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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCR 43 of 2012
BETWEEN:
THE INDEPENDENT STATE
OF PAPUA NEW GUINEA
First Applicant
AND:
PEPI KIMAS,
SECRETARY FOR LANDS & PHYSICAL PLANNING
Second Applicant
AND:
DR. PUKA TEMU,
MINISTER FOR LANDS & PHYSICAL PLANNING
Third Applicant
AND
TOKA ENTERPRISES LIMITED
Respondent
Waigani: Injia CJ, Hartshorn and Nablu JJ
2017: June 2nd,
2018: September 20th
SUPREME COURT REVIEW – CIVIL – s. 155(2)(b) CONSTITUTION – JUDICIAL REVIEW – MANDAMUS – Review of three
decisions: grant of leave to apply for judicial review; order granting application and mandamus; assessment of damages.
Delay in making application for leave – 13 years – exercise of public power over matters of public interest – disposition
of State’s interest in public property to private interest.
SUPREME COURT - PRACTICE AND PROCEDURE - Delay in making application for leave – whether delay undue – whether explanation for delay adequate – whether jurisdiction of National Court properly engaged.
PRACTICE AND PROCEDURE – Order of Mandamus – no reasons given - Award of damages – requirement to comply with s. 5 Claims By and Against the State Act when damages claimed against the State
DAMAGES - Award of damages – whether evidence of purported loss sufficient
Cases Cited:
Papua New Guinea Cases
State (Conlon Construction Co) v. Court County Council Unreported I.R. 31 July 1975 Avia Aihi v. The State [1981] PNGLR 81
Kapal v. Independent State of Papua New Guinea [1987] PNGLR 417
Kekedo v. Burns Philip Co Limited [1988-89] PNGLR 122
NTN Pty Ltd v. PTC [1987] PNGLR 70
Application of Eric Gurupa (1990) N856
Application of Evangelical Lutheran Church [1995] PNGLR 276
Pipoi v. Seravo (2001) N2120
Joseph Yonge v. Luke Niap (2001) N2101
Mision Asiki v. Manasupe Zurenuoc (2005) SC797
Kelvin Rumpia v. Abaris Buri (2006) N3035
Peter Makeng v. Timbers (PNG) Ltd (2008) N3317
Azzam El Cheikh v. The Honourable Rimbink Pato, Minister for Foreign Affairs and Immigration and Solomon Kantha, Acting Chief Immigration
Officer and the Independent State of Papua New Guinea (2017) N6879
Overseas Cases
In re Wall [1890] Viclaw Rp 143
Ex parte Anlezark; Re Manufacturers’ Mutual Insurance Ltd [1930] NSW St Rp 75
Ex parte Ozone Theatres [1949] HCA 33; (1949) 78 CLR 389
Inland Revenue Commissioner v. National Federation of Self-Employed and Small Business Ltd [1981] UKHL 2; [1982] A.C 617
Counsel:
Mr. L.A. Jurth and Mr. D. Levy, for the Applicants
Mr. A. Mana, for the Respondent
20th September, 2018
1. INJIA CJ: I have read the draft judgments of Justice Hartshorn and Justice Nablu and agree with the reasons for their decision to uphold the application for review and the orders they propose. I give some additional reasons of my own.
2. This is an application to review three decisions made by two Judges in National Court judicial review proceedings OS N0. 240 of 2007 Toka Enterprises Ltd v The Independent State of Papua New Guinea, Pepi Kimas, Secretary for Lands and Physical Planning and Dr Puka Temu, Minister for Lands and Physical Planning. On 7th June 2007, the first Judge granted the plaintiff (respondent in this application) leave to apply for judicial review under Order 3 rule 3 of the National Court Rules (NCR) on 7th June 2007 (first decision). The substantive relief to be sought if leave were granted was an order of mandamus to compel the defendants (applicants in this application) to issue State Leases to the respondent over the land in question. The leave application was made 13 years after the applicants failed to deliver him official State Leases over the land. On 27th June 2008, some 12 months after leave had been granted, the second Judge granted the substantive application and ordered that damages be assessed (second decision). On 27th November 2008, some five months after the trial on liability was concluded, the second Judge awarded damages. All three proceedings were conducted ex parte. The applicant did not appeal any of those three decisions. Instead, the applicants moved an application before a third Judge seeking orders to set aside the orders of the second Judge. On 15th February 2012, that application was dismissed. On 20th December 2012, an appeal against the third Judge’s decision was dismissed by the Supreme Court on competency grounds. On 25th October 2012, the applicants filed an application for review of the three decisions. On 29th November 2013, the applicants were granted leave to apply for judicial review in the Supreme Court under s 155(2)(b) of the Constitution. We heard the application for and reserved our decision which we now give.
3. In an application for judicial review, three things are of essence – time, the public nature of the decision under review, and an inter partes hearing.
4. Time is of essence in judicial review proceedings conducted before the National Court and the Supreme Court. The Courts do not play by the timelines of the parties and do not tailor the dispensation of justice along the convenience of the parties in the case. Courts should be on guard to detect long delayed cases that parties rush before the Court to obtain rushed judgments that do not properly deal with the substantive issues in the case and as a result of which substantial injustice may occur.
5. In the case at hand, the respondent delayed the commencement of judicial review proceedings in the National Court by 13 years. After leave for review was obtained, the respondent delayed the trials by several months. It took the State between 4- 6 years to commence proceedings in the National Court to contest the second and third decisions and to bring judicial review proceedings in the Supreme Court. Time, it is clear to me, was the least of the concerns of the parties even though the public property was a prime piece of land of huge commercial potential and value that was situated in Waigani that would have prompted the parties to seek justice from the Courts with due expediency. It would be of interest to learn of the activities of the parties in the delay period that soaked up that much time.
