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Geosite Management Ltd v Kavo [2020] PGNC 223; N8439 (30 April 2020)

N8439


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS. NO. 1074 OF 2014


BETWEEN:
GEOSITE MANAGEMENT LIMITED
Plaintiff


AND
HONOURABLE HAVILA KAVO, MEMBER OF PARLIAMENT AND as the GOVERNOR OF GULF PROVINCIAL GOVERNMENT
First Defendant


AND
GULF PROVINCIAL GOVERNMENT
Second Defendant


AND
GULF FISHERIES LIMITED
Third Defendant


Waigani: Kandakasi, DCJ
2016: 05th July
2020: 30th April


JUDGMENTS & ORDERS – Application to set aside consent orders – Relevant principles - Proper cause or remedy for an aggrieved party – Public policy requiring finality in litigation – Same trial Court cannot assume and effectively exercise powers reserved for an appellate or review court or determine a separate cause of action without the benefit of proper pleadings and trial on the relevant issues – National Court Rules O. 12, r 8 .


PRACTICE & PROCEDURE – Setting aside of consent orders – Application by notice of motion in proceedings concluded by consent orders – National Court functus officio – Notice of motion inappropriate mode to revisit a concluded matter - Notices of motion are for current and yet to be concluded proceedings only – Correct and proper remedy lies in fresh proceedings alleging fraud or misrepresentation or lack of authority or by review to the Supreme Court – Application to set aside consent order dismissed – National Court Rules O.4, rr. 4 & 37 and O.12 r.8.


WORDS & PHRASES – “Acquiesce” or “laches” - Inferring of a consent or approval from a party’s conduction, especially in cases where a party should have raised an issue when required to but that party has failed to do so.


“Interlocutory application” - An application that can be made during the currency of a proceeding to deal with any interlocutory matter prior to a final determination of the issues presented in the case – National Court Rules, O.4, rr 4 and 37.


Facts


After the entry of consent orders finalising the proceedings in the National Court, the Defendants applied by notice of motion to have the consent orders set aside. The Defendants claimed that:


  1. their former lawyers who gave the consent on their behalf acted without their instructions and authority to do so;
  2. the plaintiff did not meet the condition precedent of giving notice of his intention to make a claim in accordance with s. 5 of the Claims by and Against the State Act (CBASA) and the requirements of the Public Finance (Management) Act 1995 (PFMA); and
  3. this Court has the necessary jurisdiction under O.4, rr.4 and 37, O.12, r. 8 (4) and (5) of the National Court Rules (NCR), s. 155 (4) of the Constitution and the Supreme Court’s decision in Simon Mali v. The State (2002) SC 690 to entertain the application and grant it.

Held


  1. The provisions of O.4, rr.4 and 37 of the NCR provide for interlocutory applications by notice of motions prior to the conclusion of any proceeding and not after the conclusion of a matter.
  2. The National Court has power under O.12, r. 8 of the NCR to revisit and set aside its own orders except in cases where the orders have dismissed the proceeding or have finally determined any matter in dispute between the parties and the motion for set aside is filed after the entry of the relevant orders.
  3. Section 155 (4) of the Constitution does not apply since O.12, r. 8 of the NCR already provides for the way in which the National Court can revisit its own orders and have them set aside. A ready resort to s. 155 (4) of the Constitution amounts to an abuse of that provision and an abuse of the Court’s process.
  4. The decision in Simon Mali v. The State (2002) SC690, could be an exception to correct parameters in which s. 155 (4) of the Constitution may be invoked based on the peculiar facts of the case, which do not exist in the present case.
  5. The claim that the Defendants’ former lawyers acted without instruction or authority warrants separate proceedings where the former lawyer can be heard in his defence before final judgment and not by notice of motion to his exclusion.
  6. The Defendants failed to plead specifically under O. 8, r. 14 of the NCR their claim of the plaintiff not meeting the condition precedents of notice of intention to make a claim under s. 5 of the CBASA and the requirements of the PFMA and are therefore precluded from raising the issues belatedly. The doctrine of acquiescence and lashes apply.
  7. Accordingly, the Court declined to assume jurisdiction and dismissed the Defendants’ application with costs to the plaintiff.

Cases Cited:


Harry Tovon & Ors v. Carl Malpo & Ors (2016) N6240
Thomas Barry v Joel Luma (2017) SC1639
Christopher M Smith v. Ruma Constructions (2002) SC695
James Aiwasi v. Monty Derari – Oro Provincial Administrator & Ors (2017) N6602
Peter Malt v. Dean Queen & Christian Union Mission Inc. (2009) N357
Thomas Rangip v. Peter Loko - City Manager, NCD & Others (2009) N3714
Pogera Landowners Association Inc v. Christopher Trainor (2017) N7645
Morobe Provincial Government v. Tropical Charters Ltd (2009) N4160
Simon Mali v. The State (2002) SC690
SC Review No 4 of 1990; Application by Wili Kili Goiya [1991] PNGLR 170
William Powi (Acting Administrator for Southern Highlands Province) v. Southern Highlands Provincial Government (2006) SC844
Eremas Wartoto v. The State (2015) SC1411
Louis Medaing v. Ramu Nico Management (MCC) Limited (2011) SC1156
Boochani v. Independent State of Papua New Guinea (2017) SC1566
Paul Torato & Ors v. Sir Tei Abal & Ors [1987] PNGLR 403,
Peter Lipsey v. The Independent State of Papua New Guinea [1993] PNGLR 405
Griffin vs. Westpac Bank (PNG) Limited [1993] PNGLR 353
Joseph Kupo v. Steven Raphael, Secretary for the Department of Defence Force (2004) SC751
Lee & Song Timber (PNG) Co Ltd v. Nathanael Burua (2003) N2404
Aloysius Eviaisa v. Sir Mekere Morauta Prime Minister & Ors (2001) N2144
SCR 21 of 2003 Application by Jim Nomane
Rage Augerea v. The Bank South Pacific Ltd (2007) SC869
Rimbunan Hijau (PNG) Ltd v Ina Enei (2017) SC1605
Hargy Oil Palm Ltd v. Ewasse Landowners Association Inc (2013) N5441
Philip Takori v. Simon Yagari & Ors (2008) SC905
Papua New Guinea Banking Corporation (PNGBC) v. Jeff Tole (2002) SC694
Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370
Mauga Logging Company Pty Ltd v Okura Trading Co Ltd [1978] PNGLR 259


Legislation Cited:


Lands Act 1996
Physical Planning Act 1989


Counsel:


I. Molloy and S. Ketan, for the Applicant/Defendant

C. Gagma, for the Respondent/Plaintiff


30thApril, 2020


1. KANDAKASI DCJ: The Defendants by notice of motion are seeking to set aside consent orders formally made and entered more than 1 year 2 months ago which finalised this proceeding. The main basis for the Defendants is that, the consent orders were made without their consent. They also seek to raise lack of notice under s. 5 of the Claims by and Against the State Act (CBASA) and an alleged failure to meet the requirements of the Public Finance (Management) Act 1995 (PFMA) without first raising those issues in their defence. Further they raise the issue of the consent orders being made contrary to s. 12 (2) of the CBASA. These claims are in addition to their denial of the Geosite’s claim.


2. Geosite is opposing the application arguing that, the consent orders finally determined this matter. This Court is therefore functus officio. Also, it argues that a notice of motion is not a correct mode to vest this Court with the requisite jurisdiction to grant the reliefs the Defendants are seeking.


Relevant issues for determination


3. Two main issues are presented for determination. They are:


(1) Can the Defendants seek to set aside the consent orders by notice of motion?


(2) Are the Defendants at liberty to raise the issue of lack of notice under s. 5 of the Claims by and Against the State and not meeting the requirements of the PFMA, without any foundation in their defence?


