SC1646

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA No.85 of 2015

BETWEEN:  
NOMINEES NIUGINI LIMITED
Appellant 

AND:
INDEPENDENT PUBLIC BUSINESS CORPORATION
First Respondent

AND:
MOTOR VEHICLES INSURANCE LIMITED
Second Respondent

AND:
NATIONAL SUPERANNUATION FUND LIMITED
Third Respondent

Waigani   :  Kirriwom J, David J & Toliken J
2016:  25 February
2017:  6 December 

PRACTICE AND PROCEDURE - civil appeal to Supreme Court from National Court – appeal from interlocutory judgment – notice of appeal filed – appellant asserting that appeal lay without leave because it raised questions of law and mixed fact and law – consequently no application for leave to appeal filed and served - objection to competency of appeal –compliance with Order 7 Rule 15 Supreme Court Rules 2012 mandatory – notice of objection to competency filed out of time – inherent power of Court exercised - objection to competency upheld – appellant to pay second respondent’s costs of objection to competency and costs of appeal to be taxed if not agreed -  Supreme Court Act, Section 14(1)(a) and (b), (3)(b), Supreme Court Rules, Order 7 Rule 15.  

Cases cited:

Arthur Gilbert Smedley v The State (1980) PNGLR 379
Waghi Savings and Loans Society Limited v Bank South Pacific Limited (1980) SC185
The State of Papua New Guinea v Kubor Earthmoving (PNG) Pty Ltd (1985) PNGLR 448
Lowa v Akipe (1991) PNGLR 265
Gregory Puli Manda v Yatala Limited (2005) SC795
Sir Arnold Amet v Peter Charles Yama (2010) SC 1064
Mountain Catering Ltd v Frederick Punangi & Ors (2013) SC1225
Mek Kuli v Peter O’Neill (2014) SC1331

Counsel:

Erik Andersen with Miriam Tusais, for the Applicant/Second Respondent 
Gibson Geroro, for the Respondent/Appellant

JUDGMENT

6th December, 2017 

1.	BY THE COURT: On 26 May 2015, in the National Court proceedings commenced by WS No.1252 of 2010, the Respondent/Appellant, Nominees Niugini Limited (the Appellant) filed a notice of motion seeking, inter alia, an order for Gadens Lawyers (Gadens) to cease to act for the Applicant/Second Respondent, Motor Vehicles Insurance Limited (the Second Respondent) on the basis of having a conflict of interest and breach of Gadens’ professional obligations.  The application was heard on 29 May 2015.  On 11 June 2015, the primary judge gave his decision refusing the application.  Aggrieved by the judgment, the Appellant instituted this appeal by a Notice of Appeal filed on 20 July 2015 appealing against the whole of the judgment of the primary judge.  In the Notice of Appeal, the Appellant pleaded that the appeal lies without leave pursuant to Section 14(1)(a) and (b) of the Supreme Court Act because it raises both questions of law and of mixed fact and law. 

2.	The grounds of appeal are set out at paragraph 3 of the Notice of Appeal and these are:

“3.1	The primary judge incorrectly applied the law [at paragraph 12] in his finding [paragraph 15] that “…NNL and its lawyers are unable to avail themselves of the provisions of Rule 10 Professional Conduct Rules in this instance”.
3.2.	The primary judge erred in finding [lines 26 – 28 at paragraph 15 of the judgement] that the appellant and its lawyers were unable to avail themselves of the provisions of Rules 10 of the Professional Conduct Rules 1989 (PCR) when the primary judge should have found that the appellant’s lawyers had standing to raise such issues as officers of the Court.
3.3	The primary judge erred in finding that [at paragraph 21] “as to Rule 10 (4) the PCR, its drafting is sufficiently broad to allow lawyers or a firm of lawyers to represent more than one interest in litigation so long as those interests are not conflicting” in that the words “conflicting interest” in Rule 10(4) of the PCR should be read to mean “different parties” in litigation.
3.4	The primary judge erred in finding [at paragraph 22] that there was no conflicting interests for the purpose of Rule 10(4) of the PCR when Gadens has initially acted for the plaintiff and then subsequently acted for the first defendant in the same proceedings, namely WS 1252.
3.5	The primary judge erred in finding [at paragraph 22] that Gadens has not acted for MVIL when MVIL was in conflict with IPBC in WS 1252 when, on the pleadings and evidence, Gadens  has previously acted for MVIL when MVIL was in conflict with IPBC in WS 1252.
3.6.	The primary judge erred in finding [at paragraph 22] that Gadens has not acted for different positions in WS 1252 when, on the pleadings and evidence, Gadens had acted for different positions in WS 1252.
3.7	The primary judge erred in finding [at paragraph 22] that Gadens had not acted for different parties in WS 1252 when, on the pleadings and evidence, Gadens had acted for the different parties in WS 1252.
3.8	The primary judge erred in finding that Rule 10(5) of the PCR did not apply to the circumstances of this case [paragraph 23] when on the plain and ordinary reading the provision was applicable to this case.
3.9	The primary judge erred in finding [at paragraph 32] that only a former client of a lawyer for  party to litigation can avail itself of the sanctions contemplated by Rules 10(4) and 10 (5) of the PCR.
3.10	The primary judge incorrectly applied the law [at paragraph 32] when on the pleadings and evidence, a fair-minded reasonable informed member of the public would conclude that the proper administration of justice required that Gadens Lawyers, should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice.”

