|
|
Home
| Databases
| WorldLII
| Search
| Feedback
National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO. 764 OF 2016 (COMM)
BETWEEN:
ELEANA TJANDRANEGARA
First Plaintiff/Cross-Defendant
AND:
NAIMA INVSTMENTS LTD
Second Plaintiff/Second-Cross-Defendant
V
AUSTRALIA AND NEW ZEALAND BANKING GROUP (PNG) LTD
Defendant/Cross-Claimant
Waigani: Anis J
2021: 20th & 31st August
NOTICE OF MOTION – seeking dismissal of proceeding in its entirety – Order 10 Rule 5, Order 10 Rule 9A(15)(2)(c) & (d), (17) and Order 12 Rule 1 of the National Court Rules – considerations – effect of National Court stay order – whether plaintiffs capable of paying costs as had been ordered – whether plaintiffs’ action to not pay was deliberate with the intention to delay progress of the matter – exercise of discretion
Counsel:
R Tamarua, for the Plaintiffs/Cross-Defendants
D Akane, for the Defendant/Cross-Claimant
RULING
31st August, 2021
1. ANIS J: The defendant/cross-claimant (defendant) applied to dismiss the proceeding. I heard the application on 20 August 2021, which was contested by the plaintiffs/cross-defendants (plaintiffs) and reserved my ruling to a date to be advised.
2. This is my ruling.
BACKGROUND
3. The dispute arose from a business loan facility called Fully Drawn Advance Facility that had been entered by the second plaintiff and the defendant (the loan facility/facility). The loan facility was signed on 14 November 2014. The facility permitted the second plaintiff to fully draw down a maximum sum of K10,000,000 to use for its intended purpose. The facility’s repayment period was 5 years with provisions for extension. Interest and charges were charged by the defendant to the second plaintiff which were part of the terms and conditions of the facility. The loan facility was amended in December 2014 to make changes to its secured securities. The final secured securities consist of (i), an unlimited guarantee given by the first plaintiff dated 16 December 2014 (Deed of Guarantee), and (ii), a mortgaged property owned by the second plaintiff described as Allotment 29, Section 494, Hohola, National Capital District (the Property), entered pursuant to a mortgage agreement also dated 16 December 2014 (mortgage agreement/deed).
4. The defendant claims the second plaintiff defaulted in its monthly loan repayments of K118, 207, from 17 June 2015 to 17 June 2017. As such, it says it had issued the various notices of demands and defaults on the plaintiffs which have not been complied, and that it is in a position to enforce its various rights under the secured securities. The plaintiffs responded by filing this proceeding challenging the loan and security agreements. They deny, amongst others, the existence or validity of the loan facility and the agreements that have been reached. They claim that they were induced or coerced by the defendant into these arrangements, including allegation of constructive fraud, and they seek orders, amongst others, for the Court to nullify these agreements and exonerate them from these alleged debts and obligations.
5. The defendant has filed a defence and cross-claim in response to the claim. It denies the claim, and it asserts in the cross-claim, amongst others, its intention to enforce various rights that are contained in the facility and security documents.
APPLICATION
6. The defendant’s notice of motion was filed on 20 July 2021 (NoM). It seeks various relief but essentially, the main relief is to summarily dismiss the plaintiffs’ claim and enter summary judgment that recognizes the defendant’s rights under the loan facility and the secured securities. These are captured under relief 1 and 4 of the NoM. But the relevant relief in general are as follows,
(a) the purposes of Order 10 Rule 9A(15)(2)(a) – want of prosecution by the Plaintiff/Cross Defendants since the filing of the proceeding or since the last activity on the file;
(b) the purposes of Order 10 Rule 9A(15)(2)(c) – the Plaintiff/Cross Defendants’ non-compliance with the Court’s orders of 7 August 2019;
(c) the purposes of Order 10 Rule 9A(15)(2)(d) – the proceeding by the Plaintiff/Cross Defendants against the Defendant/Cross Claimant disclose no reasonable cause of action, is frivolous and vexatious, and an abuse of the process of the Court.
......
7. There are no jurisdictional challenges to the sources of the NoM so I will proceed on that basis. In any event, I find them to be in order, that is, Order 10 Rule 5, Order 12 Rule 1, Order 10 Rule 9A(17), and Order 10 Rule 9A(15)(1)(a), (2)(a), (c) and (d), of the National Court Rules (NCR).
