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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
W. S. No1274 of 2005
BETWEEN
JIMM TRADING LTD
Plaintiff
AND:
JOHN MADDISON
First Defendant
AND:
RICHARD BUSBY
Second Defendant
AND:
BANK SOUTH PACIFIC
Third Defendant
AND:
BARRY TAN
Fourth Defendant
AND:
STEVEN TAN
Fifth Defendant
AND:
NEVILLE SEETO
Sixth Defendant
AND:
T.S.T. 4 MILE LTD
Seventh Defendant
AND:
T.S.T. 4 TRADING LTD
Eight Defendant
Waigani: Kandakasi, J.
2006: 08th May
2016: 24th November
2017: 02nd June
PRACTICE & PROCEDURE – Pleadings – Claim based on fraud - Need to plead with precision and sufficiently particulars clearly disclosing a cause of action against each named defendant – Prior proceedings between parties – Plaintiff obliged to sufficiently plead how the common law doctrines of res judicata and issue estoppel do not apply – Failure to – Proceedings open to dismissal.
PRACTICE & PROCEDURE – Motion seeking to dismiss proceedings without a defendant firstly filing and serving a formal defence
– No such requirement – A defendant is entitled to seek dismissal of proceedings by motion as of right provided the defendant
has file and served notice of intention to defendant within prescribed time limits – Leave of Court required if notice of intention
to defend filed outside the required time limits for its filing.
PRACTICE & PROCEDURE – Abuse of process – Multiple proceedings out of one event – Relevant and applicable principles
– Need to avoid duplication of proceedings – Duty of a plaintiff to issue one proceedings against all possible defendants
and possible causes of action – Failure to – Conclusion of one proceedings out of one event concludes all other possible
causes of action against all possible defendants – Principle of res judicata and issue estoppel – Application of –
Plaintiff not at any liberty to issue fresh proceedings after conclusion of earlier proceedings
MORTAGES – Rights and duties and responsibilities of mortgagors and mortgagees – Mortgagors right of redemption – Mortgagee exercising rights and powers with approval or endorsement of the Courts – Contract with third party resulting in mortgagee sale and transfer – Whether mortgagor has any right to challenge validity of sale on grounds other than fraud – Right of redemption - Relevant principle – Right of redemption ceases upon execution of contract of sale with a third party – Mortgagors rights and powers – Damages only available remedy in the absence of fraud.
LAND LAW – Mortgagee sale – Transfer and registration of title in third party – Except only on grounds of deliberate fraud to extinguish mortgagor’s right of redemption, execution of contract of sale by mortgagee with third party extinguishes mortgagors right of redemption – Whether a mortgagor has any right to seek to set aside transfer of title – Correct way to seek a set aside of a transfer and its registration? - Judicial review against the Department of Lands in proceedings seeking declaratory orders – Whether the issuance of a writ of summons seeking to set aside a transfer and registration of a transfer a correct mode? – Where fraud is involved writ of summons correct mode.
COMPANY LAW – Mergers or change of names of companies – Effect of – Continuity in existence of company under relevant and correct name respectively under previous and new or merged name – Effect on liabilities and assets – Company has the requisite power and authority to function under the respective names at the relevant times – All relevant contractual and other obligations continue under the new company name.
Cases Cited:
Papua New Guinea Cases
Jimm Trading Ltd v. Maddison (2006) N3174
Titi Christian v. Rabbie Namaliu (1996) SC1583
Telikom PNG Ltd v. Independent Consumer and Competition Commission (2008) SC906
The Government of Papua New Guinea and Davis v. Barker [1977] PNGLR 386
South Pacific Post Pty Ltd v. Ikenna Nwokolo [1984] PNGLR 38
John Peng v. The State [1982] PNGLR 331
Abiari v. The State [1990] PNGLR 250
James Pari v. The State [1993] PNGLR 173
Rawson Construction Ltd v. Department of Works (2005) SC777
Ben Kairu v. The State (2005) SC782
Tamara Player Tomscoll v. The State (2012) SC1208
MVIT Ltd v. Yama Security Services Ltd (2009) SC1004
Golobadana No 35 Ltd v. Bank of South Pacific Ltd (2002) N2309
National Fisheries Authority v. New Britain Resources Development Ltd (2015) N6078
Open Bay Timber Ltd v. Hon Lucas Dekena (2013) N5109
MVIT v. John Etape [1994] PNGLR 596
PNGBC v Jeff Tole (2002) SC694.
Harry Tovon v. Carl Malpo (2016) N6240
TST Holdings Pty Ltd v. Thomas John Pelis [2000] PNGLR 186
Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali & Anor; Ome Ome Forests Ltd v. Ray Cheong & Ors (2002) N2289
Kerry Lerro v. Philip Stagg as Chairman of Central Tenders Board & The State (2006) N3050.
William Powi v. Niugini Building Supplies Ltd (2016) SC1501
Philip Takori v. Simon Yagari (2008) SC905
Mount Hagen Urban Local Level Government v Sek No. 15 Ltd (2009) SC1007
Jackson Tuwi v. Goodman Fileder International Ltd (2016) SC1500
Michael Kuman v. Digicel (PNG) Ltd (2013) SC1232
MVIL v. Sossie Joe (2007) SC863
Waim No 85 Ltd v. The State (2015) SC1405
John Hiwi v. Rendle Rimua (2015) SC1460
Able Construction Ltd v. W.R. Carpenter (PNG) Ltd (2014) N5636
Richard Wapua v. Poss Lopkopa (2009) SC1048
Dan Salmon Kakaraya v. The Ombudsman Commission of Papua New Guinea (2003) N2478
Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906
Gene v. Hamidian-Rad [1999] PNGLR 444
Overseas Cases cited:
Jonesco v. Beard [1930] AC 298
Pilato v. Metropolitan Water Sewerage and Drainange Board (1959) 76 W.N. (NSW) 364
Other sources cited:
Halsbury Laws of England (4th Ed) Vol. 9, paragraph 57.
Counsel:
P. Parkop, for the Plaintiff
I.R Shepherd, for the Defendants
02nd June, 2017
1. KANDAKASI J: This is the latest of several proceedings issued by the Plaintiff, Jimm Trading Ltd (JTL) against the Bank South Pacific Ltd (the
Bank) and the other defendants. JTL failed in four earlier separated proceedings,[1] some going as high as the Supreme Court. In those proceedings, JTL unsuccessfully tried to stop the Bank from exercising its mortgagee
powers over a property described as Lots 7 and 11, Section 387, Hohola, National Capital District (the property) which JTL gave as
security for a loan to it from the Bank. JTL defaulting on its loan repayments triggered the Bank’s action. In this proceeding,
JTL claims the Bank acted fraudulently for two main reasons. Firstly, the Bank sold the property to a non-existent company. This
is something JTL says it discovered after the conclusion of the earlier proceedings. Secondly, JTL claims, the Bank breached court
orders preventing the sale. The First, Second, Fourth, Fifth and Sixth Defendants have been named as Defendants only on account
of being employees and or shareholders and directors respectively of the Third, Seventh and Eight Defendants.