6. It is imperative to understand the importance of the public nature of the case for judicial review. The exercise of public power over matters of public interest calls for special care from those whose duty it is to protect the public interest and those seeking to take or acquire interests or benefits in public property and funds to ensure that the State is not unjustly deprived of its interest. The Courts are duty-bound to deal with the substantive issues in the case on the merits and sanction the disposition of the State’s interests in public property to private interests and even other public bodies in clear cases where it is demonstrated, by evidence, that the State intends to divest itself of the public property and according to law.
7. This particular case before the National Court was of immense importance to the parties, the government and the public. The case was rushed by the parties and rushed by the Court constituted by different Judges, that resulted in substantial injustice to the State that represented the public interest in the land and public funds.
8. The first decision (leave application) was rushed by the Court. As a result, two important requisites under Order 16 rule 4 were given inadequate consideration or not at all. Order 16 rule 4 is in the following terms:
“4. Delay in applying for relief. (UK. 53/4)
(1) Subject to this Rule, where in any case the Court considers that there has been undue delay in making an application for judicial review or, in a case to which Sub-rule (2) applies, the application for leave under Rule 3 is made after the relevant period has expired, the Court may refuse to grant-
(a) leave for the making of the application; or
(b) any relief sought on the application,
if, in the opinion of the Court, the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.
(2) In the case of an application for an order of certiorari to remove any judgement, order, conviction or other proceeding for the purpose of quashing it, the relevant period for the purpose of Sub-rule (1) is four months after the date of the proceeding.
(3) Sub-rule (1) is without prejudice to any statutory provision which has the effect of limiting the time within which an application for judicial review may be made.”
9. The question of undue delay in the first part of Sub-rule 1 is to be alongside the factors appearing in the second part of Sub-rule (1). The relevant period to bring an application for leave for review in respect of an application for certiorari is four months. There is no time prescription for an application for leave to apply for an order of mandamus. It is settled that such application must be brought within reasonable time. Justice Gavara-Nanu succinctly restates these principles in Azzam El Cheikh v. The Honourable Rimbink Pato, Minister for Foreign Affairs and Immigration and Solomon Kantha, Acting Chief Immigration Officer and the Independent State of Papua New Guinea (2017) N6879, in these terms:
“The plaintiff must show that there is no delay from the date of the decision to
the date leave is sought. Where certiorari is sought as a substantive relief, the
period prescribed under Order 16 r 4 (2) of the NCR within which the
application must be made is four months. If there is delay, the plaintiff should
provide a reasonable explanation for such a delay. But in a case where
mandamus is sought as a substantive relief, the pertinent questions for the Court are whether the application is made within a reasonable time and whether it is in the overall interest of justice to grant leave. The relevant issues for the Court to consider and take into account among others are undue delay, hardship, good administration and prejudice to the rights of others, these are stated under Order 16 r 4 (1) (b). Innovest Limited v. Hon. Patrick Pruaitch, Minister for Forests and Climate Change & Or (supra).”
10. The first part of Sub-rule (1), undue delay in bringing the application for leave for judicial review by 13 years, was given inadequate consideration. The trial Judge gave an oral ruling where he said “the delay has been adequately explained by the numerous attempts that the plaintiff has made to get an administrative decision out of the government” and was unable to obtain registered title. The Judge did not elaborate on how those “numerous attempts” took 13 years to complete.
11. The second part of Sub-rule 1 was given little or no consideration at all. No consideration was given to whether to grant leave would cause “substantial hardship to, or substantial prejudice to the rights of any person” or “would be detrimental to good administration”. The subject land formed part of the land occupied by the National Broadcasting Corporation, a public institution. The land was given to the respondent by way of a town sub-division lease for commercial development. The term of the original sub-division lease was a fixed 5 year term. Had the position of the parties substantially shifted in those 13 years? Were the improvement conditions complied with? Were there any subsequent renewal of the sub-division leases? Was the land rezoned? Did any third party acquire any interest in the land? Had there been any improvements erected on the land, by whom and of what value? No such inquiry on the part of the Court occurred. These were important considerations that if considered would have produced a just outcome of the case.
12. The second decision was also rushed and substantial injustice occurred. The order for mandamus requiring the State to issue State Leases over the land was made without the Court fully addressing the substantive issues raised above which were also issues at the trial.
13. The third decision was clearly rushed. At the time of trial, there were no physical improvements of value erected on the land. The evidence from the respondent proved expenses were incurred for preparatory work but no actual sub-division work was carried out during the term of the 5 year town sub-division leases. The respondent said it incurred costs when it carried out survey work, paid land fees, engineering fees, administration fees and so forth. The respondent claimed general damages for pain and suffering, administrative costs, economic loss, punitive damages and special damages for various fees paid to service providers including land rent, lease preparation fees, survey fees, engineering fees, legal fees and administrative costs.
14. The trial judge awarded damages in the sum of K39 million. These included awards of K472,000 for special damages when the evidence supported K3,414.79; K8,669,700 for past economic loss; K16,200,080 for future economic loss; and K11.2 million for interest.
15. Clearly, the damages in all categories were exaggerated. The trial Judge fell into error in accepting these figures that were unsubstantiated by proper evidence. An award of K39 million in damages inclusive of interest for a piece of undeveloped land is a grossly exaggerated award that clearly manifests substantial injustice to the State that represents the public interest.
