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Super Value Store Ltd v Dangkim [2021] PGNC 154; N8957 (30 July 2021)

N8957

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS (COMM) NO. 459 OF 2017 (NO. 2)

BETWEEN:
SUPER VALUE STORE LIMITED
Plaintiff/Cross-Defendant

V

JOEL DANGKIM as MANAGING DIRECTOR of STAR MOUNTAIN INVESTMENT HOLDING LIMITED
First Defendant

AND:
STAR MOUNTAIN INVESTMENT HOLDING LIMITED
Second Defendant/Cross-Claimant

Waigani: Anis J
2021: 16^th & 30^th July

NOTICE OF MOTION – leave to add a party as defendant - Order 8 Rule (1) – National Court Rules – leave to amend the originating process – Order 8 Rule 50(1) – National Court Rules – exercise of discretion

Cases Cited:

Super Value Store Ltd v. Joe Dangkim and Or (2020) N8177
Kuk Kuli v. Senior Constable Nicholas Tande and Ors (2016) N6275

Counsel:

Mr D Levy, for the Plaintiff
Ms Igua K Guba, for the Defendants
Mr A Mana, for an interested party

RULING

30^th July, 2021

1. ANIS J: The plaintiff filed a notice of motion on 16 June 2020 (NoM). It seeks to join Richard Kuna as a defendant. The plaintiff also seeks leave to amend the Writ of Summons and Statement of Claim filed on 12 May 2017 (the SoC).

2. I heard the NoM on 16 July 2021 which was strenuously contested by the defendants and Richard Kuna. I reserved my ruling thereafter to a date to be advised. Parties have been notified of today’s sittings so I will give my ruling.

BACKGROUND

3. The plaintiff initially commenced this proceeding with Star Mountain Supermarket Limited (Star Mountain) who was named as the second plaintiff. On 31 January 2020, this Court, amongst others, ordered the removal of Star Mountain. The main reason for Star Mountain’s removal was because Star Mountain was then (as well as is presently) in liquidation, and the plaintiff herein had not obtained the consent of the liquidator Richard Kuna before it decided to join Star Mountain as the second plaintiff to the proceeding. The decision is reported in Super Value Store Ltd v. Joe Dangkim and Or (2020) N8177. In the present proceeding, the plaintiff is seeking damages for alleged breaches of 2 agreements, namely, a management agreement and a shareholders’ agreement, against the defendants. These are set out in the SoC. In damages, the plaintiff claims a sum of K9, 883,228 plus interest and cost.

4. The defendants have filed their defence. In addition, the second defendant has filed a crossclaim against the plaintiff. It says the plaintiff and itself are equal shareholders of Star Mountain which is presently under liquidation. It says they (i.e., second defendant and the plaintiff) have entered into a written shareholders’ agreement and that the plaintiff has allegedly breached the said agreement. It therefore seeks damages for breach of contract, interest, and cost.

MOTION

5. The NoM is moved pursuant to Order 5 Rule 8(1), Order 8 Rule 50(1), and Order 12 Rule 1 of the National Court Rules (NCR), and also pursuant to s.155(4) of the Constitution. There is no challenge on these sources so I will proceed on that premise.

ISSUES

6. The main issues, in my view, are (i), whether Richard Kuna should be added as a defendant to the proceeding, and (ii), whether the amendments contained in the proposed amended statement of claim follow the requirements under the NCR or practice, and if not, whether it should be permitted.

JOINDER OF RICHARD KUNA

7. Order 5 Rule 8(1) states:

8. Addition of parties. (8/8)

(1) Where a person who is not a party —

(a) ought to have been joined as a party; or

(b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on,

the Court, on application by him or by any party or of its own motion, may, on terms, order that he be added as a party and make orders for the further conduct of the proceedings.

8. I note the submissions of the parties regarding this issue. I note in particular the depositions contained at paragraphs 33 to 44 in the affidavit of Wahju Hanafi for the plaintiff filed on 16 June 2020. I also note Richard Kuna’s responding affidavit filed on 12 July 2021.

