The Independent State of Papua New Guinea v Zachary Gelu, Solicitor–General and [Manoburn] Manorburn Earthmoving Limited (2003) SC716

• Jurisdiction: Papua New Guinea
• Judge: Amet CJ, Kapi DCJ, Los J
• Judgment Date: 15 August 2003
• Court: Supreme Court
• Docket Number: SCA No 116 of 2002
• Citation: (2003) SC716
• Year: 2003
• Judgement Number: SC716

Full Title: SCA No 116 of 2002; The Independent State of Papua New Guinea v Zachary Gelu, Solicitor–General and [Manoburn] Manorburn Earthmoving Limited (2003) SC716

Supreme Court: Amet CJ, Kapi DCJ, Los J

SC716

PAPUA NEW GUINEA

[In the Supreme Court of Justice at Waigani]

SCA NO. 116 of 2002

BETWEEN:

THE INDEPENDENT STATE OF

PAPUA NEW GUINEA

Appellant

AND:

ZACHARY GELU, SOLICITOR

GENERAL

First Respondent

AND:

MANORBURN EARTHMOVING

LIMITED

Second Respondent

Waigani: Amet CJ., Kapi DCJ., Los J.

13th June, 15th August 2003

State of Papua New Guinea – Role of representation by the Attorney-General and Solicitor General – Attorney-General Act and Claims by and Against the State – Function of Attorney-General and Solicitor General considered.

K. Kua for the Appellant

A. Baniyamai for the First Respondent

M. Pokia for the Second Respondent

Cases cited:

Peter Aigilo v Sir Mekere Morauta & Others (Aigilo Case) (Unreported Judgment of the National Court dated 15th June 2001, N2102)

Lord Green MR in Carltona, Ltd v Commissioners of Works & Others [1943] 2 All ER 560 at 564)

Simon Mali & Others v The State (Unreported judgment of the Supreme Court dated 3rd April 2002, SC690)

Legislations cited:

Constitution

Public Finance Management Act

Acts of Parliament

The Attorney-General Act 1989

Claims By and Against the State Act

Investment Promotion Act 1992

Public Services (Management) Act 1995

Public Holidays Act

15th August 2003

By The Court: This is an appeal against an interlocutory ruling made by the National Court (Kandakasi J) on 13th December 2002 in which the Court directed that (1) investigation be undertaken to establish whether the allegations of fraud against Mr Zachary Gelu, (First Respondent) and Manoburn Earthmoving Ltd (MEL) (Second Respondent) exist (2) that if the investigations demonstrate a case of fraud the State through the Solicitor General (SG) will decide whether to proceed with the claim.

This direction arose out of the following circumstances. The Second Respondent made a claim for damages arising out of a road contract for road works in Oro Province against the State (Appellant) in a separate proceeding (WS 285 of 2000). The Appellant failed to file a defence and the Second Respondent obtained default judgment with damages to be assessed.

The Appellant vigorously contested the damages. On the 29th June 2001, the Attorney-General (AG) briefed out to Posman Kua Aitsi, Lawyers to act for the State in the assessment of damages.

However, on 30th July 2001, the First Respondent acting as SG signed a Deed of Settlement and Release in favour of the Second Respondent settling the claim for K8.6 million. It is alleged that the First Respondent entered into the Deed without the knowledge and instructions of the AG and nor on the advice of Posman Kua Aitsi, lawyers for the Appellant.

On AG’s instructions, Posman Kua Aisi acting on behalf of the Appellant filed this action (WS 1343 of 2002), alleging that the Deed of Settlement was procured:

(a) by fraud

(b) in breach of s 61 of the Public Finance Management Act

© in breach of s 13 (2) of the Attorney-General Act

(d) ultra vires the powers of the First Respondent

The Second Respondent has filed a defence to the action while the First Respondent has not filed a defence.

On 6th November 2002, the Second Respondent filed motion seeking an order for the dismissal of the proceedings, alleging that the AG lacked capacity to bring the cause of action in the name of the State.

On 13th December 2002, the trial judge concluded amongst other things that:

(a) The AG has no power to sue and defend proceedings in the name of the State

(b) The SG has the exclusive power to act on behalf of the State in litigation.

