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Feo v Samson [2022] PGSC 41; SC2239 (17 March 2022)

SC2239

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM 5 OF 2020

BETWEEN:
KINOKA FEO
Appellant

AND
BENJAMIN SAMSON AND OTHERS
Respondents

Waigani: Logan J
2022: 17^th March

PRACTICE & PROCEDURE – security for costs – where appellant seeks security against a respondent in relation to the respondent’s objection to competency – where respondent has not paid interlocutory cost orders – where proceedings governed by Order 10 of Supreme Court Rules 2012 – where no special circumstances exist to justify award of security – application dismissed.

Facts:

The appellant applied in the National Court for judicial review of a decision of the Registrar of Titles (Registrar) to register certain land in the name of the fourth respondent Mr Lucas Maino. The appellant was successful in that judicial review application, insofar as it was found that there had been an error by the Registrar in administering the Land Registration Act 1981. The National Court remitted the matter to the Registrar for redetermination.

The National Court also made ancillary orders permitting title to the relevant land to remain with Mr Maino pending the Registrar’s redetermination. The appellant purported to institute an appeal against those orders and the remitting of the matter to the Registrar for redetermination.

In response, Mr Maino filed an objection to competency of that appeal. That objection to competency was dismissed and Mr Maino was ordered to pay the appellant’s costs, which the appellant sought to have taxed. Those costs were not paid.

The appellant then applied for Mr Maino to provide security for the appellant’s costs of the appeal in the amount of K20,000.

Held:

1. The Supreme Court Rules 2012 do not expressly cater for security for costs being ordered in relation to appeals from the National Court’s judicial review jurisdiction. In those circumstances, the Supreme Court’s power to order security is derived from s 18 of the Supreme Court Act 1975 and the incorporation of Order 14, Division 4, Subdivision A of the National Court Rules 1983 by virtue of Order 2, Rule 1(h) of the Supreme Court Rules.
2. Special circumstances must be shown to justify ordering security pursuant to s 18(1) of the Supreme Court Act. The failure of a respondent to pay an interlocutory costs order is not a sufficiently special circumstance to justify an award of security in favour of an appellant.
   

Cases Cited:

Tulapi v Yer [2012] PGSC 50; SC1212

Legislation:

Land Registration Act 1981
Supreme Court Act 1975
National Court Rules 1983
Supreme Court Rules 2012

Counsel:

Mr. J Poya, for the Appellant
Mr. A Ona, for the Fourth Respondent
No appearance for the First, Second and Third Respondents

Oral decision delivered on
17^th March 2022

1. LOGAN J: The broad background to the present security for costs application lies in most unfortunate decision, unfortunately also not unique, in the administration of the Land Registration Act 1981. The end result of that in this particular case was the institution of a judicial review proceeding, OS (JR) 494 of 2018, by the appellant, Mr Kinoka Feo as against the first respondent, the Registrar of Titles, and, materially for present purposes, the fourth respondent, Mr Lucas Maino.
   
2. The result of the judicial review application in the National Court was success only in part for Mr Feo. By this, I mean that an error in the administration of the Land Registration Act was found to have been made. Nonetheless however, the Court ordered that the title to the land concerned remain in the name of Mr Maino, pending a rehearing of the parties by the Registrar of Titles. It is not necessary for present purposes further to detail how those orders came to be made.
   
3. Mr Feo has instituted or, at least, purported to institute, an appeal against the orders made in the National Court insofar as title was permitted to remain in Mr Maino’s name and the matter remitted to the Registrar of Titles for rehearing. A controversy on the appeal is whether or not the fraud exception found in s 33(1)(a) of the Land Registration Act ought to have been held proven on the evidence before the National Court. Mr Maino’s response repost to the appeal was to file a notice of objection to competency which, as amended, was filed on 20 November 2020.
   
4. On 17 May 2021, in respect of an interlocutory application filed by Mr Maino on 10 May 2021, the court ordered:
   

“(1) The application filed by fourth respondent on 10 May 2021 is dismissed.

