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Samamoto Ltd trading as Nichi Auto Co v Pacific Perfumes Ltd trading as Pacific A1 Motors [2000] PGNC 9; N1966 (4 May 2000)

Unreported National Court Decisions

N1966

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 368 OF 1999
BETWEEN
SAMAMOTO LIMITED (TRADING AS NICHI AUTO CO)
FIRST PLAINTIFF
AND
LIM ENG LEONG
SECOND PLAINTIFF
AND
PACIFIC PERFUMES LIMITED (TRADING AS PACIFIC A1 MOTORS)
DEFENDANT

Waigani

Sevua J
12 April 2000
19 April 2000
4 May 2000

Counsel

E. Anderson for Plaintiffs

C. Narokobi for Defendant

4 May 2000

SEVUA J: There are two applications reserved for ruling this morning. Firstly, the defendant’s notice of motion filed on 6^th April, 2000, which sought the dismissal of this action; and secondly, the plaintiff’s notice of motion filed on 20^th March, 2000. I will deal with the defendant’s application first as it was heard first on 12^th April.

The basis for the defendant’s application is that the plaintiffs have done nothing to prosecute their claim since the filing of their writ of summons.

The plaintiffs’ writ of summons was filed on 16^th April, 1999. There is no affidavit of service. However, a amended writ of summons filed on 16^th April, 1999 was served on the defendant’s lawyers on 1^st November, 1999. The defendant filed its defence on 12^th July, 1999. Since then both parties have made a number of interlocutory applications by way of notices of motions. In fact, Court records reveal that the parties have filed seven (7) notices of motions between 4^th June, 1999, and 25^th April, 2000.

The defendant’s evidence in support of the motion is simply that, since the plaintiffs filed their writ of summons twelve months ago, nothing has been done to prosecute that writ. That brief evidence is contained in a very short affidavit sworn by Mr Narokobi on 4^th April, 2000.

I consider that the reason the plaintiffs have not prosecuted their substantive claim is because this matter is not ready for trial. It seems to me that the plaintiffs have been unable to prosecute their substantive claim because of the interlocutory applications, which seem never-ending.

It is my view that the defendant’s application is both premature and misconceived. The substantive claim has not yet been set for trial. The pleadings in this matter have not yet closed and I am of the view that the matter is not yet ready for trial.

Procedures for the conduct of trials are provided for under the National Court Rules. Order 10 Rule 4(1) provides that “a party may, after the pleadings are closed, file a notice requesting that the proceedings be set down for trial”. Rule 5, Order 10 is the rule governing an application for dismissal for want of prosecution. It states, “where a plaintiff does not, within six weeks after the pleadings are closed, set the proceedings down for trial, the Court on motion by any other party, may, on terms, dismiss the proceedings or make some other order as the Court thinks fit.”

The procedures adverted to have yet to occur. Pleadings have not closed, and this matter is yet to be set down for trial. In my view, unless the pleadings have closed and the matter set down for trial, there can be no basis for the defendant’s application. That is why I alluded to a little earlier that, in my view, this application is both premature and misconceived.

This matter is only twelve months old to 16^th April, this year. Although it is not recent, it is a fairly new matter in terms of the filing date. The file in this matter is approximately four inches thick and due to its size, a second file had to be opened on 6^th April this year. That indicated to me the amount of documents that both parties have filed in their interlocutory applications. Even then, there is no discovery yet, and I assume that, that procedure will be utilized before the matter is ready for trial.

For these reasons, I am of the opinion that the defendant’s application must fail. I therefore order that it be dismissed with costs.

I now turn to the plaintiffs’ notice of motion filed on 20^th March this year, and heard on 19^th April.

The plaintiffs in their notice of motion are seeking a restraining order to protect the parties’ status quo.

It appears quite obvious to me that, in so far as claims for monies are concerned, there are a lot of contentious issues between the parties. The plaintiffs claim that the defendant has breached its agreement by not paying them what they are owed from the proceeds of sales of motor vehicles. On the contrary, the defendant claims that the plaintiffs owed monies to it, which arose from payment of costs and freight to the tune of K110,983.61; a sum of K30,045.39 for duty; a sum of K9,127.72 for wharfage and handling, and another sum of K7,560.00 for rent of premises.

