SC1423

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 102 OF 2014

BETWEEN:

JIMMY LAMA & LILLY LAMA
First Appellants

AND

BIBRA TRADING LIMITED
Second Appellant

AND

NDB INVESTMENTS LIMITED
First Respondent

AND

NATIONAL DEVELOPMENT BANK LIMITED
Second Respondent

Waigani: Cannings J, Collier & Geita JJ
2015:	28 April, 1 May

PRACTICE AND PROCEDURE – objection to competency of appeal – grounds of objection: non-compliance with Order 7, Rules 9(c) and 10 of the Supreme Court Rules 2012 – failure to obtain leave of the Supreme Court under Section 14(1)(c) of the Supreme Court Act to argue questions of fact – whether appeal incompetent – whether appeal should be dismissed.

The respondents to a Supreme Court appeal filed a notice of objection to competency of the appeal. The appeal, which consisted of at least 29 grounds, was against the decision of the National Court to dismiss civil proceedings, following a trial in which the appellants claimed damages against the respondents for breach of contract and negligence. The objection to competency was based on two broad grounds: (1) non-compliance with Order 7, Rules 9(c) and 10 of the Supreme Court Rules 2012; and (2) failure to obtain leave of the Supreme Court pursuant to Section 14(1)(c) of the Supreme Court Act to argue questions of fact.

Held:

(1)	Order 7, Rules 9(c) and 10 of the Supreme Court Rules impose three requirements for a ground of appeal: (a) the ground must be stated briefly, but specifically (ie the ground must make grammatical and legal sense and be intelligible); (b) if it is alleged that a judgment is against the evidence or the weight of the evidence, the notice must specify with particularity the ground relied on to demonstrate that it is against the evidence or the weight of the evidence; (c) if it is alleged that the judgment is wrong in law, the notice must specify with particularity the ground relied on to demonstrate the specific reasons why the judgment is alleged to be wrong in law.

(2)	If a ground of appeal raises a question of fact (as distinct from a question of law or a question of mixed fact and law) leave to argue that ground must be granted by the Supreme Court pursuant to Section 14(1)(c) of the Supreme Court Act.

(3)	In determining an objection to competency it is appropriate to assess each ground of appeal in terms of the nature of the objection to it.

(4)	Here, the Court set out each ground of appeal and assessed its competency in terms of the two types of objection to competency and concluded that each ground offended against one or both of the two grounds of objection.

(5)	All grounds of appeal were determined to be incompetent and accordingly the objection to competency of the appeal was upheld and the appeal was entirely dismissed.

Cases cited

The following cases are cited in the judgment:

Coca Cola Amatil (PNG) Ltd v Yanda [2012] PGSC 52; (2012) SC1221
Henganofi Development Corporation Ltd v Public Officers Superannuation Fund Board (2010) SC1025
Ipili Porgera Investments Ltd v Bank of South Pacific Ltd (2007) SC1322
Jimmy Lama and Lilly Lama & Bibra Trading Ltd v NDB Investments Ltd and National Development Bank Ltd, WS No 858 of 2011, 07.07,14, unreported
Mann v Alpar Trading Ltd [2013] SC1229
Namah v Pato [2013] SC1241
Pacific Equities & Investments Ltd v Goledu (2009) SC962
Simon Kou v Simon Kaupa (2010) SC1021
Toale Hongiri Incorporated Land Group v Wolotou Incorporated Land Group [2012] SC1201
Waghi Savings & Loans Society Ltd v Bank of South Pacific (1980) SC185

OBJECTION

This was an objection to competency of an appeal against a decision of the National Court. 

Counsel

T Tingnni, for the Appellants
I R Shepherd, for the Respondents

1 May, 2015

1.	BY THE COURT: On 22 August 2014 the respondents filed a notice of objection to the competency of an appeal filed by the appellants on 11 August 2014. 

GROUNDS OF OBJECTION

2.	As they explained in their written submissions, the respondents object to all the grounds of appeal for two primary reasons:

1	Non-compliance with Order 7, Rules 9(c) and 10 of the Supreme Court Rules 2012.

2	Failure to obtain leave of the Supreme Court pursuant to Section 14(1)(c) of the Supreme Court Act to argue questions of fact.

Order 7, Rules 9(c) and 10 of the Supreme Court Rules provide:

9(c)	The notice of appeal shall ... state briefly but specifically the grounds relied upon in support of the appeal. 

10	Without affecting the specific provisions of Rule 9, it is not sufficient to allege that a judgment is against the evidence or the weight of the evidence or that it is wrong in law, and the notice must specify with particularity the grounds relied on to demonstrate that it is against the evidence and the weight of the evidence and the specific reasons why it is alleged to be wrong in law.

Section 14(1) of the Supreme Court Act states:

Subject to this section, an appeal lies to the Supreme Court from the National Court—

(a)	on a question of law; or
(b)	on a question of mixed fact and law; or
(c)	with the leave of the Supreme Court, on a question of fact.

