N8530

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS (COMM) NO. 670 OF 2018

BETWEEN:
SOLTUNA LIMITED
Plaintiff

AND:
PARADISE SUPERMARKET LIMITED
Defendant

Waigani: Anis J
2020: 21st and 30th September

NOTICE OF MOTION – application to strike out defence and cross-claim and for judgment to be entered for assessment of damages – Order 9 Rule 15(1)(a) and (b), Order 12 Rule 1 and Order 10A Rules 15, 16 and 25 – National Court Rules – s. 155(4) – Constitution – exercise of discretion – Order 9 Rule 15(1) – discretion not limited to relief under sub-rule (1)(a) or (b) – issuance of other orders and directions 

Cases Cited:

Brian Joshia v. Stephen Raphael (2016) N7640
Ace Guard Dog Security Services Limited v Lindsay Lai (2003) N2459
Curtain Brothers (PNG) Limited v UPNG (2005) SC788

Counsel:

Mr A Edo, for the Plaintiff
Nil appearance for the Defendant

RULING

30th September, 2020

1.	ANIS J:  The plaintiff applied asking the Court to strike out the defendant’s defence and crossclaim, and for orders that judgment be entered in its favour with damages to be assessed.  The application was moved on 21 September 2020.  I heard and reserved my ruling to a date to be advised.

2.	Parties have been notified so I will rule on it now.

BACKGROUND

3.	The plaintiff is suing the defendant for alleged trademark infringement and in tort for passing-off.  It claims that the defendant had imported 9 cartons of canned tin fish that have a brand type that resembles its registered brand of canned tin fish which it sells in Papua New Guinea and in other countries.  It pleads that its registered brand name is called “Solomon Blue” whilst the defendant’s imported canned tin fish brand is called “Solemoon Bleu.”  The plaintiff seeks declaratory relief and damages for what it claims were the wrongful actions of the defendant.

4.	The defendant on the other hand has filed a defence and crossclaim.  In summary, it denies the claim and, amongst others, seeks declaratory relief as well as damages. 

NOTICE OF MOTION 

5.	The Notice of Motion was filed on 8 September 2020 (NoM/application).  The main relief sought therein are:

1.	Pursuant to Order 9 Rule 15(1)(a) and (b) and Order 12 Rule 1 of the National Court Rule, Order 10A Rules 15, 16 and 25 of the National Court (Commercial List) Rules, Section 155(4) of the Constitution and/ or the inherent jurisdiction of the Court, the defendant’s Amended Defence filed 16 August 2018 be struck out and judgment be entered accordingly against the defendant and the Cross-claim filed on 16 August 2018 be dismissed.
2.	Pursuant to Order 10 Rule 17 of the National Court Rules the claim by the plaintiff be set down for trial for the assessment of damages.

6.	The defendant did not appear in Court on 21 September 2020 to oppose the NoM.  I was satisfied that the defendant had been notified of the hearing date, as per the Court’s direction made on 18 September 2020, and so I granted leave to the plaintiff to move its NoM ex parte.  I would refer to the transcript of proceedings for my full reasonings.

ISSUES

7.	The main issue in my view is this, whether sufficient cause(s) or reason(s) is shown or established by the plaintiff to an extent where I should exercise my discretion and strike-out the defendant’s defence and cross-claim, and enter judgment in favour of the plaintiff for damages to be assessed.

EXERCISE OF DISCRETION

8.	The Court’s power herein is discretionary.  Justice Kariko in the case, Brian Joshia v. Stephen Raphael (2016) N7640, stated and I quote:

18.  O9 r15(1) of the National Court Rules grants the National Court discretionary power to make “such order as it thinks fit” where a party has defaulted in complying with the requirements of the Rules in relation to discovery and inspection. Where the proceedings are by way of a writ of summons and the defaulting party is the plaintiff, the Court may dismiss the proceedings; O9 r15(1)(a).

19.  It is well-settled that dismissal of proceedings following default in giving discovery should not be ordered readily. In Ace Guard Dog Security Services Limited v Lindsay Lai (2003) N2459 Sakora, J emphasised the caution that the discretionary powers under O9 r15(1)(a) to dismiss proceedings should not be quickly applied and that dismissal may be considered in circumstances where there is repeated default in compliance verging on chronic, or discovery is inadequate prejudicing a fair trial and proper conduct of the defendant’s case.  These principles were approved by the Supreme Court in Curtain Brothers (PNG) Limited v UPNG (2005) SC788.

9.	I fully adopt the above as my own.  See also cases:  Ace Guard Dog Security Services Limited v Lindsay Lai (2003) N2459; Curtain Brothers (PNG) Limited v UPNG (2005) SC788.  In the present case, the plaintiff is seeking judgment to be entered under Order 9 Rule 15(1)(a) and (b) of the National Court Rules (NCR).  Order 9 Rule 15(1) begins and I quote,…..Where a party makes default in filing or serving a list of documents or affidavit or other document, or in producing any document as required by or under this Division, the Court may make such order as it thinks fit, including —.  To me, the rule permits a wider use of the Court’s power under Order 9, that is, in addition to what it may order under sub-rules (a) or (b) under Rule 15 of Order 9.