(2) The fourth respondent pay the costs of and incidental to the said application.”

5. That order was taxed on the application of Mr Feo on 9 December 2021. Following a taxation on 8 December 2021, a certificate issued in which a Registrar, as taxing officer, certified materially a taxed sum of K3,575 (inclusive of the GST). That certificate was served upon Mr Maino. The amount as certified remains unpaid. That has apparently motivated Mr Feo to apply for security for costs in respect of the appeal.
   
6. In support of that application and as is usual in relation to a security for costs application, the application is supported by a draft or, as is sometimes termed, “skeleton” bill of costs. Such support is, in the ordinary course, necessary so as to provide a foundation upon which the court can conclude reasonably what amount to order by way of security for costs in the event that the court is disposed to make such an order.
   
7. In this particular instance, the grand total in respect of costs in the draft bill is K23,720. As to that and recognising that in prospect is the taxing off of some of that amount were the matter to proceed taxation, the amount sought by way of security for costs is K20,000.
   
8. In support of the application for security for costs, Mr Poya, who appeared for Mr Feo, pointed initially to Order 11, Rule 28 of the Supreme Court Rules 2012.
   
9. That rule, amongst other things, makes applicable to appeals of the present kind, Order 7, Division 5 of the Supreme Court Rules which is directed to objections to competency of appeals. In itself, however, Order 11, Rule 28 has nothing to say in relation to the subject of security for costs. Order 7, Rule 24 does have something to say in relation to security for costs of an appeal but that rule, as was common ground, is not applicable to an appeal such as the present which is governed in the first instance by Order 10 of the Supreme Court Rules because it is an appeal from orders made in the National Court’s judicial review jurisdiction. Order 11 provides for rules of general application. However, nothing in Order 11 is expressly directed to the subject of security for costs.
   
10. So, the present circumstance, in my view, is one of those situations where pursuant to Order 2, Rule 1(h) of the Supreme Court Rules, the National Court Rules 1983 practice is incorporated by reference.
    
11. Before turning to that, there is an overarching statutory provision to which reference must be made. That is s 18 of the Supreme Court Act 1975 which provides:
    

“18. SECURITY FOR APPEAL.

(1) 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.

(2) If any security ordered under Subsection (1) is not given in accordance with the order, the appeal, or the application for leave to appeal, as the case may be, shall be deemed to have been abandoned.”

12. It can be seen at once from the text of s 18 that that section has nothing at all to say expressly in relation to an application by an appellant for security of costs. It is cast in more general terms with the power being granted to the court or judge in special circumstances to order that just security be given for the costs of an appeal. In theory, the language of s 18(1) does look to be broad enough to capture an application by an appellant for a respondent to pay security for costs.
    
13. But such an application is a very unusual one indeed. Particularly, that is so where the respondent concerned is a natural person. That that is so is revealed by regard to National Court practice as incorporated by reference. That practice is found in Order 14, Division 4, Subdivision A. The practice there contemplates the making of orders for security for costs as against a plaintiff in particular circumstances.
    
14. It is, therefore, apparent that the National Court Rules do not contemplate in the ordinary course, an order for security for costs on the application of the plaintiff against a defendant. So, the present, may be one where although the language of s 18 is at least generously construed, sufficient to permit an appellant to seek costs against the respondent, the practice is not prescribed such that it would fall to the court or a judge to prescribe that practice.
    
15. The National Court Rules in Order 14, Rule 25 set out particular classes of cases in which, in the ordinary course, security might be ordered as against a plaintiff. Even adapting this for the purposes of a present case, none is applicable. Mr Maino has not shown any evidence to be ordinarily a resident outside Papua New Guinea. He is not responding other than for his own benefit. His address is given in the proceedings. That address is for service by his lawyer. There is no evidence that he has changed his address as a consequence of trying to avoid the consequences of the proceedings after their commencement.
    
