SC2100
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM NO 21 OF 2021

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
First Appellant

NATIONAL EXECUTIVE COUNCIL
Second Appellant

V

RT HON PAIAS WINGTI, IN HIS CAPACITY AS CHAIRMAN OF THE WESTERN HIGHLANDS PROVINCIAL EXECUTIVE COUNCIL
First Respondent

PROVINCIAL EXECUTIVE COUNCIL,
WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Second Respondent

JOSEPH NENG
Third Respondent

ELVIS MARK BALG
Fourth Respondent

Waigani:  Batari J, Makail J, Anis J
2021: 27th April, 4th May

SUPREME COURT – PRACTICE AND PROCEDURE – stay of decision of National Court pending appeal – application to discharge or vary orders of a single Judge of Supreme Court – whether stay order should be discharged – whether stay order is granted under Supreme Court Act section 5 or section 19.

The appellants appealed to the Supreme Court against the decision of the National Court to quash the appointment of the fourth respondent as a provincial administrator. Having lodged the appeal, the appellants then applied for and were granted, by a single Judge of the Supreme Court, a stay of the National Court proceedings, including an order that the fourth respondent "resume" office as provincial administrator, pending determination of the appeal. The first, second and third respondents (who had been plaintiffs in the National Court) then applied to the full Court of the Supreme Court under s 5(3) of the Supreme Court Act and Order 11, Rules 25 and 26 of the Supreme Court Rules 2012 to discharge the order of the single Judge. The first, second and third respondents argued that: the single Judge  acted ultra vires his powers under section 5(1)(a) of the Supreme Court Act as the stay order was a direction involving the decision on appeal and was prejudicial to the claim of the respondents; they were denied the opportunity to be heard on the second order authorizing the fourth respondent to resume office as provincial administrator, as such relief was not sought by the appellants; and the appellants had incompetently relied on section 19 of the Supreme Court Act to apply for interim stay orders, whereas section 5(1) provides the jurisdictional basis of stay orders. This was a ruling on the application by the first, second and third respondents to discharge the order of the single Judge of the Supreme Court. 
 
Held:

(1)	An order granting a stay of National Court proceedings pending determination of an appeal against orders of the National Court is made under section 19 of the Supreme Court Act, not under section 5 of the Supreme Court Act.

(2)	The application of the first, second and third respondents was misconceived as it mistakenly regarded the stay order granted by the single Judge as a direction or interim order made under s 5 of the Supreme Court Act, when the order was made under s 19.

(3)	To the extent that the application to discharge the stay order granted by the single Judge was made under section 5(3) of the Supreme Court Act, it must be dismissed as being based on an incorrect source of jurisdiction.

(4)	There is no readily identifiable procedure in the Supreme Court Act or Supreme Court Rules for a party aggrieved by a stay order granted by a single Judge under s 19 of the Supreme Court Act to apply for the discharge of that order, so the first, second and third respondents ought to have invoked the inherent jurisdiction of the Supreme Court under s 155 of the Constitution. They did not do that, however, and their application was dismissed as an abuse of process.

(5)	Further, the first, second and third respondents failed to show that they had been denied procedural fairness as the terms of the stay order, which included the order that the fourth respondent resume office as provincial administrator, were consequential in nature and there did not have to be a specific pleading for such an order.

(6)	The application of the first, second and third respondents was dismissed, with costs. 

Cases Cited 

Hon Havila Kavo MP v Hon Mark Maipakai MP & 12 Ors (2010) SC1067
Isaac Lupari v Sir Michael Somare (2008) SC951
Kawari Fortune Resources Ltd v Louis Limbo Apurel (2015) SC1614
McHardy v Prosec Security Communication Ltd [2000] PNGLR 279
National Capital Ltd v Port Moresby Stock Exchange (2010) SC1053
PNG Air Traffic Controllers Association Inc v Civil Aviation Authority (2008) SC950
PNG Pipes Pty Ltd & Anor v Sefa, Globe Pty Ltd & 2 Ors [1998] PNGLR, 551

APPLICATION

This was an application to discharge a stay order of a single Judge of the Supreme Court.

