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Possy v Frotos [2022] PGNC 485; N9978 (14 October 2022)

N9978

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 762 OF 2021

BETWEEN:
TERRY POSSY for and on behalf of himself & 599 other Claimants whose names are endorsed in Schedule 1 of the Writ of Summons
Plaintiffs

AND:
BRUNOX FROTOS, NICKOS BAIZA, GILBERT BAIZA STANLEY, TINAMO HETOT BAIZA & BILL TUTUPA
First Defendants

AND:
WENKI, Team Leader
Second Defendant

AND:
HG POWER TRANSMISSION PNG LIMITED
Third Defendant

AND:
PNG DATA CO. LTD.
Fourth Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

Goroka: Mugugia, AJ
2022: 11^th &14^th October

PRACTICE AND PROCEDURE – Motion seeking order to dismiss relief claimed against named party – grounds relied on – disclosing no reasonable cause of action against this party - frivolous and vexatious – National Court Rules, Order 12, Rule 40(1)(a) or Rule 40(1)(b) relied on.

PRACTICE AND PROCEDURE - Alternative relief in motion – order for removal of named party in the proceedings – ground relied on – this party was improperly or unnecessarily joined - National Court Rules, Order 5, Rule 9(a) – exercise of discretion – motion refused.

Cases Cited:

Kerry Lerro v. Stagg & Others (2006) N3050
Takori v.Yagari & Others (2008) SC905
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007
PNG Forest Products Pty. Ltd. and Inchcape Berhad v. The State and Jack Genia [1992] PNGLR 85
Pundia v. Kiwai (2011) N4427
Erave v. Homosi, (2020) SC2121

Counsels:

N. Amoiha, for the Plaintiffs
D. Kints, for the Fourth Defendant
No appearance for the other Defendants

RULING

14^th October, 2022

1. MUGUGIA, AJ: In its’ application by Notice of Motion filed on 1^st September 2022, the Fourth Defendant sought a dismissal order of the relief claimed by the Plaintiffs against it (Term 1). The grounds for seeking this dismissal order as stated in the motion are that there is no reasonable cause of action disclosed, or the action against the Fourth Defendant is frivolous or vexatious. Order 12, Rule 40(1)(a) or (b) of the National Court Rules were cited in the motion.

2. The alternative order sought in the motion was an order for removal of the Fourth Defendant as a party to the proceedings under Order 5, Rule 9(a) of the National Court Rules (Term 2). The reason for seeking this order is that the Fourth Defendant has been improperly or unnecessarily named as a party to the proceedings.

3. The evidence in support of the orders sought in the motion were contained in the Affidavit of the Fourth Defendant’s Chief Executive Officer Mr Paul Komboi filed on 1^st September 2022.

4. I heard the Fourth Defendant’s application on 11^th October 2022. This application was opposed by the Plaintiffs’ lawyer. I reserved my ruling to 14^th October 2022, which I now deliver.

Background to the Plaintiffs’ claim

5. As per the pleadings in the Plaintiffs’ Statement of Claim endorsed to their Writ of Summons filed on 26^th October 2021, their cause of action arose close to seven years ago on 27^th October 2015. This is a claim in the millions by the Plaintiffs who claim that their properties and the surrounding flora and fauna in the Kompri area of the Kafetina Local Level Government area, Henganofi District in the Eastern Highlands Province, were destroyed by a fire which went out of control. This, they claim was due to the negligence of the First and Second Defendants who are employees of the Third and Fourth Defendants who failed to extinguish the fire. The Plaintiffs reside at villages in Ward 1 of the Kafetina Local Level Government area.

6. The Plaintiffs pleaded negligence against the Defendants. The allegation is that one of the First Defendants namely Nickos Baiza who is an employee of the Fourth Defendant, had lit a fire in their area to cook bananas to eat. All the other persons named as First Defendants had participated. The fire went out of control and caused massive destruction to the Plaintiffs’ properties. The Plaintiffs’ ceremonial grounds, burial sites and the entire ecosystem in the area were destroyed by the fire.

