Task Guard Ltd v Foulton [2011] PGNC 361; N6615 (20 July 2011)

N6615

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 130 OF 2004

BETWEEN:

TASK GUARD LIMITED
Plaintiff

AND:
PAUL FOULTON, ROD SAKER, FELIX TAVIL,
GUY DUGDALE, STEWART SHANKY and
ANDREW HOLDING in their capacity as
members of the LIHIR MANAGEMENT
COMPANY TENDERS BOARD COMMITTEE
First Defendant

AND:
NIOLAM SECURITY LIMITED
Second Defendant

AND:
LIHIR MANAGEMENT COMPANY LIMITED
Third Defendant

Kokopo: Hartshorn J.

2011: July 18^th and 20^th

Application to dismiss proceeding for want of prosecution

Cases cited:
Bank of South Pacific Ltd v. Raun Wok Ltd (2001) N2118
General Accident Fire & Life Assurance Corporation Limited v. Ilimo Farm Products Pty Ltd [1990] PNGLR 331
Mali Pyali v. Chief Inspector Leo Kabilo (2003) N2492
Obadia Buka v. Jude Baisi (2004) N2602
Ronald Nicholas v. Commonwealth New Guinea Timbers Pty Ltd [1986] PNGLR 133
Thomas Rangip & Anor v. Peter Loko & Anor (2009) N3714

Counsel:
Mr. W. Donald, for the Plaintiff
Mr. M. G. R. Henao, for the First and Third Defendants
Mr. P. Yange, for the Second Defendant

20^th July, 2011

1. HARTSHORN J: The plaintiff Task Guard Limited, alleges that it should have been awarded a security services contract to provide security services to the third defendant Lihir Management Company Limited (LMC) and commenced this proceeding seeking damages and loss of income when it was not.
   
2. LMC and the first defendants, the members of LMC’s tenders board (collectively referred to with LMC as LMC) apply to have this proceeding dismissed for want of prosecution as:
   
   1. there has been an inordinate delay in prosecuting the proceeding,
      
   2. there is no reasonable explanation given by Task Guard for the delay,
      
   100. the delay has caused injustice or prejudice to LMC,
        
   4. a result of the conduct of Task Guard and its lawyers in their prosecution of the proceeding,
      
   5. it is in the interests of justice.
      
3. Task Guard opposes the application as:
   
   1. there has not been intentional default or inexcusable delay,
      
   2. LMC has contributed to any delay,
      
   100. it is not in the interests of justice that the proceeding be dismissed.
        
4. LMC relies upon Order 4 Rule 36 (1) National Court Rules which is:

“(1) Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may stay or dismiss the proceedings.”

Law

5. Task Guard submits that for an order of dismissal to be successfully sought pursuant to Order 4 Rule 36 (1) LMC must establish:

1. an intentional default or inordinate or inexcusable delay in prosecuting the plaintiff's claim,
2. that there is no reasonable explanation for the delay,

100. that the defendant is suffering injustice or prejudice by the delay,

4. that the conduct of the plaintiff is such that the proceeding has not been properly progressed,
5. that the balance of convenience favours the proceeding being dismissed.

6. Task Guard relies upon numerous cases including Ronald Nicholas v. Commonwealth New Guinea Timbers Pty Ltd [1986] PNGLR 133 and the cases cited therein, Obadia Buka v. Jude Baisi (2004) N2602, Bank of South Pacific Ltd v. Raun Wok Ltd (2001) N2118, General Accident Fire & Life Assurance Corporation Limited v. Ilimo Farm Products Pty Ltd [1990] PNGLR 331 and Mali Pyali v. Chief Inspector Leo Kabilo (2003) N2492.

7. The requirements for a successful dismissal application and the relevant principles contained in the above cases are similar to numerous other decisions in this jurisdiction on the question of when a proceeding ought to be dismissed for want of prosecution.