16. The three decisions were reached after ex parte hearings. The State is entitled to be represented at these hearings. The circumstances under which the Courts allowed those ex parte hearings is unclear. The Courts appear to have paid little regard to the importance of the issues at stake that required care to be taken in ensuring that full and proper inter partes hearings occurred that would have enabled the substantive issues to be tried and decisions reached on the merits.
17. The test applicable to a grant of review under s 155(2) (b) of the Constitution is settled. An application for review may be allowed if it is in the interest of justice to do so, that there are cogent and convincing reasons and exceptional circumstances that show some substantial injustice is manifest or the case is of special gravity; and that there are clear grounds meriting a review of the decision. I am satisfied that the test has been met in this case.
18. For the foregoing reasons, I too would allow the appeal, quash all three decisions of the National Court and order that each party bear their own costs of these proceedings.
19. HARTSHORN J: I have had the opportunity of reading the draft judgment of Nablu J and respectfully adopt the background of this review as detailed by Her Honour.
20. The first of the three decisions of the National Court sought to be reviewed concerns the order granting Toka Enterprises leave to apply for judicial review on 7th June 2007 (leave order). I consider the leave order first.
21. The application of Toka Enterprises sought leave to apply for an order in the nature of mandamus for a title deed to issue over the subject land. Damages were also sought in the sum of K15 million for the, “costs of and incidental to preparations and expenses incurred for the proposed development of the subject land over the past 18 years”, and interest thereon.
22. The State applicants’ grounds for review of the leave order include that there had been substantial and inordinate delay of about 13 years in Toka Enterprises filing its application for judicial review. During that time there had been significant changes in circumstances in respect of the description and ownership of the subject property. Toka Enterprises submits that exceptional circumstances militated in favour of the grant of the leave order. This included the dereliction of duty of relevant officers within the Department of Lands and Physical Planning to issue a title to the subject land.
Delay
23. In considering an application for leave for judicial review, the National Court in addition to Order 16 Rule 3 National Court Rules, must also have regard to Order 16 Rule 4(1). It is as follows:
“4. Delay in applying for relief. (UK. 53/4)
(1) Subject to this Rule, where in any case the Court considers that there has been undue delay in making an application for judicial review or, in a case to which Sub-rule (2) applies, the application for leave under Rule 3 is made after the relevant period has expired, the Court may refuse to grant-
(a) leave for the making of the application; or
(b) any relief sought on the application,
if, in the opinion of the Court, the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.”
24. The first question for the National Court in considering Order 16 Rule 4(1), if there is delay in making an application for judicial review, is whether that delay is undue. If the Court considers that there has been undue delay then the Court considers the other three factors in the latter part of Rule 4(1) in arriving at a determination of how to exercise its discretion whether to refuse to grant leave.
25. From the transcript of the ex tempore ruling of the primary judge, the primary judge does not consider whether the delay of 13 years is undue. In regard to whether the primary judge fell into error in not considering whether the delay was undue, the primary judge states that, “... the delay has been adequately explained by the numerous attempts that the plaintiff has made to get an administrative decision out of the government ...”, but he still has not been issued a title, “... despite considerable representations to the defendants over a period of 18 years ...”. The evidence before the primary judge was that these representations were by correspondence.
26. In a consideration of whether there was undue delay in this instance, notwithstanding that the time limit of four months in Order 16 Rule 4(2) National Court Rules does not apply to an application for an order of mandamus, it may be considered indicative of the time within which other applications for leave for judicial review should be made.
27. No decisions in this jurisdiction were brought to our attention specifically on the question of the effect of delay upon an application for an order of mandamus, however a consideration of overseas authority reveals that such applications must be brought within a reasonable time. In Judicial Review of Administrative Action, 3rd ed. 1973, S. A. de Smith at 504 said as to mandamus:
“... but unless the application is made within a reasonable time after the right to apply (or to demand performance of the duty) has arisen the court will in its discretion refuse the application.”
28. In the Irish case of State (Conlon Construction Co) v. Court County Council Unreported I.R. 31 July 1975, referred to in Judicial Review of Administrative Acts: The problem of remedies, Ireland Law Reform 1979, Butler J said:
“The making of the order is within the discretion of the Court..... Where mandamus is sought to secure a right the right must be promptly claimed and the claim pursued vigorously.....”
29. I have also had recourse to the following Australian cases:
a) in the case of In re Wall [1890] Viclaw Rp 143, the applicant applied for a prerogative writ of mandamus to compel the Public Service Board to classify him in the clerical division on the ground that in 1884 he was performing clerical duties, and ought then to have been classified in that division. The Court held that the applicant had been guilty of a delay of six years and the Court ought not to exercise its discretion in granting a writ of mandamus;
b) in Ex parte Anlezark; Re Manufacturers’ Mutual Insurance Ltd [1930] NSW St Rp 75, Ferguson J, after stating that a writ of mandamus is a discretionary writ, and that it is a well established rule that an applicant for the writ must come within a reasonable time, refused to issue a writ of mandamus because of a five month delay in the application;
c) in Ex parte Ozone Theatres [1949] HCA 33; (1949) 78 CLR 389, the High Court said:
“The writ of mandamus is not a writ of right nor is it issued as of course. There are well recognised grounds upon which the court may, in its discretion, withhold the remedy. For example the writ may not be granted if a more convenient and satisfactory remedy exists, if no useful result would ensue, if the party has been guilty of unwarrantable delay ....”