ALLEGED ACTS OF DEFAULT/DELAY

10.	The plaintiff gives 2 reasons for the relief it seeks.  It firstly claims that the defendant has not fully complied with discovery, that is, it alleges want of full disclosure to its Notice for Discovery.  It claims that the List of Documents filed and furnished by the defendant, failed to give full disclosure particularly concerning documents which it claims may have come to the knowledge of the defendant but which it no longer has.  It submits that despite numerous promises made by the defendant that it would furnish a complete list by way of filing an Amended List of Documents, it had failed to do so, thus this application.

11.	Its second claim is this.  It claims that the defendant has failed to diligently attend to its request to inspect the discovered documents in the defendant’s List of Documents.  It says despite numerous promises to organize time for an inspection, the defendant failed in that regard.  It also claims that documents that it had requested from the said list were not delivered to it until only recently after it filed this application.

12.	It submits that the defendant’s failure and belated action, should not deter this Court from exercising its discretion in the manner as is sought in the NoM.

CONSIDERATION

13.	I begin by setting out herein Order 9 Rules 14 and 15(1)(a) and (b), of the National Court Rules (NCR):

14.	Order only if necessary. (23/14)
The Court shall not make an order under this Division for the filing or service of any list of documents or affidavit or other document, or for the production of any document unless satisfied that the order is necessary at the time when the order is made.
15.	Default. (23/15)
(1)	Where a party makes default in filing or serving a list of documents or affidavit or other document, or in producing any document as required by or under this Division, the Court may make such order as it thinks fit, including —
(a)	if the party in default is a plaintiff—an order that the proceedings be stayed or dismissed as to the whole or any part of the relief claimed by him in the proceedings; or
(b)	if the proceedings were commenced by writ of summons and the party in default is a defendant—an order that his defence be struck out and that judgement be entered accordingly.

14.	I also find Order 9 Rule 7 relevant for this purpose.  It reads:

7.	Order for particular discovery. (23/7)
Where, at any stage of the proceedings, it appears, to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceedings that there are grounds for a belief that some document or class of document relating to any matter in question in the proceedings may be or may have been in the possession, custody or power of a party, the Court may order that party —
(a)	to file an affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has become of it; and
(b)	to serve the affidavit on any other party.

15.	I have considered the evidence put by the plaintiff, to support its contentions.  The evidence, in my view, do support the plaintiff’s argument concerning want of full compliance with discovery and delay.  Firstly, the plaintiff had drawn the defendant’s attention to the defendant’s List of Documents and had informed the defendant that the list was defective or incomplete in that it did not plead documents that may have or had come to its knowledge but which it did not have.  The plaintiff also adduced evidence which showed the defendant’s failure in organizing inspection of its List of Documents, and the defendant’s tardiness in providing copies of documents which the plaintiff had requested of the said list.

16.	Considering all that, let me begin by saying this.  As stated above, the Court’s power is discretionary, and my options, in my view, are not limited under Order 9 Rule 15(1)(a) and (b).  They are, (i), whether I should upon hearing this NoM, grant the relief that are sought therein, or (ii), whether I should refuse them completely, or (iii), whether I should make other orders exercising my wider power under Order 9 Rule 15(1), that will address or assist to progress the matter forward to trial in the interest of justice.  I prefer to deal with this matter following the third option, that is, I propose to make orders for compliances with discovery so that the matter may progress to trial.

17.	The reasons for my decision are as follows.  Firstly, I note that the approach taken by the plaintiff is an option that is provided for under Order 9 of the NCR and the plaintiff is entitled to take that option.  There are also other options that are available under Order 9.  One of them is Order 9 Rule 7 as I state above in my decision.  So, I was faced with the issue of whether I should, instead of exercising my discretion in the manner as proposed by the plaintiff, order compliance in the manner as provided for under Order 9 Rule 7.  I have chosen the latter as my intended decision.  I believe that this option is sufficient and appropriate under the circumstances of this case.  I did note the evidence of the delays in providing the documents as had been requested, as demonstrated by the plaintiff in its evidence.  But I have noted that the evidence also showed that the requested documents have been provided by the defendant at the very last minute.  In regard to the documents which may have come to the knowledge of the defendant but which it may no longer have, I took into account the fact that the defendant has already filed its List of Documents.  But the plaintiff’s complaint however is that the defendant’s said List of Documents is insufficient and that it is also defective; it claims that certain documents that the defendant ought to have knowledge of or had come across in the past, were not pleaded or captured in its List of Documents.  In my view, I believe that the complaint may be remedied by an order directing the defendant to file an Amended List of Documents within a specific timeframe for compliance.  The order may also include provisions for specific documents to be disclosed.

