SC2143

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 183 AND 196 OF 2019

BETWEEN:
RD FISHING (PNG) LTD
Appellant

AND:
HAMILTON MASAI for himself and on behalf of the traditional inhabitants of Kanam village and Sek Island along North Coast Road, Madang District, Madang Province whose names appear on the schedule of this Writ
Respondent

Waigani: Gavara-Nanu J, Hartshorn J and Makail J
On the papers
2021: 20th August

SUPREME COURT APPEAL - Appeal of three interlocutory judgments which refused to dismiss a representative proceeding

Cases Cited:
Simon Mali v. The State (2002) SC690
Curtain Bros (PNG) Ltd v. UPNG (2005) SC788
Tigam Malewo v. Keith Faulkner (2009) SC960
State v. Central Provincial Government (2009) SC977
Mango v. Passismanua Inland Resource Ltd (2009) SC1163
Ron Napitalai v. PNG Ports Corporation Ltd &Ors (2010) SC1016
James Marape v. Peter O’Neill (2016) SC1493
Mark Philip v. Ken Tiliyago (2019) SC1783
Independent State of Papua New Guinea v. Kunai (2020) SC2029 
Amaiu v. Yalbees (2020) SC2046  

Counsel:

Mr. T. Injia, for the Appellant
Mr. G. Pipike, for the Respondent

20thAugust, 2021

1. THE COURT: This is a decision on an appeal against three interlocutory judgments of the National Court. The judgments appealed each refused applications to dismiss National Court proceeding WS No. 169 of 2019. As the judgments appealed are interlocutory judgments, leave to appeal was required. Leave to appeal was granted on 10th March 2020.

Background

2. The respondent commenced proceedings in the National Court against the appellant for himself and on behalf of what are pleaded to be local villagers, indigenous inhabitants and residents of Kananam Village and Sek Island in Madang Province. The respondent pleads amongst others, that the appellant by its fishing operations has interfered with the respondents’ customary or artisanal fishing, their travelling routes and their use and enjoyment of certain waters known as Vidar Bay. The respondent claims that the appellant is liable in negligence and nuisance and seeks damages.

Interlocutory judgments appealed

3. The judgments appealed are three ex tempore judgments which were delivered on 26th September 2019, 21st October 2019 and 5th November 2019 by the same primary judge. The three judgments are decisions on three applications to dismiss the proceeding. The three applications had sought to dismiss the proceeding in essence for failure to comply with the representative proceeding requirements of Order 5 Rule 13(1) National Court Rules as detailed by the Supreme Court in Simon Mali v. The State (2002) SC690 and Tigam Malewo v. Keith Faulkner (2009) SC960.

4. On 26th September 2019, the primary judge had refused the first application to dismiss and ordered that the respondent rectify the proceeding. This was after the primary judge had stated that the proceeding appeared to be non-compliant with representative proceeding requirements. On 21st October 2019 the primary judge refused the second application to dismiss. The primary judge stated that he acknowledged that the proceeding remained non-compliant and ordered that amongst others, the respondent rectify the proceeding. On 5th November 2019 the primary judge again refused to dismiss the proceeding and declared that only those persons who had signed an authority to act would be regarded as plaintiffs in the proceeding.

5. As referred to, the three interlocutory judgments are appealed. We consider the appeal against the third interlocutory judgment (5/11 judgment) first.

Grounds of appeal

6. In summary the grounds of appeal allege amongst others that the primary judge fell into error in the exercise of the courts discretion in refusing to dismiss the proceeding notwithstanding that the proceeding was and remained non-compliant with representative proceeding requirements.

7. The respondent submits amongst others that the primary judge did not fall into error in his exercise of the court’s discretion as representative proceedings may be filed by one or more persons and that this National Court proceeding was not invalid because 81 persons listed as plaintiffs did not give their consent. Further, as the primary judge permitted the respondent to rectify the deficiencies in the proceeding, the proceeding was now compliant with representative requirements.

Consideration

8. This appeal is against the exercise of discretion by the primary judge in three interlocutory judgments.

9. This Court’s role in an appeal from an exercise of judicial discretion is considered in Curtain Bros (PNG) Ltd v. UPNG (2005) SC788. We respectfully agree with and reproduce the following passage from that decision:

“The appellate Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction, except where the exercise of that discretion is clearly wrong.  A discretionary judgment may be set aside if an identifiable error occurred in the exercise of discretion.  Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is “unreasonable or plainly unjust” and such that an error can be inferred.  These principles are well established. We adopt a passage from Kitto J in the Australian High Court case of Australia Coal and Shale Employees’ Union v The Commonwealth (1956) 94 C.L.R. 621 at p.627, which was adopted by Clarkson J. in Breckwoldt & Co. (N.G.) Pty Ltd v. Gnoyke [1974] PNGLR 106 at p.112 – 113:

