Lae City Authority v FTM Holdings Ltd [2021] PGDC 48; DC6006 (19 May 2021)

DC 6006

PAPUA NEW GUINEA

[IN THE DISTRICT COURT OF JUSTICE

SITTING IN ITS CIVIL JURISDICTION]

CV 76 of 2021
BETWEEN

LAE CITY AUTHORITY
Complainant

AND

FTM HOLDINGS LIMITED
Defendant

Lae: L Wawun Kuvi

2021: 19& 20 April, 6, 11, 17 & 19 May 2021
 

CIVIL-EXPARTE ORDER-Whether District Court Act permits ex parte hearings when one party has not been served the originating process?

JURISDICTION- Cause of Action discloses criminal breach- Whether a Complaint can be amended to become an Information? If not, what is the appropriate process?

JURISDICTION- What is the difference between an Information and a Complaint?

CRIMINAL -INFORMATION- Lae City Authority Act 2015- Does Lae City Authority have power of prosecution? Does Lae City Authority have powers under the Trading Act to enforce breach?

CRIMINAL- INFORMATION- Whether lawyer has authority to sign information on before of client? Whether lawyer can prosecute on behalf of Lae City Authority when Authority has no prosecution powers?

CRIMINAL -INFORMATION- Does the Information disclose an offence known to law?

Cases Cited
Sevese v Cutmore [2020] PGDC 21; DC4077 (8 October 2020)
Shem Emmanuel v Elizabeth Iga [2003] PNGLR 20
Johnston v Munro [2001] PGNC 133; N2089 (19 May 2001)
Bai, as Representative of Lae Squatter Settlement v Morobe Provincial Government [1992] PGNC 51; N1100 (4 May 1992)

References
District Court Act 1963
Lae City Authority Act 2015
Trading Act 1949

References
N.K.F O’neill and R.N Desailly ,The Criminal Jurisdiction of Magistrates in Papua New Guinea New South Wales Institute of Technology Sydney,1982

Counsel

Ms Wendy Bue for the Complainant Respondent

Mr Kenneth Asi for the Defendant Applicant

19 May 2021

L Wawun-Kuvi, Magistrate:

Chronology

1. In order to follow the proceedings, the chronology has to be set out as follows:
   • On 19 April 2021, Lae City Authority through David and David Company Lawyers filed a Complainant, Summons on Complainant, Affidavit by Robin Calistus, Notice of Motion and Undertaking as to Damages.
   • The matter was registered as CV 76 of 2021.
   • Ms Natasha David from David and David Company Lawyers then sent a letter to the Clerk of Court requesting an urgent ex parte hearing citing urgent municipal issues pertaining to the Trading Act 1949 (Trading Act).
   • On the same day, the matter was listed before the Senior Provincial Magistrate (SPM). Miss Bue appeared for the Complainant. The SPM noted that the matter was criminal in nature as it relates to breach of legislation. He directed that the matter be commenced by way of Information and Summons on Information. The case was adjourned to 20 April 2021.
   • On 20 April 2021, the Complainant filed an Information, Summons on Information, Affidavit in Support, Notice of Motion and Undertaking as to Damages. In essence the same documents, with the titles and dates changed.
   • The Information was signed by Natasha David of David and David Company Lawyers.
   • The matter was still registered as CV 76 of 2021.
   • The motion by the Complainant was then determined ex parte by the SPM.
   • The Motion sought Orders as follows:
     1. Pursuant to section 22 of the District Court Act;
        1. Leave be granted to dispense with requirements of services.
        2. The Defendant by itself, employees/servants and agents or associates howsoever is/are restrained from conducting any business activities until such time the Defendant discloses to the Complainant for business activities.
        100. Costs to be in the costs.
        4. Such order or further orders as the Court deems fit.
   • Ms Bue appeared for the Complainant.
   • The SPM granted the Motion and additionally ordered that the matter be returnable on 27 May 2021 for the Defendant to comply with the Order.
   • On 30 April 2021, the Defendant through Kelly Naru Lawyers filed a Notice of Intention to Defend, Defence, Affidavit and Notice of Motion.
   • The Motion was listed on 6 May 2021.
   • On 6 May 2021, the Defendant’s Motion was listed before the SPM.
   • Ms Bue appeared for the Complainant and Mr Aisi appeared for the Defendant.
   • Ms Bue sought an adjournment stating that the CEO for the Authority was out of town and she needed time to seek further instructions. Mr Aisi objected to the Application. The SPM granted the Application and ordered that the matter be returnable before me.
   • On 11 May 2021, both lawyers appeared. Ms Bue sought a further adjournment stating from the bar table that Ms David was not available. Mr Aisi strongly opposed the Application stating that his motion was filed on 30 April 2021 and both Ms David and Ms Bue had sufficient notice.
2. Having considered the history of the matter and the fact that Ms David had written a letter stating that this was an urgent matter and had the registry list the matter the same day, I do not see where the urgency has gone now that the Defendant has filed its motion. In fact the history demonstrates that Ms Bue has been the counsel in carriage of the matter having moved the initial application. She has also not filed any affidavit seeking the first adjournment and the present application. Her reasons for adjournment being inconsistent. For those reasons, I refused the application for adjournment and allowed Mr Aisi to move his Motion.

