Lae Bottling Industries Ltd v Lae Rental Homes Ltd and Independent State of Papua New Guinea and Viviso Seravo (2011) SC1120

• Jurisdiction: Papua New Guinea
• Judge: Gavara-Nanu, Davani & Yagi JJ.
• Judgment Date: 02 September 2011
• Court: Supreme Court
• Citation: (2011) SC1120
• Docket Number: SCR NO. 15 OF 2006
• Year: 2011
• Judgement Number: SC1120

Full Title: SCR NO. 15 OF 2006; Lae Bottling Industries Ltd v Lae Rental Homes Ltd and Independent State of Papua New Guinea and Viviso Seravo (2011) SC1120

Supreme Court: Gavara-Nanu, Davani & Yagi JJ.

Judgment Delivered: 2 September 2011

SC1120

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCR NO. 15 OF 2006

BETWEEN:

LAE BOTTLING INDUSTRIES LTD

-Applicant-

AND:

LAE RENTAL HOMES LTD

-First Respondent-

AND:

INDEPENDENT STATE OF PAPUA NEW GUINEA

-Second Respondent-

AND:

VIVISO SERAVO

-Third Respondent-

Waigani: Gavara-Nanu, Davani & Yagi JJ.

2010: 25 October

2011: 2 September

JUDICIAL REVIEW – Constitution ; s. 155 (2) (b) – Leave - Criteria for grant of leave – Discretion of the Court to grant leave – Inordinate delay – Issue of delay to be considered subjectively – Circumstances in which leave may or may not be granted discussed – Interest of justice.

JUDICIAL REVIEW – Land Act; ss. 69 (2) (d) and 122 (3) – Forfeiture of lease – Fraud – Flagrant breaches of mandatory statutory requirements – Applicant being fully aware of such breaches - Application for review refused.

Facts

The first respondent had title over the property described as Section 65 Allotment 1, Lae. By agreement between the applicant and first respondent the applicant was allowed to improve the property up to the value of K300,000.00 and no more. The agreement provided that in the event that agreement was terminated the improvements made to the property were either to revert to the first respondent as landlord or be cleared away. The applicant made improvements worth well over K300,000.00 on the property. The first respondent’s lease was forfeited for non payment of lease rentals. First respondent challenged the forfeiture of its lease in the National Court and obtained ex-parte orders restoring its title over the property. The applicant was not made a party to the proceedings in the National Court. Although the applicant became aware of the National Court decision about a week after it was handed down, he failed to appeal the decision. Two years after the National Court decision the applicant filed its review application under s. 155 (2) (b) of the Constitution.

Held:

(1) Per Gavara-Nanu and Yagi JJ: Although delay was inordinate and no reasonable explanation was given for the delay, there were exceptional circumstances particularly the substantial improvements made to the property which made the case of special gravity. This warranted granting of leave so that the applicant who was not made a party to proceedings in the National Court could be heard.

(2) Per Gavara-Nanu and Yagi JJ: The applicant having satisfied all the criteria for grant of leave except delay leave should be granted in the interest of justice. In this regard the Court has very wide discretion and in exercising the discretion it has to consider the issue of leave subjectively. Leave should be granted.

(3) Per Davani J: In relation to delay, the applicant took no steps to appeal the decision of the National Court or to have set it aside until 3 years later despite being fully aware of the National Court decision about a week after it was delivered. This constituted an inordinate delay. Explanation given by the applicant for the delay is unreasonable and without merit. As no useful purpose would be served if leave is granted, leave should be refused.

(4) Per Gavara-Nanu and Yagi JJ: There was overwhelming evidence that title issued to the applicant was issued irregularly and fraudulently. Mandatory statutory procedures provided under the Land Act were breached by officers of Department of Lands and Physical Planning. The applicant was fully aware of those irregularities and breaches. The trial judge made correct findings. Emas Estate Development Pty Ltd –v- John Mea and Others [1993] PNGLR 315 and Papua Club Inc. –v- Nusaum Holdings Limited and Ors N2603, adopted.

(5) The decision of the Court in this application for review be dismissed with costs.

