Harold v Harro - Ruling 2 [2004] PGNC 140; N2647 (10 September 2004)

N2647

PAPUA NEW GUINEA

IN THE NATIONAL COURT OF JUSTICE

MC NO. 6 OF 1999

BETWEEN:

ELIJAH HAROLD also known as ELIJAH COCO HARRO
Petitioner

AND:

REGINA WAIM HARRO
First Respondent

AND:

ALLAN KUNDI
Second Respondent

AND:

WHITE CORNER INVESTMENT LIMITED, REDCOCO PROPERTIES LIMITED, NOKANGE CONSULTANCY SERVICES LIMITED, GOLIKUKA BUSINESS GROUP INC. (No. 1)
Third Respondents

Lae: Manuhu, AJ
2004: September 3rd and 10th.

RULING

EVIDENCE – Admissibility – Fresh evidence – Re-opening case – Discretionary – Relevant considerations.

Cases cited:
Straits Contracting (PNG) Pty Ltd v Branfill Investment Limited [1988] PNGLR 239.
Parao Tunboro v. Motor Vehicles Insurance (PNG) Trust [1984] PNGLR 272.

Counsel:
Mr. P. Ousi, for the Petitioner.
Mr. K. Kua, for the First Respondent.
Mr. D. Poka, for the Third Respondents.

10th September 2004.

MANUHU, AJ.: The substantive proceeding is a petition for divorce, custody and maintenance, and property settlement. The marriage has been dissolved by decree nisi and custody of four children has been finalized. What remained for resolution are custody of a female child, maintenance and property settlement, which are to be tried jointly. In preparation for the trial, the parties have been directed and ordered to proceed with discovery.

The substantive proceeding was set down for trial on 20th July 2004. On that day, however, I had to deal with two applications by the First Respondent. Both applications essentially stem from the orders for the parties to discover. The applications were against the Petitioner for his Reply to be struck out; and against the Third Respondent for a receiver and manager to be appointed, on the basis that both have failed since 1999 to properly discover.

The decisions on the applications were supposed to be handed down on 3rd September but I had to first deal with this application by the Petitioner, who seeks "orders that leave be granted to the Petitioner and [Third Respondents] to adduce evidence as set out in the Petitioner’s Affidavit sworn on the 1st day of September 2004."

Several issues arise in this application. I will deal with them in their natural order. Firstly, the application should be for the reopening of the pending applications which have been heard and which decisions would have been handed down on 3rd September. No fresh evidence will be adduced unless the pending applications are reopened. The Petitioner should therefore be seeking to reopen the already-closed proceedings. Instead, he seeks leave "to adduce evidence" which, in my humble view, is inappropriate.

The second issue relates to locus standi. The Petitioner’s application relates to the question of whether a receiver should be appointed but the appropriate pending application was made against the Third Respondent and not the Petitioner. The Petitioner is a shareholder of the Third Respondent companies but the Third Respondents are already parties to the proceeding and are represented by a separate legal firm. Thus, Mr. Poka, who represents the Third Respondent, should be pursuing this application and not Mr. Ousi. I am ultimately entitled to strike out the application on the basis of the Petitioner having no standing in the circumstances to pursue this application.

The third issue is more substantive. If this is really an application to re-open the pending applications, there are certain considerations relevant to reopening a case. In Parao Tunboro v Motor Vehicles Insurance (PNG) Trust[1], McDermott J held that an application to reopen a case for the purpose of adducing fresh evidence is a discretionary matter that is dependent on:

(a) the effect of the fresh evidence on the state of case when made;
(b) that the fresh evidence would, if believed, probably affect the result;
(c) that the fresh evidence could not with reasonable diligence have been adduced before;
(d) that the fresh evidence is not merely confirmation of the party’s case;
(e) that the fresh evidence was not omitted by inadvertence;
(f) that the fresh evidence was not omitted by deliberate election; and
(g) that it is in the interest of justice that the fresh evidence be admitted.

The cited case was approved and followed four years later in Straits Contracting (PNG) Pty Ltd v Branfill Investments Ltd[2] in the following manner:

"(1) An application by a party to re-open his case to admit fresh evidence is a matter within the discretion of the court as to which the following matters, inter alia, are relevant:

(a) that the fresh evidence would, if believed, probably affect the result;
(b) that the fresh evidence could not with reasonable diligence have been discovered before;
(c) that the fresh evidence was not omitted by inadvertence; and
(d) that the fresh evidence was not omitted by deliberate inadvertence."

The fresh evidence in question are the Valuation Report by KPMG on White Corner Investment Limited and Redcoco Properties Limited; and a quotation from KPMG which estimates the "Cost of Investigation into the companies’ financial affairs" at K30,000 per year.