PRIMARY DECISION

3.	The decision of the National Court the subject of the appeal was delivered on 7 July 2014 (Jimmy Lama and Lilly Lama & Bibra Trading Ltd v NDB Investments Ltd and National Development Bank Ltd, WS No 858 of 2011, 07.07,14, unreported). The background facts were explained by the trial Judge, Justice Hartshorn, as follows:

The first plaintiffs Mr and Mrs Jimmy and Lilly Lama, were operating a trade store in Madang under the "Stret Pasin Stoa" Scheme (SPS Scheme). This scheme was supervised by Retail Management Services Ltd (RMS). The property in which the trade store was located was owned by the second plaintiff, Bibra Trading Ltd. Pursuant to the SPS Scheme, Mr and Mrs Lama were to repay a loan that was advanced by the second defendant the National Development Bank Ltd (NDB) to Bibra Trading.

Mr and Mrs Lama claim that in or about August 2005, Bibra Trading was alleged to be in arrears on its payments to NDB and the property was advertised for sale by tender. The property was then withdrawn from tender when the Lamas claim they borrowed from Mr Abanam Wadau, a relative by marriage, and paid K100,000.00 in September 2005 in settlement of the amount owing by Bibra Trading to NDB. The mortgage to NDB was then discharged and ownership of the property remained with Bibra Trading.

The Lamas further claim however, that in April 2008 the defendants, NDB Investments Ltd (NDBIL) and NDB, released the owner's copy of the title to the property to Abanam Wadau who subsequently changed the ownership of the property from Bibra Trading.

The plaintiffs, the Lamas and Bibra Trading, claim a breach of contract. They also claim that NDBIL and NDB were negligent in the management of the loan account of the Lamas and Bibra Trading and in releasing the title to the property to Abanam Wadau, and that they have suffered significant losses as a consequence. General, special and exemplary damages are sought.

NDBIL and NDB contend that:

(a)	RMS was an entity that is now deregistered. NDBIL was never known as RMS and is a separate legal entity. Any action based upon a breach of contract made between the plaintiffs and RMS in either 1994 or May 1996 must fail.

(b)	There is no evidence that NDBIL entered into any agreement with the plaintiffs or that it held shares in or was a subsidiary of RMS.

(c)	NDBIL and NDB were not parties to either the 1994 or 1996 contracts and so pursuant to the doctrine of privity of contract they are not liable.

(d)	As to the claims in negligence, NDBIL and NDB deny that they were negligent. They contend that there was a family arrangement in or about September 2005 between the Lamas and Abanam Wadau. Abanam Wadau was to take ownership of the property either in his own right or as a owner of the shares in Bibra Trading in consideration for his K100, 000.00 payment. Pursuant to this arrangement, NDB did transfer the shares in Bibra Trading to Abanam Wadau and did release the title to the property to him.

(e)	As Jimmy Lama wanted the property, he then fraudulently transferred the shares in Bibra Trading back to himself before realising that Abanam Wadau had title to the property and not Bibra Trading.

(f)	There are no financial statements or other records produced to substantiate any claim for mismanagement of the plaintiff's account and no evidence of an independent expert to support such a claim.

4.	The appellants claimed that three legal issues were raised:

(a)	Was there a contract between the plaintiffs and defendants?

(b)	If there was a contract, was there any breach of it?

(c)	Was there negligence in the performance of the contract by the defendants?

5.	The trial Judge considered each of these legal issues. In relation to issues (a) and (b), his Honour noted that the appellants claimed there was an agreement dated 30 November 1994 between Jimmy Lama and RMS. However, what was pleaded was that there was an agreement in or about May 1996 with NDBIL and the Lamas, and that RMS and NDBIL were one and the same entity (because at some stage RMS had changed its name to NDBIL). NDB and NDBIL denied that RMS and NDBIL were one and the same entity, or that NDBIL had entered into an agreement with the plaintiffs in May 1996.

6.	His Honour held that:

•	It was uncertain on the material before the court whether RMS continued to exist. A current extract from the Register of Companies before his Honour recorded that RMS had existed and that its company number was 7-2025.

•	There was evidence that the company number of NDBIL was 1-6129, that it was registered on 4 May 1976, and that its previous name was NDB Investments Limited.

•	NDBIL had not changed its name from RMS.

•	NDBIL and RMS were separate entities.

•	There was no evidence before the court that NDBIL had entered into any contract with the plaintiffs. It followed that any action for the plaintiffs for breach of contract against NDBIL, whether it concerned a contract in 1994 or May 1996, must fail.

•	Further, there was no evidence that NDB had entered into any contracts with the plaintiffs, and therefore any claim for breach of contract against NDB (if there was such a claim) must fail.

•	As neither NDBIL nor NDB were parties to either the 1994 or May 1996 contracts, the doctrine of privity of contract would preclude any action against them.

