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Nambawan Super Ltd v Paraka (trading as Paul Paraka Lawyers) [2018] PGNC 547; N7686 (17 December 2018)

N7686

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1662 of 2016

BETWEEN:
NAMBAWAN SUPER
LIMITED
Plaintiff

AND:
PAUL PARAKA trading as PAUL
PARAKA LAWYERS
Defendant

Waigani: Hartshorn J,
2018: December 17^th

APPLICATION FOR PROCEEDING TO BE DISMISSED – Order 12 Rule 40 National Court Rules

Cases Cited:
Papua New Guinea Cases

Kerry Lerro v. Stagg & Ors (2006) N3050
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007
KVDC Gold Ltd v. Periasomy (2010) N4270
Madang Cocoa Growers Export Co Ltd v. National Development Bank Ltd (2012) N4682
Peter Makeng & Ors v. Timbers (PNG) Ltd & Ors (2008) N3317
Takori v.Yagari & Ors (2008) SC905
Siu v. Wasime Land Group Incorporated (2011) SC1107
Wamena Trading Limited v. Civil Aviation Authority of Papua New Guinea (2006) N3058

Overseas Cases

Hubbuck & Sons, Ltd v. Wilkinson, Heywood & Clarke, Ltd [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86

Counsel:

Mr. D. Wood and Mr. T Injia, for the Plaintiff
Mr. P. Paraka, the Defendant, in person

17^th December, 2018

1. HARTSHORN J: This is a decision on a contested application by the defendant to dismiss this proceeding.
   

Background

2. The plaintiff, Nambawan Super Ltd (NSL), claims amongst others that:

a) it leased three floors of office accommodation and allocated car parking spaces in its Mogoru Moto Building to the defendant (Mr. Paraka) from about 2007 to December 2016. After August 2012, Five D PNG Ltd managed Mogoru Moto Building on behalf of NSL;

b) on 23^rd March 2016 NSL and Mr. Paraka entered into a Deed of Settlement and Indemnity (Deed) in which it was mutually agreed that Mr. Paraka, as at 1^st March 2016, owed and was to immediately pay to NSL, rental arrears of K373, 423.11 and that further, Mr. Paraka was to commence paying rental amounts on a monthly basis in advance;

c) Mr. Paraka breached clause 4 of the Deed by failing to pay the rental arrears of K373,423.11, and breached clause 6 of the Deed by failing to pay rent on a monthly basis in advance of every month from 1^st April 2016;

d) NSL determined the Lease on 9^th December 2016 and subsequently re-took possession of the three floors and allocated car parking spaces;

e) in the National Court proceeding OS 115/14, commenced by Mr. Paraka against NSL, the Court refused to grant orders sought by Mr. Paraka and found that Mr. Paraka had defaulted in his obligations under the Deed to settle his outstanding rental arrears and meet the monthly rental payments as of 1^st April 2016;

f) NSL claims amongst others, K2,626,425.50 rental, damages and interest against Mr. Paraka.

Dismissal application

3. Mr. Paraka submits that this proceeding should be dismissed as:

a) the Lease agreement and Deed between Mr. Paraka and NSL dated 10^th September 2013 is dutiable under the Stamp Duties Act, but have not been stamped. They cannot be pleaded or given as evidence in court;

b) NSL’s action is based upon instruments that have not been stamped. It is therefore incompetent and a nullity.

4. NSL submits that the proceeding should not be dismissed as:

a) NSL is not prevented from relying on the Lease document and the Deed. If it is so prevented, then NSL has nevertheless adduced sufficient extrinsic evidence to establish the relevant terms of the Lease and that it was duly executed;

b) the Deed is not subject to s.19 Stamp Duties Act and so is admissible as evidence of its own terms and is evidence of terms of the Lease;

c) NSL has adduced sufficient extrinsic evidence to establish the existence of the Lease, and its essential terms.

Consideration

5. In his notice of motion, Mr. Paraka relies on Order 12 Rule 40 National Court Rules, s. 19 Stamp Duties Act and s. 155(4) Constitution as being provisions that provide this court with the jurisdiction to dismiss this proceeding.

6. In regard to s. 155(4) Constitution, it is settled law that it is only to be relied upon to protect the primary rights of parties in the absence of other relevant law. In addition, s. 155(4) cannot be applied to do anything contrary or inconsistent with the provisions of the National Court Rules: Peter Makeng & Ors v. Timbers (PNG) Ltd & Ors (2008) N3317 per Injia DCJ (as he then was). Consequently, as Mr. Paraka is able to have recourse to Order 12 Rule 40 National Court Rules, there is not an absence of other relevant law and so I will not consider s.155(4) Constitution further.

