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Ruma Constructions Pty Ltd v Smith [1999] PNGLR 201 (25 March 1999)

[1999] PNGLR 201

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

RUMA CONSTRUCTION PTY LIMITED

V

CHRISTOPHER SMITH

WAIGANI: KAPI DCJ; SAKORA, INJIA JJ
22, 25 March 1999

Facts

The respondent claimed specific performance of a contract and/or damages against the appellants over a sale of property in the National Capital District by way of a writ of summons filed on May 27, 1997. On May 30, 1997, the respondent obtained orders to restrain the appellant from transferring, leasing or otherwise dealing with the property pending the determination of the substantive cause of action.

On July 30, 1997 an order for specific performance was made in favour of the respondent. However, these orders were ineffective because the property, which was the subject of the order, were earlier transferred and registered in the name of SJS Enterprises Pty Ltd on July 3, 1997.

Hence, on November 10, 1997 the respondents set aside the specific performance orders and in substitute obtained summary judgement against the appellant with damages to be assessed. Whilst it was established that the motion for summary judgement was served on the appellants, the orders were obtained in the absence of the appellants and their lawyers.

Under s 14(3)(b) of the Supreme Court Act, no appeal lie to the Supreme Court from an interlocutory judgment without leave of court.

The appellants now seek to review the National Court decision by this application for leave. They submit that this leave application is filed as a precautionary measure only because the orders in question are not an interlocutory judgement but a final order and therefore leave is not required. In the alternative, if leave is required, they should be granted leave. The respondents, however submit that orders by the National Court are in the nature of an interlocutory judgement because they were obtained in the absence of the appellants and their lawyers and may be set aside under Order 12 r 3 of the National Court Rules – further submitting that the provisions for setting aside the judgement renders a summary judgement made in absence of a party an interlocutory judgement. Therefore, it is necessary for the respondents to obtain leave.

Held

1. The following tests must be applied in determining whether a judgement is a summary judgement or not: that, the Court must look at the nature of the application to the court and not the order the court eventually makes; and
   
2. That the Court must look at whether the judgement or order made finally disposes off the right of the disputing parties: see Shelly v PNG Aviation Services [1979] PNGLR 119; Provincial Government of North Solomons v Pacific Architecture [1992] PNGLR 145; Rimbink Pato v The Hon. Sir Julius Chan and the Hon. Chris Haiveta [1998] PNGLR 449; LA Jarden Collector Agency Pty Ltd v Richard Hill & Associates and Masket Ingalio and Public Curator of PNG (unreported judgment of the Supreme Court dated 31st August 1998, SC597).
   
3. By applying these tests to the present case, the judgement finally disposes off the issues before the Court and there are no further issues left to be determined. Whether or not the law makes provision for reviewing that decision and whether or not that decision may be discharged or varied does not change the nature of the orders that they are final.
   
4. Hence, we find that summary judgement in the present case is not an interlocutory judgement, but a final judgement and therefore leave is not necessary.
   

Papua New Guinea cases cited

LA Jarden Collector Agency Pty Ltd v Richard Hill & Associates and Masket Ingalio and Public Curator of PNG (unreported judgment of the Supreme Court dated 31st August 1998, SC597).
Provincial Government of North Solomons v Pacific Architecture [1992] PNGLR 145.
Rimbink Pato v The Hon. Sir Julius Chan and the Hon. Chris Haiveta [1998] PNGLR 449.

Shelly v PNG Aviation Services [1979] PNGLR 119.

Counsel

W Frizzell, for the appellant.
P Payne, for the respondent.

25 March 1999

BY THE COURT. The National Court entered summary judgment in this matter (WS 481 of 1997) on 10th November 1997 under the provisions of the National Court Rules (Rules). An application for leave to appeal against this decision together with a separate notice of appeal was filed on 19th December 1997. The application for leave has come before us for determination.

The relevant facts which gives rise to the application for leave may be summarised as follows. By a writ of summons filed on 27th May 1997, Mr Christopher M Smith (respondent) claims specific performance of a contract and/or damages against Ruma Construction Pty Ltd (appellant) over a sale of property, Part Lot 3, Section 27, Granville, in the National Capital District. On the 30th May 1997, the respondent obtained orders to restrain the appellant from transferring, leasing or otherwise dealing with the said property pending the determination of the substantive cause of action.