30. A consideration of numerous National Court judgments reveals that other applications for leave to review have been refused where the delay in bringing the applications was rather less than 13 years: NTN Pty Ltd v. PTC [1987] PNGLR 70 - 11 months; Application of Evangelical Lutheran Church [1995] PNGLR 276 - 11 ½ months; Application of Eric Gurupa (1990) N856 – 2 years; Pipoi v. Seravo (2001) N2120 – 10 years.
31. Further, various National Court decisions have recognised that judicial review proceedings are considered to be of a different nature to other proceedings and that they require prompt action. In Joseph Yonge v. Luke Niap (2001) N2101, Kandakasi J. stated that:
“... judicial review, by their (sic) very nature, require prompt action ...”,
and in Kelvin Rumpia v. Abaris Buri (2006) N3035, Kirriwom J. said:
“Judicial review is a special procedure that circumvents conventional process or procedures because of exceptional circumstances surrounding a given case and avails jurisdiction to a party who has either lost his right or his (sic) prohibited by Statute from going further through the normal appeal process. Because of this special nature of its jurisdiction, there is a degree of urgency in the matter being disposed of expeditiously. This special nature of judicial review and the urgency it demands is reinforced by the National Court Rules in Order 16 rule 4(1).......”
32. I also make mention of s. 16(1) Frauds and Limitations Act 1988. Notwithstanding that this section is not applicable in this instance, a comparison may be made with the time prescribed therein. An action founded on simple contract or tort or to enforce a recognisance or an award shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued. A delay of 13 years is obviously more than twice the time permitted in s. 16(1).
33. To my mind, and being guided by the cases and other matters to which I have referred, a delay of 13 years, prima facie, constitutes by virtue of that period of time, undue delay. To the extent that the primary judge did not find that the period of delay in the application before him was not undue delay, I am of the respectful view that the primary judge fell into error.
34. The primary judge’s consideration and acceptance of the explanation for the delay did not take into account or question why an application for leave for review could not have been filed earlier in the 13 year period, for instance after the first or second letter requesting issuance of the subject title went unheeded. In accepting the explanation for the delay as the primary judge did, I am of the respectful view that he fell into error, especially in not attempting to determine why application to the National Court had not been made earlier and in not attempting to ascertain whether there was an impediment preventing the filing of proceedings earlier.
35. As mentioned, to the extent that the primary judge did not consider whether the delay constituted undue delay, did not find that 13 years did constitute undue delay and made a finding that there was an adequate explanation for the delay of 13 years, I am of the respectful view that he fell into error. The primary judge should have found that there was undue delay, and then considered the three factors detailed in the latter part of Order 16 Rule 4(1) to determine how the Court’s discretion whether to refuse leave should be exercised. Given the above, the primary judge fell into error by granting the leave order on improper bases.
36. Having found that the primary judge fell into error in granting the leave order, the jurisdiction of the National Court to hear the application for judicial review was not properly engaged. I refer in this regard to Peter Makeng v. Timbers (PNG) Ltd (2008) N3317, in which at [34] Injia DCJ (as he then was) said:
“Under O 16, a plaintiff has no right to seek judicial relief unless leave is granted. No such primary right to commence proceedings exists until leave is granted ...”
37. Consequently, having found that the primary judge amongst other things, fell into error in granting the leave order, it is not necessary for me to consider the other grounds, and submissions of counsel. As to costs, I agree with the comments of Nablu J. I would make the following orders:
Orders
38. The formal Orders of the Court are:
a) The decisions of the National Court of 7th June 2007, 27th June 2008 and 27th November 2008 in National Court Waigani proceedings OS 240 of 2007 are quashed;
b) The parties shall bear their own costs of and incidental to these proceedings.
39. NABLU J: Leave was granted on 29th November 2013 to review three (3) decisions of the National Court.
40. The three (3) decisions are stated below for ease of reference. They are;
(1) the extempore decision of the National Court per His Honour Justice Lay to grant leave to the respondent on 7th June 2007 to review the decision or failure of the Secretary for Lands and Physical Planning to issue a State Lease to the respondent;
(2) the order of the National Court per His Honour Justice Salika (as he then was) to grant an order in the nature of mandamus compelling the Secretary for the Department of Lands & Physical Planning and the Minister for Lands & Physical Planning to grant a State Lease to the respondent on 27th June 2008; and
(3) the order of the National Court per His Honour Justice Salika (as he then was) to award damages for the sum of K27 million to the respondent.
41. The plaintiff seeks orders to uphold the review and set aside the orders of the National Court in relation to the grant of leave, damages, the order to grant a mandamus order and costs.
42. The grounds of review are provided in the application which was filed on 25th October 2012 and contained at pages 8 to 16 of the Review Book. The grounds of review are summarised as follows.
Ground of Review of Leave Order
43. The National Court erred in law in granting leave to apply for judicial review on the ground that there was a substantial and inordinate delay of thirteen 13 years. At the time leave was granted there had been significant changes in the circumstances such as the description and ownership of the subject property that had changed. The State Lease was non-existent and had already expired. There were third parties that had already acquired an interest in the subject land.
44. The respondent had failed to assert its interest during the time the State Lease was valid. The National Court erred in granting leave when the respondent had been adequately compensated in respect of any rights that it had in the subject land by the granting of an alternative State Lease. The land the subject of the State Lease had been rezoned and the state lease land ceased to exist. Further, the land was subsequently rezoned and had been granted to third parties for development.