4. The Defendant’s claim of their former lawyers not acting without their instructions or authority will be considered in the context of the first issue. Also, in order to properly determine the first main issue, it will be necessary to look at:


(a) the question of whether the consent orders finalising the proceedings are open for revisitation by notice of motion after the formal entry of the orders? and


(b) are the Defendants left with no remedy?


Relevant Background and Facts


5. The relevant background and facts in this case are straight forward. They are set out in the affidavits that have been filed in support and against the application now before me. From those affidavits, the relevant facts are drawn.


6. On 18th March 2015, this Court made the following orders by consent of the parties as then presented:


“By Consent of the parties following successful settlement negotiations, the Court makes the following orders:


  1. The Defendants shall pay a sum of K960, 000.00 to the Plaintiff as full and final settlement of this claim within six (6) months for three (3) equal instalments commencing from the date of entry of this Order.
  2. The Plaintiff shall file a Notice of Discontinuance upon payment of the final balance and execution of a Deed of Settlement between the Parties.
  3. Interest on the Judgment debt at the rate of 8% percent per annum from 5th September 2014 until paid pursuant to Section 1 (2) of the Judicial Proceedings (Interest on Debts and Damages) Act.
  4. Parties shall bear their own costs of this proceeding.
  5. Time is abridged to the date of settlement which shall take place forthwith before the Registrar.”

7. The following chronology of events led to the above orders:


- 17thJanuary 2011 – prior to the issue of proceedings, Geosite wrote to the then Provincial Administrator for Gulf Province, Mr. Simon Peter by way of a follow up on two invoices issued to the Provincial Government and Administration for the provision of consultancy services totalling K653, 130.00;

- 26th February 2014 – Geosite issued a final notice of demand for payment of outstanding bills in a sum of K838,400.00 with warning to sue the Defendants. The notice was served on the First Defendant through the then Defendants’ lawyers, Soi & Associates;

- 10th June 2014 - the Defendants through Kumbari Lawyers requested an audience with Geosite to discuss and explore settlement proposals;

- 02nd July 2014 – Geosite’s lawyers accepted the request and confirmed the requested meeting for the next day with the Defendants lawyers, Mr. Kumbari of Kumbari Lawyers;

- 03rd July 2014 - the parties then lawyers met at the ground floor of Vision City cafeteria, discussed possible settlement and the way forward. The meeting resolved upon the Defendants’ lawyer’s request for Geosite to submit a settlement proposal based on the Geosite’s settlement proposal for the Defendants’ consideration and payment;

- 04th July 2014 – Geosite gave instructions to its lawyers on the possible terms of settlement;

- 04th July 2014 – Geosite’s lawyer, Mr. Gagma emailed his clients proposal to the Defendants’ then lawyers and delivered the original hard copy the following day, 05th July 2014.

- thereafter, the parties through their lawyers further discussed the possible terms of settlement and did not result in any settlement and there was no further communication.

- 05th September 2014 - Writ of Summons filed through Wantok Legal Group. The main claim was for a settlement of Geosite’s professional fees for services rendered in the provision of consultancy services which included a provision of an environmental impact studies relative to the PNG LNG Project as it concerned the Gulf Province;

- 06th October 2014 – Kumbari Lawyers filed Notice of Intention to Defend and Notice of Appearance for all the Defendants;


- 05th November 2014 – Gagma Legal Services filed Notice of Change of Lawyers for Geosite;


- 10th November 2014 – Geosite gave notice to the Defendants of its intention to apply for summary judgment;

- 17th November 2014 – Kumbari Lawyers filed all the Defendants’ defence denying Geosite’s claim;

- 10th February 2015 – Geosite filed motion for summary judgment against all Defendants with a supporting affidavit from a Sigi Dorugl;

- 26th February 2015 – Geosite filed together with a supporting affidavit, an amended notice of motion seeking an order striking out the Defendants’ Defence and for entry of summary judgment against them;

- 04th March, 2015–Geosite’s amended motion went for hearing. The Court adjourned the motion to 17th March 2015 and directed the parties to have the matter resolved by their own direct negotiations;

- 06th March, 2015 – Geosite’s lawyer served the Defendants lawyers with their settlement proposal;

- 13th March 2015 – the Defendants’ lawyers responded to Geosite’s settlement proposal and requested draft consent orders that would conclude the negotiations and this proceeding;

- 16th March 2015 - the Geosite’s lawyers responded with a draft order for settlement and conclusion of the proceeding by consent;

- 17th March 2015 - the Defendant’s lawyers wrote back to Geosite’s lawyers requesting amendment to Item 1 of a set of then draft consent orders which the Geosite’s lawyers accepted and amended the draft orders accordingly;

- 17th March 2015 – the matter returned to Court. All parties’ lawyers appeared and tendered draft Orders by Consent of parties for the Court’s endorsement. After having satisfied myself as to there being a valid cause of action and there was no apparent impediment to an endorsement of the draft orders, I endorsed them, which resulted in the consent orders the subject of the Defendants’ notice of motion now before me.

- 20th March 2015 - sealed copies of the Orders were served on the Defendant’s lawyers. Despite follow ups during the period April to early October 2015, the Defendants took no step to comply with the consent orders;

- 20th October 2015 - the parties then lawyers met in conference with the Defendants through the First Defendant, Governor of Gulf Province, Hon. Havila Kavo and discussed settlement of the judgment debt. That resulted in the First Defendant giving an undertaking to have the Gulf Provincial Executive Council members approve payment for the judgement debt on instalment basis and also directed his lawyers, Kumbari Lawyers to draft a PEC submission for the Gulf PEC members deliberations and approval;

- 16th December 2015 – Geosite’s lawyers were made aware of a part payment of K350,000.00 on 11th December, 2015;

- 24th December 2015 – upon banking of the cheque by Geosite with its bank, it was informed that the cheque could not be honoured due to unavailability of funds. Geosite then contacted the Defendants’ who promised that payment would be processed again and would be ready for collection on 09th January, 2016, which did not happen;

- 08th March 2016 - contempt proceedings filed against the Defendants for not complying with the consent orders and their own commitments and undertakings;

- 16th March 2016 – Kumbari Lawyers, filed Notice of Ceasing to Act for the Defendants;

- 17th March 2016 – the contempt proceeding went for hearing at which Manjin Lawyers appeared for the Defendants and successfully sought and secured an adjournment on indications that the consent orders would be satisfied;

- 21st March 2016 – Geosite received a payment of K350,000.00

- 22nd March 2016 – the Defendants filed motion seeking a variation of the consent orders to allow for payment of the balance of the judgment debt by equal instalment payments until the debt is satisfied in full;

- 23rd March 2016 - on return of the contempt proceeding and the Defendants motion, the Court directed the parties to settle the judgment and defer any hearing and determination of the contempt charges;

- 21st April 2016 – the Defendants changed lawyers to Ketan Lawyers who filed a Notice of Appearance;

- 17th May 2016 – the Defendants through Ketan Lawyers, filed notice of motion seeking to set aside the consent orders with supporting affidavits. The supporting affidavits deny Geosite’s claim and claim the consent orders were entered into without the Defendants’ instructions and consent without explaining the attempted payment of K350,000.00 on 11th December 2015 and actual payment made in March 2016.

Issue 1 - Can the Defendants seek to set aside the consent orders by notice of motion?


8. I will now deal with the first issue first. According to term 2 of the Defendants’ notice of motion, they plead “Order 12, Rule 1 and/or Rule 8 (4) of the National Court Rules (NCR) and/or Section 155 (4) of the Constitution and or inherent jurisdiction of the Court” as the jurisdictional foundation for their application. This is central to the application.