Parties Arguments
2. In their response, the Defendants filed and eventually moved a motion for a dismissal of this proceeding. They argue that this proceeding constitutes an abuse of the process of the Court, or are frivolous and or vexatious because:
(a) all earlier proceedings were determined against JTL and they effectively authorized the Bank’s actions;
(b) the earlier proceedings finally concluded all claims arising out of the Bank’s exercise of its mortgagee rights and powers and as such JTL is precluded from issuing this proceeding despite the alleged discovery of new facts;
(c) the main relief claimed is against the Registrar of Titles without naming him as a party and in any case it should have been by judicial review proceeding and not by a writ of summons; and
(d) the claim of fraud has not been properly pleaded with sufficient particulars despite the requirements for such pleadings by the National Court Rules (“the Rules”).
3. In the event that their application fails, the Bank and the other Defendants apply for security for costs to be paid into Court by JTL. This proceeds on the basis that the sole shareholder or owner of JTL is not a PNG national and is indebted to the Bank in access of K1.7 million.
4. JTL in opposing the application, first argues that, the Bank and its officers’ application is an abuse of process itself because it is not preceded by a formal defence to its claim. Secondly, it argues that, the cause of action in this proceeding is separate even though it arises out of the Bank’s exercise of its mortgagee powers which was the subject of the earlier proceedings. Thirdly, it goes on to argue that, this claim is based on a discovery of the Bank having sold the property to a none existent entity at the relevant time of the sale and transfer of the property to a Patu No. 27 Ltd which later changed to T.S.T. 4 Mile Ltd (“TST”) by reason of which the company was none existent and therefore amounted to a fraud against JTL. This discovery, it claims, came after the earlier proceedings were concluded. Fourthly, JTL claims the sale to TST was contrary to a consent National Court orders under WS 308 of 2000. Fifthly, JTL argues that the affidavits filed in support of the Defendants’ application do not constitute any fact upon which the Court can act as they amount to hearsay, arguments and submissions and nothing more. Finally, JTL argues that, it has a good case based on fraud and breach of court orders which deserve a proper trial before there can be a final decision on its claims. Accordingly, it argues for a dismissal of the Defendants’ application for having no factual or legal foundation.
Relevant Issues
5. From the arguments of the parties, the issues presented for this Court to consider and determine are these:
(1) Do the particular circumstances of this case, attract an application of the common law doctrines of res judicata and or issue estoppel?
(2) Does JTL sufficiently plead a cause of action against each of the Defendants in its statement of claim?
(3) Are the defendants entitled to file and move their notice of motion without first filing and serving their formal defence to the plaintiffs claim?
(4) Is judicial review the only process that must be used by persons seeking a reversal of an entry on a title by the Registrar of Titles?
(5) Is it necessary for a plaintiff to name and plead a cause of action against the Registrar of Titles to enable an order for a reversal of an entry in a title?
6. I will consider and determine each of these questions in the order in which they are presented. The second to the fifth issues are questions of law. These can be answered quickly by reference to the relevant law and how JTL has pleaded its claim without more. The first issue requires evidence going into earlier proceedings and how the current proceedings might be a repeat of what was earlier determined. As it will become clearer soon, I dealt with one of the latest cases involving the same parties and the very issues raised in this proceedings. The decision has been published. Hence, the first question can be answered by reference to the relevant law and the facts as set out in my prior judgment and any evidence JTL has brought in its attempt to demonstrate how the current proceedings are different from any of the proceedings it earlier brought and were finally determined against it. In view of this, I decided against listing and separately dealing with JTL’s arguments against the Defendants’ affidavits.
Res Judicata and Issue Estoppel – Issue 1.
7. The first issue raises the question of whether the particular circumstances of this case attract an application of the common law doctrines of res judicata and issue estoppel. This requires an establishment of what the circumstances are and then consider if either or both of the doctrines apply.
8. As I mentioned one of JTL’s earlier proceedings came before me and I made a final decision on it. That was under WS No.145 of 2003. I dismissed that proceeding by a written decision delivered on 3rd November 2006 and published as Jimm Trading Ltd v. Maddison.[2] Essentially, the parties are the same. The only changes are in the names of the natural persons who are officers, servants and or agents of the Bank and TST. In that earlier proceeding, I noted the relevant factual background. The relevant chronology of events started in August 1999. Around that time, the Bank, then known as PNGBC Limited trading as Papua New Guinea Banking Corporation, provided at the request of JTL an overdraft facility in the sum of K400, 000. That was in addition to a loan of K3.3 million JTL had earlier obtained. The loan was for a period of 5 years with a monthly repayment of K88, 000. On 5th December 1999, JTL asked for and the Bank provided a further loan of K600, 000. These overdraft and loan facilities were secured by various registered fixed and floating charges, registered mortgages over four real properties and an unlimited guarantee given by a Wesley Hui director of JTL in favour of the Bank.
9. On 15th November 2000, the Bank issued a letter of demand. That followed JTL defaulting on its loan and overdraft repayments in the same
year. On 11th December 2000, the Bank served a further letter of demand on JTL for a total amount of K4, 050,724.06. Despite the letters of demand,
JTL’s default continued. More than six months later, by letter dated 21st June 2001, the Bank through its then lawyers, Blake Dawson Waldron, served on JTL a request to vacate the property, allotments 7
and 11, section 387, Hohola. This, JTL did not do. Consequently, the Bank issued National Court proceedings, O.S. 665 of 2001 on
26th October 2001, seeking amongst others vacant possession from JTL. On 12th December 2001, the National Court, per the then Chief Justice, Sir Arnold Amet, granted those orders.
10. Being aggrieved by the decision of the National Court, JTL on 20th December 2001, filed Supreme Court appeal, SCA 110 of 2001. On the next day, JTL filed an application with the Supreme Court seeking
a stay of the National Court orders. Sheehan J., heard that application as a single judge of the Supreme Court and dismissed it on
24th December 2001. Thereafter, on 3rd January 2002, JTL filed OS No. 2 of 2002, between it as plaintiff and the Privatization Commission as defendant, without naming the
Bank. Then by the consent of the parties to those proceedings Salika J., on 5th January 2002, ordered amongst others:
“1. That the Defendant direct PNGBC to refrain from exercising its power of sale of the mortgage property.
2. That the Defendant direct PNGBC Limited to avoid unnecessary litigation and further stay execution of the writ of possession and
any other court orders obtained against the Plaintiff until properly reviewed by the Defendant of the possible damages and liabilities
resulting from the execution of the said writ of possession or orders.”
11. Under cover of letter dated 4th January 2002, by then Chairman of the Privatization Commission, Mr. Ben Micah to Garth McIllwain of the then PNGBC, forwarded a copy of the consent orders. About 4 days later, on 8th January 2002, the Bank filed a writ of possession, which ordered that the Sheriff enter the property and caused the Bank to have vacant possession. By letter dated 28th January 2002, addressed to Emmanuel Hela, Metropolitan Superintendent, the Bank said it would continue with the execution of the writ of possession.
12. On 13th March 2002, the Bank filed Supreme Court appeal, SCA 8 of 2002, against Salika J.’s orders of 5th January 2002. Then in July 2002, JTL was again served with a notice to vacate the property under the writ of possession. On 11th July 2002, JTL filed a notice of motion in SCA 110 of 2001, seeking an order restraining the Bank from executing the writ of possession issued under O.S. 665 of 2001. Amet CJ, (as he then was) on 12th July 2001, ordered a dismissal of that motion and directed the Sheriff to execute the writ of possession. Accordingly, the Sheriff executed the writ of possession against the property on 17th July 2002.
