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Newsat Ltd v Telikom PNG Ltd [2007] PGNC 161; N3452 (22 August 2007)

N3452

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1350 OF 2006

NEWSAT LIMITED
Plaintiff

AND

TELIKOM PNG LIMITED
First Defendant

INDEPENDENT CONSUMER AND COMPETITION COMMISSION
Second Defendant

THE INDEPENDENT STATE OF
PAPUA NEW GUINEA
Third Defendant

Waigani: Cannings J
2007: 20, 22 August

RULING

PRACTICE AND PROCEDURE – National Court – application to strike out all of parts of an amended statement of claim – National Court Rules, Order 12, Rule 40.

As a result of a previous motion by a defendant, the court struck out various parts of a statement of claim and ordered the plaintiff to file an amended statement of claim within seven days. The plaintiff filed an amended statement of claim, which the defendants object to, arguing that it goes beyond what the court ordered and that it raises new matters that do not disclose a reasonable cause of action.

Held:

(1) The previous order, requiring the plaintiff to file an amended statement of claim, allowed and required the plaintiff only to file a consolidated and clear document, giving effect to the striking out of the constitutional claim and prayer for relief.

(2) The previous order was not a grant of authority to the plaintiff to amend the substance of its statement of claim at its discretion.

(3) Accordingly the amended statement of claim was struck out as it was filed contrary to the Court’s previous order and without leave.

(4) It is unnecessary to decide whether the amended statement of claim discloses a reasonable cause of action.

(5) Orders made as to further conduct of the proceedings.

Cases cited
No cases are cited in the judgment.

NOTICE OF MOTION
This was an application on notice to strike out parts or all of an amended statement of claim.

Counsel
G Poole, for the plaintiff
A Mana, for the 1st defendant
J Brooks, for the 2nd defendant

22 August, 2007

1. CANNINGS J: The plaintiff, Newsat Ltd, and the first defendant, Telikom PNG Ltd, entered into a contract regarding provision of VSAT broadband internet services in PNG. A dispute arose between them and one week before the contract was due to terminate Newsat commenced legal proceedings against Telikom claiming damages and other relief for breach of contract. In addition, the plaintiff sought declarations that various Acts of the Parliament and other laws regulating the industry in which it and Telikom did business, are unconstitutional. The ICCC and the State were named as defendants in the same proceedings, WS No 1350 of 2006.

2. There are other proceedings, WS No 1644 of 2006, in which Telikom is suing Newsat, seeking injunctions and declarations on the ground that Newsat is providing telecommunications services in PNG contrary to the Telecommunications Act 1996.

3. A few months ago, I heard and determined four motions regarding WS No 1350 and three motions regarding WS No 1644. Five were brought by Newsat, two by Telikom.

4. What has come before me this week is another motion, this time by the ICCC, the second defendant in WS No 1350. This motion relates to orders I made in WS No 1350, following a motion by Telikom.

5. Telikom’s motion, filed on 24 October 2006, which I heard on 24-26 April 2007 sought two orders:

• first, a stay of the court proceedings, so that the dispute could be referred for arbitration;
  
• secondly, dismissal of the part of the statement of claim that raised questions of constitutional interpretation and application.
  

6. I refused the first part of Telikom’s motion but granted the second; then I made an order which, with the irrelevant bits deleted, stated:

(1) Telikom’s application for a stay of proceedings is dismissed.

(2) Telikom’s application for striking out the constitutional claim and prayer for relief is granted and that part of the claim is struck out.

(3) Newsat shall file an amended statement of claim within seven days after the date of entry of this order.

(4) Telikom has 14 days after service of the amended statement of claim, to file a defence.

7. That order was made on 7 May 2007. Newsat filed a ‘further amended statement of claim’ on 16 May 2007. That seems to be outside the time limit I allowed but no one has taken issue with that, so I will ignore that apparent breach for the time being. What is most significant about the document filed on 16 May is that it introduces new material and appears to rely on a hitherto unmentioned cause of action – misfeasance in public office. It appears on the face of it to be a very substantially amended statement of claim, seeking different relief to the statement of claim to which Telikom’s motion related.

8. The ICCC wants me to strike out the further amended statement of claim filed on 16 May 2007, for two reasons:

• first, it goes beyond the terms of the order of 7 May, ie it has been filed in breach of that order; and
  
• secondly, it raises many issues but fails to disclose a reasonable cause of action against the ICCC.
  

