR 342
PNG Pipes Pty Ltd v Sefa (1998) SC592

Counsel:

Mr. I Mambei, for the Appellants
Mr. Kalip Salo and Mr. Santee Margis in person

28 October, 2009 

1. BY THE COURT: Peter Terry Gerari and Lawrence Job Polain (the Appellants) have previously obtained leave to appeal (against both the conviction and the sentence) and leave to adduce further evidence. The appeal was heard by Kapi CJ, Hinchliffe J and Sakora J. However, by reason of section 3 (2) (b) of the Supreme Court Act, it has been necessary for their appeal to be heard. The appeal requires this court to consider the Appellants conviction and sentence for contempt arising out of civil proceedings which the Respondents brought against the Applicants.

2. This appeal arises from the National Court proceedings OS 596 of 2004, commenced on 22 October 2004, in which a number of landowners (the first Respondents), who allege they were the lawful representatives of Mussau Timber Development Ltd (the second Respondent), sought orders against the Appellants in relation to landowners’ royalties. The orders sought in those proceedings included that the Appellants produce records and accounts pertaining to royalty monies arising from a timber permit and that an amount of K500,000, previously received by the Appellants, be paid into a bank account to be nominated. It should be noted that the evidence filed in support of those orders included a copy of a cheque dated 8 September 2004 and numbered 789611 for K500,000 which was made out to the Appellants.

3. On 3 November, 2004, the Respondents obtained an ex parte order which included an order that the Appellants (and others) be restrained from dealing with K500,000 in a bank account operated by the Appellants, an order that such amount be paid into the National Court pending the determination of the proceedings, an order that the Appellants produce all relevant accounts and records in relation to that sum of K500,000 and other monies and, in paragraph 6 of the orders, an order that the Appellants provide to the Court all relevant information in relation to the K500,000 and other royalty monies received by the Appellants. It should also be noted that the orders included an order which provided for the Appellants to challenge the ex parte order by giving at least 72 hours (ie 3 days) notice to the Respondents. 

4. On 10 February 2005, the Respondents filed a Notice of motion which sought to have the Appellants charged with contempt. The Statement of Charge filed in support of that motion disclosed that the ex parte orders were served on the Appellants on 5 November 2004 and that the Appellants were reminded of those orders via letters to their lawyers dated 22 and 26 November 2004.

5. The First Appellant, Mr Gerari (whose name is shown as Gerari by the Respondents), filed an affidavit sworn 18 April 2005 in which he said he had not provided any documents since all the documents he had were already in the possession of the Respondents. He annexed copies of what he said were the only documents he had in relation to the subject of the proceedings. He also deposed that he was unable to operate the subject bank account as it was frozen. 

6. The Second Appellant, Mr Polain, filed an affidavit sworn 23 August 2005 in which he maintained that he had been served with the Statement of Charge and affidavit in support but not the Notice of Motion.

7. The transcript of the hearing on October 2005 appears at pages 163 to 203 of the Appeal Book. A reading of that transcript reveals:

(1) That an affidavit of the Second Appellant (Mr Polain), seemingly to the same effect as the First Appellant’s affidavit referred to earlier, was filed on 3 December 2004;

(2) That Mr. Cooper, who appeared for the Appellants, conceded that the Appellants would have had some information that would have enabled them to respond to paragraph 6 of the orders;

(3) That it was admitted that the Appellants had not complied with paragraph 3 and 6 of the orders;

(4) That pleas of guilty were entered by both Appellants; and

(5) That the Appellants were acquitted in relation to paragraph 3 of the orders but convicted for non-compliance with paragraph 6 of the orders. 

8. In a judgment delivered on 7 November 2005 the Appellants were convicted of contempt and sentenced to 18 month’s imprisonment with hard labour. Bail was set at K5,000. During his submissions, Mr Mambei suggested the Appellants had spent a period of 5 to 6 months in custody although he later told the court that his clients were in custody from when they were sentenced by the National Court in November 2005 until August 2006 which is a period of 9 months. The Court has proceeded on the basis that the Appellants have each already served 9 months of the sentence imposed by the trial judge.

9. The appeal is primarily based on the submission that the hearing which resulted in the convictions for contempt was not fair in that:

(1) the trial judge knew soe of the respondents personally in that they were members of the same church and sang in the same choir (the 1st reason);

(2) the trial judge knew the 2nd Appellant who had been married to the first cousin sister of the trial judge (the 2nd reason); and

(3) the wife of the trial judge sat in court during the sentencing of the Appellants (the 3rd reason).

