SCA No 18 of 1999: The Honourable Andrew Baing and The Independent State of PNG v PNG National Stevedores Pty Limited and Bank of South Pacific Limited (2000) SC627

• Jurisdiction: Papua New Guinea
• Judge: Sheehan J, Sawong J, Kirriwom J
• Judgment Date: 23 February 2000
• Court: Supreme Court
• Citation: (2000) SC627
• Year: 2000
• Judgement Number: SC627

Supreme Court: Sheehan J, Sawong J, Kirriwom J

Judgment Delivered: 23 February 2000

SC 627

PAPUA NEW GUINEA

[In the Supreme Court of Justice in Waigani]

SCA NO. 18 of 1999

THE HONOURABLE ANDREW BAING

First Appellant

AND

THE INDEPENDENT STATE OF PNG

Second Appellant

-V-

PNG NATIONAL STEVEDORES PTY LIMITED

First Respondent

AND

BANK OF SOUTH PACIFIC LIMITED

Second Respondent

WAIGANI : SHEEHAN J, SAWONG, KIRRIWOM JJ.

1999 : 23 November, 23 February, 2000

APPEAL — Application for leave to Appeal under Supreme Court S.14 (3) (b) — proper principles for exercise of discretion.

PRACTISE AND PROCEDURE

Conditional Orders — Applications to strike out defence — and enter judgment. Order 9 r 25 (1) (b) National Court Rule

PRACTISE & PROCEDURE

Irregular judgments — setting aside irregular judgments. Order 1 r 9 National Court Rules

FACTS

The first respondent proceedings against the Appellants and the PNG Harbours Board claiming it had suffered financial loss as a result of a change in Government policy relating to the grant of stevedoring licences. In their defences, the appellants and the PNG Harbours Board pleaded that no cause of action was disclosed. During pre-trial proceedings, the respondent obtained orders for discovering of documents. These were served on the appellants. The Appellants did not comply with the orders for discovering. Consequently on 13 September 1996, Salika, J made conditional consent orders. Subsequently on 17 September 1996, pursuant to the said conditional orders the respondent, filed an affidavit with the registrar of the National Court and obtained orders, striking out the Appellants defence and entering judgement in favour of the respondent.

Some 16 months later the appellants, applied to the National Court to have the orders set aside. The Deputy chief Justice refused this application. This appeal lies from that refusal.

Held:

1. The registrar of the Court has no jurisdiction to strike out a party's defence and entering a judgment.

2. Only the Court has such a jurisdiction.

3. A conditional order, by its very nature, necessitates the exercise of further judicial function of determining whether the condition had been satisfied or not at the specified time.

Cited cases:

Yakam v Meriam, Unreported Supreme Court Judgment, November 1997

Chan v Ombudsman Commission of PNG, Unreported Supreme Court Judgment,

25 June, SC607

FAI General Insurance Co Ltd v Southern Cross Exploration [1988] 165 CLR 268

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

Wong v Haus Bilas Corporation (PNG) Pty Ltd [1988-89] PNGLR 42

Credit Corporation (PNG) Ltd v Gerard Lee [1988-89] PNGLR 11

Keram v Warum & other [1994] PNGLR 130

Re Mune v Poto

Bank of South Pacific Ltd v Spencer [1983] PNGLR 239

Post & Telecommunication Corporation v Takoa Pastoral Co Pty Ltd

[1985]PNGLR 44

I. MOLLOY, for the First & Second Appellants.

G.J. SHEPPARD, for the First Respondent.

B. NEILL, for the Second Respondent.

Cur adv. Vult.

23rd February 2000

BY THE COURT : This was an application for leave to appeal against an order of the National Court made on 9th April 1998 refusing an application by the First and Second Appellants to set aside interlocutory judgments against them, for damages to be assessed.

BACKGROUND

In order to appreciate the arguments put forward, it is necessary to set out the background of this litigation.