3.	The orders sought are set out at paragraph 4 of the Notice of Appeal and they are:
	
	“4.1	The appeal is upheld.
4.2	The judgment by the primary judge given on 11 June 2015, refusing the relief sought in paragraph 2 of the Notice of Motion filed by the Appellant on 26 May 2015 is reversed and set aside.
4.3	Pursuant to Section 16 (c) of the Supreme Court Act, this Honourable Court give such judgment as ought to have been given in the first instance that Gadens Lawyers to cease to act for Motor Vehicles Insurance Limited forthwith in WS No.1252 of 2010 [Comm] on the basis of having a conflict of interest in the proceedings, breach of Gadens Lawyers professional obligations and in the interests of the protection of the integrity of the judicial process and the due administration of justice.	
4.4	Costs of and incidental to the appeal be paid by the Second Respondent.”

4.	On 21 July 2015, the Appellant’s lawyers, Leahy, Lewin, Lowing Sullivan (LLLS) served a copy of the Notice of Appeal on Gadens.  No application seeking leave to appeal was filed or served on the Second Respondent.

5.	On 4 September 2015, the Second Respondent filed a Notice of Objection to Competency (the Objection to Competency) of the appeal contending that the Notice of Appeal challenging the orders of the primary judge contravenes Section 14(3)(b) of the Supreme Court Act as the orders were from an interlocutory judgment and not final in nature and therefore leave was required. 

