N6239
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1129 OF 2013

BETWEEN:
KALILI KOKONAS ESTATE LIMITED
Plaintiff

AND:
SAMSON SOALIGA
First Defendant

AND:
PUTBINI INCOPORATED LAND GROUP
Second Defendant

AND:
BASOMA HOLDINGS LIMITED
Third Defendant

AND:
VIVA SUCCESS LIMITED
 Fourth Defendant

AND:
NAITONAL FOREST AUTHORITY
Fifth Defendant

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Sixth Defendant

Kokopo:  Anis, AJ
2016:  26th February & 4th March

PRACTISE AND PROCEDURE - writ not served within 2 years of filing - Order 4 Rule 13 discussed

PRACTISE AND PROCEDURE - writ not a nullity but an irregularity which can be cured - Order 4 Rule 13 discussed with Order 1Rules 7 and 8 of the National Court Rules

PRACTISE AND PROCEDURE - notice of intention to filed but not served - want of service of the notice of intention to defend prevents one from invoking Order 6 Rule 2(3 ) of the National Court Rules - Order 7 Rule 2 of the National Court Rules discussed

PRACTISE AND PROCEDURE - Court's discretionary powers under Order 12 Rule 1 of the National Court Rules include the Court's power to dismiss a proceeding on the basis that the writ was not served within the 2 years time limitation set under Order 4 Rule 13 of the National Court Rules

Cases cited:
Niugini Mining Ltd v. Joe Bumbandy (2005) SC804
Tepend Jack v. MVIT (2008) N3343

Counsels:
Copland Raurkela, for the 1st, 2nd, 3rd and 4th defendants
No appearance by the plaintiff

RULING ON MOTION

4th March, 2016

1.	ANIS AJ:  This is an application filed by the first, second, third and fourth defendants (four defendants) on 6 October 2015.  It seeks to dismiss the proceedings based on various grounds.

2.	At the commencement of hearing on 26 February 2016, the Court queried the types of reliefs the four defendants were going to seek in their application.  After some discussions with counsel, the four defendants opted to seek only three reliefs from a total of six they had original sought in their application.

3.	I summary them as follows:

•	Pursuant to Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution, the proceeding as against the four defendants be dismissed for failure by the Plaintiff to serve the Writ of Summons and Statement of Claim.

•	The entire proceeding be dismissed for failure by the plaintiff to comply with the mediation orders of the Court made on 6 May 2014 pursuant to Order 10 Rule 9A(15)(2)(c) of the National Court Rules.

•	Cost of the proceeding.

Preliminary matters

(i)	Earlier Court Direction

4.	Earlier on, on 19 February 2016, this Court issued directions after it was dissatisfied that the four defendants had duly served the plaintiff with the application.

5.	The directions were as follows:

1.	The 1st, 2nd, 3rd and 4th defendants' Notice of Motion filed on 6 October 2015 is adjourned to 9:30am on 26 February 2016 for hearing.

2.	The 1st, 2nd, 3rd and 4th defendants shall effect service of the application documents upon the plaintiff's lawyers by registered post and file an affidavit of service to that effect before or by 26 February 2016.

3.	The 1st, 2nd, 3rd and 4th defendants to notify the plaintiff of the next return date.

4.	Time is abridged.
6.    The Court had noted amongst others, before issuing the above directions, submissions by counsel for the four defendants that it was not possible to effect service of the application documents at the stated location and address of the plaintiff's lawyer Glen Jerry of Eda Legal Services.

7.     The four defendants also served the present application on Kawat Lawyers who recently filed court documents purportedly for the Plaintiff.  I used the term 'purported' because there is no notice of change of lawyers filed by Kawat Lawyers to say they act for the plaintiff.  Counsel drew the Court's attention to affidavit filed to prove service of the application on Kawat Lawyers.

8.     As it was, the Court noted that Kawat Lawyers were not lawyers on record for the plaintiff, which had led it to issue the above set of directions.

9.    It is interesting to note that Glen Jerry signs off as the lawyer for the plaintiff under Kawat Lawyers in a recent motion filed by the Plaintiff.  I will not dwell further on that as that motion is not before this Court.

