SC1371 

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 154 OF 2009

BETWEEN:

PEPI KIMAS as delegate of the Minister for Lands
First Appellant

AND:

INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Appellant

AND:

BOERA DEVELOPMENT CORPORATION LIMITED
First Respondent

AND:

APAU BESENA COMPANY LIMITED
Second Respondent

AND:

NAMONA OALA and IGO NAMONA OALA
for and on behalf of Iduata Gubarei
No. 2 Clan of Boera Village
Third Respondent

AND:

MOI ENO and OALA MOI
for and on behalf of Koke Gubarei
No. 1 Clan of Boera Village
Fourth Respondent

Waigani: Hartshorn J.
2010: April 15th, 20th

Application for Leave to Appeal and Stay of National Court Proceeding 

Cases cited: 

Lowa v. Akipe [1992] PNGLR 399 
Supreme Court Act: Garamut Enterprises Ltd v. Steamships Trading Company Ltd (1999) SC625 
Gary McHardy v. Prosec Security [2000] PNGLR 279 
Mali v. The State (2002) SC690 
Boyepe Pere v. Emmanuel Ningi (2003) SC711 
State v. Nelson (2004) SC766 
Application by Piu Land Group Inc (2004) N2660 
Oberia v. Charlie (2005) SC801 
Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853 
Sekesu Sisapi Land Group (Inc) v. Turama Forest Industries Ltd (2008) SC976 
Tigam Malewo v. Faulkner (2009) SC960 

Counsel:

Mr. I.R. Molloy and Ms. K. Sheehan, for the Appellants
Mr. G.M. Egan and Mr. A. Mana, for Esso Highlands Ltd, a joined party
Mr. M. Wilson, for the Respondents

20th April, 2010

1. HARTSHORN J. The Appellants make application:

a) for leave to appeal a National Court decision that granted leave to apply for judicial review and made consequential orders and directions,

b) together with Esso Highlands Ltd, a joined party to the proceeding, for a stay of the National Court proceeding from which this appeal emanates, pending determination of the appeal.

2. I consider the application for leave to appeal first. 

Application for leave to appeal

3. Leave to appeal is required as the proposed appeal is from an interlocutory judgment or order within the meaning of s. 14(3) Supreme Court Act: Garamut Enterprises Ltd v. Steamships Trading Company Ltd (1999) SC625; State v. Nelson (2004) SC766.

4. The decision in respect of which leave to apply for judicial review was granted was the decision of the First Appellant to give notice of a declaration pursuant to s. 5 Land Act that certain land would be deemed not customary land unless good cause to the contrary was shown within 3 months of publication of the notice, and shall vest in the State.

5. The Appellants submit that the judge at first instance erred in granting leave to the Respondents to apply for judicial review as:

a) the National Court proceeding seeking the relief claimed is misconceived and fatally flawed on grounds relating to amongst others, the standing of the Respondents, the correct commencement of representative actions, the ability to bring constitutional claims in the National Court, delay and exhaustion of other remedies,

b) to allow the case to go further would be a major impost upon court resources and unjust to those affected by the proceeding,

c) the proposed grounds of appeal disclose a meritorious or arguable appeal.

6. The Respondents submit that leave to appeal should not be granted as:

a) there was no appearance on behalf of the Appellants at the hearing before the judge at first instance,

b) the judge at first instance was correct in granting leave,

c) the declaration by the First Appellant should not have been made and should be judicially reviewed,

d) the judicial review proceeding in the National Court should be allowed to proceed, the application for leave to appeal prolongs the matter and is a waste of time,

e) it is not in the interests of justice that the application for leave to appeal should be granted.

7. I mention here that counsel for the Respondents informed the court that he relied upon written submissions already filed and his oral submissions. The written submissions to which he referred concerned discretionary powers of the Minister for Lands and Constitutional issues and did not specifically address the applications before this court.

