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Pagen v Ilarupa [2023] PGSC 167; SC2527 (26 September 2023)

SC2527

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 141 OF 2022 (IECMS)

BETWEEN:
RICHARD PAGEN
-First Appellant –

AND:
OMBUDSMAN COMMISSION OF PAPUA NEW GUINEA
-Second Appellant-

AND:
NEROL ILARUPA
-First Respondent-

AND:
ALEXIA LUKE
-Second Respondent-

AND:
MIRIAM WAWE
-Third Respondent-

AND:
GENLY MALAWE
-Fourth Respondent-

Waigani: Bona J, Auka J, & Numapo J

2023: 26^th September

SUPREME COURT APPEAL - Leave to Appeal - National Court interlocutory decision - Section 14(3) (a) of Supreme Court Act – Principles of res judicata – Abuse of process of the Whistle Blowers Act 2020.

PRACTICE AND PROCEDURE - Applicable criteria for leave to appeal – arguable case – decision within the discretion of the trial judge – primary rights of the parties affected – substantial injustice caused if decision is allowed to stand – Appellant has not shown that the trial process should be interrupted by an appeal – Leave refused.

Cases Cited:
State v. John Tuap (2004) SC765
William Powi v. Southern Highlands Provincial Government (2006) SC8440
Sir Julius Chan v Ombudsman Commission of PNG [1999] PNGLR 240
Pato v Manjin [1999] PNGLR 6
Oberia v The State (2005) SC80
Sekesu Sisapi Land Group Inc. v. Turama Forest Industries Ltd (2008) SC976
Lyons Putupen v. Enga Provincial Government (2009) SC1035
Breckwoldt v. Gnoyke (1974) PNGLR 106
Lord & Co. Ltd v Timothy Inapero [2010] SC1081
Rimbink Pato v. Anthony Manjin & Ors SC622
Waim No 85 Ltd v. Independent State of Papua New Guinea [2015] PGSC 34; SC1405
Titi Christian v. Rabbie Namaliu (1996) SC1583
Kante Mininga v The State & Ors N1458
Bale Kitipa v, Vincent Auali & Ors N1773
Kalaut v Thompson [2015] SC1551

Counsel:

Mr. S. Phannaphen, for the First Appellant
Mr. Keda, for the Second Appellant
Mr. D. Dotaona, for the Respondents

DECISION

26^th September 2023

1. BY THE COURT: Appellants sought leave to appeal against an interlocutory decision of the National Court made on 31 August 2022 whereby the primary judge refused the first appellant’s part of the notice of motion filed on the 22 August 2022 to dismiss the respondents’ claim for being res-judicata and an abuse of process under the Whistle Blowers Act 2020.

2. The notice of motion in the National Court sought the following orders:

(i) The entire proceedings be dismissed pursuant to Order 12 Rule 40 (1) of the National Court Rules 1983 (NCR) for lack of compliance of section 5 of the Claims By and Against the State Act;

(ii) Alternatively, pursuant to Order 12 Rule 40(1) (c) of the NCR:

• (a) the claim for relief in respect of the appointment of the first defendant as the Chief Ombudsman be dismissed in its entirety for the claims being res judicata; and
  
• (b) the claim for relief under the Whistle Blowers Act 2020, be dismissed in its entirety for lack of compliance of pre-conditions under section 12(1) of the Whistle Blowers Act 2020.
  

(iii) In the event that Order 2 is granted, an Order that the first defendant be removed as a party pursuant to Order 5 Rule 9 (b) of the NCR.

(iv) Subject to Orders (1) and (2) above, an Order that the Ombudsman Appointment Committee and the Independent State of Papua New Guinea be joined into this proceedings pursuant to Order 5 Rule 8(1) of the NCR.

(v) Costs of the application and/or the proceedings to be paid by the plaintiff.

(vi) Any further Order that the Court deems fit.

B. BACKGROUND

3. The National Court proceedings were instituted by four former employees of the Ombudsman Commission (second appellant) challenging their retrenchment from their employment. The first respondent was the Finance Manager, second respondent – IT Manager, third respondent – Policy & Planning Manager and fourth respondent – Logistic Manager.

