SC2256

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 78 OF 2021

BETWEEN:
MARCELLA HASIFANGU
Appellant

AND:
MARK MAULUDU
in his capacity as Chief Executive Officer
of Boram General Hospital
First Respondent

AND:
PASCOE KASE
in his capacity as Secretary of the Department of Health
Second Respondent

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent

Waigani: Hartshorn J., Collier J., Narokobi J.
2022: 29th June, 1st July

APPEAL – Appeal from decision to strike out and dismiss proceedings issued for contempt of court – where appellant was successful in lower court and alleges non-compliance with orders – whether primary Judge erred in finding that there was no evidence to prove personal service of the statement of charge – whether primary Judge erred in finding that the earlier National Court orders did not bind the second respondent as he was not named in those proceedings, but rather was directed at the first respondent by operation of the Public Hospitals Act 1994  - whether primary Judge erred in finding that there was part compliance with the Orders of the lower court - where statutory process mandated by the Claims By and Against the State Act 1996 to seek satisfaction of that judgment debt - personal costs order against solicitor where fruitless course of litigation by virtue of non-compliance with Claims By and Against the State Act 1996 - appeal dismissed 

Cases Cited:

Vaki v. Baki [2014] N5612
Tzen Pacific Ltd v. Innovest Ltd [2015] SC1454 
Hasifangu v. Mauludu [2021] N8934
Kabilali v. Tolopa [2022] N9589

Legislation Cited: 

Public Hospital Act 1994
National Court Rules
Claims By and Against the State Act 1996

Counsel:

Mr. J. Napu, for the Appellant
Mr. T. Tanuvasa and Ms. A. Nasu, for the Respondents

1st July, 2022

1. BY THE COURT: Before the Court is a Notice of Appeal filed on 24th July 2021, in which the primary Judge upheld a notice of motion filed by the third respondent to strike out and dismiss proceedings commenced by the appellant in the National Court, on the basis that no reasonable cause of action was disclosed (Hasifangu v. Mauludu [2021] N8934).

2. In summary, the appellant had earlier been successful in the National Court in obtaining relief, including an order for reinstatement to her employment and damages. The appellant had brought an application for contempt of Court against the second respondent for alleged failure on the part of the second respondent to comply with the National Court’s orders, which was struck out and dismissed. 

3. In our view the appeal should be dismissed, for reasons that follow.

BACKGROUND

4. Key background facts are not in dispute. The appellant was a nursing officer at Boram Hospital in Wewak until her termination of employment, and subsequent reinstatement and demotion. She applied to the Public Service Commission (PSC) in respect of the termination and demotion, and the PSC found in her favour. 

5. The appellant subsequently applied to the National Court for orders giving effect to the decision of the PSC, and damages. The appellant – being the plaintiff in the National Court proceedings – named:

•	As first defendant: Mark Mauludu in his capacity as Chief Executive Officer of Boram General Hospital;
•	As second defendant: Pascoe Kase in his capacity as Secretary of the Department of Health; and
•	As third defendant: the Independent State of Papua New Guinea.

6. These defendants are now respectively the first, second and third respondents to
this appeal. We further note that the second respondent has, at all times, been sued
in his capacity as Secretary of the Department of Health. Notwithstanding that the
appeal was filed naming Pascoe Kase as the second respondent, it appears
uncontentious that during the material period in 2021 the incumbent in that position
was Dr Osborne Liko.