Leave to appeal

8. As to the requirements for a successful application for leave, the Supreme Court said in Boyepe Pere v. Emmanuel Ningi (2003) SC711 that the reason for leave is to, "ensure that only meritorious cases go to the Supreme Court on appeal.", and in Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853, "It is clear law now that in order to obtain leave of this Court, the appellant must satisfy the Court that there is a meritorious and arguable case.".

9. In Oberia v. Charlie (2005) SC801, Lay J., after a comprehensive review of the authorities listed the following tests that are to be applied to the facts of each application for leave to appeal:

a) is there an arguable or prime facie case or has it been demonstrated that the trial judge was wrong?
 
b) does the appellant have other recourse in the court below?
 
c) was the ruling within the discretion of the court? Has it been shown that its exercise was manifestly unreasonable, exercised on a wrong principle or a mistake of fact?

d) does the decision have any bearing on the final determination of the issues between the parties? Will it affect the primary rights of the parties or prevent the determination of the issues?

e) will substantial injustice be caused by allowing the decision to stand?
 
f) has cause been shown that the trial process should be interrupted by an appeal?

Arguable case

Standing

10. The Appellants submit that it is a fundamental requirement that applicants for judicial review have standing. Where the subject matter of the claim is land, then ordinarily only persons having or claiming a legal or equitable right, title or interest in the land would have standing. 

11. Here, the First and Second Respondents are companies incorporated under the Companies Act. They are not customary landowners or incorporated land groups. They have no standing to bring judicial review proceedings in respect of land in which they have no current legal or equitable title. The Appellants submit therefore, that they have a good argument on appeal that the National Court should have refused leave to the First and Second Respondents as they have no standing. 

12. From a perusal of the documentation filed on behalf of the Respondents in the National Court, by applying for a Special Business Lease and a "Lease and Lease Back" arrangement, it is intended that the customary owners of the land will lease their land to the State pursuant to s.11 Land Act on the condition that the State then leases that land to the First Respondent with the Second Respondent having a reversionary interest in the land.

13. I assume that the First and Second Respondents argue that by virtue of the application referred to above, they have an interest in the land. If such an interest is created by merely making the application referred to, and I make no comment as to whether any interest is created by such an application, is it sufficient to give standing for judicial review purposes? It is not apparent that the judge at first instance gave consideration as to whether the First and Second Respondents have the requisite standing to apply for judicial review of a decision concerning the subject land.

14. Following a consideration of relevant authorities including Application by Piu Land Group Inc (2004) N2660 and my own decision of Sekesu Sisapi Land Group (Inc) v. Turama Forest Industries Ltd (2008) SC976, I am satisfied that to have the requisite standing to be able to judicially review a decision concerning land, ordinarily a person must have or claim to have a legal or equable interest in the land. 

15. The Appellants, I am satisfied, have shown an arguable case that the First and Second Respondents do not have standing to bring the judicial review proceeding as they have.

Representative actions

16. The Third and Fourth Respondents claim to be representatives of and members of clans. Representative actions are permitted pursuant to Order 5 Rule 12 National Court Rules but there are certain procedural requirements to be met. These were set out in Mali v. The State (2002) SC690, and more recently in Tigam Malewo v. Faulkner (2009) SC960. The requirements are that:

a) all intended plaintiffs must be named in the originating process,

b) each and every intended plaintiff must give specific instructions (evidenced in writing) to their lawyers to act for them; and

c) any person in whose name proceedings are commenced and who claims to represent other intended plaintiffs must produce an authority to the court to show that he was authorised by them to file proceedings as a class representative.

17. The Appellants submit that none of these requirements have been met in the current National Court proceeding. Consequently, the Appellants submit that the claims of the Third and Fourth Respondents in a representative capacity, are flawed and are an abuse of process.

18. The judge at first instance does not appear to have given consideration as to whether the requirements for representative actions have been complied with. There are no submissions on behalf of the Respondents before me on this issue.

