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ISAS Ltd v Nutley [2023] PGSC 84; SC2443 (12 August 2023)

SC2443

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 49 OF 2023

BETWEEN:
ISAS LIMITED
Applicant

AND:
SIMON NUTLEY
First Respondent

AND:
PETER LOWING
Second Respondent

AND:
STEPHEN LEWIN
Third Respondent

AND:
MICHAEL SULLIVAN
Fourth Respondent

AND:
JOHN LEAHY
Fifth Respondent

Waigani: David, J
2023: 3^rd & 12^th August

PRACTICE & PROCEDURE – application for leave to appeal from final judgment of the National Court – proper principles – exercise of discretion - Supreme Court Act, ss.10(1)(a) and 14(1)(c).

Cases Cited:
Waghi Savings and Loan Society Ltd v Bank of South Pacific Ltd (1980) SC185
Sir Julius Chan v The Ombudsman Commission of Papua New Guinea [1999] PNGLR 240
Boyepe Pere v Emmanuel Ningi [2003] PNGLR 58
Oberia v Charlie (2005) SC801
Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853
Wawoi Guavi Timber Company Ltd v Ken Mondia (2007) SC1028
Ramu Nico Management Ltd v Joe Koroma (2009) SC1046
Hon. Patrick Pruaitch v Chronox Manek (2010) SC1052
Motor Vehicle Insurance Ltd v Niugini Nominees Ltd (2014) SC1334
Bank of South Pacific Ltd v Robert Tingke (2014) SC1355
Hon. Ano Pala & The State v Sam Koim (2015) SC1436
Pioneer Security Services v Niusky Pacific (2021) SC2088

Counsel:
Wilson Mininga, for the Applicant
Ronald J. Webb SC with Loretta Damien, for the Respondents

JUDGMENT

12^th August 2023

1. DAVID, J: INTRODUCTION: This is an application to a single judge of the Supreme Court seeking leave to appeal against part of the final judgment of the National Court given on 29 March 2023 to dismiss the proceedings, WS No.800 of 2016 between ISAS Limited and Simon Nutley, Peter Lowing, Stephen Lewin, Michael Sullivan and John Leahy (the Second National Court Proceedings) following a trial on both liability and quantum pursuant to s.14(1)(c) of the Supreme Court Act.
   
2. In the Second National Court Proceedings, the Applicant claimed damages against the Respondents for negligence or professional negligence in the prosecution of its claim against Telikom Limited (Telikom) in proceedings WS No.705 of 2007 where it claimed damages for alleged breach of a contract of a Distributorship Agreement entered into between the Applicant and Telikom executed on or about 3 February 2006 for the distribution by the Applicant of Prepaid Telephone Cards (Telikads, Prepaids for mobile phone services and Rait prepaids) in Papua New Guinea (the Prior National Court Proceedings). The Prior National Court Proceedings were dismissed for want of prosecution on 26 March 2013 and unsuccessfully appealed in the Supreme Court by its dismissal on 10 September 2014 following a contested hearing. In the Second National Court Proceedings, the primary Judge held that the Applicant failed to establish that there was a breach of duty of care on the part of the Respondents.
   

APPLICATION FOR LEAVE TO APPEAL

3. The Application for Leave to Appeal (the Application for Leave) was filed on 5 May 2023. The Applicant relies on and reads the Affidavit of Wilson Mininga sworn on 30 May 2023 and filed on 31 May 2023.
   
4. The question involved in the Application for Leave relates to the primary Judge’s finding of fact that the directional orders made in the Prior National Court Proceedings of 2 September 2008, 16 November 2011 and 23 October 2012 or the minutes of those directional orders were not in evidence before the Court. If leave is granted, the proposed ground of appeal is:
   

The primary Judge erred in fact by finding that the directional orders of 2 September 2008, 16 November 2011 and 23 October 2012 or their minutes were not in evidence before the Court when:

(a) The directions of 2 September 2008 were in evidence annexed to the Affidavit of Stuart Fancy of the Applicant;
(b) Evidence of the directions of 16 November 2011 and 23 October 2012 was contained in the affidavit of Philip Aeava annexed to the affidavit of Stuart Fancy; and
(c) The directions were referred to and summarised in the decisions of the National Court and Supreme Court annexed to the affidavit of Stuart Fancy.

