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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO. 34 OF 2015
THOMAS SEROWA
Appellant
V
PACIFIC HIRES LIMITED
Respondent
Waigani: Cannings J, Collier J, Ipang J
2015:30 June
2016:27 & 29 June
PRACTICE AND PROCEDURE – interlocutory order of National Court to refuse motion to dismiss proceedings and refer proceedings for mediation – judicial discretion – whether properly exercised – National Court’s power to order mediation – whether dependent on consent of parties.
The appellant appealed against an order of the National Court in civil proceedings that dismissed the appellant’s motion that the proceedings be dismissed and referred the proceedings to mediation.
Held:
(1) The National Court has discretion whether to grant or dismiss a motion to dismiss proceedings and has power on its own motion to order mediation at any stage of proceedings with or without consent of the parties.
(2) The appellant failed to prove that the discretion and power of the National Court were not exercised in accordance with law.
(3) The appeal was accordingly dismissed.
Cases cited:
There are no cases cited in the judgment.
APPEAL
This was an appeal from an interlocutory order of the National Court, dismissing a motion to dismiss proceedings, and ordering mediation.
Counsel:
T Serowa, the Appellant, in Person
P Kunai, for the Respondent
29th June 2016
BACKGROUND
The respondent claimed further that the appellant had failed or refused to pay that sum, and sought judgment, interest and costs.
5. In an amended defence filed in 2011 the appellant contended, in summary:
NATIONAL COURT DIRECTIONS OF 14 AUGUST 2014
6. On 14 August 2014 the primary Judge gave the following directions:
NOTICE OF MOTION FILED BY THE APPELLANT
7. On 23 February 2015 the appellant filed a notice of motion seeking the following orders:
8. In support of this notice of motion on 23 February 2015 the appellant filed an affidavit in which he deposed, in summary:
The appellant submitted further that no affidavit material had been filed by the respondent evidencing the invoices, no statement of agreed and disputed facts and legal facts had been drafted or filed, and no pleadings books had been compiled or filed.
DECISION OF PRIMARY JUDGE
9. In the appeal book before the Court there is what appears to be a set of orders made by the primary Judge on 11 March 2015, certified by the primary Judge’s associate. Those orders are as follows:
10. A copy of the transcript of the hearing at which these orders were made is included in the appeal book before the Court. In particular we note the following exchanges between the primary Judge and the parties:
HIS HONOUR: Thank you, just a moment. Okay, whose application is this and for what? Mr Serowa?
MR SEROWA: Your Honour, it is my application.
HIS HONOUR: When is this – where is this?
MR SEROWA: It is filed on 23 February – document number 58.
HIS HONOUR : Just a minute. Mr Serowa, the last or – both of you, the last orders that this court made was for it to be put on the mediation call-over list? What happened? Counsel for the plaintiff was to draft formal mediation orders. Substantive proceedings were adjourned to a date or after mediation. What happened?
MR SEROWA: Your Honour ordered for the draft mediation orders to be drafted but whether that has happened or not, I am not too sure. Counsel for the plaintiff can advise the court on that.
HIS HONOUR: Why did it not go to mediation? Parties are to attend at the mediation call over.
MR SEROWA: Yes, that is – there was no mediation since the orders were made to date.
HIS HONOUR: All right.
MR SEROWA: And the application that is coming before this court is based on the earlier orders ---
HIS HONOUR: What is your motion for?
MR SEROWA: To dismiss the proceedings for want of compliance for the direction orders your Honour made on 14 August 2014.
HIS HONOUR: Right, that being the mediation, was it?
MR SEROWA: No, that is the direction orders to have the parties prepare for trial of the substantive issue.
HIS HONOUR: Tell me, Mr Kunai, is there any matter of law not hitherto determined by the courts of this – you may sit down, Mr Serowa. Mr Kunai, is there any matter of law not hitherto determined by the courts of Papua New Guinea which requires judicial adjudication or is this a matter of a dispute of facts?
MR KUNAI: Your Honour, it is a matter involving dispute of facts.
HIS HONOUR: Thank you. Mr Serowa, do you identify any issue of law not already determined by any court in Papua New Guinea?
MR SEROWA: Your Honour, it is a matter of disputed facts which your Honour ordered for the trial to be fast tracked by direction orders.
HIS HONOUR: Right, thank you. I am going to make orders now, take them down.