7.	In relation to issue (c), his Honour held that, as there was no contract between the plaintiffs and defendants, there could be no negligence by the defendants in the performance of any contract. In relation to the appellants' claims of negligence which were pleaded in respect of the title to the property and for allegedly failing to keep records, his Honour concluded that:

•	The respondents conceded that NDB had released the title to the relevant property to Mr Abanam Wadau on 22 April 2008, and that it had transferred the shares in Bibra Trading to him.

•	The respondents relied on an executed contract of sale and executed Department of Lands transfer between Bibra Trading and Abanam Wadau to the effect that the property was sold to Abanam Wadau for K100, 000.00. Significantly, in cross-examination Mr Lama confirmed (after an initial denial) that the signatures on the contract and the transfer on behalf of Bibra Trading were his. Mr Lama claimed, however, the Bank "got him to sign".

•	His Honour allowed into evidence the affidavit of Young Wadau sworn 29 May 2013 filed on behalf of the defendants on the basis that one of the annexures was a copy of an affidavit of Mr Abanam Wadau in another National Court proceeding. In particular, his Honour noted that Mr Abanam Wadau had passed away, and that the content of that affidavit was not only relevant to the proceeding but was the best evidence available of a relevant meeting for the purposes of Section 44 of the Evidence Act.

•	The evidence of Mr Abanam Wadau (deceased) was that Mr Jimmy Lama agreed if Mr Wadau paid K100, 000.00, the title of the property the subject of the proceedings would be transferred to Mr Wadau. Further, Mr Abanam Wadau (deceased) deposed that there was a meeting at NDB between various persons including Mr Abanam Wadau, Mr Jimmy Lama and Mr Richard Maru, the Managing Director of NDB, at which NDB had agreed to reduce the debt owing of K113,000.00 to K100,000.00 on payment of a bank cheque of K100,000.00 by Mr Wadau. Mr Abanam Wadau (deceased) further deposed that Mr Maru agreed to transfer the land to Mr Abanam Wadau and his wife following and in light of a verbal agreement between Mr Abanam Wadau and Mr Jimmy Lama.

•	His Honour was satisfied that there was an agreement to the effect claimed by the respondents between Mr Jimmy Lama and Mr Abanam Wadau, and that NDB had acted in pursuance and in accordance with this agreement and the arrangements to which NDB was party. Accordingly, his Honour was not satisfied that NDBIL and NDB were negligent in releasing the title to Abanam Wadau.

•	In relation to the appellant's claim that the respondents failed to keep records, there were no financial statements or other records in evidence to substantiate any claim for mismanagement of the account of the appellants and no evidence of any independent expert to support such a claim.

8.	Finally his Honour concluded:

The plaintiffs sue NDBIL and NDB for damages. From a perusal and consideration of the evidence given on behalf of the plaintiffs I agree with the submission of counsel for NDBIL and NDB that:

•	The plaintiffs' claim approximately K80,000.00 "overpayment" plus interest. It is not clear though how this amount has been calculated. Jimmy Lama refers to him only drawing down K30, 000.00 of a loan of K50, 000.00. This means that he only borrowed K30, 000.00 and not K50, 000.00.

•	Jimmy Lama claims K100, 000.00 being the amount, which was paid by Abanam Wadau in 2005, and he claims interest on that amount. There is no explanation however as to why he should be entitled to this money.

•	The plaintiffs claim "loss of private enjoyment of the property". The plaintiffs however do not own the property and I have found that there was the agreement that it be transferred to Abanam Wadau and his wife.

•	The plaintiffs claim loss of salary without any explanation and without any documentary support for such a claim.

•	The plaintiffs claim damages for stress without any medical evidence or any other evidence to support such a claim.

•	The plaintiffs claim loss of business without any financial statements, income tax returns or any other evidence to support such a claim.

•	The plaintiffs also claim the current value of the property, although there is no basis for any such claim. Any claim that the plaintiffs may have concerning the property is against the Wadaus for presumably, breach of contract, if it is alleged that the agreement with them was breached.

•	It is the case that almost all of these claims have not been properly pleaded with full particulars and in the absence of any supporting evidence they all must fail.

•	Further, the plaintiffs have not given any evidence as to how they have attempted to mitigate their losses and in the absence of any such evidence the claims for economic loss must fail.

9.	Accordingly, his Honour dismissed the appellant's claims, with costs awarded against them.

NOTICE OF APPEAL AND OBJECTION TO COMPETENCY – GENERAL PRINCIPLES

10.	The notice of appeal filed by the appellants is quite lengthy. The 29 grounds of appeal can however be grouped as follows:

•	The trial Judge erred in holding that there was no contract (grounds 3.2(i) to (viii)).

•	The trial Judge erred in holding there was no breach of contract (grounds 3.2.1(i) to (vii)).

•	The trial Judge erred in holding that there was no negligence by the respondents (grounds 3.3.1(i) to (xii)). 

