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Denny v Pipiya [2021] PGSC 51; SC2125 (1 July 2021)

SC2125

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM NO 2 OF 2020

SIMON DENNY
Appellant

V

HANGU PIPIYA
Respondent

On The Papers: Cannings J, Makail J, Collier J
2021: 10^th May, 1^st July

PRACTICE AND PROCEDURE – judicial review – whether substantive relief can be granted at the same time as the grant of leave for judicial review

This was an appeal against the decision of the National Court that, when granting leave to the respondent for judicial review of a decision of the Registrar of Companies, appeared to grant the substantive relief sought in the judicial review. The appellant argued that the National Court erred in law by granting substantive relief at the same time as granting leave for judicial review. The respondent argued that the appeal was an abuse of process as the appellant had not exhausted the avenues available under the National Court Rules to apply to the National Court to set aside its decision.

Held:

(1) There is no need for a person aggrieved by a decision to grant leave for judicial review, to first apply to the National Court to set aside its decision before appealing to the Supreme Court.

(2) The procedural code for judicial review of administrative decisions is set out in Order 16 of the National Court Rules, an essential component of which is that leave must first be granted before the application for review is heard and determined. Granting of leave, and a substantive hearing of an application for judicial review, are two separate and distinct processes, which cannot be merged.

(3) Here, substantive relief was granted at the same time as leave for judicial review was granted, which was a serious error of law. The appeal was allowed, the decision of the National Court was quashed, the National Court proceedings were dismissed and costs were awarded against the respondent.

Cases Cited

The following cases are cited in the judgment:

Kalinoe v Paraka [2014] 2 PNGLR 188
Kitogara Holdings Pty Ltd v NCDIC [1988-89] PNGLR 346
Timothy v Marus [2014] 2 PNGLR 407

APPEAL

This was an appeal against granting of leave for judicial review.

Counsel

H Pora, for the Appellant
P Daime, for the Respondent

1^st July, 2021

1. BY THE COURT: The appellant, Simon Denny, appeals against the decision of the National Court of 17 March 2020 in judicial review proceedings OS (JR) No 62 of 2020.

2. In those proceedings the respondent to this appeal, Hangu Pipiya, was applying for judicial review of a decision of the Registrar of Companies to amend the register of companies regarding the shareholders and directors of a company, Bebahoya Ltd. The Registrar’s decision had the effect of reinstating the appellant and his associates as directors, and removing the respondent and his associates as directors.

3. The primary ground of the appeal is that the primary Judge, in granting leave for judicial review of the Registrar’s decision, erred in law by granting the substantive relief sought in the judicial review. The respondent argues that the appeal is without merit, and also raises a preliminary point that the appeal ought to be summarily dismissed as an abuse of process. The two issues for determination are:

(1) Is the appeal an abuse of process? And if it is not –

(2) Was there an error of law in the granting of leave?

1: IS THE APPEAL AN ABUSE OF PROCESS?

4. No. There is no need for a person aggrieved by a decision of the National Court to grant leave for judicial review, to first apply to the National Court to set aside its decision before appealing to the Supreme Court. This is especially so in the present case as the appellant was not a party to the National Court proceedings.

5. The appellant is aggrieved by the decision of the National Court and is directly affected by it, so he has standing to institute the appeal under s 17 of the Supreme Court Act (Kitogara Holdings Pty Ltd v NCDIC [1988-89] PNGLR 346). There is no abuse of process. The respondent’s preliminary point is without merit.

2: WAS THERE AN ERROR OF LAW IN THE GRANTING OF LEAVE?

6. To appreciate the appellant’s argument it is necessary to set out the terms of the order appealed against. It states:

The Application for Leave for Judicial Review is granted on these following terms:

1. Pursuant to Order 16 Rule 3 of the National Court Rules, for Leave of the Court to apply for Judicial Review to be granted to the Plaintiff to make his Application for an Order in the nature of Certiorari to bring into Court and quash the decision of the second, third and fourth Defendants made on the 8^th October, 2019 to exempt the first Defendant company from compliance with Division 8, 9 & 10 of part VI of the Companies Act 1997 so as to remove the Plaintiff as a Shareholder of the first Defendant company, contrary to Sections 35, 40, 65 and 77 of the Companies Act 1997, Section 4 of the Fairness of Trust Act 1993 [sic], and Section 53 of the Constitution.
   
