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Sios v Kelegai [2020] PGNC 357; N8594 (17 August 2020)

N8594

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 663 of 2015

BETWEEN:
JANET ROLAND SIOS
Plaintiff

AND:
PHILMA KELEGAI
First Defendant

AND:
KAREN BUSHELL
Second Defendant

AND:
SALLY NAPOLINI
Third Defendant

AND:
ALEX TONGAYU, REGISTRAR
OF COMPANIES
Fourth Defendant

Waigani: Hartshorn J,
2020: 17^th August

COMPANY LAW – trial - removal of director and shareholder in a company - plaintiff claims first, second and third defendants fraudulently removed her as a director and shareholder of the company - plaintiff also seeks orders in the nature of mandamus against fourth defendant - Orders for mandamus are only able to be applied for by way of an application for judicial review pursuant to Order 16 Rule 1 (1) National Court Rules – plaintiff also alleges fraud against the defendants – allegations of fraud and fraudulent intention are general and the facts, matters and circumstances relied on are not stated fully and precisely with full particulars - plaintiff would have been better placed to commence this proceeding by writ of summons and statement of claim – application by plaintiff dismissed

Cases Cited:
Puri Ruing v. Allan Marat (2012) N4672
Open Bay Timber Ltd v. Lucas Dekana (2013) N5109
Nali Hole v. Allan Mana (2016) SC1536
Esso Highlands Ltd v. Willie (2018) N7684

Counsel:

Mr. S. Phannaphen and Mr. E. Kasi, for the Plaintiff

17^th August, 2020

1. HARTSHORN J: This is a decision on substantive relief sought concerning the directorship and shareholding of a company.

2. I permitted the hearing of the amended originating summons to proceed in the absence of representation on behalf of the first and fourth defendants as I was satisfied that their lawyers had been properly informed and are aware of the hearing date and time. The second and third defendants have not been served with the originating process.

Background

3. The plaintiff claims that the first, second and third defendants fraudulently removed her as a director and shareholder of the company, PNG Fashion Week Ltd. Various declarations are sought as well as two orders for mandamus against the fourth defendant, the Registrar of Companies.

Preliminary

4. The second and third defendants have not filed an appearance or taken a step in the proceeding. As referred to, there is no evidence that the second and third defendants have been served with the originating process. Consequently, this court cannot make any orders against the second and third defendants.

5. Also as referred to, the plaintiff seeks two orders for mandamus against the Registrar of Companies. Order 16 Rule 1(1) National Court Rulesis as follows:

“(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.”

6. Orders for mandamus are only able to be applied for by way of an application for judicial review pursuant to Order 16 Rule 1 (1) National Court Rules: Puri Ruing v. Allan Marat (2012) N4672 at [14]. Clearly this proceeding has not been instituted as an application for judicial review and leave for judicial review has not been made. The relief sought therefore is bound to fail, it is frivolous and vexatious and is an abuse of the process of the court. This proceeding should be dismissed on this basis.

7. Further, allegations of fraud are made in five of the declarations that are sought in the amended originating summons. I reproduce the following passage concerning fraud from my decision in Esso Highlands Ltd v. Willie (2018) N7684:

“9. For fraud to be proved, I refer to the classic statement of Lord Herschell in William Derry v. Sir Henry Peek (1889) 14 A.C. 337 at 374:

“First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states.”

10. This statement has been reproduced and referred to with approval in Post PNG Ltd v. Hubert (2004) N2656 and In re O’Dwyer (2007) N3226.

11. In regard to the pleading of fraud, while noting Order 8 Rule 30 National Court Rules which requires amongst others, that particulars of any fraud be given, in William Maki v. Michael Pundia [1993] PNGLR 337 at 338, Woods J said:

“An allegation of fraud is a very serious allegation, and the courts have required strict adherence to requirements for pleadings in such cases. Courts have never allowed general allegations of fraud. Courts have required that a person pleading fraud should set out the facts, matters, and circumstances relied on to show that the party charged had or was actuated by a fraudulent intention. The acts alleged to be fraudulent must be stated fully and precisely with full particulars. It is not enough just to say that the person lied or swore a false affidavit. The facts, matters and circumstances which make such statements lies must be particularised.”’’

8. I also refer to the following passage from Open Bay Timber Ltd v. Lucas Dekana (2013) N5109 which was reproduced and approved by the Supreme Court in Nali Hole v. Allan Mana (2016) SC1536 at [22]:

“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. Order 4, Rule 2(1)(b) (where writ of summons required) of the National Court Rules states that "proceedings shall be commenced by writ of summons ... where a claim made by the plaintiff is based on fraud. Particulars of the alleged fraud would have to be pleaded under Order 8, Rule 30 (fraud etc).”

9. In this instance, the allegations of fraud and fraudulent intention are general and the facts, matters and circumstances relied on are not stated fully and precisely with full particulars. The plaintiff would have been better placed to commence this proceeding by writ of summons and statement of claim.

10. In regard to the declarations sought that there were not the three directors’ meetings, the plaintiff deposes that there were no such meetings but does not depose as to how she is aware of these facts. Presumably the plaintiff did not attend at the Grand Papua Hotel as she has deposed that she was not notified of the meetings. It does not follow however, that there were no such meetings.

11. It is the case that the first and fourth defendants were not represented at the hearing of the amended originating summons and that no evidence was tendered on their behalf.The plaintiff however, is still required to prove her case to the civil standard, being the balance of properties. As I stated in Esso Highland (supra), as to the requisite burden of proof, in John Alman v. Bank of South Pacific Ltd (2010) N6639, I stated at [10]:

“This standard of proof was considered by Sheehan J in Haiveta v. Wingti (No 1) [1994] PNGLR 160, when he said:

“The standard of proof is the civil standard of proof on the balance of probability. Though not as onerous as the standard in criminal cases, the evidence must nonetheless be convincing commensurate with the seriousness of the matter in question. The evidence must therefore be real and substantial.”

11. These remarks are in similar vein to those of Wilson J in Alan Arthur Morris v. PNG Associated Industries Ltd (1980) N260 (L) where he said:

“In considering the standard of proof in a case such as this....., I have borne in mind the words of Lord Denning LJ (as he then was) in Bater v. Bater [1951] P 35 at pages 36 to 37:

“.......It is of course true that by our law a higher standard of proof is required in criminal cases than in civil cases. But this is subject to the qualification that there is no absolute standard in either case. In criminal cases the charge must be proved beyond reasonable doubt, but there may be degrees of proof within that standard.

As Best CJ, and many other great judges have said, “in proportion as the crime is enormous, so ought the proof to be clear”. So also in civil cases, the case may be proved by a preponderance of probability, but there may be degrees of probability within that standard. The degree depends on the subject matter. A civil court, when considering a charge of fraud will naturally require for itself a higher degree of probability than that which it would require when asking if negligence is established. It does not adopt so higher degree as a criminal court, even when it is considering a charge of a criminal nature; but still it does require a degree of probability which is commensurate with the occasion.” ”

12. In this instance, from a perusal of the evidence of the plaintiff which was relied upon and which was tendered, I am not satisfied that the plaintiff has proved her case on the balance of probabilities. For the above reasons, this proceeding is dismissed.

Orders

13. It is ordered that:

a) This proceeding is dismissed;

b) No order as to costs;

c) Time is abridged.
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Kipes Law: Lawyers for the Plaintiff
Axis Pacific Lawyers: Lawyers for the First Defendant