The Defendant’s Motion

3. The Defendant’s motion is as follows:
   1. Pursuant to section 22 of the District Court Act , Chapter 40, the National Court Rules be invoked for this entire matter to be dismissed for being frivolous and vexatious, disclosing no reasonable cause of action and abuse of process.
   2. Pursuant to section 25 of the District Court Act, Chapter 40, the Orders of 20^th April, 2021 be set-aside forthwith.
   3. Costs to be in the cause.
   4. Any other Orders this Court deems fit.

Submissions

4. Mr Aisi relies on the affidavit filed by his client and says that FTM holdings Limited does not operate any business in Lae, that the interim orders are the same as the substantive orders and that the Trading Act has been misapplied by the Complainant.
5. Mr Aisi relies on the case of Dick v Lake [2007] N3205 to support his contention that the complainant cannot seek the same interim relief as the substantive relief.
6. Miss Bue merely states that she has not been instructed to make submissions.

The Ex parte Order

7. I have decided to address the Defendant’s motion in this manner. I will first determine whether the Ex Parte Order should be set aside and then proceed to determine whether the Information discloses a cause of action.
8. Lenali, J in Johnston v Munro [2001] PGNC 133; N2089 (19 May 2001), sets out the grounds for setting aside an Ex parte Order, as follows:
   1. The Applicant must provide a reasonable explanation as to why the judgement was allowed to go by default;
   2. The Application to set aside should be made within reasonable time;
3. There is a defence on the merit.^[1]

Why was the Order dated 20 April 2021 allowed to go by default?

9. It is evident on the Court’s records that the Order was granted in the absence of service of the Complaint and Summons on Complaint. The Defendant was not aware of the proceedings that led to the granting of the Order.
10. I have noted that there is a practice to issue ex parte interim orders pursuant to section 22 of the District Court Act when the defendant has not been served the complaint and summons on complaint. My humble view, which is subject to higher Court interpretation, is, section 22 cannot be used to issue ex parte interim orders, in the absence of service of the complaint and summons on complaint, on the defendant.
11. District Courts are created by law and must comply with the written law. As Kirriwom J in Shem Emmanuel v Elizabeth Iga [2003] PNGLR 20 clearly stated at page 2117:

“The power of the District Court is limited to what the enabling Act expressly provides. Generally all courts of summary jurisdiction exercise their powers within the limitation imposed upon the court as creatures of Statute. They are not court of records. Their first source of power is the law under which the District Court is given the jurisdiction to deal with a matter, for example in this case the Adultery and Enticement Act. If a remedy sought under that Act is unavailable the next reference point is the District Court Act, which is the overall law that creates the Court and gives it power. If that Act is silent or makes no provision for the type of relief that a party seeks, there is no other source. That is why the District Court and all other subordinate courts are courts of limited jurisdiction to the matters specifically granted to them by statute”.

