Review Pursuant to Constitution, Section 155(2)(B); Application by John Maddison and Bank of South Pacific Limited (2009) SC984

• Jurisdiction: Papua New Guinea
• Judge: Mogish J, Cannings J, Manuhu J
• Judgment Date: 27 July 2009
• Citation: (2009) SC984
• Docket Number: SCR NO 41 0F 2008
• Court: Supreme Court
• Year: 2009
• Judgement Number: SC984

Full Title: SCR NO 41 0F 2008; Review Pursuant to Constitution, Section 155(2)(B); Application by John Maddison and Bank of South Pacific Limited (2009) SC984

Supreme Court: Mogish J, Cannings J, Manuhu J

Judgment Delivered: 27 July 2009

SC984

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCR NO 41 0F 2008

REVIEW PURSUANT TO CONSTITUTION, SECTION 155(2)(b)

APPLICATION BY

JOHN MADDISON AND BANK OF SOUTH PACIFIC LIMITED

Waigani: Mogish J, Cannings J, Manuhu J

2009: 3, 27 July

APPEALS AND REVIEWS – decision of National Court to enter default judgment – no application made to set aside order of National Court – no appeal or application for leave to appeal – whether leave for review under Constitution, Section 155(2)(b) should be granted.

In civil proceedings commenced by the respondent, the National Court ordered default judgment on liability against the applicants, with damages to be assessed. The applicants were not made aware of the order until eight months after it was made, by which time it was too late to appeal or seek leave to appeal against it. Nine months after becoming aware of the order, the applicants applied to the Supreme Court for leave under Section 155(2)(b) of the Constitution for review of it. On the presumption that leave was granted, the applicants also argued the substantive application for review. The respondent applied to have the applicants’ applications dismissed for abuse of process. This is a ruling on those applications.

Held:

(1) The applicants had a right of appeal or at least a right to seek leave to appeal against the decision of the National Court, which was not invoked. Thus three criteria had to be satisfied for leave under Section 155(2)(b) to be granted:

(a) it is in the interests of justice to grant leave; and

(b) there are:

(i) cogent and convincing reasons and

(ii) exceptional circumstances, eg some substantial injustice is manifest or the case is of special gravity; and

(c) there are clear legal grounds meriting a review of the decision (Avia Aihi v The State [1981] PNGLR 81 applied).

(2) In deciding whether there are cogent and convincing reasons, the following matters are relevant:

(a) the reasons for not filing an appeal within time; and

(b) the merits of the case sought to be argued.

(3) Here, the applicants had good reasons for not filing an appeal within time and the merits of the case sought to be argued are considerable. Thus there are cogent and convincing reasons warranting a review. Further, there are clear legal grounds meriting a review of the National Court’s decision (in particular due to the absence of reasons for the decision).

(4) However, no substantial injustice is manifest (as the decision was only on liability with damages to be assessed) and the case is of no special gravity.

(5) Further, the applicants had failed to exhaust their rights to apply to have the National Court order set aside (such right being available under National Court Rules, Order 12, Rule 35) and the application for leave was made after an inordinate delay (nine months after the applicants became aware of the National Court order) and no good reason was provided for it. So it was not in the interests of justice to grant leave.

(6) Thus only one of the three criteria was fully satisfied and the Court exercised its discretion to refuse leave.

Cases cited

The following cases are cited in the judgment:

Application by Herman Joseph Leahy (2006) SC855

Avia Aihi v The State [1981] PNGLR 81

Danny Sunu v The State [1984] PNGLR 305

David Toll v The State (1989) SC378

Green & Co Pty Ltd v Green [1976] PNGLR 73

Jeffrey Balakau v Ombudsman Commission [1998] PNGLR 437

NCDC v Namo Trading Ltd (2001) SC663

New Zealand Insurance Co Ltd v Chief Collector of Taxes [1988-89] PNGLR 522

Sam Anonga v Jack Were (2001) N2149

The State v Colbert [1988] PNGLR 138

William Mel v Coleman Pakalia (2005) SC790

APPLICATIONS

This was an application for leave to seek review of a judicial act of the National Court – an order to enter default judgment on liability with damages to be assessed – and an application for substantive review of that act; together with an application that both those applications be dismissed as an abuse of process.

