SC2138

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 170 OF 2017

BETWEEN:
VICTOR JOSEPH
Appellant

AND:
RUI RAMI
First Respondent

AND:
NATIONAL HOUSING CORPORATION
Second Respondent

Waigani:  Hartshorn, Collier & Logan JJ.
(Heard on the papers: Last submission filed on 30th March 2021)
2021: 28th July

PRACTICE AND PROCEDURE – National Housing Corporation – whether necessary to give prior notice of proceeding under s 5 of the Claims by and Against the State Act – whether, even if necessary, it was evidenced that no such notice given – whether open to National Court to dismiss proceeding

Held:

Allowing the appeal, assuming, without deciding, that there was a requirement for the giving of a notice to the second respondent, there was no evidence before the primary judge that a notice under s 5 of the Claims by and Against the State Act had not been given. Accordingly, the proceeding ought not to have been dismissed. 

Cases Cited:
Papua New Guinea Cases

Asiki v Zurenuoc, Provincial Administrator [2005] PGSC 27; SC797

Frederick Martins Punangi v Sinai Brown as Minister for Public Service, Sir Michael Somare as Chairman of the National Executive Council and The State (2004) N2661
Josiah v Raphael [2018] PGSC 8; SC1665
Keka v Yafaet [2018] PGSC 18; SC1673
Mineral Resources Development Company Ltd v Sisimolu [2010] PGSC 50
National Capital District Commission v Reima [2009] PGSC 15
Rema v Yaki [2019] PGSC 104; SC1874
Tohian, Minister For Police and The State v Tau Liu [1998] PGSC 25; SC566

Overseas Cases

Commonwealth of Australia v Mewett (1997) 191 CLR 471
Crofter Hand Woven Harris Tweed Co v Veitch [1942] AC 435 
McKernan v Fraser (1931) 46 CLR 343

Papua New Guinea Legislation

Claims by and Against the State Act, ss 2, 5
National Court Rules, O. 8, r. 12

Overseas Legislation

Crown Proceedings Act 1947 (UK), s 2
Judiciary Act 1903 (Australia), ss 56 and 64

Counsel

Mr A Furigi, for the Appellant
Mr J Ole, for the First Respondent

28th July, 2021

1.      BY THE COURT: On 7 November 2017, the National Court dismissed, with costs, a proceeding instituted by the appellant, Mr Victor Joseph, against the respondents, respectively, Mr Rui Rami (the first respondent) and the National Housing Corporation (the second respondent - NHC). 

2.     Mr Rami is the registered proprietor of a residence lease granted under s 61 of the Land Act Chapter 185 in respect of land described as Allotment 64, section 359, Hohola, Port Moresby in the National Capital District (the leasehold). He acquired the leasehold for the sum of K43,120.00 from its registered proprietor, the NHC, pursuant to a contract in writing dated 25 January 2016.

3.       In the National Court, Mr Joseph alleged in his statement of claim that the transfer of the leasehold interest by the NHC to Mr Rami was procured by the fraud of each of them and with the intention to defraud him. He has been the occupier of the leasehold since 1995. Mr Joseph asserted an interest in the leasehold derived from an application made by him to the NHC, for the leasehold, accompanied by an application fee, pursuant to a “giveaway scheme” of the national government. Notably, save for an unparticularised allegation of “conspiracy”, unparticularised as to its overt acts but based on an allegedly mutual knowledge of his occupancy of the leasehold, the particulars of the alleged fraud given by Mr Joseph refer to acts of the NHC alone, including an alleged breach of s 37 and s 38 of the National Housing Corporation Act. 

4.     Mere knowledge of Mr Joseph’s occupancy would not, of course, in itself, prove anything. He may, after all, have been nothing more than a longstanding squatter. 