12. There is nothing in the District Court Act that allows for the Complainant to have a matter heard ex parte where that Complainant has not served the summons on the Defendant.
13. There is also no provision for dispensing of service.
14. The only mandatory requirements are found under section 42(2) DCA. That section requires:
    1. The defendant to be named; and
    2. The date and place of the hearing must be stated and the defendant must be required to attend; and
    3. Before the hearing will proceed, the summons must be lodged with the Clerk of Court where the Complaint was filed.
15. Section 143 permits ex parte orders against a defendant but only on the following conditions:
    2. Where the Defendant does not appear on the date and time specified in the summons, or the date of adjournment or hearing; and
    3. It appears on oath that the defendant was served with 72 hours; and
    4. No sufficient grounds are shown for an adjournment.
16. Section 25 of the District Court Act provides for the setting aside of Ex Parte Orders. It clearly states that an order may be set aside when one party does not appear upon application by that party.
17. Upon reading sections 42 (2) and 143 , it is apparent that in all proceedings in the District Court, the defendant must be served the summons and it is only upon non-appearance after the summons, then the Court is entitled to proceed ex parte. And in the event the defendant wishes to set aside that Order, the District Court is empowered by section 25 of the enabling Act, guided by the principles enunciated in Johnston v Munro (supra).
18. Whilst section 22 can be invoked to grant interim stay, in my view, there should done either interparty and on the basis that the status quo should be maintained pending substantive hearing. And ex parte proceedings should only be entertained when the defendant has been served and wilfully refuses to attend Court.
19. I need not consider the other two principles stated in Johnston v Munro, because the initial order was prejudicial to the defendant. In that it was not an interim order but a substantive order obtained in the absence of service.
20. Furthermore there are serious issues pertaining to this case that cannot be ignored.

Preliminary Issues

21. Whilst Mr Aisi has not made submissions on whether it was appropriate for the matter to be still listed as a civil matter when the originating process is now by way of information, I find that this is an important issue which affects this Court’s jurisdiction.
22. District Courts are created by Statue or Law. All powers that we exercise must be prescribed by law. Any decision that is made inconsistent with the law is null and void. ^[2]
23. On 11 May 2021, Mr Aisi was confused when the Court intimated that the proceedings were commenced by way of Complaint and Summons on Complaint. This was because his client was served an Information and Summons on Information.
24. On perusal of the file, one see that the Complainant had initially filed a Complaint. When the SPM identified that the matter was criminal in nature, the Complainant then laid an Information with the view that it amended the Complaint.
25. The question here is whether this is proper? In order to answer this, one reverts to the District Court Act.

How are proceeding commenced in the District Court?

26. Section 28 of the District Court Act (DCA), provides for three modes of initiating proceedings in the District Court. There are by Information, Complaint or Traffic Infringement Summons.
27. By definition and the manner in which the DCA has been written, Informations are laid for criminal offences and complaints are for civil matters.
28. Section 1 of the DCA is clear that informations relate to offences. This definition is universal and any check with any legal dictionary, law book or law website confirms this.
29. An information is a formal criminal charge which begins a criminal proceeding in the District Court.^[3]

Was it proper for the Complainant to file an information with the view that it amended the Complaint?

30. No it was not proper. This was highly irregular and against rules of practice and procedure.
31. Civil and criminal cases are distinct.
32. The proper course for the Complainant was to withdraw the matter after the SPM identified that the matter was criminal. Further, the registry should have identified this and listed the matter as criminal when the new documents were filed rather than insert them in the civil file.

Is the case a civil or criminal case?

33. It is a criminal case.
34. The Complainant refers to section 8 of the Trading Act as the basis for filing the Information.
35. Section 8 states:

8. UNLICENSED TRADING

(1) A trader, other than the holder of a licence, who sells or offers to sell goods to, or buy or offers to buy goods from, any person to whom this Act applies is guilty of an offence.

(2) A licence must be held in respect of each place of business at which a trader carries on the business of selling goods to, or buying goods from, persons to whom this ACT applies.

Penalty: A fine not exceeding K200.00.

