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Madang Cocoa Growers Export Co Ltd v Tautea [2013] PGNC 186; N5426 (22 November 2013)

N5426

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 273 OF 2012

MADANG COCOA GROWERS EXPORT CO LIMITED
Plaintiff

V

LAUATU TEA'RIKI TAUTEA
First Defendant

COCOA BOARD OF PAPUA NEW GUINEA
Second Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Madang: Cannings J
2013: 11, 27 September, 22 November

ADMINISTRATIVE LAW – remedies – whether damages an appropriate remedy once error of law proven: decision of statutory authority to cancel plaintiff's registration – decision made ultra vires, in breach of principles of natural justice.

PRACTICE AND PROCEDURE – whether statement of claim disclosed reasonable cause of action – whether proceedings time-barred by statute – whether multiplicity of proceedings were an abuse of process.

The plaintiff is a commodity exporter which proved in earlier judicial review proceedings that the decision of the defendants (the statutory regulator and its chief executive officer) to cancel its registration was unlawful and a nullity, for being made ultra vires the relevant legislation and in breach of the principles of natural justice. After determination of the judicial review the plaintiff commenced separate proceedings by writ of summons claiming damages for business losses arising from the unlawful decision of the defendants. The defendants denied liability, arguing that the statement of claim disclosed no reasonable cause of action, the action was time-barred and the proceedings were an abuse of process. The defendants further argued that in the event that liability was established, the claim for damages (of approximately K9 million) was manifestly excessive.

Held:

(1) The statement of claim adequately pleaded a cause of action: the unlawfulness of the decision to cancel the plaintiff's registration.

(2) The action was not time-barred by the Frauds and Limitations Act 1988 as it was not one of the types of cause of action caught by the limitation periods in that Act; and it was not clear that the action was not commenced within a reasonable period after the date on which the cause of action accrued.

(3) The proceedings were however an abuse of process as they entailed a multiplicity of proceedings, engaging in litigation in a piecemeal manner and having a "second bite at the cherry" without a satisfactory explanation. The proceedings were therefore dismissed generally. The question of assessment of damages did not arise.

(4) As the defendants did not before trial properly agitate the issue of abuse of process and it was not raised in their defence, the parties were ordered to bear their own costs.

Cases cited

The following cases are cited in the judgment:

Anderson Agiru v Electoral Commission and The State (2002) SC687
Application by Anderson Agiru (2003) SC704
Kiee Toap v The State (2004) N2766
Madang Cocoa Growers Export Co Ltd v Tautea & Cocoa Board (2012) N4584
National Executive Council & Luke Lucas v Public Employees Association [1993] PNGLR 264
Ok Tedi Mining Ltd v Niugini Insurance Corporation [1988-89] PNGLR 425
Pruaitch v Manek (2010) N4149
Telikom (PNG) Ltd v ICCC & Digicel (PNG) Ltd (2008) SC906

STATEMENT OF CLAIM

This was a trial in which the plaintiff sought damages in respect of a decision of the defendants that was proven in earlier proceedings to be unlawful.

Counsel

S I Asivo, for the plaintiff, with leave of the Court
R Diweni, for the first & second defendants

22nd November, 2013

1. CANNINGS J: The plaintiff, Madang Cocoa Growers Export Co Ltd, was operating in the business of exporting cocoa until the permit granted to it by the Cocoa Board (the second defendant) was in 2005 cancelled by the Chief Executive Officer of the Board (the first defendant). The plaintiff proved in earlier judicial review proceedings that the decision of the defendants to cancel its registration was unlawful and a nullity, for being made ultra vires the Cocoa Act and in breach of the principles of natural justice. A submission by the plaintiff for damages was rejected as damages were not sought in the plaintiff's originating statement and there had been little argument on the issue (Madang Cocoa Growers Export Co Ltd v Tautea & Cocoa Board (2012) N4584).

2. Four days after the Court delivered judgment in the judicial proceedings the plaintiff commenced the present proceedings by writ of summons claiming damages for business losses arising from the unlawful decision of the defendants. The defendants deny liability, arguing that the statement of claim discloses no reasonable cause of action, the action is time-barred and the proceedings are an abuse of process. The defendants argue that in the event that liability is established, the claim for damages is manifestly excessive.

3. A trial has been conducted on both liability and damages. The plaintiff has adduced evidence in support of its claim for damages of approximately K9 million. The defendants have adduced no evidence. I will first determine the issue of liability by addressing the defendants' three preliminary arguments.

1 DOES THE STATEMENT OF CLAIM DISCLOSE A REASONABLE CAUSE OF ACTION?

4. Mr Diweni for the defendants submitted that the statement of claim is vague and fails to clarify whether damages are sought as a consequential order following the order made in the judicial review proceedings or whether the cause of action is intended to be contract or tort. For this reason the proceedings should be entirely dismissed under Order 12, Rule 40 of the National Court Rules, which states:

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings—

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under Sub-rule (1).

