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Aikos v Hornibrooks NGI Ltd [2024] PGNC 378; N11047 (22 October 2024)

N11047

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 05 OF 2024

BETWEEN:
JOHNSY AIKOS
Plaintiff

AND
HORNIBROOKS NGI LIMITED
First Defendant

AND
JOSEPH SAAD
Second Defendant

AND
JARTI RONGO
Third Defendant

Waigani: Dowa J
2024: 18^th & 22^nd October

PRACTICE AND PROCEDURE- application for dismissal of proceedings for want of prosecution-Order 10 Rule 5, and for disclosing no reasonable cause of action and for frivolity - Order 12 Rule 40 of the National Court Rules

CONTRACT OF EMPLOYMENT-termination of contract of employment - remedies for unlawful termination-whether reinstatement possible in private setting-application of section 36 of the Employment Act-whether proceedings frivolous-clear case for summary dismissal-application granted-proceedings dismissed.

Cases Cited:
Mt Hagen Urban LLG v Sek No.15 (2009) SC1007
Philip Takori v Simon Vagari (2008) SC905
Telikom PNG v ICCC & Digicel (PNG) Ltd (2008) SC906
Kerry Lerro v Philip Stagg (2006) N3050
PNG Forest Products vs. State [1992] PNGLR 1984-85
Ronny Wabia vs. BP Exploration Co. Ltd [1998] PNGLR 8
Wabia vs. BP Petroleum (2019) N4337
National Provident Fund vs. Maladina & Others (2003) N2486
Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310
Kalang Advertising Ltd v Kappusamy (2008) SC924
Leonie James v Kelvin Iria James (2024) N10997
Nelly Igarang v Graham Brown (2024) N11032
Seravo v Bahafo (2001) N2078
John Naile v Sepik Coffee Producers Ltd (2004) N2637
Kalang Advertising Ltd v Kappusamy (2008) SC924
Waril Incorporated Land Group v Morobe Provincial Government (2023) N10108

Counsel:
K Aisi, for the /Plaintiff
J Kaki, for the Defendants

RULING

22nd October 2024

1. DOWA J. This is a ruling on the Defendant’s application for dismissal of the Plaintiff’s proceeding for want of prosecution, for failing to disclose a reasonable cause of action and for frivolity. The application was heard on 18^th October 2024 and ruling was reserved which is delivered now.
   

Background Facts

2. The Plaintiff is a former employee of the first Defendant, Hornibrook NGI Limited. The Plaintiff was employed as a Supervisor-Light Vehicles under a written contract of employment executed on 26th February 2018. On 3rd October 2019, the Plaintiff’s contract of employment was terminated by a letter signed by the second Defendant, the Plant & Hire Division Manager of the first Defendant company. The reasons given for the termination were for insubordination and for disobeying lawful instructions.
   
3. The Plaintiff alleges that the termination is unlawful because firstly he was terminated by the second Defendant, a non-citizen who had no valid work permit to work in PNG and secondly, he denies committing any of the disciplinary offences he was accused of. The Plaintiff alleges that he did not commit any serious disciplinary offence to warrant a summary dismissal of his employment contract. The Plaintiff therefore instituted the current proceedings seeking reinstatement and, in the alternative, damages for unlawful termination of employment.

Defence

4. The Defendants filed a Defence, denying the allegations. The Defendants plead that the Plaintiff was terminated for insubordination and for failing to follow lawful instructions, a serous disciplinary offence warranting summary termination of employment. Even if the termination is found to be unlawful, the Plaintiff will only be entitled to damages for the notice period which the Defendants have already paid and thus, the proceedings are frivolous.
   

The Defendants’ application

5. By Notice of Motion filed 19^th September2024, the Defendants seek the following orders:
   
   1. Pursuant to Order 10 Rule 5 and Order 10 Rule 9A (15) of the National Court Rules, the entire proceedings be dismissed for Want of Prosecution.
      
   2. Alternatively, pursuant to Order 12 Rule 1 and Order 12 Rule 40(1)(a) and (b) of the National Court Rules, the proceedings be dismissed for disclosing no reasonable cause of action and for being frivolous and vexatious.
      
   3. Costs of this application
      
   4. Any other order the Court deems fit
      
6. The Defendants rely on the Affidavit of Edna Bagasel filed 19^th

September 2024.