COMMON GROUND
8. The parties are at common ground on the following. Firstly, the plaintiffs have, to date, not complied with term 2 of the Court Order of 7 August 2019 (the court order of 7 August) which required them to pay for the mediation costs. Secondly, the plaintiffs have appealed against that decision to the Supreme Court in proceeding SCA No. 136 of 2019, which is pending. And thirdly, there is no stay order granted by the Supreme Court that stays this National Court proceeding generally.
ISSUES
9. The main issues, in my view, are (i), whether the NoM is misconceived since there is a stay order in place that prevents the plaintiffs from progressing their matter to trial, which is term 2 of the court order of 7 August, (ii), if not, whether the matter was not set down for trial or prosecuted with due dispatch or diligently, (iii), whether the plaintiffs are unreasonably or intentionally delaying setting the matter down for trial, (iv), whether the plaintiffs were or are capable of paying the defendant’s mediation costs as ordered by the Court and whether their actions in not paying were deliberate and in breach of the court order of 7 August, if so, (v) whether the plaintiffs should be punished for that with the relief that are sought in the NoM, and (vi), whether the action discloses no reasonable cause of action, is frivolous and vexatious, or is an abuse of the process of the Court.
PRELIMINARY ISSUE
10. I first deal with the preliminary issue raised by the plaintiffs. Counsel submits the NoM is misconceived because there is already a stay order in place that prevents the plaintiffs from progressing the matter to trial. As such, he submits it is untenable to say the plaintiff has not taken steps to progress the matter to trial or to set the matter down for trial.
11. The argument was sound at the outset, and I note that I took counsel for the defendant to task to explain in response. What then became crucial was the relevant term and reading, of the court order of 7 August. I set out terms 1, 2 and 3 herein,
(i) the Defendant’s actual invoiced legal costs for that period, and
(ii) the actual expenses of the Defendant’s representative attending the mediation, including without limitation airfares, taxis or other transport expenses in travelling to and within Papua New Guinea and attending the mediation along with all accommodation meals and incidentals the Plaintiffs to pay to the Defendant the amounts referred to in 1(c)(i) and 1(c)(ii) above within 14 days of deliver of qualification of the amounts to the Plaintiffs.
12. I have considered the submissions of both counsel, the relevant fact, and the court order of 7 August. My view has not changed which is this. Term 2 of the court order of 7 August is express. The plaintiffs were stayed from pursuing their claim until they reimbursed the defendant’s mediation costs and incidentals. The said order remains to this day. Evidence disclosed by the defendant shows that on 2 December 2019, the order was served on the plaintiffs together with the defendant’s quantified mediation costs which were quantified at K124, 406.87. This is shown at annexure DA4 to Ms Akane’s affidavit filed on 20 July 2021. The defendant, in its lawyers’ letter dated 2 December 2019, requested the plaintiffs to settle the debt in compliance with term 2 of the court order of 7 August, within 14 days from 2 December 2019. The 14th day expired at close of business on 16 December 2019. The plaintiffs did not settle the costs, and to the date of hearing of this NoM on 20 August 2021, there is a delay of 1 year 8 months and 3 days.
13. The plaintiffs’ assertion that they were and are still prevented from prosecuting their claim by or because of the stay order, with respect and in my view, appears to have very little weight. The reason is this. The plaintiffs were obliged to comply with term 2 of the order within 14 days from the date of service. The defendant’s letter of demand requesting settlement within 14 days is consistent with the standard requirement for compliance of orders under the NCR. The relevant rule is Order 12 Rule 4(2), which reads,
4. Time for compliance. (40/4)
(1) Subject to Sub-rules (3) and (4), a judgement or order which requires a person to do an act shall specify the time within which he is required to do the act.
(2) The time shall, unless the Court otherwise orders, be 14 days after the date of service of a minute of the judgement or order on the person required to do the act.
(3) Sub-rules (1) and (2) apply to a judgement or order which requires a person to pay money.
14. The plaintiffs failed to comply with term 2 of the court order of 7 August before or by 16 December 2019. Because they failed in that regard, it seems and I note from the plaintiffs’ submission, that they are captured or covered by the stay order which prevents them from progressing the matter to trial. They argue that their hands were and are tied, so to speak, to progress the matter. However, in my view, the plaintiff cannot have it both ways. They either should have paid up within 14 days as required by Order 12 Rule 4(2) and prosecute their matter, or they should provide an exceptional reason(s) as to why they were unable to comply with the court order which has caused delay in the matter for this long.
15. I therefore do not find the NoM misconceived or untenable. I find it to be properly before the Court. I also find that it is the plaintiffs that have to explain why they have breached term 2 of the court order of 7 August which has caused delay to the progress of the matter to a hearing stage.
