SC1186

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NOs. 31 & 37 OF 2011

BETWEEN

KAMALI RENALI, WILLIAM KERO,
ROBIN KERO, PAUL YATUPALI,
on behalf of KOMAME PEREPE CLAN
Appellants

AND

PETER LOKO, Managing Director
Telikom PNG Limited
First Respondent

AND

TELIKOM PNG LIMITED
Second Respondent

Waigani: Gavara-Nanu, Gabi & Yagi, JJ
2012: 	01 March
2012:	04 May

CIVIL PRACTICE & PROCEDURE – National Court Rules – Order 4 rule 7 & Order 12 rule 1 – Applicants must apply for orders – Parties restricted to relief in their pleadings – Claimants for compensation must prove ownership – Claimants have no cause of action if ownership not proven. 

Facts:

The two (2) appeals arise out of two (2) decisions of His Honour Kandakasi J given on 8th March 2011 and 21st March 2011 respectively. On 8th March 2011, His Honour set aside a default judgment dated 18th June 2010 while on 21st March 2011 he dismissed the entire proceeding.

Held:

The right to claim compensation is dependent on the question of ownership of the land. There must be a clear title to the land before a claim for compensation is entertained. Neither the appellants nor Rata Palisa and his group from Kanarepa Clan have a clear title to the land for purposes of claiming compensation. The appellants have no cause of action against the respondents. 

Cases cited:
Canopus No. 16 Limited vs. Maisi Trust Company Ltd (2008) N340
Papua New Guinea Banking Corporation v Jeff Tole (2002) SC694)
Paul Torato and United Party Inc. vs. Sir Tei Abal & Ors [1987] PNGLR 403 
Peter Lipsey vs. The State [1993] PNGLR 405
Steven Charles Pickthall v Lae Plumbing Pty Ltd [1994] PNGLR 363 

Counsel: 
L. Tilto, for the Appellants
C.A. Kuira, for the Respondents 

4 May 2012 

1	BY THE COURT: Introduction: The two (2) appeals arise out of two (2) decisions of His Honour Kandakasi J given on 8th March 2011 and 21st March 2011 respectively. On 8th March 2011, His Honour set aside a default judgment dated 18th June 2010 while on 21st March 2011 he dismissed the entire proceeding.

Background

2.	On 6th October 2009, the appellants commenced proceeding by way of Originating Summons, OS No. 557 of 2009, seeking the following orders: (i) leave to file proceeding out of time pursuant to s. 16(1)(a) of the Frauds and Limitations Act 1988; (ii) the plaintiffs (appellants) are not statute barred from claiming compensation as the waiting was to determine the ownership of the land known as Mt. Komame by the Local Land Court; (iii) the time for making a claim runs from 23rd September 2009 being the date the defendants (respondents) advised that compensation will not be paid; and (iv) declaration that landowners of the land known as Mt. Komame led by the plaintiffs (appellants) are entitled to compensation for damages to the environment at Mt. Komame where a communication tower was built. 

3.	On 18th June 2010, His Honour, Salika DCJ ordered default judgment and damages to be assessed. On 8th December 2010, the respondents filed a motion on notice to set aside the default judgment. The motion and the supporting affidavits were never served on the appellants or their lawyers. On 8th March 2011, His Honour, Kandakasi J heard the application and set aside the default judgment and adjourned the matter to 18th March 2011 to hear the substantive issue of extension of time under s.16 of the Frauds and Limitations Act. On 21st March 2011, His Honour dismissed the proceeding in the absence of the appellants or their lawyers.

Grounds of Appeal

4.	SCA No. 31 of 2011 arises from the setting aside of the default judgment. The grounds of appeal are:

"3.	(a)	The learned judge erred both in law and fact by setting aside a judgment obtained by consent of the parties when His Honour had no jurisdiction to do so in that the application moved by the Respondents under Order 12 Rule 8(2) and (4) lacked any jurisdictional basis.

(b)	The learned judge erred both in law and fact by setting aside a judgment obtained by consent of the parties in that this remedy was not readily available to the Respondents under Order 12 Rule 8(2) and (4) or any other provisions of the National Court Rules.

(c)	The learned judge erred in law and in fact by failing to enquire further into why the "Default Judgment" was allowed to be entered in the first instance when such Judgment was given inter partes by consent on 18th June 2010.

(d)	The learned judge erred in law and in fact by failing to consider that the Appellants had good valid legal reason to apply for dismissal of the Respondents motion for want of service.

(e)	The learned judge erred in law and in fact by failing to consider that the Appellants were not in position to properly and adequately respond to the Respondents motion when it was clear that the grounds relied on by the Appellants as contained in their supporting affidavits were not served on the Appellants, thus denying the Appellants the right to be properly heard.

(f)	The learned judge erred in law and in fact by setting aside a judgment entered by consent of parties even under Section 155(4) of the Constitution when the Respondents failed to demonstrate by evidence that there existed exceptional circumstances warranting the Court to exercise its inherent powers envisaged under Section 155(4) of the Constitution after a delay of six months when the consent judgment was entered."