11.	As the Supreme Court explained in Coca Cola Amatil (PNG) Ltd v Yanda [2012] PGSC 52; (2012) SC1221:

An objection [to competency] is, materially and as that rule expressly provides, "to the competency of an appeal", not to the notice of appeal. An appeal will be competent if, having regard to the notice by which the appellant has sought to initiate it, the jurisdiction of the Supreme Court has been invoked. A concession that the notice contained at least one ground by which the court's jurisdiction was validly invoked is necessarily a concession that the appeal is competent. That remains so even though it may be that other grounds specified in the notice lack merit, including a lack of merit because they seek to raise an issue which the court does not have jurisdiction to entertain. That absence of merit may well result in the dismissal of those grounds but that dismissal will not occur because the appeal is incompetent but rather because particular grounds lack merit. The importance of this distinction and of recognising that an objection must go to the competency of the appeal, not a ground of appeal per se cannot be over-emphasised.

(Also see Toale Hongiri Incorporated Land Group v Wolotou Incorporated Land Group [2012] SC1201 at [19]; Namah v Pato [2013] SC1241 at [26]; Mann v Alpar Trading Ltd [2013] SC1229 at [44]).

12.	It follows that it is necessary to consider the notice of appeal in some detail, to identify whether the notice of appeal contains at least one ground by which the Court's jurisdiction was validly invoked. In doing so we note that both the appellants and the respondents were legally represented, and that both filed submissions in relation to the respondents' objection to the competency of the appeal.

GROUNDS 3.2(i)-(viii): WHETHER THERE WAS A CONTRACT BETWEEN THE APPELLANTS AND THE RESPONDENTS (OR EITHER OF THEM)

13.	These grounds of appeal relate to the question set out in ground 3.1, namely: was there a contract between the appellants and the respondents? The grounds in this group read as follows:

3.2	The learned National Court Judge erred in holding that there was no contract:

(i)	When the learned Judge erred in fact and law when he failed in his findings that there was a contract entered into by both the Appellants and the Respondents in 1994. The First Respondent facilitated the contract as a Management entity on behalf of the Second Respondent in a policy known as Stret Pasin Stoa Scheme on the initiative of the National Government that funded the Second Respondent to implement the policy. 

(ii)	When the learned Judge erred in law and fact when he failed to find that the contract was binding on parties and the Appellants performed on the terms and conditions set out in the contract.

(iii)	The above are based on errors in law and fact when the learned Judge failed to find under his ruling under paragraphs 8, 9 and 10 by stating: "8. RMS is not a party to this proceeding. Pursuant to evidence tendered on behalf of NDBIL and NDB, a current extract from the Register of Companies merely records RMS but nothing more apart from a company number 7-2025. RMS has no share, shareholders, directors, address or charges. A current extract for NDBIL records that its company number is 1-6129, that it was incorporated and registered on 4th May 1976 and its previous name was NDB Investments Limited. I am satisfied that NDBIL did not change its name from RMS and that NDBIL and RMS are separate entities, if needed. RMS continues to exist. Given this, there is no evidence before the court that NDBIL entered into any contract with the Plaintiff. Consequently, action of the Plaintiff for breach of contract against NDBIL, whether it be a contract in 1994 or May, 1996, must fail."

(iv)	When the learned Judge erred in law and fact when he failed to consider or take into account that there was sufficient evidence before the Court that RMS has changed its previous name from "Retail Management Services Ltd" on or around 10th August, 2010 according to the Extract from the Register of Companies attached to Annexure "A1" of the Respondent/Defendants Affidavit sworn by Asher Waffi on 15th and filed on 19th November, 2012. Full detail of the change of name RMS to NDBIL is contained in the Register of Companies Extract obtained as of 28th July 2014. 

(v)	When the learned Judge therefore erred in law and fact when he further failed to take into account that the National Development Bank, (NDB) of Papua New Guinea had also changed its previous name from RDB to NDB which the later [sic] is the shareholder of NDBIL therefore properly sued as it (NDB) was the facilitator of the National Government funds towards the implementation of the policy as a shareholder

(vi)	When the Judge erred in law and fact when he failed to give effect to lift the corporate [sic] to make NDB liable because there was sufficient evidence that NDB was and is a shareholder of NDBIL and the company directors and secretary of both NDB and NDBIL are or were the employees serving both entities at the material times during the commencement and course of the proceedings.

(vii)	When the Judge erred in law and fact when he concluded in his findings that there was no contract between the parties when he failed to take into account of the grounds as stated in the above that there was a contract binding all parties as the Respondents under the law have assumed the functions and management of RMS after RMS has changed its name to NDBIL in 2010.

(viii)	When the learned Judge erred in law and fact when he failed in his findings that the change of name from the previous "RMS" to "NDBIL" did not affect the purpose and management functions and furthermore did not affect the assets and liability of NDBIL over the change of name.

14.	In our view there are a number of fatal flaws in these grounds of appeal, such that in respect of these grounds the appeal is incompetent. First, a number of grounds of appeal are vague or do not, in fact, identify a basis on which the decision of the trial Judge should be set aside. In particular:

•	In relation to ground (i), the allegation that NDBIL "facilitated" the contract as a management entity on behalf of NDB is in the nature of a pleading, rather than a ground of appeal. To that extent, this ground of appeal is not competent.

