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Independent State of Papua New Guinea v Maladina [2021] PGSC 98; SC2180 (24 December 2021)

SC2180

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 187 OF 2019

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Appellant

V

JIMMY MALADINA
Respondent

On The Papers: Cannings J, Makail J, Anis J
2021: 23^rd November, 24^th December

JUDGMENTS AND ORDERS – appeal against decision of National Court that was not opposed – grounds of appeal based on points of law not raised in National Court – frivolous and misconceived appeal.

COSTS – appropriate scale of costs in circumstances where an appeal is frivolous and misconceived – solicitor-client costs.

This was an appeal by the State against an order of the National Court that it pay K2.65 million to the respondent as restitution for the same sum paid on his behalf to the State due to a mistake of fact. The respondent brought an action in unjust enrichment against the State based on its failure to pay to him K2.65 million paid on his behalf to the State after he was convicted of conspiracy and misappropriation and before sentence. His conviction was later quashed on appeal to the Supreme Court. In the National Court trial of the unjust enrichment action, the State filed no defence, offered no evidence and effectively conceded the claim. It made submissions only on the rate of interest payable to the respondent. The notice of appeal contained four grounds of appeal: the respondent had misled the Court by pleading in the statement of claim that he had paid K2.65 million to the State when in fact that amount was paid by someone else purporting to be on his behalf; the payment was not made under any mistake of fact; the trial judge erred in assuming that the company that paid K2.65 million to the State owed that amount to the respondent; the trial judge did not put the respondent to proof as to his losses and there was a denial of natural justice. Before the Supreme Court, the respondent asserted that the appeal ought to be summarily dismissed as, at the trial in the National Court, the appellant had not resisted the substantive claim, and was now raising points of law that were not raised at the National Court.

Held:

(1) The appeal was summarily dismissed on the Court’s own initiative under O 16, r 16(1)(c) of the Supreme Court Rules for being frivolous, in that: (a) the appellant was appealing against an order that it consented to, without providing an adequate explanation for doing so; and (b) the appeal was based on arguments that were not raised at the National Court, despite full opportunity to raise them being provided.

(2) If the appeal were not summarily determined, it would be dismissed on its merits.

(3) As it was a frivolous and misconceived appeal, the appellant was ordered to pay the respondent’s costs on a solicitor-client basis.

Cases Cited

The following cases are cited in the judgment:

Fairweather v Singirok (2013) SC1293
Maladina v The State (2016) SC1495
Maladina v The State (2019) N8039
The State v Maladina (2015) N6049

Counsel

G Nindil-Awesa, for the Appellant
I Molloy & M Muga, for the Respondent

24^th December, 2021

1. BY THE COURT: This is an appeal by the State against the order of the National Court that it pay K2.65 million to the respondent, Jimmy Maladina. It is an unusual appeal that arises from an unusual case in the National Court.

CRIMINAL PROCEEDINGS

2. The respondent, Jimmy Maladina, was in 2015 convicted in the National Court of offences of conspiracy and misappropriation regarding an allegation of conspiring with others to defraud the NPF Board of Trustees of K2.65 million by fraudulently increasing the construction cost of a building and dishonest application of that money. After conviction and before sentence he arranged for a company that he said was indebted to him for consultancy fees, to pay K2.65 million to the State as restitution. The State, which is the appellant in this appeal, received that money. The respondent was sentenced to eight years imprisonment, all of which was suspended after the Court took into account that full restitution of the K2.65 million had been made (The State v Maladina (2015) N6049).

3. The respondent in 2016 appealed to the Supreme Court against his conviction. His appeal was allowed and his conviction and sentence were quashed (Maladina v The State (2016) SC1495).

CIVIL PROCEEDINGS

4. The respondent requested the State to “repay” to him the K2.65 million paid on his behalf as restitution. His request was declined.

5. In 2017 he commenced civil proceedings in the National Court against the State, WS No 635 of 2017, pleading a cause of action in unjust enrichment. He was the sole plaintiff and the State was the sole defendant. He sought repayment to him of the K2.65 million, which he pleaded had been paid to the State under a mistake of fact, plus interest.

6. The case is unusual as we are not aware of any other case where a person has been convicted of an offence and paid restitution and then had their conviction quashed and then sought repayment of the restitution.

7. The State filed no defence but rather than the case being resolved through a default judgment, it went to trial. That was unusual too.

8. At the trial before Justice Dingake the respondent relied on two affidavits that were admitted into evidence. The State offered no evidence. After extensive submissions were made by counsel for the respondent (then the plaintiff), Mr Asigau, who had to deal with a proper and thorough interrogation from the trial judge as to the details of this unusual case, counsel for the State (then the defendant), Mr Monei, responded: “The State does not oppose the application, your Honour, because of the very fact that we do not have any evidence to rely on.” Mr Monei’s only quibble was about the amount of interest on the judgment sum. The respondent wanted eight percent but Mr Monei convinced his Honour that it should be only two percent. There was no claim for damages. His Honour delivered a written judgment three days after the hearing (Maladina v The State (2019) N8039).

9. An order was duly entered by which the State was ordered to pay the respondent K2.65 million plus interest at the rate of two percent per annum from the date of judgment, 11 October 2019.