19. I am satisfied from a perusal of the documentation and the submissions of counsel for the Appellants that the Appellants have shown an arguable case that the claims of the Third and Fourth respondents in a representative capacity are flawed and an abuse of process.

Constitutional claims

20. The Appellants submit that:

a) the National Court does not have jurisdiction to deal with the Respondents' constitutional claims. The Respondents seek declarations that ss. 5 and 132 Land Act and/or the notice published under s. 5 are unconstitutional and claim that various constitutional provisions have been contravened,

b) s. 18(1) Constitution provides that, subject to the Constitution, the Supreme Court has original jurisdiction to the exclusion of other courts as to any question relating to the interpretation or application of the Constitution. The principal exception to the Supreme Court's exclusivity arises where a claim is brought for breach of a constitutional right under ss. 57 and 58 Constitution or under any other provision that gives the National Court jurisdiction,

c) it is not permissible to bring a claim that raises a constitutional issue on the basis that the issue should be referred by the National Court to the Supreme Court under s. 18(2) Constitution as the Respondents are attempting to do. In the case of Lowa v. Akipe [1992] PNGLR 399, the plaintiff sought declarations from the National Court that certain sections of the Mining Act were unconstitutional. The Supreme Court held that the National Court had no jurisdiction to entertain those questions. Any questions concerning the application or interpretation of a constitutional law must be dealt with by the Supreme Court and any referral by the National Court must arise in the course of proceedings properly before the National Court. These principles have been applied in a number of subsequent cases,

d) the claims by the Respondents for declarations that provisions of the Land Act, or the notice under s. 5, are unconstitutional for breaches of the various provisions of the Constitution are misconceived. The National Court has no jurisdiction to deal with these matters whether in judicial review proceedings or at all. The National Court erred in granting leave to apply for judicial review in respect of these matters.

21. There are no submissions on this point before me on behalf of the Respondents and it is not apparent that the judge at first instance gave consideration to it.

22. I am satisfied after a perusal of the documentation, a consideration of the submissions of counsel for the Appellants and the authorities cited, that the Appellants have an arguable case that the National Court does not have jurisdiction to deal with the Respondents' constitutional claims.

23. As I have found that the Appellants have established that they have an arguable case on the 3 grounds that I have considered, it is not necessary that the other grounds advanced by the Appellants be considered at this juncture.

Respondents' submissions

24. As to the submission of counsel for the Respondent that there was no appearance for the Appellants before the judge at first instance and that the arguments raised now should have been raised then; the non representation of the Appellants before the Judge at first instance is a cause for concern, but any suggestion that the Appellants are in some way precluded from applying for leave to appeal is rejected.

25. As to the submissions that the judge at first instance was correct in granting leave and that the subject declaration should be judicially reviewed, as previously indicated, I am satisfied that in respect of the 3 grounds relied on by the Appellants that I have considered, the Appellants have shown arguable cases that the trial judge erred in deciding to grant leave.

26. As to the submissions that the judicial review proceeding should be allowed to proceed, it is in the interests of justice that it do so and that this application for leave to appeal is a waste of time; if the judicial review proceeding is fundamentally flawed as is submitted by the Appellants, then it is not in the interests of justice that the proceeding be allowed to continue. The Appellants have satisfied me on the 3 grounds that I have considered that they have an arguable case that the judge at first instance erred. If I decide to grant leave to appeal, this application will not have been a waste of time.

27. As to other factors to be considered:

Other recourse

28. The Appellants do have other recourse in the court below. They can argue their case on the judicial review application.

Exercise of discretion

29. As I have found that the Appellants have on 3 grounds an arguable case, it can be argued that the exercise of discretion by the judge at first instance was after an incorrect or incomplete consideration of the submissions and material before him.

Bearing on final determination

30. The parties are able to argue their cases on the application for judicial review.

Substantial injustice

31. As to substantial injustice that may be suffered by the Appellants, the costs of the hearing of the judicial review application would be required to be met if leave to appeal was not granted, but that does not constitute substantial injustice.