5.	There are two (2) main grounds of appeal. First, the trial Judge had no jurisdiction to set aside the order as it was a "consent order." Secondly, the appellants' right to be heard on the matter was not afforded to them.

Consent order 

6.	The appellants' case is that the order for default judgment was a consent order. Counsel for the appellants submitted that a consent order cannot be set aside unless it is obtained by fraud or the order is likely to cause grave injustice to the party affected by the order and referred us to Paul Torato and United Party Inc. v. Sir Tei Abal & Ors [1987] PNGLR 403 and Peter Lipsey v. The State [1993] PNGLR 405. 

7.	It is clear to us that the order of 18th June 2010 is not a consent order. The learned trial Judge set aside the order for the following reasons: (i) the order or relief granted by the court was not the one sought by the appellants in the pleadings; (ii) the matter appeared to be statute barred; and (iii) default judgment cannot be obtained in an Originating Summons. 

8.	Order 12 rule 1 of the National Court Rules provides:

"The Court may at any stage of any proceedings, on the application of any party, direct the entry of such judgment or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgment or order in any originating process."

9.	Order 12 Rule 1 in essence allows the court at any stage of the proceedings on the application of any party to make such orders as the nature of the case requires notwithstanding that the applicant does not make a claim for those orders in the originating process. In Canopus No. 16 Limited vs. Maisi Trust Company Ltd (2008) N3401, His Honour, Hartshorn J. commenting on O12 r 1 said:

"This provision provides for what was permitted in Collison v Warren [1901] 1 Ch 812. In that case a defendant successfully obtained a mandatory injunction against a plaintiff even though he had not filed a counterclaim, as what he was seeking arose out of the same contract upon which relief was sought in the proceedings."

10.	Under Order 12 Rule 1, a court may make such orders as the nature of the case requires, on the application of a party. It is clear to us that no application for default judgment was ever made by the appellants and the making of the order in the absence of any application is inconsistent with Order 12 Rule 1 of the National Court Rules. Secondly, Order 4 Rule 7 (1) of the National Court Rules provides that an originating process shall state specifically the relief claimed and that a party is restricted to what has been included in his originating summons or writ of summons and statement of claim: Steven Charles Pickthall v Lae Plumbing Pty Ltd [1994] PNGLR 363; Papua New Guinea Banking Corporation v Jeff Tole (2002) SC694. In this case, the appellants did not apply for default judgment nor was it a relief the appellants were seeking in the pleadings. The appellants were seeking extension of time to apply for leave under s.16 of the Frauds and Limitations Act. Moreover, we note that no application for leave was made to the court. 

Right to be heard

11.	The second issue is denial of natural justice on the basis that the motion and the supporting affidavits were never served on the appellants. While the documents may not have been served on them, counsel for the appellants was present and heard on the matter. The order was set aside principally on a question of law, which is that a relief cannot be granted if it is not sought in the pleadings. No affidavit evidence is required to argue the point. The order was set aside after an inter parte hearing. 

12.	We are satisfied that the learned trial Judge correctly set aside the default judgment. Accordingly, the appeal is dismissed.

13.	SCA No. 37 of 2011 arises from the decision by the trial judge to dismiss the entire proceeding on 21st March 2011. The grounds of appeal are:

"3.1	The learned judge erred both in law and fact by proceeding to conduct an ex parte hearing of the matter when the matter was not listed for hearing on 21st March 2011and that no reasonable notice was given to the appellants or their lawyers for the hearing of the matter on that date.

3.2	The learned judge erred both in law and fact by proceeding to conduct an ex parte hearing of the matter when the matter was by order of the Court adjourned to 18th March 2011 but was not listed and no hearing took place on that date.

3.3	The learned judge erred both in law and fact that there was no evidence to suggest that the Appellants or their lawyers were aware of the hearing of the matter on 21st March 2011.

3.4	The learned judge erred both in law and fact when:-

(a)	No notice was given to the Appellants or their lawyers that the matter was listed for hearing on 21st March 2011 as is the requirement.

(b)	The Respondent's counsel misled the Court into believing that due notice was given of the hearing date.

3.5	The learned judge erred both in law and fact by conducting an hearing on an issue that was not fixed for hearing before His Honour on 21st March 2011 when:-

(a)	By order of the Court made on 8th March 2011, the matter was fixed for hearing on 18th March 2011 on the issue of extension of time and not on the issue of representative capacity to sue by the Appellants in a matter involving environment damages to their customary land. 

(b)	The Respondent's counsel misled the Court into believing that the issue for the court to hear and determine was on the issue of the Appellants representative capacity to sue in a matter involving environmental damages to their customary land.

3.6	Furthermore, the learned judge erred in both law and in fact by placing reliance on the copy of a letter handed up to court by the Respondent's counsel as conclusive evidence that the Appellants or their lawyers were aware of the hearing of the matter on 21st March 2011.