11. His Honour then made the orders set out above, after which the following interchange occurred between his Honour and Mr Serowa:
MR SEROWA: The motion I have filed, what happens to that in this court?
HIS HONOUR: The motion is dismissed.
MR SEROWA: Thank you, your Honour.
HIS HONOUR: All right I will make the formal orders in matter WS 1228 of 2003. The motion filed by the defendant on the ---
MR SEROWA: 23rd
HIS HONOUR : 23rd February 2015 is dismissed and the matter is referred to mediation pursuant to Section 7B(2) of the National Court Rules and Rule 5(2)(a) of the Alternative Dispute Resolution Rules in terms I have just made and I note that the mediation call-over is tomorrow. All right, thank you.
NOTICE OF APPEAL
12. On 23 April 2015 Mr Serowa filed a notice of appeal against his Honour’s orders of 11 March 2015. The grounds of appeal
are as follows:
(a) His Honour, the learned judge, erred in fact by allowing extraneous matters not coming before his Honour to influence his ruling and which served as the basis to predispose and subsequently dismissed the notice of motion application filed on the 23/02/2015.
(b) His Honour, the learned judge, erred in fact by overlooking the direction orders made to dispose the substantive issue of liability and quantum of damages by trial based on filing affidavits to be relied upon, filing statements of agreed and disputed facts and legal issues and completing and filing the pleadings books; and having failed to satisfy the terms of the orders warranted the dismissal of the proceedings but allowed the continuation of the proceedings by miscarriage of justice.
(c) His Honour, the learned judge, erred by excessively exercising judicial discretion in preparing beforehand mediation orders on the 10/03/2015, as substitute or alleviating orders, forcing the parties into mediation on the Court’s own independent initiative, without the parties making request for mediation, and announced them on the 11/03/2015 at mention of the notice of motion whilst the defendant took issue with the plaintiff’s disobedience to the direction orders of 14/08/2014 and by miscarriage of justice transferred the matter to the Mediations Court Track instead of the Trials Listings Court for disposal.
(d) His Honour, the learned judge, erred in fact and law by overlooking the prerequisites (set out in case SC849 Kulunga v WHPG) which defaulting parties are required to comply with if orders made for their compliance should not have a binding effect, and wherein the Plaintiff did not satisfy the prerequisites as set out in the above case and accordingly the plaintiff did not make out its case to have the proceedings continued where:
- it did not file an affidavit deposing facts giving reasonable explanations as to why it was sitting on the Court Direction Orders and allowing the times for compliance to expire on the 28/11/2014, 31/01/2015, and 20/02/2015 which are progressively over 7-months time period from 14/08/2014;
- it did not file an affidavit showing the Court any reasonable and exceptional circumstances that circumvented compliance with the Court direction orders over the 7-months time period;
- it did not file an application in time, within the 7-months time period before expiry to extend the times for the direction orders to enable the continuity of the proceedings;
and by miscarriage of justice, his Honour allowed the continuation of the proceedings without the meritorious grounds as conditions fixed by the prerequisites.
(e) His Honour, the learned judge, erred in law and fact by failing to apply case laws Yap v Tan &Ors [1987] PNGLR 277 and Chuck v Cremer [1846] Eng Re 924; [1846] EngR 924; 47 ER 820, where it was held that it was the obligation of every person against whom an order is made that it be obeyed unless and until the order is discharged; wherein in this case the plaintiff disobeyed the Court’s direction orders which his Honour failed to consider and apply in the application coming before him.
(f) His Honour, the learned judge, erred in law by failing to apply the case law Withan v Holloway (1995) 183 CLR 525, where their Honours stated at page 533-534 where Court Orders vindicate the authority of the Court, the resulting injustice created by disobedience, and public interest of finality in litigation and dispensation of justice, which his Honour failed to consider and apply in the application coming before him.
(g) His Honour, the learned judge, erred in law to dispense justice pursuant to the Listing Rules 2005 Item 2 (c), Order 10, Rule 5, and Order 10, ule 24(b) and (c) as applied for in the terms of the Notice of Motion for want of compliance with Court Direction Orders made on 14/08/2014.
(h) His Honour, the learned judge, erred by excessively exercising judicial discretion to allow the continuation of the proceedings, unwarranted by the factual circumstances and laws, and refused to strike out the plaintiff’s writ of summons and the amended statements [of] claim and dismissing the proceedings for want [of] compliance with the directions orders.