16. All that there is, is that underlying motivation to which I have earlier referred, in respect of someone who not having paid the costs as certified. But that underlying motivation, which I do not doubt, is one of sincerity is, with all respect to Mr Poya and Mr Feo, misconceived. As was highlighted by Mr Ona on behalf of Mr Maino, the ordinary position in relation to an interlocutory costs order is as stated in Order 12, Rule 4(b) of the Supreme Court Rules which states:
    

“An order for costs of an interlocutory proceeding shall not, unless the Court or a Judge otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.”

17. The order made in May 2021 in relation to interlocutory costs made no provision for those costs to be paid forthwith.
    
18. Accordingly, Mr. Maino is under no obligation to make payment forthwith. So, the basis for the present application, in terms of motivation, just does not exist.
    
19. In any event, the case is not one for the ordering of security. My attention was drawn in submissions on behalf of Mr Feo to a judgment of Justice Hartshorn in relation to an application for security for costs. Tulapi v Yer [2012] PGSC 50; SC1212. That case is an example of one where special circumstances in s 18(1) of the Supreme Court Act were found to exist such that an order for costs on the application of a respondent was made against an appellant. The occasion for making reference to this case on behalf of Mr Feo was apparently a belief that the objection to competency was doomed to failure and the appeal was necessarily one with high prospects of success.
    
20. It may well be that the objection to competency could have been prosecuted with more diligence. However that may be, yesterday, in the ordinary course of administering the appeal, Justice Makail ordered that Mr Feo’s application to dismiss Mr Maino’s objection to competency be adjourned until further order. His Honour made further directions yesterday to the end of case managing the expeditious progression of the appeal to its hearing. His Honour adjourned the appeal in that matter, which necessarily includes anything in relation to the objection to competency to 2 May 2022, for listing of the substantial appeal.
    
21. Whilst I respectfully agree that Tulapi v Yer helpfully highlights considerations which may amount to special circumstances, none of those, in my view, is established in relation to the present case. It is to be remembered that even if the appellant, Mr Feo, were to enjoy complete success on the appeal and a costs order were made in his favour following that event, all that would occurr in the ordinary course would be that those costs would be taxed and certified and if not paid within 14 days, an entitlement to judgment would arise in respect of the costs as certified, together with the costs of an application for judgment.
    
22. In those circumstances, Mr Feo could then enforce, in the ways permitted by the Supreme Court Rules, that judgment. If the judgment were not satisfied, Mr Feo would be entitled; if so disposed, to seek the issuing of a bankrupty notice. If the bankruptcy notice remained unsatisfied for the requisite period, Mr Feo would then be entitled to apply for a sequestration order. In turn, if that order were granted, Mr Feo would become one of perhaps a number of unsecured creditors. The rights of unsecured creditors would then fall for administration under the insolvency law such that Mr Feo would then receive, assuming there was any, property of the bankrupt to distribute, a ratable amount in accordance with the insolvency law.
    
23. In my view, Mr Feo is impermissibly seeking a guarantee in effect that whatever costs may be awarded in his favour will be met out of a sum paid into court by Mr Maino. It is telling that no precedent could be citied in support of such an application, particularly in respect of an individual respondent resident in Papua New Guinea. In my view and with all due respect to Mr Poya, the application is one which is misconceived. There are no special circumstances established which would warrant the unusual course of making an order for costs on the application of an appellant against a respondent. I therefore dismiss the application.
    

Orders

1. The appellant’s submission in relation to the security for costs application made by the appellant be placed on the file.
2. The appellant’s security for costs application in respect of the fourth respondent be dismissed.
3. The appellant pay the fourth respondent’s costs of and incidental to that application, to be taxed if not agreed.
4. The orders made today be entered forthwith.

__________________________________________________________________
Poya Legal Services: Lawyers for the Appellant
Ona Lawyers: Lawyers for the Respondents