9. The application now before me is similar to an application I had and dealt with and arrived at a published judgment. That was in the matter of Harry Tovon & Ors v. Carl Malpo & Ors (2016) N6240. There, the plaintiffs also by notice of motion applied for a set aside of consent orders finalising the proceeding. The application was based amongst others, on a claim that the plaintiffs’ former lawyers acted without instructions and authority when they accepted settlement proposals and consented to the terms of the consent orders. After having heard the parties, I came to a decision holding amongst others that:


(1) Notice of motions are incorrect modes to use because they are dependent on current proceedings for interlocutory reliefs pending a determination of a substantive matter.


(2) Consistent with the public policy requirement for there to be finality in litigation, once the National Court has come to a final decision, the only recourse is a Supreme Court appeal, or review process.


(3) The issue of lawyers acting without instructions gives rise to a separate cause of action which needs to be properly commenced through separate proceedings with proper pleadings. This is necessary to give the lawyer allegedly acting without instructions the opportunity to know what is being said against him or her, respond to the allegation, and unless settled, have the issue determine by a proper trial.


10. I came to that decision having regard to the provisions of O4.rr. 4 &37 and O. 12 r 8 (4) NCR and s. 155(4) of the Constitution as well as the relevant case law on point.


11. In the present case, the Defendants in their supplementary submissions specifically dealing with my decision in Harry Tovon’s case, refer to O.4 r. 4 and 37 as well as O. 12 r. 8 (4) and (5) of the NCR and Constitution s. 155(4). They then argue firstly that, their motion does “relate to an interlocutory application”. This they submit brings their application within the provisions of O.4 r.4. Also, they argue that even if their motion is not interlocutory it is an “other application, in or for the purposes of or in relation to proceedings commenced ... by writ of summons”, within the meaning of O.4 r.37. Secondly, they argue that, O.12 r. 8(4) does not preclude this Courts power to set aside its own judgment or orders which is preserved under sub-rule (5). Thirdly, they argue that s. 155(4) gives this Court the inherent power to revisit and set aside its own judgment or orders and cite the decision in Simon Mali v. The State (2002) SC690 (per Hinchliffe, Sakora and Batari JJ. (as the first two were then)) in support of that argument.


12. These arguments necessitate a consideration of the particular wording in each of the provisions cited along with the case law that has been developed around them. The relevant provisions as noted are, O.4 rr.4 and 37, O.12 r 8 (4) and (5) of the NCR and s.155 (4) of the Constitution. These provisions state as follows:


“4. Mode of proceedings in interlocutory matters.


Proceedings may be instituted by motion, only if they relate to an interlocutory application.

...

37. Interlocutory or other application in proceedings. (19/1)


An interlocutory or other application, in or for the purpose of or in relation to proceedings commenced or to be commenced by writ of summons or by originating summons, shall be made by motion.”


13. Order 12, r.8 (4) and (5) read as follows:


“8. Setting aside or varying judgement or order. (40/9)


(1) The Court may, on terms, set aside or vary a direction for entry of judgement where notice of motion for the setting aside or variation is filed before entry of the judgement.


(2) The Court may, on terms, set aside or vary a judgement —

(a) where the judgement has been entered pursuant to Order 12 Division 3 (default judgement); or

(b) where the judgement has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or

(c) when the judgement has been entered in proceedings for possession of land pursuant to a direction given in the absence of a person and the Court decides to make an order that the person be added as a defendant.


(3) The Court may, on terms, set aside or vary an order —

(a) where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or

(b) where notice of motion for the setting aside or variation is filed before entry of the order.


(4) In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgement) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.


(5) This Rule does not affect any other power of the Court to set aside or vary a judgement or order.”


14. Finally, s. 155(4) of the Constitution reads:


“(4) Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.”


15. At paragraphs 11 and 12 respectively of my decision in Harry Tovon, I reproduced the provisions of O.4 rr.4 and 37. I then discussed the meaning and effect of these provisions in the following terms:


“13. The word interlocutory comes from the word interloqui which is to say ‘speaking between’. According to L.B. Curzon’s A Dictionary of Law the term means ‘Not final, (ie, during the course of an action) as in an interlocutory (interim) injunction.’ Similarly, an internet based legal dictionary defines the word in terms of:


‘Provisional; interim; temporary; not final; that which intervenes between the beginning and the end of a lawsuit or proceeding to either decide a particular point of matter that is not the final issue of the entire controversy or prevent irreparable harm during the pendency of the lawsuit.’


14. The Australian Commonwealth Corporations Act 2001, makes the position much moreclearer by providing a definition for the phrase ‘interlocutory application’ to mean an application that:


(a) is made during the course of a proceeding; and

(b) is for an order that is incidental to the principal object of that proceeding, including, for example:


(i) an order about the conduct of that proceeding; or

(ii) an order assisting a party to that proceeding to present their case in that proceeding; or

(iii) an order protecting or otherwise dealing with property that is the subject matter of that proceeding;

but not including an order making a final determination of existing rights or liabilities.’


15. The above, sources put beyond any argument that, an ‘interlocutory application’ is an application that can be made during the currency of a proceeding to deal with any interlocutory matter prior to a final determination of the issues presented in the case and hence a resolution of the proceedings. In other words, an interlocutory application can be made prior to the termination or conclusion of a proceeding. It follows therefore that, no motion can be filed once a proceeding has been concluded. This is understandable as an aggrieved party has recourse by way of appeals or reviews as the case might be. Order 12 r. 8 (4) strengthens this position by precluding from the reach of the National Court’s power to set aside orders made even in the absence of a party where the order determines an in issue between the parties or in the proceeding or the proceedings are dismissed. The provision reads:


‘(4) In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgement) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.’


16. The position is further strengthened by the position the Supreme Court has taken of late. Through the Supreme Court, the law and practice in PNG in my view has correctly developed to the current position, where appeals from a trial court lies to an appellate court like the Supreme Court as of right, if the decision appealed from finally determines the proceedings or an issue between the parties.”


16. At paragraphs 18 and 19 of the judgment, I added:


“18. ... Public policy requires finality in litigation. This principle says, subject only to one’s right of appeal and review where that is available or going by the slip rule principle, there must be finality in litigation once a final decision has been arrived at or a matter before the court gets concluded. The decision of the Supreme Court in Richard Dennis Wallbank and Jeanette Minifie v. The Independent State of Papua New Guinea, ... stated this principle in terms of:


‘...the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a Court has good reason to consider that in its earlier judgment it has proceeded on a misapprehension as to the facts or the law. As this Court is a final Court of Appeal, there is no reason for it to confine the exercise of its jurisdiction in a way that would inhibit its capacity to rectify what it perceives to be, an apparent error arising from some miscarriage in its judgment. However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court, nor is it to be exercised simply because a party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and a misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a back door method by which unsuccessful litigants can seek to re-argue their cases.’

19. As might be apparent from the Supreme Court’s decision, there must be finality in litigation, subject to a rehearing in cases where for good reason an earlier decision was wrongly arrived at by reason of a misapprehension of the facts or the law. Where the error is in a decision of a final appellate or review court, correction is through the application of the slip rule principle. Where the error is at a lower trial level it is usually by appeal or review in accordance with their respective governing rules and principles and any statutory provision on point.”


17. The Supreme Court in its decision in the matter of Thomas Barry v Joel Luma (2017) SC1639 (per Kirriwom, Yagi & Ipang JJ. (as the latter then was)) endorsed my views in the following terms:


“We have read the National Court decision in James Aiwasi (supra). In the course of writing this decision we have also come across another judgment of the National Court in Harry Tovon v Carl Malpo (2016) N6240. Both are judgments of his Honour Kandakasi J. These two cases discussed, amongst others, the effect of Rule 8(4) of Order 12 and both reached the same conclusion on the very issue before us. In Harry Tovon case (supra) his Honour Kandakasi J discussed, amongst others, the scheme of the Rules and the meaning of “interlocutory” in the context of the Rules. Both of his Honour’s decisions agree with the reasoning by Makail AJ (as he then was) in Peter Malts case (supra). We are of the view that the reasoning in these 3 cases is sound in law and practice. We agree with and endorse their Honours’ reasoning and conclusion.”


