Derwent Ltd v Pakena [2015] PGNC 111; N6003 (24 June 2015)

N6003

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1144 OF 2013

BETWEEN

DERWENT LIMITED
(Formerly known as Telemu No. 9 Limited)
Plaintiff

AND

ANTON PAKENA
First Defendant

AND

NIYA LIMITED
Second Defendant

AND

Waigani: Ipang, J
2015: 17th April & 24th June

CIVIL – MOTION – Defendant seeking to dismiss the entire proceedings for being vexatious and abuse of court process – Order 12 Rule 40 (6) & (c) National Court Rules.

CIVIL – MOTION – Plaintiff seeking to dismiss First Defendant's Notice filed on the 13th of August 2014, for want of prosecution – Rule 17 Motions (Amendment) Rules 2005

Cases Cited:

Urban Giru v Luke Mata & Ors (2005) N2877

Counsel:

Mr D Levy, for the Plaintiff
Mr Moses Philip, First Defendant
Mr H Leahy, for Second Defendant

12 June, 2015

1. IPANG, J: There are two (2) motions before this Court. One motion is filed by the First Defendant on the 13th August 2014. The next motion is the amended motion filed by the Plaintiff on the 24th February 2015. I will deal with the First Defendant's motion first and later deal with the Plaintiff's motion. The first Defendant's motion filed on the 13th of August 2014, seeks the following orders;
   
   • The proceeding be dismissed for being vexatious and abuse of court process pursuant to Order 12 Rule 40 (c) of the National Court Rules.
     
   • Cost of this proceeding;
     
   • Such other orders the court deems fit.
     
2. In support of the application, the Plaintiff rely on the Affidavit of Anton Pakena filed on the 13th August 2014, and on the Affidavit of Dr Michael Reynolds filed on the 18th September 2014.
   

Background facts to the case

3. A Contract of Sale was entered between the Plaintiff and the Second Defendant on the 28 August 2007. The Second Defendant agreed to sell all the land contained in the State Lease Volume 31 Folio 121 and described as Allotment 3, Section 275, Hohola (Ensisi Valley), National Capital District. The Contract of Sale was for 65 Allotments.
   
4. The settlement did not progress so after five (5) years the parties met on the 5th and 8th August 2011, and held discussion to rescind the contract as provided for under Clause 18 of the Contract of Sale.
   
5. First Defendant said in the meetings held on the 5th and 8th August 2011, the parties agree that he repay the deposit money and other payment made to the purchaser in the sum of K227, 339.25.
   
6. First Defendant stated on the 9th of August 2011, he raised a cheque through his Lawyers (Steven Lawyers) and delivered to the Plaintiff.
   
7. On the 9th of June 2011, First Defendant arranged for the Sale of his shares to Tay Kian Chuan. He said when the contract was rescinded, he concluded the sale of his shares to the new Directors including the transfer of some properties.
   
8. Mr Pakena said that due to the proceeding he is still awaiting the settlement of the transfer of the properties to him and he said the delay is causing him to lose business and frustration. He submits that the proceeding is vexatious and is an abuse of court process and therefore the proceeding should be dismissed.
   

Plaintiff's Reply

9. The Plaintiff through Dr Michael Reynolds submitted that there was a delay in reaching a settlement of the contract because the First defendant failed to lodge the 65 transfer instruments with the Internal Revenue Commission for stamping despite being provided with the necessary funds by the Plaintiff to do so.
   
10. Dr Reynolds said the Plaintiff and the First Defendant never agreed to rescind the contract.
    
11. Reynolds said the First Defendant breached Clause 5 (a) of the contract by failing to notify the Plaintiff's Lawyer that the ministerial approval was granted. He said the Plaintiff had to find out himself through its own means later. Plaintiff denies there was an agreement to rescind the contract.
    

Issue(s)

12. Whether there was rescission of contract by both parties on the 5th and 8th August 2011.
    
13. The First Defendant through his Affidavit of 12th August 2014, deposed that the parties had agreed and rescinded the contract already as stated on the 5th and 8th August 2011.
    
14. The First Defendant further deposed that prior to the Contract being rescinded on the 5th and 8th August 2011, he sold his shares in the company (Second Defendant) to another company on the 23rd June 2011 and at the same time resigned as the Director of the Second Defendant. Plaintiff says the First Defendant resigned as a Chairman of Niya Limited on the 23rd June 2011. Plaintiff also says the First Defendant sold his shares in the company to a Third Party whilst the contract was in existence.
    
15. Plaintiff also stated that the First Defendant continued to give the Plaintiff the impression that he (First Defendant) was genuine about the settlement of the matter by continuing to accept payments from the Plaintiff to the Second Defendant from the period of August 2011 to December 2013.
    
16. It was also stated by the Plaintiff that the First Defendant failed to notify the Plaintiff that he had resigned as a Director of the Second Defendant on or around 23rd of June 2011. Plaintiff says First Defendant continued to act as the Chairman of the Second Defendant. On the 5th August 2011, he informed the Plaintiff that he would reimburse the Plaintiff's money and that he was pulling out of the contract.
    
17. Plaintiff says as from 24th June 2011 and onwards the First Defendant had no authority to represent the Second Defendant Company. As the First Defendant had resigned as Chairman of Niya Limited on the 23rd of June 2011. Plaintiff therefore says he (First Defendant) was not an authorized officer of the Second Defendant to rescind the contract.
    
18. First Defendant said the contract was rescinded on 5th and 8th August 2011. However, the Plaintiff denied that the contract has not being rescinded. It is not very certain on what terms and conditions of the contract, it was rescinded tis is a serious issue and not frivolous or vexatious. In the case of Urban Giru v Luke Mata & Ors (2005) N2877 Yagi, J stated;
    

"The Defendants have denied the existence of the contract. Therefore, the issue of whether a legally binding contract was entered into between the parties needs to be determined at a trial. The issue is seriously disputed and the evidence is insufficient to show the exact terms of the contract and assuming if there were, that was a clear breach. On this alone I am satisfied that there are serious issues of fact and law that require determination at the trial proper".

19. The Plaintiff in this case have denied the rescission of the contract. Whilst First Defendant argued the contract was rescinded. This issue is seriously disputed and there is insufficient evidence to show on what exact terms the contract was rescinded. I am satisfied that there are serious issues to be tried on facts and law that would require determination at a trial proper. I, therefore refuse the order(s) sought in the Notice of Motion filed by the First Defendant on the 13th of August 2014.
    

_____________________________________________________________
Manase & Co Lawyers: Lawyer for the Plaintiff
Korerua & Associate Lawyers: Lawyer for the First Defendant
Pacific Legal Group Lawyers: Lawyer for the Second Defendant