36. As subsection (1) clearly shows, a breach of the section is an offence.
37. The Act does not define Offence nor does the District Court Act or the Summary Offences Act.
38. Section 2 of the Criminal Code Act, Ch 262 (the Code), defines offence as “an act or omission that makes the person doing or making it liable to punishment.....”
39. Section 3 of the Interpretation Act 1975 defines offence as “includes a breach or contravention of, or a failure to comply with, the law”.
40. The mode of proceedings should have been my way of Information and proceeded in the Criminal track.

What Criminal track should the matter have been listed before?

41. Section 3 of the Code provides that offences fall within three categories, namely, crimes, misdemeanours and simple offences.
42. Crimes and misdemeanours are indictable offences and are to be tried on indictment, or by section 420 of the Code, or by any other law.
43. Any offence not designated is classified as a simple offence of which the matter is to be prosecuted in a court of summary jurisdiction.
44. Section 21 of the Interpretation Act defines indictable offences as offences that are declared to be treason, crimes, misdemeanours, indictable offences or have imprisonment over 12 months.
45. For the present matter the offence is not designated as such it is a simple offence.
46. Section 22 of the Interpretation Act provides that an offence which is not an indictable offence is punishable on summary conviction. This is in line with section 3 of the Code.
47. This matter should have been properly filed before the Criminal Summary Jurisdiction.

Other serious issues with the Informant’s case.

The Form

48. The document filed as Information, identifies the document as Form 15.
49. Form 15 in the District Court Regulations is the Complaint. The authentic Form 15 identifies at the top left hand corner the empowering section, which is section 28.
50. The document filed by the Informant identifies section 41, 42, 44 and 47 which refers to summonses and service.
51. The correct form is form 16, styled Information. The top left hand corner identifies section 28 and 35 of the District Court Act. The sections which provide for Informations.
52. I don’t know whether David and David Co Lawyers have access to the District Court Regulations or someone was just plain lazy or incompetent and thought the Court is too ignorant to notice that the Form of the Information was wrong.

Provincial Boundaries

53. Magistrates are confined to the provinces in which they sit, see section 122 DCA.
54. In this matter the Information lists the address of the Defendant as P.O. Box 1840 Boroko, NCD. The Company Extract provided by the Defendant shows that the registered address, address for service and residential address as being in National Capital District.
55. Whilst the location where the cause of action arose can determine where the case may be heard, the Information specifically paragraph 3, says that the Informant does not know the business the Defendant is involved in.
56. The Informant attempted to circumnavigate this by filing an interim order requiring the defendant to disclose this.
57. It was incumbent on the Informant to identify the relevant provision in law that grants the District Court powers to compel a defendant to disclose their business operations and its locations. Without this, any Order made is null and void.
58. The Information fails to identify whether the District Court in Lae has territorial jurisdiction in this matter.

Time of Offences

59. Section 36(1) DCA provides that an information for a simple offence can only be heard within 6 months after the time when the matter of the information arose.
60. The Information does not provide the specific dates of the alleged offending but generally states since 2009.
61. As it is the information is time barred.

Authority to Lay Information

62. The Information is signed by Natasha David of David and David Co Lawyers as lawyer for the Informant.
63. Section 28 authorises the legal representative of the Informant to lay an information.

Authority to Prosecute

Does the Lae City Authority have power to prosecute under its Act?

64. No.
65. It is not one of the specific functions or powers found under section 4 and 5 of the Lae City Authority Act 2015.
66. It may be that the Public Prosecutor shall provide counsel pursuant to s 4(h) of the Public Prosecutors (Office and Functions Act) (Chapter 338).
67. I do not wish to venture anymore in this, other than to state that the Authority needs to seriously consider amending its empowering legislation in order to say “give it more teeth”. There is no point being a regulatory body when your prosecution functions are not specified.
68. Ms Bue nor Ms David have an authority to present the Lae City Authority in criminal cases pending clarification by an Act of Parliament as to whether the Authority can prosecute cases, see Sevese v Cutmore [2020] PGDC 21; DC4077 (8 October 2020).