18. On its own part, the Supreme Court, said:


“A notice of motion is only an interlocutory process. It cannot be used to commence or re-commence a substantive proceeding. It can only be used, as its name suggests, whilst the substantive proceeding is current. It is intended to be used within and not without a current proceeding. Where the proceeding is brought to a finality by way of a dismissal order the currency or life of the proceedings is at end and cannot be brought back to life or resurrected, as it were, by an interlocutory process. This is made clear by virtue of Rule 4 of Order 4.”


19. Then on the public policy requirement, the Supreme Court endorsed the statement of the law in the Wallbank case in the following terms:


“Another most important consideration is the public policy reason. The Public Policy dictates or requires finality in litigation. There must be finality in litigation once a final decision has been arrived at. We adopt the remarks as stated in Richard Dennis Wallbank & Jeanette Miniffe v The Independent State of Papua New Guinea [1994] PNGLR 78”


20. Earlier at paragraph 12 of its judgment citing the decision in Christopher M Smith v. Ruma Constructions (2002) SC695 with approval, the Court said:


“The earlier Supreme Court case of Christopher M Smith v Ruma Constructions (2002) SC695 reinforced the view that the National Court did not have the jurisdiction to review its own decision in the guise of an application to set aside an ex-parte order. Thus, further emphasizing the point that a court has decided on an issue, it cannot rehear the matter save only on appeal or review before the Supreme Court.”


21. Against these authorities and the law, they represent, the Defendants through their learned counsel, Mr. Molloy as already noted, argues firstly based on O.4, rr. 4 and 37 of the NCR that, their motion “relates to an interlocutory application”. But even if it is not the case, it is “an application, in or for the purpose of or in relation to proceedings commenced...by writ of summons”. Secondly, based on O.12 r 8 (4) and (5) of the NCR, they argue that the Courts power to set aside its own decision is retained by the provisions of sub-rule (5) as well as s. 155(4) of the Constitution.


22. With respect, these arguments are flawed and cannot be sustained for a number of reasons. Firstly, the Defendants’ first argument misses the opening part of both rr. 4 and 37 of Order 4 of the NCR. Both provisions talk about and provide for “interlocutory” applications during the currency of a proceeding or a proceeding to be filed in the case of r.37 and not one that has already been concluded. I gave full consideration to the provisions of O. 4 r.4 and 37 in the Harry Tovon case and came to a deliberate judgment. Secondly, the Defendants make no submission as to why the reasoning in Harry Tovon is wrong and provide good reason for this Court to come to a different conclusion as to the meaning and effect of the provisions of O.4 rr. 4 and 37. As the Supreme Court held in its decision in Thomas Barry case, the reasoning in Harry Tovon along with the decisions in James Aiwasi v. Monty Derari – Oro Provincial Administrator & Ors (2017) N6602 and Peter Malt v. Dean Queen & Christian Union Mission Inc. (2009) N357 are sound and remain so.


23. The Supreme Court decision in Thomas Barry’s case also resolved an apparent difference of views in the National Court. On the one hand are the line of decisions in Peter Malt, James Aiswasi and Harry Tovon’s cases. On the other, are the decisions represented by the decision in Thomas Rangip v. Peter Loko - City Manager, NCD & Others (2009) N3714 (per Hartshorn J.); Porgera Landowners Association Inc v. Christopher Trainor (2017) N7645 (per Kariko J.) and Morobe Provincial Government v. Tropical Charters Ltd (2009) N4160(per Gabi J.), which have held that the National Court still has the jurisdiction to revisit a concluded matter by motion. That line of cases, did not consider the provisions of O.4 rr.4 and 37 as well as the exceptions provided for in O.12 r 8 (4). Further, those line of cases when viewed against the clear import of the decisions of the Supreme Court in cases like that of Christopher M Smith v. Ruma Constructions (supra), reveals errors in the understanding and statement of the law in the second line of cases. The correct legal position is clear and easy to understand. Once, the National Court has come to a decision that finally disposes of a matter, the Court becomes functus officio, and therefore retains no power to revisit the decision by notice of motion. The proper way to correct any error of law or fact or impropriety leading to a final judgment, is only by way of an appeal or review or fresh proceedings on the basis of fraud or misrepresentation or as the case might be. This is necessarily important because it meets the public policy requirement for finality in litigation. There can be no going back and forth.


24. This leaves us to turn to the second of the Defendants arguments and my third reason for saying the Defendants arguments are flawed. The Defendants’ second argument is based on O.12 r.8 (4) and (5) of the NCR as well as s.155(4) of the Constitution and the decision of the Supreme Court in Simon Mali’s case.


25. I deal firstly with the Defendants seeking to invoke the provisions of s.155 (4) of the Constitution. Section 155(4) has been readily used by so many lawyers and parties almost as a matter of cause. In most cases, this provision has been abused more than its proper application. One of the very first cases in which s. 155(4) was incorrectly sought to be invoked was in the matter of SC Review No 4 of 1990; Application by Wili Kili Goiya [1991] PNGLR 170. There, Kapi DCJ (as he then was) said with the agreement of the other members of the Court, their honours, Los and Sheehan JJ:


“In summary, these cases establish that the first limb of s155 (4) gives the Supreme Court and the National Court power to make orders in the nature of prerogative writs and the second limb power to make other orders which are remedial, adjectival as well as procedural in nature.


In so far as power is given to make these orders in reviewing exercise of power by the courts, this supervisory jurisdiction is exercised over inferior courts. That is the nature of prerogative writs. It cannot be used by the same court to review a decision of the same level of court. If the constitutional framers intended this, they would have said so expressly.”
(Underlining mine)


26. Later in William Powi (Acting Administrator for Southern Highlands Province) v. Southern Highlands Provincial Government (2006) SC844, there Honours, Jalina J., (as he then was) Gavara-Nanu J and myself carefully reviewed and considered all the cases on point and clearly stated the correct parameters for the application of s. 155(4) in the following terms:


“From the foregoing, we are of the view that, there are about five important features or attributes of s. 155 (4) of the Constitution. These are as follows:


  1. The provision vests the Supreme and National Court with two kinds of jurisdictional powers, namely orders in the nature of prerogative writs and the power to make ‘such other orders as a necessary to do justice in the particular circumstances of a case’ before the Court;
  2. Although the power is inherent, it is not a grant of jurisdiction to cover all and every other situation and for the creation and grant of new rights. Instead it is a general grant of power to the Court to develop and grant such remedies as are appropriate for the protection of rights already existing and granted by other law, including the Constitution;
  3. Where remedies are already provided for under other law, the provision does not apply;
  4. The provision does not grant the Supreme Court power to set aside or review the decision of another Supreme Court regardless of the number it is constituted, except as may be provided for by any law; and
  5. A person seeking to benefit from that provision has an obligation to demonstrate a case of his rights or interest being affected or that he stands to suffer much damage or prejudice and he has no remedy available under any other law.’

(Underlining mine)


27. Applying this to the case then before the Court, the Court held at paragraph 35:


“Hence, to the extent that, the applicants seek to invoke s. 155 (4) of the Constitution and not the relevant and applicable provisions of the Supreme Court Act, the application is an abuse of the process of the Court. The Court has an inherent power to protect itself from any such abuse by dismissing the application and we would do just that here.”


28. Almost 10 years later, the Supreme Court had occasion to consider a case in which a party sought to invoke s. 155(4) of the Constitution to injunct criminal proceeding. That was in matter of Eremas Wartoto v. The State (2015) SC1411 (per Injia CJ; Sakora, Kirriwom, Kandakasi and Davani, JJ. (as they then were except for Kirriwom J.). In Sakora J. and my joint judgment, we referred to the above statement of the law and said at paragraph 64:


“Hence, it would be an abuse of the process of the National Court and s. 155 (4) of the Constitution itself for an accused person to seek to invoke the civil jurisdiction of the National Court to effectively review criminal investigations and prosecutions, without first exhausting the remedies that are available under the District Court Act, the Criminal Code and the National Court’s Criminal Practice Rules.”