Counsel

D Wood, for the applicants

S Ketan, for the respondent

27 July, 2009

1. BY THE COURT: There are three applications before us, all flowing from a judgment of the National Court made by Hinchliffe J on 6 February 2007. The judgment was a default judgment on liability with damages to be assessed. It was in favour of Wesley Hui in civil proceedings, WS 1580 of 2002, he had commenced against John Maddison and Bank of South Pacific Limited.

2. In this judgment we refer to Mr Hui as ‘the respondent’ and Mr Maddison and the Bank as ‘the applicants’.

3. The three applications before us are:

· an application by the applicants for leave to seek review under Section 155(2)(b) of the Constitution of the judgment of the National Court;

· an application by the applicants – on the presumption that leave is granted – for substantive review of the National Court judgment;

· an application by the respondent for dismissal of both the other applications for being an abuse of process.

4. We consider that the respondent’s application can be accommodated when we determine the first application. It is unnecessary to make a ruling on it. The respondent is arguing that leave should be refused as the applicants are guilty of an abuse of process. It is really the other side of the same coin so it makes sense to consider the abuse of process arguments in the course of deciding whether leave should be granted.

5. The primary issue we have to address is whether leave should be granted to review the judgment of 6 February 2007. Only if leave is granted will it be necessary to determine the application for review of that judgment.

JURISDICTION UNDER SECTION 155(2)(b)

6. Section 155(2)(b) of the Constitution states:

The Supreme Court … has an inherent power to review all judicial acts of the National Court.

7. In the present case the applicants have no right, unless leave is first granted, to have the National Court judgment reviewed. This is because there was a right to appeal or at least a right to seek leave to appeal against the judgment, which was not exercised within the 40-day time limit imposed by Section 17 of the Supreme Court Act. That right having been lost, it is incumbent on the applicants to satisfy the three criteria that the Supreme Court conventionally has regard to in the exercise of its discretion whether to grant leave:

· it is in the interests of justice to grant leave; and

· there are cogent and convincing reasons and exceptional circumstances, eg some substantial injustice is manifest or the case is of special gravity; and

· there are clear legal grounds meriting a review of the decision.

8. The above principles are based on the landmark decision of the Supreme Court in Avia Aihi v The State [1981] PNGLR 81. They have subsequently been developed and applied in many cases, eg Danny Sunu v The State [1984] PNGLR 305; The State v Colbert [1988] PNGLR 138; David Toll v The State (1989) SC378; New Zealand Insurance Co Ltd v Chief Collector of Taxes [1988-89] PNGLR 522; Jeffrey Balakau v Ombudsman Commission [1998] PNGLR 437,; Review Pursuant to Constitution, Section 155(2)(b); Application by Herman Joseph Leahy (2006) SC855.

9. We will deal with the three criteria in a different order to what is usually the case. The issues become:

1 Are there cogent and convincing reasons and exceptional circumstances warranting review?

2 Are there clear legal grounds meriting a review?

3 Is it in the interests of justice to grant leave?

1 ARE THERE COGENT AND CONVINCING REASONS AND EXCEPTIONAL CIRCUMSTANCES WARRANTING REVIEW?

10. There are in fact two requirements under this criterion: cogent and convincing reasons plus exceptional circumstances.

Cogent and convincing reasons

11. In deciding whether there are cogent and convincing reasons, the following matters are relevant:

(a) the reasons for not filing an appeal within time; and

(b) the merits of the case sought to be argued.

Reasons for not filing an appeal or seeking leave to appeal in time

12. The applicants have provided a perfect excuse for not exercising their rights within the time permitted by Section 17 of the Supreme Court Act: they were not notified that the National Court would be handing down its judgment on 6 February 2007 and they and their lawyers were not present (and neither was the respondent or his lawyers) when the judgment was handed down and they were not told that the judgment had been handed down until eight months later (on 26 October 2007). The respondent’s application for default judgment had been heard more than three years beforehand (on 22 October 2003) and the applicants’ lawyers had been following up with the Judge’s associate throughout that period. Whatever the reasons for this state of affairs it is clear that the applicants were not to blame. They had good reason for not meeting the time limits of Section 17.

Merits of the case sought to be argued

13. A cursory examination of the merits of the applicants’ case shows that it appears to have considerable merit for a number of reasons, including the following:

· no reasons were given in support of the...