10. Documents relevant to those reasons are the affidavits said to constitute the further evidence, which were listed in the Notice, namely:

(1) the affidavit of Edward Kenas sworn 28 November 2005;

(2) the affidavit of the Second Appellant sworn 7 November 2005; 

(3) the affidavit of Milson Kalase sworn 23 May 2007; and

(4) the affidavit of the First Appellant sworn 28 May 2007

11. To the extent that the further evidence goes to the 1st reason and 2nd reason, that does not appear to be fresh evidence in that the Appellants were aware of those matters when they appeared before the trial judge on 20 October 2005 and 7 November 2005. Indeed, given that those two matters were known to the Appellants at that time, it is difficult to see why no application was made by the Appellants for the trial judge to disqualify himself. If, as the Appellants now suggest, it was obvious that the 1st and 2nd reasons clearly warranted that the trial judge not hear the charge of contempt the why was no such application made to the trial judge?

12. It is difficult to see why the Supreme Court should permit the Appellants to do now what they should have done in the National Court. Counsel for the Appellants submitted to this Court that the hearing of the contempt charge on 20 October 2005 and the hearing on 7 November 2005 (when the trial judge announced his decision and sentenced the Appellants to 18 months imprisonment with hard labour) were occasions when, to adopt the test set out in PNG Pipes Ltd v Sefa (1998) SC592, right-minded people went away thinking the trial judge was biased. That submission was devoid of any acceptable explanation for the absence of any application for the trial judge to disqualify himself. The submission that there was no opportunity to make such a submission on either 20 October 2005 or on 7 November 2005 does not accord with what appears in the transcript. 

13. Turning to the 3rd reason, it has been alleged that the wife of the trial judge attended court and sat with some of the Respondents on the day when the Appellants were sentenced. It was submitted that the only difference between that and the situation in Boateng v The State [1990] PNGLR 342 was that Boteng’s case was a criminal case and this was a civil case. However, the evidence in Boateng’s case was much stronger since it included eye-witness evidence that the wife of the trial judge not only sitting with the investigating police officer and the prosecutrix during a rape trial but also speaking with them when the court adjourned.

14. For the sake of completeness, it should be noted that the Appellants sought to rely on evidence that was plainly inadmissible in support of the claim that the trial judge should have disqualified himself. That evidence included what a deponent said the former Mrs. Polain said the trial judge had said! It is sufficient to record that the court did not take into consideration those portions of the affidavit s which were irrelevant and/or inadmissible.

15. Having described the submission that the trial judge should have disqualified himself as the primary basis of the appeal, the secondary basis was that the conviction was unfair and that the sentence was excessive. There is a difficulty with the claim that the conviction was unfair in that the Appellants entered a plea of guilty.

16. It has not been suggested in this Court that there was compliance with paragraph 6 of the orders and there has been no application to withdraw the plea of guilty. In circumstances where a court order was disobeyed and where the Appellants admitted their disobedience, there is no valid reason for the conviction for contempt to be set aside.

17. It remains to consider the question of the sentence imposed in the court below. Unfortunately, Mr. Mambei was unable to provide the court with details of sentences in any other contempt case, in Papua New Guinea or elsewhere. 

18. A submission was made that the Appellants had limited time to prepare what was required of them by paragraph 6 of the orders. Indeed, Mr. Mambei submitted that the Appellants were only given 7 days despite the fact that the orders specified a period of 14 days. In reality, the ex parte orders made on 3 November 2004 were served on 5 November 2004, the charge of contempt was initiated by the Respondents on 10 February 2005 and was heard until 20 October 2005 and was not finalised until 7 November 2005. Accordingly, the Appellants had a year in which to comply with paragraph 6 of the orders between the time they first became aware of the orders and the time they were sentenced for non-compliance with paragraph 6 of those orders. 

19. Explanation sought to be made during the appeal in relation to the topic covered by paragraph 6 of the orders only served to raise the question of why those matters were not previously placed before the court. It must be concluded that the Appellants deliberately chose not to provide the trial judge with any explanation in relation to a cheque for K500,000 dated 8 September 2004 which was made out to them.

20. It was said on behalf of the Appellants, that the proceedings in the National Court had been finalised by consent orders and that those consent orders only dealt with future payments. However, a copy of those consent orders was not placed before the Court. For that reason the Court obtained the approval of the parties to locate and consider the file in the National Court proceedings which gave rise to this appeal, being the proceedings numbered OS 596 of 2004, so that the Court reliably ascertain when those proceedings were finalised and on what terms.