•	In relation to ground (ii), without further particularisation a bare allegation that the trial Judge erred in failing to find that the contract was "binding on parties and the appellants performed on the terms and conditions set out in the contract" is incompetent, both by reference to the lack of clarity as to the identity of "parties and the appellants", and the uncertainty of the words "performed on the terms and conditions set out in the contract". We do not accept the submission of the appellants that they do not have to provide detail and "pin out" the errors in respect of a binding contract because that would be a matter for determination at the substantive appeal.

•	In relation to ground (iii), to the extent that we can draw any meaning from this ground, it appears to simply particularise and support either – or both – grounds (i) and (ii). Primarily it appears to be a quote from his Honour's judgment. We accept the submission that it is not competent, because it actually is not a ground of appeal.

15.	Secondly, as Section 14(1)(c) of the Supreme Court Act makes plain, an appeal to the Supreme Court from a Judge of the National Court on a question of fact lies only with the leave of the Supreme Court. Appeals on questions of law or questions of mixed fact and law lie without leave (Section 14(1) (a) and (b)). (See the detailed consideration of Section 14(1) by the Supreme Court in Henganofi Development Corporation Ltd v Public Officers Superannuation Fund Board (2010) SC1025.)

As Kearney DCJ pointed out in Waghi Savings & Loans Society Ltd v Bank of South Pacific (1980) SC185:

What are questions of fact and law are difficult to determine. On this question Lord Denning said:

"On this point it is important to distinguish between primary facts and the conclusions from them. Primary facts are facts which are observed by witnesses and proved by oral testimony, or facts proved by the production of a thing itself, such as an original document. Their determination is essentially a question of fact for the tribunal of fact, and the only question of law that can arise on them is whether there was any evidence to support the finding. The conclusions from primary facts are, however, inferences deduced by a process of reasoning from them. If and in so far as those conclusions can as well be drawn by a layman (properly instructed on the law) as by a lawyer, they are conclusions of fact for the tribunal of fact and the only questions of law which can arise on them are whether there was a proper direction in point of law and whether the conclusion is one which could reasonably be drawn from the primary facts". (Underlining mine.)

See British Launderers' Research Association v. Central Middlesex Assessment Committee and Hendon Rating Authority [(1949) 1 All ER 21] at pp 25 and 26. [Emphasis in original.]

16.	Grounds (i) and (iv)-(viii) of the notice of appeal seek to attack:

•	The finding of the trial Judge that there was no contract between the appellants and either or both of the respondents (grounds (i) and (vii)).

•	The finding of the trial Judge that RMS had not changed its name to NDBIL (grounds (iv), (vii) and (viii)).

•	The failure of the trial Judge to lift the corporate veil between NDB and NDBIL to make NDB liable for the actions of NDBIL (grounds (v) and (vi)). 

17.	All of these grounds of appeal challenge findings of fact and, so far as concerns the raising of the corporate veil between NDB and NDBIL, the approach of the trial Judge to the proceedings before his Honour. It was because of his Honour's finding of fact that there was no contract between the appellants and either or both of the respondents, that the question whether the corporate veil between NDB and NDBIL should be raised was simply not an issue. That this is the case which is clear, notwithstanding that the appellants have framed these grounds of appeal in terms of alleged "error in law and fact" on the part of the trial Judge. 

18.	No leave has been sought by the appellants in respect of these grounds of appeal pursuant to Section 14(1)(c) of the Supreme Court Act. In this respect they are not competent.

19.	Thirdly, a number of these grounds of appeal not only challenge the findings of his Honour, they also challenge the manner in which his Honour reached these findings. Relevantly, the respondents drew our attention to comments of the Supreme Court in Pacific Equities & Investments Ltd v Goledu (2009) SC962. In that case their Honours, referring to the predecessor to Order 7, Rules 9(c) and 10, observed:

The three requirements are:

1	The ground relied on in support of the appeal must be stated briefly, but specifically.

2	If it is alleged that a judgment is against the evidence or the weight of the evidence, it is not sufficient for a ground of appeal to be drafted in those terms only. Instead the notice must specify with particularity the ground relied on to demonstrate that it is against the evidence or the weight of the evidence.

3	If it is alleged that the judgment is wrong in law, it is not sufficient for a ground of appeal to be drafted in those terms only. Instead the notice must specify with particularity the ground relied on to demonstrate the specific reasons why the judgment is alleged to be wrong in law.

The Supreme Court explained in Haiveta v Wingti (No 2) [1994] PNGLR 189 that these requirements exist for two reasons:

•	the respondent must be informed of the basis of the appeal so they can prepare their arguments; and

•	the court must be informed of the issues to be determined.

