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Covec (PNG) Ltd v Kama [2024] PGSC 155; SC2692 (16 December 2024)

SC2692

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

SCA 123 OF 2024 [ICEMS]

BETWEEN:
COVEC (PNG) LIMITED
Appellant

AND:
PETER KAMA, ANNA KAMA AND MICAH KAMA
As Joint Tenants over SABI, 1239C Volume 15, Folio 43
First Respondent

AND:
ALA ANE, REGISTRAR OF TITLES
Second Respondent

AND:
BENJAMIN SAMSON,
Secretary, Department of Lands and Physical Planning
Third Respondent

AND:
HON. JOHN ROSSO
Minister for Lands and Physical Planning
Fourth Respondent

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Respondent

AND:
JOHN NUKA
For himself and on behalf of the Kunalgapam Clan of
Kumai Tribe of Kup, Kerowagi District, Simbu Province
Sixth Respondent

WAIGANI: HARTSHORN J
4, 16 DECEMBER 2024

COSTS - application for security for costs- whether “special circumstances” exist such that an order for security for costs should be made - appellant’s failure and refusal to pay numerous costs orders to the applicant in multiple related proceedings to this appeal constitutes special circumstances - security for costs should be ordered as it is unlikely that the appellant will pay the costs of the first respondent of this appeal if ordered to do so - s. 18 (1) Supreme Court Act, Order 7 Rule 24 Supreme Court Rules,

Cases cited
Brinks Pty Ltd v. Brink’s Incorporated [1996] PNGLR 75
McConnell v. Loloata Island Resort Ltd (2024) SC2553

Counsel
Mr. W. Mapiso for the appellant
Mr. C. Gagma for the first respondent

Mr. J. Bakerman for the Second to fifth respondents

Oral decision delivered

on 16^th December 2024

1. HARTSHORN J: This is a decision on a contested application by the first respondent for an order for security for costs.

Background

2. The appellant appeals against a National Court decision which dismissed a proceeding. The appellant was a defendant in the subject National Court proceeding. The applicant for security for costs was also a defendant in the National Court proceeding and is the first respondent in this appeal.

Application for security for costs

3. The applicant submits that the appellant’s failure and refusal to pay numerous costs orders to the applicant in multiple related proceedings to this appeal constitutes special circumstances, such that security for costs should be ordered as it is unlikely that the appellant will pay the costs of the first respondent of this appeal if ordered to do so.

4. The appellant submits that the first respondent has not established that special circumstances exist and the application should be dismissed. Further, this application is an abuse of process.

The Law

5. The law as to a security for costs application made under s. 18 (1) Supreme Court Act, such as this application, is set out in Brinks Pty Ltd v. Brink’s Incorporated [1996] PNGLR 75. I adopt the principles contained therein. I also refer to my judgment in McConnell v. Loloata Island Resort Ltd (2024) SC2553.

Consideration

6. In Brinks v. Brinks (supra), after considering what constitutes “special circumstances” and listing matters to be considered, this Court stated that the list is not exhaustive and that there may be other circumstances, which may come within the words “special circumstances”.

7. In [12] of McConnell v. Loloata Island Resort Ltd (supra), I said:

“As to other circumstances which may come within “special circumstances”, as referred to in Brinks v. Brinks (supra), the “Rules” seek to protect the costs of a defendant and by analogy in an appeal, the costs of a respondent.”

8. The first respondent submits amongst others that the appellant has been involved in six related court cases in which costs were awarded in favour of the first respondent and against the appellant.

9. The appellant has failed to settle judgment debts and several orders for costs in

these related court proceedings. Further, the appellant intentionally and with full knowledge of the judgment debts and costs, has refused to pay and has procrastinated by instituting several court proceedings.

10. The appellant submits in essence, that the litigation has been on going since 2007, is still on going and so costs do not have to be paid. Further, the basis upon which the first respondent has succeeded in the litigation and has been awarded orders, is a title to land, which was obtained by fraud and which continues to be the subject of litigation.

11. The appellant does not rebut the evidence of the first respondent concerning the judgment and court orders outstanding.

12. In the submission of the appellant at [22], it is stated, significantly in my view:

“Covec decided not to satisfy the judgment debt and the related costs orders, the subject of the application pending determination of its fresh proceeding pending in the National Court and the appeal”

13. It is the position then and not in dispute, that the appellant has decided of its own violation not to satisfy “the judgment debt and related costs orders.” This is notwithstanding the orders of this Court determining that the appellant is liable to pay the said judgment debt and costs orders.

13. The appellant itself, has decided not to comply with Court orders concerning a judgment and costs.

14. It is noted further, that this appeal was commenced by the appellant against amongst others, the first respondent, notwithstanding that the appellant was not a plaintiff in the National Court proceeding from which this appeal emanates and did not seek any relief against the first respondent in the said National Court proceeding.

15. The basis for an order for “security for costs” is to protect the costs of a defendant or a respondent. As it is not now in dispute that the appellant of its own volition has decided not to satisfy a judgment debt and costs orders which it was ordered to pay to the first respondent and given the circumstances of this appeal as referred to, I am satisfied that the first respondent has established that “special circumstances” do exist such that an order for security for costs should be made. This is because there is reason to believe that the appellant will not pay the costs of the first respondent if ordered to do so.

16. As the judgment sum is the subject of another proceeding and also not recoverable by way of any application for security for costs, it is not appropriate to make an order concerning that sum in this application. Further, I note that an estimation of the costs of the first respondent for this proceeding, has not been given.

17. Notwithstanding this, I am satisfied that it is appropriate for an order for security for costs to be made as special circumstances have been established in my view. Given this, it is not necessary to consider the other submissions of counsel.

Orders

18. The Court Orders that:

a) Pursuant to s. 18 (1) Supreme Court Act and Order 7 Rule 24 Supreme Court Rules, the appellant shall pay the sum of K80,000.00 into the National Court Trust Account at Waigani by 17^th January 2025.

b) The costs of and incidental to the application for security for costs filed 31^st October 2024 shall be costs in the appeal.
________________________________________________________________
Lawyers for the appellant: Guardian Legal Services
Lawyers for the first respondent: Gagma Lawyers
Lawyer for the second to fifth respondents: Solicitor General
Lawyers for the sixth respondent: Tindiwi Lawyers