SC1042

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA No. 61 & 62 of 2009

Between:

LORD & CO. LTD
Appellant

And:

TIMOTHY INAPERO TRADING AS GORDONS SPORTS & ENTERTAINMENT CENTER
Respondent

Waigani: Injia, CJ
2009: 21st July

SURPEME COURT – practice and procedure – application for stay of National Court judgment striking out Defences filed by Appellant - principles on grant or refusal of stay of judgment discussed - grant or refusal of stay discretionary - overall interest of justice favors continuation and conclusion of trial pending determination of appeal - majority of considerations favor first respondent – application for stay refused with costs to the respondent 

Cases Cited:

Bernard Juali v The State (2001) SC667
Gary McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279
Leo Duque v Andrew Paru [1997] PNGLR 378

Counsel:

F Griffin, for the Appellant
J Abone, for the Respondent

21st July, 2009

1. INJIA CJ: On 6th May 2009, the National Court struck out the Defences filed in two related proceedings and entered judgment against the appellant for damages to be assessed in each matter. On 10th June 2009 the applicant filed separate applications for Leave to Appeal (leave applications). The applicant now applies for stay of the judgments pending determination of the leave applications.

2. The respondent contests the applications. Both parties filed affidavits to support their respective cases. On 17th July 2009, I heard submissions and directed further supplementary submissions to be filed. Those submissions have been filed. I have considered the material and submissions. 

3. The principles on grant or refusal of stay of judgment appealed from are settled. The grant or refusal of stay is discretionary. The relevant principles are set out in Gary McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279 (McHardy case). Apart from the principle that the Court must start from the basic premise that the judgment creditor is entitled to enjoy the benefit of the judgment, there are ten (10) other considerations which are enumerated in that case which may be considered. These considerations are often determined by a quick perusal of the matters set out in the leave application which may include the proposed grounds of appeal and the trial Judge’s decision and a consideration of the material placed before the Court. The applicant carries the onus of persuading the Court to exercise the discretion in its favor.

4. Apart from the matters set out in the leave application, the parties have provided those materials including the transcript of proceedings.

5. I apply the considerations set out in McHardy in the following manner.

6. The judgment appealed from favors the respondent. 

7. Leave to appeal is required because the decision is not final. This consideration favors the respondent.

8. The issue of delay is not contested. This consideration favors the applicant. 

9. The nature of the judgment, the arguable nature of the appeal and error in the judgments can be dealt with together. In a case such as this, in my view, unless there are clear grounds suggesting an apparent error of procedure or error in the grant of default or summary judgment for damages to be assessed which is likely to cause a fair trial unlikely, the course of the trial should not be interrupted by a stay order. 

10. In SCA No. 61 of 2009, damages is the gist of the action in negligence instituted by WS 846//03 in the National Court. In SCA No. 62 of 2009, damages is also the gist of the action in negligence instituted in WS 844 of 2003. In a case where damages is the gist of an action, judgment entered by default or otherwise for damages to be assessed in the nature of an interlocutory judgment, the time for appeal runs from the date the final judgment, that is judgment on damages, is given. A defendant aggrieved by an award of damages may appeal against the whole of the judgment inclusive of the interlocutory judgment on liability. 

11. I agree with Mr Abone of counsel for the respondent that the exercise of discretion has not been shown to be erroneous and that time and cost would be saved by allowing the trial to be completed and the appellant would be at liberty to file an appeal at the end of the trial. 

12. One of the issues in the trial would be whether or not damages should be awarded and if so, the quantum of damages. Another issue is of vicarious liability of the applicant in respect of the default judgments entered against the other defendants which have not been appealed against. If these issues are determined in the applicant’s favor there would be little or no cause for the applicant to appeal the final judgment. If they are determined against the applicant, it would be entitled to appeal the final judgment inclusive of interlocutory judgment on liability.

13. The interlocutory judgment proposed to be challenged on appeal is on the exercise of discretion based on the refusal by the trial judge to accept the explanation given by the appellant’s lawyer as to why they failed to appear in Court on 22nd April 2009 and why they failed to comply with the Court order of 18th March 2009 to file a Defence to the Amended Writ of Summons and thereby allowed or caused the default judgment to be entered. The explanations offered by Mr Griffin of counsel for the applicant are essentially the same explanations that were offered to the trial judge. These are contained in the affidavits presented to the trial judge. The same affidavits which have been produced before me indicate reasons to do with laxity in internal administrative arrangements in the office of the applicant’s lawyers in attending to the applicant’s case. In Court a draft Defence was shown by counsel who appeared on 6th May 2009 but none was annexed to his affidavit for a proper consideration of the draft Defence by the judge. The explanation given to the Court is not a good excuse for avoiding obvious legal consequences of a failure by a lawyer in complying with prescribed Court rules of procedure or Court orders made pursuant to those rules. The remedy for a party aggrieved by failure of a lawyer in attending to the case resulting in judgment entered against that party lies in a professional negligence suit and not setting aside the judgment entered in favor of the other party. The case authorities are clear on this point. There are many cases on this point but two Supreme Court decisions which come to my mind are Leo Duque v Andrew Paru [1997] PNGLR 378 and Bernard Juali v The State (2001) SC 667. The two cases cited by the trial judge to support his view perhaps may not be on point but any error in that regard may be of no real consequence. 

14. Other procedural issues I raised including the question of whether default or summary judgment can be entered on a claim based on fraud are not raised in the leave application and therefore irrelevant to the application before me.

15. On the face of the material before me and for the reasons I have given, I am not persuaded that these considerations favor the applicant. They favor the respondent. 

16. In terms of possible hardship, inconvenience or prejudice to either party, the trial on assessment of damages is pending and the appellant is entitled to appeal after final judgment is given. Apart from incurring costs of proceedings, the respondent stands to suffer no real hardship, inconvenience or prejudice. This consideration favors the respondent. 

17. In terms of the financial ability of the applicant, this consideration is irrelevant to the facts of this case.

18. The balance of convenience favors both parties. I accept Mr Abone’s submission that it is in the interest of both parties that the trial should be allowed to proceed expeditiously and in a less costly manner, given the long delay in finalizing the claims which were instituted in 2003. The questions whether the leave application will be granted, and if leave is granted whether the appeal will be successful are at this stage speculative and so is the question of whether damages will be proved in the National Court and even if proved, whether the appellant will be held vicariously liable to satisfy the default judgment entered against the other defendants.

19. In terms of the overall interest of justice, for reasons I have given, I consider that the overall interest of justice favors the continuation and perhaps conclusion of the trial pending the determination of the appeal.

20. In summary notwithstanding the small number of considerations which favor the Applicant, I consider that the majority of considerations favor the first respondent. 

21. For these reason, I refuse the application with costs to the respondent. 

________________________________________________
Young & Williams: Lawyers for the Appellant
Parkil Lawyers: Lawyer for the Respondent