4. The first and fourth respondents started employment with the Ombudsman Commission in 1999 whilst the third respondent and the first respondent commenced their employment in 2005 and 2007 respectively.

5. As part of the internal restructuring, certain positions within the organization were re-advertised and those who were not successful were placed on retrenchment. The respondents were included in the list of those retrenched on 17 December 2019.

6. On 12 February 2021 the respondents appealed against the decision on their retrenchment. In its meeting on 16 February 2021, the second appellant considered the request for their reinstatement but reaffirmed the decision to relieve them of their services by placing them on the redundancy list. The retrenchment notices were served on the respondents on 17 February 2021.

7. The respondents claimed that the appointment of the first appellant as Chief Ombudsman was unconstitutional and that he was not qualified to be appointed to the position. Furthermore, that the first appellant had acquired a gift or benefit in breach of section 8(1) of the Organic Law on Ombudsman Commission, and has practiced cronyism and nepotism in the appointment of staff at the Ombudsman Commission and made financial decisions contrary to law, and claims on breaches of human rights. Respondents sought declaratory relief and damages and costs of the proceedings.

C. INTERLOCUTORY DECISION

8. The first appellant seeks to appeal against the interlocutory decision of the primary judge to dismiss paragraphs 2(a) and (b) of the first appellant’s notice of motion filed on 22 August 2022. Appellant sought two orders; leave to appeal the interlocutory decision of the primary judge, and if leave is granted, stay the proceedings.

9. On 8 November 2022 the first appellant moved its application for leave to appeal the interlocutory judgment of the primary judge made on 31 August 2022 before a single judge of the Supreme Court pursuant to section 14 (3) of the Supreme Court Act. The application for leave to appeal was however, dismissed with costs under s.10 (1) (a) of the Act. Being aggrieved by the decision of the single judge, the first appellant exercised his rights under s.10 (2) and in accordance with Order 11 Rule 27 of the Supreme Court Rules 2012 applied to the full Supreme Court to have the matter determine by the Court. Where leave is refused by a single judge, the applicant has the right to pursue the same leave application before the full Supreme Court; (State v. John Tuap (2004) SC765; William Powi v. Southern Highlands Provincial Government (2006) SC8440).

10. Order 11 Rule 27 states: ‘where a judge refuses an order on application pursuant to s. 10 (1) of the Act, that application shall not stand dismissed, but shall remain on foot, and the same application may be moved before the Court pursuant to s.10 (2) of the Act, provided that a written request on that behalf is served on the Registrar within 14 days of the order refusing relief.’

11. Although, it is not clear to us if the first appellant has given such written request to the Registrar as required by the rules, we are satisfied nonetheless that the application for leave to appeal is properly before the Court.

D. LEAVE TO APPEAL –APPLICABLE CRITERIA

12. Leave to appeal is a screening process to making sure that the appeal has merit. There are certain applicable criteria that must be met if leave is to be granted. Granting of leave is at the discretion of the Court. The position in law on leave to appeal an interlocutory judgment was stated in the Supreme Court case of Sir Julius Chan v Ombudsman Commission of PNG [1999] PNGLR 240; which held that:

“To obtain leave to appeal an interlocutory judgment, it is not simply a matter asserting there is an arguable case; that there has been some error. It is not the case that every error will affect the outcome of the substantive proceedings. What must be shown is, not only that there is patent error, but also that the error affects a party’s substantive rights or will prevent the proper determination of the issues. That is, there is error in the interlocutory judgment that goes to jurisdiction.”

13. The decision from that case established two important policy considerations pertaining to the requirement of leave to appeal from interlocutory decisions of the National Court under s.14(3)(b) of the Supreme Court Act. The first, is the need to uphold the function of the Courts of the National Judicial System to ensure that the tribunal empowered by law with the jurisdiction to hear and determine a matter is able within the scope and discretion of that jurisdiction, to conduct and order its own proceedings. Secondly, that the interlocutory judgments, not being final orders may be vacated or varied by the court that issued them. A Court in making interlocutory decisions is not functus officio. Rulings so made, are open to vacate or vary upon application under the rules of that Court.