2. Pursuant to Order 16 Rule 1(2) of the National Court Rules, a declaration that the above-mentioned decision of the Second Defendant made on the 8^th October, 2019 is ultra vires for being contrary to Section 35, 40, 65 and 77 of the Companies Act 1997, Section 4 of the Fairness of Transactions Act 1993, and therefore it is of no legal force and effect whatsoever.
   
3. Pursuant to Order 16 Rule 1(2) of the National Court Rules, a declaration that the previous shareholding and directorship records of the First Defendant Company before the Second Defendant made the decision the subject of review herein on the 8^th October, 2019 is the correct and legal shareholding and directorship records of the First Defendant company as held by the Third Defendant Office under Sections 71, 132, 142 and 152 of the Companies Act 1997, Section 5 of the Fairness of Transactions Act 1993, and Section 22 of the Constitution.
   
4. Costs of these proceedings be awarded to the Plaintiff to be borne by the Defendants.
   
5. The time for entry of these orders be abridged to the time of settlement which is forthwith.
   
6. Such further or other Order of Directions this Honourable Court deems appropriate.
   

7. That order was in the same terms as the orders sought by the respondent in a notice of motion filed on 28 February 2020. It is also in essentially the same terms as paragraph 4, headed “RELIEF SOUGHT”, of the respondent’s originating statement under Order 16, Rule 3(2)(a) of the National Court Rules, which is the document in which an applicant for judicial review sets out his name and description, the substantive relief sought and the grounds on which it is sought.

8. So, it is indeed the case, as alleged by the appellant, that the National Court granted the substantive relief sought by the respondent at the same time it granted leave for judicial review. This was contrary to the procedural code for judicial review of administrative decisions set out in Order 16 of the National Court Rules, an essential component of which is that leave must first be granted before the actual application for review is heard and determined (Kalinoe v Paraka [2014] 2 PNGLR 188).

9. Granting of leave, which is essentially an ex parte procedure and requires only a prima facie consideration of the applicant’s case to ensure that it is arguable (together with other preliminary requirements), and a substantive hearing of an application, of which notice and an opportunity to be heard must be given to all interested parties, are two separate and distinct processes. They cannot be merged (Timothy v Marus [2014] 2 PNGLR 407).

10. Here, substantive relief was granted at the same time as leave for judicial review was granted. This was a serious error of law warranting quashing the whole of the decision of the National Court. It was also a decision made contrary to the principles of natural justice. The appellant, whose interests were directly affected by the decision, was not a party to the National Court proceedings and was given no notice of the decision and had no opportunity to be represented at the hearing of what should have been a simple application for leave.

CONCLUSION

11. The decision of the National Court involved a serious and fundamental error of law. The decision must be quashed. The appellant also seeks dismissal of the National Court proceedings. We consider that that is an appropriate remedy as the decision of the National Court followed a notice of motion that sought substantive relief at the leave stage. That the notice of motion was filed, and then heard, and determined, is a manifestation of the serious abuse that was left unchecked and condoned in the National Court. Dismissal of those proceedings is warranted. The appeal must be allowed, with costs to follow the event.

ORDER

(1) The appeal is allowed.

(2) The order of the National Court of 17 March 2020 in OS (JR) No 62 of 2020 is quashed.

(3) The National Court proceedings, OS (JR) No 62 of 2020, are dismissed.

(4) The respondent shall pay the appellant’s costs of the appeal, on a party-party basis, which shall, if not agreed, be taxed.

_________________________________________________________________
Henry Pora Lawyers: Lawyers for the Appellant
Peter Daime Kaii Lawyers: Lawyers for the Respondent