If the notice of appeal fails to meet those requirements, the Supreme Court has discretion to strike out the offending ground(s) of appeal. Examples of cases where it did that are Haiveta v Wingti (No 2) [1994] PNGLR 189, Henao v Coyle (2000) SC655 and NCD Water and Sewerage Ltd v Tasion (2002) SC696. Alternatively, the Court could dismiss the entire appeal as incompetent. If, for example, all of the grounds set out in a notice of appeal were defective in that they failed to comply with the requirements of Order 7, Rules 8(c) and 9, the natural conclusion to draw would be that the appeal is incompetent.

20.	Similar observations were made in the earlier Supreme Court decision in Ipili Porgera Investments Ltd v Bank of South Pacific Ltd (2007) SC1322. We glean from the observations in those cases the requirement that any ground of appeal must make grammatical and legal sense and be intelligible. If it does not meet that requirement it will be incompetent. 

21.	It is clear that these matters are mandatory and that failure to comply with them is fatal to the competency of an appeal (Simon Kou v Simon Kaupa (2010) SC1021).

22.	Ground (vi) – to the extent that it pleads an error of fact – offends the principles explained by the Supreme Court in Goledu in that it pleads an allegation that his Honour's judgment was against the evidence or the weight of the evidence without demonstrating that it was against the evidence or the weight of the evidence. Further, grounds (ii), (iii), (vi) and (viii) – to the extent that they plead error of law or mixed fact and law – do not specify with particularity the grounds on which the appellants rely in order to demonstrate why his Honour's judgment was wrong.

23.	Fourthly, we consider that ground (iv) has two additional fatal flaws as a ground of appeal:

•	The appellants claim that his Honour failed to take into account relevant material before him, namely material in an affidavit sworn by Asher Waffi on 15 November 2012 and filed on 19 November 2012 supporting the appellants' claim that RMS had changed its previous name from "Retail Management Services Ltd" on or around 10 August 2010. While the question whether his Honour failed to take into account relevant material raises an issue of mixed fact and law, the question is rendered otiose by the uncontested fact that the affidavit of Asher Waffi upon which the appellants rely was not tendered before his Honour, and accordingly was not in evidence. We do not accept the submission of counsel for the appellants that, notwithstanding that this affidavit was not tendered, his Honour should have taken judicial notice of its contents. To this extent, this ground of appeal is not competent.

•	The appellants refer in ground (iv) to "full detail of the change of name RMS to NDBIL" being "contained in the Register of Companies extract obtained as of 28th July 2014." As this material post-dated the hearing, it was clearly not before his Honour. To that extent, this ground is also not competent.

24.	Finally, we note the affidavit sworn by Mr Lama on 20 February 2015 and filed the same date. We understand from counsel for the appellants that the appellants do not, at this stage, apply to this Court to allow the affidavit to be introduced as fresh evidence pursuant to Section 6(1) of the Supreme Court Act. It follows that its contents are irrelevant for the purposes of the proceeding before us.

GROUNDS 3.2.1(i)-(vii): WHETHER THERE WAS ANY BREACH OF "THE CONTRACT"

25.	In our view, because the grounds of appeal are incompetent in respect of which the appellants challenge his Honour's findings concerning the absence of a relevant contract, it follows that these grounds of appeal are also incompetent.

GROUNDS 3.3.1(i)-(xii): WHETHER THERE WAS NEGLIGENCE BY THE RESPONDENTS

26.	His Honour found that there was no contract between the appellants and either of the respondents, and accordingly there could not be negligence in the performance of any alleged contract. However, his Honour made findings concerning the appellants' claims of negligence in relation to the title to the property and for allegedly failing to keep records. 

27.	Excluding ground 3.3 which is in the nature of a question introducing the grounds that follow (rather than a ground of appeal itself), the appellants advance thirteen grounds of appeal against his Honour's findings. They are as follows:

[3.3.1] The learned National Court Judge erred in holding that there was no contract between the appellants and the respondents therefore there could not be negligence in its performance by the respondents.

(i)	The learned Judge erred in law and fact when he preferred to determine the issue on negligence in respect to transfer of the title of the property, Section 68, Lot 37, Baidal Road, Madang after in his findings he already ruled that there could not be negligence of the Respondents as there was no contract between the parties.

(ii)	The learned Judge erred in law and fact when he allowed himself to rely on the Affidavit of Maryanne Uraiwa who gave evidence that she was an employee of NDB as its Branch Manageress of Madang when the Judge in his findings and [sic] ruled already that NDB was not a party to the agreement therefore there was no contract. This places the findings of his ruling on a contradictory circumstance [sic] which is not the [sic] interests of justice.

(iii)	The learned Judge erred in law and fact when he further allowed the evidence of Young Wadau, a lawyer who previously act [sic] or represented the deceased Abanam Wadau in another proceedings whose evidence already prejudiced the Appellants with matters and issues that were not of relevance to the current proceedings as those amount to hearsay evidence. The evidence in those proceedings were matters and claim made by Abanam Wadau against the same Respondents in respect to release of the Owners Copy of the Title Deed of the property the Respondents possessed at that time. Those disputes and claims came about as a result of the breach and negligence of the Respondents as claimed by the current Appellants in the National Court subject to this appeal.