HEARING OF APPEAL
13. The notice of appeal in this case first came before us on 30 June 2015. At that time the Court asked the appellant to identify the previous orders of the National Court referring the matter to mediation, which the primary Judge discussed with the parties when the matter came before the National Court on 11 March 2015. The appellant informed the Supreme Court that neither the earlier orders discussed by His Honour, nor any transcript associated with such orders were in the appeal book.
14. At the hearing of 30 June 2015 Mr Kunai for the respondent also informed the Court that the matter had also been before the National Court on other dates. No orders other than those set out in this judgment are included in the appeal book. Counsel also informed the Court from the bar table that the parties appeared in the National Court on 2 October 2014, and it was then that the primary Judge made orders for the matter to go to mediation.
15. In light of what appeared to be an incomplete appeal book, the Supreme Court adjourned the hearing of the appeal, and made directions for the production of transcripts and orders in the matter between 1 August 2014 and 31 March 2015. The Court also ordered mediation in the matter to be stayed.
CONSIDERATION
16. We have set out the facts in some detail to demonstrate that this matter is clearly a factual dispute, referable to the alleged failure of the appellant to pay amounts owing to the respondent arising from car hire transactions. The amounts involved are not trivial. Further, it is clear that this matter has been before the Court, without trial, for a considerable length of time.
17. In our view this appeal should be dismissed. We have formed this view for the following reasons.
1 Previous orders of primary Judge
18. First, the appellant has failed to bring to the Court’s attention previous orders made by the primary Judge directing that the matter be placed on the mediation call-over list. That this occurred, in Court, with the parties being provided the opportunity to make submissions, is clear. In particular we note the transcript of 5 December 2014 in WS 1228 of 2003, where the following exchange took place:
HIS HONOUR: Now, can you identify for me any point of law that requires to be determined by a court? Why should it not go to mediation? Court’s time is valuable. We have more matters waiting to be heard here than any other registry outside Waigani. And this has been going for years and has got nowhere. And that is holding up other matters. Why should it not go to mediation?
MR SEROWA: Your Honour, the judicial point that pleaded liability and the quantum is subject to discovery and production.
HIS HONOUR: That is a matter of fact as to whether it has been done or not, is it not?
MR SEROWA: So that is ---
HIS HONOUR: There has got to be a real and meritorious issue in the proceedings that warrants judicial consideration and determination.
MR SEROWA: Your Honour, I am not moving an application – for moving to ---
HIS HONOUR: You do not have to. I can do it myself regardless of the attitude of the parties. I am giving you the opportunity to be heard on why I should not order it to mediation now.
MR SEROWA: Your Honour, I prefer the order for production and after which this can be dealt with.
HIS HONOUR: Preference has nothing to do with it. Tell me why I – I am giving you an opportunity to be heard. I do not have to, I can order it myself right now.
MR SEROWA: Your Honour ---
HIS HONOUR: And that will save a great deal of court time.
MR SEROWA: Your Honour, we do not want to come back again to this court again.
HIS HONOUR: No you will not if I send it to mediation.
MR SEROWA: So, in the event that these documents are not available for my examination ---
HIS HONOUR: We are not talking about that Mr Serowa, we are talking about why this should not go to mediation. If I make an order it goes to mediation, the only recourse you will have will be to convince the judge in-charge of the mediation track that this is a matter of legal and not factual dispute or to go the appeal court?
MR SEROWA: Your Honour, subject to your discretion but my motion is before the court on a ---
HIS HONOUR: I know that but I am asking you first – I do not have to hear your motion.
MR SEROWA: Yes.
HIS HONOUR: If I make this order, your motion is suspended or if you wish for the sake of neatness I can dismiss it or you can withdraw it. But why should this matter not go to mediation?
MR SEROWA: Your Honour, if you can ask the – it is their prosecution, it is not mine and it is up to the ---
HIS HONOUR: All right, you have nothing to say?
MR SEROWA: My point is that, your Honour, I want the production of documents; that is all. And we should go for trial after that, subject to production, your Honour.
HIS HONOUR: Mr Kunai, what do you say about mediation?
MR KUNAI: Your Honour, whichever way, a trial or mediation, we prefer mediation and if it is not resolved then come back to the – go for trial.