7. Relevantly, two sets of orders were made by the National Court. 

8. First, on 13th February 2019 the National Court made orders as follows:

“1.	The Plaintiff is to be reinstated forthwith to the position of Quality Assurance Officer Grade 13 at Boram General Hospital, Wewak East Sepik Province.
2.	In the event that Quality Assurance Officer, Grade 13 at Boram General Hospital, Wewak East Sepik Province, is already filled by another officer, the plaintiff is to be reinstated forthwith to a position equivalent to Quality Assurance Officer, at Grade 13 level and be paid accordingly.
3.	The Defendants more specifically the CEO of the Boram General Hospital, Wewak East Sepik Province, is ordered to forthwith comply with and give effect to Orders 1 and 2 above.
4.	The Plaintiff is to be reimbursed fully with all the lost salaries and entitlements and other emoluments as a result of being put off the pay-roll and not being paid at her substantive level as a result of being reinstated to a position lower than her substantive position of Quality Assurance Officer. This order is to be implemented in two ways:
i.	Payments of lost salaries and entitlements and other emoluments from the date she was taken off the pay-roll to the date she was reinstated.
ii.	Payment of lost salaries and entitlements and other emoluments resulting from the plaintiff being reinstated to a lower Grade or Grades and not being reinstated to her substantive position of a Quality Assurance Officer, first at Grade 10 level, then at Grade 13 level when the position of Quality Assurance Officer when the position of Quality Assurance Officer was upgraded.

	The payments or amounts to be paid to the Plaintiff under the second category would therefore be the difference between the salaries, entitlements and other emoluments paid to the plaintiff when she was reinstated to lower Grades and the payments or amounts she would have been paid as a holder of Grade 10 level initially then Grade 13 level for the position of Quality Assurance Officer.
5.	The Defendants are liable for the damages suffered by the Plaintiff as claimed in the 	Statement in Support pursuant to Order 16 Rule 7, of the National Court Rules.
6.	Default judgement is entered for the Plaintiff with damages to be assessed.
7.	The Plaintiff is to file and serve particulars of damages she claims to have suffered 	within 21 days of today’s date viz; Wednesday 27th February 2019. The particulars of 	damages should include the lost salaries and entitlements and any other emoluments 	as ordered in paragraph 4 above together with damages claimed for frustration and 	mental anguish.
8.	The Defendants are to file and serve particulars of any defence they may raise against 	damages claimed by the Plaintiff for the purposes of assessment of damages within 	14 days from the date of receipt of the particulars of damages claimed by the Plaintiff.
9.	The Defendants will pay the Plaintiff’s costs of and incidental to this proceeding 	including directions hearings and any applications made by the Plaintiff for the 	purposes of assessment of damages for the Plaintiff, which if not agreed to be taxed.
10.	The matter will return to Court for directions hearing on Monday 11th March 2019.”

(13th February 2019 Orders).

9. Second, on 14th September 2020 the National Court made orders as follows:

“1.	The court awards the following amounts in general, exemplary and special damages.
i)	General damages the court awards
a)	General suffering, humiliation and inconvenience in issuing proceeding and to prove claims – K20,000.00
b)	Frustration, anxiety, emotional and mental distress – K30,000.00
ii)	Special damages
a)	Airfares, taxi and bus fares – K18,581.00
b)	Accommodation and meals – K18,450.00
c)	Lost salaries and entitlements – K111,445.84
d)	For telephone calls, facsimile transmission, typing and other electronic transmissions – K15,000.00
e)	Medical expenses – K10,000.00
iii)	Exemplary damages – K125,000.00
2.	The total amount awarded is K340,566.84 at the normal rate of 2% interest per annum.
3.	Interest is to be calculated from the date of the trial to the date of the judgement ie from 25th October 2019 to 14th September 2020 that is a period of 10 months, 2 weeks. Amount in interest is K5,809.45 including 2 weeks interest which is total is [sic] K6,099.02.
4.	The total amount awarded in damages with interest is K354,666.76.
5.	The Defendants will pay the Plaintiff’s costs of an incidental to the proceeding which if not agreed to be taxed.
6.	Orders accordingly.”
(14th September 2020 Orders)
          
	10. (It is convenient to refer to the 13th February 2019 Orders and the 14th September 2020 Orders cumulatively as the two sets of Orders).
	
	11. In a Statement of Charge filed on 27th April 2021 the appellant alleged that the second respondent refused and ignored to implement or comply with the two sets of Orders. 

DECISION OF THE PRIMARY JUDGE

12. In striking out the appellant’s application, the primary Judge noted that the third respondent’s motion was supported by an affidavit of Dr Osborne Liko sworn on 4th June 2021. The primary Judge noted that the two sets of Orders were directed at the State, and the CEO of the Boram Hospital, which was a State entity created by the Public Hospital Act 1994. His Honour noted the evidence of Dr Liko that the plaintiff and her lawyers did not personally serve him with any court documents for the contempt application before it was filed on 27th April 2021. Dr Liko deposed however that the service of the documents constituting the purported contempt proceeding was attempted outside Court on 1st June 2021.