7. In regard to s. 19 Stamp Duties Act, the wording of that section does not provide power to this court to dismiss proceedings.

8. As to Order 12 Rule 40 National Court Rules, there are numerous authorities in respect of the principles to be considered. I refer to the following cases in this regard: Kerry Lerro v. Stagg & Ors (2006) N3050, Takori v.Yagari & Ors (2008) SC905, Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 and Siu v. Wasime Land Group Incorporated (2011) SC1107. The Court in Mount Hagen v. Sek (supra) in paragraphs 27 to 30 conveniently sets out the requirements of Order 12 Rule 40 (1) (a), (b) and (c) as follows:

“27. The terms “vexatious”, “frivolous”, “abuse of the process of the Court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori & The State (2006) N3050; Philip Takori & Others v. Simon Yagari & 2 Others (2008) SC 905. These cases say the same thing.

28. The law with regard to an application for dismissal of proceedings based on O.12 r.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori’s case (supra).

29. The phrase ‘disclosing a reasonable cause of action’ consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i) A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

(ii) The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii) The purpose of O.12 r.40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv) A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.

(v) A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

30. In an application under O.12 r.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded.”

9. Further, notwithstanding all of the various judicial pronouncements since, the position is succinctly summarised in Hubbuck & Sons, Ltd v. Wilkinson, Heywood & Clarke, Ltd [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86. At 90-91 the Court of Appeal said:

“The second and more summary procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands, is insufficient, even if proved, to entitle the plaintiff to what he asks.”

10. Mr. Paraka submits that the Lease and Deed are dutiable under the Stamp Duties Act, have not been stamped and therefore cannot be pleaded or given in evidence pursuant to s. 19 Stamp Duties Act. As a consequence, the proceeding is a nullity, it is submitted, and so amongst others, no reasonable cause of action is disclosed.

11. Assuming for present purposes only, that the Lease and Deed in this instance cannot be relied upon by NSL pursuant to s. 19 Stamp Duties Act, there are numerous authorities for the proposition that if an agreement that is required to be stamped pursuant to the Stamp Duties Act and has not been, and therefore cannot be relied upon as evidence pursuant to section 19(1) Stamp Duties Act, this does not preclude the relevant party from relying on other evidence to prove the existence of the unstamped document and its contents.

12. I refer in this regard to:

a) Wamena Trading Limited v. Civil Aviation Authority of Papua New Guinea (2006) N3058, in which Lay J said at [20]:

“20. Not being able to rely on the unstamped leases does not prevent a witness from asserting that such documents exist and have been executed as is asserted in the evidence for the Plaintiff.”

b) KVDC Gold Ltd v. Periasomy (2010) N4270, in which I said at [7]:

“7. If however the Gold Agreement does require stamping and is not able to be used in evidence, I am satisfied that there is sufficient collateral evidence given of the Gold Agreement and its terms in the affidavits filed on behalf of KVDC, Mrs. Judge and Oceanic International, to permit KVDC to rely on that evidence: Tian Chen Ltd v. The Tower Ltd (2002) N2313, New Ireland Development Corporation Ltd v. Arrow Trading Limited (2007) N3240.”

c) Madang Cocoa Growers Export Co Ltd v. National Development Bank Ltd (2012) N4682, in which Cannings J said at [9]:

“However, that does not mean that the plaintiff cannot rely on other evidence to prove its existence. Not being able to rely on an unstamped agreement does not prevent a witness from asserting that such an agreement exists and giving evidence as to its terms (Wamena Trading v Civil Aviation Authority (2006) N3058).”

13. Consequently, on the assumption for present purposes only, that NSL cannot rely on the Lease and Deed by virtue of s. 19 Stamp Duties Act, this does not ipso facto lead to the conclusion that this proceeding is a nullity. Further, from a perusal of the evidence relied upon by NSL, I am satisfied that there is sufficient evidence to establish the existence of the Lease and Deed.

14. I am of the view that it has not been satisfactorily shown that NSL’s claim is plainly and obviously untenable, that it cannot possibly succeed and that it is bound to fail. Consequently I am not satisfied that Mr. Paraka has successfully made out his case for this proceeding to be dismissed.

Orders

15. The court orders that:

a) The relief sought in paragraph 1 of the notice of motion of the defendant filed 25^th August 2017 is refused;

b) The defendant shall pay the plaintiff’s costs of and incidental to the hearing of the relief sought in paragraph 1 of the said notice of motion on a party party basis;

c) Time is abridged.

Ashurst Lawyers: Lawyers for the Plaintiff
Paul Paraka Lawyers: Lawyers for the Defendant