T.W.Transport Ltd v Maru [2012] PGNC 279; N4934 (7 December 2012)

N4934

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 27 OF 2009

BETWEEN:

T. W. TRANSPORT LIMITED trading as TRANSWEST TRANSPORT
Plaintiff

AND:

RICHARD MARU, Managing Director, National Development Bank Limited
First Defendant

AND:

NATIONAL DEVELOPMENT BANK LIMITED
Second Defendant

Waigani: Hartshorn J.
2012: 5th & 7th December

Plaintiff company is deregistered – plaintiff ceases to exist – property of plaintiff vests in the Registrar of Companies – no application made to substitute Registrar of Companies for the plaintiff – no person before the Court in whom the plaintiff's cause of action can continue

Facts:

The plaintiff was a transport company. It obtained a loan from the second defendant to purchase some trucks for its business. The plaintiff was unable to meet the loan repayments. It contends that it entered into a contract with the second defendant whereby the second defendant would sell the trucks in consideration for the loan being considered as repaid. The second defendant sold the trucks but maintains that the loan has not been fully repaid and continues to accrue. The plaintiff seeks to enforce its contract. During the course of the trial, the defendants' sought to have the proceeding dismissed as the plaintiff company T. W. Transport Ltd, is deregistered and no longer exists.

Held:

Upon deregistration, the plaintiff ceased to exist and all of its property vested in the Registrar of Companies. No application was made following deregistration or at trial to substitute the Registrar of Companies for the plaintiff in this proceeding, and so there is no person who is before the court in whom the plaintiff's cause of action is able to survive or continue. Consequently the proceeding is dismissed.

Cases cited:
Papua New Guinea Cases

Ace Guard Dog Security Services Ltd v. Lindsay Lailai (2004) SC757

Overseas Cases

Eldridge v. Burgess [1878] UKLawRpCh 12; (1878) 7 Ch D 411
United Insurance Co Ltd (in liq) v Lang [1935] NSWStRp 51; (1935) 35 SR (NSW) 487
Fielding v. Rigby [1993] 4 All ER 294
International Bulk Shipping & Services Ltd v. Minerals & Metals Trading Corporation of India [1996] 1 All ER 1017
Deveigne & Anor v. Askar [2007] NSWCA 45

Counsel:

Mr. A. Manase, for the Plaintiff
Messrs J. Nalawaku and F. Pomoso, for the Defendants

7th December, 2012

1. HARTSHORN J: The plaintiff was a transport company. It obtained a loan from the second defendant to purchase some trucks for its business. The plaintiff was unable to meet the loan repayments. It contends that it entered into a contract with the second defendant whereby the second defendant would sell the trucks in consideration for the loan being considered as repaid. The second defendant sold the trucks but maintains that the loan has not been fully repaid and continues to accrue. The plaintiff seeks to enforce its contract. The trial of the matter has been heard and I reserved my decision which I now deliver.

2. During the course of the trial counsel for the defendants sought to have the proceeding dismissed as the plaintiff company T. W. Transport Ltd, is deregistered and no longer exists. I will deal with this issue first as if the defendants are successful with their argument, it will determine the proceeding.

3. The evidence before the court of the deregistration, being an extract from the Register of Companies as at 30th November 2012, is that T. W. Transport Ltd was deregistered on 13th May 2011. Counsel for the plaintiff conceded that T. W. Transport Ltd is deregistered but that an application to re-register the company had been lodged in June 2011. A letter dated 20th October 2012 to the Registrar of Companies from the plaintiff is before the court. In the letter, the plaintiff requests advice as to the status of the application but no reply has been received. Counsel for the plaintiff informed the court that T. W. Transport Ltd would be re-registered and he would make an appropriate application when that had occurred. The court should only determine a matter on the evidence before it and the submissions made at the time. The evidence is that the plaintiff company is deregistered and the court will proceed on that basis.

Law

4. In the Supreme Court case of Ace Guard Dog Security Services Ltd v. Lindsay Lailai (2004) SC757, it was held amongst others, that an appellant that was not incorporated as a company has no legal standing and is therefore incompetent to institute an appeal.

5. In Australia, in the New South Wales Supreme Court in United Insurance Co Ltd (in liq) v Lang [1935] NSWStRp 51; (1935) 35 SR (NSW) 487 at 495, Jordan CJ (with whom Halse Rogers and Street JJ agreed) said:

"[A] non-existent person cannot sue. In the case of a natural person, the English Courts would decline to entertain an action in his name....."

This passage was reproduced and favourably referred to in Deveigne & Anor v. Askar [2007] NSWCA 45.

6. In England, in International Bulk Shipping & Services Ltd v. Minerals & Metals Trading Corporation of India [1996] 1 All ER 1017, proceedings were held to be a nullity where the plaintiff companies had been dissolved prior to their commencement. In that case the following authorities were cited and relied upon: Lazard Bros & Co v Midland Bank Ltd [1933] AC 289 at 296, Dubai Bank Ltd v. Galadari (No. 4) (1990) Times 23 February (Morritt J) and Fielding v. Rigby [1993] 4 All ER 294 at 297-298.

7. In Fielding v. Rigby (supra), Sir Thomas Bingham considered the applicable authorities and in so doing made reference to Eldridge v. Burgess [1878] UKLawRpCh 12; (1878) 7 Ch D 411. I reproduce a passage from Sir Thomas's judgment as I consider it relevant to the present circumstances:

"..... proceedings were issued and arrangements for trial made before the plaintiff, who had started the proceedings, in effect became bankrupt and before his trustee was appointed. When the matter came on before Fry J at the trial, neither the plaintiff nor his trustee appeared and at no stage was any attempt made to substitute the trustee for the plaintiff in the conduct of the action. The learned judge held that the cause of action must survive or continue in some person who is before the court and, in the absence of the trustee, struck out the action. That decision again appears to me to be plainly correct...."

8. I have had regard to the authorities referred to and particularly the judgment in Fielding v. Rigby (supra). In this instance, when the proceeding was commenced, the plaintiff existed but ceased to exist subsequently. Upon deregistration, the plaintiff ceased to exist and all of its property vested in the Registrar of Companies. No application was made following deregistration or at trial to substitute the Registrar of Companies for the plaintiff in this proceeding, and so there is no person who is before the court in whom the plaintiff's cause of action is able to survive or continue. Consequently this proceeding should be dismissed.

9. Given this finding it is not necessary to consider the other submissions of counsel.

10. As to costs, I would have thought that it was appropriate to award costs against the lawyers who had continued to prosecute the proceeding on behalf of a non-existent party but no such order was sought. Given that a non-existent party cannot pay costs, I make no order as to costs.

Orders

11. The proceeding is dismissed and time is abridged.

_________________________________________
Manase & Co Lawyers: Lawyer for the Plaintiff
Namani & Associates: Lawyers for the Defendants