29. Subsequent decisions have endorsed the statement of the proper parameters of s. 155(4) of the Constitution as enunciated in the William Powi case. For examples of case on point, I refer to the decisions in Louis Medaing v. Ramu Nico Management (MCC) Limited (2011) SC1156 (per Davani (as she then was), Hartshorn and Kariko JJ) and the joint judgment of Salika DCJ (as he then was) and Hartshorn J in Boochani v. Independent State of Papua New Guinea (2017) SC1566.


30. In view of the foregoing position of the law, I had a closer look at the decision in the Simon Mali’s case as I did in the Harry Tovon case for the purposes of the present case. This reveals with respect that, the Court in Simon Mali did not consider the parameters for the application of the provisions of s.155 (4) of the Constitution. Also, that judgment did not consider the provisions of O. 4 rr. 4 and 37 as well as O. 12 r 8 of the NCR. That being the case, I am of the view that, the decision in Simon Mali’s case is of no help to the Defendants in the present case. Nevertheless, even if that decision is relevant and applicable, the factors or conditions that existed and warranted the Court of first instance in the Simon Mali case to assume jurisdiction and receive the approval of the Supreme Court, were the existence of irregularities clearly apparent in the face of the record without more. That is not the case here. At paragraph 33 in my decision in the Harry Tovon case, I listed the irregularities as follows:

“(a) This was a class action with a number of proceedings, which did not name and include a schedule of the other plaintiffs the “principle plaintiffs” claimed to represent;

(b) There was no written consent from each of unnamed plaintiffs authorizing the issuance of the proceedings in their behalves in an Authority to Act form pursuant to O.5, r.3 of the National Court Rules;

(c) No lawyer for the State endorsed the draft consent orders, before the appellant’s lawyer appeared before the trial judge alone and moved for the purported consent orders;

(d) There was no evidence of the presiding judge endorsing a draft of the purported consent orders before they could be formally entered;

(e) The presiding judge could not recollect ever endorsing any draft consent orders either in the terms of the purported consent order or otherwise;

(f) The purported consent orders effectively contradicted an order that was in fact made to have the proceedings transferred to Waigani from Mt. Hagen, which suggested no orders finalizing the proceedings were made;

(g) The purported consent orders were purportedly made in chambers rather than in an open court, especially when the foregoing factors existed;

(h) There was no court file endorsement indicating what transpired in court on the relevant day; and

(i) The purported settlement was endorsed or approved by the Attorney General and not the Solicitor General.”


31. As I noted at paragraph 33 in my decision in the Harry Tovon case, the decision in Simon Mali’s case could be seen as an exception to the established law and practice as represented by the earlier judgments on the proper parameters for the application of s. 155(4) of the Constitution. This exception could apply strictly within the four corners of the basis on which the National Court assumed jurisdiction with the Supreme Court’s approval. Clearly, this exceptional process is not a license or an opening of any high way for persons wanting to get around a final decision of the National Court to return to the same Court for such a relief. The correct process is by way of appeals or reviews by the Supreme Court or fresh proceedings based on fraud or misrepresentation.


32. The question then is, have the Defendants in the present case made out a case strictly within the four corners of the decision in Simon Mali? Viewing this case against the various factors in the Simon Mali case as listed above, the answer to the question is, no. The present case is not a class action. It is an action by a single plaintiff seeking to enforce a claim based in contract. Parties went into settlement negotiations with the encouragement of the Court. They arrived at a settlement and settled upon draft consent orders endorsed by all the parties. When the draft orders were presented to the Court, all parties turned up and confirmed their agreement in the terms of the draft consent orders. I as the presiding Judge then, recall and confirm having endorsed the consent orders on 17th March 2015. The orders were not made in chambers but in open Court. The Court file has the relevant endorsements. The issue between the parties for more than a year since the consent orders were made, has been satisfaction of the consent orders. After a part payment, the Defendants failed to satisfy the balance. That resulted in contempt proceedings. In response, the Defendants changed their lawyers to Ketan lawyers in April 2016 and for the first time after 1 year 2 months since the orders were made. That was after having changed lawyers once earlier and still negotiating satisfaction of the consent orders through those other lawyers. They then started to take issue with the consent orders, raising issues they should have but failed to raise earlier and prior to the making and the formal entry of the consent orders finalising this proceeding.


33. Instead, of strictly going by the decision in Simon Mali as the kind of setting that warranted the outcome in that case, the Defendants here speak of: (1) a lack of notice under s. 5 of the CBASA; (2) a failure to meet public tender requirements under the PFMA; (3) the consent orders were made contrary to s.12 (2) of the CBASA; and (4) a failure to disclose a cause of action. This they are doing without first raising the first two and the fourth issues formerly in their defence. Order 8, rr.12 and 14 of the NCR require specific pleading of these issues. These matters are therefore not on the record and are absent from the face of the record. In any event, they are raising these issues more than a year after the formal entry of the orders, which is precluded by O. 8, r (1) and (2) of the NCR. I will take up further the point about lack of pleadings when I come to deal with the second main issue.


34. The third statutory issue raised has a number of problems. First, it is being raised in a motion that has been filed more than a year after the formal entry of the consent orders. This is contrary to O.8, r. 8 (1) and (3) of the NCR. Section 155 (4) of the Constitution cannot be invoked because of the provision already made in the rules for set aside applications. Secondly, the orders came by the consent of all parties. For all intents and purposes the Defendants decided to commit to a time frame for a payment of moneys in settlement. That in my view then was because of the so many failures on Defendants part from failing to file their defence in time, to failing follow through and conclude settlement negotiations prior to commencement of proceeding and the in ordinate delay they have caused to the cause being addressed and resolved promptly earlier. Section 12 (2) was therefore not an issue for the Defendants. Only after failing to meet their obligations and arrival at the scene of a new set of lawyers, the Defendants have belatedly turned back on their consent. I am mindful that there is now an issue on their admission 1 year 2 months later. I will deal with that belated admission in some detail a little later also.


35. Let me now briefly turn to the argument by the Defendants that O. 12, r.8 (5) of the NCR retains the National Court’s power to set aside its own orders. This argument and the provision need to be considered in the context of the whole of O.12, r.8 and NCR and the acceptable scheme of the judicial process. When that is done, one will appreciate that a court usually issues various kinds of orders which I could term “in-between orders” for simplicity sake, from when a matter first goes before a judge until the final orders disposing a matter are made. Those other in-between orders prior to the final orders are often referred to and known as interlocutory orders. Such orders may include amongst others, orders for amendment of pleadings, discovery of documents, mediation or a process for parties to have their disputes resolved, calling and number of witnesses, witness summonses, preparation and filing of further pleadings and other documents, preparation and settlement of a statement of the relevant facts and issues for trial, filing and serving of submissions and so on to get a matter resolved promptly either through parties settlement negotiations or by trial.


36. Except in cases where a statutory law otherwise authorises, as does the s.14 (3) (b) (i) – (iii) of the Supreme Court Act, there can be no appeal or review against an interlocutory order. This is because, the same Court as the power to revisit interlocutory orders and can have them varied or set aside. Order 12, r. 8 of the NCR provides for that power specifically in cases of default judgment (r.8 (2) (a)) or orders made in the absence of a party (r. 8(2) (b) and (c) and r. 8 (3)), provided a motion for set aside is filed before the entry of the orders. By r. 8 (4) the power to set aside is acknowledged but at the same time, it most importantly, provides for with 2 exceptions. These exceptions are:(1) cases in which the order dismisses the proceeding; (2) the order determines any claim for relief or a question arising from a claim. This is the case because, the recourses of appeals and or reviews, as already discussed are there. There is no specific mentioning and catering for of all the other kinds of interlocutory orders that can be made. In my view, rather than providing for all the possible interlocutory orders scenario which could make the rule more cumbersome, the drafters of the NCR provided for sub-rule (5) of r. 8 to reinforce the power the Court already has in revisiting and setting aside interlocutory orders or judgments. This is again possible, if the motion for the set aside application is filed prior to a formal entry of the orders sought to be set aside.