HIS HONOUR: The next mediation call-over will be 3 February, make a note of the date please counsel.
MR KUNAI: That is correct, your Honour.
HIS HONOUR: In matter WS 1228 of 2003, the defendant moves by a motion filed on 2 October 2014 for an order for production of documents. I have become familiar with this file on this matter which has been going now for over 11 years and contains a great number of documents of dubious relevance. Neither the defendant in person nor the plaintiff’s counsel have advanced any reason why this matter contains a real and meritorious issue, judicial issue, that warrants consideration by a court. A mediator can order production of documents. Parties, if they attend mediation, are obliged to do so in good faith and if they do not, the mediator can find against them. A mediator is not restricted by the formal rules of evidence and the proceedings are in general considerably cheaper and quicker than judicial proceedings particularly in this jurisdiction where the list is long.
I adjourn the motion filed on 2 October [2014]. I order that this matter be placed on the mediation list for 3 February [2015]. I direct the plaintiff’s lawyer to prepare mediation orders for my consideration and forward them to my associate without delay. And adjourn the substantive proceedings to the mediation call-over on 3 February 2015 or when next heard if it should not be 3 February. There is no order as to costs...
19. Following that exchange on 5 December 2014 the primary Judge made these orders:
Neither the transcript nor the orders of 5 December 2014 were included in the appeal book. Clearly a trial Judge has the power to refer a matter or part of a matter to mediation in appropriate circumstances. Despite ground (c) of the notice of appeal, it cannot seriously be contended that a Judge of the National Court lacks the power to direct parties to attend mediation on his or her own motion, or that a Judge can only do so with the consent of the parties.
20. Section 7B (power to order mediation, etc) of the National Court Act states:
(1) In addition to the jurisdiction vested in the Court by Section 166 of the Constitution, and any other law, the Court—
(a) may order a resolution of a dispute or a matter before it by mediation for an amicable resolution of the dispute; or
(b) may order or direct a proceeding or any part of the proceeding to be inquired into and resolved by an appropriately qualified and experienced person or an expert in the issue.
(2) At any stage of a proceeding, the Court may, whether with or without the consent of the parties, order that the proceeding or a part of the proceeding before it be referred to mediation.
(3) Where the Court decides to refer a matter to mediation the presiding judge—
(a) may, with the consent of the parties, conduct the mediation; or
(b) may with the parties' consent appoint a mediator of their choice to conduct the mediation; or
(c) may failing the consent of the parties appoint a mediator from the Court's list of approved mediators.
(4) At the time of ordering mediation, the Court shall stipulate the timeframe within which the mediation should be progressed and be finalized and issue such directions or orders as it considers necessary for the purpose of the ordered mediation, including appropriate orders as to the cost of the mediation.
(5) Unless the Court otherwise orders, an order for mediation shall not operate as a stay of the proceedings nor shall it be a cause for delaying in getting the case ready for trial.
(6) For the purposes of Subsection (3)(c) herein, Court shall develop and maintain a list of appropriately qualified and experienced mediators.
21. Rule 5(2) of the ADR [Alternative Dispute Resolution] Rules states:
The Court shall on the request of all parties to a proceeding or on the application of any party to a proceeding or on its own motion order mediation for:
(a) a resolution of all or any parts of the proceedings; or
(b) failing settlement, identify and limit the real and meritorious issues in the proceedings that warrant judicial consideration and determination; and/or
(c) enable the parties to reach consensus on the conduct of litigation.
As is clear from the transcript of 11 March 2015 the verbal exchange between the parties and his Honour was clearly on the basis that, at some time prior to 11 March 2015, orders had been made by the Court to put the matter on the mediation call-over list. Indeed, that this occurred is confirmed by the transcript of 5 December 2014 and orders of that date. It is also apparent from the transcript of 11 March 2015 that, in light of the orders of 5 December 2014, his Honour was understandably nonplussed that the matter was back before him on 11 March 2015.
22. Secondly, it is clear from the transcript of 11 March 2015 that his Honour was of the view that previous directions of 14 August 2014 taking the matter to trial (and which is the subject of this appeal) had been superseded by the reference of the proceedings to the call over list. Indeed, that would be an expected result of the matter being referred to the mediation call over list. Reading transcripts of proceedings in this matter before the primary Judge of 26 September 2014 and 5 December 2014 (neither of which are in the appeal book) reveals that, particularly in light of multiple notices of motion filed by Mr Serowa, the primary Judge considered the matter a proper candidate for mediation rather than proceeding directly to trial, and that his Honour made this clear to the parties.