Counsel 

P Tamutai, for the Applicant/Second Respondent
P Mawa, for the First & Third Respondents
K Kipongi, for the Appellants
M R Obora, for the Fourth Respondent

4th May, 2021

1.	BY THE COURT:  This is a contested application to discharge or vary a stay order of a single judge of the Supreme Court.  The application is made under s5(3) of the Supreme Court Act and O 11, rr. 25 and 26 of the Supreme Court Rules 2012.

2.	The Third Respondent, Joseph Neng, was the Provincial Administrator (PA) of Western Highlands Province, until the expiry of his contract on 10 December 2019.  Applications were then submitted for the position of PA.  The Department of Personnel Management (DPM) shortlisted five names to the Public Services Commission (PSC) and the PSC in turn recommended to the Western Highlands Provincial Executive Council (PEC) the names of five most suitable candidates in the order of preference, amongst them, Elvis Mark Balg, the Fourth Respondent.  The Provincial Governor and Chairman of the PEC expressed concern about the selection process being used and wrote to the Secretary for DPM requesting that the position be re-advertised. The letter was copied to amongst others, the Prime Minister and Chairman of the National Executive Council (NEC) (Second Appellant).  The First Respondent's letter drew no response from the Secretary for DPM. Four months later, the NEC appointed Elvis Mark Balg as Provincial Administrator.  Aggrieved by the decision of the NEC, the Governor and Joseph Neng, (the immediate past PA) sought and were granted leave to apply for judicial review of the NEC decision to appoint the Fourth Respondent.

3.	On 29 March 2021, the National Court at Waigani granted the application for Judicial Review and declared the appointment of Mr Balg unlawful.  The Court further ordered, inter alia, that the appointment of Mr Balg be quashed, and that Mr Neng continue to act in the office of the PA pending expeditious filling of the vacancy.  Aggrieved by the decision of the National Court, the Appellants filed this appeal by way of notice of motion on 13 April 2021.

4.	On 15 April 2021, his Honour Justice Hartshorn sitting as single judge of the Supreme Court granted interim orders staying the effect of the decision of the National Court pending the determination of the appeal.

This application

5.	The applicant (Second Respondent), supported by the First and Third Respondents, submits on several contentions, the Stay Orders should be discharged or varied as:

a)	The judge acted ultra vires his powers under s 5 (1) (a) of the Supreme Court Act as the stay orders in effect were directions involving the decision on appeal and that the interim orders are prejudicial to the claim of the respondents under s 5(1) (b). [Grounds 1 & 2].

b)	The respondents were denied the opportunity to be heard on the second order approving Mr Balg to resume office as Provincial Administrator of Western Highlands Province pending determination of the appeal when such relief was not sought by the appellant in its application for stay. [Ground 3].

c)	The appellant incompetently relied on s 19 of the Supreme Court Act to apply for interim stay orders where s 5(1) provides the jurisdictional basis of Stay Orders whereas s 19 was merely a descriptive remedial provision. [Ground 4].

6.	The appellants' contentions, supported by the fourth respondent, for dismissal of the application for discharge or variation of the Stay Orders are that:

a)	the application is incompetent and misconceived.

b)	the applicant has not shown any basis for prejudice, hardship or inconvenience. 

c)	the orders approving Mr Balg to resume office was merely consequential to the grant of stay and that the respondents had the opportunity to be heard on that before the primary Court. 

d)	the justice of the case weighs in favour of maintaining the status quo.

Law

7.	The relevant laws and procedural rules for determination of this application are sections 19 and 5(1) and (3) of the Supreme Court Act and O. 11, rr. 25 and 26 of the Supreme Court Rules 2012.  We set these out below for completeness.

Section 19.  Stay of proceedings on appeal.

“Unless otherwise ordered by the Supreme Court or a Judge, an appeal, or an application for leave to appeal, to the Supreme Court does not operate as a stay of proceedings.”

