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Urame v Tongayu [2018] PGNC 146; N7238 (26 March 2018)

N7238

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 662 of 2017

IN THE MATTER OF THE COMPANIES
ACT 1997 AND
IN THE MATTER OF AN APPLICATION PURSUANT TO S. 408(1) FOR AN EXTENSION OF TIME IN WHICH TO APPEAL A DECISION OF THE REGISTRAR

BETWEEN:
REVEREND JACK URAME
First Plaintiff

AND:
BERNARD KAISOM
Second Plaintiff

AND:
EVANGELICAL LUTHERAN CHURCH
OF PAPUA NEW GUINEA
Third Plaintiff

AND:
ALEX TONGAYU,
Registrar of Companies
Defendant

Waigani: Hartshorn J.
2017: 20^th September,
2018: 26^th March

Application for extension of time in which to appeal a decision of the Registrar of Companies – s. 408(1) Companies Act 1997
Cases Cited:
Papua New Guinea Cases

Albright Ltd v. Mekeo Hinterland Holdings Ltd (2013) N5774
Gigira Development Corporation Ltd v. Komo Umbrella Joint Venture Ltd (2016) N6785
Green & Co Pty Ltd (Receiver Appointed) v. Roger Britain Green [1976] PNGLR 73
Hi Tech Industries Pty Ltd v. Papua New Guinea Institute of Internal Affairs Inc. (2008) N3654
Independent Public Business Corporation v. Motor Vehicles Insurance Limited (2017) N6664
K. A. Properties (PNG) Ltd v. Simatab (2017) N7070
National Superannuation Fund Ltd v. National Capital Ltd (2017) N6952
Totamu v. Small Business Development Corporation (2009) N3702
Was Neimari & Ors v. Maira Iapential & Anor (2008) SCA 9/05 delivered 2/10/08

Overseas Cases

Evans v. Bartlam [1937] AC 473; 2 All ER 646
Gallow v. Dawson [1990] 93 ALR 479

Counsel:

Mr. S. Gor, for the Plaintiffs

26^th March, 2018

1. HARTSHORN J: This is an application for leave to extend the time within which to appeal three decisions of the Registrar of Companies. The application is made pursuant to s. 408(1) Companies Act 1997.
   
2. I allowed the application to proceed in the absence of representation of the defendant, the Registrar of Companies, as I was satisfied that service of the necessary documentation had been affected and that the defendant had been made aware of the date and time of the hearing of the application.
   

Background

3. The application concerns Lutheran Shipping Pty Ltd (Lutheran Shipping). The second plaintiff was a director of Lutheran Shipping until or about 25^th July 2017. The first and second plaintiffs are members of the third plaintiff, the Evangelical Lutheran Church of Papua New Guinea (Church). They are also members of the National Church Council of the Church (Council).
   
4. The plaintiffs now seek to appeal three decisions of the Registrar of Companies made on 14^th November 2014 that restored Lutheran Shipping to the register of companies, and that removed Fritz Dziobeck and Wayne McKeague as shareholders and directors of Lutheran Shipping and replace them with other persons (Registrar Decisions).
   

This application

5. The plaintiffs seek an extension of time within which to appeal the Registrar’s Decisions on the grounds that there is a reasonable explanation for the delay in seeking to appeal and that there is a real likelihood that their appeal will be successful.
   
6. The explanation for the delay in seeking to appeal is that when the Council and Church discovered that Lutheran Shipping had been restored to the register of companies, as Lutheran Shipping was a company without any assets or liabilities as it has been deregistered for a lengthy period of time, the Council and Church decided it was not necessary to appeal its restoration. In addition, notwithstanding that Lutheran Shipping had been restored to the register of companies by the Registrar of Companies because of false representations made by Reverend Giegere Wenge, a former Bishop of the Church, the Council and Church did not foresee that Bishop Wenge and his supporters would use Lutheran Shipping to unlawfully appropriate property and assets belonging to the Church and Kambang Holdings Ltd (in liquidation).
   
7. Further, the lawyers for the Church have repeatedly written to the Registrar of Companies expressing its disappointment and objection to the decision to restore Lutheran Shipping. An understanding was purportedly reached with the Deputy Registrar of Companies, Mr. Miningi, to transfer all of the shares in Lutheran Shipping from Reverend Wenge to the first plaintiff. The directors of Lutheran Shipping were also changed. This was done with a view to dissolving Lutheran Shipping. A recent company search of Lutheran Shipping has revealed however that the Registrar of Companies has removed the first plaintiff as shareholder and replaced him with Reverend Wenge and the directors have also been changed, contrary to the purported understanding that had been reached.
   