13. A stock take of the property and materials present on the property was carried out on or between 18th and 20th July 2002, by the agents and servants of the Bank. After the stock take, the Bank invited TST and its servants and agents to inspect the properties and tender for a purchase of the stock at the property, which they did on 1st August 2002. They tendered for a price of K300, 000 for items listed by the Bank. The Bank accepted the tender and on 5th August 2002, it gave access of the property to the TST and its servants, employees or agents and for them to enter the property and do everything necessary and possible to re-open the business.
14. On 14th August 2002, JTL filed an Application for Leave to Appeal against the decision of Amet CJ., in SCA 110 of 2001. On 24th November 2003, the Supreme Court dismissed JTL’s appeal. Meanwhile, a number of activities took place in other litigation fronts covering the period, December 2002 to May 2003. That started with the issuance of proceedings W.S. 1580 of 2002 on 3rd December 2002, by Wesley Hui, the main shareholder and owner of JTL, against the Bank and two of its officers. He also issued W.S. 58 of 2003, against Neville Seeto, Barry Tan, Stephen Tan, TST 4 Mile Limited, the purchasers of the property and the Bank on 20th January 2003. The following month on 6th February 2003, JTL issued the proceeding WS No.145 of 2003.
15. Supreme Court appeal, SCA 8 of 2002 by the Bank against the consent orders under O.S. 2 of 2002 went before Sakora J as a single judge of the Supreme Court. His Honour on 28th March 2003, held the consent order was binding on the Bank. His Honour then issued several restraining orders and ordered a return of the goods and assets seized under the writ of possession. JTL filed contempt of Court proceedings against the Bank under SCA 8 of 2002. Eventually however, the orders of Sakora J., were discharged by the Supreme Court on 24th November 2003.
16. On 14th May 2003, the proceedings under WS No.145 of 2003, came before me on an application by JTL for default judgment in default of the Defendants’ defence. Also, before me was an
application by the Bank and the other defendants for a dismissal of the proceedings for failure to disclose a reasonable cause of
action or the claim being frivolous and vexatious. I refused both of the applications and ordered JTL to file and serve within 14
days an amended statement of claim with particulars especially, in relation to JTL’s claims of fraud. I also ordered the defendants
to file and serve their defence within a further 14 days period from the date of the service of the amended statement of claim.
17. On 28th May 2003, JTL filed and served an amended statement of claim in purported compliance of the orders of 14th May 2003. By a detailed letter dated 5th June 2003, the Defendants informed JTL that the amended statement of claim did not fully comply with the orders of 14th May 2003, and was defective for a number of reasons. Hence, they requested JTL’s lawyers to withdraw the amended statement
of claim. At the same time, they warned JTL that, unless JTL withdraws the amended statement of claim by or before close of business
the same day, they will apply for a dismissal of the proceeding.
18. On 13th June 2003, JTL filed a notice of motion seeking to enter judgment in default of the Defendants defence. The Defendants responded with a counter motion seeking amongst others, a dismissal of the amended statement of claim and for judgment in their favour. I heard the motions on 15th March 2006 and came to a decision on 3rd November 2006, dismissing the proceeding. In paragraph 66 of the judgment I summed up the reasons for my decision as follows:
“...The proceedings against all of the defendants disclose no reasonable cause of action and or an action that is sustainable. Further, the proceedings amount to an abuse of the process of the Court particularly when there was an earlier long drawn out history of litigation as between the Bank and JTL which resolved in favour of the Bank, without JTL seriously pursuing its right of appeal. They also amount to an abuse of the process of the Court because JTL has failed to provide any reasonable explanation either in the pleadings or by any evidence that these proceedings and the issues they raised are clearly different and that they could not have been raised in the earlier proceedings to avoid the application of the doctrine of res judicata. Furthermore, JTL has named the Bank and the other defendants and have made allegations against the Bank’s former lawyer in a manner that is vexatious, scandalous and embarrassing to the Bank and the other defendants. The Court in the exercise of its discretion in JTL’s favour once already granted JTL leave to file and serve an amended statement of claim with particulars of each of the claims against the defendants and show how the issue of res judicata does not arise. That opportunity has not been properly made use of and no case has been made out for a further exercise of discretion in favour of JTL. The Court does have the power under O 12 r 1 and r 40 to put a stop to proceedings that amount to an abuse of the Court’s process or are vexatious, scandalous and have the potential to embarrass the parties to the proceedings. In the circumstances, I consider it appropriate to order a dismissal of the proceedings with costs against JTL to be agreed if not taxed.”
19. In this proceeding, JTL pleads in paragraphs 10 to 21 the earlier proceedings arising out of the Bank exercising its mortgagee powers. Interestingly, JTL does not make any mention in any of its current pleadings or at all, it’s earlier proceeding under WS 145 of 2003. The pleadings make no reference to the fact that all of the previous proceedings were determined against JTL finally by the Supreme Court. Instead, the pleadings for example at paragraph 34 plead that the Bank acted contrary to the consent orders under OS 2 of 2002 which were effectively discharged by the Supreme Court under SCA 8 of 2002 on 24th November 2003. Similarly, there is not a single pleading in JTL’s statement of claim which acknowledges the dismissal of its earlier proceedings and a demonstration of how it is entitled to issue this proceeding instead of appealing against the earlier decision.
20. The Defendants’ lawyer’s submission does not expressly argue for an application of the doctrines of res judicata or issue estoppel. However, I am of the view that, their submissions under the subheading “Vexatious” is sufficient to have that effect. The law on these doctrines are clear from the Supreme Court decisions in Titi Christian v. Rabbie Namaliu.[3] That decision was referred to in Telikom PNG Ltd v. Independent Consumer and Competition Commission.[4] The relevant principles can be summarized as follows:
(1) Res judicata means “a final decision pronounced by a judicial tribunal having competent jurisdiction over the cause of matter and over the parties therein, disposes of once for all the matters decided so that they cannot afterwards be raised for re-litigation between the same parties or their privies.”
(2) “The effect of such a decision is two-fold. In the first place, the judicial decision estops or precludes any party to the litigation from disputing, against any other party thereto, in any latter decision, the correctness of the earlier decision in law and fact. The same issue cannot be raised again between them, and this principle extends to all matters of law and fact which the judgment, decree or order necessarily established as the legal foundation or justification of the conclusion reached by the court. In the second place, by virtue of the decision the right or cause of action set up in the suit is extinguished, merging in the judgment which is pronounced. The result is that no further claim may be made upon the same cause of action in any subsequent proceedings between the same parties or their privies.”
(3) In summary, a claim of res judicata will be made out if a defendant is able to establish that the:
(a) parties or their privies in an earlier proceeding and a later one are the same;
(b) issues in both matters are the same;
(c) previous judgment or decision is final and conclusively determined all issues presented; and
(d) previous decision was by a court of competent jurisdiction.
21. On issue estoppel, although related to res judicata, it arises where the:
(1) same question was or could have been decided in both proceedings;
(2) judicial decision said to create the estoppel was final; and
(3) parties to the earlier proceeding were the same persons or their privies as the parties to the proceeding in which the estoppel is raised or their privies.