45. The third parties were the National Broadcasting Corporation, the Church of Latter Day Saints and the Evangelical Church of Manus. These interested parties were neither joined as parties to the judicial review application nor were they made aware of the National Court proceedings. Furthermore, the National Court erred in law when granting leave to apply for judicial review which included seeking an award of damages because the order for damages sought was statute barred pursuant to Section 16 of the Frauds and Limitations Act.
Ground of Review for the Mandamus Order
46. The National Court erred in granting an order in the nature of mandamus compelling the applicants to issue a State Lease and awarding damages to be assessed on the grounds that;
Ground of Review for the Damages Order
47. The National Court erred in law in assessing damages for the sum of K27 million in circumstances where there was no admissible evidence before the Court of any loss or damage suffered by the respondent. The respondent has been adequately compensated in respect of any rights that it had in the subject land. The National Court erred when the respondent had failed to plead or particularize its loss or damage suffered pursuant to Order 16 Rule 7 of the National Court Rules. The National Court also erred in granting an award for damages on the grounds that the claim for damages was statute barred pursuant to Section 16 of the Frauds and Limitations Act and that the respondent had failed to comply with Section 5 of the Claims by and Against the State Act by giving the statutory notice six (6) months after the date the cause of action allegedly arose.
48. The background facts are that the respondent was the successful applicant for a State Lease in 16th February 1989. The State lease was described as Town Division Sub-Division Lease over allotment 9, 11 and 12, Section 136 and Part Portion 1455 Waigani City Centre, Milinch Granville, Moresby, National Capital District. The original lease was for a period of five (5) years which expired on 15th February 1994. The decision of the Head of State was published in the National Gazette No. G612 of 1989.
49. Unbeknown to the respondent (see the Affidavit of Pepi Kimas which was filed on 22nd September 2009 and contained at pages 694 – 782 of the Review Book, Annexure B to the Affidavit of John Ofoi filed on 26th April 2013) the National Broadcasting Commission occupied part of the land where it had its aerial farm and other related communication structures. The Evangelical Church of Manus had a special purpose lease over part of the land which was subject of the lease granted two (2) years earlier on 2nd July 1987. The church had erected a residential dwelling on the land. It appears that the subject land’s ownership was further complicated because of the fact that the Department of Foreign Affairs and Trade also held a certificate of occupancy over Allotments 11 and 12 of Section 136. In June of 1989, the Department of Lands, then entered into negotiations with the National Broadcasting Commission to remove their aerial farm and other communication structures in light of the fact that the subject land was now granted to the respondent. It was unclear what transpired from the negotiations however it appears that they failed to settle the matter.
50. The respondent executed a Lease Acceptance Form and paid the prescribed fee in July 1989.
51. On 6th September 1990 the respondent then applied for a Business (Light Industrial) Lease over Portion 109, Milinch, Granville, Fourmil, Moresby, National Capital District as a replacement lease for the whole State Lease of the subject land or a part of the land for Allotment 9, Section 136. On 27th September 1991 the respondent was granted a replacement lease. The notice for the replacement state lease was gazetted on 14th March 1991.
52. As per the procedure for replacement of a title, the respondent was requested to conditionally surrender the original lease in order for the replacement lease to be issued. The respondent had applied to sub-divide the land. The seven subdivided allotments were sold by the Respondent at the cost of K50, 000 each.
53. On 15th February 1994, the original lease expired. According to the affidavit of Pepi Kimas the respondent did not lodge an application to renew the lease. Between 2002 and 2003 there were major developments in progress for a Waigani City Centre Plan where Portion 2126 was (the part of the respondent’s land which was rezoned and ceased to exist). This included a major road construction from Somare Circuit to Waigani Drive. The rezoning of the Waigani area resulted in the creation of Portions 2534, 2535, 2536, 2537, 2538 and 2539.
54. On 3rd May 2007, the respondent filed proceedings OS No. 240 of 2007 seeking leave to apply for judicial review. The respondent claimed substantive relief in terms of an order in the nature of mandamus to compel the applicants to issue a state lease over the subject land and damages of K15 million.
55. Leave to apply for judicial review was granted on 7th June 2008. After hearing of the substantive application for review the National Court granted a writ of mandamus compelling the applicants to grant a state lease over the parcel land described as Portion 2126, Granville and Allotments 9, 11 and 12 of Section 136, Hohola, National Capital District. The order also included an order for damages to be assessed and the respondent was ordered to provide evidence of the damage suffered.
56. On 16th March 2009, the respondent was issued titles to Portion 2538 and 2539, Granville, Moresby and Section 136 Allotment 19, Hohola of the rezoned land in compliance with the mandamus order after they had initiated contempt proceedings. The lease was for a period of five (5) years and commenced on 16th February 1989 and expired on 15th February 1994.
57. The respondent was aggrieved with the grant of that title, because it was alleged that the land in that State Lease comprised of a smaller parcel of land than the original lease. However, on 26th May 2009 the respondent surrendered the said lease for rezoning. On 16th June 2009, the respondent was granted an Urban Development Lease Volume 34 Folio 173 for land described as Portions 2534, 2535, 2538 and 2539 and Allotment 19 Section 136, Granville Moresby, National Capital District. The Urban Development lease was for a period of five (5) years which would expire on 10th June 2014.
58. On 17th February 2012, a certificate of judgment was issued by the Registrar of the National Court in favour of the respondent for the sum K39, 021, 206.00 which comprised of K27, 784,536.00 for damages and K11, 236, 670.00 as interest at the rate of 8% from the date of filing of the proceedings to 15th February 2012.