Delay

8. LMC submits that the conduct of Task Guard and its lawyers clearly indicates inordinate delay and that the proceeding has not been prosecuted with due diligence. This is evidenced by the following:

1. this proceeding was commenced in March 2004,
2. no action was taken to prosecute the proceeding by Task Guard for considerable periods of time. From a perusal of the affidavit of Wesley Donald the lawyer for Task Guard, it is apparent that no action was taken for all of 2006 up to November 2007, from May 2008 to the end of October 2009 and from January to May 2010,

100. Task Guard did not, of its own volition, take steps to set the proceeding down for trial until 6 years after pleadings closed in July 2005 and 7 years after the proceeding was commenced,

4. Task Guard’s application to have the proceeding set down for trial was filed 16 days after the notice of motion of LMC seeking dismissal and is an attempt to avoid dismissal,
5. 8 months after the issue arose as to what should be included in the draft index to the pleadings book, Task Guard's lawyers then sought clarification from LMC's lawyers as to what constituted pleadings despite various undertakings to attend to requested changes when the issue arose,
6. there was an unsuccessful application to dismiss the proceeding for want of prosecution in October 2007 and in March 2010 and March 2011, letters were sent by LMC foreshadowing applications for dismissal being made unless steps were taken to progress the proceedings.

9. LMC further submits that Task Guard has not provided any reasonable explanation for the failure to progress the proceeding and the inordinate and repeated delays.

10. Task Guard submits amongst others that:

1. LMC is responsible for the delays in settling the pleadings book,
2. it had to apply to court to have the defendants sign the statement of agreed and disputed facts and issues for trial,

100. the lawyers for LMC did not properly communicate with the lawyers for Task Guard concerning the application to dismiss for want of prosecution,

4. Task Guard has not defaulted in compliance with any court orders,

e) any delays are because of the actions of all parties.

11. As to whether there has been inordinate delay, I am mindful that the proceeding was commenced in March 2004. From the evidence, there have been numerous periods of inactivity including 22 months from 2006 to 2007, 19 months from 2008 to 2009, 4 months in 2010 and 2 and one half months in 2011. In the 7 years since the proceeding commenced it has never been set down for trial. I am satisfied after considering all of the evidence and the submissions on the point that there has been inordinate delay in prosecuting the proceeding since it was commenced.

Explanation for delay

12. Counsel for Task Guard has not given any explanation for the delay of 22 months between 2006 and 2007. As to the other delays, in my view no reasonable explanations have been given, when regard is had to the fact that the onus is on the plaintiff to prosecute its claim with due diligence and that it is the plaintiff who should take the necessary steps in a proceeding to have it ready for trial: Obadia Buka v. Jude Baisi & Anor (2004) N2602, referred to in Thomas Rangip & Anor v. Peter Loko & Anor (2009) N3714. If settlement negotiations occur, the onus upon the plaintiff to prosecute the proceeding is not removed unless the express consent of the defendant is obtained: Rangip v. Loko (supra). Further, if there is a disagreement with the defendant for instance over the composition of a document, or the conduct of the defendant is such that the timely prosecution of the proceeding is being affected, the onus is upon the plaintiff to apply to the court for appropriate relief.

13. Following a consideration of the evidence and submissions of counsel, I am satisfied that as to the inordinate delay in prosecuting the proceeding, Task Guard has not given any or any reasonable explanations for the inordinate delay.

Injustice or prejudice

14. LMC submits that it is a dormant company and but for this proceeding would be considered for voluntary winding up. It has no assets. Further, as to the 6 members of the committee named as the first defendant, only 2 of those members are now employed by Lihir Gold Ltd. LMC does not know the whereabouts of the remaining persons apart from Mr. Paul Foulton. LMC will be prejudiced by having to incur costs in locating the members of the committee named as the first defendant and arranging for them to be in Kokopo for a trial. LMC will also be prejudiced by incurring associated expenses such as airfares, land transportation, food, accommodation, insurance and visa costs.

15. Counsel for Task Guard submits that any liabilities of LMC would have been taken into account at the time of the corporate rearrangement with Newcrest Mining Ltd. This submission does not take into account the increased costs, prejudice and injustice that LMC submits has occurred as a consequence of the delay in prosecuting the proceeding. Given the above, I am satisfied that LMC has and continues to suffer prejudice because of the delay in prosecuting the proceeding.