22. I have no hesitation in finding the factual background to this proceeding do give rise to an application of the doctrines of res judiciata and or issue estoppel. This is so because the:
(a) parties or their privies in the earlier proceedings and the current one are the same;
(b) issues or questions in the earlier proceedings and the current one are the same;
(c) previous judgments or decision were final and conclusively determined all issues then and now presented; and
(d) previous decisions were by Courts of competent jurisdiction.
23. Indeed, I find the current proceedings are on all fours with the proceedings under WS No.145 of 2003. The only difference, although not significant, is the fact that, in the earlier case, JTL was given an opportunity to properly plead its case but it failed to properly do so. The attempt by JTL to get around an application of the doctrines of res judicata and issue estoppel in the current proceeding by claiming a later discovery of the alleged fact of the Bank selling the property to a non-existent company or entity cannot be sustained. If this claim can be sustained the correct process to use is the appeal or review process. Under such a process an application for the introduction of fresh evidence can be made. To succeed in such an application, JTL has the burden of meeting the well-established tests of the evidence in question:
(1) could not have been obtained with reasonable diligence for use at the trial;
(2) if that evidence was given, although not decisive, it would have probably had an important influence on the eventual outcome of the case; and
(3) must be such that, it must be apparently credible, though need not be incontrovertible.[5]
24. In a number of recent cases like the one in Tamara Player Tomscoll v. The State[6] and Rawson Construction Ltd v. Department of Works,[7] applications for fresh evidence were refused where one or more of these tests were not met. In these two cases, the Supreme Court found that the evidence sought to be adduced as fresh evidence were available at the time of the trial. The evidence could have been adduced into evidence at the trial with the exercise of reasonable care and attention. This, the respective parties applying to adduce them as fresh evidence failed to do. Also, the Court found that the evidence in question would not have influenced the outcome of the case.
25. Applying these tests to the case at hand, the alleged late discovery of evidence fails to meet these tests. Here, the evidence was always around. All it required was a quick search at the register of companies which would have revealed the information JTL wants to adduce as fresh evidence now. If JTL was diligent enough, it could have ascertained and included this aspect of its claim in its earlier proceedings’ pleadings. Even if the evidence in question could pass for fresh evidence test, it would still make no difference in the bank’s exercise of its mortgagee powers. At law, a change in a company’s name does not render a company non-existent. Instead, the company continues to exist without affecting its rights, duties and obligations. Section 24 (4) (b) of the Companies Act 1997, makes this clear in the following terms:
“(4) A change of name of a company—
...
(b) does not affect the identity of the company, or the rights or obligations of the company, or legal proceedings by or against the company, and legal proceedings that might have been continued or commenced against the company under its former name may be continued or commenced against it under its new name.”[8]
26. In MVIT Ltd v. Yama Security Services Ltd,[9] the Supreme Court had a similar argument as presented in the present case. The Supreme Court was not impressed. Without having any particular regard to the relevant provisions of the Companies Act, an argument aimed at getting around a judgment on account of a change in the name of the appellant company was dismissed. What happened there and the foregoing brief discussion on the legal consequence that follows following change in a company’s name is clear. Consequently, it should also be clear that, the basis on which JTL thinks it is entitled to re-litigate is seriously flawed.
27. Further, except only on a clear case of fraud being brought home to the purchaser in the mortgagee sale, Patu No.27 Ltd or TST could not be dragged into Court by JTL. The only pleading against TST is JTL’s allegation of TST not existing at the relevant time under its current name and nothing more. How does that amount to fraud? JTL does not demonstrate how this amounts to fraud in its pleadings. Although there is reference to fraud and intend to defraud, nothing is in the pleadings with any particulars that brings fraud home to TST. If indeed, TST lacked the necessary capacity at the relevant time, the only party entitled to raise it was the Bank and not JTL. The doctrine of privity of contract dictates that. Further, it is settled law that, a mortgagor’s right to redeem his or her mortgaged property exists up to and before a mortgagee signs a contract of sale with a third party. Once a contract of sale is signed, a mortgagor’s right of redemption ceases and may only be entitled to sue for damages if for example the mortgagee exercises its powers negligently and in the consequence, the mortgagor suffers harm, loss or injury. I elaborated on the relevant principles in the case of Golobadana No 35 Ltd v. Bank of South Pacific Ltd,[10] which I need not repeat here.
Sufficiency of pleadings – Issue 2
28. Only through a carefully considered and set out pleading would help answer questions raised above. This raises the question of sufficiency of pleadings. That is the subject of the second issue before this Court, to which I now turn to.
29. It is well accepted in our jurisdiction that pleadings with appropriate particulars serves an important purpose in litigation. A succinct statement of the law is in the following terms:
“Pleadings define the issues in general terms. Particulars control the generality of the pleadings and restrict the evidence to be led by the parties at the trial and give the other party such information as may enable him to know what case he will be met with at the trial and prevent surprise. Evidence enables the tribunal within the ambit of the general definition of the issues, affected by the pleadings and limited by the particulars, to decide where the truth lies.”[11]
30. In the case of a claim based on fraud there is a strict requirement to plead it with precision and with particulars. The point is clearly made by the House of Lords in Jonesco v. Beard,[12] per Lord Buckmaster, with whom the other members of the House of Lord’s concurred said at p. 300:
“It has long been the settled practice of the court that the proper method of impeaching a completed judgment on the ground of fraud is by action in which, as in any other action based on fraud, the particulars of the fraud must be exactly given and the allegation established by the strict proof such a charge requires.”
31. Locally, Hartshorn adopted and applied this principle in his honour’s decision in National Fisheries Authority v. New Britain Resources Development Ltd.[13] Earlier, in Open Bay Timber Ltd v. Hon Lucas Dekena,[14] Cannings J., accepted an argument for the defendants that an allegation of fraud against them was not properly before the Court as it had “not been properly pleaded with precision.” Order 8, r. 30 of the National Court Rules (the Rules) codifies this position of the law by requiring a party pleading fraud to give particulars.
32. In the case before me now, I note this is a repeat of what has been the case in the previous proceedings brought by JTL. JTL and his lawyers always had a problem with properly pleading with sufficient particulars in accordance with the law and practice. In my first decision in Jimm Trading Ltd v. Maddison[15] which was out of WS 145 of 2003, I made this observation at paragraph 32 of my judgment:
“Leaving aside the issue of JTL’s authority to issue and maintain these proceedings, the question that remains for me to determine is, what was JTL’s cause of action? That was one of the pertinent questions when this matter initially came before me on 14 May 2003. Issues of res judicata, abuse of the Court’s process and possible duplication of proceedings arose. Bearing these and other factors in mind, rather than dismissing these proceedings, I ordered JTL to file and serve an amended statement of claim so as to enable the defendants and the Court to identify and determine how these proceedings were different from the proceedings and issues that were earlier determined or raised in the other related proceedings.”
33. As it turned out, JTL failed to comply with the orders for it to file and serve an amended statement of claim. Consequently, I ordered a dismissal of the WS 145 of 2003, proceeding. In the proceeding now before the Court, JTL has again failed to plead with sufficient particulars. Apart from the pleadings describing the parties, JTL’s claim could be easily summed up as being based on allegations of:
(a) Entering into and signing the contracts of sale and transfer between TST and the Bank was contrary to and in breach of various Court orders;
(b) TST did not exist at the relevant time but Patu No. 27 Ltd did and later changed to TST;
(c) The contracts and transfer instruments were not properly signed under company seal of Patu No. 27 Ltd and did not receive Ministerial approval;
(d) Registered mortgages in the name of Patu No.27 Ltd and in the name of PNGBC when these entities had ceased to exist.