(ii)	Compliance with Court's Directions

10.     Mr Raurela submitted there was compliance.  He referred this Court to the Affidavit of Tania Tiki filed on 26 February 2016.

11.   The said affidavit states that the four defendants posted the application documents through to the plaintiff's postal address on 23 February 2016.  The affidavit also attaches a copy of their covering letter dated 22 February 2016 whereby the four defendants had given notice of the hearing of the application to the plaintiff.

12.   I was satisfied based on the materials presented by counsel that the directions issued by the Court were complied, and I proceeded to hear the application.

13.    I also note now that had the Plaintiff wanted more time, it could have at least attended Court on 26 February 2016 to present its case or make its request.  In this case, the plaintiff for whatever reason failed to attend Court on 26 February.

Evidence
14.    In support of the motion, counsel relied on two of his affidavits namely:
(i)	Affidavit of Mr Raurela filed on 6 October 2015; and
(ii)	Affidavit of Mr Raurela filed on 30 November 2015.

Relevant background

15.    The plaintiff filed this Court proceeding on 11 October 2013.

16.    It alleges that it holds title to a land described as Portion 182, Milinch Lelet, and Fourmil Namatanai New Ireland Province.

17.    The plaintiff claims the defendants without its authority entered the said land and conducted activities, which include alleged illegal logging. 

18.     The plaintiff said it suffered as a result and sued the defendants seeking various damages and declaratory orders.

19.    On the same day of filing the writ of summons on 11 October 2013, the plaintiff also filed an urgent application and had that heard ex-parte on the same day on 11 October 2013.  His Honour Acting Judge Oli as he then was granted the interim injunctions and reliefs that same day on 11 October 2013.

20.   The said interim injunctions and reliefs were actually substantive in nature.
The four defendants learnt of the interim ex-parte order on or about 18 December 2013 and on 19 December 2013 they filed an urgent application to stay the ex-parte order.  Justice Oli granted the four defendants' application and issued a stay on the ex-parte order of 11 October 2013 on 19 December 2013.

21.    The Court granted both court orders of 11 October 2013 and 19 December 2013 ex-parte.

22.    As it is, the stay order of 19 December 2013 remains to this day.

Issues

23.    They are:

(i)	Did the plaintiff ever serve the Writ of Summons and Statement of Claim (Writ) on the four defendants after it filed the Writ?, and if not, is the Plaintiff now out of time to do so?
(ii)	If the answers to the first issue are in the affirmative, what is the legal consequence of that?
(iii)	If the Court finds irregularity in service of the writ as the consequence, can the Court go on to dismiss the claim against the four defendants?
(iv)	If so, have the four defendants convinced the Court enough for the Court to exercise its discretion in their favour?
(v)	Subject to the entire above, can the four defendants go on to argue that the plaintiff failed to comply with mediation orders?
Writ not personally served

24.    The four defendants allege the plaintiff, to date, never personally served them with sealed copies of the Writ.

25.   They also allege that despite various attempts to serve the Writ at their lawyers' office, these did not eventuate but in any event, they allege that they did not instruct their lawyers back then to accept service of the Writ on their behalf.

26.   The allegation in my view is not difficult to determine.

27.    The four defendants of course have the burden to prove the plaintiff did not serve them each personally with the Writ.  

28.   Their evidence appears credible.  It reveals the plaintiff to date has not personally served each of them with the Writ whether personally as in the case of an individual, or in the case of a corporate entity, by following due process for service under their relevant legislations.  Upon perusing the Court file, I note no affidavit of service filed by the plaintiff that would prove otherwise.  For the record, Mr Raurela, during his submission, pointed to an affidavit of one Mathias Tauka filed on 13 December 2013.  Counsel submitted that the said affidavit showed attempts by the plaintiff to serve the Writ and other court documentations at his firm's office, which he submitted did not constitute proper service.  I have considered Mr Tauka's affidavit but I cannot see evidence of due or proper service of the Writ upon the four defendants.  Service upon the lawyers cannot amount to personal service unless of course there is clear evidence that the law firm is authorised to accept service of the Writ on behalf of its clients.  There is no evidence in that regard to justify the actions of the plaintiff through its process server Mr Tauka.