Section 5.  Incidental directions and interim orders

“(1)	Where an appeal is pending before the Supreme Court-

(a)	a direction not involving the decision on the appeal; or
(b)	an interim order to prevent prejudice to the claims of the parties; or
(c)	an order in any proceedings (other than criminal proceedings) for security for costs; or
(d)	an order dismissing an appeal in any proceedings (other than criminal proceedings) for default in furnishing security; or
(e)	an order admitting an appellant to bail,

may be made by a Judge.

(2)	A direction or order made under Subsection (1) shall be deemed to be a direction or order of the Supreme Court.

(3)	A direction or order made under Subsection (1) may be discharged or varied by the Supreme Court.”

Supreme Court Rules Order 11 rules 25 and 26

“25. A party dissatisfied with a direction or order given by a Judge under these rules or Section 5 of the Act, may, upon notice to the other parties concerned in the proceedings, filed and served within 21 days of the making of such direction or order, apply to the Court which may make such order as appears just.

26. Proceedings under Rule 25 shall be instituted as if it was an appeal under Order 10 and the application of the rules under that Order with all necessary modifications shall apply.”

8.	The application of these provisions is relied on by all parties, with references to cases supporting their contentions.  We refer to some of those cases in this ruling. 

Consideration

9.	At the outset, it is settled that the source of power of the full Court to discharge or vary a direction or order made by a single judge of the Supreme Court exercising the powers under s 5(1) of the Supreme Court Act, is found in s 5(3).  The process to give effect to that power to discharge or vary the directions or orders is set out in O.11, rr. 25 and 26 of the Supreme Court Rules. That source of power of the Supreme Court seems to be exclusive and limited to incidental directions and interim orders made by a Judge under s 5(1).

10.	In this case, the applicant is seeking to discharge or vary the Stay Orders of a single judge of the Supreme Court made pursuant to s 19 of the Act.  There is no apparent process in the legislation or the Supreme Court Rules to invoke the powers of the full Court to discharge or vary a stay of the National Court proceeding pending an appeal.  But we consider that the applicant has resort to seek the inherent jurisdiction of the Supreme Court under s 155 (2) of the Constitution.  On that consideration, this application may be incompetent for relying on s 5 of the Act.  We will return to this aspect in the latter part of this ruling.

11.	The orders being contested in this application are in these terms:

“1.	 The National Court decision of 29th March 2021 is stayed pending the determination of this appeal.

2.	The National Executive Council decision of 20th December 2020 published in the National Gazette No G903 of 22nd December 2020 which appointed Mr Elvis Mark Balg as Provincial Administrator of Western Highlands Province is effective and in force pending the final determination of this appeal.

3.	Mr Elvis Balg shall resume office as Provincial Administrator of Western Highlands Province pending the determination of this appeal.”

12.	The power of a single judge of the Supreme Court to hear and grant a stay is derived from s 19 of the Supreme Court Act.  The principles to be applied when deliberating whether to grant stay orders are set out in the often-cited case of McHardy v Prosec Security Communication Ltd [2000] PNGLR 279.

13.	In this application, the applicant contends in the fourth ground that the single judge of the Supreme Court erred in law when he invoked s 19 (1) instead of relying on s 5(1)(a) of the Supreme Court Act to stay the decision of the National Court.

14.	That argument is misconceived.  It flouts the substantive and procedural law on the stay application to the Supreme Court following an appeal or an application for leave to appeal.  Section 19 gives the Supreme Court the jurisdiction to hear and determine an application for stay of the primary Court decision pending an appeal. The applicant also refers to s 19(1) which does not exist.  This is misleading.  It can also be fatal to the contention being based on wrong application of the law.

15.	In PNG Pipes Pty Ltd & Anor v Sefa, Globe Pty Ltd & 2 Ors [1998] PNGLR, 551 (Amet CJ, Kapi DCJ, Los J) in reviewing the powers of the Court under s 19 of the Supreme Court Act, the Court held at p 553:

“It is clear from this that the Supreme Court or a single judge of the Court may hear and grant an application to stay proceedings pending an appeal.  In the present case, the application for stay was determined by a single judge.”

