Lawyers coming from other jurisdictions often assume an appellant must put up security before the appeal can proceed. In Papua New Guinea the Supreme Court Rules start from the opposite position.
Order 7 Rule 24
Unless the court otherwise directs no security for costs of an appeal to the court shall be required.
No security is payable on filing. The registry does not require it, and an appeal is not held up for want of it.
The onus is on the respondent. Security exists only if the Court directs it, and the Court will not direct it of its own motion in the ordinary case. A respondent who wants security must apply.
The power is discretionary. “Unless the court otherwise directs” is unconfined. There is no list of conditions in the Rule.
Section 5 of the Act
Section 5(1) of the Supreme Court Act provides that where an appeal is pending —
(c) an order in any proceedings (other than criminal proceedings) for security for costs; and
(d) an order dismissing an appeal in any proceedings (other than criminal proceedings) for default in furnishing security,
may be made by a Judge.
Section 5(2): such an order shall be deemed to be a direction or order of the Supreme Court. Section 5(3): it may be discharged or varied by the Supreme Court.
Both paragraphs are expressly limited to proceedings other than criminal proceedings. Security for costs cannot be ordered against an appellant in a criminal appeal, and an appeal cannot be dismissed for failing to furnish it.
The same distinction appears in Order 7 Rule 22, which excludes criminal appeals from the costs liability on discontinuance.
The kinds of case
Rule 24 gives no criteria, so the discretion is exercised on general principles: is there reason to think that, if the appeal fails, the respondent will not recover the costs?
The situations that recur are —
The appellant is a company in financial difficulty, so that a costs order would be unenforceable in practice.
The appellant is resident outside the jurisdiction with no assets in Papua New Guinea, so that enforcement would require proceedings abroad.
The appellant has not paid an existing costs order — often the costs of the trial, or of an earlier interlocutory application.
The appeal is weak, though this is rarely decisive on its own and shades into the merits.
That the appellant is a natural person of limited means. Security is not to be used to shut a poor litigant out of the Court — an argument with constitutional weight, given the guarantee of the protection of the law in section 37 of the Constitution and the right of access reflected in the appeal provisions themselves.
That the appellant’s impecuniosity was caused by the conduct complained of in the litigation.
That the application was made late, after the appellant has incurred the cost of preparing the appeal.
Procedure
Order 13 Rule 15 provides that all applications for interlocutory orders must contain a concise statement of the Court’s jurisdiction to grant the orders being sought, that (urgent applications aside) they shall be made to the Duty Judge on a scheduled motions day, and that all applications shall be made in Form 4.
So an application for security is made in Form 4, not by notice of motion, and must state the jurisdiction relied on — Order 7 Rule 24 and section 5(1)(c) of the Act.
Support it with an affidavit going to the appellant’s financial position, any unpaid costs orders, and the respondent’s estimated costs of the appeal.
Kawaso Ltd v Oil Search (PNG) Ltd [2010] PGSC 34; SC1082 held, on an application for a stay, that the proper manner of applying is by an application using Form 4, and that an application made by notice of motion is incompetent and may be struck down. The applicant must also state the nature of the application and the grounds in the application itself.
The same discipline should be applied to any interlocutory application in the Supreme Court.
Apply early
An order made after the appeal book has been settled and submissions filed protects very little. The point of security is to hold the costs that are about to be incurred.
A respondent who intends to apply should do so soon after entering an appearance under Order 11 Rule 2, and in any event before the appointment to settle.
The same application can conveniently deal with an objection to competency, which must in any case be filed within 14 days of service.
If an application is made against you
The starting point is against security. Rule 24 says none shall be required unless the Court directs otherwise. Make the respondent justify a departure from that.
Delay. An application made months into the appeal, after the appeal book has been prepared, protects little and looks tactical.
Access to the Court. Where the sum sought would end the appeal, say so and support it with evidence of means. An order that in practice denies a hearing is a serious one.
Offer an alternative. A lesser sum, instalments, a bank guarantee, or an undertaking to prosecute the appeal quickly. A Judge with a workable alternative is less likely to make an order the appellant cannot meet.
Sources
- Supreme Court Rules 2012 — O 7 rr 15, 22, 24; O 11 r 2; O 13 r 15; Form 4
- Supreme Court Act (Chapter 37) — s 5
- Kawaso Ltd v Oil Search (PNG) Ltd [2010] PGSC 34; SC1082
- Constitution of the Independent State of Papua New Guinea — s 37
Before relying on anything here, read the current text of the Supreme Court Rules 2012 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.