5. Specifically the defendants rely on Order 12, Rule 40(1)(a): no reasonable cause of action is disclosed, therefore the proceedings should be generally dismissed.

6. I reject that submission. The statement of claim adequately pleads a cause of action: the unlawfulness of the decision to cancel the plaintiff's registration. The Court's declaration that that decision was unlawful is a sufficient basis on which to seek relief in the form of damages. The statement of claim does not fail to disclose a reasonable cause of action and cannot be dismissed under Order 12, Rule 40(1)(a).

2 IS THIS ACTION TIME-BARRED?

7. The defendants argue that the plaintiff's action for damages is time-barred by Section 16(1) of the Frauds and Limitations Act 1988, which states:

Subject to Sections 17 and 18, [which are not relevant to the present case] an action—

(a) that is founded on simple contract or on tort; or

(b) to enforce a recognisance; or

(c) to enforce an award, where the submission is not by an instrument under seal; or

(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

8. Mr Diweni submitted that the date on which the cause of action accrued was the date of the decision to cancel the plaintiff's permit, 25 November 2005. Six years after that is 25 November 2011. The action was not commenced until 27 March 2012, four months after the expiry of the limitation period. Therefore, Mr Diweni submitted, the action is time-barred.

9. I reject that submission. The cause of action being prosecuted here is the unlawfulness of the cancellation of the plaintiff's permit. It is not an action in contract or tort or any of the other types of cause of action caught by the limitation periods in the Frauds and Limitations Act. The only limitation period to which these proceedings were subject was the sort of limitation period that applies in a judicial review proceeding: the proceedings must be commenced within a reasonable time. I am not satisfied that the action was not commenced within a reasonable period after the date on which the cause of action accrued. The action is not time-barred.

3 ARE THE PROCEEDINGS AN ABUSE OF PROCESS?

10. Mr Diweni submitted that it was not permissible for the plaintiff to commence separate proceedings seeking a consequential order for damages based on the result of earlier proceedings in which it had the opportunity to seek damages but failed to exercise it. The plaintiff has engaged in a multiplicity of proceedings, which is an abuse of process.

11. I uphold this submission. Commencement of separate proceedings that seek different remedies based on the same cause of action will almost invariably be regarded as an abuse of process. The cases show that a plaintiff who commences a second set of proceedings to seek a remedy that could have been sought in earlier proceedings, which have been determined, will be adjudged to have engaged in a multiplicity of proceedings or conducted litigation in a piecemeal manner, which is actively discouraged: Ok Tedi Mining Ltd v Niugini Insurance Corporation [1988-89] PNGLR 425, National Executive Council & Luke Lucas v Public Employees Association [1993] PNGLR 264, Telikom (PNG) Ltd v ICCC & Digicel (PNG) Ltd (2008) SC906, Pruaitch v Manek (2010) N4149. A very good explanation needs to be provided for commencing separate proceedings, and this explanation is required irrespective of whether the plaintiff has the separate proceedings running simultaneously or, as here, where the separate proceedings are commenced after the first proceedings have been determined.

12. No good explanation has been provided. The plaintiff had the opportunity in the judicial review proceedings to seek damages under Order 16, Rule 7 of the National Court Rules, but failed to avail itself of that opportunity. I acknowledge, as Mr Asivo for the plaintiff pointed out, that the Court did not expressly refuse a claim for damages in the earlier proceedings as the question of whether damages should be awarded was not properly before the Court and there had been little argument on the point. That is correct, but it does not detract from the characterisation of the order in the earlier proceedings as being a final determination of the cause of action. The Court's order of 23 March 2012 was the end of that matter. The plaintiff is re-agitating the same cause of action and by doing so is having a second bite of the cherry, a clear indication of abuse of process (Anderson Agiru v Electoral Commission and The State (2002) SC687, Application by Anderson Agiru (2003) SC704, Kiee Toap v The State (2004) N2766).

CONCLUSION

13. Though only one of the defendants' preliminary arguments has succeeded it is sufficient to conclude for the purposes of Order 12, Rule 40(1)(c) of the National Court Rules that these proceedings are an abuse of process. I see no good reason not to exercise the power of the Court to generally dismiss the proceedings. The question of assessment of damages does not arise.

14. Costs will not follow the event as the defendants did not before trial properly agitate the issue of abuse of process. It was also not raised in their defence. The parties will bear their own costs.

ORDER

(1) The proceedings are generally dismissed for being an abuse of process.

(2) The parties shall bear their own costs.

Judgment accordingly.
___________________________________________________

Lawyers for the plaintiff: Nil
Diwenis Lawyers: Lawyers for the First & Second Defendants