9. The ICCC also seeks an order that it be removed as a party from WS 1350 of 2007.

DOES THE 16 MAY DOCUMENT BREACH THE ORDER OF 7 MAY?

10. Mr Poole, for Newsat, argued that the order of 7 May did not say what could or could not be in the next amended statement of claim. The order simply required Newsat to file an amended statement of claim, which they did; so there is no breach of the order.

11. Mr Brooks, for the ICCC, supported by Mr Mana, for Telikom, conceded that the order was perhaps ambiguous, but argued that any ambiguity was resolved by looking at the written order that I delivered and the context in which the order was made.

12. I have found Mr Brooks’ submission compelling. The purpose of the order that Newsat file an amended statement of claim is clearly apparent from page 16 of the ruling, under the heading ‘housekeeping matters’, where I stated:

That means there are only two things still to be resolved: giving effect to the strike-out of the constitutional claim and costs.

I will order that Newsat file an amended statement of claim within seven days, removing the constitutional claim and the corresponding prayer for relief; and that Telikom have 14 days from the day of service of the amended statement of claim to file a defence. That ties in with Injia DCJ’s order of 30 October 2006. [Emphasis added.]

13. The purpose of the order was to attend to a housekeeping matter: to ensure that the plaintiff, Newsat, filed a consolidated and clear document, giving effect to the striking out of the constitutional claim and prayer for relief. The order of 7 May 2007 was not a grant of authority to the plaintiff to amend the substance of its statement of claim at its discretion.

14. By May 2007 the pleadings in this case had closed. They were reopened only to the extent permitted by the order of 7 May 2007.

15. Newsat was permitted, indeed required, to file an amended statement of claim that simply recited the bits of its last previous statement of claim that had not been struck out and deleted the bits that were struck out. They did not do that. They have turned a simple matter of housekeeping into a major renovation. So I agree with Mr Brooks’s submission that yes, Newsat breached the order of 7 May.

CONSEQUENCES OF BREACH OF ORDER

16. It follows that the further amended statement of claim, filed on 16 May 2007, will be struck out. I agree with Mr Brooks that what Newsat did was on the verge of being an abuse of process, which would raise the question of whether the entire proceedings should be dismissed. I consider, however, that the substantially amended document was filed as a result of a misunderstanding of the court’s order rather than a deliberate act of obfuscation. So I do not find an abuse of process and do not strike out the proceedings.

17. It is unnecessary to deal with the second part of the ICCC’s motion – that what Newsat filed does not disclose a reasonable cause of action, that it is incomprehensible and so forth. Argument on that might have to be made at another time. I would only say in passing that the comprehensive submissions on this point by Mr Brooks should give Newsat plenty to think about if they are intent on arguing misfeasance in public office against the ICCC.

18. For the time being I am going to make orders aimed at expediting the proceedings. If Newsat wants to further amend their statement of claim, they have to do it properly, which means leave must be obtained under Order 8, Rule 50 of the National Court Rules; and granting leave, given the complex history of this litigation and the number of times Newsat has already substantially amended its statement of claim, would not be a formality.

19. For the time being, it is prudent that the ICCC remain a party to the proceedings, so that part of the ICCC’s motion is refused.

20. As to costs, I agree that Newsat should pay the costs of ICCC on a solicitor-client basis. This motion has been made necessary by the misconceived filing of the document on 16 May 2007.

ORDERS

(1) The further amended statement of claim filed by Newsat on 16 May 2007 is struck out.

(2) Newsat shall file and serve a further amended statement of claim, that complies with the court’s order of 7 May 2007, by 24 August 2007.

(3) The defendants shall file and serve their defences by 27 August 2007.

(4) Leave of the court is required for any further amendment of the statement of claim.

(5) ICCC remains a party to the proceedings.

(6) Newsat shall pay Telikom’s costs of this motion on a party-party basis to be taxed if not agreed.

(7) Newsat shall pay ICCC’s costs of this motion on a solicitor-client basis to be taxed if not agreed.

(8) Time for entry of this order is abridged to the date of settlement by the Registrar, which shall take place forthwith.

Order accordingly.

O’Briens Lawyers: Lawyers for the plaintiff
Allens Arthur Robinson: Lawyers for the first defendant
Gadens Lawyers: Lawyers for the second defendant