6.	The Objection to Competency was supported by the Affidavit of Jeanale Nigs sworn on 3 September 2015 and filed on 4 September 2015. 
7.	In opposing the Objection to Competency, the Applicant relied on and read the Affidavit of William Yep sworn and filed on 6 September 2015.
8.	On 9 September 2015, Gadens wrote to LLLS giving notice that the Objection to Competency was filed and requested them to provide them with any evidence in response whilst an Objection to Competency Book was being compiled.
9.	On 22 September 2015, Gadens wrote to LLLS enclosing a copy of the draft index to the Objection to Competency Book and also requested them to review and to revert to them by close of business on Friday, 22 September 2015 as to the correctness of the content.
10.	On 23 September 2015, LLLS wrote to Gadens inviting the Second Respondent to withdraw the Objection to Competency within 14 days from the date of that letter , i.e., by 7 October 2015, on the basis that it itself was incompetent having been filed contrary to Order 7 Rule 15 of the Supreme Court Rules 2012 and relying on the decision of Gregory Puli Manda v Yatala Limited (2005) SC795 and failing which costs would be sought against Gadens on an indemnity basis should the Objection to Competency be unsuccessfully prosecuted.   The Second Respondent did not withdraw or discontinue the Objection to Competency by 7 October 2015 or at all.  
11.	Mr. Andersen for the Second Respondent conceded that the Objection to Competency was filed outside the fourteen days period prescribed by Order 7 Rule 15 of the Supreme Court Rules.  However, he contended that despite being non-compliant, the Supreme Court still has discretion to hear an objection that is raised after the expiration of 14 days and relied on the decisions of the Court in Mountain Catering Ltd v Frederick Punangi & Ors (2013) SC1225 and Mek Kuli v Peter O’Neill (2014) SC1331 to support the proposition.  Those cases support the proposition that the Court has a discretion which must be exercised on a proper basis and the nature and validity of the objection is the key in the Court exercising its discretion to allow an objection filed out of time.
12.	In Mountain Catering Ltd v Frederick Punangi & Ors (supra), the appellant opposed the objection to competency on the basis that it was raised on short notice and that greatly prejudiced its defence.  The Court held that the appellant did not establish that it was prejudiced by the belated objection.  
13.	In Mek Kuli v Peter O’Neill & Anor, the Court found that the Court has a discretion which is vested in it by its inherent power which carries with it the onerous responsibility to safeguard its processes and procedures against abuse.  On a quick review of the grounds, the Court noted that the applicant sought a dismissal of the appeal because the Notice of Appeal was filed upon a dismissal of judicial review proceedings contrary to Order 10 Division 1 of the Supreme Court Rules which requires that appeals from orders made under Order 16 of the National Court Rules shall be instituted by a notice of motion.  The Court ruled that that was convincing enough for them to find that the preliminary objection that the objection to competency was filed out of time was without merit and that the objection to competency was properly before the Court.         
14.	Mr Andersen also submitted that the approach taken by those cases were in line with other past Supreme Court decisions such as Waghi Savings and Loans Society Limited v Bank South Pacific Limited (1980) SC185 and Arthur Gilbert Smedley v The State (1980) PNGLR 379 which held that the failure to comply with Rules 23 of the Supreme Court Rules 1977 which was equivalent to Order 7 Rule 15 of the Supreme Court Rules 2012 did not bar a respondent from objecting to the competency of an application for an application for leave to appeal out of time because an objection to competency was really an objection to jurisdiction which may be made at any  time. 
15.	Mr Andersen submitted that a review of the ground of objection will demonstrate that there is a good ground for objection and therefore the Objection to Competency was properly before the Court and the Court can exercise its discretion in favour of allowing the objection.    
16.	Mr. Andersen also submitted that the Respondent could not rely on Section 14(3)(b)(ii) of the Supreme Court Act as it was not pleaded in the Notice of Appeal.
17.	Mr. Geroro for the Appellant riposted and opposed the Objection to Competency mainly on the ground that the Objection to Competency itself was incompetent as it was filed and served out of time.   He relied on Gregory Puli Manda v Yatala Limited which was a case that dealt with Order 7 Rule 14 of the Supreme Court Rules, the forerunner of Order 7 Rule 15 to support that proposition.  There, the Court in approving the decisions of Lowa v Akipe (1991) PNGLR 265 and The State of Papua New Guinea v Kubor Earthmoving (PNG) Pty Ltd (1985) PNGLR 448 held that the terms of Order 7 Rule 14 of the Supreme Court Rules were explicit and couched in mandatory terms by virtue of the word “shall” and they did not give a respondent who failed to file an objection within the prescribed period of 14 days a right to raise questions of incompetence on the hearing of the appeal.  Hence, Mr. Geroro submitted that it was not necessary to deal with the merits or otherwise of the Objection to Competency.