7. The Plaintiff opposes the application and relies on the following Affidavits:
   
   1. Affidavit of Johnsy Aikos filed 20^th September 2024
   2. Affidavit of Johnsy Aikos filed 4^th October 2024
      

Issues

8. The issues for consideration are:
   
   1. Whether the proceedings be dismissed for want of prosecution
   2. Whether the proceedings be dismissed for disclosing no reasonable cause of action.
   100. Whether the proceedings be dismissed for being frivolous and vexatious.
        
   1. Whether the proceedings be dismissed for want of prosecution
      

Law

9. The relevant rules relied on in the application are Order 10 Rule 5 and 9A (15) (1) & (2) of the National Court Rules. These rules read:
   

“ . 5. Want of prosecution (33/6)

Where a plaintiff does not, within six weeks after the pleadings are closed, set the proceedings down for trial, the Court, on motion by any other party, may, on terms, dismiss the proceedings or make such other order as the Court thinks fit.

Rule 9A (15)

“(1) The Court may summarily determine a matter:

a. on application by a party; or

b. on its own initiative; or

c. upon referral by the Registrar under (3) below.

(2) The Court may summarily dispose of a matter in the following situations:

a. for want of prosecution since filing the proceedings or since the last activity on the file; or

b. for a failure to appear at any of the listing or directions hearing by a party or his lawyer; or

c. for non-compliance of any order or directions previously made or issuedby the Court at any of the listing processes.

d. under any of the grounds set out in Order 12 Rule 40 and Order 8 Rule 27 of the National Court Rules.

e. on any competency ground relating to non-compliance with the National Court Rules or any other relevant rules of Court.”

10. The principles governing dismissal for want of prosecution are well settled in this jurisdiction as summarised in the cases Seravo v Bahafo (2001) N2078, John Naile v Sepik Coffee Producers Ltd (2004) N2637 and Kalang Advertising Ltd v Kappusamy (2008) SC924 and they are:

1. The Plaintiff's default is intentional or is allowing for an inordinate and inexcusable delay in the prosecution of his claim.
2. There is no reasonable explanation given by the Plaintiff for the delay.
3. That the delay has caused injustice or prejudice to the Defendant.
4. The conduct of the Parties and their lawyers
5. Interest of justice
   

Consideration

11. The last of the pleadings in this matter closed when the Plaintiff filed its Reply to Defence on 22^nd May 2024. The Plaintiff did not set the matter down for trial within six (6) weeks as required by Order 10 Rule 5 of the National Court Rules. The Defendant issued a warning letter to the Plaintiff on 11^th July 2024. Despite the warning letter, the Plaintiff did not set the matter for trial, resulting in the application for dismissal for want of prosecution.

12. The Plaintiff has now filed an affidavit explaining the failure to comply with the Rules. He deposed, as a layman, he did not know the time requirements to set the matter down for trial and that he is very much interested in prosecuting the matter.

13. As I have held in the other matters that come before this Court, being a non-lawyer is not a good reason for failing to comply with the rules and processes of the Court. A litigant who files proceedings in Court is presumed to know the rules and Court processes and is expected to follow or comply with them. Ignorance of the law is no excuse. Refer: Leonie James v Kelvin Iria James (2024) N10997 and Nelly Igarang v Graham Brown (2024) N11032.

14. That said, for the present case, I find, despite the failure to set the matter for trial within the required time, there is sufficient activity on the file. The Writ was filed on 13^th January 2024. The Defence was filed belatedly with the leave of the Court on 25^th March 2024. The Reply to the Defence was filed on 22^nd May 2024. The Plaintiff filed two Affidavits in October 2024, one of which is a substantive affidavit on the merits of the case. I find there is no inordinate or inexcusable delay. For this reason, the application for summary dismissal for want of prosecution is refused.

2. Whether the proceedings be dismissed for disclosing no reasonable cause of action
   

15. Order 12 Rule 40 (1) of the National Court Rules is relevant, and it reads:

“Frivolity, etc. (13/5)

(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 proceedings are an abuse of the process of the Court,

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

16. The caselaw on Order 12 Rule 40 of the National Court Rules is well settled. Refer: PNG Forest Products vs. State (1992) PNGLR 84–85, Ronny Wabia vs. BP Exploration Co. Ltd (1998) PNGLR 8, Wabia vs. BP Petroleum (2019)) N4337, Mt. Hagen Urban LLG vs. Sek No. 15 (2009) SC1007, National Provident Fund vs. Maladina & Others (2003) N2486; and Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310.

