Zachary Gelu and Isaac Lupari and Tau Liu v Sir Michael Somare MP and Maurice Sheehan, Justice Cathy Davani & Don Manoa and The Independent State of Papua New Guinea (2008) N3526

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 21 November 2008
• Court: National Court
• Citation: (2008) N3526
• Docket Number: OS NO 654 OF 2008
• Year: 2008
• Judgement Number: N3526

Full Title: OS NO 654 OF 2008; Zachary Gelu and Isaac Lupari and Tau Liu v Sir Michael Somare MP and Maurice Sheehan, Justice Cathy Davani & Don Manoa and The Independent State of Papua New Guinea (2008) N3526

National Court: Cannings J

Judgment Delivered: 21 November 2008

N3526

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 654 OF 2008

ZACHARY GELU

First Applicant

ISAAC LUPARI

Second Applicant

TAU LIU

Third Applicant

V

SIR MICHAEL SOMARE MP

First Respondent

MAURICE SHEEHAN, JUSTICE CATHY DAVANI & DON MANOA

Second Respondents

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Respondent

Waigani: Cannings J

2008: 18, 21 November

RULING

JUDICIAL REVIEW – application for stay of proceedings following grant of leave to seek judicial review – National Court Rules, Order 16, Rule 3(8) – principles to apply when determining whether to grant a stay of proceedings.

Three persons who were granted leave to apply for judicial review of the decision of the Prime Minister to appoint a commission of inquiry applied for a stay of the proceedings of the Commission of Inquiry.

Held:

(1) As the applicants are ultimately seeking orders of prohibition and certiorari, the granting of leave for judicial review operates by virtue of Order 16, Rule 3(8)(a) of the National Court Rules as a stay of proceedings to which the application for judicial review relates – if the court so directs.

(2) A direction for a stay is not automatic. It is, rather, a matter of discretion to be exercised according to normal principles for granting interim injunctions.

(3) It is accordingly incumbent on the applicant to show that:

(a) there are serious questions to be tried and that an arguable case exists;

(b) an undertaking as to damages has been given;

(c) damages would not be an adequate remedy if a stay is not granted;

(d) the balance of convenience favours the granting of a stay; and

(e) the interests of justice require that there be a stay of proceedings.

(Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853 applied.)

(4) As to (a), the court should make an assessment of the strength of the arguments; the standard applicable being higher than at the stage of granting leave for judicial review. Furthermore, if an applicant is seeking to stay an ongoing investigation being conducted by a proper authority under the laws of Papua New Guinea, the appropriate test to apply is that the grounds of judicial review be strongly arguable (Rimbink Pato v Anthony Manjin and Others (1999) SC622, Simon Ketan v Lawyers Statutory Committee (2001) N2290 considered).

(5) In the present case:

(a) the applicants do not have a strongly arguable case;

(b) an undertaking as to damages has been given;

(c) damages would be an adequate remedy if a stay is not granted;

(d) the balance of convenience does not favour the granting of a stay;

(e) the interests of justice do not require that there be a stay.

(6) Only one of the five considerations favours the granting of a stay. It was outweighed by the other four. Accordingly, a stay of the proceedings was refused. However, in the circumstances it was appropriate to order a stay of publication of findings of the Inquiry without the leave of the Court.

Cases cited

The following cases are cited in the judgment:

Bank of Papua New Guinea and Wilson Kamit v Marshall Cooke QC and Others (2003) N2369

Bernard Hagoria v Ombudsman Commission (2003) N2400

Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853

Dan Kakaraya v Ombudsman Commission (2003) N2478

Ewasse Landowners Association Inc v Hargy Oil Palms Ltd (2005) N2878

Gelu v Somare (2008) N3524

Peter Makeng v Timbers (PNG) Ltd (2008) N3317

Pius Nui v Mas Tanda (2004) N2765

Rimbink Pato v Anthony Manjin and Others (1999) SC622

Simon Ketan v Lawyers Statutory Committee (2001) N2290

Abbreviations

The following abbreviations appear in the judgment:

Inc – Incorporated

J – Justice

Ltd – Limited

N – National Court judgment

No – number

OS – Originating Summons

PNG – Papua New Guinea

PNGLR – Papua New Guinea Law Reports

Pty – Proprietary

QC – Queen’s Counsel

SC – Supreme Court judgment

v – versus

APPLICATION

This was an application for a stay of the proceedings of a commission of inquiry following grant of leave to seek judicial review.