APPEAL

10. It is against that order that the State appeals. That is unusual, as it did not oppose the order it now appeals against.

11. Four grounds of appeal are relied on:

1. the respondent misled the Court by pleading in the statement of claim that he had paid K2.65 million to the State when in fact that amount was paid by a third party purporting to be on his behalf;
   
2. the payment was not made under any mistake of fact;
   
3. the trial judge erred in assuming that the company that paid K2.65 million to the State owed that amount to the respondent;
   
4. the trial judge did not put the respondent to proof as to his losses and there was a denial of natural justice.
   

12. The appeal was heard on the papers in accordance with the Registrar’s Practice Direction No 3 of 2020 so we did not get the chance to raise with counsel for the appellant some obvious questions such as: Why is the State appealing against an order it did not oppose? How can the State succeed when none of the arguments raised in the appeal were raised in the National Court?

13. Our need to ask such questions has, however, been overcome by the opening submissions of Messrs Molloy and Muga, for the respondent, who contend that the appeal should be summarily dismissed because in the National Court the State did not file a defence, did not object to the respondent’s evidence, offered no evidence and did not oppose the claim except as to interest (and in that regard its submission was accepted). Furthermore, none of the arguments in the grounds of appeal were argued before the National Court.

14. None of those issues were addressed in the submissions of Ms Nindil-Awesa, for the State.

15. We uphold the opening submissions of counsel for the respondent. This is a frivolous and misconceived appeal. Though the order of the National Court was not in strict legal terms or described as a consent order, that’s what it in effect was. We are mindful of s 14(2) of the Supreme Court Act:

An appeal does not lie from an order of the National Court made by consent of the parties.

16. It is surprising that that provision was not referred to in submissions for the respondent.

17. Be that as it may, this is an appeal that requires summary determination. Though there is no formal application before us to summarily determine it, we can do the same thing on the own initiative of the Court under O 13, r 16(1) of the Supreme Court Rules 2012, which provides:

The Court may summarily determine a matter:

(a) on application by a party; or

(b) on referral by a Judge; or

(c) on the Court’s own initiative; or

(d) upon referral by the Registrar in accordance with the procedure set out in sub-rule (2) below or pursuant to s 11 of the Act.

18. We will summarily determine, and dismiss, the appeal for two reasons. First, as already explained, the State is appealing against an order that it consented to. This is prohibited by s 14(2) of the Supreme Court Act. Compelling reasons would need to be given before any appeal brought in such circumstances could be heard. No reasons at all have been provided.

19. Secondly, the appeal is based on arguments that were not raised at the National Court, despite full opportunity to raise them being provided. We acknowledge (as pointed out in written submissions for the respondent) that there are different lines of authority on this issue, which were addressed by the Supreme Court in Fairweather v Singirok (2013) SC1293 in the following terms:

The Supreme Court takes a strict approach when a party appealing against or seeking review of a decision of the National Court wishes to raise a new point of law not raised in the National Court. In fact it can be said to take two approaches as there are conflicting lines of authority as to how the Supreme Court should deal with such a situation. Both are strict approaches: one could be described as strict, and the other very strict.

The strict approach says that a party can raise in the Supreme Court a point of law not put before the National Court, but only if it seeks and obtains the leave of the Supreme Court to do so, this being the approach taken in cases such as Van Der Kreek v Van Der Kreek [1979] PNGLR 185, The Papua Club Inc v Nusaum Holdings Ltd (2005) SC812, Application by Herman Joseph Leahy (2006) SC 855, Telikom PNG Ltd v ICCC (2008) SC906 and Comrade Trustee Services Ltd v Arnold Daugle (2011) SC1105.

The very strict approach is the one that says that under no circumstances can a party raise in the Supreme Court a point of law not put before the National Court, this being the approach taken in cases such as MVIT v James Pupune [1993] PNGLR 370, PNGBC v Jeff Tole (2002) SC694, Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705, Curtain Brothers (PNG) Ltd v University of Papua New Guinea (2005) SC788 and Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853.

20. If we were to take the very strict approach, the State would be absolutely prohibited from raising these arguments. If we take the strict approach, we note that the State has neither sought nor been granted leave to raise the new arguments it is raising in the grounds of appeal. The result is the same. All arguments must be rejected as not being properly before the Court.

21. If we had been persuaded to entertain the merits of the appeal, the result would be the same. The respondent did not mislead the National Court. The respondent amply demonstrated the mistake of fact that led to the State being unjustly enriched. There was ample evidence that the payer of the sum of K2.65 million to the State was indebted in that sum to the respondent. The trial judge correctly put the respondent to proof. There was no denial of natural justice.

CONCLUSION

22. As the appeal is summarily dismissed for being frivolous and misconceived, we will order costs on a solicitor-client basis.

ORDER

(1) The appeal is entirely dismissed.

(2) The order of the National Court of 11 October 2019 in WS No 635 of 2017 is affirmed.

(3) The appellant shall pay the respondent’s costs of the appeal on a solicitor-client basis, which shall, if not agreed, be taxed.

__________________________________________________________________
Solicitor-General: Lawyer for the Appellant
Simpson Lawyers: Lawyers for the Respondent