On 30th July 1997, an order for specific performance was made in favour of the respondent. However, these orders were not effective because the property, which was the subject of the orders, was transferred and registered in the name of SJS Enterprise Pty Ltd on 3rd July 1997.

On 10th November 1997, the respondent set aside the specific performance orders and in substitute obtained summary judgment against the appellant with damages to be assessed. There is no question that the appellant was served with the motion for summary judgment. However, the order was made in absence of the appellant and its lawyers.

The appellant seeks to review this decision by this application for leave to appeal. No appeal lies to the Supreme Court from an interlocutory judgment except with the leave of the Supreme Court (s 14 (3) (b) of Supreme Court Act (the Act)).

Counsel for the appellant submits that the order in question is not an interlocutory judgment but a final order and therefore leave is not required. The application for leave to appeal was filed only as a precaution. In the alternative, he submits that if leave is required, the Court should grant leave to appeal.

Counsel for the respondent on the other hand submits that the order is in the nature of an interlocutory judgment because the order was made in absence of the appellant and its lawyers may set aside the judgment under O 12 r 3 (a) of the National Court Rules. He submits that the provision for setting aside the judgment renders a summary judgment made in absence of a party an interlocutory judgment. Therefore, he submits that it is necessary for the appellant to obtain leave of the Court to appeal. In this respect, he submits that the appellant has failed to satisfy the Court why it should grant leave.

The issue before us is; whether the summary judgment entered is an interlocutory judgment. The cases have established in determining this issue that there are two tests, which may be applied. The tests are first, that the court must look at the nature of the application to the court and not the order the court eventually made. Second, the court must look at whether the judgment or order made finally disposes off the right of the disputing parties (Shelly v PNG Aviation Services [1979] PNGLR 119; Provincial Government of North Solomons v Pacific architecture [1992] PNGLR 145; Rimbink Pato v Sir Julius Chan and Chris Haiveta [1998] PNGLR 449; LA Jarden Collector Agency Pty Ltd v Richard Hill & Associates and Masket Ingalio and Public Curator of PNG (Unreported judgment of the Supreme Court dated 31st August 1998, SC597).

We apply these tests in determining this application. Counsel for the respondent relies very heavily on the consideration that a summary judgment, which is obtained in absence of a party, is by nature interlocutory because such a judgment may be set aside upon application to the National Court under the Rules. Counsel for the appellant submits that the summary judgment obtained in the present case goes to issues in dispute between the parties in the cause of action and the judgment finally disposes of those rights and therefore the judgment is final. Both counsel failed to refer to any authority, which deals with this particular issue of whether a summary judgment is an interlocutory judgment.

In LA Jarden Collector Agency Pty Ltd v Richard Hill & Associates and Masket Ingalio and Public Curator of PNG (supra), the National Court was concerned with adjudication under the provisions of Insolvency Act. Under s 141 of that Act, the National Court may annul an insolvency order. Such an order may be reviewed, varied or rescinded under ss 97 or 150 of the Insolvency Act. Los J. accepted the argument that in view of the power of the National Court to vary such an order, he concluded that the order in question is an interlocutory judgment. The majority on the other hand reached a contrary view. They held:

"In this case the appellants were claiming against the estate of the insolvent after properly filing proof of debts and were entitled to be properly considered in the insolvency. The proceedings for annulment were intended to terminate the insolvency and discharge the first respondent from further obligation under the insolvency order. The effect of the annulment order is that the first respondent is discharged from insolvency and the appellants are deprived of opportunity to obtain satisfaction of their debts under the insolvency by full utilisation of the provisions of the Insolvency Act. The appellants will however need to re-institute proceedings afresh if they wished to recover their debts. It is thus obvious that the decision, albeit interlocutory, is a final decision as there is no substantive issue afoot that remains to be tried, thus leave is not required to appeal."

We prefer the view expressed by the majority. We agree with the majority opinion that the fact that appellants in the above-named case had other avenues open to them under the Insolvency Act to challenge the order is a distinct and separate issue from whether the order is interlocutory or final.

In the present case, the judgment finally disposes off the issues before the Court and there are no further issues left to be determined. Whether or not the law makes provision for reviewing that decision and whether or not that decision may be discharged or varied does not change the nature of the orders that they are final. We find that the summary judgment in the present case is not an interlocutory judgment and therefore leave is not necessary.

There is a notice of appeal, which is on foot and should be set down for determination on the merits.

Lawyers for the appellant: Warner Shand.
Lawyers for the respondent: Blake Dawson Waldron.