Were the only material orders of the National Court those made on 14 August 2014, we would have grave concerns about the apparently arbitrary dismissal of the appellant’s notice of motion of 23 February 2015 without a hearing. This, however, was clearly not the case. It is clear from the transcript of 11 March 2015 that the dismissal of the appellant’s notice of motion was not arbitrary, and that his Honour made the order dismissing the notice of motion in circumstances where orders had been made on 5 December 2014 referable to the mediation call list. The tenor of Mr Serowa’s notice of appeal is to ignore the existence of the orders of 5 December 2014.
The orders of 5 December 2014 were not matters “extraneous” to the proceedings before the Court on 11 March 2015 as the appellant claims in ground (a). Nor did his Honour “overlook” the orders of 14 August 2014 (as claimed in ground (b)) in circumstances where it appears those directions had been superseded by further orders of his Honour on 5 December 2014.
23. Third, to the extent that in ground (c) the appellant suggests bias in the primary Judge by the alleged inclusion in the Court file of orders dated 10 March 2015 identical to those made by his Honour on 11 March 2015, we do not accept that claim. Even assuming that the document was sourced from the Court file (which is by no means clear), we have no difficulty with preparation by a Judge of the National Court of draft orders in anticipation of those which may or may not be made subsequently in Court. The orders of 11 March 2015 gave formal effect to the order of the primary Judge of 5 December 2014 that the proceedings be transferred to the mediation call-over list, and to that extent were perfectly proper.
24. Fourth, there is no merit in grounds of appeal (d), (e), (f), (g) and (h) which are referable to the appellant’s complaints of failure by the respondent to comply with orders of 14 August 2014.
It is of great concern to us that orders and material explaining the entire relevant procedural history of this matter were not before this Court. It is the responsibility of the appellant to compile an appeal book containing documentation of relevance to the appeal. Notwithstanding this, it is painfully clear that the appeal book is seriously deficient. It follows that, on the basis of the material before the Court, we are not prepared to find that the primary Judge erred in dismissing the appellant’s notice of motion filed 23 February 2015.
CONDUCT OF THE RESPONDENT
25. Notwithstanding our finding that this appeal lacks merit, we also consider it appropriate to make a number of observations concerning the conduct of the respondent in this appeal.
First, some fault lies at the feet of the respondent in respect of the contents of the appeal book. The respondent was also required to (and did) certify the correctness of the appeal book for the purposes of the appeal. The respondent is legally represented. Much valuable Court time could have been saved had the respondent or its lawyers brought to the attention of the Court the deficiencies in the appeal book.
Secondly, while we find no fault in the orders of the primary Judge, it appears from material before this Court that the respondent has been unduly and improperly casual in its approach to this litigation. Indeed, it appears that both parties failed to comply with Order 2 of 14 August 2014 which required all affidavit materials to be relied upon, to be filed and served by 28 November 2014. We consider the failure of the respondent, which is represented by lawyers, to comply with that order of particular note. Further, we note that his Honour devised and made mediation orders on 11 March 2015 after the respondent failed to produce draft mediation orders for his Honour’s consideration, as ordered on 5 December 2014. Both failures of the respondent to comply with orders of his Honour constituted circumstances contributing to the appeal before this Court.
Thirdly, we note that there was no appearance by the respondent or its lawyers in Court at the recent continuation of the hearing of this appeal. No explanation has been given by the respondent for its absence, in circumstances where we are satisfied from the material before the Court that the respondent was notified of the listing of the hearing. It is of particular concern to us that the lawyer for the respondent, who could have provided assistance to the Court, was not present at the hearing.
CONCLUSION
26. In our view the appeal matter should be returned to the National Court for continuation of the proceedings. So far as concerns costs, the appellant has brought this appeal to the Supreme Court without presenting all relevant material to the Court. We consider further that the appeal has no merit. However we also consider that conduct of the respondent in this case requires recognition in an appropriate costs order. In our view the appellant should pay 50% of the costs of respondent of this appeal, such costs to be taxed if not otherwise agreed.
ORDER
_________________________________________________
Kunai & Co Lawyers: Lawyers for the Respondent
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