5. The Applicant states that the reasons why leave should be given are:
   
   1. It seeks leave to appeal against part of the primary Judge’s judgment on a finding of fact.
   2. Leave is required under s.14(1)(c) of the Supreme Court Act.
   3. The primary Judge erred in his decision that the directional orders or minutes of the orders were not in evidence when the directional order of 2 September 2008 was in fact in evidence and there was evidence on the content or effect of the directional orders of 16 November 2011 and 23 October 2012.
      

BACKGROUND FACTS

6. As I have alluded to above, in the Second National Court Proceedings, the Applicant claimed damages against the Respondents for negligence or professional negligence. A Statement of Agreed and Disputed Facts and Issues for Trial was endorsed by the parties and filed on 16 March 2018. This will suffice for this purpose. It relates to both the Applicant’s claim and the Respondents’ cross-claim against one John Oswald-Jacobs. I set out below the relevant agreed and disputed facts relating to the Applicant’s claim.

Agreed Facts

7. The Appellant sued the Respondents who were legal practitioners practicing under various firm names including Peter Allan Lowing Lawyers and Leahy Lewin Nutley Sullivan Lawyers for negligence or professional negligence in the National Court.
   
8. On or about 3 February 2006, the Applicant entered into an agreement (the Agreement) with Telikom for the distribution of telephone cards in Papua New Guinea.
   
9. On 27 June 2007, the Applicant instructed the Respondents to commence proceedings in the National Court against Telikom claiming, inter alia, damages for breach of the Agreement and the Respondents accepted the Applicant’s instructions.
   
10. The Respondents considered the Agreement for purposes of preparing the Applicant’s claim against Telikom and provided legal opinion to the Applicant on the prospects of success of the Applicant’s claim based on the Agreement.
    
11. The Respondents issued the Prior National Court Proceedings.
    
12. In the course of the Prior National Court Proceedings:
    
    1. Directions were made on 2 September 2008, 16 November 2011 and 23 October 2012 requiring the Applicant through the Respondents and Telikom to take certain procedural steps (the Directions);
    2. The proceedings were listed for trial on 5 February 2013;
    3. As the lawyer for Telikom was not able to appear on 5 February 2013 for medical reasons, the Respondents agreed that they would have a lawyer attend Court and seek an adjournment by consent;
    4. The Respondents failed to have a lawyer appear on behalf of the Applicant in Court on 5 February 2013 meaning no adjournment by consent was sought;
    5. The Court dismissed the proceedings for want of prosecution on 5 February 2013 (the First Dismissal Order);
    6. The Respondents filed an application to set aside the First Dismissal Order on 6 February 2013 (the Setting Aside Application);
    7. Telikom through its lawyers thereafter filed an application on 7 February 2013 to dismiss the proceeding for want of prosecution (the Dismissal Application);
    8. On 26 February 2013, both the Setting Aside Application and the Dismissal Application were listed for hearing; and
    9. After hearing both applications on 26 February 2013, the Court gave judgment on 26 March 2013 setting aside the First Dismissal Order, but dismissed the proceedings upon determination of the Dismissal Application (the Second Dismissal Order) .
       
13. The Respondents, on behalf of the Applicant, unsuccessfully appealed the Second Dismissal Order to the Supreme Court in proceedings SCA No.36 of 2013 (the Appeal Proceedings).
    
14. As a consequence of the dismissal of the Appeal Proceedings, the Applicant’s claim against Telikom became statute barred.
    

Disputed Facts

15. Telikom repudiated the Agreement.
    
16. The relationship of the Applicant and the Respondents was at that time and at all material times that of a lawyer and client.
17. Accordingly, the Respondents owed the Applicant a duty of care requiring the Respondents to act by exercising all due care and skill in the pursuit of the Prior National Court Proceedings.
    
