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HBS (PNG) Ltd v Hi-Lift Logistics Ltd [2026] PGNC 38; N11675 (20 January 2026)

N11675

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS NO. 270 OF 2023

BETWEEN:
HBS (PNG) LIMITED
Plaintiff

AND:
HI-LIFT LOGISTICS LIMITED
Defendant/cross claimant

AND
HBS MACHINERY LIMITED
Second Cross Defendant

LAE: DOWA J
5 APRIL 2024; 20 JANUARY 2026

PRACTICE ND PROCEDURE- application for dismissal of defendant’s cross claim for disclosing no reasonable cause of action for frivolity and proceedings for abuse of process -- Order 12 Rule 40 of the National Court Rules- -not a clear case for summary dismissal-application refused.

Cases cited

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
Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310
Waril Incorporated Land Group v Morobe Provincial Government & others (2023) N10108

Counsel

A. Dalton and M. Hiob for the plaintiff/cross defendants
D. Bidar for the defendant/cross claimant

RULING

1. DOWA J: By Notice of Motion, the Plaintiff/Cross-defendants seek the following orders:
   
   1. Leave be granted to the Plaintiff to withdraw its K 1 million security paid to Court.
   2. Leave be granted to the Plaintiff to amend its statement of claim.
      
   3. The Defendant’s crossclaim against the Plaintiff and second Cross defendant be dismissed for disclosing no reasonable cause of action under Order 12 Rule 40 of the National Court Rules.
      

Background Facts

2. The Plaintiff/first Defendant engaged the Defendant/cross claimant to carry out clearance for goods being shipped both locally and internationally. The service provided consists of individual service contracts numbering up to 250 on a case-to-case basis. Each job is documented with purchase order, an invoice and remittance advice for payment and delivery of the cargo which concludes the transaction.
   
3. The Plaintiff alleges the Defendant refused to release its cargo despite being paid for the invoices under the service contract. The total value for the goods withheld is more than K8,000,000.00. The Plaintiff alleges that in detaining the goods, the Defendant has unfairly charged the Plaintiff for late payments and storage fees which are unnecessarily accrued. The Plaintiff alleges further that, because of the unlawful detention of the cargo, they have suffered business losses within the vicinity of K4,988,785.14 in sales and K34, 148.30 in projected income. The Plaintiff filed proceedings seeking release of the cargoes.
   
4. The Defendant filed a cross claim of K463,404.98 for logistics, customs clearance, cartage, freight clearance and for warehouse rental fees against the Plaintiff and a related company, HBS Machinery Limited.
   
5. Meanwhile Hi-Lift Global Pte Ltd, a Singaporean company, related to the Defendant filed proceedings in WS No 631of2023 -Hi-Lift Global Pte Ltd v HBS (PNG) Limited & HBS PNG Pty Ltd, claiming the following:
   
   1. Against HBS (PNG) Limited-
      
      1. PNGK 770,928.85
         
   2. Against HBS Pty Ltd-
      
      1. AUD 110,651.62
      2. USD 326,616.04
         
6. On 7^th December 2023, with the consent of parties, the Court made the following orders (paraphrased):
   
   1. The Plaintiff pay into Court K 1 million as security for the claim by Hi-Global Pte Ltd in proceedings WS 631 of 2023 as well as the Defendant’s crossclaim in this proceeding.
   2. The agents and servants of both Hi-Lift Logistics Limited and Hi-lift Global Pte Ltd release the Plaintiff’s cargo, the subject of these proceedings and the proceedings in WS No 631 of 2023.
   3. Plaintiff shall make direct payments of any outstanding charges for shipping and wharfage etc. due to third parties.
      
7. Orders 1 and 2 have been complied with. As to Order 3, there is dispute that the Plaintiff is yet to settle outstanding claim of a third party.
   

Issues

8. From pleadings, evidence and submissions the following issues arise:
   
   1. Whether leave be given to the Plaintiff to withdraw the K 1 million paid to Court as security.
   2. Whether leave be granted to the Plaintiff to amend its statement of claim
   100. Whether the proceedings be dismissed for disclosing no reasonable cause of action and for frivolity and abuse of the Court process.
        