The trial judge did not dismiss the action but based on the forgoing reasons, he gave directions to investigate the allegation of fraud and that the decision whether to pursue the claim is to be made by the SG.

The Appellant has appealed against this decision on the following grounds:

“Grounds

(1) The Learned National Court Judge erred in law in holding that the Attorney General does not have any power to sue or defend any action on behalf of the State which are vested primarily in the Solicitor General in circumstances where the following statutory provisions provide in their ordinary and literal meaning to the contrary, namely:

(a) Section 4 of the Claims and Against the State Act 1996 (the “Claims Act) provides that only the attorney General has the powers to bring any suit, including relator proceedings, in the name of the State, and;

(a) Sections 7(a), (b) and (c0), of the Attorney General’s Act 1989, (the “AG Act”) jointly and severally empower the Attorney General to issue or defend any suit on behalf of the State, and

(a) Section 13(1) of the AG Act provides that whilst the primary function of the Solicitor General is to appear as an advocate to all matters in Court involving the State, the power is subject to two important limitations:

(i) The Solicitor General can only act on such matter if and when instructed by the Attorney General (and not without it) pursuant to section 13(2), of the AG Act and

(i) The Attorney General has the powers to instruct external lawyers (other than the Solicitor General) to act for the State pursuant to his powers under section 7 of the AG Act.

(1) The Learned Trial Judge erred in law in holding that section 4 of the Claims Act did not affect an earlier decision National Court in the matter of Pater Aigilo vs the State and Ors (No. 1) N2102, when on a combined reading of the section 4 of the Claims Act and sections 7(a), (b), (c), (I) and 13 of the AG Act, these provisions in their literal and ordinary meaning make it clear that only the Attorney has the power to sue or to defend any action on behalf of the State, and the Solicitor General’s role is confined to acting only on the exclusive instruction of the Attorney General in such matters.

(2) Whilst the Learned Trial Judge correctly held that the National Court was not bound by one of its own previous decisions, the Learned Trial Judge erred in law insofar as he held that there were no reasons for the National Court in that instance to depart from a previous National Court ruling in the case of Peter Aigilo vs The state and Ors (N2102), in circumstances where for the reasons amongst others mentioned in paragraphs 3(1) and (2) above, the matter of Peter Aigilo vs The State was wrong decided.

(3) The Learned Trial Judge erred in law in holding that the Attorney General had no power to brief external lawyers (other than the Solicitor General or lawyers in his office) without the recommendation and advice of the Solicitor General, when the scheme of the AG Act and inn particular sections 7(a), (b), (c), (I), 8, 9 and 13 of the AG Act and Section 4 of the Claims Act all provide to the contrary, namely, that the Attorney General has exclusive powers to brief external lawyers which maybe exercised without any recommendation or advice from the Solicitor General.

(4) The Learned Trial Judge erred in law and in fact in holding that the pleadings disclosed negligence and mismanagement rather than fraud against the First Respondent and where His Honour did not have to make a final determination on the various causes of action as pleaded but need only satisfy himself that there was a prima facie cause of action. Further His Honour failed to consider whether any one of the causes of action other than fraud as pleaded disclosed a prima facie cause of action.

(5) The Learned Judge erred in law in invoking summary jurisdiction under Order 12 Rule 1 of the National Court Rules and sections 155(4) and 166 of the Constitution which are both of general application in circumstance where there are specific provisions that provide for summary jurisdiction. In particular:

(a) Order 8 rule 27 (Embarrassment), Order 10 rule 21 (Order for Decision), Order 12 rule 40 (Frivolity) of the National Court Rules, and the inherent powers provide the National Court with the only sources of summary jurisdictions.

(a) The first three sources cited in paragraph 3(6)(a) herein are specific provisions.

(a) The fourth source being the inherent powers under sections 155(4) and 166(1) of the Constitution are of general application, and may only be exercised in accordance with the principles in the National Court Rules cited in paragraph 3(6)(a) herein.

(a) The Court below in having held earlier that there was no jurisdiction under Order 12 rule 40, and where the Second Respondent...