8. In regard to the likelihood that the appeal will be successful, Lutheran Shipping was deregistered in or about 12^th September 1996, or by some records, in 1997, for failure to lodge returns. Pursuant to s. 378 Companies Act 1997, the Registrar of Companies only has power to restore a company to the register of companies if the company was removed from the register during the previous six years. Clearly, the Registrar of Companies exceeded his powers under s. 378 Companies Act 1997 by restoring Lutheran Shipping to the register of companies, about 16 or 17 years after it was deregistered. Only this court has that power pursuant to s. 379.
   
9. Further, the consent of the Council and Church was not obtained before the transfer of all of the issued shares in Lutheran Shipping from Fritz Dziobeck and Wayne McKeague to Reverend Wenge, in breach of s. 65 Companies Act 1997.
   

Consideration

10. Section 408(1) Companies Act 1997 is as follows:

“A person who is aggrieved by an act or decision of the Registrar under this Act may appeal to the Court within one month after the date of notification of the act or decision, or within such further time as the Court may allow.”

11. As to the factors that should be considered to determine whether further time should be allowed for a person to appeal, as I did in Hi Tech Industries Pty Ltd v. Papua New Guinea Institute of Internal Affairs Inc. (2008) N3654, I have had recourse to the Supreme Court decision of Was Neimari & Ors v. Maira Iapential & Anor (2008) SCA 9/05 delivered 2/10/08 (Sevua, Batari, Lay JJ). That case was an appeal from a refusal of the National Court to extend time to appeal a District Court decision.
12. The Supreme Court held amongst others, that there are rare cases where strong merits may outweigh unsatisfactory reasons for delay and that there is an arguable case, is a relevant consideration on an application to extend time to appeal.
13. I have also had recourse to the decision of Gallow v. Dawson [1990] 93 ALR 479. In that decision McHugh J. at 480 provided principles as to the matters to be considered in an application for leave to bring an appeal out of time:

“The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court.... to do justice between the parties....In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences of the parties of the grant or refusal of the application for extension of time.... When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal.”

14. The Courts in this jurisdiction have considered Australian authorities amongst others, on the question of the exercise of a court’s discretion and such decisions are of persuasive value.
    
15. I propose to consider the principles enunciated in Was Neimari (supra) and Gallow (supra) in determining whether to exercise the discretion of this court in favour of allowing the plaintiffs to appeal. Further, as the discretion given to the court under s. 408(1) Companies Act is unfettered, I make reference to the House of Lord’s decision of Evans v. Bartlam [1937] AC 473; 2 All ER 646 referred to in Green & Co Pty Ltd (Receiver Appointed) v. Roger Britain Green [1976] PNGLR 73 and referred to in the decision of David J in Totamu v. Small Business Development Corporation (2009) N3702 and by me in Albright Ltd v. Mekeo Hinterland Holdings Ltd (2013) N5774; Independent Public Business Corporation v. Motor Vehicles Insurance Limited (2017) N6664, Gigira Development Corporation Ltd v. Komo Umbrella Joint Venture Ltd (2016) N6785, National Superannuation Fund Ltd v. National Capital Ltd (2017) N6952 and K. A. Properties (PNG) Ltd v. Simatab (2017) N7070.
    
16. In Evans v. Bartlam (supra), Lord Wright at 488 quoted with approval the following statement of Bowen, LJ in Gardner v. Jay (1885) 29 Ch 50, at 59:
    

“When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view of indicating the particular grooves in which the discretion should run, for if the Act or the Rules did not fetter the discretion of the Judge why should the Court do so?”

Delay

17. The Registrar Decisions were made in November 2014. The originating summons commencing this proceeding seeking amongst others an extension of time to appeal was filed in August 2017 - about two years nine months after the Registrar Decisions were made. Clearly there has been delay. Explanations have been given for the delay, but to my mind these explanations are not reasonable. Once the purported restoration of Lutheran Shipping had come to the notice of the Council and Church as a consequence of what is alleged to be, and prima facie appears to be, fraudulent and other unlawful conduct, the Council and Church had a duty to my mind, to draw this to the attention of the relevant authorities and make application to court when no satisfaction was forthcoming. That this occurred eventually, does not absolve the Council and Church for their initial lack of action. I am not satisfied that the explanations given for the delay in commencing this proceeding are reasonable in the circumstances.
    

Merits of appeal

18. In my view, there is a real likelihood that the plaintiffs’ appeal of the Registrar Decisions will be successful. From the evidence, prima facie, the Registrar of Companies appears to have relied upon false representations and has exceeded his authority. This is a case where strong merits outweigh unsatisfactory reasons for delay. I am satisfied that the court should exercise its discretion in favour of the plaintiffs’ and grant them the extension of time to appeal the Registrar’s Decisions that they seek.
    

Orders

19. The formal orders of the Court are:
    
    1. All of the relief sought in the originating summons is granted;
       
    2. The plaintiffs shall have until close of business on 30^th April 2018 to appeal to the court pursuant to s. 408(1) Companies Act 1997;
       
    100. Time is abridged.

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Fiocco & Nutley Lawyers: Lawyers for the Plaintiffs