7. The Plaintiffs’ allegation is that the Third and Fourth Defendants were negligent in that they failed in their duty to ensure that their employees (First and Second Defendants) were adequately supplied with essentials like food when working along the Highlands Highway. The Third and Fourth Defendants and their employees failed and or neglected to take heed of the warning signs against lighting fires which were placed in the area. The facts give rise to a claim for vicarious liability. The Plaintiffs claim that as a result of the destruction by the fire, they have suffered irreparable damage and have sustained enormous economic loss.

Issues

8. The issues arising from the Fourth Defendant’s motion are:

(i) Whether the relief claimed against the Fourth Defendant should be dismissed.

(ii) Whether the Fourth Defendant should be removed as a party to the proceedings.

Parties’ Submissions

9. Counsel for the Fourth Defendant Mr Kints’ submissions were that:

• The pleadings do not disclose a reasonable cause of action against the Fourth Defendant and is frivolous and vexatious.
  
• The Third Defendant is a company and has the capacity to sue and be sued. The First and Second Defendants are not the employees of the Fourth Defendant. Therefore, the Fourth Defendant does not owe them any duties. The First and Second Defendants are or may be employees of the Third Defendant.
  
• Any allegations against the Fourth Defendant on breach of duties cannot sustain because the Fourth Defendant does not owe the First and Second Defendants any duties.
  
• The Third Defendant is an independent contractor. In this case, the work to be done is determined by the Optical Fibre Installation Agreement entered into by the Third and Fourth Defendants. The Fourth Defendant does not control how the work is to be done or carried out by the Third Defendant. Therefore, the Fourth Defendant cannot be liable for any negligent conduct of the Third Defendant or its employees. There is no agreement which provides that the Fourth Defendant shall be liable for the negligent conduct of the Third Defendant or its servants or agents. Hence, there is no cause of action disclosed, and there is no likelihood of the Plaintiffs succeeding in their claim against the Fourth Defendant.
  
• Given that there are other Defendants named in the proceeding, the appropriate remedy is to dismiss the proceeding or claim for relief against the Fourth Defendant.
  
• Alternatively, the Fourth Defendant be removed as a party to the proceeding pursuant to Order 5, Rule 9(a) of the National Court Rules.

10. Mr Amoiha for the Plaintiffs argued that the Defence filed by the Fourth Defendant is not properly before the Court because it was filed out of time.

Issue (i): Whether the relief claimed against the Fourth Defendant should be dismissed.

11. The first order sought in the Fourth Defendant’s motion is for dismissal of the relief claimed by the Plaintiffs against it. Order 12, Rule 40(1)(a) or Rule 40(1)(b) of the National Court Rules are relied on. Should I grant the order sought?

The Law

12. Rule 40 of Order 12 of the National Court Rules provides for ‘Frivolity, etc.’. Rules 40(1)(a) and 40(1)(b) read:

“(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings –

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) ...

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”

13. The power conferred on the National Court to dismiss is discretionary and must be exercised based on proper principles.

14. Many past case authorities have been referred to. They include Kerry Lerro v. Stagg & Others (2006) N3050, Takori v.Yagari & Ors (2008) SC905 and Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007.

15. I remind myself of the principles and requirements to consider.

16. The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

17. The purpose of Order 12, Rule 40 of the National Court Rules is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

18. A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.
19. A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

20. In PNG Forest Products Pty. Ltd. and Inchcape Berhad v. The State and Jack Genia [1992] PNGLR 85, the Court held that:

“An action should only be struck out in cases where “the cause of action is obviously and almost incontestably bad.”

21. A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.
Finding

22. I adopt the principles and apply them in the present case.

23. I find that there is a reasonable cause of action against the Fourth Defendant. The Plaintiffs’ action against the Fourth Defendant is not frivolous or vexatious. My reasons are:

(i) At first glance at the pleadings against the Fourth Defendant in the Statement of Claim, a reasonable cause of action is disclosed against the Fourth Defendant. Allegations raised against the Fourth Defendant are set out in paragraphs 5, 6, 10 and 31 of the Statement of Claim. Particulars of negligence are set out in paragraphs 34, 36, 55, 56, 58 and 59 of the Statement of Claim. It is pleaded in the Statement of Claim that payments of K20,000.00 and K50,0000.00 were made by Data Co. PNG Ltd. The Plaintiffs claim K1,000,000.00 from the Fourth Defendant for the destruction of the sacred burial sites and ceremonial sites, and K2,000,000.00 as punitive and exemplary damages. The pleadings in the Statement of Claim clearly establish a cause of action against the Fourth Defendant.