9. What stood out in my view are the following. Firstly, I note that Mr. Kuna is a duly appointed liquidator of the company in liquidation, namely, Star Mountain. And, according to Mr. Kuna’s affidavit, the liquidation process has taken a while due to various reasons as he explains in his affidavit. When I consider the plaintiff’s argument, the main reason for joining Mr. Kuna is to compel him to account for the plaintiff’s 50% shares in Star Mountain or to enable him to account for the status of the liquidation process of Star Mountain. The argument in my view is, with respect, mischievous, baseless and is made without regard to the liquidation process that is prescribed under the Companies Act of 1997 (the Companies Act). I uphold the submissions of the defendants and Mr Kuna in this regard. If the plaintiff has issues regarding the performances of Mr Kuna as the liquidator of Star Mountains, there are processes under the Companies Act which it may invoke. For example, and I refer to s. 332 – Court Supervision of liquidation, or s. 334 – Orders to enforce liquidator’s duties, to name a few. These processes are available to the plaintiff under the Companies Act. They involve separate proceedings with their own requirements and have no resemblance to the present proceeding and to what is pleaded herein. And in regard to the plaintiff’s claim of its shares in Star Mountain, it would or may have to follow the liquidation process which is presently underway with observance to the provisions of the Companies Act and the directions of the liquidator in the said process, or it may be that the said interest is being addressed in the present proceeding.

10. I am therefore not persuaded by the plaintiff regarding relief 2 as sought in the NoM. I do not find that Richard Kuna ought to have been joined in the first place and therefore should be joined in this proceeding. I also do not find his inclusion necessary for the Court to address the matters that have been pleaded in the SoC. I find that there are processes that are already in place under the Companies Act where the plaintiff, if it so chooses, may invoke to pursue its interest against the liquidator in regard to Star Mountain.

11. I decline to grant relief 2.

PROPOSED AMENDMENTS

12. The defendants’ preliminary complaint to the first relief is this. They submit that the proposed draft defence is not prepared in accordance with the Court Rules and practice. Their complaint is that there is no way of knowing the exact proposed amendments to the SoC because the plaintiff has not included the cross-out or deleted pleadings in its proposed amended statement of claim that it seeks to file if leave is granted.

13. Counsel for the plaintiff, I find, did not appear to follow the complaint by the defendants except to state that the editions were marked or underlined in red.

14. Practice Directions require proposed amendments to a pleading to be properly set out, that is, the amendment must include or capture the original pleading that is crossed out, and the new pleading which has to be underlined in red. Justice Poole in Kuk Kuli v. Senior Constable Nicholas Tande and Ors (2016) N6275, stated at page 18 of his judgment:

18. The form of the Amended Defence is improper and contrarily to the Practice Direction which requires words in an original that are not to be relied on in the amended document to be ruled through in red and words which are to be inserted in the text of the amended document to be underlined in red.

15. The draft proposed amendments that is attached in evidence does not fully observe or comply with the practice direction requirements. In my view, this is something that should be redone as a draft and forwarded to the defendants for consideration or otherwise it should be annexed to another affidavit, and perhaps returned to the Court later in an interlocutory process for argument if it is not resolved between the parties. The defendants’ preliminary complaint, in my view, is a valid one and has to be addressed. As such, I will refuse to grant relief 1 sought in the NoM. In so doing, it is not necessary for me to address the relief or its merits.

SUMMARY

16. In summary, I refuse the plaintiff’s NoM.

COST

17. An award of cost in this case is discretionary. I will order cost to follow the event on a party/party basis to be taxed if not agreed.

ORDERS OF THE COURT:

18. I make the following orders:

1. The plaintiff’s notice of motion filed on 16 June 2020 is refused.
   
2. The plaintiff shall pay the defendants’ and Richard Kuna’s costs of the application on a party/party basis which may be taxed if not agreed.
   
3. Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.
   

The Court orders accordingly.
________________________________________________________________
Manase & Co: Lawyers for the Plaintiff

Allens: Lawyers for the Defendants

Corrs Chambers Westgarth: Lawyers for an interested party