(iv)	The learned Judge erred in law when he failed to give the true meaning and its application of Section 44 (b) and (d) of the Evidence Act which does not allow or give the Court any power or jurisdiction to consider and accept the substantive evidence during which objections are raised on hearsay evidence. The law did not apply to the instant matter at the material time.

(v)	The learned Judge erred in law and fact in holding that the transfer of the title of the property to Abanam Wadau is legal when he failed to find that there was no loan outstanding and overpayment was made on the total loan borrowed including the property and the starting capital of K30,000.00

(vi)	The learned trial Judge further erred in law and fact in his findings that there was lack of records, statements etc when he failed to find that it was the Respondents duty to prepare financial statements and records verifying how much was paid, how much was outstanding and which dates payment were made. The Respondents were negligent by failing to confirm and inform the Appellants of every signal [sic] transaction that took place.

(vii)	The learned trial Judge erred in law and fact in holding that there was no evidence of damages suffered by the Appellants: (a) when he failed to consider the evidence of admission by the Respondents on the K20, 000.00 loan that was paid to Jimmy Lama. The evidence were [sic] contained in Mr Jimmy Lama's Affidavit sworn and filed on 3rd May 2013. (b) When he failed to accept the facts and evidence that the K100, 000.00 was not a purchase price of the property it was the payment of the alleged outstanding loan as the Respondents wrongly charged the increased rate interest of the K20,000.00 that was not released from K50,000.00 approved initially as the starting capital. (c) When he failed in findings and ruled that there was an agreement for sale of the property to late Abanam Wadau. The loss of private enjoyment of the property amongst other things by the Appellants is due to initial breach of the agreement and negligence of the Respondents which there is a clear initial nexus to it. There was no tender and the Respondents allowed K100, 000.00 to be settled on the total outstanding loan pursuant to agreement held between the Appellants and Wadau. (d) When he failed in his findings when there were sufficient evidence contained in the affidavit materials sworn by Jimmy Lama pursuant to Notices to Rely on Evidence under Section 35 of the Evidence Act filed as to claim for loss of salary, damages for stress, loss of business and etc. (e) When he failed to find that the actual value of the property is how much the Respondents loss in light of the unlawful release of the Original Owners Copy of the Title Deed of the property to late Abanam Wadau which Charity Wadau has transferred to her name late in 2013 without the knowledge of the Respondents whilst the proceedings were still on foot.

(viii)	The learned Judge erred in law and fact when he held that there was no proof of evidence and pleadings in the breach of contract and negligence in the claim for losses. The pleadings clearly stated the breach of the contract by the Respondents and in particular NDBIL and whose original name is RMS. As a result of the breach of the Agreement damages were clearly suffered through both breach of contract and negligence and those were clearly pleaded and supported with the various affidavits of Jimmy Lama.

(ix)	The learned Judge erred in law and fact in holding that the property was purchased legally by Abanam Wadau for sum [sic] of K100, 000.00. He failed to find the sum of K100, 000.00 less K113, 000.00 from the alleged total outstanding on the loan (K113,000.00) is or was a result of the breach of contract and negligence of the Respondents in that the Respondents failed to release the full start-up capital of K50,000.00 loan borrowed. Instead only K30, 000.00 was released to the Appellants but unnecessary interest with capital of K20, 000.00 NOT released to the Appellants were charged continuously and accumulated for over a period of nine (9) years from 1997 to 2005, therefore resulted in overpayment. 

(x)	The learned trial Judge erred in law and fact when he failed to consider that because of the breach of Agreement and negligent [sic] the Respondent have [sic] prepared to settled [sic] to the matter out of Court in 2012 NOT on "without prejudice" basis that amounts to admission of liability. The evidence of that is also attached to Mr Jimmy Lama's Affidavit sworn and filed on 3rd May 2013.

(xi)	The learned Judge erred in law and fact when he failed to find that as a result of the breach of contract and negligence of the Respondents the Appellants attempted to prevent and preserve from sale of the property. Therefore he borrowed K100,000.00 from late Abanam Wadau and his wife Charity Wadau who are relatives of the first Appellants on an agreement that Wadau would be leasing the property free of charge to recoup K100,000.00 plus and later the Appellants themselves would occupy same.

(xii)	The trial Judge erred in law and fact in holding that the Appellants failed to produce evidence to substantiate the mismanagement of the accounts by the Respondents when all the sufficient evidence has been produced in every affidavit of Jimmy Lama. 

28.	In respect of these grounds of appeal we make the following observations. Ground 3.3.1 clearly cannot stand because of our findings in respect of his Honour's judgment and his Honour's findings that no contract existed between the appellants on the one hand and either or both of the respondents on the other.