Should the trial process be interrupted?

32. As I have already determined that the Appellants have established that they have an arguable case on the 3 grounds that I have considered and that it can be argued that the exercise of discretion by the judge at first instance may have been exercised after an incorrect or incomplete consideration of the submissions and material before him, I am of the view that sufficient cause has been shown to interrupt the trial process by an appeal. Leave to appeal is granted.

Application for stay

33. Section 19 Supreme Court Act provides that unless otherwise ordered by the Supreme Court or a Judge, an appeal, or an application for leave to appeal, to the Supreme Court does not operate as a stay of proceedings.

23. In Gary McHardy v. Prosec Security [2000] PNGLR 279 the Supreme Court found that it had unlimited jurisdiction to do justice and should exercise its discretionary power depending on the factors and circumstances of the particular case. Factors to consider when deciding whether to stay a decision of the National Court include:

a) whether leave to appeal is required and whether it has been obtained;

b) whether there has been a delay in making the application;

c) possible hardship, inconvenience or prejudice to either party;

d) the nature of the judgment sought to be stayed;

e) the financial ability of the applicant;

f) a preliminary assessment about whether the applicant has an arguable case on the proposed appeal;

g) whether on the face of the record of the judgment there may be indicated apparent error of law or procedure;

h) the overall interests of justice;

i) the balance of convenience;

j) whether damages would be a sufficient remedy.

24. In this instance, leave to appeal is required and it has now been granted. As to delay, counsel for the Respondents submits that there has been delay as the decision to grant leave to apply for judicial review was made in October 2009. The Appellants submit that there has not been undue delay. The court vacation has intervened since the application for leave to appeal was filed and excluding the vacation, the stay application has followed closely on the application for leave to appeal. Adjournments have been by consent and have not occurred as a result of the fault of the Appellants.

25. As to possible hardship, inconvenience or prejudice to any of the parties, this would be likely to occur if the judicial review proceeding continued and then this appeal was granted. I note at this juncture that the judicial review proceeding has not been progressed by the Respondents since leave to apply for judicial review was granted.

26. As to the nature of the judgment sought to be stayed, it is a grant of leave to apply for judicial review and as such no substantive rights will be affected by the granting of a stay.

27. As to the financial ability of the Applicants for the stay, they submit that this consideration is only relevant to money judgments and is not relevant here. In any event, the Appellants are the State and its representative and the other Applicant is Esso. Counsel for the Respondents made submissions concerning the disparity in resources of the Applicants and Respondents and presumably does not take issue with the financial ability of the Applicants.

28. As to a preliminary assessment of the strength of the appeal, the Appellants have submitted that the National Court proceeding is fatally flawed. I have already determined that the Appellants have an arguable case on the 3 grounds that I have considered and that it can be argued that the judge at first instance erred in granting leave after an incorrect or incomplete consideration of the submissions and material before him.

29. After taking into account all of the above factors and the submissions counsel, I am satisfied that the overall interests of justice and the balance of convenience favour the grant of a stay of proceeding OS 485 of 2009 pending determination of this appeal. I am not satisfied that the Respondents would be unduly prejudiced by the imposition of a stay.

Orders

30. The application for leave to appeal against the decision of the National Court granted on 13th October 2009 at Waigani in proceeding OS 485 of 2009 granting the Respondents leave to apply for judicial review and making consequential orders and directions, is granted.

31. The time for filing a Notice of Appeal outside of the 40 day period required by the Supreme Court Act is extended and the First and Second Appellants are granted leave to file a Notice of Appeal within 21 days of today.

32. National Court proceeding OS 485 of 2009 is stayed pending the determination of the appeal.

33. The costs of and incidental to the application for leave to appeal and the applications for stay are reserved.

_____________________________________________________________
Blake Dawson: Lawyers for the Appellants 
Allens Arthur Robinson: Lawyers for Esso Highlands Ltd 
Warner Shand: Lawyers for the Respondents