18. In the course of the Prior National Court Proceedings:
    
    1. the Directions were not complied with by the Respondents;
    2. in any event, the Respondents were not ready to proceed to trial on 5 February 2013 and had not, by that time, made any attempt to apply to vacate the trial dates to allow more time to prepare for trial;
    3. the Dismissal Application was not competent as it was filed at a time when the proceedings were not on foot as they had been dismissed by the First Dismissal Order; and
    4. the Respondents did not object to the competency of the Dismissal Application.
       
19. The Respondents owed the Applicant a duty of care requiring the Respondents to act by exercising all due care and skill in the pursuit of the Appeal Proceedings.
    
20. The Appeal Proceedings were unsuccessful because:
    
    1. the Respondents did not object to the competency of the Dismissal Application; and
       2. the Respondents had not filed affidavit evidence in the Prior National Court Proceedings sufficient to explain any reason for the delay or non-compliance in the Prior National Court Proceedings and as a result, were unable to raise such new evidence in the Appeal Proceedings.

LAW

21. Pursuant to s.14(1)(c) of the Supreme Court Act, an appeal lies to the Supreme Court from the National Court with the leave of the Supreme Court on a question of fact.
    
22. Pursuant to s.10(1)(a) of the Supreme Court Act, a single Judge may exercise the power of the Supreme Court to give leave to appeal. A “Judge” means a Judge of the Supreme Court: see s.1(1) of the Supreme Court Act. The power that is exercised is discretionary and the discretion must be exercised on proper legal principles: Bank of South Pacific Ltd v Robert Tingke (2014) SC1355, Pioneer Security Services v Niusky Pacific (2021) SC2088.
    
23. The purpose of seeking leave to appeal is for the Supreme Court to screen and allow only meritorious cases which are fairly arguable to go before it on appeal for judicial consideration: Sir Julius Chan v The Ombudsman Commission of Papua New Guinea (1999) PNGLR 240, Boyepe Pere v Emmanuel Ningi (2003) PNGLR 58, Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853, Wawoi Guavi Timber Company Ltd v Ken Mondia (2007) SC1028, Ramu Nico Management Ltd v Joe Koroma (2009) SC1046, Hon. Patrick Pruaitch v Chronox Manek (2010) SC1052, Motor Vehicle Insurance Ltd v Niugini Nominees Ltd (2014) SC1334, Hon. Ano Pala & The State v Sam Koim (2015) SC1436.
    
24. In addition, the requirement for leave ensures that the Supreme Court is not clogged by litigants simply reagitating matters of fact.
    
25. In Oberia v Charlie (2005) SC801, Lay J, after a comprehensive review of the authorities apposite to the question of whether or not to grant leave to appeal on particular facts, suggested the following principles to be considered in the exercise of the jurisdiction:
    
    1. Is there an arguable or prima facie case or has it been demonstrated that the trial judge was wrong?
    2. Does the appellant have other recourse in the court below?
    3. Was the ruling within the discretion of the court? Has it been shown that its exercise was manifestly unreasonable, exercised on a wrong principle or a mistake of fact?
    4. Does the decision have any bearing on the final determination of the issues between the parties? Will it affect the primary rights of the parties or prevent the determination of the issues?
    5. Will substantial injustice be caused by allowing the decision to stand?
    6. Has cause been shown that the trial process should be interrupted by an appeal?
       

ISSUE

26. The central issue that I need to determine is whether I should grant the Applicant leave to appeal.
    

CONSIDERATION

Arguable case

27. Mr. Mininga for the Applicant contends that it was an agreed fact that directions were made on 2 September 2008, 16 November 2011 and 23 October 2012 in the Prior National Court Proceedings for the Applicant through the Respondents to take procedural steps to prepare for the trial. He states that the primary Judge however found that the directions particularly those issued on 2 September 2008, 16 November 2011 and 23 October 2012 were not in evidence. It is submitted that primary Judge’s finding was contrary to the position taken by the parties as they were on common ground that directions were issued on 2 September 2008, 16 November 2011 and 23 October 2012.
    