29.    The lack of evidence in the court file to prove service of the Writ puts the plaintiff in an awkward position.  I note the Plaintiff was not present to defend itself but this is a 2013 matter. More than two years have lapsed.  Court rules and good practise require lawyers to prepare and file affidavit of service immediately or soon after service of an originating process.

30.   I note the Plaintiff is represented by a law firm and the Plaintiff had more than two years right up till 26 February 2016, when the application was moved, which was more than ample time to file evidence to prove service.  Doing nothing or keeping quiet about it leaves this Court with little or no choice except to conclude in favour of the four defendants.

31.    In the present case, I am satisfied the four defendants have proven that they were never personally served with the Writ.  They have discharged their burden of proof.  The burden then shifts to the plaintiff, however, I am not satisfied that there is any material evidence disclosed which shows that the four defendants were personally or duly served by the plaintiff within two years since the Writ was filed.

32.    The plaintiff has therefore failed to discharge its burden of proof and as such, I am satisfied that the four defendants have proven their case regarding the first issue which is want of service of the Writ.

Is the plaintiff out of time now to serve the Writ?

33.    This issue is also not difficult to solve.

34.   The plaintiff filed the Writ on 11 October 2013.

35.   Order 4 Rule 13 of the National Court Rules reads:

13.	Validity for service. (7/7)

(1)	For the purpose of service an originating process shall be valid for two years from the date on which it is filed.

(2)	The Court shall not extend the period of two years mentioned in Sub-rule (1).
		
(3)	This Rule does not prevent the plaintiff from commencing fresh proceeding by filing another originating process.(Underlining is mine)

36.   Two years from 11 October 2013 is 11 October 2015.

37.    Consequently, the Writ expired on 12 October 2015.

38.    I am satisfied that the plaintiff is already out of time to serve the Writ on the four defendants.

The four defendants' notice of intention to defend

39.    The four defendants filed a notice of intention to defend on 19 December 2013.  

40.    According to evidence, this happened after the four defendants' lawyers learnt (whilst at Kokopo on 18 December 2013 for another matter) that the plaintiff had obtained ex-parte orders and interim injunctions against the four defendants.  Counsel states at paragraphs 5 and 6 of his affidavit filed on 6 October 2015 and I quote:

5.	Upon being informed of those Court Orders, I informed my clients of the same and since my clients were with me that time, I was instructed to immediately file an urgent application to have those Orders set-side because the Orders required the Police to arrest my clients for trespass.
6.	I am aware that before a party can take any steps in a proceeding, a party must first and foremost file a Notice of Intention to Defend and so that is what our lawyers did, and then proceeded to file the application to set aside those Orders.

41.    Counsel did not point the Court to the correct rule but I think it is obvious that he was referring to Order 7 Rule 2 of the National Court Rules, which reads:

2.	No step without notice of intention to defend. (11/2)

Subject to these Rules, a person shall not, except by leave of the Court, take any step in any proceedings unless, before taking the step, he has filed originating process in the proceedings or has given a notice of intention to defend in the proceedings.(Underlining is mine)

42.     In my opinion, the rule that is now relevant and requires consideration in light of the actions of the four defendants, that is, in filing a notice of intention to defend when they also allege the plaintiff did not serve them with the Writ, is Order 6 Rule 2(3) of the National Court Rules.

43.   It reads:

2.	Originating process. (9/2)
...
(3)	Where a defendant to any originating process serves a notice of intention to defend under Order 7, the originating process shall be taken to have been served on him personally on the date on which that notice is filed or on such earlier date as may be proved.(Underlining is mine)

44.    The key requirement there is not filing but service of the notice of intention to defend.

45.   There is no affidavit of service filed or evidence deposed to by the four defendants to prove they served their notice of intention to defend on the plaintiff.

46.    I am not prepared to speculate here except accept the evidence and facts of the case as they are or as the four defendants present.