14. Leave to appeal is unlikely to be given in circumstances where the judgment challenged may have little or no bearing on the final determination of the issues between the parties; leave should not be given where by the rules of the court, there is obvious recourse for further application on the matter, nor should leave be given where the ruling is within the discretion of the Court and discloses no obvious breach of principles (Sir Julius Chan v. The Ombudsman Commission (supra)).

15. We are required to satisfy ourselves, without descending into the merits of the case, that the proposed appeal raises issues of law and fact which are fairly arguable and require further judicial deliberations. In Micah v. Lua [2015] SC1445, the Supreme Court said:- “a person who seeks to challenge a primary judge’s exercise of discretion must show an error of principle”. In Pato v Manjin [1999] PNGLR 6, the Supreme Court said that an applicant for leave must advance – “cogent and convincing reasons or exceptional circumstances. There must be clear legal grounds meriting an appeal, and he must have an arguable case”.

16. We are further guided by the applicable criteria for leave to appeal set out by Lay J (as he then was) in Oberia v The State (2005) SC801 (12 October 2005) which includes:

(i) Is there an arguable case?
(ii) Is the decision within the discretion of the trial judge?
(iii) Does the decision have any bearing on the final determination of the matter?
(iv) Does the appellant have other recourse to the Court below?
(v) Does it affect the primary rights of the parties?
(vi) Will substantial injustice be caused by allowing the decision to stand?
(vii) Has cause been shown that the trial process should be interrupted by the appeal?

17. These criteria were later adopted and applied in other cases such as; Sekesu Sisapi Land Group Inc. v. Turama Forest Industries Ltd (2008) SC976, and Lyons Putupen v. Enga Provincial Government (2009) SC1035.

E. APPLYING THE CRITERIA FOR LEAVE

18. We have considered the first appellant’s application for leave to appeal against the interlocutory decision of the primary judge given on 31 August 2022 whereby Her Honour refused part of notice of motion to dismiss the respondents’ claim for being res-judicata and abuse of process under Whistle Blowers Act 2020.

(i) Arguable case

19. The main criteria to be established for leave to appeal is that there is an arguable case. The onus is the applicant to show an arguable or prima fascie case that the decision of the trial judge was wrong and that substantial injustice will be done by leaving the erroneous decision unrevised; (Breckwoldt v. Gnoyke (1974) PNGLR 106.) Applicant is required to persuade the Court to exercise the decision in its favour; (Lord & Co. Ltd v Timothy Inapero [2010] SC1081).

20. To grant leave, we need to be satisfied that there is an arguable or prima fascie case showing an error in the decision of the primary judge or that the Court has reached a wrong conclusion not supported by law and therefore, substantial miscarriage of justice has occurred.

21. Applicant is required to demonstrate an arguable case and must show clear legal grounds meriting an appeal. It may not be necessary, in our considered opinion, for the applicant to present before this Court cogent and very convincing reasons or exceptional circumstances for leave to appeal an interlocutory decision. In that regard, the decision in Rimbink Pato v. Anthony Manjin & Ors SC622 requiring cogent and convincing evidence has made it difficult to seek leave. The minimum requirement is that the applicant must be able to show that an arguable case exists on a question of law that it does not necessarily require evidence that involved facts. In addition, the requisites for leave to appeal an interlocutory decision is quite distinct from leave to appeal on questions of fact only. The difference is that, when a court determines that leave was not sought for appealing from an interlocutory decision, the appeal may be declared incompetent and consequently dismissed. As regards to questions of fact, if the Court determines that a ground of appeal mounted in the notice of appeal or notice of motion raises questions of fact only, but leave was not obtained, the offending ground will be struck out and the appeal will proceed on the competent grounds; (Kalaut v Thompson [2015] SC1551). Again, the important consideration is that applicant must show an obvious error in the decision of the trial judge, or that the conclusion reached by the Court is wrong in law, therefore, an arguable case exists.