These issues are quite contentious that, not only do they go against the defendant in its motion I have just dismissed, but they are issues that the Court is unable to make findings of facts and law until the substantive hearing.

The money claims are very contentious and they involve quite substantial amounts that, in fairness to all parties, their respective interests ought to be protected. Judging from the manner in which counsel exchanged arguments and the intensity of their vigor in arguing this motion, it is my view that any proceeds of the sale of the remaining motor vehicles are to be secured by an order by this Court, so that the financial interests of both parties are protected. That is why I made several suggestions in my attempt to short-circuit this application on 19^th April.

Both counsel raised several issues, which I do not wish to address individually. However, I need to settle one such issue now.

The plaintiffs have called for the summons for production, which was filed on the 17^th April and served on the defendant on 18th April, 2000. Mr Anderson submitted that it has been properly served and therefore called upon the summons in the course of his submissions on 19^th April. Mr Narokobi, on the other hand, submitted that the summons was not proper and the defendant was not given adequate time to search for the documents required for production.

It is not necessary to spend a lot of time on this issue. Despite both counsel’s arguments, I consider that it is unfair for the plaintiffs to expect the defendant to comply with the summons when it was short-served. The rules require that service of documents be effected three days prior to the date of hearing a matter the documents relate to. Whilst I do not accept that Mr Narokobi can pick and choose which documents he can accept and those he cannot accept, the Court nevertheless considers it quite unfair for the defendant, who has not really been accorded ample time, to produce documents required by the summons for production. In any event, the defendant has not waived the requirement of service.

Accordingly, I consider that the plaintiffs cannot call for the summons they had short-served, basically because they had placed the defendant in a position where compliance with the summons was not possible under the circumstances. It is therefore premature for the plaintiffs to call for that summons. It would have been a different matter if the plaintiffs had complied with the requirement of service. The plaintiffs’ call for the summons is disallowed. The summons for production should be allowed to take its ordinary course.

Having said that, let me express my concern briefly over an issue which I raised on 19^th April, and that relates to the involvement of Mr Narokobi personally, and his firm. I consider it unethical and improper for Mr Narokobi to act for the defendant in these proceedings when he is a shareholder and director of the defendant company. The affidavit evidence relating to this conduct regarding the service of the summons for production is undisputed. Mr Narokobi’s conduct were such that he and his firm ought to withdraw completely from acting for the defendant. What I have said is not a personal vendetta against Mr Narokobi, but the manner in which he conducted himself raises questions of ethics and professionalism. The interest of the defendant, as a party in these proceedings, is of importance, and it is necessary therefore for counsel having a pecuniary interest in this matter not to represent the defendant.

Whilst I acknowledge that Mr Narokobi is not on trial here, I consider that his involvement should cease. The question of fair exercise of judgment in various issues before the Court is of some significance here, and it is of concern to the Court whether Mr Narokobi will be fair and impartial in these issues when he has a personal interest in this case. I do not wish to say more, and I consider that a direction may need to be made at the end of this judgment to dispose of this issue.

Now turning back to the substantive issues before the Court, I consider that the plaintiffs are not barred from making this application. The defendant strenously argued that a similar application filed by the plaintiffs had been dismissed, therefore, they cannot came back and take a second bite of the cherry, so to speak. It seems that is an abuse of process.

Whilst I agree that a previous application similar to this was dismissed, I consider that the basis for such dismissal does not preclude the plaintiffs from making this application. As I recall, and I think Mr Narokobi alluded to this in his address, that application was dismissed for want of prosecution, because counsel did not appear to prosecute it. The merits of the application were not determined so it was dismissed on a mere technicality. Order 12 Rule 7(1) of the rules gives the plaintiffs the right to bring this application, and accordingly, I consider that there is no impropriety on the plaintiffs filing this application.