18.	The second reason is this.  I considered the fact that the relief in which the plaintiff is seeking is substantive in nature compared to the failure, delays, or the frustrations that the defendant may have put the plaintiff through throughout the discovery process.  In other words, the proposed punishment for the inactions of the defendant, appears severe.  I also considered the fact that the pleadings are substantive and appear to be at an advanced stage in the sense that a crossclaim has been filed and that pleadings are closed.  To summarily dismiss the proceeding based on the inactions or conduct of the defendant, should, in my view, be pursued with caution, and in particular, bearing in mind the rights of the parties to be heard on the merits of the matter.  I must say that I share the same view as expressed by Justice Kariko in Brian Joshia v. Stephen Raphael (supra) that, dismissal of proceedings following default in giving discovery should not be ordered readily.

19.	The third reason is this to do with the Court’s wide power as expressed under Order 9 Rule 15(1).  I considered the fact that I have the power to make such orders as I think fit or necessary.  In this case, the appropriate thing to do under the circumstances, should be to issue directions or orders for compliances, and with consequential orders to follow.

SUMMARY

20.	In summary, I will say this.  Although I do find causes for delays and insufficiencies in regard to full compliances with the discover requirements or process by the defendant, they are not, in my view, sufficient to an extent that I should exercise my discretion and grant the relief in the manner as sought in the NoM.

21.	Even if I may be wrong with my first conclusion, I would still refrain from exercising my discretion for the reason that the consequences or punishment that I am being asked to impose or grant, in my view, are severe, namely, to strike out the defence and cross-claim of the defendant which would mean that the defendant would be shut out completely from defending itself or from being heard on its cross-claim, or it would mean that the Court will not have the benefit of hearing the matter on its merits.  Parties have ‘cross-swords’, so to speak, by coming to the Court and they have set themselves now, with the pleadings in order, for a trial.  The Court’s role is to ensure that the parties are heard or that justice is dispensed in the normal or in a fair manner, and that the Court should try to avoid summary determination of proceedings where possible if the matter appears ready to be trialed.

22.	Therefore, and in relation to the application, I propose to issue directive orders in its stead, for the defendant to file an Amended List of Documents, which may capture the documents inquired by the plaintiff.  If for whatever reason the documents were never received by the defendant, I will also order the defendant to provide an affidavit explaining that within the time that is required for filing its Amended List of Documents.  I will also make orders for the matter to return on a fixed date for directions.  Further, I will also issue an order that if the defendant fails to comply with the Court’s Order on the return date, that it shall show cause with supportive evidence of why its defence and cross-claim should not be struck out with judgment entered for the plaintiff for assessment of damages.

23.	In my view, I do have powers under Order 9 Rule 15(1) to exercise my discretion in the manner as I propose above, instead of granting the orders or relief in the manner as sought by the plaintiff under Order 9 Rule 15(1)(a) and (b) of the NCR.  The plaintiff, by invoking Order 9 Rule 15(1), also enables or entitled this Court to make the orders in the manner as I propose.

COST

24.	An award of cost is discretionary.  I will order cost in favour of the plaintiff.  Evidence adduced shows that it was due to the inactions of the defendant to fully comply with discovery that caused the plaintiff to make the application.

25.	I will order cost to be assessed on a party/party basis to be taxed if not agreed.

ORDERS OF THE COURT 

26.	I make the following orders:

1.	I refuse the relief sought in the plaintiff’s notice of motion filed on 8 September 2020.

2.	I will in its stead, make the following orders:

(i)	The defendant shall file and serve its Amended List of Documents within 7 days from the date of receipt or service of this Court Order.
(ii)	To be included in the Amended List of Documents should be the following:
(a)	Bills of lading;
(b)	Consignment note;
(c)	Commercial invoices;
(d)	Receipt of payment;
(e)	Letter of credit (if any);
(f)	details of the seller of the infringing goods, including details about the manufacturer of those goods.
(iii)	If the defendant does not have possession of or had not come across these documents or information, it shall explain that in a separate affidavit which shall be filed and served, within the time set for filing its Amended List of Documents.

3.	If the defendant fails to comply with term 2 of this order, at the next return date, it shall be required to show cause, with supportive evidence, why its defence and cross-claim should not be struck-out with judgment entered in favour of the plaintiff with damages to be assessed.

4.	This matter shall return for directions hearing at 9:30am on Monday 12 October 2020.

5.	The defendant shall pay the plaintiff’s costs of its application using the party/party cost scale which may be taxed if not agreed.

6.	Subject to term 2 of the Court Order, time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.

The Court orders accordingly. 

Ashurst PNG:     Lawyers for the Plaintiff
Kuria:                  Lawyers for the Defendant