22. The two main issues advanced by the appellant in this application for leave to appeal was on res judicata and abuse of process under the Whistle Blowers Act 2020. We address these two issues separately as follows:

(ii) Res Judicata

Appellants submitted that there is an arguable case on the issue relating to the appointment of the first appellant as the Chief Ombudsman. The matter has already been judicially determined when, one, Mr Howard Maliso challenged the appointment of the first appellant in a judicial review proceedings styled; OS (JR) No. 33 of 2020 (IECMS) Howard Maliso –v- Richard Pagen & Others and sought leave to review the appointment but leave was refused with costs.

23. The substantive relief sought by the respondents was the revocation of the appointment of the first appellant as the Chief Ombudsman. According to the appellants the same issues have been dealt with, adjudicated and settled. The Court in that case held that;

(i) Hearsay information and privileged or confidential communications to the Ombudsman Appointment Committee (OAC) are not admissible evidence”.

(ii) The OAC has an unfettered discretion to appoint the Chief Ombudsman and the two Ombudsmen, thus its decisions are not subject to judicial review; and

(iii) The plaintiff in that matter, though he was one of the Ombudsmen at the time lacked standing to seek leave of the Court to review the decisions of the OAC.

24. On that basis, the appellants submitted that the matter in relation to the appointment of the first appellant as Chief Ombudsman be dismissed for being res-judicata.

25. In support of the argument, the first appellant referred to the Supreme Court decision in Waim No 85 Ltd v. Independent State of Papua New Guinea [2015] PGSC 34; SC1405 where the Court said: “An essential pre-requisite for a matter to be regarded as res judicata is that the earlier judicial determinations followed a hearing on the merits of the matter which is before the court in the later hearing”.

26. We do not see how the decision in Waim No 85 Ltd v. State (supra) could advance the appellant’s case for the reason that the decision in that case was made following a hearing on the merits of the matter (emphasis ours). As regards to Maliso v. Marape, it was an application for leave for judicial review which was refused. With leave being refused, the substantive matter relating to the appointment of the first appellant as Chief Ombudsman has not been judicially determined on merits. The substantive relief sought were not granted because leave was refused. On that basis, the matter is not res judicata.

27. Secondly, although, some aspects of the claim by the respondents relates to the same issue (i.e. appointment of the first appellant as Chief Ombudsman), the factual circumstances giving rise to the claims are not the same with that of Maliso v, Marape. We considered that the issues of facts and law are not identical. The losses suffered and damages sought are also not the same. The present case involves employees of the second appellant challenging their retrenchment. They do not wish to be retrenched. The earlier proceedings instituted by Howard Maliso was in relation to the position of Chief Ombudsman. He was one of the applicants for the position but was unsuccessful. He then decided to challenge the decision of the Ombudsman Appointment Commission through a judicial review but leave was refused. He was not a retrenched staff. The circumstances of these two cases are totally different.

28. We concluded therefore, that there is no privity of interest between the two parties. There is no substantive legal relationship between the respondents and Howard Maliso. The two parties are different as well as their respective claims. The decision in Titi Christian v. Rabbie Namaliu (1996) SC1583 therefore, is irrelevant and does not apply here.

29. Based on what we have said so far, we are satisfied that the matter is not res judicata and accordingly, we upheld the decision of the primary judge.

(ii) Abuse of Process

30. As regards to the claim on abuse of process under the Whistle Blowers Act 2020, appellants submitted that the respondents filed their complaints after they have left their employment with the second appellant. They were no longer employees within the definition of the Act and cannot make any such protected disclosure that is likely to attract occupational penalties that gives an employee the right to protection and any other statutory claim therein.

31. Appellants submitted that a Deed of Release was executed between the respondents and the second appellant after the respondents’ were paid their final entitlements. Consequently, the respondents are no longer employees of the second appellant and therefore, not entitled to bring proceedings under the Whistle Blowers Act 2020 hence, an abuse of process.

32. The issue raised by the appellants relates to the interpretation and application of the Whistle Blowers Act 2020. We considered that this is a matter for evidence at the substantive hearing. As to whether or not the respondents are entitled to bring proceedings under the Act is to be determined when all the evidence are in. Considerations such as the employment status of the respondents and their standing to bring proceedings under the Act are matters for evidence. We therefore, affirmed the decision of the Court below. The trial judge had correctly ruled that the issue in relation to abuse of process is a matter for evidence at the substantive hearing.