Does the Lae City Authority have authority to prosecute under the Trading Act 1949?

69. No.
70. There is nothing within the Trading Act that confers powers to the Lae City Authority.
71. The power to grant licence is vested on the pre-colonial District Officer.
72. Section 3 of Interpretation Act defines District Officer as a person occupying the position of District Officer, Assistant District Officer, Patrol Officer and Assistant Patrol Officer.
73. In Bai, as Representative of Lae Squatter Settlement v Morobe Provincial Government [1992] PGNC 51; N1100 (4 May 1992), Doherty J as she was then, looked to the Interpretation Act for the definition of District Officer.
74. She noted that the positions referred to in the Act have been transferred to the Provincial Governments.
75. There is little in the Information or the Affidavit by Robin Calistus which shows that Lae City Authority has assumed the powers of the Morobe Provincial Government for licencing of traders under the Trading Act.
76. The Affidavit of Robin Calistus dated 20 April 2021 at paragraph 2 says that section 5 (2) (b) of the Lae City Authority Act 2015 confers powers of licencing. Unless I am looking at a different Act, there is no such power under section 5. In fact upon search on the National Parliament Website under Bills and Legislation there is a Lae City Authority (Amendment) Bill 2021 which was passed on 21 April 2021 but has not been certified. I do not know whether Mr Robin Calistus is referring to that Act.
77. It is for this Court to go on a fishing expedition to determine whether the Informant is invoking the right provisions to vest this Court with jurisdiction.

Who has the powers of Arrest and Prosecution under the Trading Act?

78. The Act is silent.
79. It is not the present function of the Court to determine this. However, considering the decision of Bai, as Representative of Lae Squatter Settlement v Morobe Provincial Government, it may be the Provincial Government. This is however dependent on what the new Act prescribes.

Does the Information offender the rules?

80. Yes.
81. The Information does not disclose an offence.
82. The Information is drafted like a complaint when the breach is a criminal offence.
83. Furthermore, the Orders that the Complainant seeks have no statutory basis. If a Court where to grant such Orders, they would be null and void because the Trading Act does not confer such powers nor does the District Court Act.

Conclusion

84. This is a simple case turned into a mess. Most of the procedural errors, error in form and error in law are so basic that any person legally trained would have identified and rectified before initiating the Court process.
85. This proceeding was without merit and a waste of judicial time.

Orders

86. The Orders of the Court are as follows:
    1. The Ex parte Interim Order obtained on 20 April 2021 is set aside.
    2. The Complaint filed on 19 April 2021 is dismissed for abuse of process.
    3. The Information laid on 20 April 2021 is dismissed for abuse of process and want of statutory jurisdiction.
    4. The Defendant is discharged.
    5. The Informant/Complainant shall pay the Defendants costs, assessed on a solicitor/client basis, to be taxed if not agreed.

Lawyer for the Complainant David and David Co Lawyers

Lawyer for the Defendant Kelly Naru Lawyers

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^[1] See also Green & Company Pty Ltd v. Green {1976} PNGLR 73 see also Barker v. The Government of Papua New Guinea and Davies v. Barker {1977} PNGLR 386, George Page Pty Ltd v. Malipu Bus Balakau [1982] PNGLR 140
^[2] Lawerence Wood Ltd v Wai (2020) PGDC 5051, Cutmore v Sevese (2020) DC 4047, Wama v Palme [2012] PGNC 85; N4714 (22 May 2012); Aviat Social & Sporting Club (Lae) Inc v Anthony Meehan Ltd [2001] PGNC 118; N2071 (8 March 2001), William Moses v. Otto Benal Magiten (01/12/00) N2023; Rabaul Shipping Limited v. Rita Ruru (08/12/00) N2022; ABCO Transport Pty Ltd v. Timothy Sakaip [1997] N1577; Kiau Nekints v. Moki Rumints [1990] PNGLR 123 and The Senior Stipendiary Magistrate, Ex parte The Acting Public Prosecutor [1976] PNGLR 344 at 349.
^[3] see The Criminal Jurisdiction of Magistrates in Papua New Guinea