13. The third respondent also relied on an affidavit of Mr Cletus Bon sworn on 6th May 2021. Mr Bon deposed, inter alia, that at that time he was the Acting Chief Executive Officer of East Sepik Provincial Health Authority, and materially:

“Due to new Integrated Financial Management System (IFMS) in place the calculation and payment of the plaintiff’s lost salaries and entitlements and other emoluments were paid out to the plaintiff through a cheque of K57,078.00 on 16th February 2021.”

14. In relation to the question whether there had been personal service of process and supporting material on the second respondent by the appellant, his Honour noted that the appellant relied on the affidavit of Mr Thomas Barry, a legal clerk employed by the lawyers for the appellant, Napu & Company Lawyers. His Honour observed:

“14.	The argument is based on the evidence of the plaintiff’s affidavit of service deposed to by one Thomas Barry of the 06th May 2021 Legal Clerk of Napu & Company Lawyers who deposes that, “On the 05th May 2021 at 2.17pm, I served upon the contemnor Dr. Osborne Liko, which was received by a Fredolina Simbagi who identified herself to be the Admin Assistant at the Secretary’s office on the top floor of Aopi Centre, National Department of Health, Waigani, NCD the following document; (1) Letter dated 04th May 2021 advising the Contemnor of the adjournment date of 17th May 2021.”Annexure “A” is a copy of that letter and “B” is the acknowledgement of service form.
15.	It details out as to what documents are served, and upon who at what location, and on what date the service takes place, who receives what on what time and date receipt is made. The person receiving also signs the document acknowledging receipt and designation of the person. It is counter signed in this case by Thomas Barry who serves the document.
16.	In this instant it is a letter that is served dated the 04th May 2021 advising about the adjournment of the court. The place it is served is National Department of Health (NDOH) Waigani date is 05 May 2021 time is 2.17pm and person receiving is Fredoline Simbago Admin Assistant and she signs acknowledging. The subject letter of the 04th May 2021 is in the following terms, “Application for contempt of Court-OS (JR) No. 832 of 2016-Marcella Hasifangu v Mark Mauludu & ors. This matter was returned for mentioned yesterday 03rd May 2021; wherein, the Solicitor General sought adjournment, for reason that, you did not issue instructions to them. We inform you now that the matter is adjourned to the 17th of May 2021 at 9.30am. You may now instruct your lawyers should you wish to defend the cause. You are also at liberty to comply with the Court Orders, should you wish to avoid, taking unnecessary risk of being imprisoned. We inform you accordingly. Thank you. Yours faithfully John N Napu Principal.”
17.	This is the same in each case reliance is placed on the affidavit of Thomas Barry from affidavit of the 28th May 2021, in both cases the acknowledgement form is by Fredolina Simbago, there is service on her, but not personally on the alleged contemnor Dr. Osborne Liko in person….”

15. His Honour referred to Order 14 Rule 45 of the National Court Rules which provides:

“The notice of motion or summons, the statement of charge, and the affidavits shall be served personally on the contemnor.”

16. His Honour observed, in summary:

•	The requirement that the application or – in this case – statement of charge be served personally on the alleged contemnor, must be observed; and
•	The order that is supposedly breached must be clear, and not ambiguous.

17. In striking out the statement of charge, his Honour found, in summary:

•	As was clear from the evidence, service of the statement of charge was made on Ms Fredolina Simbago, not the alleged contemnor the second respondent (at that time Dr Liko) in person; 
•	The order allegedly breached by the second respondent was directed at him as the incumbent of the role, and not personally;
•	Orders were made against the State and its agencies, in respect of which the Claims By and Against the State Act applied, however no certificate had been obtained in accordance with sections 13 and 14 of that Act; and
•	There had been no disobedience against a court order in the sense explained in Vaki v. Baki [2014] N5612.