(e) By reason of (a) to (d) above, the Bank, the Sixth and Seventh Defendants conducted “by way of fraud with intend to defraud the Plaintiff”, JTL.
34. Not a single particular is pleaded as to how these actions amounted to fraud or dishonesty on the part of any or all of the Defendants with intent to unlawfully deprive JTL of its rights in the property or at all and how these defendants benefited. Without any precise pleading in such terms, JTL’s claim is doomed and bound to fail from the outset. As already noted, the law allows for changes in company names without affecting its rights, duties and obligations. The same goes for company amalgamations or takeovers subject to certain conditions imposed by Companies Act 1997 especially under Part XIV (ss. 232 -240). Obviously, JTL’s claims fail to properly appreciate and recognize the consequences that follow the changing of company names and or amalgamation of companies.
35. If indeed the Defendants acted contrary to any specific Court orders, the answer and recourse to that lied in applications for contempt of Court or enforcement of the orders or judgments. The submissions of JTL does not assist with any arguments addressing the issue of how a breaching of a Court order gives rise to a new cause of action. There is much authority both locally and internationally for the proposition that, public policy requires finality in litigation between the same parties over the same cause of action subject only to the right of appeal or review. There is however, one additional exception to that, in cases where a judgment or final order has been arrived at by fraud or mistake. Persons who are affected by such a judgment could issue fresh proceedings against the judgment or order of a Court on the basis that the judgment was arrived at by mistake or fraud. Based on earlier authorities[16] I made that observation in my decision in Harry Tovon v. Carl Malpo[17] in these terms in the context of a consent order finalizing a proceeding:
“...once final judgement has been entered, the only recourse to a party aggrieved by a consent order or a judgement is to either appeal or to issue fresh proceedings on the basis of fraud or such orders or judgement being obtained by mistake.”
36. Indeed, there is precedent of such action being taken in our jurisdiction. The case of TST Holdings Pty Ltd v. Thomas John Pelis[18] is on point. In that case, the plaintiff successfully brought the case against the Defendant on the basis that a National Court judgment against it was secured by fraud. That resulted in a set aside of the judgment, the subject of the claim. The proceedings before me are not such a proceeding.
37. In the present case, apart for the pleadings describing, the First, Second, Fourth and Fifth Defendants, who were officers of the Bank and TST, at the relevant times, nothing is in the pleadings that discloses an allegation or claim against each of them personally. This is again a repeat of what happen in WS 145 of 2003. There, JTL named Richard Busby, John Maddison and other individuals. They were employees of the Bank and TST acting in the course of their respective duties as employees of those corporate entities. Other than that fact, nothing else was pleaded that could attract personal liability against the individuals. I observed in that case and I continue to do so here that, lawyers these days a merely naming heads and other staff of government departments and company officials and employees merely by reason only of the positions they hold which hardly discloses are reasonable cause of action against them. This is being done despite clear judgments like the one I published in Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali & Anor; Ome Ome Forests Ltd v. Ray Cheong & Ors[19] in the context of a contempt of Court proceeding and what I said in my decision in WS 145 of 2003. There, citing a passage from the Ome Ome Forest case, I said:
“This means where an employee or an officer of a company is in the course of his employment pursing his employer or principle’s business or interest and incurs a liability, that liability becomes that of the company or the principle. The correct party should therefore, be the company or the principle and not the employee or the officer. If however, the employee or the officer goes out on a frolic and detour of his own and incurs any liability, that employee becomes personally liable and is therefore the correct party to be named and not the company.”
38. I went on to emphasise the need for a plaintiff to:
“...exercise care and restrain before naming an employee or an officer of an employer as a defendant to any claim against a company if all that the employee or officer did was pursued his or her employers business in the course of his or her duties, unless they did something to attract personal liability.”
39. Applying these principles to the WS 145 of 2003 proceedings, I noted the only pleading against the Bank’s officers were allegations of negligence. The negligence was allegedly in enabling the other defendants to take occupation of goods and assets detained at the mortgaged property. I then found that:
“If there was any such negligence it could have been that of the Bank as the first and second defendants’ only acted in pursuance and in furtherance of the Bank’s interest. That interest was to enforce the Bank’s securities following JTL’s defaults in the repayment of its various loans. Nothing is pleaded in the amended statement of claim. Also, there is no disclosure neither in the pleadings nor in any evidence before me that the first and second defendant had something personally against JTL and that they were out to get JTL. In these circumstances, I am of the view that the naming of the first and second defendants is scandalous and vexations, they do have the effect of embarrassing and making the defence of the Bank and the other defendants unnecessarily expensive given the multiplicity of defendants.
40. Similarly, I found that:
“...the naming of the other defendants is also scandalous and vexatious. No particulars of any of the allegations against these defendants are pleaded. For example no particulars in terms of time, date and place and the people involved in coming up with the conspiracy and other allegations against them. There are also no pleadings and or evidence of any conspiracy or collusion between these defendants and the Bank in respect of the steps the Bank took against JTL under the various registered securities for its loans or advances to JTL. The fourth to the sixth defendants are the shareholders, officers and or employees of the seventh and the eight defendants. Nothing is pleaded that discloses a case of the fourth to the sixth defendants having incurred personal liability in order for them to be also named as defendants. Clearly therefore, the pleadings defy the separate legal personality principle in terms of the relationship between the fourth to the sixth defendants and the seventh and eight defendants either has servants, agents and or the shareholders. It is also abundantly clear that, the seventh and eight defendants became the successful purchaser of the property, goods and assets the Bank sold under its various registered mortgages and charges and nothing more. In the circumstances, I find that the fourth to eight defendants were unnecessarily and scandalously named as defendants. This does have the potential of embarrassing these defendants. In the circumstances, I find that, JTL abused the Court process in naming these defendants. I would therefore order a dismissal of the proceedings as against these defendants as well.
41. In the end I concluded as I did at paragraph 66 of that judgment. The relevant text is reproduced at paragraph 18 of this judgment, which I need not restate here.
42. The current proceeding has no improvement from what I found in the earlier proceeding. They therefore attract the application of the provisions of O. 12, r. 40 (1). There is a large body of case law on this provision and the summary power the Court is vested with. In my decision in Kerry Lerro v. Philip Stagg as Chairman of Central Tenders Board & The State,[20] I reviewed all of the relevant case authorities on point and summarized the relevant principles emanating from them. The Supreme Court has in a number of its judgments as in William Powi v. Niugini Building Supplies Ltd,[21] cited that decision and applied the principles summarized there.
43. For the case at hand, I quoted the relevant passage in my decision in WS 145 of 2003 and I wish not to repeat it here. What is apparent from these long list of authorities is that, in appropriated cases, where no cause of action is pleaded or disclosed or the pleadings otherwise amounts to an abuse of the Court’s process or scandalous, the Court has the power to end the proceedings. This is necessary to prevent the wastage of the parties time and costs and other hardships. It also helps avoid a wastage of public funds which funds the Courts, the Courts’ time and other resources.