“The decision by the primary judge to stay the action was made in exercise of a judicial discretion and I accept that in those circumstances the principles on which this Court should act are as described by Kitto J. in Australian Coal and Shale Employees’ Union v The Commonwealth ... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgements is that there is a strong presumption in favour of the correctness of the decisions appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.  A degree of satisfaction to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts.  Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance…”

10. This passage has been agreed with and adopted by this Court in amongst others, the decisions of State v. Central Provincial Government (2009) SC977; Mango v. Passismanua Inland Resource Ltd (2009) SC1163; Ron Napitalai v. PNG Ports Corporation Ltd & Ors (2010) SC1016 and James Marape v. Peter O’Neill (2016) SC1493.

11. The three interlocutory judgments appealed are concerned with a representative action. In Simon Mali v. The State (supra) and Tigam Malewo v. Keith Faulkner (supra), it was held that where a plaintiff is acting in a representative capacity for other persons:

a)	all intended plaintiffs (those who he claims to represent) must be named in the originating process;

b)	each and every intended plaintiff must give specific instructions (evidenced in writing) to their lawyers to act for them;

c)	any person who commences proceedings and claims to represent other intended plaintiffs must produce an authority to the court to show that he was authorised by them to file proceedings as a class representative.

12. These requirements have recently been referred to with approval in Mark Philip v. Ken Tiliyago (2019) SC1783 at [24] (David, Hartshorn and Kariko JJ), Independent State of Papua New Guinea v. Kunai (2020) SC2029 at [10] (Makail J.) and Amaiu v. Yalbees (2020) SC2046 at [21] (Salika CJ, Makail J and Berrigan JJ).

13. The 5/11 judgment now under consideration is an interlocutory judgment delivered on a third attempt by the appellant to dismiss the National Court representative proceeding. After the first and second attempts to dismiss the proceeding for non-compliance with representative proceeding requirements, in addition to refusing both dismissal applications and on both occasions ordering the respondent to rectify the proceeding, the primary judge amongst others, ordered that the appellant was at liberty to file a fresh notice of motion seeking dismissal of the proceeding if the respondent failed to rectify the proceeding. Further, in his consideration of the first motion seeking dismissal, the primary judge in his ex tempore decision said at p 17 line 25, “it appears that the proceedings are non-compliant …. at least in regard to the second and third requirement” (stated in the Mali and Malewo (supra)), at p17 line 43, “the proceedings are generally non-compliant with the requirements for commencement of representative proceedings” and at p19 line 11, “having found that the proceedings are non-compliant with the requirements for commencement of representative proceedings, it appears that the proceedings are in that sense and to that extent an abuse of process and I reiterate are therefore liable to be dismissed.”

14. In his consideration of the second motion seeking dismissal, the primary judge in his ex tempore decision at p47 line 6, “I will decline to dismiss the proceedings. I acknowledge that the proceedings presently remain noncompliant.”

15. It is in the above context that the third dismissal motion was heard and the 5/11 judgment delivered.

16. In the course of the hearing of the third dismissal motion, it transpired that only 77 persons had signed the authority to act which had been filed since the hearing of the second dismissal motion and not by the 156 persons listed as plaintiffs in the schedule to the writ when the proceeding was filed. The proceeding had therefore not been rectified as had been ordered by the primary judge in each of his judgments on the first and second dismissal applications. The primary judge in the 5/11 judgment though, did not dismiss the proceeding and declared that only those persons who had signed an authority to act would be regarded as plaintiffs in the proceeding.

17. In considering whether the primary judge fell into error in the exercise by him of the court’s discretion in refusing to dismiss the third application to dismiss, we have had recourse to Mark Philip v. Ken Tiliyago (supra). This case was cited to the primary judge by counsel for the appellant. In Mark Philip v. Ken Tiliyago (supra) the Court considered an appeal from a similar fact situation to that presently before the court. The National Court had refused to dismiss a representative proceeding which contained deficiencies although the respondent had been alerted previously of the deficiencies by the National Court.

18. At [29] the Court in Mark Philip v. Ken Tiliyago (supra) stated:

“29. The Courts have expressed the view that failure to meet the procedural requirements of a representative action under Order 5 Rule 13 means the plaintiff lacks standing and therefore no reasonable cause of action is disclosed, and it also amounts to an abuse of process. Recent cases reflecting this position include Huriba Andago v Andy Hamaga (2018) N7332, Dingake, J; Ben Kwayok v Jeremy Singomat (2017) N7097, Nablu, J; Amos Ere v National Housing Corporation (2016) N6515, Hartshorn, J.”