Cases cited:

Allan Pinggah v. Margaret Elias & ors (2005) N2850

Alphonse Hayabe v. William Powi (2007) N3113

Avia Aihi –v- The State (No. 2) PNGLR 44

Emas Estate Development Pty Ltd –v- John Mea and Ors [1993] PNGLR 215

High Lift Company –v- Miri Sasea and Another N2004

Kitogara Holdings Pty Ltd –v- NCDC and Ors [1988 – 89] PNGLR 346

Mission Asiki v. Manasupe Zurenuoc & Others (2005) SC797

NTN Pty Ltd v. PTC & ors [1987] PNGLR 70 N587

Steamships Trading Company Ltd –v- Minister for Lands and Physical Planning and Others N1959

The Papua Club Inc –v- Nusaum Holdings Limited and Ors N2603

Counsel

A. Manase & G. Lau, for the Applicant

M. Pokia, for the First Respondent

E. Geita, for the Second Respondent

1. GARAVA-NANU and YAGI JJ: The right of an applicant under s. 155 (2) (b) of the Constitution to have a decision of the National Court reviewed by Supreme Court stems from s. 17 of the Supreme Court Act, Chapter No.37. This section gives the applicant the primary right to appeal a decision of a National Court but such an appeal must be lodged within 40 days after the date of judgment, or within such further period as allowed by the Court. In this case it is clear that the applicant has lost its primary right of appeal thus it is now invoking the review process under s. 155 (2) of the Constitution to have the decision of the National Court reviewed, however that right of review is not automatic it has to be by leave.

Leave

2. For the applicant to be granted leave it must satisfy the following criteria:-

(i) Whether there was a delay by the applicant in making the application, if so whether there are exceptional circumstances showing manifestation of substantial injustice or whether the case is of such special gravity warranting the grant of leave;

(ii) The grant of leave is in the interest of justice; and

(iii) That there are clear arguable issues warranting leave to review the decision.

3. Firstly, in regard to the issue of delay it has to be considered subjectively to matters raised by the other criteria for leave. The Court has wide discretion when considering delay, thus, even if the Court finds that there is delay, if the applicant can satisfy all or any of the criteria for leave, the Court can in the exercise of its discretion still grant leave: Avia Aihi v. The State (No. 2) [1982] PNGLR 44.

4. There is undisputed evidence that the applicant became aware of the decision of the National Court a week after it was given. The applicant then engaged lawyers who offered him advise on the decision, he did not appeal the decision until two years after the decision when it instituted this application, thus a delay of two years by the applicant in making this application.

5. The explanations given by the applicant for the two year delay appear unreasonable and unsatisfactory. The delay also appears to be inordinate. But the question still remains, can the Court in the exercise of its discretion grant leave?

6. One of the points stressed strongly by the applicant in seeking leave is that it was not joined as a party to the proceedings in the National Court although its interests were directly affected by the proceedings. The applicant argued that because it was not joined as a party, it did not have the opportunity to be heard by the Court on the issues raised by the respondents. It is not in dispute that the proceedings in the National Court were heard ex-parte and the applicant was not a party to the proceedings. Whilst it is true that applicant was not made a party to the proceedings in the National Court, as one whose interests were directly affected, he had the locus standi to appeal the decision of the National Court: Kitogara Holdings Pty Ltd –v- NCDC and Ors [1988-89] PNGLR 346.

7. The applicant says it is coming to this Court under s. 155 (2) (b) of the Constitution so that it can be heard and to challenge the ex-parte decision of the National Court which favored the first respondent.

8. The applicant already has a title over the property and has made substantial improvements to the property, these are not disputed. What is in issue is whether that title was obtained legally and whether the improvements made to the property were made legally. If leave is refused on the basis of delay, the end result is that the applicant will not be heard on these two fundamental issues. The application will therefore be effectively refused on the basis of delay alone and costs will most likely also follow the event thus affirming the ex-parte National Court decision. The end result is that applicant’s title will be rendered null and void and the first respondent’s title to the property will be restored. The decision will also result in the applicant closing business. It can be seen from this that a lot will be at stake for the applicant which in my opinion constitutes exceptional circumstances with special gravity.

9. Except for the issue of delay, the applicant has in our opinion satisfied the other three criteria stated above for the grant of leave. In our opinion the interest of justice merits a review, given that if the...