59. In the present review, there are a number of legal issues for determination. The issues raised relate to the numerous grounds of review. There are three decisions of the National Court which are reviewed. However, I am of the view that there are some similarities in the questions for determination which transcend between the decisions. I propose to deal with the headline issues when considering the grounds of review accordingly.
60. The legal issues for determination by the Court are as follows:
61. The principles upon which a Judge exercises his or her discretion to grant leave for judicial review are well established in this
jurisdiction. The National Court has the discretion to grant leave for judicial review where the applicant has satisfied the Court;
that it has met the four requirements for leave to be granted. These are that the applicant has sufficient interest as required by
Order 16 Rule 3(5) of the National Court Rules; that the plaintiff has demonstrated that it has an arguable case which is supported by a Statement of Support and the facts in the
statement are verified by the applicant in an affidavit; that the plaintiff has also exhausted all the administrative remedies available
to it and that the application for leave to apply for judicial review has been filed promptly.
62. These principles have been established by a number of authorities by the Supreme Court in landmark cases like Kekedo v. Burns Philip Co Limited [1988-89] PNGLR 122 and Kapal v. Independent State of Papua New Guinea [1987] PNGLR 417.
63. The two principles which are codified in the National Court Rules are, first, the requirement for the applicant to establish that it has sufficient interest in the matter which is capable of invoking the Court’s inherent supervisory power of review. That principle is provided for under Order 16 Rule 3(5) of the National Court Rules. The second principle is the principle of delay which is provided for under Order 16 Rule 4 of the National Court Rules. Order 16 Rule 4 of the National Court Rules states that:
if, in the opinion of the Court, the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.
64. In regard to the grounds of review challenging the decision of the National Court to grant leave to apply for judicial review, the applicant argued that the respondent’s lawyers mislead the Court into granting leave. This is because the applicant’s counsel did not disclose two key matters which would have literally caused the learned judge not to exercise his discretion and grant leave. They were the fact that the State Lease had expired in February 1994 and that there were no other interests in the Land. The applicant argued that at the time the leave application was made in 2007, it had been thirteen years since the original State Lease had expired. It was also eighteen years since the grant of the State Lease to the applicant. Therefore, the delay in bringing the application for leave for judicial review was inordinate. It was submitted that the learned judge had erred in law and fact. Mr Jurth of counsel for the applicant further submitted that the respondent’s counsel also mislead the Court by submitting that there were no other persons with an interest in the property.
65. Mr Mana of counsel for the respondent submitted that there were exceptional circumstances which militated in favour of the grant of leave and in that respect the learned judge did not err and exercised his discretion correctly. There was also the fact that the evidence before the National Court was unchallenged; that the officials of the Department of Lands & Physical Planning had failed to discharge their duties and functions to formalise the grant of the State Lease and provide a copy of the owner’s copy of the title and that the respondent had painstakingly made numerous attempts to follow up on the grant of the actual title but to no avail.
66. It was submitted that time did not run where a physical state lease had not yet been produced to the grantee of the lease. Section 81 of the Land Act did not take effect because of the failure to grant the physical lease document.
67. The respondent also submitted that the applicant’s submission that the State Lease could not be granted because the land purportedly overlapped with the land on which the National Broadcasting Commission had their aerial farm and communication structures is a speculative assertion because there was no evidence adduced before the National Court. The land was formally advertised to the public. This argument only highlighted the Department of Lands Officials failure to discharge their duties and exacerbates the applicant’s breach of the statutory process. Despite this, it is not disputed that there was no evidence adduced at the trial by the applicants which was detrimental to their case.
68. The question posed is whether the learned trial judge erred in law and fact when he granted leave to review a decision or failure of the Department of Lands duty to grant a state lease after thirteen (13) years. The lease was granted in 1989. The lease expired in 1994.
69. A grant of leave to review is an exercise of judicial discretion. Notwithstanding that the National Court has a wide and unfettered discretion; the exercise of discretion must still be exercised within the ambit of the law and upon proper legal principles. This does not in any way vitiate the National Court’s powers to make orders in the interest of justice pursuant to its inherent jurisdiction under Section 155(4) of the Constitution. However, the exercise of this inherent power is only invoked to protect an applicant’s primary right (see Avia Aihi v. The State [1981] PNGLR 81).
70. It is not disputed that the consideration of the National Court when determining whether to grant an applicant leave is not a consideration of the substantive merits of the case. The duty of the Court is to merely consider whether the applicant has established a prima facie case which warrants further examination by the Court. (see Inland Revenue Commissioner v. National Federation of Self-Employed and Small Business Ltd [1981] UKHL 2; [1982] A.C 617).
71. In Inland Revenue Commissioner’s case (supra), the principles pronounced by Lord Diplock which have been adopted and applied in numerous cases in this jurisdiction at page 644 are that;
“If, on a quick perusal of the material then available, the court (that is the Judge who first considers the application for leave) thinks that it discloses what might on further consideration turn out to be an arguable case in favour of granting to the applicant the relief claimed, it ought, in the exercise of judicial discretion to give him leave to apply for the relief. The discretion that the court is exercising at this stage is not the same as that which it is called upon to exercise when all the evidence is in and the matter has been fully argued at the hearing of the application.”
72. In the present case, the main contentious issue is that leave to review was granted thirteen years after the decision sought to be reviewed was made or in this case not made. The respondent was granted the State Lease on 16th February 1989. The State Lease was for a term of five years and it expired on 16th February 1994.