19. Notwithstanding the ratio decidendi of Mali and Malewo (supra), the Court in Mark Philip v. Ken Tiliyago (supra), then stated that it approved of the approach of giving an opportunity to a plaintiff to rectify deficiencies in a representative action. At [31] – [33] the Court said:

“31.	In PNG Communication Workers Union v Telikom PNG Ltd (2018) N7322 Cannings, J dismissed the proceeding as an abuse of process under Order 12, Rule 40(1)(c) National Court Rules when the plaintiffs failed to rectify the deficiencies in the representative action although they were given ample opportunity to correct them, and no reasonable explanation was offered for the failure. 

32.	We approve of the approach by Cannings, J and endorse the proposition that non-compliance with the procedural requirements of a representative action under Order 5 Rule 13 National Court Rules should normally attract dismissal of a proceeding. However, if the Court allows a plaintiff time to correct the non-compliance but the plaintiff does not rectify the default and without good reason, the Court should then dismiss the proceeding. 

33.	We also regard the following principles to be relevant in deciding this appeal: 

(1)	Court orders and directions must be complied with and non-compliance shows disrespect to the Court and is at the peril of the defaulting party; and 
(2)	the defaulting party must provide a reasonable explanation for the default. 
(Korak Yasona v Casten Maibawa & Electoral (1998) SC552; Hami Yawari v Anderson Agiru & Electoral Commission (2008) N3983).”

20. In Mark Philip v. Ken Tiliyago (supra), in considering the exercise of discretion in the decision being appealed before it, the Court considered that the primary judge in that case had failed to take into account that by a court direction, the respondent had previously been given sufficient opportunity to rectify the irregularity in the proceeding and the respondent had failed without good reason to comply with the court direction. The appeal was upheld and the National Court proceeding was dismissed.

21. A similar situation pertains here in our respectful view. In this instance, the respondent on two previous occasions had been given sufficient opportunity to rectify the proceeding and on two previous occasions had been ordered to rectify the proceeding but did not and without good reason. To our minds, the primary judge did not give proper weight to the fact that without good reason the respondent had failed to comply with two orders of the court requiring him to rectify the proceeding by certain dates.

22. The appellant was entitled to rely upon the National Court enforcing its own orders. Instead, in this instance, the primary judge did not give sufficient or any weight to the non-compliance by the respondent with the orders. Significantly, on the third instance of non-compliance, the respondent was left with an option but did not apply by motion, to amend the proceeding to exclude the persons listed as plaintiffs in the schedule to the writ who had not signed and proceed with the remainder. In the absence of a motion seeking such relief, the primary judge amended the proceeding so that the proceeding did purportedly become compliant.

23. Moreover, as the question of standing of the lead plaintiff determines the survival of the proceeding, a vague request, not clearly expressed to be an application by counsel to amend the proceeding to correct the deficiency, as was done in this case, on the third instance of non-compliance, is insufficient for the primary judge to act on to correct the defective proceeding.

24. Finally, in this case the respondents failed to comply with the Court order to rectify the proceeding. There was a specific finding to that effect by the Court. The Court should have then enforced its order and dismissed the proceeding on the strength of Mali, Malewo and Mark Philip (supra), for being an abuse of process. Furthermore, the proceeding could not be allowed by the Court to be on foot because the whole proceeding was based on the claims made by the plaintiffs the majority of whom as found by the primary judge had no standing. This also rendered the pleadings irrelevant thus leaving the action by the respondents without a reasonable cause of action.

25. For the above reasons, in our respectful view the primary judge fell into error in his exercise of the court’s discretion. The appeal should be allowed in respect of the 9/11 judgment. Given this it is not necessary to consider the other appeals against the other two interlocutory judgments the subject of SCA No. 183 of 2019. 

Orders

26. It is ordered that:

a)	The appeal is upheld in SCA No. 196 of 2019;

b)	The orders of the National Court made on 5th November 2019 in WS No. 169 of 2019 are quashed;

c)	In lieu thereof the respondent’s claim in the National Court is dismissed;

d)	The respondent or his lawyers, GP Lawyers, shall pay the appellants costs of and incidental to the appeal, including the application for leave to appeal and 	in the National Court.

e)	The appeal in SCA No. 183 of 2019 is rendered otiose by virtue of the appeal in SCA No. 196 of 2019 being upheld and is therefore dismissed;

f)	The parties shall meet their own costs of and incidental to appeal SCA No. 	183 of 2019.

__________________________________________________________________
Ashurst Lawyers: Lawyers for the Appellant	
GP Lawyers: Lawyers for the Respondent