47.    The four defendants explained in evidence that the only reason why they had to file the notice of intention to defend was to enable them to file an urgent application to stay the ex-parte order obtained by the plaintiff (see Order 7 Rule 2 of the National Court Rules above).

48.   I notice from the court file the four defendants filed their notice of intention to defend on 19 December 2013, which was on the same day when they also filed and moved their application before the National Court to stay, the ex-parte order of 1 November 2013.  I note the Court granted their application and stayed the ex-parte order of 1 November 2013.

49.     I therefore find that Order 6 Rule 2(3) of the National Court Rules did not apply to the present case.  In other words, the four defendants did not invoke its application.

50.    Because I have found that the four defendants did not invoke Order 6 Rule 2(3), the Court's earlier findings regarding want of service of and expiry of the Writ, are un-affected.

Present legal status of the Writ on the four defendants

51.   Case law has referred to phrases to describe a writ that is not served within two years such as 'stale' or 'nullity' or 'expire'[see the cases: Tepend Jack v. MVIT N3342 (2008); Niugini Mining Ltd v. Joe Bumbandy (2005) SC804].

52.  The Supreme Court in Niugini Mining Ltd v Joe Bumbandy (Supra) discussed at length the application of Order 4 Rule 13 and Order 1 Rule 7 and 8 of the National Court Rules.

53.    In summary and on point, the Supreme Court held that Order 4 rule 13 was not immune to the Court's general powers under Order 1 Rules 7 and 8.  The Supreme Court also held that a writ of summons not served after two years from the date of filing, such a writ would not be a nullity but regarded as an irregularity.

54.    The exact words used by the Supreme Court are and I read:

Likewise, there is no provision in O.4 r.13 which expressly excludes the operation of O.1 r.7 and r.8 to it.  We are of the view that O.1 r.7 and r.8 apply to O.4 r.13.  Therefore the Court has power under both r. 7 and r.8 to extend time for service of a Writ which has expired notwithstanding the express provision in O.4 r.13 (2).  Such Writ is not a nullity but an irregularity which can be cured under O.1 r.7 and/or r.8.  

55.    The above is the law on point and this Court is bound to follow the Supreme Court's decision, which is of course binding.

56.   I find the present Writ, which is still pending service upon the four defendants, an irregularity given that the plaintiff has not served the Writ within two years as required under Order 4 Rule 13(1) of the National Court Rules.

57.   And I note and conclude that the irregularity to the Writ was created or caused by the plaintiff.

Can the Court dismiss the claim based on irregularity of the Writ?

58.  The four defendants have asked the Court to dismiss the claim or proceedings against them under two grounds, the first, which I will now look at, is in regard to want of service of the Writ on the four defendants.  The second ground relates to want of compliance with mediation orders of the Court.

59.   Now, I note that I have already made the following findings:

(i)	the plaintiff did not personally serve the Writ on the four defendants;

(ii)	the Writ which is still pending service on the four defendants has passed its two years' time period required by Order 4 Rule 13(1) of the National Court Rules;

(iii)	the expired or stale Writ is regarded as an irregularity.

60.   The source relied upon by the four defendants to seek the first relief is Order 12 Rule 1 of the National Court Rules and section 155(4) of the Constitution.  

61.    I will leave out section 155(4) of the Constitution because I think Order 12 Rule 1 itself is sufficient to invoke this Court's power.

62.   Order 12 Rule 1 reads:

1.	General relief. (40/1)

The Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating process. (Underlining is mine)

63.    I am satisfied that this Court has the power to consider and decide whether to grant or refuse to grant the reliefs sought by the four defendants.  That is, whether this Court should dismiss the proceedings against the four defendants for (i) failure by the plaintiff to serve the four defendants with the Writ and (ii) on the basis of the plaintiff's action, which is, by allowing the Writ to expire and now being considered as an irregularity in the service process.

Discretion

64.   The Court's power to consider and determine the Writ under Order 12 Rule 1 is of course discretionary.

65.    I note that I have considered the facts, evidence and law in relation to this matter and I am confident that I am in a much better position now to exercise my discretion.