44. In my decision in WS 145 of 2003, I found and held that JTL failed to disclose a reasonable cause of action, the proceedings were scandalous and amounted to an abuse of the process of the Court. The current proceeding clearly fails to make any improvement from the earlier proceedings. Instead, it is in essence a repeat of the same claim as the previous ones, with no cause of action pleaded against each of the defendants. The only exception is the claim as against the Bank, TST and Neville Seeto against whom there is something at least pleaded. Even in those cases, pleadings against them is a repeat without any improvement from the earlier proceedings that were dismissed. In these circumstances, I am convinced that a dismissal of the proceedings is called for.
Motion seeking dismissal without a formal defence – Issue 3
45. However, a negative answer to the third issue might prevent the Court from ordering a dismissal of this proceeding on the basis
of the answers to the first two questions. Hence, it is appropriate to consider the issue presented. The issue here is, can a notice
of motion for dismissal of proceedings be brought without a defendant first filing and serving a formal defence.
46. Counsel, Mr. P. Parkop through whom JTL has raised this issue failed to cite any provision in the Rules or a case law that supports
its arguments. Order 7 r. 2 is the only provision in the Rules that appear to come closer to the issue at hand and the only Rule
that appears to prohibit filing and moving of motions without leave of the Court. The provision reads:
“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.”
47. The Supreme Court in Philip Takori v. Simon Yagari & Ors [22]considered this Rules as well as O. 6 r. 11 and O. 7 r. 6 and concluded:
“A reading of these rules make it clear that, no person can take any step in any proceeding unless, he or she is the person who issued the proceedings at the first place or has filed a notice of intention to defend in the proceedings, within the time periods stipulated in the Rules of the Court. Nevertheless, a defendant may still file and serve his or her notice of intention to defend any time passed the time period for him or her to do so without leave of the Court. But he or she is not entitled to file and serve his or her defence or do anything else except with the leave of the Court. That means no defendant is at any liberty to file and serve his or her defence or take any other step in the proceedings without first seeking and obtaining the permission to do so from the Court. We cannot put it any clearer than that.”
48. In the case before it, the State and other defendants successfully moved by motion for a dismissal of the appellant’s case for want of notice under s. 5 of the Claims By and Against the Act 1996. In upholding an appeal against that outcome, the Supreme Court found the State and the other defendants’ failure to come within the time periods for the filing of their notice of intention to defendant and defence and then proceeding to file and moving their notice of motion without leave of the Court was critical. In its own words the Court said:
“The need for them [the State and other defendants] to first seek and secure the leave of the court to file and serve their defence arose when they did not file their notice of intention to defend within the required period of 30 days. Hence, going by the provisions of O 7 r2 and r6, they had no right to file and serve their defence without first seeking and securing the permission of the Court to do so.
....
Again, going by the provisions of O 7, r2 and r6, the State and the other defendants’ were at no liberty to file and then move, let alone, succeed on that motion, unless they first sought and obtained the leave of the Court. Our perusal of the records of proceedings before the National Court does not show, neither the State and the other defendants nor the Court raising the issue of leave of the Court. So the learned trial judge did not give any consideration to the issue in his judgment. What is clear though is that, the learned trial judge proceeded to deal with the matter as if the State and the other defendants were entitled to bring the application, or that, there was no impediment to their application.”
49. Earlier in MVIL v. Sossie Joe,[23] the Supreme Court took a similar view with one clarification. The clarification was this. If a defendant files his or her notice of intention to defend outside the prescribed time limits but is within the time period allowed for the filing of his or her defence, there is no need for leave. A defendant in that situation could file his or her formal defence as of right. Later in Waim No 85 Ltd v. The State,[24] the Supreme Court arrived at a view different to the one in the Philip Takori case. After referring to the decision in Sossie Joe’s case, the Court held:
“The effect of filing and serving a notice of intention to defend was to confer on the first respondent the right to take any step in the proceedings, provided the step was taken in compliance with the Rules and in particular within time limits imposed by the Rules (Badastal Ltd v Dr Puka Temu (2011) SC1092). Neither the National Court Rules nor any other law imposes a time limit on a defendant for filing a motion for dismissal of proceedings. The first respondent therefore had the right to make interlocutory applications such as moving a motion for dismissal of the proceedings.”
50. Recently, the Supreme Court in John Hiwi v. Rendle Rimua,[25] dealt with the issue of the defendants successfully moving a motion for dismissal of proceedings without first filing a formal defence. There, the appellant argued that, the trial Court erred in allowing the respondents to move their motion without first filing and serving their defence. The Supreme Court rejected that argument and gave three reasons. Two of those reasons are relevant for our purposes. The first was:
“...there is no rule of practice and procedure that prohibits a defendant who has not filed a defence, from moving the Court to dismiss proceedings on the ground that they are time-barred (Waim No 85 Limited v The State (2015) SC1405). The third defendant filed a notice of intention to defend and that was sufficient.”
51. The next reason was...
“though the Supreme Court in Oil Search Limited v Mineral Resources Development Corporation Ltd (2010) SC1022 cautioned against the practice of hearing motions for dismissal of proceedings on the ground that they were time-barred, as distinct from requiring that the issues be pleaded in a defence and argued at trial, the caution was qualified by the proviso that hearing such motions can be justified in clear-cut cases. We consider that this was a clear-cut case and that her Honour exercised the discretion of the Court as to the order of hearing the motions carefully and properly and committed no error.”
52. The decision in Waim No 85 Ltd and John Hiwi did not have any regard to the decision in the Philip Takori case. It appears the parties and the Court were not aware of the existence of that earlier decision. Had the Court in those cases had regard to the decision in the Philip Takori case, the only difference that could have made would have been in a defendant’s right to move a motion for dismissal being affected by the late filing of the defendant’s notice of intention to defend. According to Philip Takori, no further step including the filing and moving a motion could be possible without first obtaining the Court’s leave. On the other hand, according to the Waim No 85 Ltd case, there is no such requirement. I have carefully reviewed the reasons offered by the Supreme Court in both cases. I see no good reason to depart from the view expressed in the Philip Takori case subject to the clarification provided by the decision in Sossie Joe’s case. The foundation for this is in the words used in O 7 r 6(2) and as interpreted and applied by the decision in Philip Takori.
53. Turning then to the specific issue before me, I am of the viewed that, the answer is clearly provided by the decisions in Sossie Joe and Waim No 85 Ltd’ cases. The present case is similar to the Waim No 85 Ltd case. These cases stand for the proposition that there is no requirement for the filing and serving of a defence before a defendant can move to dismiss proceedings especially, in clear cut cases. This is a very sensible position at law. It helps the parties to avoid further costs by going through the process of filing and serving of a formal defence, a reply to that, the various processes that follow through to trial and final decision.