37. Given all of the foregoing, the answer to the first main issue of whether the final consent orders can be revisited by a notice of motion in this case, is an obvious no. This necessarily gives rise to the question, then what is the correct mode or process to revisit the consent orders?


38. The question posed above was also before me in the Harry Tovon case. There, I had regard to a number of decisions on point. This included the decisions in Paul Torato & Ors v. Sir Tei Abal & Ors [1987] PNGLR 403,
Peter Lipsey v. The Independent State of Papua New Guinea [1993] PNGLR 405, Griffin vs. Westpac Bank (PNG) Limited [1993] PNGLR 353, Joseph Kupo v. Steven Raphael, Secretary for the Department of Defence Force (2004) SC751 and a couple of others on point. Based on those authorities, I summarised the principles governing applications for set aside of consent judgment or orders finalising a proceeding in the following terms at paragraph 36:


“The principles governing applications for a set aside of orders by consent which finalize any proceeding can be summarized in this way:


(a) Like any other agreement, a consent order finalizing any proceeding that was arrived at by misrepresentation or fraud can be set aside on application of a party affected by the order;

(b) The majority of case authorities on point stand for the proposition that, claims of lack of instructions and or authority in a party’s lawyer to consent to an order cannot undo or result in a set aside of the consent order. Instead, the party concerned as a recourse against his lawyer if indeed the lawyer acted without instructions.

(c) The principle stated in (b) above is founded on the doctrine of ostensible authority. This is necessary for the purposes of protecting the innocent third parties and to also safeguard, protect and encourage parties to have their disputes settled through their own direct negotiations or other forms of ADR by upholding their agreement subject only to fraud and misrepresentation brought whom to the other parties which may undo them;

(d) If the consent order is yet to be formally entered, an application by motion in the same court that made the order can be filed and pursued;

(e) If, however, the order has been formally entered, the order can be revisited only by a fresh proceeding or by an appropriate Supreme Court review application; and

(f) There is one exception to the above. Where a serious error or irregularity is apparent on the face of the record as was the case in the Simon Mali case, the Court has power to readily deal with the matter to safeguard against any abuse of its process.”


39. In the present case, the Defendants are seeking to set aside consent orders that finalised this proceeding. The main basis for the Defendant’s application, apart from the statute-based issues, is an allegation of their then lawyer acting without their specific instructions. As already noted, this claim and the Defendants’ application have been raised and filed well after the orders they are seeking to set aside were formally entered, part complied with and steps take to enforce them. This attracts an application of principle (b) – (e) against the Defendants’ application. I have already found the final principle (f) applying against the Defendants for the reasons I have earlier given. Accordingly, I find the Defendants have come to this Court also in breach of the principles governing applications seeking to set aside a consent judgment or order that finalises a proceeding.


40. This takes me to a related question I raised and answered in the Harry Tovon case also which leads to my fourth reason for saying the Defendants arguments are flawed. The question was: How should the court consider and determine the factual foundation for the application which were seriously in contest? That question was directed at the applicants because they were claiming their former lawyer acted without their specific instructions. Citing my decision in Lee & Song Timber (PNG) Co Ltd v. Nathanael Burua (2003) N2404, I made the point at paragraph 40:


“It is well accepted that, only through proper trial with cross examination of the relevant witnesses can a court or a tribunal come to a decision on which of the facts in contest should be accepted and acted upon. This is so basic that there is no need to cite any authority.”


41. I discussed a number of other cases on point such as my decision in Aloysius Eviaisa v. Sir Mekere Morauta Prime Minister & Ors (2001) N2144 and the Supreme Court decision in SCR 21 of 2003 Application by Jim Nomane, by tracing the development of case law on point. That ended with the judgment of the Supreme Court in Rage Augerea v. The Bank South Pacific Ltd (2007) SC869 (per Salika, Jalina and Kandakasi JJ., (as they then were). That decision at paragraph 9 of its judgment in the context of a summary judgment application said:


“The Court hearing an application for summary judgment must be satisfied that there is no serious conflict on the questions of fact or law presented before him or her. It should follow that, where there is clear conflict in the facts or the law and the Court has to make a decision as to which of two conflicting versions the Court must accept, the matter ought to be put to a proper trial, where witnesses and their evidence and or testimonies can be tested in the usual way of cross examination and re-examination, before the Court can decide to accept one of the versions.”

(Underlining mine)


42. Applying these principles of the law in the Harry Tovon case, I found there were serious issues in the material aspects of whether:


“(a) the Applicants’ instructed their then lawyers to consent to the terms of the consent orders;

(b) the Applicants themselves participated in the proceedings and therefore knew or ought to have known of the terms of the orders and gave their consent either expressly or by necessary inference from their conduct;

(c) Lawyer Alfred Manase and his [firm] Manase & Co., were in a conflict of interest situation in that the lawyer allegedly acted for them; and

(d) the Applicant made out a case of irregularity on the face of the record as it was the case in the Simon Mali’s case?”


43. Then at paragraph 45, I took the view that:


“These facts ... require proper testing for clarification, accuracy, credibility and acceptance before a decision could be made on the application. That can happen only on the basis of a proper pleading and trial. The pleadings would give the State and its lawyers an opportunity to file its defence, be heard on it and a final decision on the allegations arrived at. This would also give an opportunity to Applicants’ former lawyers to respond to the allegations against them. That could happen only by way of fresh proceedings or an appropriate application for review by the Supreme Court. Since reviews of the decisions of the National Court are available to the Supreme Court, it would be lot better to have fresh proceedings issued out of the National Court first on the basis of fraud or misrepresentation on the part of the applicant’s lawyers for acting without instructions. That would enable the calling of evidence for or against the allegations, cross examination, the Court’s consideration and acceptance of one version of the facts it finds credible and arrive at a decision. Such a decision would be subject to further consideration by way of an appeal whereas a review application may not be able to give either of the parties a second opportunity. If, however, for argument sake there is further opportunity for the parties at the Supreme Court level, it would strictly be by way of the slip rule principle.”


44. Then turning specifically to the allegation that the applicants’ former lawyers had acted without instructions, I said at paragraph 46 of the judgment that:


“Since the basis for the complaint against the consent orders in this case is mainly, the Applicants’ lawyers acting without their clients’ instructions, it would be a matter between the relevant lawyers and their former clients. It should not be unnecessarily dragging the State into a matter that is strictly speaking between the Applicants’ and their former lawyers and yet the State [is] ... made to suffer a consequence not of its making. Instead, in accordance with the relevant principles discussed above, the State and its lawyers were entitled and did proceed on the basis of the Applicants’ lawyer’s representation. Whether or not the Applicants’ former lawyers sought their then clients’ instruction or not and whether the instructions sought were given, is a matter peculiarly within the knowledge of the Applicants’ and their former lawyers. In the circumstances, issuing and pursuing fresh proceedings against the Applicants’ former lawyers would be the better choice not only because of the reasons just given but also because the Applicants’ former lawyers in fairness have not yet been made parties to the application and were not heard in their defence. Issuing refresh proceedings against the Applicants’ former lawyers will give them the opportunity to be heard in their defence first before final judgment is arrived at.”


45. These observations and considerations equally apply to the present case. The Defendants in their supplementary submissions accept the legal position when fraud is alleged. However, in this case, they argue they are merely claiming lack of authority and not necessarily fraud or misrepresentation. They are also saying they are not making any claims against their former lawyers, who has given them an affidavit admitting this claim. As a matter of law, this submission cannot be right. The error in the submission becomes apparent when one considers the definition of the term “fraud”.