17. The principles of law settled and emanate from the above cases are:

1. A claim may be disclosing no reasonable cause of action if the facts pleaded do not clearly show all necessary facts and legal elements to establish a claim known to law.
   
2. A claim may be frivolous if it can be shown that it is obviously untenable that it cannot possibly succeed or is bound to fail it if proceeds to trial.
   

100. Proceedings are vexatious where the case is a sham, amounting to harassment of the opposing party, or where the opposing party is put to unnecessary trouble and expense of defending the case.
     

4. The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.
   
5. The Court cannot readily dismiss a case for lack of disclosing a reasonable cause of action or for frivolity or abuse of process unless it is shown that the case is clearly untenable and that it is unlikely to succeed even if it proceeds to trial.
   

18. I also adopt my discussions on the law on applications under Order12 Rule 40 of the National Court Rules in the case Waril Incorporated Land Group v Morobe Provincial Government & others (2023) N10108, where the Court said:
    
    12. The law on applications under Order 12 Rule 40(1) of the National Court Rules is settled. In the case, PNG Forest Products v State (1992) PNG LR84-85 the Court adopting some English Court phrases stated that a court be slow and cautious in entertaining applications for dismissal of proceedings on the grounds of a party disclosing no reasonable cause of action. A Plaintiff should not be driven from the judgment seat unless the case is “unarguable” or the cause of action is “obviously and almost incontestably bad, or plainly untenable. In that case, the Court also said the Court has a discretionary power to dismiss if the proceedings are an abuse of the Court process.

......

12. In my view, the purpose of Order 12 Rule 40(1) of the National Court Rules is to provide for summary determination of the Plaintiff’s proceedings where it is plain and clear based on the pleadings that no triable cause of action is disclosed or where some common and proven facts show that the proceedings will not succeed if it proceeds to trial. Where common and proven facts show that the claim is untenable, no amount of evidence, or amendment to the pleadings will cure or improve the facts on which the claim is based. It is in the interest of all parties to terminate the proceedings early to avoid cost of a prolonged and winding litigation. The Court should not give the impression that the factual situation will change with the passing of time or that the Plaintiff’s chances of success will improve with more litigation. After all, the Court has a duty to protect itself from abuse of the Court process by entertaining unmeritorious claims which will only consume time and resources.”
    

Submissions of the Parties

19. Mr. Kaki, counsel for the Defendant, submits that the Plaintiff does not have a cause of action because the Plaintiff was terminated for cause, that is for insubordination resulting in summary dismissal without notice as allowed by Section 36 (1) of the Employment Act. Counsel submits further that if the Court finds the termination unlawful, the Plaintiff is only entitled to damages for the notice period and for unpaid or outstanding entitlements which, in this case, have been fully paid to the Plaintiff at the time of termination and thus it is frivolous to maintain the proceedings.
    
20. In response, Mr. Aisi, counsel for the Plaintiff, submits that the termination is unlawful for the following reasons:
    
    1. The Plaintiff has an arguable case and should not be driven from the judgment seat prematurely.
    2. The Plaintiff was terminated by the second Defendant, a non-citizen who had no valid work permit to work in PNG
    3. The Plaintiff denies committing any of the disciplinary offences he was accused of, warranting a summary dismissal of his employment contract.
    4. The actions of the defendants were harsh and oppressive
       

Consideration

21. The Plaintiff was employed under a brief written contract dated 23rd February 2018. He was terminated on 3rd October 2019. The reasons for termination on the letter of termination is that he committed multiple disciplinary offences, the serious one being for insubordination and for disobeying lawful instructions. In response, the Plaintiff deposed in his affidavit that the alleged disciplinary offences complained of were committed by persons other than him and that he was not given a chance to provide an explanation. In other words, he disputes the summary termination and questions the way the disciplinary process was handled. I note the written employment contract is brief, and it does not provide for disciplinary procedure and processes like the notice period. Where an employment contract does not clearly set out the terms of engagement, the minimum terms under the Employment Act, especially Section 36 of the Act, applies. In the light of the contention by the Plaintiff, it is not safe to conclude that the pleadings do not disclose a reasonable cause of action. The proper time and place to deal with the disputed facts and the assessment of evidence is at the time of trial proper and not during the interlocutory application.
    
