Raymond Liu & Another v Daul Emoto & 23 Ors (2009) SC1032

• Jurisdiction: Papua New Guinea
• Judge: Injia, DCJ
• Judgment Date: 20 April 2009
• Citation: (2009) SC1032
• Docket Number: SCA No. 91 of 2008
• Court: Supreme Court
• Year: 2009
• Judgement Number: SC1032

Full Title: SCA No. 91 of 2008; Raymond Liu & Another v Daul Emoto & 23 Ors (2009) SC1032

Supreme Court: Injia, DCJ

Judgment Delivered: 20 April 2009

SC1032

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA No. 91 of 2008

Between:

RAYMOND LIU & ANOTHER

Appellants

And:

DAUL EMOTO & 23 ORS

Respondents

Waigani: Injia, DCJ

2009: 20th April

PRACTICE AND PROCEDURE – application for leave to appeal against an interlocutory ruling of National Court – nature of ruling is refusal to set aside default judgment on liability for damages - main test is whether applicant has shown there is a prima facie case that the decision was wrong and that substantial injustice will be done by leaving the erroneous decision unrevised - whether defence on the merits was disclosed in the proposed Defence – relevant considerations

PRACTICE AND PROCEDURE – respondents object to competency of leave application - decision was final and leave is incorrectly sought - basis of objection - test to be applied is whether judgment or order is final – respondents objection to competency dismissed - no substantial injustice will be caused to appellant by allowing the judgment to stand - arguable case has not been demonstrated – application dismissed with costs to respondent

Cases Cited:

Papua New Guinea Cases

Baing v PNG Stevedores Pty Ltd (2000) SC 627,

Boyepe Pere v Emmanuel Ningi (2003) SC 711

Breckwoldt v Gronoyke [1974] PNGLR 106,

Rimbink Pato v Anthony Manjin [1999] PNGLR 6

Sir Julius Chan v Ombudsman Commission of Papua New Guinea [1999] PNGLR 240

, Breckwoldt & Co. (N.G.) Pty Ltd v Groyke [1974] PNGLR 106

Curtain Brothers (PNG) Ltd v UPNG, (2005) SC 788.

La Jarden Collected Agency Pty Ltd v Richard Hill & Ors (1998) SC 597

Matiabe Oberia v Police and the State (2005) SC 801

NCDC v PNG Water Ltd & Ors (1999) SC 624)

NCDC v Namo Trading Ltd (2001) SC 663,

Electricity Commission of NSW v Lapthorne (1971) 124 C.L.R. 177

Overseas Cases

Australia Coal and Shale Employees’ Union v The Commonwealth (1956) 94 C.L.R.

Counsel:

Mr Kaore, for the Appellants

Ms Mugagia, for the Respondents

20th April, 2009

1. INJIA, DCJ: This is an application for leave to appeal against an interlocutory ruling of the National Court made on 18th July 2008 in refusing to set aside its default judgment on liability for damages to be assessed, entered on 16th April 2008. Before I deal with the merits of the application, I deal first with a number of threshold procedural issues.

2. The respondents object to the competency of the application for leave on the basis that the decision was final and leave is incorrectly sought. I am of the view that the application for leave is competent because the decision to dismiss the application to set aside the default judgment is interlocutory and not final. The effect of the decision is that the default judgment still stands and the question of damages is yet to be litigated. The question of liability and damages in the circumstances of this case, are inseparable and only a decision on quantum of damages would put the seal of finality in the judgment.

3. The test to be applied in judgments of this type is whether the judgment or order is final in that it "finally disposes of the right of the disputing parties" or "there is no substantive issue(s) a foot that remains to be tried" (La Jarden Collected Agency Pty Ltd v Richard Hill & Ors (1998) SC 597), or "because the order results in the rights of the parties in those proceedings being terminated or extinguished" ( NCDC v PNG Water Ltd & Ors (1999) SC 624). In NCDC v Namo Trading Ltd (2001) SC 663, the Supreme Court dealt with the question of finality of a summary judgment but what was said in passing in relation to default judgment on liability for damages to be assessed is relevant. The Supreme Court adopted the majority view in the case of Electricity Commission of NSW v Lapthorne (1971) 124 C.L.R. 177 , where Barwick CJ said at 184 -185 :

"But the question remains whether so regarding the order of the Court of Appeal as a judgment (entered for the Plaintiff with damages to be assessed) of the Supreme Court, it was a final judgment of that Court. In my opinion, so regarded, it was relevantly to be described as an interlocutory judgment, an appeal from it being competent only by leave of this Court. It did not dispose of the action nor of any part of it. Where damages are of the gist, liability cannot relevantly be divorced from the damages as a separate and independent matter.