16.	In Kawari Fortune Resources Ltd v Louis Limbo Apurel (2015) SC1614 (Injia CJ, Logan J, Kangwia J), the Court had the opportunity to consider the applications of s 5 and s 19 of the Supreme Court Act where on the application for interim orders before a single judge of the Supreme Court, it was stated that the application was made pursuant to both s 5 and s 19 of the Act as the source of power to make the interim orders.  The Court held:

“Section 19 of the Supreme Court Act empowers the Supreme Court or a judge to stay the operation of the judgement under appeal or the subject of an application for leave to appeal. The interim order did not, in terms, stay the operation of the orders of the National Court. Instead, it appears to us that the statutory power under which it must be taken that his Honour sought to act was s 5(1)(b) of the Supreme Court Act. The application by the original vendor shareholders and the original vendor directors under s 5(3) of that Act assumes that s 5(1)(b) was the source of the power to make the interim order. Their case is not that the court lacked power to make the order but rather that it ought not in the circumstances to have been made.

An interim order made under s 5(1)(b) of the Supreme Court Act can, like a stay order under s 19 of that Act, have the effect of preserving the status quo pending the hearing and determination of an appeal or application for leave to appeal but these two types of relief are conceptually different. An interim order is typically an injunction addressed to an opposing party so as to protect an interest of the party seeking the interim order whereas a stay is not so addressed but rather suspends the operation of the judgement or decision under challenge: Peter Makeng v Timbers (PNG)Limited (2008) N3317 (Injia DCJ, as the Chief Justice then was). This distinction has not been understood by the original purchaser shareholder and the original purchaser directors, for the court's order of 12 November 2014 left in operation the various orders made by the National Court in the s 408 appeal. This is by no means the limit of the lack of understanding on display in this case.”  (Underlining added).

17.	It is clear then, the reliefs sought under s 19 and s 5 (1) are not the same.  An order for stay stops the continuation of proceeding in the National Court pending determination of the appeal or leave to appeal whereas, an interim relief grants fresh orders which are necessary to "prevent prejudice to the claims of the parties" pending determination of the appeal.  So, the principles to be applied on an application for stay and for an interim relief are not necessarily the same though, some consideration may be common to both: Hon Havila Kavo MP v Hon Mark Maipakai MP & 12 Ors (2010) SC1067.

18.	Havila Kavo's case also cautions that it may be a mistake to slavishly adopt and apply the principles on stay to an application under s 5 (1) (b) of the Act as it appears to be the case in PNG Air Traffic Controllers Association Inc v Civil Aviation Authority (2008) SC950 and Isaac Lupari v Sir Michael Somare (2008) SC951.  We agree with and adopt that as a sound proposition.

19.	In National Capital Ltd v Port Moresby Stock Exchange (2010) SC1053, Injia CJ made this clear on the jurisdiction of the Court to deal with stay applications under s 19 of the Supreme Court Act:

“In the absences of a specific procedure provision on the Supreme Court Act and the Supreme Court Rules 1984 governing application for stay, it is common practice for lawyers to invoke section 19 and the Supreme Court has accepted this practice.  

It is obvious from section 19 that a stay is granted in an appeal that is pending before the Court.  The same applies to directional orders that may be granted under section 5(1) of the Supreme Court Act.”

20.	The applicant's contentions in support of ground four are therefore without merit.  It is dismissed.
21.	The applicant's contentions under grounds 1 & 2 of the application are that the Judge acted in excess of jurisdiction under s 5 (1) (b) when he gave directions involving the decision on the appeal.  The applicant contends that the grant of stay with consequent orders also caused serious prejudice to the respondents, as:

a)	the orders in effect determined the right of the parties in the substantive 	appeal as the gist of the appeal is whether Mr Balg was lawfully appointed.

b)	the Court has imposed on the Western Highlands Provincial Government a person it has never recommended pursuant to the selection process in section 73(2) of the Organic Law on Provincial Government and 	Local-level Governments.

22.	In the third ground, the applicant asserts denial of natural justice.  We will deal with these remaining grounds together.