46. The term “fraud” is defined by most dictionaries, including Oxford and Collins English Dictionaries to mean an intentional perversion of the truth in order to induce another person to give something of value or to surrender a legal right. Other dictionaries say fraud means an act of dishonesty, trickery, deception or misrepresentation. Still other dictionaries also add an act of breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage. Put another way, fraud means the intentional use of false or misleading information in an attempt to deprive another person or entity of its money, property, or legal rights.


47. Applying this to the present case, the claim by the Defendants is that their former lawyer acted without their specific instructions or authority. Their former lawyer Mr. Kumbari has now admitted not getting his then clients’ specific instruction and hence authority to settle. This means the lawyer misrepresented his then clients and acted dishonesty and in a deceptive manner breaching the confidence placed in him by his then clients. This conduct resulted in the Defendants being forced to suffer the detriments of foregoing their right to defend Geosite’s claim and possibly have the case dismissed at best or have damages assessed well below the amounts they agreed to pay under the consent orders. At the same time, Mr. Kumbari’s dishonest, deceptive or fraudulent conduct caused Geosite to have its claim settled. Based on that representation and formal consent orders, Geosite would have made business and other decisions. Its own and that of its witnesses’ evidence, may no longer be available or if available their integrity compromised. This would no doubt cause prejudice to it if there is to be a trial after the passage of more than 9 years after Geosite had issued its last invoice on 17th January 2011 for his services had been rendered and more than 6 years after the issuance of this proceeding on 05th September 2014.


48. The Defendants’ former lawyers conduct gives rise to more questions than answers, starting with, what was Mr. Kumbari’s motivation for acting without instructions and or authority? Was it his legal bills or some other gain or advantage? What exactly were his instructions and who from for the conduct of the Defendants defence? Why did he not plead in his then clients’ defence the matters now being raised in the application? Did he say or do anything to indicate to Geosite that he was acting without specific instructions? Did Geosite give or do anything for him to give the consent on behalf of his former clients without their instructions? Why has it taken him more than 1 year 2 months since the consent orders were made, for him to now admit that he acted without instructions? What is his motivation for giving this most belated admission? Have the Defendants offered him any incentive for his admission or was it out of free volition? Why have the Defendants decided against taking any action against their former lawyer?


49. The question then is, what is the proper remedy or recourse available to the Defendants? Does the fact of lack of authority entitle the Defendants to a set aside of the consent orders? What about the interest and rights of Geosite which stands to be affected by a set aside, if we get to that? These questions take me to Woods J.’s decision in Motor Vehicles Insurance (PNG) Trust v.Kulubala Salem[1991] PNGLR 305.That decision represents the doctrine of ostensible authority vested in lawyers for purposes of negotiations and resolution of disputes between parties. There, the plaintiff’s negotiated settlement with the Defendants lawyers and reached an agreement to settle at K10,000.00. Unbeknown to the plaintiff, the defendant had changed lawyers and her former lawyer acted without her specific instructions or authority. The defendant sought to get around the settlement agreement through a new lawyer for a higher amount in damages. The plaintiff went to the National Court and successfully secured an order for an enforcement of the agreement to settle at K10,000.00. In arriving at that decision, the Court reasoned:


“The law is quite clear that solicitors and counsel have a general authority to effect a compromise in all matters connected with the suit in question and not merely collateral to it. And if they act within their apparent authority and the other party has no notice of any limitation on it the client will be bound thereby. There are numerous cases which emphasise the principle, however, I will refer to the case of Little v. Spreadbury [1910] UKLawRpKQB 109; [1910] 2 KB 658.”


50. Then in the context of the case before his Honour, he said:


“A body like the plaintiff here and its lawyer and other lawyers must be able to rely on the traditional authority of a lawyer or counsel to have their client's authority to act for the client and bind the client otherwise there could be no resolution of many matters.”


51. Subsequent decisions have adopted and applied the principles of law enunciated in the Kulubala Salem case. The decision of the Supreme Court in Hilary Singat v. Commissioner of Police (2008) SC910 is one of those cases on point. There, the Court elaborated on the relevant principles in this is way:


“The law or the doctrine of ostensible authority has developed in the way it has for good reason. One good reason is that, a third party or the other contracting parties or parties to Court proceedings would not be parties or privy to any contract or relationship between a lawyer and his client or an agent and his principle and communication taking place between them. It is entirely a matter between, the agent and his principal or a lawyer and his client except as the law may otherwise permit. Another good reason is that, a client in the case of a lawyer or a principal in the case of an agent acting without the appropriate and necessary instructions has recourse against his lawyer, servant or agent. The lawyer, servant and or agents can be terminated and a cause of action would accrue to the client or the principal to sue the lawyer or the servant or agent who acts without instructions. The third party, with whom the lawyer, servant and or agent may have negotiated with and entered into any agreement, would have no such recourse. A further, reason would be that, the general business efficacy including the orderly and timely handling and dispositions of cases in Court and business generally would be adversely affected by the ready undoing of contracts or steps taken on the representation of a party through his lawyer, servant or agent, and there would be no finality in sight for any litigation.”

(Underlining mine)


52. In the present case, the Defendants on the admissions of their former lawyer may, have a valid cause of action based on fraud or misrepresentation and get an order for damages against him. The mandatory requirement for lawyers to have professional indemnity insurance cover as a condition precedent before the issuance of practicing certificates would provide confidence in the possible recovery of damages if an action or claim against a lawyer succeeds. This could be pursued through a fresh claim and a separate proceeding. That would enable the parties to adduce into evidence all the relevant evidence, have those tested and tried in the usual way and a final decision arrived at after all the parties are heard on the relevant issues. Through such an action or proceeding, most if not all of the questions mentioned in paragraph 48 above, may be answered. The Defendants success on their claim against their former lawyer will be dependent amongst others, on their ability to prove through a proper trial that, they could have had the case against them by Geosite dismissed at the highest and or a much lesser amount of damages would have been assessed against them and that, it would have been worth the costs of taking the matter down the trial pathway rather than a settlement. Of course, if the Defendants’ former lawyer maintains his admission all the way through, the proceeding will be shortened and the Defendants will easily and quickly get to a final judgment against their former lawyer and possible have that satisfied promptly because of the compulsory insurance scheme for lawyers.


53. The admission by the Defendants’ former lawyer of acting without instructions or the necessary authority cannot be of any consequence against Geosite. The Defendants have not brought in any evidence suggesting any impropriety against Geosite resulting in the consent orders. Hence, Geosite remains innocent. In the absence of any evidence to the contrary, Geosite has secured an agreement confirmed by a set of consent orders. In the absence of any evidence to the contrary, on Geosite’s part all of that was done in good faith and without the Defendants raising the kind of issues they are raising now much belatedly and without any indication in any manner or form that, their former lawyer Mr. Kumbari was at the relevant time acting without instructions or authority.


54. There has to be finality in litigation, which is an important public policy consideration. It is this concept of finality in litigation that forms one of the pillars for trust and confidence in our judicial process and system. It gives confidence to the parties, to businesses and generally confidence in a country’s economy which is necessary for needed foreign investments. This is one of the reasons why the courts with the Supreme Court at the highest are encouraging parties to have their matters resolved through mediation and other forms of ADR, with the exception of a few identified cases: See Rimbunan Hijau (PNG) Ltd v Ina Enei 2017 (SC1605) (per Salika DCJ, Kandakasi J (as they then were) and Toliken J at para 41. The more settlement there are, with ready enforcements by the courts of negotiated outcomes enables and generates more confidence in out of court settlement negotiations and settlements. Settlements comes with the potential amongst others, of bringing about lasting solutions, lesser appeals or reviews and much reduced, time, costs and a reduced backlogged list. Ready revisiting of consent orders or compromises or agreements arrived at by the parties and having them set aside, except only on the well-known and accepted legal grounds, would stop parties from resolving their disputes through negotiations. That would in turn sadly, cause the courts to be further inundated quite unnecessarily with an overwhelming backlog of cases and contribute adversely public confidence in our judicial system and its processes.