3.7	The learned judge erred in law and in fact by dismissing the entire claim when an affidavit relied on by counsel for the Respondent's was unreliable, uncorroborated and untested namely that:-

(a)	The affidavit of Rata Palisa from an opposing clan filed on 
8th December 2010 was tainted with bias and unreliable.

(b)	The issue before the court was not the Appellants representative capacity to sue but an application for extension of time and the use of Rata Palisa's affidavit was irrelevant."

14.	The two (2) main grounds of appeal are: (i) the appellants or their lawyers were never notified of the hearing on 21st March 2011; and (ii) that the issue before the court for consideration was an application for extension of time for leave pursuant to s.16 of the Frauds and Limitations Act not the appellants' representative capacity to sue for damages to the environment on Mt. Komame.

It is not disputed that the learned trial Judge conducted an ex parte hearing and dismissed the proceeding on the basis that the appellants' lacked representative capacity to sue.

15.	As for the first issue, counsel for the appellants submitted that the trial Judge was misled into believing that due notice was given to the appellants or their lawyers by the respondent's lawyer who appeared on the day when no such notice was given. Secondly, the undertaking by the respondent's lawyers to file an affidavit annexing the purported notice was not done. Finally, the trial Judge relied on the purported notice to conduct the hearing on 21st March 2011 which led to the dismissal of the proceeding. He argued that this was a denial of natural justice. 

16.	With respect to the second issue, counsel for the appellants submitted that the issue fixed for hearing and determination on 18th March 2011 was extension of time to apply for leave and not representative capacity to sue in a matter involving environment damages to their customary land. In doing so the trial judge took into account irrelevant considerations to dismiss the proceeding. Secondly, the affidavit of Rata Palisa dated 29th November 2010, which was relied on by the trial Judge, was tainted with bias and therefore not credible or reliable. Counsel submitted that the appellants should have been given an opportunity to file affidavits to rebut matters raised by Rata Palisa. It is not the duty of a trial Judge to advise lawyers to file affidavits to rebut a particular piece of evidence. It is the duty of a lawyer, who has been engaged to represent the interest of a party, to seek instructions from his client and place before the court materials helpful to his client. 

17.	The issues of extension of time and lack of evidence of representative capacity were matters properly before the court for determination. They were relevant matters for consideration. In fact, we note that the motion filed on 8th December 2010 was on foot where one of the orders sought was dismissal of the proceeding on the ground that there was no evidence to suggest that the appellants were acting in a representative capacity. Counsel for the appellants argued that the motion and the supporting affidavits were never served on the appellants or their lawyers. Before hearing the application the trial Judge enquired as to whether the documents were served on the appellants or their lawyers. There was evidence of service of the documents on the appellants or their lawyers on 10th March 2011. The evidence of receipt of documents on 10th March 2011 is on pages 53, 55 and 66 of the Appeal Book. The trial Judge was satisfied and proceeded to hear the matter. We accept the trial Judge's view that the documents were served on 10th March 2011.

18.	In their affidavits dated 29th November 2010, Carl Abram Kuira and Rata Palisa depose that the plaintiffs (appellants) have not produced any documentary evidence to prove that they act in representative capacity. Secondly, they depose that customary ownership dispute between Perepe clan and Kanarepa clan over Mt. Komame and the surrounding area has not been settled as yet and the matter was pending in the Local Land Court in Mendi.

19.	Rata Palisa deposes that the appellants commenced a similar proceeding in Mt. Hagen in 2004. The proceeding was OS No. 139 of 2004: Kamali Renali for himself and for and on behalf of the Komame Perepe Clan of Erave, Southern Highlands Province v. Loki Sau, Akore Kupali, Kearu Warua, Ruri Lora & Rata Palisa for themselves and on behalf of the Kanarepa Clan of Erave, Southern Highlands Province. The matter was dismissed by David J on 16th July 2008 and referred to the Local Land Court for determination of the issue of customary ownership. 

20.	The appellants never placed any documentary evidence before the court to contest these matters. Even if they were heard on the matter, there would not have been any evidentiary basis for opposing the application for dismissal by the respondents. We believe the trial Judge was entitled to rely on the affidavits of Messrs Kuira and Palisa to dismiss the proceeding.

21.	This case is concerned with compensation for damages to the environment at Mt. Komame. The right to claim compensation is dependent on the question of ownership of the land. There must be a clear title to the land before a claim for compensation is entertained. Neither the appellants nor Rata Palisa and his group from Kanarepa Clan have a clear title to the land for purposes of claiming compensation. The appellants have no cause of action against the respondents. 

22.	For all the above reasons, we dismiss the appeal.

23.	Orders;

1.	The appeals are dismissed.
2.	The appellants shall pay the costs of the appeal.

______________________________________________
Kari Bune Lawyers: Lawyers for the Appellants
In-House Lawyer Corporate Legal Services Telikom PNG Limited: Lawyers for the Respondents