John Midan & John Posai v Oscar Lisio as the Chairman of Directors of Kandrian Timber Investments Limited (2010) SC1086

• Jurisdiction: Papua New Guinea
• Judge: Sakora, Mogish & Makail, JJ
• Judgment Date: 03 December 2010
• Court: Supreme Court
• Citation: (2010) SC1086
• Docket Number: SCA NO 60 OF 2007
• Year: 2010
• Judgement Number: SC1086

Full Title: SCA NO 60 OF 2007; John Midan & John Posai v Oscar Lisio as the Chairman of Directors of Kandrian Timber Investments Limited (2010) SC1086

Supreme Court: Sakora, Mogish & Makail, JJ

Judgment Delivered: 3 December 2010

SC1086

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO 60 OF 2007

BETWEEN

JOHN MIDAN & JOHN POSAI

Appellants

AND

OSCAR LISIO as the CHAIRMAN OF DIRECTORS OF KANDRIAN TIMBER INVESTMENTS LIMITED

Respondent

Waigani: Sakora, Mogish & Makail, JJ

2010: 02nd September & 03rd December

SUPREME COURT - PRACTICE & PROCEDURE - Application to dismiss for want of prosecution - Failure to prosecute appeal - Grounds of - Failure to settle draft index to appeal book - Draft index to appeal book eventually settled by Deputy Registrar of Supreme Court - Ex-parte settlement - Failure of obtain transcripts of National Court proceedings - Reasons for failure unsatisfactory - Application for dismissal upheld - Appeal dismissed - Supreme Court Rules, 1984 - Order 7, rules 40, 41, 42, 43 & 53(a).

SUPREME COURT - PRACTICE & PROCEDURE - Preliminary application - Grounds of - Competency of application to dismiss for want of prosecution - Want of form - Omission of phrase “to appear and show cause” - Omission of whose affidavit in support is being relied upon and the date of swearing of affidavit - Purpose of - No real prejudice shown - Preliminary application refused - Supreme Court Rules, 1984 - Order 7, rule 53 & Form 11.

Cases cited:

Ben Keimali -v- Air Niugini Limited & Ors (2010) SC1061

Donigi & Ors -v- Papua New Guinea Banking Corporation Limited (2001) SC691

Counsel:

Mr N Kubak, for Appellants

Mr G Gileng, for Respondent

03rd December, 2010

RULING

1. BY THE COURT: In this appeal, the appellants and the respondent are landowners of Alimbit-Anduru timber project area in Kandrian in West New Britain Province. They had established a landowner company called Kandrian Timber Investments Limited to represent their interest in the project. Dispute arose between them over the composition of the board of directors of the landowner company following the election of the respondent and other persons as directors. The respondent was then elected chairman of the board of directors. The appellants commenced proceedings in the National Court in OS No 269 of 2006 to nullify their election. That proceeding was subsequently discontinued by agreement of the parties. Despite the discontinuance of the proceeding, the appellants continued to dispute the election of the respondent and others including interfering with monies of the landowner company at Westpac bank.

2. The respondent subsequently commenced fresh proceeding in OS No 407 of 2006 to seek orders to stop the appellants from interfering with the operations of the landowner company including monies held at Westpac bank. The case went before Sevua, J on at least two occasions where his Honour stayed the proceeding and ordered the parties to convene a fresh meeting of shareholders to elect the directors.

3. On 23rd October 2006, the shareholders held a meeting at Liamo Reef Resort and elected the respondent and others as directors for the second time. The appellants still disputed their election on the basis that they were not properly elected. On 08th December 2006, the respondent filed an application to declare the meeting of 23rd October 2006 valid and their election as directors of the landowner company proper. On 23rd May 2007, Kandakasi, J granted the respondent’s application and declared the respondent and others duly elected directors based on the meeting of shareholders of 23rd October 2006. Aggrieved by that decision, on 26th July 2007, the appellants appealed to the Supreme Court.