(ii) Based on the documents before me, the Plaintiffs’ case against the Fourth Defendant is arguable. The Fourth Defendant filed a defence. Triable issues have arisen. In this claim for negligence, the evidence from all the named parties which will be presented at the trial of the matter will assist the Court to make a finding about duty of care. It is not for me to make a conclusion at this interlocutory stage. The action against the Fourth Defendant should not be dismissed at this interlocutory stage. The matter should progress to trial for the issues in dispute to be fully determined by this Court.

(iii) The allegations against the Fourth Defendant in the Statement of Caim demonstrate that this is not a case where the proceeding discloses no reasonable cause of action against the Fourth Defendant, or the cause of action against the Fourth Defendant is obviously and almost incontestably bad such that it should be dismissed at this interlocutory stage.

(iv) The Plaintiffs’ action against the Fourth Defendant is not frivolous or vexatious. As such, it will not be terminated at this interlocutory stage.

24. In the exercise of my discretion, I will refuse Term 1 of the Fourth Defendant’s motion filed on 1^st September 2022.

Issue (ii): Whether the Fourth Defendant should be removed as a party to the proceedings.

25. The second order sought in the Fourth Defendant’s motion which is an alternative order is an order for removal of the Fourth Defendant as a party to the proceedings under Order 5, Rule 9(a) of the National Court Rules.

The Law

26. Order 5, Rule 9 of the National Court Rules provides the power of the Court to remove a party to a suit or proceeding. Pursuant to Order 5, Rule 9(a), where a party has been improperly or unnecessarily joined, the Court, on application by any party or of its own motion, may, on terms, order that he cease to be a party and make orders for the further conduct of the proceedings. The Court has a discretion.

Finding
27. I have already found that there is a reasonable cause of action against the Fourth Defendant, and the Plaintiffs’ action against the Fourth Defendant is not frivolous or vexatious. Should I grant the alternative order sought by the Fourth Defendant? Should I order that it cease to be a party?

28. In Pundia v. Kiwai (2011) N4427, Makail J dealt with applications by the third and fifth defendants to be removed as defendants from the proceeding. His Honour had considered the pleadings in the plaintiff’s statement of claim. For the third defendant, His Honour held that:
“The third defendant was a proper party to the proceeding as the pleadings in the statement of claim alleged that the first defendant colluded with him to remove the plaintiffs as shareholders of the second defendant and/or was negligent in the discharge of his duty when he accepted the first defendant's application for change of shareholders and removed the plaintiffs as shareholders of the second defendant. The third defendant's application for removal as a party was accordingly refused.”

29. In Erave v. Homosi, (2020) SC2121, the Supreme Court stated at paragraph 29 as follows:

“29. A “necessary party” is one whose presence in the suit is indispensable to the very existence of the suit and against whom no order can be passed.”

30. The Plaintiffs raise allegations of negligence against the Fourth Defendant. The vicarious liability of the Fourth Defendant is clearly pleaded in the Statement of Claim. The Plaintiffs seek relief against it. Since the Fourth Defendant has filed a defence, triable issues have arisen. The Fourth Defendant’s presence in this proceedings is necessary to determine the issues involved in dispute between all the parties at the trial of this matter. As such, the Fourth Defendant should not be removed as a party at this interlocutory stage.

31. I find that the Fourth Defendant has been properly joined as a party to the proceedings. It is a necessary party.

32. In the exercise of my discretion, I will refuse the alternative order sought in Term 2 of the Fourth Defendant’s motion filed on 1^st September 2022.

33. I have chosen not to entertain Mr Amoiha’s argument that the Fourth Defendant’s Defence is not properly before the Court because there is no proper basis for this argument.

Court’s Formal Orders:

34. I order that:

1. The Fourth Defendant’s application by Notice of Motion filed on 1^st September 2022 is refused.

2. The Fourth Defendant shall pay the Plaintiffs’ costs, which are to be taxed if not agreed.

3. Time for entry of these orders is abridged to the date and time of settlement of these orders by the Registrar which shall take place forthwith.

The Court orders accordingly.
________________________________________________________________
N. Amoiha: Lawyer for the Plaintiffs
D. Kints: Lawyer for the Fourth Defendant