GROUNDS OF APPEAL

18. The appellant appealed against the decision of the primary Judge on five grounds. In summary, those grounds were that:

•	The primary Judge erred in finding that there was no evidence to prove personal service of the statement of charge on the second respondent, and that the primary Judge had failed to take into consideration the affidavit of Mr Thomas Barry sworn on 29th April 2021 which clearly deposed to personal service on the second respondent (ground 4.1);
•	The primary Judge erred in finding that the earlier National Court orders did not bind the second respondent as he was not named in those proceedings, but rather was directed at the first respondent by operation of the Public Hospitals Act 1994 (grounds 4.2, 4.3 and 4.4); and
•	The primary Judge erred in finding that there was part compliance with the 14th September 2020 Orders in respect of the payment of K57,000.00 (ground 4.5).

CONSIDERATION

19. Civil contempt was discussed by the Supreme Court in Tzen Pacific Ltd v Innovest Ltd [2015] SC1454. In that case the Court observed:

“13.	… We agree with the appellant that there is a distinction between civil contempt and criminal contempt. Civil contempt is a term used to describe conduct that is not in itself a crime, such as disobedience of a court order, but which is nevertheless punishable as a crime so that the courts are able to ensure that their orders are enforced. Criminal contempt refers to all other types of conduct that interfere with the due administration of justice ...
14.	This distinction has been referred to in cases such as Bishop Bros Engineering Pty Ltd v Ross Bishop (1989) N690, Concord Pacific Ltd v Thomas Nen [2000] PNGLR 47, 21 ILGS Gobe Project Area Incorporated Land Groups v MRDC (2006) N3066 and Geoffrey Vaki  v Gari Baki (2014) N5612…”

20. Further, in Bishop v Bishop Bros Engineering Pty Ltd [1988-89] PNGLR 533 the Supreme Court held that, in proceedings for contempt of court for failing to obey a court order:

•	The court order must be clear and unambiguous;
•	The order must have been properly served upon the alleged contemnor so that he has knowledge of the terms of the order;
•	Failure to obey the terms of the order must be wilful; and
•	The standard of proof was proof beyond reasonable doubt.

21. In applying these principles we find as follows:

22. First, in relation to the alleged personal service on the second respondent by Mr
Barry of relevant process and supporting material, we note the following evidence
of Mr Barry:

“2.	On the 28th of April, 2021 at 3.35pm, I served upon the Contemnor Dr Osborne Liko, personally in his office on the top floor at Aopi Centre, National Department of Health, Waigani, NCD the following documents:
	1.	Notice of Motion filed 27th April 2021;
	2.	Statement of Charge filed 27th April 2021;
	3.	Affidavit of Thomas Barry filed 27th April 2021; and
	4.	A cover letter dated 28th April 2021 enclosing the contempt proceeding documents and advising them of the hearing date.
…
3.	The Contemnor, then received all the named document and then read each of them through, before my watchful eyes. After reading through all the document, he called in a Fridolina Simbago, an Admin Assistant, Legal Division to sign the proof of services documents.
4.	I insisted that the Contemnor himself sign, but he assured me that, he is personally served, and refused signing.
5.	I am satisfied in the circumstance that the contemnor is being personally served.
6.	I say the above to be true and to the best of my knowledge and belief.”

23. The “Service Detail Document” annexed to Mr Barry’s affidavit describes
the name of the person receiving service of the documents as “Fridolina
Simbago” and her occupation as “Admin Assistant Legal”. There is a
signature, apparently that of Ms Simbago. The place and location of service
was “NDOH – Waigani” on 28/04/2021 at 3:40pm.

24. To the extent that Mr Barry gave evidence of statements and “assurances”
allegedly made by Dr Liko to him in relation to the personal service of the
documents, those statements appeared to be no more than hearsay on the part
of Mr Barry. In any event, on the face of Mr Barry’s affidavit, and as his
Honour observed, the documents were served on Ms Simbago rather than Dr
Liko. The absence of personal service on Dr Liko is further consistent with
evidence of Dr Liko himself in his affidavit sworn 4th June 2021, where Dr
Liko deposed that:

“4.	The Plaintiff and her lawyers did not personally served [sic] on me any court documents for the contempt application before the application was filed on the 27th of April 2021.”