18.	In addition, the Appellant contended that the appeal was competent on two grounds:

(a)	the decision of the primary judge was final in nature and effect; and
(b)	the appeal was properly filed as of right as it fell within the exception specified under Section 14(3)(b)(ii) of the Supreme Court Act as the nature of the order sought against Gadens Lawyers could be likened to an order for mandatory injunction and its refusal was the subject of the appeal.	
19.	The central issue for us to decide is whether the Court has any discretion to allow a respondent to file a Notice of Objection to Competency outside the fourteen days period specified by Order 7 Rule 15 of the Supreme Court Rules.
20.	Order 7 Rule 15 states:
“A respondent who objects to the competency of an appeal, or of an application for leave to appeal, shall, within 14 days immediately after service upon him of the Notice of Appeal-
(a) file an objection in accordance with Form 9; and
(b) 	serve a copy of the objection on the appellant." (Our emphasis)
21.	Clearly, there appears to be two views propounded by the Supreme Court on the application of Order 7 Rule 15 of the Supreme Court Rules.  The opposing views have been succinctly highlighted by the parties, one advocating a hardline mandatory approach and adopted by the Appellant and the other advocating a discretionary approach adopted by the Second Respondent.    
22.	With respect, we endorse the views expressed by the Court in The State of Papua New Guinea v Kubor Earthmoving (PNG) Pty Ltd, Lowa v Akipe and Gregory Puli Manda v Yatala Limited.  Order 7 Rule 15 is quite explicit and unambiguous and couched in mandatory terms by the use of the word "shall".   The rule requires that any objection to the competency of an appeal "shall" be filed "within 14 days after service on him of the notice of appeal". The rule plainly and ordinarily does not give any discretion or power on the Supreme Court to extend the fourteen days period.
23.	The other view advocating the discretionary approach adopted by the Second Respondent seems to equate the inherent power of the Court as the source of the discretion.   We think that is a misconception.  We are of the view that the inherent power of the Court is independent to the statutory power given by Order 7 Rule 15 which is in mandatory terms and gives no discretion or power on the Supreme Court to extend the fourteen days period.
24.	In the present case, LLLS served a sealed copy of the Notice of Appeal on Gadens on 21 July 2015.  The time limited for the Second Respondent to file a notice of objection to competency of the appeal lapsed on 4 August 2015.  The Second Respondent filed its objection on 4 September 2015, about six weeks after being served with a sealed copy of the Notice of Appeal. There is no dispute about service of the Objection to Competency.  Clearly the Second Respondent breached the mandatory requirements of Order 7 Rule 15 of the Supreme Court Rules. Consequently, the Second Respondent cannot as a matter of right raise the question of competency now.
25.	Is there any proper basis upon which the Court can exercise its inherent power to address the question of competency notwithstanding the Second Respondent being non-compliant with Order 7 Rule 15?  We have considered the decision of the Court in Sir Arnold Amet v Peter Charles Yama (2010) SC 1064 where at paragraphs 27 and 28, the Court held:
“27.	The issue of competence is to do with legal and jurisdictional aspects of the court process. More often than not, this concerns the validity of the very proceedings before the court. Hence, it can be raised and determined at any stage of the proceedings. In, Chief Collector of Taxes v Bougainville Copper Limited and Bougainville Copper Limited v Chief Collector of Taxes (2007) SC853 the Supreme Court, adopting the principle in Patterson Lowa & Ors v Wapula Akipe & Ors [1992] PNGLR 399 made that clear when it held: 
"It is settled law that, the Courts have an inherent jurisdiction to watch over their processes and procedures to ensure that they are not abused. This is an issue that is always open to the court at any stage of the proceedings. As such, it does not matter whether a party appearing before the Court is raising it, because it goes into the competence of the very proceedings brought before the Court." 
28.	The issues raised in this review concern procedural compliance with a provision of the Organic Law and the Criminal Code. The challenge also raises issues of facts pertaining to proof of the material facts. Whether these issues were raised in the court below or not is in our view, immaterial. Now that it is raised, this Court should not shun away from its primary duty to uphold the rule of law where the occasion to do so arises at any stage of the proceedings. The inherent power of the Court carries with it, the onerous responsibility to safeguard its processes and procedures against abuse.”
26.	In the present case, the Second Respondent raises a valid objection concerning procedural compliance as to the requirement to seek leave of the Court from an interlocutory judgment made or given by the National Court under Section 14(3)(b) of the Supreme Court Act and that the orders sought to be challenged were not final in nature.  No application for leave to appeal has been filed and served on the Second Respondent to date.  The exceptions under Section 14(3)(b) particularly Section 14(3)(b)(ii) do not apply as the Appellant has failed to plead them in the Notice of Appeal as well. 
27.	We are satisfied that the Objection to Competency is not without merit and is therefore properly before the Court. 
28.	For these reasons, we find that the Notice of Appeal filed on 20 July 2015 is not properly before the Court and must be dismissed. 
29.	The formal orders of the Court are:

1.	The objection to competency of the appeal made pursuant to the Notice of Objection to Competency filed on 4 September 2015 is upheld.
2.	The Notice of Appeal filed on 20 July 2015 is dismissed for being incompetent.
3.	The Appellant shall pay the Second Respondent’s costs of the application and also the costs of the appeal to be taxed, if not agreed. 

___________________________________________________________________
Leahy Lewin Lowing Sullivan:  Lawyers for the Appellant
Gadens:  Lawyers for the Second Respondent