28. In addition, it is argued that the directional orders of 2 September 2008, 16 November 2011, and 23 October 2012 or their minutes were in evidence before the Court as:
    
    • (a) the directions of 2 September 2008 were in evidence, annexed to the Affidavit of Stuart Fancy of the Applicant;
    • (b) evidence of the directions of 16 November 2011 and 23 October 2012 were contained in the Affidavit of Philip Aeava, annexed to the affidavit of Stuart Fancy of the Applicant; and
    • (c) the directions were referred to and summarised in the decisions of the National and Supreme Courts annexed to the affidavit of Stuart Fancy.
      
29. The Respondents through Mr. Webb submit that the Application for Leave is misconceived because the Applicant does not seek to appeal an error of fact, but an error of the primary Judge in failing to draw an inference or conclusion from material before him. He states that that is not an error of fact that falls under the rubric of or within the meaning of s.14(1)(c) of the Supreme Court Act so leave must be refused relying on Waghi Savings and Loan Society Ltd v Bank of South Pacific Ltd (1980) SC185 and Pioneer Security Services v Niusky Pacific (2021) SC2088.
    
30. I have considered the submissions and the material placed before me. I am satisfied that the Applicant has established an arguable case.
    

Other recourse in the Court below

31. The Applicant does not have any other recourse in the Court below.
    

Exercise of discretion

32. The Applicant is seeking leave to appeal against the part of the judgment of the primary Judge when he found that the directional orders made on 2 September 2008, 16 November 2011 and 23 October 2012 or their minutes were not in evidence. I have determined that the Applicant has an arguable case.
    

Final determination of issues between the parties

33. The Application for Leave is against part of the final judgment of the Court after a trial which effectively dismissed the Applicant’s claim against the Respondents in the Second National Court Proceedings.
    

Substantial injustice

34. The Respondents in their written extract of submissions submit that no substantial injustice will occur if leave is refused because even if the Applicant successfully argued the ground, the Supreme Court would not be likely to disturb the judgment at first instance, ie, the appeal would nevertheless be dismissed because:
    
    1. As the primary Judge noted, the pleaded claim was that the orders required the Respondents to do certain things whereas the evidence referred to in the ground of appeal suggests that the orders required that they were to be done by the Applicant;
    2. The primary Judge found that there was no pleading which particularised how an allegation that the Applicant had failed to comply with the orders because of a breach of duty by the respondents and no evidence that the Applicant’s non-compliance with the directions was due to such a breach of duty;
    3. The primary Judge consequently dismissed the claim based on non-compliance with the orders by the Applicant because it was not caused by a breach of duty; and
    4. The primary Judge:
       
       • (a) Recorded the uncontroversial principle that a lawyer’s duty includes a duty to act in accordance with client’s instructions;
       • (b) Found that the person who made it impossible for the trial in the Prior National Court Proceedings to commence was the Applicant’s representative, Mr. Stuart Fancy.
       • (c) Found that it was the Applicant, not the Respondents, which failed to prepare for the trial.
         
35. I will refrain from delving into the merits or otherwise of the proposed appeal for which leave is being sought.
    
36. Substantial injustice will be suffered by the Applicant if the leave is refused.
    
37. The proposed ground of appeal clearly demonstrates that there is an arguable case.
    

Interruption of trial process by an appeal

38. The Second National Court Proceedings have been determined following a trial. This requirement does not apply.
    

CONCLUSION

39. In the circumstances and in exercise of my discretion, I will grant leave.
    

COSTS

40. This is a contested application so costs will follow the event.
    

ORDERS

41. I now make the following orders:
    
    1. The Application for Leave to Appeal filed on 5 May 2023 to appeal against part of the decision of the National Court made at Waigani on 29 March 2023 in proceedings WS 800 of 2016 between ISAS Limited and Simon Nutley, Peter Lowing, Stephen Lewin, Michael Sullivan and John Leahy is granted.
    2. The Respondents shall bear the Applicant’s costs of and incidental to the application on a party-party basis which shall, if not agreed, be taxed.
    3. The Applicant shall file a Notice of Appeal in accordance with Order 7 Rule 6 of the Supreme Court Rules 2012.
       

Judgment and orders accordingly.

_____________________________________________________________
Bradshaw Lawyers: Lawyers for the Applicant
Leahy Lewin Lowing Sullivan: Lawyers for the Respondents