25. We reject the submission of the appellant that the primary Judge erred in
finding that there was no evidence to prove personal service, or that his
Honour erred in failing to take into consideration the affidavit of service of
Mr Thomas Barry sworn 29th April 2021. Rather, we find that his Honour
plainly did examine, in detail, the evidence of service, and for good reason
found the appellant’s claim of personal service on the second respondent to
be unsubstantiated.

26. As his Honour also correctly noted, both in the general law and pursuant
to Order 14 Rule 45 of the National Court Rules, an application seeking an
order of contempt, and supporting material, must be served personally on the
alleged contemnor. The evidence in this case does not support a finding of
personal service. Ground 4.1 is not substantiated.

27. Second, we are not satisfied that the two sets of Orders were clear and
unambiguous, such that a failure by the second respondent to comply with
them could result in that respondent being liable for contempt. In particular
we note:
•	The two sets of Orders were made in respect of all three respondents;
•	To the extent that the two sets of Orders bound the first and second respondents, it was plain that they were bound only in their capacity as agents or officers of the State. As Mr Napu for the appellant conceded at the hearing, failure by the first and second respondents to comply with those Orders would not make them personally liable; and
•	The only Order which appeared specifically directed at one of the  individual respondents was Order 3 of the 13th February 2019 Orders, which required the first respondent to reinstate the appellant. The reinstatement of the appellant is not in issue in these proceedings. 

28. Grounds 4.2, 4.3 and 4.4 are not substantiated.

29. Finally, in relation to ground 4.5, Mr Napu submitted, in effect, that the payment
to the appellant by the State of K57,078.00 could not be described as partial
compliance of the 14th September 2020 Orders, because the payment was not made 
in the first instance to him for him to either deal with, or for him to transmit to the 
appellant. 

30. It was plainly open to the primary Judge to find that the payment of this sum to
the appellant was referable to the Court orders, despite what appeared to be Mr.
Napu’s chagrin at being by-passed as a conduit for the payment of that sum to the
appellant. The affidavit of Mr Bon sworn 6th May 2021 is clearly conclusive 
evidence of the nature of the payment in the amount of K57,078.00 to the 
appellant, being partial compliance with the 14th September 2020 Orders. 

31. Ground 4.5 is not substantiated.

CONCLUSION

32. In conclusion, we note that the appellant, through her lawyer Mr Napu, appeared primarily concerned that the balance of the sums owing to her pursuant to the 14th September 2020 Orders had not been paid. However, as the primary Judge correctly observed, the two sets of Orders fell within the parameters of the Claims By and Against the State Act 1996. Section 13 (2) of that Act provides that where a judgment is given against the State, the registrar, clerk or other proper officer of the Court by which the judgment is given shall issue a certificate to the party in whose favour the judgement is given. Section 14 (1) of the Act provides that such a certificate shall be served on the Solicitor-General, and the Solicitor-General is required by s 14 (2) to endorse the certificate. Section 14 (3) of the Act provides that, upon receipt of the certificate of a judgment against the State bearing the Solicitor-General’s endorsement that judgment may be satisfied, the Departmental Head responsible for finance matters shall, within a reasonable time, satisfy the judgment out of moneys legally available.

33. Importantly, s 14 (4) and (5) of the Act provide:

“(4)	Any payment in satisfaction of judgement may, in the absolute discretion of the Departmental Head responsible for finance matters, be made by instalments, provided the judgement is thereby satisfied within a reasonable time.
(5) 	No action–
(a) for or in the nature of mandamus; or
(b) for contempt of court,
or otherwise lies against the Solicitor-General or the Departmental Head responsible for finance matters in respect of the satisfaction of a judgement under this Act, other than for failure to observe the requirements of Subsection (2), (3) or (4), as the case may be, or unless other exceptional circumstances can be shown to the satisfaction of the court.”

34. An instalment has been paid by the State to the appellant in the amount of K57,078.00. The State does not dispute the existence of a judgment debt owed to the appellant. However it appears that the appellant, through her lawyer, has not engaged in the statutory process mandated by the Claims By and Against the State Act 1996 to seek satisfaction of that judgment debt. 