4. Pending the appeal, on 17th February 2010, the respondent filed an application to dismiss the appeal for want of prosecution pursuant to Order 7, rule 53(a) of the Supreme Court Rules. At the hearing of the application, the appellants raised a preliminary objection in relation to the competency of the application. That objection was based on the respondent’s non compliance of Form 11 of the Supreme Court Rules. This is our decision on both applications.

Preliminary application - Competency of application to dismiss

5. In respect of the preliminary application, it was argued by Mr Kubak of counsel for the appellants that the form of the application was not in accordance with Form 11 of the Supreme Court Rules because the form did not include the phrase “to appear and show cause” and the requirement to state whose affidavit(s) in support of the application is being relied upon and the date of swearing of the affidavit(s) were also missing. He argued that while the respondent may have substantially complied with the procedural requirements in terms of form, it must not be forgotten that the Court is being asked to exercise its discretion to dismiss the appeal for want of prosecution and such discretion must be equally applied to the appellants’ preliminary application so as to maintain consistency and fairness in the circumstances. If the Court is to fairly exercise its discretion, it is clear that the Court should exercise it in favour of the appellants and dismiss the respondent’s application to dismiss the appeal for want of prosecution because the application to dismiss is clearly incompetent.

6. Mr Gileng of counsel for the respondent urged us to refuse the preliminary application on the basis that the respondent had substantially complied with the Supreme Court Rules and in particular, Form 11. That is to say, while the phrase “to appear and show cause” is missing and the application did not state whose affidavit(s) in support of the application is being relied upon and the date of swearing of the affidavit(s), the Supreme Court Rules are not an end to themselves but a means to an end. That means, notwithstanding the omissions, the appellants are not being prejudiced by the application because they were fully aware of the nature and grounds of the application, hence have appeared to oppose it.

7. We have considered Form 11 and also the document titled the “Application to dismiss for want of prosecution” filed by the respondent and we agree with Mr Kubak that the phrase “to appear and show cause” is missing, and that the application does not state whose affidavit(s) in support is being relied upon and the date of swearing of the affidavit(s). Technically, the application is incompetent but we must also agree with Mr Gileng’s submissions and would dismiss the preliminary application because as he had correctly pointed out, the respondent had substantially complied with the Supreme Court Rules and in particular, Form 11.

8. That is to say, while the phrase “to appear and show cause” is missing and the application does not state whose affidavit(s) is being relied upon and the date of swearing of the affidavit(s), the Supreme Court Rules are not an end to themselves but a means to an end. That means, notwithstanding the omissions, the appellants are not being prejudiced by the application. No issue had been taken as to service of the notice of application and the supporting affidavit of Mr Gileng sworn on 15th February 2010 and filed on 17th February 2010. Neither had the appellants argued that they were not informed by the respondent that he would be relying on the affidavit of Mr Gileng (supra) to support the application. Further, the appellants had not argued that they were short served the application. Hence, we take it that they had been served with those documents and also within a reasonable time to prepare their response to the application.

9. They were also well aware that the respondent would be relying on the affidavit of Mr Gileng (supra) to support the application. Further, we consider that the purpose of having Form 11 in the Supreme Court Rules is to ensure that a party whose appeal is subject of a dismissal application is given sufficient notice so that it may respond to the application. This is where the principles of natural justice come into play. A party must be heard in his or her defence before judgment is passed on that party. In the present case, it is clear to us based on Mr Kubak’s in depth submissions in opposition of the application that the appellants were well aware of the nature and grounds of the application. In our view, the appellants have not shown any real prejudice in this case. For these reasons, we find no merit in the preliminary application and dismiss it.

Substantive application - Application to dismiss

10. We turn to the substantive application. The respondent claimed that the appellants failed to diligently prosecute the appeal and relied on the affidavit of Mr Gileng (supra) to demonstrate that more than two and a half years had gone by since the appeal was filed on 26th July 2007 and the appellants had yet to set it down for hearing. The delay had been caused by the appellants’ failure to first, settle a draft index to the appeal book and secondly, obtain transcripts of the National Court proceedings for purposes of preparing the appeal book.

11. First, in relation to the appellants’ failure to settle the draft index within a reasonable time following...