21. The National Court file contains a document entitled Consent orders which set out the following orders as having been made on 10 August 2006 and entered the following day:

"1. the First Plaintiff [ie. Kalip Salo, Santee Margis and the other named as First Respondents in the appeal] are/were the duly appointed landowner trustee representative shareholders of the Second Plaintiff [ie Mussau Timber Development Ltd]

2. The following First Plaintiffs – Kalip Salo, Santee Margis, Jonathon Salo, Luke Freeman, together with others namely Gilis Tom, William Tamaru, Lindsay Manoah, Kuru Peresi, Ismael Kael, and nathenial Belo are/were duly appointed directors of the Second Plaintiff.

3. The following First Plaintiff, Kalip Salo is/was the duly appointed General Manager of the Second Plaintiff.

4. The Second Plaintiff is/was the holder of Timber Permit No 16-29, 16-41, pursuant to the Forestry Act 1991 (as amended).

5. The Fourth and Sixth Defendants shall, in liaison with the Third and Fifth Defendants, forthwith proceed to pay the One Hundred and Ninety Five Thousand Three Hundred and Ninety Five Kina fifty three toea (K123,395.53) being royalty monies already identified by the Third and Fifth Defendants to the landowners of the Mussau Timber Project in New Ireland Province I conjunction with the First and Second Plaintiffs pending further and better disclosure and verification of any and all other outstanding royalty monies which may become due and payable to the landowners.

6. The Fourth and Sixth Defendants shall, in liaison with the Third and Fifth Defendants, forthwith cause to be paid any and all outstanding royalty monies due and payable to the landowners of the Mussau Timber Project area in New Ireland Province in conjunction with the First and Second Plaintiffs following further and better verification of landowner agents or representatives by the Third and Fifth Defendants.

7. Costs of the whole proceedings awarded against the Defendants.

8. Time abridged to the time of settlement by the Registrar which shall take place forthwith."

22. It must be observed that those Consent Orders do not make any reference to the Appellants, Peter Terry Gerari and Lawrence Job Polain, who were together named as the First Defendants in those National Court Proceedings. That, coupled with the Appellants’ deliberate failure to comply with paragraph 6 of the orders and the fact that misappropriation charges against the Appellants were dismissed at the committal hearing, explains why Kalip Salo and Santee Margis, when provided with an opportunity to address the Court owing to the absence of their lawyer, expressed disappointment that the Appellants had neither explained what happened to the K500,000 paid to them via the cheque dated 8 September 2004 nor repaid any of that amount.

23. Having regard to the circumstances which resulted in the conviction for contempt, the Court is of the view that a sentence of 18 months imprisonment with hard labour was excessive and that the appropriate sentence was 12 months imprisonment with hard labour. Allowing for 9 months already served, there remains a period of 3 months from today to be served by the Appellants. The Court wishes to make clear that the reduction in that sentence was made in response to what has been described as the secondary basis of this appeal, namely that the sentence was excessive.

24. Having formed the view that the sentence imposed by the trial judge was excessive, it is not necessary to consider whether the trial judge should have disqualified himself. The Court deliberately refrains from considering that issue so as not to set a precedent fro claims that a trial judge should have disqualified himself (or herself) to be made for the first time on appeal when the matters upon which that claim is based were known to the Appellants at the time of the hearing.

25. It is important for parties and their lawyers to realise that any application to disqualify a trial judge should be made to the trial judge and not made for the first time on appeal unless the application is based on matters that were not known to the applicants at the time of the hearing or could not be reasonably ascertained by the applicants at the time of the hearing.

26. The Court is of the view that it is desirable for there to be some guidelines so as to provide clarity in relation to when a judge should disqualify himself (or herself) and, for that reason, a copy of this judgment will be made available to the Court’s Ethics Committee as prevention is better than cure.

27. These reasons have been prepared in order to explain why the court made the following orders after a short adjournment at the conclusion of the hearing:

(1) the appeal against convictions is dismissed.

(2) The appeal against the sentences is allowed

(3) Substitute a sentence of 12 months imprisonment with hard labour which, allowing 9 months in respect of time already served, leaves a term of imprisonment of 3 months to be served, starting today.

_________________________________

Mambei Lawyers & Consultants: Lawyers for the Appellants
Harricknen Lawyers: Lawyers for the Respondents