35. We also note the proviso to s 14 (5) of the Act has not been enlivened in the present case.

36. In our view the appeal is entirely devoid of merit. 

37. The respondents are clearly entitled to their costs of and incidental to the appeal. The only question is whether the appellant ought to bear the burden of those costs, or – as the respondents submitted – Mr Napu personally should do so.

38. The position in respect of a superior Court ordering a lawyer to personally pay costs was recently summarised by Tamade AJ in Kabilali v. Tolopa [2022] N9589, as follows:

“17.	Costs is a discretionary matter before the courts. Where a party seeks costs of a punitive nature against a lawyer personally rather than the client, the Court has to exercise discretion whether it is just and fair in the circumstances.
18.	Justice Gavara-Nanu in the case of Patrick v Kimas [2010] PGNC 166; N3913 (12 March 2010) considered the issue of costs against a lawyer pursuant to Order 22 Rule 65 of the National Court Rules and amongst other considerations stated that:
	“because the reputation of the lawyer is at stake, the Court should exercise its power to award costs only in the clearest of cases.”
19.	Justice Derek Hartshorn considered the issue of costs in the case of Pololi v Wyborn [2013] PGNC 318; N5898 (30 July 2013) and stated that:
	Reference is also made to the case of PNG Ports Corporation Ltd v. Canopus No 71 Ltd (2010) N4288 in which at paragraph 26, the case of Island Helicopter Services Limited (supra) is considered. In PNG Ports (supra), Kandakasi J noted that Injia DCJ (as he then was) in Islands (supra) as to the practice of asking for costs on a solicitor and client basis against lawyers, held that there must be proper forewarning as noted in the Supreme Court decision in PNG Waterboard v. Gabriel Kama (2005) SC821, and proper pleading by way of a motion clearly asking for such costs and supported by affidavit 	evidence which clearly identifies the conduct about which there is complaint.”
20. 	There is no evidence from Mr. Token that he has forewarned Ms. Yom not to pursue her application given his client’s position on section 125 of the Land Registration Act. Mr. Token’s application seems to be a reactive submission on Ms. Yom pursuing her client’s application however he has not done his due diligence to forewarn Ms. Yom and put her on notice that he will ask for costs personally against her and or on a higher scale as punitive in nature.
21.	I will therefore decline the order for costs against Ms. Yom personally and exercise my discretion as to costs to be met by the Applicants being the First and Fourth Defendants on a party-party basis to be taxed if not agreed.”

39. In their written submissions the respondents sought indemnity costs
against the appellant in the event that the appeal was dismissed. At the
hearing, however, Mr Tanuvasa for the respondents specifically submitted
that the Court should order that Mr Napu personally pay the costs of the
respondents.

40. We are satisfied that, although the forewarning of the respondents’
position concerning a personal costs orders was short, nonetheless Mr Napu
was forewarned in oral submissions at the hearing and had the opportunity to
make his own submissions in that respect.

41. We note that Mr Napu did not oppose an order to that effect, or even
address that submission in his reply submissions. 

42. In our view the respondents’ costs of and incidental to the appeal should
be paid by Mr Napu personally, on a party party basis. Not only is the appeal
without merit, but the appellant has embarked on a fruitless course of
litigation, culminating in the present appeal, which could, and should, have
been avoided by the simple expedient of the appellant complying with the
Claims By and Against the State Act 1996 to seek satisfaction of the judgment
debt owed to her. The responsibility for this entirely unmeritorious course of
action by the appellant must rest with her lawyer.

43. THE COURT ORDERS THAT:

a)	The appeal filed on 24th July 2021 is dismissed.
b) 	The respondents’ costs of and incidental to the appeal shall be paid personally by Napu & Co Lawyers, the lawyers for the appellant, on a party party basis, without any recourse to the appellant, such costs to be taxed if not otherwise agreed.
__________________________________________________________________
Napu and Company Lawyers: Lawyers for the Appellant 
Solicitor General: Lawyer for the Respondents