BREACH OF COURT ORDER
16. The defendant submits the matter should be summarily dismissed for breach of the court order of 7 August. I have briefly considered that above in my decision.
17. There is no dispute that term 2 of the court order of 7 August has not been complied with to this day. In view of the fact that the order had been duly served on the plaintiffs on 2 December 2019, in view of Order 12 Rule 4(1), (2) and (3) of the NCR, and in view of the fact that there is no Supreme Court stay order against this proceeding generally, I uphold the submission of the defendant that the plaintiffs have breached a court order, namely term 2 of the court order of 7 August, pursuant to Order 10 Rule 9A(15)(2)(c). The provision reads, The Court may summarily dispose of a matter in the following situations:...for non-compliance of any order or directions previously made or issued by the Court at any of the listing processes. I note that the defendant’s earlier notice of motion filed on 15 June 2018 which resulted in the court order of 7 August, was made during or as part of the listing processes under Order 10 Rule 9A(7)(4) and in particular sub-rule (i) where the Court may ask the parties to consider mediation. In this case, mediation was exhausted and failed, and the defendant’s said application was based or made during the time when the matter was properly before the listing court or during the listing process. Counsel for the plaintiffs in particular made no detail submissions on point. Instead, counsel submits in general that the way forward to ensure compliance with term 2 of the court order of 7 August, should be for the plaintiffs to pay the mediation costs of K124, 406.87 into the National Court Trust Account to be held pending the plaintiffs’ appeal. Counsel submits that he has instructions to make the submission in the alternative for the Court to consider.
18. In my view, a number of serious matters arise with the submissions of the plaintiffs. Let me begin this way. Presently, there is no stay order, whether it be from the Supreme Court or the National Court, that prevents the plaintiffs from paying the defendant’s ordered mediation costs. The first part of term 2 of the court order of 7 August requires the plaintiffs to pay the defendant’s said costs. The plaintiffs have failed to comply with term 2 of the court of 7 August for 1 year and 8 months. Evidence adduced by the defendant which has not been rebutted in the present NoM, shows that the plaintiffs were capable of settling the ordered mediation costs, yet they refused to do so. And the defendant submits that the said action of the plaintiff was also deliberate so to delay the proceeding as per part of term 2 of the court order which prevents them from progressing their matter further without first settling the defendant’s mediation costs. So, I ask myself this. Is there any truth with this assertion by the defendant? Are the plaintiffs being unfair or disingenuous in that they have the means to pay but have deliberately been avoiding payment to stall or delay the proceeding and to capitalize on the part of the court order that stays them from progressing their amended statement of claim?
19. I answer these questions in favours of the defendant. I find that the plaintiffs were duly served with the court order of 7 August on 2 December 2019. They had 14 days under the provisions of the NCR to pay the sum of K124, 406.87. They failed in that regard on 17 December 2019. Then they continued to fail to make the payment to this day. Submissions by counsel for the plaintiffs that the plaintiffs are able and willing to pay the K124, 406.87 into the National Court Trust Account, with respect, corroborates the defendant’s evidence and assertion that the plaintiffs have funds to pay up but yet chose otherwise and have been delaying the payment and progress of the matter. It is the latter finding against the plaintiff, which I find to be serious or of concern. It shows perhaps a deliberate action by the plaintiffs in disobeying a valid order of the Court which was made on 7 August 2019. Evidence of that is as follows. The first is their failure to pay up within 14 days from the date of service of the court order of 7 August; the second is their admission in their submissions that they have the funds but wish to pay it elsewhere and not in the manner as ordered by the Court, when no application had been sought to vary the terms of the court order of 7 August; thirdly, I note that there is no general Supreme Court stay order in place that could have put the brakes on, so to speak, of the requirement of the plaintiffs to pay the defendant’s costs. The obligation on the plaintiffs to pay has always remained. They were never prevented by any court order to date.
20. To me, this appears serious and may be regarded as blatant disregard of a court order by the plaintiffs. As such, they, in my view, ought to pay the price for that or be punished for their actions, which may be reflected by this Court granting the orders as sought in the NoM.
DELAY
21. The material period of delay is captured above in my decision. I agree with the plaintiff’s submission that part of term 2 of the court order of 7 August restrains them from progressing their amended statement of claim. However, evidence shows that they failed to pay the defendant’s mediation costs of K124, 406.87 before or by 16 December 2019. Because of that, they cannot, in my view, fairly, honestly, or reasonably claim that they were prevented by the court order of 7 August to pursue the matter. The delay thereafter or as at 17 December 2019 was on them, and the defendant in my view was entitled to rely on it, to argue that the plaintiffs have delayed the payment to capitalize on the stay order so that the matter could not progress to a hearing stage.