5.     The learned primary judge dismissed the proceeding on 7 November 2017 on the basis that Mr Joseph had not complied with s 5 of the Claims by and Against the State Act (CBAS Act), which provides:

5.	NOTICE OF CLAIMS AGAINST THE STATE.
(1)	No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this section by the claimant to–
(a)	the Departmental Head of the Department responsible for justice matters; or
(b)	the Solicitor-General.
(2)	A notice under this section shall be given–
(a)	within a period of six months after the occurrence out of which the claim arose; or
(b)	where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or
(c)	within such further period as–
(i)	the Principal Legal Adviser; or
(ii)	the court before which the action is instituted,
on sufficient cause being shown, allows.
(3)	A notice under Subsection (1) shall be given by–
(a)	personal service on an officer referred to in Subsection (1); or
(b)	leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 a.m. and 12 noon, or 1.00 p.m. and 4.06 p.m., or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act 1953.
6.      It is settled that, where there is a requirement for a notice under s 5 of the CBAS Act to be given, and it is not duly given prior to the institution of a proceeding, the proceeding is incompetent and may be struck out as an abuse of process: Keka v Yafaet [2018] PGSC 18; SC1673, at [27]; see also, National Capital District Commission v Reima [2009] PGSC 15; Mineral Resources Development Company Ltd v Sisimolu [2010] PGSC 50 and Tohian, Minister For Police and The State v Tau Liu [1998] PGSC 25; SC566, which is the root authority. 

7.       With reference to Asiki v Zurenuoc, Provincial Administrator [2005] PGSC 27; SC797, a submission was made that s 5 of the CBAS Act had no application to the present case, because his claim was neither in tort nor contract but rather one based on fraud and breach of statutory duty. 

8.      This submission is misconceived. The actual decision in Asiki v Zurenuoc is that a judicial review proceeding and any other proceeding where relief in the nature of a prerogative writ is sought are not ones to which s 5 of the CBAS Act is applicable. Such proceedings are not instituted by “action”, i.e. by the issuing of a writ of summons and thus fall outside the text of s 5. 

9.      Taking up observations made in the original jurisdiction in Frederick Martins Punangi v Sinai Brown as Minister for Public Service, Sir Michael Somare as Chairman of the National Executive Council and The State (2004) N2661 by Injia DCJ (as his Honour then was), referred to with approval by this Court in the appeal in Asiki v Zurenuoc, it was submitted that s 5 was applicable just to claims in contract or tort and for the enforcement of constitutional rights under s 57 and s 58 of the Constitution, as defined in s 2 of the CBAS Act. 

10.       Such claims are, undoubtedly, covered by s 5 but the language of that section, “any claim”, is general. It would, with respect, be an odd construction of it to exclude from its purview claims for equitable relief, as these, too, may be included in a proceeding instituted by “action”. The present is such a case for the relief claimed is equitable, injunctions and declarations.

11.      The purpose of s 2(1) of the CBAS Act is to make explicit that claims in contract or in tort may be brought against the State in any case in which such a suit would lie against other persons. The sub-section puts beyond doubt that the State enjoys no immunity from suit in contract or in tort. Absent such statutory provision, it may be arguable, and it is unnecessary to explore the point, that the State enjoyed immunity from such suits. The historic, common law position was that the sovereign could do no wrong. That position and its rationale were notably discussed by Dawson J in Commonwealth of Australia v Mewett (1997) 191 CLR 471 where, at 497, his Honour stated:

The immunities which the Crown enjoys from suit in contract and tort rest, however imperfectly and in different ways, upon the propositions that the sovereign cannot be sued in its own courts and that the sovereign can do no wrong.

Statutory analogues to s 2(1) of the CBAS Act, enacted for like reason, are found throughout the Commonwealth: see, for example, s 56 and s 64 of the Judiciary Act 1903 (Australia) and s 2 of the Crown Proceedings Act 1947 (UK). Once the purpose of s 2(1) of the CBAS Act is understood, there is no reason to read down the generality of the text of s 5 of the CBAS Act.

12.      Mr Joseph’s claims based on fraud, breach of statutory duty and conspiracy are each claims in tort. Whole chapters, 8 and 17 respectively, in the standard English account of the law of torts, Clerk & Lindsell on Torts, 23rd Edition, are devoted to the torts of breach of statutory duty on the one hand and deceit or fraud on the other. 