23.	The applicant's grounds to discharge or vary the Stay Orders and the arguments noted in support of those grounds clearly exhibit, with respect, a total lack of understanding and appreciation of the relevant procedure and principles on applying for stay orders as set out in McHardy's case.

24.	The grant of stay is discretionary. The exercise of judicial discretion must be based on proper principles and proper grounds as are laid down in McHardy's case and a host of cases that has since followed.  The onus is on the applicant to show how and where the discretionary power of the court was wrongly exercised under those settled guiding principles in McHardy's case.

25.	In this case, the applicant did not specifically plead any error in the exercise of judicial discretion in granting the stay under the McHardy principles.  However, in the course of the arguments, the applicant raised the issue of arguable case and prejudice to good administration.  Those contentions are not persuasive against the obvious gap in showing any apparent or obvious error in granting the stay on wrong principles or improper grounds.

26.	We also consider the contentions, with respect, lacked total understanding and appreciation of the first term of the Stay Order and the consequential orders that followed as reproduced in paragraph 11 above.

27.	The ultra vires arguments under grounds 2 and 3 are, in our view, misconceived and dissipates into irrelevance because the source of power of the Supreme Court or a Judge of the Court to grant or refuse a stay of the National Court proceeding is s 19 of the Supreme Court Act.  The stay is not a direction or an interim order to which s 5(1)(a) and (b) apply.  In dealing with an application for stay, directions and interim orders, different principles of law apply though some considerations may be common to both.  We have addressed the application of s 19 in this instance, above.  Consequently, the facts that had been relied upon to form these legal arguments are also inapplicable or irrelevant.

28.	But we will also add this.  We find the orders, which were referred to by the applicant as directions under its grounds in its application, to be nothing more than consequential orders, perhaps issued to also avert confusion or situations such as what we now have before us.  And when we look at the National Court proceeding and the facts then or at the material time, we find nothing wrong with the effect of the stay order as had been clarified by Hartshorn J by his various orders of 15 April 2021.  The position, Provincial Administrator of the Western Highlands Provincial Government, was vacant at the material time. The NEC appointed the Fourth Respondent to fill the position.  The First, Second and Third Respondents were aggrieved and filed judicial review proceeding at the National Court.  The National Court upheld the judicial review application and declared, amongst others, the appointment of the Fourth Respondent null and void.  The Appellants appealed, and in the meantime successfully obtained a stay order from the Supreme Court.

29.	The grant of the stay order by the Supreme Court stays the decision of the National Court, which means that the Fourth Respondent remains as the appointed Provincial Administrator, which was the status quo before the commencement of the judicial review proceeding in the National Court. We consider that the status quo should remain as ordered by the single judge of the Supreme Court because we have not been persuaded otherwise.

30.	The right to be heard argument under ground 3 is premised on the basis that the application for stay but, in particular the 'directional orders' as regarded by the applicant, were based on the Court exercising its powers under s 5 (1) (a) or (b) of the Supreme Court Act.  In light of our rulings regarding grounds 1, 2 and 4, where we have, amongst others, disagreed with the applicant's understanding of s 5 (1) (a) and (b) and s 19, this ground shall fail. The ground we note is dependent upon the applicant's arguments under the grounds 1, 2 and 4.

31.	In the end-result, the applicant (with those supporting it) has not established the legal basis to discharge or vary the stay orders of the single judge of the Supreme Court.  We conclude that the application to discharge or vary the Stay Orders is without merit and that it be dismissed.

32.	The orders of the Court are that:

1)	The application to discharge or vary the Stay Orders of the single judge of the Supreme Court is dismissed.

2)	Costs of and incidental to the application shall be paid by the First, Second and Third Respondents on a party-party basis to be taxed if not agreed.

Ruling and orders accordingly.
__________________________________________________________
Solicitor-General 		: 	Lawyer for the Appellants
Mawa Lawyers		:	Lawyers for the First and Third Respondents
Tamutai Lawyers		:	Lawyers for the Second Respondent
Raymond Obora Lawyers: 	Lawyers for the Fourth Respondent