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Cloudy Bay Sustainable Forestry Ltd v Pako F & C Holdings (PNG) Ltd [2022] PGSC 66; SC2260 (15 July 2022)

SC2260

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 126 OF 2021

BETWEEN:
CLOUDY BAY SUSTAINABLE FORESTRY LIMITED
Appellant

AND:
PAKO F&C HOLDINGS (PNG) LIMITED
Respondent

Waigani: Gavara-Nanu J, Yagi J & Murray J
2022: 25^th April, 15^th July

APPEAL – Notice of appeal - Objection to competency – Supreme Court Rules, 2012 (as amended) – Order 7 Rules 15 and 16 – Right of a party to file affidavit – Such affidavit should form part of Objection Book – Affidavit critically relevant where material to be relied upon is other than the Notice of appeal and Notice of objection to competency – Lack of supporting affidavit fatal.

Cases Cited:

Coca Cola Amati (PNG) Ptd v. Joshua Yanda (2012) SC1221
Christopher Haiveta v. Paias Wingti & Ors (No.2) [1994] PNGLR 189
Placer (PNG) Ltd v. Joshua Siaku Yako (2019) SC1764
Toale Hongiri Incorporated Land Group v. Volotou Incorporated Land Group (2012) SC1201

Counsel:

D. Dotaona, for the Appellant
G. Sheppard with M. Numi, for the Respondent

15^th July, 2022

1. BY THE COURT: The respondent objects to the competency of the Supplementary Notice of Appeal (Notice of Appeal) filed by the appellant against the whole of the judgment of the primary judge given on 20 September, 2021, at Waigani in respect of proceeding, WS No. 794 of 2014, Pako F & C Holdings (PNG) Limited v. Cloudy Bay Sustainable Forestry Limited. The primary judge found the appellant (defendant) liable to damages claimed by the respondent (plaintiff) and awarded an amount of K117, 480, 118.92 to the respondent with interest at 8%. The judge ordered that the amount be paid within 30 days from the date of service of the Orders. The judge further ordered that if the appellant failed to comply with the Orders, the 8% interest would continue to accrue until the whole amount was paid. Costs were ordered against the appellant.
   
2. The Notice of Appeal raised 14 grounds of appeal, which are pleaded in paragraphs 3.1 to 3.14.
   
3. The respondent raised 12 grounds of objection. These grounds are pleaded in paragraphs 1(a), (b)(i) and (ii), (c), (d), (e), (f)(i), (ii), (iii), (iv) and 2(a)(i), (ii) and (b) of the Objection to Competency.
   
4. In the grounds pleaded in paragraph 1(a) and (b)(i) and (ii), the respondent claims the Notice of Appeal failed to comply with Order 7 Rule 9 (e) of the Supreme Court Rules, 2012 (as amended) (Rules), because it does not comply with Form 8 of the Rules. The respondent also claims the Notice of Appeal failed to comply with Form 17 by not identifying on whose behalf the document was filed, contrary to Order 7 Rule 4 (a) of the Rules and the lawyers’ address was not the lawyers’ office address and not within 15 kilometers from the Registry, contrary to Order 11 Rule 4 (ii) and (iv) of the Rules. However, these grounds were abandoned by the respondent during hearing, the result of which is the Notice of Appeal remains competent regarding those grounds. The effect of the abandonment of these grounds is that these grounds of appeal are competent and, on that basis alone, the appeal cannot be dismissed it must proceed to be determined by the Supreme Court on these grounds, even if the remaining grounds of appeal are found to be incompetent and dismissed. The Objection to Competency on the other hand must fail for these same reasons. See, Coca Cola Amati (PNG) Ltd v. Joghua Yanda (2012) SC1221 and Toale Hongiri Incorporated Land Group v. Volotou Incorporated Land Group (2012) SC1201.
   
5. We also note that in paragraph 1(c) of the grounds of objection, the respondent alleges the Notice of Appeal is incompetent because it fails to comply with Order 7 Rule 26 in that the Notice of Appeal was not served on the primary judge’s Associate. We dismiss this ground of objection at the outset because at the hearing, the appellant proved by an affidavit of service that the Associate to the primary judge was served with a copy of the Notice of Appeal. This was not disputed or denied by the respondent.
   
6. Turning now to the 14 grounds of appeal, they may be summarized as follows:
   
   • (a) The primary judge erred in mixed fact and law in finding the appellant liable and awarding damages in favor of the respondent upon a Service Contract between it and the respondent which was a sham or illegal.
     
   • (b) The primary judge erred in mixed fact and law in assessing damages based on misinterpretation of the notice clause in the contract and the duration of the contract.
     
   • (c) The primary judge erred in mixed fact and law by making wrong findings regarding period of service provided by the respondent and the date by which the contract was terminated. Such findings resulted in the primary judge awarding damages which were speculative and excessive. This also resulted in awarding damages for which no service was provided by the respondent.
     
   • (d) The primary judge erred in mixed fact and law in awarding damages which were not pleaded in the Statement of Claim, and for which no service was provided by the respondent.
     
   • (e) The primary judge erred in mixed fact and law in awarding special damages for the cost of the respondent’s heavy machinery when there was no evidence that the machinery were lost or damaged
     
   • (f) The above erroneous findings resulted in the primary judge awarding damages with interest in favor of the respondent which had no basis in law and were excessive and unreasonable.
     
   • (g) The primary judge erred in fact and law by denying the appellant opportunity to respond to the affidavits filed by the respondent, thus breaching the principles of natural justice prescribed under s. 59(2) of the Constitution.
     
