SC2233

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 61 OF 2021 (IECMS)

BETWEEN:
JONAH LUMBUWEH
First Appellant

AND:
DAVID HAGARUAH
Second Appellant

AND:
SALLY WATSON
First Respondent

AND:
ARIO INVESTMENT LIMITED
Second Respondent

Waigani: Hartshorn J
2021: 2nd, 15th December

COSTS - Application for security for costs

Cases Cited: 

Brinks Pty Ltd & Ors v. Brinks Incorporated [1996] PNGLR 75 
Ume v. Watson (2020) N8669

Counsel:

Mr. B. Boma, for the Appellants
Mr. E. Rere, for the Respondents

15th December, 2021

1. HARTSHORN J: This is a decision on a contested application for an order that the appellants pay security for costs, amongst others. The application is made by the respondents pursuant to s. 155(4) and s. 162 Constitution, s. 5 and s. 18 Supreme Court Act and Order 7 Rule 24 Supreme Court Rules.

Background

2. The appellants appeal a National Court decision which amongst others, found them liable to pay K350,000.00 damages to the first respondent and permanently restrained the appellants from commencing any further certain proceedings against the respondents. The respondents had commenced proceedings in the National Court claiming amongst others, fraudulent conduct, harassment and defamation by the appellants.

Consideration

3. I consider the application for security for costs first as this is the primary relief sought by the respondents.

4. Section 18 (1) Supreme Court Act is as follows:
“The Supreme Court or a Judge may, in special circumstances, order that just security be given for the costs of an appeal or an application for leave to appeal and, if an application is granted, for the prosecution of the appeal.”

5. In Brinks Pty Ltd & Ors v. Brinks Incorporated [1996] PNGLR 75, the Supreme Court held that in determining the nature of what constitutes special circumstances, in an application under s. 18 Supreme Court Act, it is relevant to have regard to the circumstances upon which the National Court may order security for costs under Order 14 Rule 25 National Court Rules. One of those circumstances described in the Supreme Court decision is “that there is reason to believe that the appellant will be unable to pay the costs of the respondent if ordered to do so.” The Court also stated that there may be other circumstances which may come within the words, “special circumstances”.
6. The respondents submit that there are other circumstances which constitute special circumstances in this instance. Those circumstances are that there is reason to believe that the appellants will not pay the costs of the respondents in this appeal as judgment debts are owed by the appellants to the respondents in three other separate proceedings. The appellants cumulatively owe the respondents these judgment debts for the total amount of K71,476. 58. The appellants have been served with these judgment debts under cover of demand letters but have failed or refused to settle these judgment debts. These judgment debts remain as contingent liabilities on the books of the respondents and the respondents are once again being forced into litigation in this appeal, the respondents submit.
7. The respondents also submit that in Ume v. Watson (2020) N8669, in which the proceedings were dismissed for being statute barred, for disclosing no reasonable cause of action, for being frivolous and vexatious and for being an abuse of process of the court, Gavara-Nanu J. reviewed the National Court proceedings initiated by the appellants and at [40] and [42] stated:

“40. There is undisputed evidence that Mr. Watson was granted PNG citizenship on 9th August, 1989. The plaintiffs did not question Mr. Watson’s PNG citizenship status until 2009, about 20 years later, which to my mind was motivated by the fallout they had with Mr. Watson. I am also of the view that proceeding OS No. 484 of 2008, in which the plaintiffs made similar complaints against Mr. Watson was motivated by their fallout with Mr. Watson and their growing resentment and dislike for Mr. Watson. I also have no doubt that WS No. 201 of 2012 was similarly actuated by the ill feelings and malice the plaintiffs had towards Mr. Watson. They were only expressing and couching their grievances differently in each proceeding they instituted. Same can be said about this proceeding. It was actuated by the first defendant’s decision to do things herself, and not involve them, which was perfectly valid and lawful as the sole Executor and Trustee of her late father’s estate. …..

42. To my mind, it is plain enough that the plaintiffs are using this proceeding to continue to express their disappointments towards Mr. Watson and now the first defendant. Thus, the proceeding is clearly actuated by improper motive and malice. This amounts to an improper use of the court processes and it is a clear abuse of process….”

8. The respondents submit that the above circumstances demonstrate special circumstances which warrant an order for security for costs. These circumstances are that:

a)	there is overwhelming evidence that the appellants will not pay the costs of the respondents in this appeal;

b)	the appellants have a history of initiating vexatious litigation against the respondents; and

c)	the appellants have a history of failing or refusing to pay judgment debts entered against them in favour of the respondents.

 9. From a consideration of the evidence before this court and in the absence of rebuttal evidence, I am satisfied that the circumstances as set out by the respondents constitute special circumstances and that the special circumstances are such that they warrant an order that just security be given for the costs of this appeal.

10. As to the amount of the security to be given, there is no evidence as to the likely amount of the costs of the respondents in defending this appeal and no submissions were made by either counsel as to any appropriate amount. To my mind, the sum of K80,000.00 would constitute just security for the respondents’ costs of this appeal. 

11. Given the above, it is not necessary to consider the other submissions of counsel

Orders

12. It is ordered that:

a)	The first and second appellants shall pay into court the total sum of K80,000.00 as security for costs for this appeal, within 14 days of today.

b)	The first and second appellants shall pay the costs of the first and second respondents of and incidental to the application of the respondents filed 24th November 2021.
__________________________________________________________________
Boma Lawyers:     Lawyers for the Appellants                                 
Corrs Chambers Westgarth: Lawyers for the Respondents