Golobadana No. 35 Ltd v Bank South Pacific Ltd [2015] PGNC 82; N5890 (18 February 2015)

N5890

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1701 OF 2001
&
WS NO. 384 OF 2003
(CONSOLIDATED)

BETWEEN:

GOLOBADANA NO. 35 LIMITED
Plaintiff

AND:

BANK SOUTH PACIFIC LIMITED FORMERLY TRADING AS PAPUA NEW GUINEA BANKING CORPORATION
First Defendant

AND:

PORT MORESBY RUGBY LEAGUE INC.
Second Defendant

Waigani: Davani, .J
2015: 17th, 18th February,

PRACISE AND PROCEDURE – referral of matter by the Court – summary dismissal – Court exercising its own initiative – O. 10 R. 9A (15) of National Court Rules

PRACTISE AND PROCDURE – Breach of Court's directions – Plaintiff required to show cause – lack of affidavit explaining non-compliance- breach blatant and intentional – proceedings dismissed.

Facts

On 2nd September, 2014, directions were issued which required that both the plaintiff and the defendant file and serve certain documents, including affidavits. On 1st December, 2014, when the matter returned for Pre-trial conference, as ordered, the plaintiff had not filed and served its affidavits including that of expert witnesses, by or before 10th October, 2014, as ordered by the Court. The plaintiff did not have any explanation as to why this was not done. The Court adjourned for the plaintiff to show cause as to why the proceedings should not be dismissed. However, when the matter returned, the plaintiff had not filed an affidavit, explaining why he could not comply with the Court's orders for him to file and serve affidavits.

Held

1. If a party does not comply with a Court's Directions or orders, for one reason or another, then the party has to demonstrate why and the proper way to do this is by admissible evidence, either a sworn affidavit or evidence given on oath in the witness box.
   
2. The filing of affidavits without leave of the Court is a practice that must be discouraged and is one that must be frowned upon by not just the Court but by all practitioners as well.
   
3. A lawyer's intentional default in not complying with a Court's directions, requires that a Court either discipline the lawyer or dismiss the proceedings.
   
4. A court must be seen to be enforcing its own orders where parties have blatantly breached such orders without providing a satisfactory explanation for doing so.
   

Case cited:

Aisi Luma Bore v. Clement Malaisa (2013) N5274

Counsel:

Mr S. Malaga, for the plaintiff
Mr M. Mukwesipu, for the defendants

DECISION

18th February, 2015

1. DAVANI .J: The parties return before me today for the plaintiff to show cause why the proceedings should not be summarily determined.
   
2. On 2nd September, 2014, I issued directions in relation to the manner in which the matter should proceed which included the filing and service of the affidavits. When counsel returned before me on 1st December, 2014, as ordered, I heard that the plaintiff had not fully complied with direction no. 3 of the my directions of 2nd September, 2014.
   
3. The full text of the 2nd September, 2014 directions read as follows:
   

"1. The Defendant/Cross-Claimant shall respond to the plaintiff/cross-defendant's draft Statement of Agreed and Disputed Facts and Legal Issues and Index to the Pleadings Book which the plaintiff had forwarded to them on 5th August, 2014 by or before 12th September, 2014;

2. The plaintiff/cross-defendant shall file and serve the settled Statement of Agreed and Disputed Facts and Legal Issues and Pleadings Book by or before 19th September, 2014;

3. The Plaintiff/cross-defendant shall file and serve its affidavit including expert witnesses' affidavit if any, by or before 10th October, 2014;

4. The defendant/cross-defendant shall file any affidavit in response to the plaintiff's witnesses' affidavit by or before 10th November, 2014;

5. Parties are to file and serve the appropriate notices under the Evidence Act by or before 28th November, 2014;

6. Parties are to return to Court on 1st December, 2014 at 9:30am for directions hearing when the matter will be fixed for pre-trial conference."

The summary determination hearing

1. Jurisdictional basis
   

4. I referred the matter to summary determination on my own initiative and for the plaintiff's breach of direction no. 3 of the 2nd September, 2014 directions. Such power is available to the Court under O. 10 R. 9A (15) of the National Court Rules ('NCR') and which reads as follows;
   

"15. SUMMARY DISPOSAL

(1) the Court may summarily determine a matter;

a. on application by a party; or

b. on its own initiative; or"

c. upon referral by the Registrar under (3) below.

(2) The Court may summarily dispose of a matter in the following situations:

a. for want of prosecution since filing the proceedings or since the last activity on the file; or

b. for a failure to appear at any of the listing or directions hearing by a party or his lawyer; or

c. for non-compliance of any order or directions previously made or issued by the Court at any of the listing processes.

d. under any of the grounds set out in Order 12 Rule 40 and Order 8 Rule 27 of the National Court Rules.

e. on any competency ground relating to non-compliance with the National Court Rules or any other relevant rules of Court.