55. The law already provides for a set aside of contracts, which includes agreements resolving court cases where the usual grounds of setting aside contracts exist: See Hargy Oil Palm Ltd v Ewasse Landowners Association Inc (2013) N5441 (at para 52). As already mentioned, where a ground for the invalidation or nullification of a contract exists, it requires separate proceedings alleging one or more of the grounds for set aside brought home by one party to a contract against the other. That is the correct process that should be utilised by a party seeking to get around a final consent order, if the process of appeal or review are not available or inappropriate.


56. This finally leads us to the remaining and second main issue before the Court. The question is: Are the Defendants at liberty to raise the issue of notice under s. 5 of the CBASA, a failure to meet the requirements of the PFMA and a failure to disclose a reasonable cause of action, without any foundation in their pleadings per their defence?


Issue 2 –Raising issues without any foundation in their defence?


57. The Supreme Court in Philip Takori v. Simon Yagari & Ors (2008) SC905 (per Kirriwom, Gavara - Nanu and Kandakasi, JJ (as I then was) is a case on point. There, the State and other defendants applied for summary determination of proceedings against them in the National Court. The Court granted that application. On appeal, it became clearer that the Defendants had not filed their notice of intention to defend within the time required by the rules of Court. That meant that, they needed leave of the Court to take further steps in the proceeding, including a formal filing of their defence. No such leave had been sought and granted. In the circumstances, the Supreme Court upheld the appeal and overturned the trial court’s decision. In so doing, it reasoned amongst others that:


“The State and the other defendants are claiming a lack of strict compliance of the rules. It is therefore fair and reasonable that, they come with full compliance of the requirements of the law or the rules of the Court. After all, equity requires them to come with having strictly complied with the rules or the law first for equity requires, “he who comes to equity must come with clean hands”.


21. In order for the State to properly and fairly argue for the Appellants to strictly comply with the law in the areas it argues for, it must first comply with all of the requirements of the law as they apply to it. The evidence clearly shows failures by the State and the other defendants to meet the requirements they were obliged to meet to give them proper foundation to make their application. Hence, they could not file and serve their defence without first seeking and securing the leave of the Court. Similarly, the State and the other defendants could not file and serve the motion leading to the decision or judgment, the subject of this appeal. Further, the State and the other defendants could not argue for and succeed on their application, without first, seeking and securing the leave of the Court to do so. They did not seek a dispensation of the strict compliance of the rules to facilitate a hearing of its motion and eventually judgment in its favour. The trial judge was obliged to consider all of these issues but he did not. Accordingly, we have no hesitation in finding that the learned trial judge fell into a clearly identifiable error.”


58. In the present case, the Defendants claim a lack of notice under s.5 of the CBASA, a failure to meet the requirements of the PFMA and a failure to disclose a reasonable case of action. This brings into play O.8 rr.12 and 14 of the NCR. The first rule assumes a:


“condition precedent necessary for the case of a party in any pleading that a thing has been done or any event has happened, a statement that the thing has happened or that the event has happened shall be implied in the pleadings.”


59. Rule 14 then imposes a duty or responsibility upon a defendant to plead in:


“...a defence or subsequent pleading ... [to] plead specifically any matter, for example, performance, release, any statute of limitation, fraud, or any fact showing illegality —

(a) which he alleges makes any claim, defence or other case of the opposite party not maintainable; or

(b) which, if not pleaded specifically, may take the opposite party by surprise; or

(c) which raises matters of fact not arising out of the preceding pleadings.”


60. In my view, this clearly means in the context of this case that, if indeed, Geosite did not meet the condition precedent of notice of intention to make a claim against the Defendants under s. 5 of the CBASA and his contract not meeting the requirements of the PFMA, they had the obligation to plead those specifically in their defence. Their defence filed on 17th November 2014 fails to so plead.


61. It is well settled law that, pleadings play a critical role in clearly bringing out the matters in issue between the parties. It is thus well settled law that, without any proper foundation in the pleadings, no party can be at any liberty to raise any matter. There is a long list of cases on point, including the Supreme Court decision in Papua New Guinea Banking Corporation (PNGBC) v. Jeff Tole (2002) SC694, (per Sheehan and Kandakasi, JJ as the they were) highlighted the need for pleadings with particulars. That decision cites the earlier authorities on point, such as the Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370 (per Kapi DCJ, Jalina and Doherty JJ). These judgments re-affirmed what was always the position at common law and consistently applied in a large number of cases in our country.


62. The law on pleadings as noted above, is consistent with another trite legal position. That law is captured in the common law doctrine of acquiescence and laches. These principles allow for inferring of a consent or approval from a party’s conduct, especially in cases where a party should have raised an issue when required to but that party has failed to do so. An illustration of this is in the passage that follows from the decision in Mauga Logging Company Pty Ltd v Okura Trading Co Ltd [1978] PNGLR 259, (per Kearney J):


“It is reasonable to presume that if a party commences court proceedings notwithstanding the existence of an arbitration clause and the other parties do not object to that course of action within a reasonable time, that they acquiesce in the court proceedings and are estopped from denying the jurisdiction of the court.”


63. It should therefore, follow from the above that the Defendants are at no liberty to raise the issue of s. 5 notice under the CBASA and a failing to meet the requirements of the PFMA without first raising them in their defence. They should have raised this in their defence but have not. Now after the consent orders were made, they are taking issue. This they cannot for the reasons given, including the need for finality for public policy considerations.


Conclusion


64. In the end, the final question is, have the Defendants made out a case for a grant of their application? The foregoing considerations make it clear that the Defendants have failed to establish a case for the Court to grant their application and consequently set aside the consent orders for the reasons given above. In short, the basis for the Court coming to that decision are these:


(a) The power of the Court to set aside an order or judgment under O.12, r 8 of the NCR is for only interlocutory orders or judgments provided the motions for the set aside is filed prior to the formal entry of the relevant orders or judgment;


(b) Section 155 (4) of the Constitution does not apply because of the provisions for set aside of interim orders already made in O. 12, r. 8 of the NCR.


(c) The Defendants used an incorrect mode, namely, a notice of motion to seek a set aside of a consent order that finalised the proceedings which is precluded by O.12, r. 8(4) of the NCR;


(d) The Defendants’ motion has been filed well after the entry of the consent orders and part payments based on the order were made and therefore contrary to O. 12, r.8 (1) and (2) and (3) of the NCR.


(e) The correct mode should have been a review filed and pursued at the Supreme Court or a fresh proceeding issued in the National Court claiming fraud or misrepresentation or such other improper conduct which has led to the consent orders;


(f) Since there is no allegation of fraud, misrepresentation or any improper conduct on the part of Geosite in their seeking and securing of the consent order, which is the only other party to the proceeding, the applicants could only pursue a proceeding against their former lawyers based on his now admitted lack of authority or fraud or misrepresentation or as the case might be;


(d) Fresh proceedings against the Defendants’ former lawyer’s is the only available option given the facts disclosed and relied upon in this application by the Defendants and the foregoing reasons;


(e) Further or in the alternative, there are more serious factual questions than answers which can only be properly resolved by a trial and not summarily on a notice of motion and affidavits alone.


65. For these reasons, I decline the Defendants’ application and order its dismissal. Costs are ordered in favour of Geosite with such costs to be agreed, if not taxed.
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Ketan Lawyers: Lawyers for the Applicants/Defendants

Gagma Legal Services: Lawyers for the Respondent/Plaintiff

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