Conduct of the parties

16. Counsel for Task Guard submits that Task Guard has made reasonable efforts to progress the proceeding and that it is LMC’s stance concerning the composition of the pleadings book that is now delaying the proceeding being set down for trial. Further, it is submitted that Task Guard had to apply to court to have the defendants sign a statement of agreed and disputed facts and issues for trial. In this regard I note the submission made on behalf of LMC that the statement of agreed and disputed facts and issues for trial was in fact drafted by the lawyers for LMC, that the lawyers for LMC were not aware that the said orders of the court were being sought and that the said orders were most likely sought to have the second defendant sign the statement.

17. LMC submits that:

1. after receiving the warning letter foreshadowing an application to dismiss dated 14^th March 2011, Task Guard changed its lawyers on 17^th March 2011, but the new lawyers did not make agreed amendments to the draft index to the pleadings book,
2. it was not until after the dismissal application was filed that Task Guard sought to progress settlement of the pleadings book,

100. the changing of lawyers by Task Guard in March 2011 and the subsequent change back to the previous lawyers was an attempt to avoid a successful dismissal application by LMC,

4. the filing of a motion to amongst others, have the proceeding set down for trial generally on the return date for the dismissal application and the obtaining of an adjournment was a move calculated to delay the dismissal application and the proceeding,
5. LMC and its lawyers have acted fairly at all times. Two warnings were given almost 12 months apart to Task Guard to take meaningful steps to progress the proceeding diligently and with due despatch. Further, LMC's lawyers followed up with Task Guard’s lawyers about the requested amendments to the draft index to the pleadings book but that despite assurances, no amendments were ever received.

18. Following a perusal of the evidence, I am not satisfied that the conduct of Task Guard and its lawyers can be considered to be the conduct that the court expects of a plaintiff who properly prosecutes its case. The conduct of Task Guard and its lawyers does not appear reasonable in the circumstances. The evidence is that the proceeding has been driven by LMC rather than Task Guard. In this regard I also make mention of the application in 2007 by LMC to have the matter set down for trial as an example of steps taken that should normally have been taken by a plaintiff. At that time as mentioned there was an unsuccessful application to dismiss for want of prosecution by LMC. Notwithstanding that the application was unsuccessful, the conduct of Task Guard and its lawyers at that time presumably was of such a nature that it was thought that a dismissal application was warranted. The unsuccessful application at least should have put Task Guard and its lawyers on notice that LMC wished to ensure that the proceeding was prosecuted promptly.

19. The explanations of Task Guard and its lawyers, such that they are, that it is LMC's conduct that has contributed to the delay, is not supported by the evidence. As previously mentioned, the onus is upon a plaintiff to prosecute his case. The conduct of Task Guard and its lawyers is not that expected of and on behalf of a plaintiff who is interested in pursuing his case.

Interest of justice - balance of convenience

20. Task Guard submits that it would be a harsh step for the court to take to dismiss the proceeding for want of prosecution and would not be in the interests of justice. Further, LMC has not clearly satisfied this court as to the considerations required to enable it to exercise its discretion and grant the orders sought.

21. All parties are entitled to the dispensation of justice. When regard is had to the circumstances of this case, my finding that there has been inordinate delay without any or any reasonable explanation, that LMC continues to suffer prejudice and that the conduct of Task Guard and its lawyers is not the conduct that this court expects of and on behalf of a plaintiff who properly prosecutes its claim, I am of the view that it is in the interests of justice, and the balance of convenience favours, that this proceeding be dismissed for want of prosecution.

Orders

22.

1. this proceeding is dismissed,
2. the plaintiff shall pay the costs of the defendants of and incidental to the notice of motion of the first and third defendants filed 31^st May 2011,

100. the time of entry of these orders is abridged to the time of entry by the Registrar which shall take place forthwith.

_____________________________________________________________

Donald and Company Lawyers: Lawyers for the Plaintiff
Blake Dawson Lawyers: Lawyers for the First and Third Defendant
Warner Shand Lawyers: Lawyers for the Second Defendant