In the Court’s attempt to have the parties resolve this matter without this application progressing to an end as it did, Mr Anderson informed the Court that the plaintiffs would have no objection to the proceeds of sales of the remaining motor vehicles being paid into Court, although he insisted that the remaining motor vehicles in the defendant’s possession be released to the plaintiffs. Mr Narokobi seemed to agree to the idea of paying the proceeds into Court. However, he insisted that the plaintiffs pay up front the amount of costs and freight of the remaining motor vehicles. There are approximately fourteen motor vehicles in the defendant’s premises plus or minus two units.

In the end, I thought Mr Narokobi was agreeing to a consent order when he intimated that the defendant was prepared to release the remaining motor vehicles to the plaintiff’s possession. However, he attached a condition to that willingness and that is, the plaintiffs should pay the actual duty and wharfage and handling costs that the defendant has already paid. Again, this is a contentious issue. As I understand, Mr Anderson said the defendant owed the plaintiff a substantial amount of money, although, I do not appear to have recorded an actual figure stated by him.

It is my considered view that, if both parties continue to fight every inch of the way without giving any concession to the other, the whole claim will continue to proceed in the present form, that is, application after application. I therefore consider that their interlocutory applications ought to end here and now so that the parties can consider other steps in the pleadings with a view of setting down the substantive issues for trial. The way in which this matter has progressed, what I have just adverted to will never occur in the near future.

Without making any definite and conclusive findings of facts, it seems obvious to me that the parties owe each other monies, the exact amount of which, will not be determined, until the substantive hearing is completed. I have already alluded to some figures in which Mr Narokobi said the plaintiff owe the defendant, and that came to a total of K 157,716.72, inclusive of duty and wharfage and handling charges. Mr Narokobi said the defendant needs to meet its operational costs and that is appreciated in any business. However, Mr Anderson said the defendants should not be paid up front because, it has been found guilty of contempt and has yet to pay any money to the plaintiffs in pursuance of an agency agreement and a bailment agreement between the parties.

Like I said, a while ago, if the parties continue to dispute every issue raised, interlocutory applications will continue to be made increasing costs to each party. It is my view, that the Court should intervene and make an order it considered appropriate. Having said that, I consider that there must be give and take by each party in this application, and doing the best I can under the circumstances, I propose to make an order which I consider to be fair to all parties until the substantive issues are dealt with, taking into account that an appeal is currently pending in the Supreme Court.

I therefore consider that the plaintiffs should be granted their application, however, the payment requested by the defendant should be made, as I am of the view that such an amount is not substantial. The amount for duty is K30,045.39 and wharfage and handling is K 9,127.72, totaling K 39,173.11. Whichever way the verdict goes in the trial proper, that amount can be adjusted in the final verdict on damages.

The formal orders I make are therefore as follows:

(1) The defendant is restrained from further selling any of the fourteen or so motor vehicles in its premises.

(2) ـ;&#16e plafs arpay tpay t defendant the sum of K39,173.11, which sum constitnstitutes utes K 30,K 30, 045. 045.39 as39 as duty and K 9, 127.72 as wharfage andling, that was paid by the defendant.

(3) &#160 ټ&#Up0; Upon receipt eipt from the plaintiffs of the sum of K39, 173.11, the defendant is to deliver to the plaintiffs, the remaining fourteen or so motor vehicles.

(4) ҈& The tiffs sffs shas shall hall pay into Court all proceeds of the sale of the remaining fourteen or so motor vehicles and such procere toeld by the Court until this case is finally disposed of.

(5) < &160; Unte Supreme durt determitermines the defendant’s appeal, all subsisting notices of motions are stayed and the parties are restrained from filing applons.

(6);ټ The; The defe defendantndant is t is to payo pay the plaintiff’s costs of this motion and the motion dealt with on 12^th April.

In conclusion, without issuing a formal order or direction, I suggest that both Mr Narokobi and his firm cease to act for the defendant, otherwise it may become necessary to make an appropriate referral.

Lawyer for Plaintiffs: Gadens

Lawyer for Defendant: Narokobi Lawyers