73. I am of the view that there was, with respect, evidence before the Court which indicated that there was a significant delay of thirteen years. The question of delay was a relevant question which should have been considered and determined by the trial judge. However, with respect, the learned trial judge did not properly consider the question of delay. The court did ask the question about delay (see page 863 of the Review Book), however, the counsel’s response was not clear.
74. The response by counsel was evasive in that he merely stated that his client had attempted on numerous occasions to obtain the title from the Department of Lands & Physical Planning. The counsel’s answers were also misleading, as he did not disclose to the Court that the tenure for the lease was for a period of five years and therefore it expired in 1994.
75. Despite the fact that the National Court Rules do not impose a time limit on the institution of an application for leave where the applicant is seeking an order in the nature of mandamus. When there is delay, and in this instance, thirteen years clearly constituted delay, the Court should consider the following questions before leave is granted. They are;
76. These principles are provided in Order 16 Rule 4 of the National Court Rules. The Court has the discretion to refuse leave where any parties interests or rights would be adversely affected or they would suffer great prejudice or the grant of relief would not be good for the administration of the authority or decision making body. When applying these principles to the decision, with great respect, I am firmly of the view that the learned trial judge exercised his judicial discretion incorrectly, when he accepted that the reasons given by counsel that the applicant was following up with the Department of Lands lawyers was a reasonable explanation for the delay. This is for the reason that it had been thirteen years since the State Lease had expired. Furthermore, it had been 18 years since the State Lease had been granted when the plaintiff/respondent sought leave to review.
77. There is evidence before me, that the learned trial judge had enquired as to whether there was any competing interest, to which counsel stated that there was no competing interest.
78. In regard to that, even if leave was granted later, the applicant was required to disclose the other competing interest. Given the long passage of time, it would in my view be unreasonable to conclude that there was no competing interest in what was prime land in the City. Therefore, with respect, the Court erred in exercising its discretion to grant leave.
79. Clearly the other persons would have suffered great prejudice if leave was granted to review the decision which related to a State Lease which had expired in 1994. Furthermore, as the lease had ceased to exist for thirteen years, it was clearly not in the interest of justice, in my view, for leave for judicial review to have been granted. Therefore, with respect, I am of the view that the learned trial judge erred when he exercised his discretion to grant leave.
80. In answering the legal issues, I would answer yes to the first question, that the judge exercised his discretion wrongly as there was clearly an inordinate delay, in misleading the application for leave that was not justified. I uphold the appellant’s submissions in regard to this ground of review.
81. The second ground of review challenges the decision of the primary trial judge to grant the relief sought in the substantive review.
82. It is trite law that judicial review proceeds in two distinct steps. First the onus is on the applicant to prove one or more of the grounds of review. After an applicant has established the grounds of review, the next step is to convince the Court to grant the relief sought (see Mision Asiki v. Manasupe Zurenuoc (2005) SC797). However, the grant of relief is discretionary. Relief may be refused, varied or even substituted by the Court for other relief. The Court’s discretion is exercised on proper legal grounds and may be refused if the applicant comes to court with unclean hands.
83. Order 16 Rule 4 of the National Court Rules also provides the rules which govern the Court’s discretion.
84. The ex tempore ruling of the Court was made on 27th June 2008. The transcript is found at pages 868 – 880 of the Review Book. It is not disputed that the State did not file any affidavits for the hearing of the judicial review application. At the date of hearing, the defendants were represented by counsel who sought an adjournment. The Court however, refused the application and proceeded with the trial. It is unclear what transpired at the hearing because there is no transcript of the hearing. It is clear though that the Court was not impressed with the defendant’s counsel as he offered little or no assistance to the Court.
85. The applicant in the present review, only challenged the primary judge’s exercise of discretion to grant the substantive relief.
86. After reading the reasons by the Court, with respect, I am of the view that the learned trial judge did not give reasons why he was exercising his discretion to order mandamus.
87. The learned trial judge has provided reasons for why the application for review was granted. However, he then proceeds straight to granting the orders without giving any reasons for ordering mandamus (see page 871 of the Review Book).
88. The grant of relief is an exercise of judicial discretion. Where no reasons are given for the exercise of judicial discretion this causes substantial injustice to the parties. I am unable to discern whether the issue of an inordinate delay was in fact raised and argued at the substantive hearing. Even if it was raised at the hearing, there is no evidence that the learned trial judge considered the question of whether there was an inordinate delay which would affect the judicial discretion to grant the substantive relief. In regard to the second issue, I would answer in the affirmative that there was an inordinate delay in the granting of the substantive relief. In regard to the third and fourth questions for determination, I am also of the view that the failure to give reasons means that there were no good reasons. Therefore, I am of the view that the trial judge fell into error in the exercise of his discretion to grant the relief.
89. The next consideration is the learned trial judge’s award of damages. The National Court ordered that the matter would return for hearing, for the awarding of damages. After the order for mandamus was made, the Court directed the plaintiff to provide evidence of damage suffered (see page 871 of the Review Book, line 37-40). The learned trial judge also directed that the applicant itemise each head of damages claimed and provide a written submission so that a decision could be made as to how much damage the plaintiff suffered (see page 872 of the Review Book, line 33-35).
90. The National Court Rules, Order 16 Rule 7 provides the powers of the Court to award damages. Order 16 Rule 7 states that:
91. The Rule is clear, the Court has the discretion to award damages in two circumstances:
92. It is not disputed that the applicant did not file any affidavits in the lower Court. It is also not disputed that there was little or no interest in defending the matter. All the evidence in the National Court was from the plaintiff/respondent.