Finally, it seems to me that in a common law system such as prevailed at the relevant time in New South Wales, a judgment entered for the plaintiff in default of appearance or of defence in an action for unliquidated damages is the classical example of an interlocutory judgment. Only after assessment of damages could a final judgment, as upon verdict, be entered. I am unable to accept the conclusion, if applied to such a situation, that because an order for the assessment of damages was intended to be a judgment for the plaintiff for damages to be assessed, the order was a final order within the meaning of s.35 of the Judiciary Act".

4. For this reason, I dismiss the respondent’s objection to competency.

5. It is necessary to determine if the application for leave remains competent in terms of compliance with the requirements of an application for leave set out in O 7 Div. 1 (rr 1-3) of the SCR. An application for leave must be in accordance with Form 7 which shall, inter alia, “2(c) state the nature of the case, the questions involved and why leave should be given”. In the present case, the application for leave contains the nature of the case but does not contain the other two requirements. Instead it contains the proposed grounds of appeal. The proposed grounds of appeal may be part and parcel of the nature of the case and the issues may be apparent from the proposed grounds of appeal but the issues and reasons why leave should be given must be explicitly spelt out in the application. In his submissions, counsel for the appellant identifies two issues raised by the grounds of appeal but identification of issues in submission is also no substitute for setting out the issues in the application itself. This is an issue of competency which goes to the jurisdiction of the Court and although it was not raised in Court before me, this Court is entitled to deal with the point as it comes to hand. The application in the present case lacks compliance with the mandatory requirements of O 7 r 2 (c) and therefore must fail. Notwithstanding this conclusion, I go on to consider the merits of the application for purpose of completeness.

6. The short facts for purpose of this application are as follows: The appellant is a Forest Developer operating in the Awowota Forest area of Oro Province and the respondents are local / forest resource landowners of the forest area. On 16th October 2007, the respondents filed an action in the National Court claiming damages for breach of a certain Timber Agreement entered into between them. The Writ was duly served on the appellant. The appellant defaulted in filing its Notice to Defend and Defence. On 27th March 2008, the respondent filed a Motion for default judgment which was heard and granted on 16th April 2008. On 27th May 2008, the appellant filed a motion to set aside the default judgment and for leave to file Defence out of time. A draft Defence was annexed to the affidavit filed in support of the application. On 18th July 2008, this motion was heard and dismissed.

7. I have considered the submissions made by counsel representing each party.

8. The appeal relates to exercise of discretion on a procedural matter within the Court’s jurisdiction in a civil case. The main issue to be determined is whether there was an error in the exercise of discretion. When the Court is determining an application for leave to appeal against such decision, it is important for the judge dealing with the application to be reminded of the ultimate test to be applied in an appeal of this nature. It is pertinent to be reminded of the strong presumption of correctness which attaches to the decision involving exercise of discretion in a civil case on a procedural matter within the Court’s jurisdiction. Such an applicant does have a harder roe to hoe, so to speak, compared with an applicant who seeks leave to appeal against error of law as to jurisdiction or exercise of statutory power and the like. The applicant must demonstrate that the exercise of discretion on the face of the record is manifestly unreasonable, or so unreasonable or plainly unjust: These principles are well established: see a statement of this principle by Kitto J in the Australian High Court case of Australia Coal and Shale Employees’ Union v The Commonwealth (1956) 94 C.L.R. 621 at p. 627, which was adopted by Clarkson J in Breckwoldt & Co. (N.G.) Pty Ltd v Groyke [1974] PNGLR 106 at p.112. Also see Curtain Brothers (PNG) Ltd v UPNG, (2005) SC 788.

9. The principles on grant of leave to appeal are canvassed in a recent judgment of Lay, J in Matiabe Oberia v Police and the State (2005) SC 801. Justice Lay discussed the main authorities on grant of leave including decisions of the pre-independence Supreme Court: Breckwoldt v Gronoyke [1974] PNGLR 106, Sir Julius Chan v Ombudsman Commission of Papua New Guinea [1999] PNGLR...