The Petitioner relies on his own affidavit of 1st September 2004 wherein he produces the valuation report and thereafter insists that he has complied with orders for discovery; and that if the First Respondent insists on the Court appointing a receiver, she should meet the costs.

It should be emphasized firstly that the appointment of a receiver is consequential in nature. It is dependent on the extent of the Petitioner’s failure to discover; and whether he has properly discovered or not is the subject of the pending interlocutory proceedings. The Petitioner has now produced a valuation report and argues that "... I have complied with the discovery process..." but that is simply a re-affirmation and an extension of his argument in the pending applications.

Secondly, the Petitioner was always able to make available a valuation report when the first Request for Discovery was served on him in 1999. His alleged failure to properly discover since 1999 prompted the making of the pending applications. The Petitioner cannot subsequently improve on his discovery and have the Court accept it by reopening the pending applications. To re-open the pending applications in order to admit the valuation report is therefore an abuse of process.

Thirdly, the valuation material may also be relevant to the pending applications but he who comes into equity must come with clean hands. The withholding of such material was by choice and design. Parties are accorded the liberty under our legal system to bring their claims and defend actions against them only once. With legal assistance, a party is required to assess the viability of his claim or defence and to properly and fairly bring his case before a court to deal with only once. He is not permitted to present his claim or defence only partially and expect to complete his case by reopening the case. That is not consistent with the notion of a fair trial. A party risks being deprived of equitable remedies if he has not conducted his case properly and fairly.

Forth, the court should always maintain a neutral position. It should only allow a proceeding to reopen in very exceptional circumstances, such as ‘where a party has been taken by surprise’, or ‘has been misled’[3]. The court cannot reopen a case to admit evidence that, though relevant, is not fresh evidence. In other words, the court cannot reopen a case to admit relevant evidence that was withheld by choice and design.

I now deal with the second leg of the Petitioner’s argument which relate to the question of costs, which seems to me to be the Petitioner’s main concern. Relevantly, the Petitioner deposed in his ten paragraph affidavit as follows:

"2. The Respondent filed a Notice of Motion seeking orders inter alia to appoint a Manager/Receiver of the Third Respondents and asking the Court to order myself and the Third Respondents to meet the costs of the Manager Receiver.

"8. If the First Respondent/Cross-Petitioner wants a Manager/Receiver then she should pay the costs of the Manager/Receiver.

"9. I have also obtained a quote from KPMG as to how much it would cost to do an investigate audit of a company...From the quote it would cost at least K30,000.00 to do an audit for a company a year so to do an audit for 2 companies for 5 years will cost K300,000.00.

"10. I am unable to afford to pay costs of K300,000.00. The Third Respondents do have such monies to pay for the investigation audit...." (sic.)

Under the National Court Rules[4], a receiver, if appointed, is allowed such remuneration as may be fixed by the Court. The Court will determine a receiver’s duration of engagement and his remuneration. These terms and conditions can be reviewed by the Court. That is because, under Order 14 Rule 22, a receiver is an officer of the Court and his powers are derived from the Court. A receiver is appointed for the Court and not the parties. He is tasked to specifically assist the Court on matters which the parties for some reasons are unable to assist the Court in.

Secondly, the proposed appointment of a receiver is consequential in nature. It is dependent on the extent of the Petitioner’s failure to discover; and whether he has properly discovered or not is the subject of the pending interlocutory proceedings. If the situation warrants that a receiver be appointed, the appointment will be made, and someone will be responsible for the receiver’s costs. If the Court requires the assistance of a receiver, the Court should appoint one; and, usually, the party responsible for prompting such an appointment is responsible for meeting the cost of the appointment and engagement. Consequently, for the purpose of this application, the cost factor may be relevant but not a determinant factor. If it is just and convenient to appoint a receiver, the question of cost becomes secondary.

I conclude therefore that the ‘fresh evidence’ in question will have little or no bearing on the pending applications which will be decided purely on the basis of whether the Petitioner and the Third Respondents have failed to properly discover; and, whether the Court requires the assistance of a receiver to assist in bringing all relevant evidence brought before it to enable it to determine the outstanding matrimonial causes issues between the parties.

For the foregoing reasons, I am reluctant to reopen the pending applications to admit the valuation report and the quote by KPMG. On this basis and on the basis of lack of standing, I dismiss the application with cost.

Orders accordingly.
________________________________________________________________
Lawyer for the Petitioner : Warner Shand
Lawyer for the First Respondent : Posman Kua Aisi
Lawyer for the Third Respondent : Pryke and Bray

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^[1] [1984] PNGLR 272.
^[2] [1988] PNGLR 239.
^[3] See Tunboro v. MVIT (Supra).
^[4] Order 14 Rule 19.