(3) Where the Registrar refers a matter for summary determination, the following procedure shall be followed;

a. A notice in the form in Schedule "D" is issued by the Registrar which gives notice to the parties of his intention to refer the matter to the judge for summary determination on the ground(s) stated in the letter. The letter will also give the parties thirty(30) days to respond and fix a return date and time for the matter to come before the Judge. In appropriate cases, the Registrar may publish the notice letter in the media.

b. If the Registrar receives a response, either in writing or verbal, he must place on the file the written response or a notice of the verbal response and advise the parties to appear in Court on the date fixed.

c. Upon expiry of 30 days, the Registrar shall forward the file to the Judge.

d. The Judge may determine the proceedings summarily based on the response received and any further representations made by the parties in Court or give such directions as may seem necessary for the future conduct of the proceedings.

e. if the parties are unrepresented, the Registrar shall draft the Court Order, enter it and forward sealed copies to the parties

f. the file is closed and forwarded to Archives for storage."

5. In this case, the referral was done on the Court's own initiative, (R 15 (1) (b)) and for the plaintiff's non-compliance with par. 3 of my directions of 2nd September, 2014. (R. 15 (2) (c)).
   
6. Therefore, there is no issue that the parties are properly before the Court, more particularly the plaintiff and that he is required this morning, to show cause as to why I should not summarily determine the matter for his non-compliance with this Court's directions.
   

2. Plaintiff's evidence
   

7. The plaintiff did not rely on any affidavits, preferring that counsel Mr Malaga make submissions in relation to the directions issued and what had occurred so far. So effectively, there is no evidence before the Court from the plaintiff to demonstrate or show cause why they had not complied with par. 3 of my directions.
   

III. Defendant's evidence

8. The defendants also did not rely on any affidavits, however, there is no reason for them to rely on any affidavits because they are basically here to support the fact that the plaintiff had not complied with the court's directions and that there is no reason why the Court should not dismiss the proceedings because the plaintiff had not shown sufficient cause not to.
   

IV. Analysis of submissions by parties

9. Before proceeding to consider submissions by both counsel, I have considered the fact that this matter has a very long history that goes back beyond 2001. The Papua New Guinea Banking Corporation (PNGBC) and now BSP, had initially given financial facilities to the Port Moresby Rugby League (POMRL). POMRL defaulted under its terms of the financial facilities which resulted in the PNGBC, now BSP taking over the property commonly known as the POMRL. The PNGBC (the 'Bank') through a management agreement engaged Golobadana the plaintiff, to manage the place. The bank also, pursuant to a sublease agreement, subleased a part of the property to plaintiff.
   
10. The Bank resolved to terminate the management agreement. The plaintiff challenged the decision and obtained ex parte stay orders. After hearing both parties, the Court discharged the interim injunctions, allowing the bank to proceed with the termination.
    
11. The plaintiff then, issued another set of proceedings, this time seeking to stay termination of the sublease agreement. The agreement was stayed by consent which remained up until the date the lease expired. That agreement has not been renewed.
    
12. The claim by the plaintiffs now before me, is their claim for damages as a result of the alleged termination of the agreement. The last action was for the bank ordering Golobadana to provide further details of its claim for damages because Golobadana had declined to do so.
    
13. The matter then progressed to directions which I issued on 2nd September, 2014.
    
14. The plaintiff must demonstrate to the Court that there is a good explanation for his failure to comply. Apart from that, the other considerations that the Court must take into account and which the plaintiff must satisfy are as set in the case Aisi Luma Bore v. Clement Malaisa (2013) N5274. These other considerations are:
    
    1. The nature and extent of the failure to comply,
       

ii. The conduct of the proceedings,

iii. Whether the interests of justice favour the dismissal.

15. I will consider submissions of both counsel under the principles set in Aisi Luma Bore (supra).
    

Principle 1: Has there been a failure to comply

16. The plaintiff has not put before the Court any evidence to demonstrate or justify why it is that they were unable to meet the deadlines set by the Court. It is imperative for a lawyer or a party, to comply with a court's orders. If they do not comply for one reason or another, then they have to demonstrate why and the proper way to do this is by admissible evidence, either a sworn affidavit or evidence given on oath in the witness box.
    