54. In the present case, there is no issue on the Defendants filing and serving their notices of intention to defend within the prescribed time limits. Hence, they were entitled to file and move the motion as they did without first filing and serving their formal defence. Even if there was a requirement for the Defendants to first file and serve their formal defence, I would make this case an exceptionally clear case for the Court to have it terminated right here without the formalities of a formal defence. The history of litigation between the parties dictate such intervention of the Court to avoid further unnecessary costs to the parties and the Court. It is fast becoming pronounced world-wide that justice must be rationed. The Courts exist to enable parties to resolve only genuine and meritorious disputes which they with their direct good faith negotiations or failing that, through the facilitation of a neutral third party like a mediator cannot resolve. In Able Construction Ltd v. W.R. Carpenter (PNG) Ltd,[26] I gave a list of the kinds of cases that should come to Court as follows:
“• a real possibility of setting a legal precedent through a judicial determine which would clarify the law or inform public policy is presented;
55. It should clearly follow therefore that, the Courts do not exist for busy bodies, vexatious and or unreasonable litigants not willing to resolve their dispute by direct or facilitated negotiations. We would have such persons if, limiting the list, they:
(1) bring proceedings without any proper legal and factual foundation;
(2) duplicate or repeatedly bring the same proceedings against the same parties without exhausting the appeal or review process or after having exhausted them;
(3) bring proceedings or take a position that is contrary to a clearly established position at law, statutorily or by case precedent; and
(4) fail to reason with the other party or parties and seek in good faith to have the proceedings resolved through direct negotiations or failing settlement, use mediation or any of the other ADR processes to resolve their dispute or identify a case as falling into the kinds of cases listed in Able Construction Ltd case.
56. The Courts have over the years zealously guided against abuse of their processes and have dismissed cases falling under any of the first three categories. The fourth is now fast becoming an additional category with the global support by law makers, Courts and business leaders for prompt resolution of disputes through mediation or other forms of ADR. There is a lot of local and international body of case law supporting this position. Ultimately, it should follow that, where the Court finds a litigant of the kind described, it should not be slow to shutting the door on him or her. This is necessary to save from certain wastage the limited resources of judicial time and other resources and minimize costs, pain and other sufferings which are often imposed on the parties by prolonged litigation. In so doing, the Courts will deliver justice in a timely manner at less costs, pain and suffering to the parties.
57. As it might now be apparent, the answers to the first three questions should be sufficient to have these proceedings determined against the Plaintiff, JTL. However, since the last two issues have been raised I will deal with them.
Correct mode to use – Issue 4
58. I start with the fourth issue. A short and quick answer to that question is this. Judicial review process is the only mode to use if a party is seeking any of the four reliefs in the nature of prerogative writs specified in O.16 r. 1(1) of the Rules. But where actual fraud is alleged a writ of summons is the correct mode to use. A failure to use the correct mode may result in there being no proper cause of action before the Court and the proceedings could be dismissed on that basis. Here, the claim is based on an allegation of fraud. That being the case, the correct mode to use is a writ of summons. Hence, the issue does not properly arise.
59. Let me elaborate. The Rules provide for the way in which persons seeking reliefs from the Court should come. Order 4, rr.1 – 4 of the Rules prescribes the mode of commencing proceedings that should be used in certain kinds of cases. Of particular relevance and application to the case at hand is Rule 2 (b). Cannings J., in the case of Open Bay Timber Ltd v. Hon Lucas Dekena,[27] considered these provisions and expressed the following view with which I agree:
“Allegations of actual fraud are better prosecuted by writ of summons and statement of claim. Indeed there is a strong argument to say that an allegation of actual fraud against a private individual or corporate body, even if it is to be agitated alongside conventional grounds of judicial review, must unless the leave of the Court is obtained to dispense with the requirements of the Rules be prosecuted by writ of summons.”
60. A failure to observe the dictates of O.4, r 2(b) could prove fatal. A case on point is the decision in Richard Wapua v. Poss Lopkopa,[28] where the learned Chief Justice noted and said:
“The applicant’s action was founded on constructive fraud. But fraud was not pleaded at all because the wrong mode of originating process was used. The action alleging fraud is required to be commenced by Writ of Summons. Order 4 r 2 (b) of the National Court Rules. ... Therefore there was no reasonable cause of action disclosed and the proceedings were liable to be dismissed on the pleadings.”
61. This is understandable because the process of judicial review generally is well accepted as a process that is concerned only about the review of decisions by public authorities or bodies and not the merits of the case. [29] A claim based on fraud would require proper pleading with particulars followed by a trial and a decision arrived at on the substantive merits of the case.
62. Order 16 of the Rules specifically provide for judicial review. Rule 1 (1) and (2) of this Order is relevant. It reads:
“(1) An application for an order in the nature of mandamus, prohibition, certiorari or quo warranto shall be made by way of an application for judicial review in accordance with this Order.
(2) An application for a declaration or an injunction may be made by way of an application for judicial review, and on such an application the Court may grant the declaration or injunction claimed if it considers that ... it would be just and convenient for the declaration or injunction to be granted on an application for judicial review.”
63. When issues of the type now before this Court arises, they can be resolved by reference to the provisions of O.16, r. 1(1) (2) and the numerous case law that has built around it. In their joint judgment, their honours Kirriwom and Cannings JJ., in Telikom (PNG) Ltd v. ICCC and Digicel[30] expressed the view that a literal interpretation of r.1 meant that judicial review with leave of the Court was “the only proper procedure” to use when seeking any of the four kinds of reliefs specified in the rule. They also expressed the view that, the use of the word “may” in r. 1(2) suggests the judicial review process is an option for a plaintiff who wants to apply for a declaration or injunction only. What this means in effect is that, a plaintiff who seeks only a declaratory order may use the ordinary originating process and not the judicial review process under O.16.
64. As their honours pointed out, this is how the Supreme Court decided in its earlier decision in National Executive Council and Luke Lucas v. Public Employees Association.[31] Again, as their honours also pointed out, the Supreme Court decision in Gene v. Hamidian-Rad,[32] followed its earlier decision in the Luke Lucas case. There the Court held that, Hamidian-Rad needed to use the judicial review process as he was going for an order in the form of a certiorari. This he failed to do. In their decision, their honours added:
“We do not consider that it is correct to say that whenever a person wishes to challenge the decision of a governmental body or public authority, the challenge must be made by using Order 16. It is a matter of considering the relief being sought and applying Order 16, Rule 1, to see whether Order 16 is mandatory (Rule 1(1)) or optional (Rule 1(2)).”
65. Applying these principles to the case then before them, their honours, observed that O.16, r.1 (2) applied. That was so because Telikom in the face of the proceeding was seeking only declarations and injunctions. It was not seeking orders in the nature of prerogative writs. Given that, Telikom had an option as to the mode of commencement of the proceedings. As such, it was entitled to use an ordinary originating summons process as it did.
66. In the present case, JTL’s claim is based on actual fraud and it seeks a number of reliefs in its prayer for relief. Two of these reliefs, 3 and 4, seek to nullify and void registration and entries on the relevant title, transfers and related mortgages and a restoration of the title to itself. This appear to attract the application of the decision in the Hamidian-Rad case. At the same time, I am of the view that, if these were the only reliefs JTL was seeking and the only parties to the proceeding were JTL as the plaintiff and the Registrar of Titles and his employer the State as the only defendants with no allegation of fraud, judicial review with leave under O.16 would be the correct mode. However, the pleadings allege fraud against the Defendants and none against the Registrar of Titles. Further, reliefs 3 and 4 are dependent on the reliefs sought earlier in reliefs, 1 and 2, which seek a declaration that the contract of sale of the property and transfer instrument illegal, null and void. If those reliefs do not get granted, reliefs 3 and 4 would follow the same fate. In these circumstances, I am of the firm view that, JTL was obliged, by operation of the O.4, 2 (b) and O 16 1(1) and (2) of the Rules and the numerous case law build around these provisions, to use a writ of summons to plead fraud and do so with particulars. Accordingly, I am of the view that, JTL use the correct mode of commencing its proceedings against the Defendants. Consequently, I would dismiss, the Defendants argument that, JTL should have proceeded by way of judicial review under an originating process with leave of the Court.