The first respondent brought a claim against the appellants and the PNG Harbour Board claiming it had suffered loss as a result of a change in Government policy in relation to the granting of stevedoring licences. Subsequently there were further amendments to its statement of claim. It is not necessary to state those for the present purposes.

In their defence, the appellants and the PNG Harbours Board pleaded that no cause of action was disclosed.

Subsequently during pre trial proceedings, the respondent obtained orders for discovery of documents. The Appellants did not comply with Orders of the Court for discovery of documents. As a consequence on 13 September 1996, a conditional consent orders was made by Salika J. The terms of the said Orders were :

"1. That the First and Third Defendants make file and deliver a List of Documents verified by Affidavit within forty-eight hours (48) of the making of this Order.

2. That in default of compliance with this Order and on the filing of an Affidavit of non compliance the Defence be struck out and interlocutory judgement be entered for the Plaintiff against the First and Third Defendants.

3. That the First and Third Defendants pay the Plaintiffs cost of incidental to this application in any event".

Pursuant to that Order, on 17 September 1996, an affidavit was filed before the registrar for the Appellants defences to be struck out and an interlocutory judgment for damages to be assessed be entered. The registrar accepted the affidavit and struck out the Appellant's defence and entered judgement against it.

The Appellant did nothing on this aspect until some 16 months later when they made an application to set aside the orders of 17 September 1996. This was refused.

It was this refusal by the Deputy Chief Justice to set aside the said orders which has led to the Application for leave to Appeal and the Appeal before us.

APPLICATION FOR LEAVE TO APPEAL.

Section 14 (3) (b) of the Supreme Court Act, Ch 37 provides that "no appeal lies to the Supreme Court without leave of the Supreme Court from an interlocutory judgment made or given by the National Court….". There is no doubt in our minds that the refusal by the Deputy Chief Justice to set aside the interlocutory judgment was itself interlocutory.

It is now settled that the requirement to apply for leave separately from the hearing of the appeal is prerequisite. This has arisen since the decision of the Supreme Court in Yakam v Meriam (Unreported Supreme Court Judgment, November 1997).

In Chan v Ombudsman Commission of Papua New Guinea (Unreported Supreme Court, 25 June 1999, SC 607) the majority said at p 21 :

"So to obtain leave to appeal an interlocutory judgment, it is not simply a matter of asserting there is an arguable case; that there has been some error. It is not the case that every error will affect the outcome of the substantive proceedings. What must be shown is, not only that there has been some patent error, but that the error affects a party's substantive rights or will prevent the determination of the issues. That is, there is an error in the interlocutory judgment that goes to jurisdiction."

In this case the application for leave was made on two principal grounds. The grounds were that

(a) it would be an injustice not to allow the Appellants to defend the Plaintiffs' claim

(b) substantially the same grounds, as are set out in the Notice of Appeal.

The Order of 13 September 1996.

The Deputy Chief Justice found that the Order made on 13 September 1996 were by consent. He found that that being the case he had no jurisdiction to set it aside.

But what is equally clear is that said orders were conditional orders. We say they were conditional orders because the terms of it were conditional upon the happening of some event in the future. The event was that the Appellants were to "make file and deliver a list of documents verified by affidavit within forty eight hours (48) of the making of this Order.." This meant that if the appellants did not comply with the terms of the order, the respondent had to come back to the Court and an appropriate application to the Court. Thus, this required further judicial function to be exercised in determining that the condition had not been satisfied at the specified time.

In FAI General Insurance Co Ltd v Southern Cross Exploration [1988] 165 CLR 268 the High Court of Australia considered, inter alia, the meaning and effect of conditional orders. The facts of that case were as follows, (from the head notes)

In the course of a long trial in the Supreme Court of New South Wales the judge made an order that "the proceedings be and stand dismissed … unless on or prior to 30 May 1986 the plaintiff's provided certain particulars and security for costs. On 30 May 1986 the plaintiffs applied for an extension...