(iii) Has cause shown that the trial process should be interrupted by the appeal?

33. As the appeal is against an interlocutory judgment of the Court below, to grant leave we need to be satisfied why the ordinary process of trial and determination of the issues should be interrupted by an appeal procedure. There has to be a good reason or cause that the court empowered by law to try the issues between the parties should not be allowed to do so and that notwithstanding an order made in the National Court is interlocutory only, it is of such a nature that it requires the intervention of the Supreme Court.

34. The first appellant had not demonstrated to our satisfaction why we should intervene and interrupt the proceedings in the Court below. The only ground raised was that a similar case challenging the appointment of the first appellant as Chief Ombudsman has previously been raised by another employee of the second appellant and the Court has already dealt with the matter and refused leave to review the appointment therefore, the matter is res judicata. Secondly, the respondents are no longer employees of the second appellant and are not entitled to bring proceedings under the Whistle Blowers Act 2020.

35. We have already given our rulings in respect to these two issues and have refused both. We are not convinced that the first appellant has made out a case warranting the intervention of the Supreme Court on this matter. Furthermore, we find no reason to stop the proceedings in the Court below and there is no good cause shown to do so. The Court below is sufficiently vested with the jurisdiction to competently try the issue between the parties and it must be allowed to do so without the interruption or intervention of the Supreme Court.

(iv) Exercise of discretion

36. The next applicable criteria concerns the discretion of the trial judge. Has the applicant shown that the exercise of the discretion was manifestly unreasonable, exercised on wrong principle or a mistake of fact?

37. Injia DCJ (as he then was) in Kante Mininga v The State & Ors N1458 and Bale Kitipa v, Vincent Auali & Ors N1773 held that any judicial discretion must be exercised judicially and not capriciously and listed some examples such as;

(a) prejudice to the rights of the co-defendants;
(b) pleadings too vague;
(c) pleadings do not disclose a good cause of action; and
(d) default judgment cannot be substantiated in law.

38. The first appellant has not addressed the Court on this criterion relating to discretion of the court on why he think the trial judge’s exercise of discretion was unreasonable or based on a wrong principle. Appellant’s extract of submission made no reference to the exercise of the discretion.

39. We are satisfied that the decision to refuse part of the notice of motion filed by the first appellant was well within the discretion of the Court below. First appellant had not sufficiently demonstrated to us that the exercise of the discretion was wrong, unreasonable or based on a wrong principle of law or mistaken fact. The refusal to grant the orders sought is not an error of fact or law. We concluded therefore, that the trial judge had correctly exercised her discretion in refusing the motion.

(v) Decision have any bearing on the final decision

40. The appellants have not specifically addressed the Court on whether or not the decision would have any bearing on the final determination of the case. In any event, we found no reason to think that it would. The issues between the parties are still pending and will be determined on its own merits at an appropriate time. We are satisfied that the decision does not have any bearing on the final determination of the case.

(vi) Primary rights of parties

41. We also considered that the primary rights of the first appellant are not affected by the interlocutory decision. The decision of the primary judge to refuse part of his motion does not bring the matter to an end nor does it prevent the same issues from being fully determined on merits in the Court below.

(vii) Substantial Injustice

42. We do not believe that substantial injustice will be suffered by the appellants if the decision is allowed to stand. The first appellant will be able to fully exercise his rights to have a trial on the issue in the Court below. As such, his rights to a full trial has not been exhausted, so to say. Delay in getting the matter to trial in the meantime, and some incidental costs of trial may be a burden to him but any litigation has the potential to incur costs, and this case is no exception.

F. CONCLUSION

43. All in all, we conclude that the first appellant has not made out an arguable case to be granted leave to appeal the interlocutory decision of the Court below and accordingly, we refuse leave.

G. ORDER

1. Leave to appeal is refused.

2. Appellants to pay the costs of this appeal on a party/party basis, to be taxed, if not agreed.

__________________________________________________________________
Lhyrn Lawyer: Lawyers for the Appellants
Dotaona Lawyers: Lawyers for the Respondents