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Credit Corporation Finance Ltd v Greenfield Contractors Ltd [2020] PGNC 34; N8210 (27 February 2020)

N8210

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1077 OF 2019 (COMM)

BETWEEN:
CREDIT CORPORATION FINANCE LTD
Plaintiff

AND:
GREENFIELD CONTRACTORS LIMITED
First Defendant

AND:
FIONA REINHARDT AS DIRECTOR AND GUARANTOR OF GREENFIELD CONTRACTORS LIMITED
Second Defendant

AND:
ALBERT REINHARDT AS MANAGING DIRECTOR OF GREENFIELD CONTRACTORS LIMITED
Third Defendant

Waigani: Anis J
2020: 19 & 27 February

NOTICE OF MOTION – Dismissal of proceeding based on abuse of court process – Order 12 Rule 40(1)(c) – National Court Rules – whether other proceeding is the same – whether plaintiff should have sought leave of Court to file a cross-claim in the other proceeding to include relief sought herein – whether failure to do so amounts to abuse of process – whether proceeding should be dismissed

Cases Cited:

Ray Logona v Clark Piokole (2015) SC1618
Telikom PNG Ltd v. ICCC (2008) SC906

Counsel:

Ms M Saroa, for the Plaintiff/Respondent
Mr A Ona, for the Defendants/Applicants

RULING

27^thFebruary, 2020

1. ANIS J: On 19 February 2020, the defendants applied to this Court to dismiss the proceeding. The application was contested. I reserved my ruling to today at 1:30pm.

2. This is my ruling.

BACKGROUND

3. The 1^st defendant is a road construction company. In 2014, it approached the plaintiff to request assistance to purchase various vehicles and machinery. Loan facility arrangements and various chattel mortgage agreements were signed between the parties. The vehicles and equipment were released to the defendant. The plaintiff alleged that the defendants defaulted, so on 14 August 2019, it issued a letter of demand to them. The defendants, according to the plaintiff, failed to comply with the letter of demand. The plaintiff filed this proceeding.

MOTION

4. The defendants in the meantime file this notice of motion (application). They allege that this proceeding constitutes multiplicity of proceedings. The defendants’ claim is based upon an earlier proceeding which is also pending before the Civil Court 3 Track, namely, WS 1097 of 2018. The plaintiff denies the said claim.

ISSUE

5. The main issue is this, whether this proceeding is the same, or similar, or is based upon the same cause of action as that in proceeding WS 1097 of 2018, and (ii), if so, whether this proceeding constitutes multiplicity of proceedings and should be dismissed.

OBSERVATION

6. Counsel for the defendants, I note, was not prepared for the hearing. His request for an adjournment was denied, and I note that he moved his client’s application orally without any extract of argument. Counsel did not cite any case law to support his submissions.

PLEADINGS

7. Sealed copies of the amended statement of claim and amended defence, for proceeding WS 1097 of 2018 are adduced in evidence, and I refer to annexures C and D to the affidavit of the second defendant. The affidavit was filed on 17 December 2019. In that proceeding, the 1^st defendant herein is the plaintiff and the plaintiff herein is the defendant.

8. I have perused the pleadings in the said proceeding. And I also note the submissions presented by both counsels. I firstly observe as follows. Proceeding WS 1097 of 2018 (related proceeding) is related to the present proceeding. I say this with qualifications. The action taken by the 1^st defendant in filing the related proceeding is based on earlier attempts or actions that had been taken by the plaintiff to enforce the mortgage chattels, that is, in relation to, not all, but some of the plants or vehicles. I note that all the chattels with the loan arrangements have been pleaded substantially in this proceeding. What I mean by earlier actions of the plaintiff is this. The pleadings in the related proceeding show that in 2018, the plaintiff had engaged a debt collector agent to recoup 8 vehicles which were subject to chattel mortgage agreements that had been entered into between the 1^st defendant and the plaintiff. The 1^st defendant contested the said action and filed the relate proceeding. So that was the main reason why the related proceeding was commenced.