93. The first issue to consider is whether the provisions of the rules were complied with. The plaintiff’s originating summons filed indicates that the plaintiff sought damages of K15 million for costs of and incidental to the proposed development of the subject land over the past 18 years. The substantive notice of motion also sought the same relief. The Statement of Support also pleads the same relief of damages (see pages 19, 23 and 28 of the Review Book). Therefore, in regard to the first part of the step in Order 16 Rule 7, it appears that that applicant had complied with the Rules.
94. The next question for determination is whether the applicant was entitled to the award of general damages and other special damages.
95. The respondent contends that the lower Court did not err when making the damages order. There was no evidence from the applicants at the hearing.
96. The applicant contends that the lower Court erred for the following reasons: the lower Court exercised its discretion when there was no material evidence before it to show the loss suffered by the respondent. The Court is not entitled to make an order for substantial damages based on the evidence of the respondent solely on the evidence of the Company’s Managing Director. The second reason, is that the applicant says that the National Court erred because the plaintiff had not filed a Section 5 notice pursuant to the Claims By and Against the State Act. The final ground argued by the applicant is that Section 16 of the Frauds and Limitations Act renders the claim for damages statute barred because the original lease was granted in February 1989 and expired in February 1994. Therefore, the action if it was founded on a simple contract would have been statute barred, after six years which was in February 1995. If however, the contract was a specialty contract, it would have been statute barred after twelve years which would still have lapsed in February 2001. Even if the Court found that the applicants’ action was still alive until the original lease expired, the twelve years time limit would have expired in February 2006. The judicial review application was still filed out of time in May 2007.
97. The respondent contends that the failure of the Department of Lands and Physical Planning or the Minister’s failure to grant a physical title to the applicant is an ongoing failure which continues and the cause of action does not arise and therefore the breach continues. Therefore, the provision of the Frauds and Limitations Act is not applicable.
98. I will consider the issue of the Section 5 notice first. Section 5 of the Claims by and Against the State Act requires a complainant/claimant to file a notice with the Solicitor General’s Office, six months after a cause of action arose.
99. The issue of whether a Section 5 notice is required to be lodged before an application for judicial review is filed has been judicially determined by the Supreme Court in the case of Mision Asiki v. Manasupe Zurenuoc (supra). On appeal by the National Court for refusing leave for judicial review for failing to file a notice of claim under Section 5 of the Claims by and Against the State Act, the Supreme Court held that:
“We agree with Injia DCJ’s reasoning in Punangi v. Brown, adopt it for the purpose of the present case and find that:
100. Whilst, I agree with the reasoning of the Supreme Court, with respect, I would differ slightly from that view and say that in cases were the applicant also seeks orders for damages whether they are liquidated or not, the applicant should file a notice of claim against the State pursuant to Section 5 of the Claims By and Against the State Act.
101. The reason for this is that if the applicant for judicial review is also seeking damages which he would otherwise be entitled to in a similar action brought under a contract or a claim for tort or breach of a constitutional right against the State, the claimant should lodge the appropriate notice pursuant to Section 5 of the Claims by and Against the State Act.
102. In the present case, the review of the Minister for Lands and Physical Planning’s failure to provide a physical title or State Lease to the successful applicant (the respondent), is not only a review of the administrative decision and procedure, it also gives rise to an action against the public officials possibly for negligence. This would require the claimant to file a notice pursuant to Section 5 of the Claims by and Against the State Act. This should be a requirement where the applicant for judicial review also seeks damages along with the other prerogative writs they claim as the substantive relief.
103. Therefore, I am of the view that where an applicant for judicial review seeks damages, the Court must be satisfied that the applicant has filed a Notice of Claim pursuant to Section 5 of the Claims by and Against the State Act. The applicant for leave for review must demonstrate that by proper pleadings in the Statement of Support pursuant to Order 16 Rule 3(2)(a) of the National Court Rules. The applicant must also adduce evidence at the application for leave or substantive hearing that they have complied with the requirement to give notice under Section 5 of the Act.
104. In regard to the issue of whether there was any evidence of the loss suffered by the respondent to substantiate the award of damages. I am of the view that there was no evidence before the Court. With respect, the respondent did not provide evidence of the loss or costs accrued to support the claim of K15 million. If business losses where claimed, there was also no evidence that the respondent company was entitled to the business losses for that period. There was no evidence of any income tax returns to substantiate the damages for future economic and business losses. The only evidence provided was the costs of K3, 414.79 for the payment of land rent and lease preparation fee which the respondent paid out of pocket.
105. Therefore, with respect, I am of the view that the learned trial judge erred when he accepted the submissions by the respondent as evidence of the loss incurred and awarded damages of K35 million. With respect, counsel provided little or no assistance to the Court in this regard and did misled the Court causing it to exercise its discretion upon wrong principles.
106. For the foregoing reasons and in the exercise of my discretion, I would grant the application for judicial review and quash the decisions of the National Court dated 7th June 2007, 27th June 2008 and 27th November 2008 forthwith. Due to the long period of time before the filing of this application in 2012, which was five years after the orders were made, I would order that each party bear their own costs.
Orders of this Court
a) The decisions of the National Court of 7th June 2007, 27th June 2008 and 27th November 2008 in National Court Waigani proceedings OS 240 of 2007 are quashed;
b) The parties shall bear their own costs of and incidental to these proceedings.
_______________________________________________________________________
Manase Lawyers: Lawyers for the Applicant
Chesterfield Lawyers: Lawyers for the Respondent
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