13.      A civil conspiracy, too, is a tort. Such a tort is grounded in either an agreement of two or more to do an unlawful act or to do a lawful act by unlawful means: see Crofter Hand Woven Harris Tweed Co v Veitch [1942] AC 435, at 439-445 per Viscount Simon LC and at 461-472 per Lord Wright; see also McKernan v Fraser (1931) 46 CLR 343, at 363-412 per Evatt J. This tort arises when the damage is caused or, if quia timet injunctive relief is sought, by the threat of such damage by a combination of persons. 

14.     If Mr Joseph cannot succeed in these claims in tort, his claim for equitable relief by way of injunction to secure the transfer of the leasehold to him must fail. But each of the claims, for the reasons given, would fall within s 5 of the CBAS Act if the NHC is “the State”.

15.     The issue of non-compliance with s 5 of the CBAS Act was not one raised on the pleadings. The prior giving of a notice was not pleaded in the statement of claim. It might, permissibly, have been pleaded but the National Court Rules (NCR) did not mandate that. Instead, the prior giving of any such notice being a condition precedent to the valid institution of a proceeding against the State, the effect of Order 8, Rule 12 of the NCR was that the happening of that event was to be implied in the pleading. Neither Mr Rami nor the NHC raised the issue of non-compliance in their respective defences. Instead, what occurred is that the issue was raised by the NHC, by a notice of motion filed on 19 October 2017 and served on Mr Joseph on 25 October 2017. Although it was the NHC which made the application, it was Mr Rami who actively prosecuted the making of orders based on alleged non-compliance with the CBAS Act.

16.     Mr Joseph submitted that it was not for Mr Rami to raise any issue of non-compliance. There is no substance in this. The National Court could have raised the issue of its own motion: Keka v Yafaet, at [27]. Where s 5 of the CBAS Act is applicable, either there is compliance or there is not.

17.     Another point raised by Mr Joseph was that s 5 of the CBAS Act, if applicable at all, only applied to the NHC, not to the other defendant, Mr Rami. That is true. However, the foundation for his claimed interest in the leasehold was some arrangement with the NHC, not with Mr Rami. Success in respect of such a claim was necessary step in his securing the relief he claimed. If this claim could not be maintained against the NHC, because against it the proceeding was incompetent for want of the prior giving of notice, to pursue it against Mr Rami would be an exercise in futility. A similar point was made in Keka v Yafaet, at [52]. The existence of such futility was, in that case, regarded as a reason for the upholding of the dismissal of the whole proceeding, not just as against the alleged “State” party. Were this the only issue raised on appeal by Mr Joseph, it would not warrant the allowing of his appeal.

18.      Mr Joseph also submitted that the NHC was not, for the purposes of s 5 of the CBAS Act, “the State”. As Keka v Yafeat reveals, that is a vexed question in respect of which there is, as yet, no settled answer. It is not necessary to answer that question in order to resolve this appeal. Rather, it is sufficient to assume, without deciding, that the NHC is “the State”.

19.      Assuming that the NHC is the State, it was for the NHC, who had raised the issue by their notice of motion, to introduce some evidence before the primary judge that the requisite notice was not given. This they did not do. If having taken the point and introduced some evidence that the notice was not given, it would then have fallen to Mr Joseph to prove, on the balance of probabilities, that a notice in accordance with s 5 of the CBSA had been given such that his action was competent: Josiah v Raphael [2018] PGSC 8; SC1665, at [23]; Rema v Yaki [2019] PGSC 104; SC1874, at [29] per Berrigan J, Kirriwom and Anis JJ agreeing. 

20.      The transcript of the hearing of the notice of motion discloses that there was no admission made on behalf of Mr Joseph that no notice had been given. Rather, he, by his solicitor, sought an adjournment so that the position could be investigated with the Solicitor-General’s chambers and with the legal firm that had initially acted for Mr Joseph. 