Counsel

N Tame, for the applicants

I Molloy & F Barton, for the respondents

21 November, 2008

1. CANNINGS J: Zachary Gelu, Isaac Lupari and Tau Liu were recently granted leave to seek judicial review of the decision of the Prime Minister to appoint the Commission of Inquiry into the Management Generally of Public Monies by the Department of Finance (Gelu v Somare (2008) N3524).

2. They are now applying for a stay of the proceedings of the Inquiry pending the outcome of their judicial review. They want the Court to order that the Inquiry cannot hold any public hearings or conduct any investigations or do anything in pursuit of the powers conferred on it by the Prime Minister until their judicial review is finally determined. They say that a stay of proceedings should be ordered as a matter of course as they have been granted leave to seek review. If a stay is not granted as a matter of course they argue that nonetheless the principles that the courts normally apply when deciding whether to grant an interim injunction favour the granting of a stay.

3. The issues in this case are:

· Does a stay of proceedings follow as a matter of course after the granting of leave for judicial review?

· If not, what principles apply when the court considers an application for a stay?

· What is the result of applying those principles in this case?

DOES A STAY OF PROCEEDINGS FOLLOW AS A MATTER OF COURSE AFTER THE GRANTING OF LEAVE FOR JUDICIAL REVIEW?

4. Mr Tame, for the applicants, hangs his submission that a stay should follow as a matter of course on Order 16, Rule 3(8)(a) of the National Court Rules, which states:

Where leave to apply for judicial review is granted, then … if the relief sought is an order of prohibition or certiorari and the Court so directs, the grant shall operate as a stay of the proceedings to which the application relates until the determination of the application or until the Court otherwise orders.

5. Mr Tame points out that in the present case leave has been granted to apply for judicial review and the relief sought by the applicants is in the nature of both prohibition (stopping the Inquiry from continuing) and certiorari (quashing the decision to appoint the Inquiry). He also says that a formal application for review has been filed and the applicants have, by notice of motion, formally asked the court to direct that there be a stay of proceedings. All of the conditions precedent set by the Rules have been met. Therefore, he submits, the Court should direct that there be a stay, as a matter of course.

6. I do not accept this submission. The literal wording of Rule 3(8)(a) does not support it. The Rule does not say that, upon satisfaction of the pre-conditions, the court shall direct a stay. It simply says that if leave is granted and the relief sought is prohibition or certiorari, “and the court so directs” the grant of leave operates as a stay. Nothing in the Rule obliges the Court to give a direction.

7. The proper interpretation of the Rule is that it confers a discretion on the Court to decide whether to grant a stay (Peter Makeng v Timbers (PNG) Ltd (2008) N3317, para 22).

WHAT PRINCIPLES APPLY WHEN THE COURT CONSIDERS AN APPLICATION FOR A STAY?

8. Once it receives an application for a stay of proceedings the court must exercise its discretion judicially. This is done by applying the general principles that are applied whenever the court determines an application for an interim injunction pending the outcome of any civil trial. I do not see much point in drawing a distinction between a stay and an injunction. The principles are well developed in PNG. They were recently discussed by the Supreme Court in Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853.

9. It is incumbent on the applicant for a stay of proceedings to show that:

(a) there are serious questions to be tried and that an arguable case exists;

(b) an undertaking as to damages has been given;

(c) damages would not be an adequate remedy if a stay is not granted;

(d) the balance of convenience favours the granting of a stay; and

(e) the interests of justice require that there be a stay.

10. Those are the general principles. As to (a) – the need to show an arguable case – I consider that when the court is considering an application for a stay of proceedings following the grant of leave for judicial review, special considerations apply.

11. First, it is necessary for the court to make an assessment of the strength of the arguments. It is not sufficient for an applicant to point to the fact that they have an arguable case. Obviously there is an arguable case. Leave would not have been granted if there were not one. The standard is higher when the court is deciding whether to grant a stay of proceedings than at the stage of granting leave for judicial review.

12. Secondly, if, as in the present case, an applicant is seeking to stay an ongoing investigation being conducted by a proper authority under the laws of Papua New Guinea, I...