7. The remaining grounds of objection to be considered from those which have either been abandoned or dismissed are pleaded in paragraphs 1(d)(e) and (f) and 2 of the Objection. Under these grounds, the respondent argued that the claims by the appellant under the following grounds of appeal are incompetent:
   
   1. Paragraphs 3.1 and 3.2(a), (b), (c), (d), (e), (f) and (g), raise issues which are res judicata as they were already dealt with in liability in which the primary judge had already decided and entered judgment against the appellant, thus, the appellant cannot raise and rely on them.
      
   2. Paragraphs 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12 and 3.14 fail to comply with Order 7 Rule 9 of the Rules because they fail to plead the particulars of those grounds. Those grounds also fail to comply with Order 7 Rule 10 of the Rules by not pleading the particulars of the grounds to demonstrate that they are against the evidence and weight of the evidence or specify reasons why the primary judge was wrong in law. These grounds also fail to identify the circumstances which gave rise to the primary judge erring in the exercise of his discretion. Furthermore, these grounds are based solely on questions of fact for which leave was required, but leave has not been sought or granted, pursuant to s.4(2)(c) and 14 (1)(c) of the Supreme Court Act, Chapter No. 37.
      
8. Under, ground 2 of the Objection, the respondent claims the Notice of Appearance wholly failed to comply with Order 11 Rule 4(a)(b) of the Rules by not identifying the name of the person on whose behalf the document was filed, and the address for service does not comply with Form 17 of the Rules. We dismiss this ground for being misconceived for two reasons. First, no Appearance has been filed by the appellant under Order 11 Rule 4 (a) and (b) for good and valid reasons. Second, these are general provisions which require a “respondent” being first served with the initiating process to file an Appearance. It does not apply to the appellant. This ground of objection therefore is an abuse of process.
   

Other considerations

9. The respondent’s objection to competency is filed under Order 7 Rules 15, 16, 17 and 18 of the Rules. These Rules are prescribed under Division 5 which are in these terms:
   

Division 5—Objection to competency of appeal

15. A respondent who objects to the competency of an appeal or of an application for leave to appeal shall, within 14 days after service on him of the notice of appeal—

(a) file an objection in accordance with form 9; and

(b) serve a copy of the objection on the appellant.

16. Any party may file affidavits.

17. An objection of which notice has been given shall be determined by the court at or before the hearing of the appeal or of the application for leave to appeal as the court thinks proper.

18. Upon the hearing of the application the burden of establishing the competency of the appeal is on the applicant.

19. If notice of objection is not given and the appeal or the notice of application for leave to appeal is dismissed as incompetent, the respondent shall not receive any costs of the appeal unless the court on special grounds orders otherwise.

10. In the circumstances of this case, Rule 16 is critically important. The Rule gives allowance for a party to file affidavits particularly where the party relies on material either in support of the competency of the appeal or objection to the competency of the appeal. In the case of the latter, such material should form part of the Objection Book. In this instance, the respondent has claimed that grounds of appeal 3.1, 3.2 (a), (b), 3.3 (a), (b), (c), (d), (e), (f) and (g) are res judicata and the appellant cannot rely on them because issues arising from these grounds have already been decided by the primary court on liability. However, the decision of the primary judge is not before the Court. The Court is therefore deprived of making proper determination of the issue. The onus is on the respondent to produce the decision to the Court as the party placing reliance on the decision to prove that those grounds are indeed res judicata and therefore incompetent. Thus, the Court is unable to make any determination regarding the grounds of objection pleaded in ground 1(d) and (e). These grounds must therefore be dismissed.
    
11. We are then left with the grounds of objection pleaded in paragraph 1(f)(i), (ii), (iii) and (iv) to consider. Under these grounds, the respondent claims grounds 3.3 to 3.14 of the notice of appeal are incompetent because they fail to comply with Order 7 Rules 9 and 10 of the Rules, that is, they fail to state particulars as to how and why the decision appealed is against the evidence and the weight of evidence and fail to state the reasons why the primary judge erred in fact and law.
    
12. Under these grounds, the respondent also claims the appellant failed to state how the primary judge failed to properly exercise his discretion. The respondent further claims that under these grounds, the circumstances which gave rise to the exercise of discretion by the judge is a question of fact for which leave is required but no leave has been sought or granted pursuant to s.4(2)(c) and 14(1)(c) of the Supreme Court Act, Chapter No.37.
    
13. The counsel for the appellant argued that the objection by the respondent that the Notice of Appeal failed to comply with Order 7 Rules 9 and 10 of the Rules, should be dismissed because the objection also fails to comply with Order 7 Rule 15(a) because it does not comply with Form 9. The objection is in that regard incompetent. Looking at the objection we accept the appellant’s argument that the objection fails to comply with Forms 9 and 17, thus the objection is itself incompetent.
    
14. We also find the above-mentioned grounds of objection lacking clarity and are ambiguous. On the other hand, we find the grounds of appeal pleaded in paragraphs 3.3 to 3.14 which the above-mentioned grounds of objection are challenging, have been sufficiently pleaded and particularized. The grounds in our view sufficiently plead the reasons why the trial judge’s decision was against the evidence and the weight of the evidence. In our view the respondent has been sufficiently informed of the issues raised under these grounds of appeal. We therefore find these grounds of appeal competent. See, Christopher Haiveta v. Paias Wingti & Ors (No.2) [1994] PNGLR 189 at 194. The grounds of appeal have also been pleaded clearly and particularized; thus, we find no ambiguity in them. See, Placer (PNG) Ltd v. Joshua Siaku Yako (2019) SC1764. The grounds of objection raised against these grounds of appeal are therefore dismissed.
    
15. The Objection is for these reasons dismissed.
    
16. The respondent will pay the appellant’s costs of and incidental to this Objection which are to be taxed if not otherwise agreed.
    

Orders accordingly.
________________________________________________________________
Dotaona Lawyers: Lawyers for the Appellant
Young & Williams Lawyers: Lawyers for the Respondents