21.       About a fortnight had passed between when Mr Joseph had been served with the notice of motion and the date on which the notice of motion was heard. The primary judge was entitled to form the view that sufficient time had passed to make the requisite investigation and, as a matter of discretionary value judgment, to refuse to grant an adjournment. So doing did not, however, change the position that there needed to be evidence to make out the non-compliance Mr Rami alleged.

22.      An affidavit made by Mr Rami, upon which reliance was placed in relation to alleged non-compliance with the CBAS Act, contained (paragraph 17) a statement that a search of the court file in the National Court registry had been conducted and a conclusory statement that Mr Joseph, as plaintiff, had “failed to comply with the mandatory requirement” of s 5 of the CBAS Act. 

23.      Neither the CBAS Act nor the NCR nor any practice direction required that Mr Joseph, as plaintiff, file an affidavit deposing the giving of a notice under s 5 of the CBAS Act. That is not to say that the filing of such an affidavit is not a prudent course to take in cases to which s 5 is applicable, only that it is not mandatory. Filing such an affidavit makes it plain both to the Court and to defendants that a plaintiff has adverted to s 5, leaving only for consideration, if need be, whether the notice is adequate. But the absence of such an affidavit on the court file did not prove Mr Rami’s point.

24.      Section 35 of the Evidence Act permitted the use, on notice, of evidence by affidavit but it did not thereby convert anything stated in an affidavit into evidence if it was not. There was no evidence by affidavit or otherwise from any officer of the Solicitor-General’s chambers or from any officer of the Department of Justice and Attorney-General (the alternative officers to whom a s 5 notice may be given) attesting to the existence of a system for the recording of the receipt of notice under s 5 and to the absence of any record of the service of any such notice. Mr Rami did not serve a subpoena on either office seeking the production of any notice given. A nil return by each to any such subpoena may have provided evidence that no notice had been given. Nor had Mr Rami sought an order in advance of the hearing for particular discovery by Mr Joseph, limited to the category of particulars of any s 5 notice and its service. 

25.      As it was, there was just no evidence, one way or the other, on the hearing of the notice of motion as to the giving of a notice under s 5 of the CBAS Act. More particularly, the then absence of evidence from Mr Joseph did not have the result that the Court was entitled to proceed on the basis that notice had not been given. Rather, having taken the point, it was for the NHC, or for Mr Rami in supporting the application, to introduce some evidence in support of it. If one or the other (or each) had, then it would have fallen to Mr Joseph to prove by other evidence that he had in fact complied with the CBSA Act.

26.      In these circumstances, it was not, with respect, open to the learned primary judge to dismiss the proceeding for want of compliance with s 5 of the CBAS Act. There was no evidentiary foundation for such a conclusion.

Conclusion 

27.       The appeal must be allowed. Mr Rami must pay the costs of the appeal and of the notice of motion in the National Court. The NHC chose not to take an active role as contradictor in relation to the appeal. It would not therefore be appropriate to make any order for costs against it.

28.      It is regrettable that over three years have passed since the order, now set aside, dismissing the proceedings, was made. It ought not to be controversial between the parties as to whether or not a notice under s 5 of the CBAS Act was given. If it is agreed (or otherwise proved) that a notice was not given, then it will be for the parties to decide whether or not to raise the issue, not necessary to decide in this appeal, as to whether the NHC was “the State”.

Orders 

1.	The appeal be allowed.
2.	The orders made by the National Court on 7 November 2017 be set aside.
3.	In lieu thereof, it be ordered that the second defendant’s (second respondent on the appeal) notice of motion be dismissed and that the defendants pay the plaintiff’s (appellant on the appeal) costs of and incidental to the notice of motion, to be taxed if not agreed.
4.	The first respondent pay the appellant’s costs of and incidental to the appeal, to be taxed if not agreed.
____________________________________________________________________
Furigi Lawyers: Lawyer for the Appellant					
Redman Lawyers: Lawyer for the First Respondent
The Second Respondent did not appear on the appeal.