SC2469

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 120 OF 2023

BSP FINANCIAL GROUP LIMITED
Applicant

V

SAMUEL TUPOU
Respondent

Waigani: Cannings J
2023: 22nd September, 2nd October

PRACTICE AND PROCEDURE – application for leave to appeal against interlocutory judgment of National Court – Supreme Court Act, s 14(3) – criteria to apply when determining application for leave to appeal.

The applicant applied for leave to appeal against an interlocutory judgment of the National Court that struck out its defence and entered default judgment against it in writ of summons proceedings. The applicant argued that the primary judge erred in fact and law by finding that the applicant had failed to comply with an order of the Court for discovery of documents, which failure was chronic, when there was no evidence of non-compliance but if there were non-compliance it was not significant.

Held:

(1)	To be granted leave to appeal against an interlocutory judgment of the National Court, the applicant must at least demonstrate an arguable case of error on the part of the National Court.

(2)	Once an arguable case is demonstrated, other considerations to take into account include whether there are cogent and convincing reasons or exceptional circumstances or clear legal grounds warranting the grant of leave and whether the interlocutory judgment has a bearing on the final determination of issues between the parties or causes a substantial injustice to the applicant.

(3)	The applicant showed that there was an arguable case that there was no evidence of non-compliance with the order for discovery but if there were, it was not material given the lengthy process of litigation and that the primary judge had exercised the discretion to strike out the applicant’s defence and order default judgment against it unreasonably and failed to take into account relevant considerations including that the applicant had filed a cross-claim against the respondent.

(4)	There appeared to be exceptional circumstances and clear legal grounds warranting the grant of leave. The interlocutory judgment had the effect of determining the question of liability. 

(5)	Leave granted. 

Cases Cited

The following cases are cited in the judgment:

Chan v Ombudsman Commission [1999] PNGLR 240
Liu v Emoto (2009) SC1032
Mirupasi v Bonou (2009) SC1049
Oberia v Charlie (2005) SC801
Pato v Manjin [1999] PNGLR 6
Punagi v Pacific Plantation Timber Ltd [2011] 2 PNGLR 92
Samuel Tupou v Bank of South Pacific Ltd, WS 613 of 2018, 5 July 2018, Linge AJ, unreported

Counsel

H Masiria, for the Applicant
S Tupou, the Respondent, in person

2nd October, 2023

1.      CANNINGS J: BSP Financial Group Ltd (the applicant) applies for leave to appeal against the interlocutory judgment of the National Court, constituted by Linge AJ, of 5 July 2023, in proceedings, WS 613 of 2018, in which it was the defendant and the respondent, Samuel Topou, was the plaintiff.

2.    His Honour ordered that the applicant’s defence be struck out and entered default judgment against it. His Honour made the order under Order 9 rule 15(1)(b) of the National Court Rules, which states: 

Where a party makes default in filing or serving a list of documents or affidavit or other document, or in producing any document as required by or under this Division, the Court may make such order as it thinks fit, including … if the proceedings were commenced by writ of summons and the party in default is a defendant—an order that his defence be struck out and that judgement be entered accordingly.

3.     His Honour ruled that the applicant had failed to comply with an order of the Court of 15 September 2022 for discovery of documents, which failure was chronic as the applicant had given insufficient and evasive answers to interrogatories over a lengthy period and had behaved in a contemptuous manner to orders of the Court (Samuel Tupou v Bank of South Pacific Ltd, WS 613 of 2018, 5 July 2018, Linge AJ, unreported). 

4.     His Honour’s decision was an interlocutory judgment as it did not determine the National Court proceedings (Punagi v Pacific Plantation Timber Ltd [2011] 2 PNGLR 92). It only entered judgment in favour of the respondent. Leave to appeal against it is necessary because of s 14(3)(b) of the Supreme Court Act, which states:

No appeal lies to the Supreme Court without leave of the Supreme Court … from an interlocutory judgement made or given by the National Court except—

(i)	where the liberty of the subject or the custody of infants is concerned; or
(ii)	in cases of granting or refusing an injunction or appointing a receiver; or
(iii)	in such other cases prescribed by the Rules of Court as are in the nature of final decisions. 

WHAT CRITERIA APPLY WHEN DETERMINING WHETHER TO GRANT LEAVE?

5.     The applicant must at least demonstrate an arguable case of error of fact or law on the part of the National Court.

6.     Once an arguable case is demonstrated, other matters to consider include:

•	whether there are cogent and convincing reasons or exceptional circumstances or clear legal grounds warranting the grant of leave;

•	whether a patent error or a jurisdictional error on the part of the National Court is apparent; 

•	whether there is no other recourse in the National Court available to the applicant; 

•	whether any exercise of discretion by the National Court was manifestly unreasonable, was based on a wrong principle or mistake of fact; 

•	whether the interlocutory judgment has a bearing on the final determination of issues between the parties or causes a substantial injustice to the applicant; and 

•	whether there is good cause for interrupting the trial process in the National Court.

(See generally Pato v Manjin [1999] PNGLR 6, Chan v Ombudsman Commission [1999] PNGLR 240, Oberia v Charlie (2005) SC801, Liu v Emoto (2009) SC1032, Mirupasi v Bonou (2009) SC1049.)

SHOULD LEAVE BE GRANTED?

7.     I consider that the applicant has raised an arguable case that there was no evidence of non-compliance with the order for discovery but if there were, it was not material given the lengthy process of litigation preceding the order. It is arguable that the primary judge exercised the discretion to strike out the applicant’s defence and order default judgment against it unreasonably and in a way that failed to take into account relevant considerations including that the applicant had filed a cross-claim against the respondent. There appear to be exceptional circumstances and clear legal grounds warranting the grant of leave. There is a reasonable argument that the exercise of discretion against the applicant was manifestly unreasonable. The interlocutory judgment has the effect of determining the question of liability. Good cause has been shown for interrupting the trial process in the National Court. It follows that leave will be granted. 

COSTS

8.     As the question of leave to appeal has been disputed, costs would normally follow the event. However, I will not apply that rule of thumb as the applicant has not complied with the Supreme Court Rules in making the application.  Order 13 rule 3 requires that applications for leave to appeal be initiated through the file reference “SC APP”, not by the file reference used here, “SCA”. This error should have been picked up by the Registrar and corrected. Both the applicant and the Registrar are at fault. It is a small error, which has not been raised by the respondent, and has no bearing on the result of the application but it is something that warrants an order that the parties bear their own costs. 

ORDER

(1)	The application for leave, filed 14 August 2023, to appeal against the interlocutory judgment of the National Court of 5 July 2023 in WS 613 of 2018, whereby the Court struck out a defence and entered default judgment, is granted.

(2)	Subject to specific costs orders made in these proceedings, the parties shall bear their own costs of the application for leave to appeal.

(3)	The applicant shall file a notice of appeal in separate proceedings in accordance with Order 7 rule 6 of the Supreme Court Rules 2012.

(4)	This file is closed.
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H Masiria: Lawyers for the Applicant