29.	In relation to ground (i), we consider that this ground offends the principles explained in Goledu in that it fails to specify with particularity the reasons why his Honour's judgment was wrong in law and fact. 

30.	In relation to ground (ii), we are unable to determine the manner in which his Honour's findings concerning the position of Ms Maryanne Uraiwa as an employee of NDB in Madang constitutes a ground of appeal in the circumstances of this case. There is no inconsistency in this finding and his Honour's decision. This ground of appeal is not competent.

31.	Somewhat confusingly, ground (iii) seeks to raise issues including alleged error of the trial Judge in admitting evidence of Young Wadau, an attack on the character of that evidence as allegedly prejudicial to the appellants, an attack on the character of that evidence as allegedly irrelevant, an attack on the character of that evidence as allegedly hearsay, and cross-referencing this ground of appeal to the appellants' claim for breach of contract. While this ground of appeal appears to raise questions of mixed fact and law, in our view it is incompetent in that it challenges the exercise of his Honour's discretion in admitting evidence without explaining why his Honour's ruling concerning this evidence was wrong. In this respect this ground of appeal fails to comply with Order 7, Rule 10 of the Supreme Court Rules, and offends the principles explained by the Supreme Court in Goledu.

32.	Ground (iv) is incompetent because it does not particularise why his Honour was wrong in his ruling, and in particular why "the law did not apply to the instant matter at the material time". Again, this ground of appeal fails to comply with Order 7, Rule 10 of the Supreme Court Rules and offends the principles explained by the Supreme Court in Goledu. 

33.	Ground (v) is confusing. We are unable to identify its meaning, or the basis upon which it stands as a challenge to his Honour's judgment. 

34.	Not only is ground (vi) sloppily drafted by reference to "lack of records, statements etc", but his Honour's finding that there was such a lack of records or statements was a finding of fact. No leave has been sought in respect of this ground of appeal.

35.	Ground (vii) raises five separate issues concerning factual findings by his Honour. In our view none of these grounds of appeal are competent because they:

•	Contain bald and unsupported assertions of failure of his Honour to consider evidence without particularisation, failing to comply with Order 7, Rule 10 of the Supreme Court Rules 2012 and offending the principles explained in Goledu (ground (vii)(a)).

•	Contain otherwise bald and un-particularised challenges to his Honour's findings, which offend the principles explained in Goledu (grounds (vii)(b), (c), (e)).

•	Seek to challenge the weight given by the trial Judge to evidence before him, which involved evaluation of the evidence before the Court and factual findings by his Honour (ground vii) (d)). No leave was sought in respect of this ground of appeal pursuant to Section 14(1) (c) of the Supreme Court Act. 

36.	Ground (viii) clearly raises issues which are not competent in light of his Honour's factual finding that no contract existed between the appellants and either or both of the respondents. This ground of appeal is not competent, notwithstanding that it is framed in terms of an error in law and fact.

37.	Ground (ix) is in the nature of a – somewhat long-winded – submission rather than a ground of appeal. It appears to seek reconsideration by this Court of evidence which was before his Honour, and challenges factual findings of his Honour without leave.

38.	Ground (x) not only seeks to raise factual issues without leave, but also makes a claim which simply has no legal basis, namely that a preparedness to settle a matter out of Court equates to an admission of liability. This ground of appeal is not competent.

39.	Ground (xi) is not only in the nature of a submission, it is a blatant attempt to challenge factual findings of his Honour without seeking leave. It is not competent as a ground of appeal.

40.	Ground (xii) is not competent in that it:

•	Without leave, challenges the factual findings of his Honour concerning the merits of and weight to be attributed to evidence produced by the appellants at the trial.

•	Is otherwise broad and vague to the point of being meaningless, in its reference to "all evidence" having been produced "in every affidavit of Jimmy Lama".

CONCLUSION

40.	Having set out each ground of appeal and assessed its competency in terms of the two types of objection to competency, we conclude that each ground offends against one or both of the two grounds of objection. All grounds of appeal are incompetent, the objection to competency of the appeal is upheld and the appeal is entirely dismissed.

41.	The respondents have sought their costs of this proceeding. As a general proposition, costs follow the event. In this case, however, while we have been critical of the drafting of the notice of appeal we must also be critical of the drafting of the notice of objection to competency. The grounds of objection should have been more clearly articulated. 

42. Further, in view of the apparently considerable disparity in the economic positions of the parties, we feel that it would not be in the interests of justice to award costs of the objection or the appeal. We have decided to exercise our discretion as to costs by ordering the parties to bear their own costs.

ORDER

(1)	The objection to competency of the appeal is upheld.

(2)	The appeal is dismissed.

(3)	The judgment and orders of Hartshorn J of 7 July 2014 in WS 858 of 2011 are affirmed.

(4)	The parties shall bear their own costs of the objection to competency and the appeal.

Judgment accordingly,

___________________________________________________
Tingnni Lawyers : Lawyers for the appellants
Ashurst Lawyers : Lawyers for the respondents