Naming and pleading against Registrar of Titles – Issue 5.
67. The foregoing discussion under the fourth issue should form the necessary foundation to answer the fifth and final issue in the Negative. By way of explanation, I first remind myself that the relief sought against the Registrar of Titles is only consequential and dependent on the primary or main reliefs JTL seeks in its prayer for relief. Secondly, the law is very clear that, there is no need to cite any authority. Earlier, in my decision in Ome Ome Forests Ltd v. Ray Cheong,[33] I expressed that view. That was in the context of a contempt of Court proceeding. There, it was argued for those facing the contempt charges that, since they were not named in the original proceedings they were wrongly charged with contempt. I made the point that “it is usual for orders to be made against persons who are not named as parties in the proceedings.” I cited and relied on a passage from Halsbury Laws of England[34] observed the clear effect of the law on point in the following terms:
“A person need not be specifically named as a party to proceedings before any orders could be made against him or her. The position is clearer and applies in cases where interim orders are made for the preservation of property or other interests before they get lost or destroyed. Orders may also be made against persons who are not themselves parties to proceedings, where it is necessary to do so to facilitate a proper dispensation of justice. For example, a third party may have documents that a relevant to proceedings before a Court. Inevitably, such a person would be ordered to produce them in Court. Similarly, a third party may have the custody or control over funds belonging to either or both of the parties to a proceeding. Such a person may be ordered to preserve them in a certain way or pay to a particular person. In any or all of these cases, can there be a challenge to such orders unless the third party concerned does not have in its custody, the funds or the documents or property or interest as the case may be. It is most unheard of for a third party to act contrary to a specific Court orders and then plead not being a party when faced with a contempt charge as in this case. That is why there is no case for the defendants to cite in support of their position, and I know of none.”
69. Applying these principles to the case at hand, I am of the firm view that it was not necessary for JTL to name and plead any fraud or any cause of action against the Registrar of Tiles. As I earlier noted, if JTL succeeds and the first two reliefs sought in its prayer for relief are granted, the entries in the relevant title will be affected. By reason of that, the next two reliefs would necessarily be granted. For that to happen, it is not necessary to name the Registrar of Titles as a party and plead fraud against him.
Summary and final decision
70. Having regard to all of the above, I firstly find that JTL has used the correct mode, a writ of summons to commence this proceeding which is based on fraud and not by way of judicial review and originating summons. Secondly, I find that, if JTL were to succeed in its claim, the entries in Title to the property as kept by the Registrar of Titles would be ordered to be appropriately altered. For that to happen, JTL is not obliged to name and plead a cause of action against the Registrar of Titles. Thirdly, given the history of litigation between the parties with all finally determined against JTL, the common law doctrines of res judicata and issue estoppel apply here. The current proceeding is a repeat of not one but at least 4 different earlier proceedings between the same parties or their privies. The claim of a late discovery of TST not being registered and therefore non-existent cannot be sustained as a matter of law and fact. In any case, that fact existed when JTL brought its earlier proceedings. As such it could have included this fact in the earlier proceedings but for its own negligence or failure. The earlier proceedings were heard and determine by Courts of competent jurisdiction, namely the National and Supreme Courts. The only way to get around them was by way of an appeal or a review filed and pursued at the Supreme Court. That was done in more than one instance and final decisions were arrived at. The proceeding now before me is therefore well and truly barred by the doctrines of res judicata and issue estoppel from being agitated again. Fourthly, if this was not the case, the onus was on JTL to plead with sufficient particulars a totally new cause of action against each of the persons or companies it named in the current proceeding. This it failed to do. Finally, the Defendants where entitled in the particular circumstances of this case and by operation of the law to move by a notice of motion as they have without first filing and serving a formal defence. In these circumstances, a dismissal of the current proceeding is warranted and I so order. I order costs will follow that event against the plaintiff to be taxed, if not agreed.
________________________________________________________________
Powes Parkop Lawyers: Lawyers for the Plaintiff
Ashurst Lawyers: Lawyers for the Defendants
[1] WS 1580 of 2002, WS 58 of 2003, WS 145 of 2003 and WS 322 of 2005.
[2] (2006) N3174
[3] (1996) (Unnumbered and Unpublished Supreme Court decision of Amet CJ, Kapi, DCJ, Los, Salika, Doherty and Andrew & Sevua JJ
[4] (2008) SC906, per Injia CJ, Kirriwom and Cannings JJ.
[5] See:The Government of Papua New Guinea and Davis v. Barker [1977] PNGLR 386; South Pacific Post Pty Ltd v. Ikenna Nwokolo [1984] PNGLR 38; John Peng v. The State [1982] PNGLR 331, Abiari v. The State [1990] PNGLR 250, James Pari v. The State [1993] PNGLR 173, Rawson Construction Ltd v. Department of Works (2005) SC777 and Ben Kairu v. The State (2005) SC782.
[6] (2012) SC1208.
[7] (2005) SC777.
[8] See s. 238 (d) to (h) of the Companies Act 1997. There is a similar effect following an amalgamation except that all actions from date of amalgamation have to be in the name of
the now amalgamated company.
[9] (2009) SC1004.
[10] (2002) N2309.
[11] Per McClemens J., in Pilato v. Metropolitan Water Sewerage and Drainange Board (1959) 76 W.N. (NSW) 364, said at 365 as accepted by the Supreme Court in MVIT v. John Etape [1994] PNGLR 596. Many other subsequent decisions of the Supreme Court as the one in PNGBC v Jeff Tole (2002) SC694, reiterate these principles.
[12] [1930] AC 298.
[13] (2015) N6078.
[14] (2013) N5109.
[15] (supra),
[16] Paul Torato & Ors v. Sir Tei Abal & Ors [1987] PNGLR 403; Peter Lipsey v. The Independent State of Papua New Guinea [1993] PNGLR 405.
[17] (2016) N6240.
[18] [2000] PNGLR 186.
[19] (2002) N2289.
[20] (2006) N3050 (wrongly cited as N3950 in some judgments).
[21] (2016) SC1501. Others cases include: Philip Takori v. Simon Yagari (2008) SC905; Mount Hagen Urban Local Level Government v Sek No. 15 Ltd (2009) SC1007; Jackson Tuwi v. Goodman Fileder International Ltd (2016) SC1500 and Michael Kuman v. Digicel (PNG) Ltd (2013) SC1232 to mention a few.
[22] (2008) SC905
[23] (2007) SC863.
[24] (2015) SC1405.
[25] (2015) SC1460.
[26] (2014) N5636.
[27] (2013) N5109.
[28] (2009) SC1048.
[29] See: Dan Salmon Kakaraya v. The Ombudsman Commission of Papua New Guinea (2003) N2478.
[30] (2008) SC906
[31] [1993] PNGLR 264.
[32] [1999] PNGLR 444.
[33] (supra).
[34] (4th Ed) Vol. 9, paragraph 57.
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