9. I note however that in this proceeding, the plaintiff is suing the 1^st defendants for losses it claims it has suffered as a result of moneys advanced to the 1^st defendant for the purchase of the plants and equipment. The plaintiff is also suing the 2^nd and 3^rd defendants in their capacities as guarantors to the transactions or loan arrangements.

WAS THERE AN ABUSE OF PROCESS?

10. Let me consider the case law. I firstly refer to the Supreme Court’s decision in the case Ray Logona v Clark Piokole (2015) SC1618. It said and I quote, in part:

The principles do not say that duplicity of proceedings that raise similar claim for relief between the same parties per se do not necessarily lead to dismissal of the subsequent proceeding, rather there is a judicial discretion to be exercised and exercised judicially. For instance even in the extreme situation where the two proceedings are similar in nature, the Court may still decline to dismiss the subsequent proceeding if the subsequent proceedings is genuine and commenced in good faith and the Court is not inconvenienced or embarrassed by the similarity in the two proceedings. If the similarity in the pleadings of the relief in the two proceedings commenced by Originating Summons can be easily crystallized and merged into some common relief by way of amendments or consolidation of the proceedings, the Court should adopt this approach instead of dismissing the proceedings in its entirety.

11. The Supreme Court had also held earlier in the case of Telikom PNG Ltd v. ICCC (2008) SC906 that, and I quote, A party commencing a multiplicity of legal proceedings concerning the same issues will commit an abuse of process unless very good reasons are shown to justify it.

12. When I consider these with the 2 sets of pleadings, that is, in this proceeding and the related proceeding, I conclude as follows. The proceedings may be similar, however, the facts and issues are not the same. In the former, the first defendant herein is seeking the tort, detinue, or damages for alleged unlawful possession of property against the plaintiff, in relation to not all but some of the chattels based on facts which are not the same as those in the present proceeding. I note that I have briefly summarized the facts above. In the present proceeding, the plaintiff’s cause of action is for breach of various contracts, and the plaintiff is seeking damages that it has suffered as a result. The present proceeding also includes 2 other parties, namely, the 2^nd and 3^rd defendants, and they are being sued as guarantors of the various agreements that had been entered into between the 1^st defendant and the plaintiff.

13. The present proceeding is a commercial matter so it could not have been registered in another Civil Court. I also find that the proceedings is genuine and that it is commenced in good faith. I find that the Court is not inconvenienced or embarrassed by the similarity in the two proceedings. Further, I note that the 2 proceedings at some point in time may have to be consolidated, that is, for efficient determination and disposal.

SUMMARY

14. Consequently, I am not inclined to exercise my discretion in favour of the defendants, in relation to their application. I find the commencement of this proceeding to be in order; that it does not amount to abuse of court process. I will refuse the defendants’ application.

COST

15. Awarding cost for this matter is discretionary. Cost, in my view, will follow the event. I will order cost of the application in favour of the plaintiff on a party/party basis which may be taxed if not agreed.

REMARK

16. I remark that the related matter and this matter should be dealt with together in terms of the way forward. I note that presently, the related proceeding is assigned to Civil Court 3 Court Track whilst this proceeding is before the Commercial Court Track.

17. I will also issue a direction for this matter to return, and at which time parties are to come prepared to answer why these proceedings should not be heard together under a single Court track.

ORDERS OF THE COURT

18. I make the following orders:

1. The defendants’ notice of motion filed on 17 December 2019 is dismissed.
   
2. The defendants shall pay the plaintiff’s cost of this application on a party/party basis which may be taxed if not agreed.
   
3. The matter is listed for directions hearing at 9:30am on Thursday 5 March 2020 whereby parties are required to appear and answer why this matter should not be consolidated or heard together with proceeding WS 1097 of 2018.
   
4. 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
_________________________________________________________
In House Lawyer: Lawyer for the Plaintiff
Ona Lawyers: Lawyers for the Defendants