        1. Whether leave be given to the Plaintiff to withdraw the K 1 million paid to Court as security.
           
9. The Plaintiff submits that they have paid the Defendant and third parties all outstanding charges and invoices and thus are entitled to the release of the security deposit. Plaintiff relies on the Affidavits of Santhy Chrysanthina filed 15^th March 2024, and Robert Watkins filed 15^th March 2024 who both deposed that the Plaintiff has paid more than amounts charged by the Defendants and third parties. Plaintiff’s evidence is in direct conflict with Defendant’s claim who relies on the Affidavits of Dane Koch filed 12^th March 2024 and Collin Townsley filed 28^th March 2024. According to Dane Koch, Plaintiff still owes money to the Defendant/cross claimant.
   
10. Where the evidence is disputed, it will require proper examination of the witnesses and analysis of evidence. For this reason, it is not clear for the security deposit to be refunded at this stage. Application for withdrawal is refused especially where the money was paid into Court by consent of parties.
    
    2. Whether leave be granted to the Plaintiff to amend its statement of claim
       
11. The Plaintiff seeks leave to amend its statement of claim. A party is entitled to amend its pleadings any time to state its claim and to clarify the issues in the proceedings. However, the Plaintiff did not provide details of the proposed amendment. They have not provided a draft statement. No order shall be made.
    
    100. Whether the proceedings be dismissed for disclosing no reasonable cause of action and for frivolity and abuse of the Court process under Order 12 Rule 40 of the National Court Rules.
         

Law

12. Order 12 Rule 40(1) of the National Court Rules are relevant, and they read:

“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.”

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

14. 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 does not clearly show all necessary facts and legal elements to establish a claim known to law.
2. A claim maybe 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 it proceeds to trial.
   

15. 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.

......

13. 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.”
    
16. Plaintiff submits that the Defendant’s Crossclaim be dismissed under Order 12 Rule 40 of the NCRs for failing to comply with Order 8, Rule 39 (5) and (6) of the National Court Rules.
    
17. Order 8 Rule 39 (5) and (6) of the National Court Rules are relevant and they read:

“(5) Subject to Rule 27 (embarrassing pleadings and the like), a cross-claimant may, in his cross-claim, plead all or any of the facts on which he relies by reference to the prior pleadings in the proceedings.

(6) A cross-claimant shall, in addition to pleading any other facts on which he relies, plead the facts showing that the claim is one which may be made in the proceedings.’

18. A perusal of the statement of Defence and Crossclaim filed by the Defendant shows the Defendant/cross claimant pleaded a clear claim in the crossclaim for a sum of K 463,404.98. It has particularized the claim in detail. It is for outstanding claims for logistics, Customs clearance, Cartage, Freight Clearance and warehouse rentals.
    
19. It is understood that the Plaintiff’s contention is based on the strength of their evidence that they have paid up all the invoices including third party claims based on the consent orders issued on 7^th December 2023. Again, that evidence is disputed by the Defendants and that will require full examination of witnesses in a proper trial. This is not a clear case for summary determination.
    
20. Another matter to note is that the evidence filed in these proceedings is also to be used in the proceedings WS No 631 of 2023 in consolidation of the two proceedings as the parties and issues raised in these proceedings are identical and the same.
    

What orders should the Court make.

21. For the reasons given, the Plaintiff’s application is refused.
    
22. The proceedings are consolidated with the proceedings, WS No 631 of 2023.
    
23. The Plaintiff shall pay the costs of the application.
    

Orders

24. The Court orders that:

1. The Plaintiff’s application is refused.
2. The proceedings be consolidated with proceedings in WS No 631 of 2023.
3. The Plaintiff pay the costs of the application.
4. Matter be fixed for listing on 9^th February 2026
5. Time be abridged.
   

________________________________________________________________
Lawyers for the plaintiff/cross-defendants: Dalton Legal Advisory
Lawyers for the defendant/cross claimant: Goodwin Bidar Nutley Lawyers