66.    In the present case, I have decided to exercise my discretion in favour of the four defendants.

67.    I do so taking note of the following:

(1)	the plaintiff commenced this proceeding on 11 October 2013 on the basis that it was urgent matter that required urgent attention and hearing, and the plaintiff took out ex-parte interim orders and injunctions without the knowledge of the four defendants;

(2)	when the ex-parte orders were made on 11 October 2013, the plaintiff never bothered to serve the order and the Writ on the four defendants; it was the four defendants themselves who discovered the existence of the proceeding in December 2013 and took steps to stay the order;

(3)	I have considered term 2 of the stay order obtained on 19 December 2013 by the four defendants.  It reads and I quote:

"Pending service of the Writ of Summons, Application and Court Order of 1 November 2013 on the Defendants, the Ex Parte Interim Orders made on 1 November2013 be stayed in the interest of justice."; 

I note the said stay order is current and binding upon the parties which can mean or be seen as clear proof that service of the Writ is still outstanding; one would have to ask this: - Is the plaintiff really serious about this proceeding at all?

(4)	a total of two years and four months have lapsed since then and this matter appears to be still stuck at the original stages; pleading has not commenced for the four defendants;

(5)	the Court found the plaintiff responsible for stalling the court proceeding, that is, by failing to serve the Writ within the prescribed time;

(6)	the plaintiff was duly notified of the Court hearing of 26 February 2016 but failed to turn up to assist the Court;

(7)	the plaintiff appears no longer interested in listing its original motion down for an inter-pates hearing; that motion was filed on 11 October 2013 and it is still awaiting a date for inter-pates hearing;

(8)	since the plaintiff's claim is alleged to have occurred in May 2011, the plaintiff's claim is not time barred if the plaintiff still intends to pursue its action against the four defendants after it is dismissed;

(9)	the four defendants appear to be the parties most affected under the present proceeding, that is, as a direct result of the conduct of the plaintiff in the matter;

(10)	the four defendants have satisfied all the contentious issues identified by this Court in the present application.

68.    I would therefore exercise my discretion and dismiss the proceedings against the four defendants.

Non-compliance with mediation orders

69.    Because I have granted the first relief sought by the four defendants, it is not necessary for me to determine this one.  Besides, the second relief also seeks the same outcome.

Costs

70.   The four defendants seek costs as its final relief.

71.    Costs will follow the event which will be assessed on a party/party basis.

Way forward

72.   There appears to be a general neglect by the parties particularly the plaintiff in prosecuting its claim.

73.    For example, I note that there are outstanding mediation orders, ordered by the Court on 6 May 2014 and 18 November 2014 respectively.  There seems to be no record in the Court file on the outcome of the said ordered mediations.

74.   The National Court has issued the mediation orders, which means that it is a valid Court Order and as such, it is, in my view, imperative for this Court to find out whether the parties have complied with the said mediation orders.

75.    It is my intention therefore to direct the remaining parties to appear and explain what steps they have taken to date to comply with the mediation orders.

76.    If the parties and in particular the plaintiff fail to appear on the date set, the Court may summarily determine the matter.

ORDERS OF THE COURT

77.   I make the following orders:

1.	The proceeding against the first, second, third and fourth defendants is dismissed, for failure by the plaintiff to serve the writ of summons and statement of claim within two years as required under Order 4 Rule 13 of the National Court Rules.

2.	The plaintiff shall pay the first, second, third and fourth defendants' costs of the proceeding on a party/party basis, which shall be taxed, if not agreed upon.

3.	This matter shall return to Court at 1:30pm on 21 March 2016 for directions hearing.

4.	This Court directs the plaintiff's counsel Glen Jerry to appear on the said date with full instructions to assist the Court and in particular brief the Court regarding the outcome of mediations as ordered by the Court on 6 May 2014 and 18 November 2014.

5.	The Assistant Registrar shall notify all the parties of the Court's directions.

6.	Time is abridged.

The Court Orders accordingly,
____________________________________________________________
Eda Legal Services	:	Lawyer for Plaintiff
Raurela Lawyers		:	Lawyers for the first, second, third and 						fourth defendants