    100. Whether the proceedings be dismissed for being frivolous and vexatious.
         

22. The next issue is whether the proceedings be dismissed for frivolity. This is on the basis that even if the Court finds the termination unlawful, an employee in the private sector will only be entitled to payment for the notice period where no disciplinary procedure is prescribed in the employment contract and where a disciplinary procedure is provided, the period it would take for the disciplinary process to be concluded and no more. That is, an employee who is terminated from employment in private employment setting shall not be reinstated to his former position nor shall he be expected to be awarded damages more than the notice period except where his contract provides otherwise. The law on termination of employment contract is explicitly explained in the following cases.

23. In Ruhuwamo v PNG Ports Corporation (2019) N8021, Thompson J said this at paragraph 17-19 of her Judgement:

“17. It is well settled by a long line of case authorities in PNG, that an employer has the right to hire and fire his employees and does not have to give reasons for his decision. If this is done in breach of the terms of a contract, the measure of damages is what the employee would have received for his salary and other entitlements if the contract had been lawfully terminated. (See Jimmy Malai v PNG Teachers Association (1992) PNG LR 568, Paddy Fagon v Negiso Distributors Pty Ltd (1999) N 1900, New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC 946, and Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) PGSC 11).

18. This is consistent with the provisions of the Employment Act. Under S 34, a contract of employment may be terminated at any time, with the length of notice being either as specified in the contract, or dependent on the length of the employment. If an employee has been employed for over five years, the length of notice shall be not less than four weeks. Under S 35, the termination may be by notice, or by payment in lieu of notice.
    
19. Under S 36, the employer may terminate without notice or payment in lieu, if the employee, inter alia, wilfully disobeys a lawful and reasonable order or misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties.”
    

24. In Mark Porawi v Agarwal and others (2023) N10118, I said this at paragraph 17 of the judgment:

“The Employment Act sets the minimum standards, terms, and conditions of employment. It safeguards against abusive behavior and from forced labour. The Act promotes fair and free employment relationship between employer and employee. This is understandable. An employee should not be forced to serve an ungrateful master under oppressive working conditions against his will. The master, likewise, is under no obligation to keep in continuous employment a defiant and disloyal servant no matter how experienced or qualified or skillful he or she may be. The only obligation they have is keeping their end of the bargain on the terms they have agreed. Where there is ambiguity or silence or unresolved matter arising out of the relationship, the Employment Act applies, which provides useful guide for resolving the matters in dispute.”

25. In the present case, the Plaintiff seeks reinstatement in the proceedings and damages in the alternative. The law is clear. He is not entitled to reinstatement. His employment contract falls within the ambit of Section 36 of the Employment Act. As such, he is only entitled to payment in lieu of notice. The evidence shows the Plaintiff was paid his final entitlements inclusive of payment in lieu of notice on 13th October 2019. The Plaintiff has not disputed that he was paid his entitlements, nor has he pleaded any claim for outstanding entitlements including the notice period.

26. If the Plaintiff is not entitled to be reinstated in the event of a finding that the termination was unlawful, what other relief is there for the Plaintiff to claim apart from any unpaid entitlements. Since the Plaintiff has been paid in full his entitlements including the payment in lieu of notice, there is nothing more outstanding for the Plaintiff to claim. The Plaintiff is only entitled to remedies that are available as allowed by law and in the present case it is exhausted. It is a futile exercise for the Plaintiff to maintain the proceedings incurring unnecessary costs. The Court shall not give the Plaintiff a false impression and raise his hopes that he will somehow be successful at the trial. The Plaintiff’s claim is obviously untenable and will not succeed even if it proceeds to trial. It is frivolous and must be dismissed.

27. I have reached the conclusion that although the Plaintiff might have a cause of action, it is unlikely to succeed in the reliefs he is seeking. This proceeding is therefore frivolous and vexatious for the reasons given in this judgment. This is a clear case where it is untenable and will not be successful if allowed to proceed to trial.

28. That said and, in the end, I am inclined to grant the Defendant’s application and thus, the proceeding filed by the Plaintiff shall be dismissed for frivolity pursuant to Order 12 Rule 40 (1) (b) of the National Court Rules.

Costs

29. The Defendants seek the cost of the application. It is a discretionary matter. The Plaintiff shall pay the costs for initiating the proceedings.
    

Orders

30. The Court orders that:
    
    1. The Defendant’s application is granted.
    2. The Plaintiffs’ proceeding is dismissed.
    3. The Plaintiff shall pay the costs of the proceedings.
    4. Time be abridged.

_______________________________________________________________
Aisi Lawyers: Lawyers for the Plaintiff
Joel Kaki-inhouse lawyer : Lawyer for the Defendants