22. I have also found above that the plaintiffs had the means to pay up but had deliberately withheld the funds, and also that the plaintiffs are now willing, in their alternative submission made, to pay the money into the National Court Trust Account. So, in addition to my findings above, I also find the delay by the plaintiffs to be deliberate and intentional. With respect, their actions could also be regarded as contemptuous.
23. I therefore find that the plaintiffs have delayed in progressing the matter for about 1 year 8 months. I find that they had the means to pay and but had deliberately withheld payments, and that they continue to do so to this day to stall progress of the matter. And because they have withheld payments, they prevented themselves from taking steps, which was in compliance with part of the court order of 7 August, but at the same time, has caused delay in the matter progressing to a hearing stage. I think the best way to explain this somewhat twisted situation is this. The plaintiffs’ obligation to prosecute the matter with due dispatch or without unreasonable delay, was not prevented or diminished by term 2 of the court order of 7 August where it states in part that they were not to progress their amended statement of claim unless they pay the defendant’s mediation costs.
REASONABLE CAUSE OF ACTION
24. Let me consider is this issue, that is, whether the claim discloses a reasonable cause of action, or whether it is frivolous, vexatious and an abuse of court process.
25. The plaintiffs challenge the validity of the loan facility. This is pleaded in their Amended Statement of Claim. I have considered the pleadings. I make these observations. I firstly note that the relief sought in the NoM are substantive in nature. And the defendant has filed and relied upon 3 affidavits, namely, the affidavits of Ms Akane filed on 20 July 2021 and 2 affidavits of Shaun Brailey filed on 27 July 2021 and 3 August 2018. The plaintiffs on the other hand rely on 1 affidavit which is the affidavit of their counsel filed on 5 August 2021. The evidence simply informs that Court that the firm has been recently engaged. So essentially, the plaintiffs have filed no evidence at all in response to the NoM.
26. I understand that this is not a trial. But because serious allegations and relief are being sought, one would have thought that the plaintiffs would file their evidence to impress upon the Court that this is a matter that should be properly tried on its merit. The plaintiffs have failed in that regard.
27. So, what I have are uncontested evidence of the defendant. I have perused the facility documents that are annexed to the affidavit of Shaun Brailey filed on 3 August 2018. I note that the loan agreement, the mortgage documents, and the guarantee given by the first plaintiff are shown as duly signed or executed by the parties at the material time. And the affidavits attest to that. On the contrary, counsel for the plaintiffs have not provided evidence that questions or challenges these claims or the documentations that have been provided by the defendant. In fact, there appears to be no evidence in response to the substantive matter that has been filed by the plaintiffs to date. This matter is about 5 years old, and the plaintiffs have not filed any material evidence or affidavits to date to substantiate or support their claims. To me, this is should be weighed against them.
28. I therefore find that the plaintiffs have failed to demonstrate that they have a prima facie case, valid or reasonable cause of action that is supported with evidence. I find that this is a case where the defendant has a valid contractual arrangement with the second plaintiff. Evidence adduced shows the parties entering into the loan facility where monies were advanced to for the benefit of the second plaintiff for its intended purpose which was to provide or assist SVS Group’s working capital needs. There is no evidence of denial by the plaintiffs that the moneys or that the K10,000,000, had been paid as per the terms of the loan facility, in response to the NoM. Evidence adduced and the pleadings show that the second plaintiff has defaulted, and the defendant intends to exercise its rights over the registered securities.
SUMMARY
29. In summary, I am minded to grant the defendant’s NoM in general. As for the relief, based on my findings, I am minded to grant relief 1, 2, 3(b)(c) and (4). In so doing, I will summarise and vary the final terms of the relief in the final orders that I will make below.
COST
30. An order for cost is discretionary. I will order cost of the proceeding to follow the event on a party/party basis to be taxed if not agreed.
ORDERS OF THE COURT
31. I make the following orders which I summarise as follows:
......
(b) the purposes of Order 10 Rule 9A(15)(2)(c) – the Plaintiffs/Cross Defendants’ non-compliance with the Court’s orders of 7 August 2019; and
(c) the purposes of Order 10 Rule 9A(15)(2)(d) – the proceeding by the Plaintiffs/Cross Defendants against the Defendant/Cross Claimant disclosed no reasonable cause of action.
The Court orders accordingly
________________________________________________________________
Lomai & Lomai: Lawyers for the Plaintiffs
Dentons PNG: Lawyers for the Defendant
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2021/224.html