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

• Jurisdiction: Papua New Guinea
• Court: Supreme Court
• Date: 15 August 2003
• Citation: (2003) SC716
• Docket Number: SCA No 116 of 2002
• Year: 2003

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

Judgment Delivered: 15 August 2003

1 State of Papua New Guinea—Role of representation by the Attorney–General and Solicitor–General—Attorney–General Act 1989 and Claims By and Against the State Act 1996—Function of Attorney–General and Solicitor–General considered.

2 Peter Aigilo v The Independent State of Papua New Guinea (2001) N2102, Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 and Simon Mali v The State [2002] PNGLR 548 referred to

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By The Court: This is an appeal against an interlocutory ruling made by the National Court (Kandakasi J in The Independent State of Papua New Guinea v Zachary Gelu (2002) N2322) on 13 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 29 June 2001, the Attorney–General (AG) briefed out to Posman Kua Aisi, Lawyers to act for the State in the assessment of damages.

However, on 30 July 2001, the First Respondent acting as Solicitor–General 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 Attorney–General and nor on the advice of Posman Kua Aisi, lawyers for the Appellant.

On Attorney–General'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 s61 of the Public Finances (Management) Act 1995

(c) in breach of s13(2) of the Attorney–General Act 1989

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

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

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

(b) The Solicitor–General 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 Solicitor–General.

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) S4 of the Claims By 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;

(b) S7(a), (b) and (c), of the Attorney–General Act 1989, (the "AG Act") jointly and severally empower the Attorney–General to issue or defend any suit on behalf of the State, and

(c) S13(1) of the Attorney–General Act 1989 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 s13(2), of the Attorney–General Act 1989 and

(ii) 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 s7 of the Attorney–General Act 1989.

(2) The Learned Trial Judge erred in law in holding that s4 of the Claims By and Against the State Act 1996 did not affect an earlier decision National Court in Peter Aigilo v The Independent State of Papua New Guinea (2001) N2102, when on a...