17. In this case, on 2nd September, 2014, the Court issued directions for the further conduct of this matter which included amongst others, the requirement for the plaintiff to file and serve its affidavits by the 10th October, 2014. The matter was then adjourned to the 1st December, 2014 for parties to return for pre-trial conference. However, on 1st December, 2014, Mr Malaga for the plaintiff informed the Court that he had not complied with the direction to file and serve affidavits. On hearing this, and the fact that Mr Malaga had not filed any affidavits to explain why he had not complied, demonstrated to the Court that this was a blatant breach of the Court's orders. Rather than dismiss the proceedings there and then, which is a power available to the court, the Court adjourned to give the plaintiff the opportunity to show cause as to why the proceedings should not be dismissed. And that exercise, is the Courts demonstration of administering justice to all and a proper exercise of discretion, because that adjournment then gives the plaintiff the opportunity to put together his explanation in affidavit from, as to why he could not comply.
    
18. So, the fact that the plaintiff had not filed his affidavits, is not disputed.
    
19. Mr Malaga however, pointed out to the Court that since those orders, that on 13th February, 2015, he filed the plaintiff's representative's affidavit and that this should be seen to be a compliance with the court's directions of 2nd September, 2014, and it shows also the plaintiff's readiness to proceed to trial.
    
20. Those submissions by Mr Malaga, demonstrate a clear lack of respect for this Court's orders and for this Court. Firstly, the affidavit was filed without leave of this court, in breach of my orders of 2nd September, 2014. It is a practice that must be discouraged and is one that must be frowned upon by not just the Court but by all practitioners as well.
    
21. Secondly, the plaintiff had 2 months, between September to December, 2014 to file those affidavits. He has now taken it upon himself to file this affidavit in February, 2015, 7 months later, in complete defiance of this Court's orders and, without any admissible explanation, as to his non-compliance and breach of orders.
    

Second principle: Whether there is a good explanation for failure to comply

22. Neither the plaintiff, nor its lawyers have stopped to remind themselves that because they are in breach of the Court's orders that they must have a proper and legally admissible explanation for the Court and such explanation can only be way of affidavit, considering a period of about 4 months had lapsed and affidavits had not been filed. Submissions from the bar table as was done by Mr Malaga are totally unacceptable and is very bad practice, more particularly from a lawyer with years of experience as in Mr Malaga's case.
    
23. As far as this Court is concerned, there is no good explanation or no explanation at all for the plaintiff's failure to comply.
    

Third principle: Conduct of the proceedings

24. I have heard from Mr Mukwesipu, lawyer for the defendants, that the plaintiff had never, during that 4 month period between September to December, 2014, informed them of their inability to comply with the Court's directions to file affidavits. I have heard also and it is on record, that the plaintiff had requested that the Court compel the Bank to provide particulars instead of providing details which would then quickly resolve the matter. The plaintiff and his lawyers' conduct, to say the least, denotes an attitude where they are effectively prolonging the proceedings rather than progressing it to a finality.
    

Fourth principle: whether the interests of justice favour a dismissal

25. The matter is nearly 15 years old. The plaintiff's nonchalant attitude tells me that they do not see any urgency or necessity in complying with the court's directions which would then enable the matter to be quickly tried. In all likelihood, staff and potential witnesses at that who were employed by the then PNGBC and who were potential witnesses, have now moved on. The considerable delay experienced in completing this matter will obviously seriously affect the defendant's ability to produce all its witnesses to properly defend itself.
    
26. A lawyer's intentional default in not complying with a Court's directions, which is clearly what has occurred here, is not a plausible explanation and one that would warrant a Court's departure from its traditional stance to discipline lawyers or to dismiss proceedings. And if the court does exercise the latter option which is to dismiss proceedings, then of course, that is the basis of a claim for professional negligence against the lawyer with carriage of the matter and the firm he is employed by or that he owns.
    

Conclusion

27. A court must be seen to be enforcing its own orders where parties have blatantly breached such orders without providing a satisfactory explanation for doing so. That is the reason why the Rules of Court provides for summary dismissals where there is blatant breach. In this case, the plaintiff's conduct is reprehensible and must be penalized by a sanction that is warranted and justified. In this case, the plaintiff has not prosecuted this matter as diligently as he ought to have, and obviously breaching orders without providing a satisfactory explanation.
    
28. For those reasons, this Court finds that there has been a blatant and intentional breach of its orders of 2nd September, 2014. The exercise of my discretion to dismiss is proper under the existing circumstances and definitely, warranted.
    

Formal Orders

29. These are the formal orders of the Court:
    

1. Proceedings WS 1701 of 2001 and WS 384 of 2003 (consolidated) are dismissed in their entirety;

2. The plaintiff will pay all defendants' costs of the proceedings, to be taxed, if not agreed.

____________________________---_________________________________
Gadens Lawyers: Lawyers for the Plaintiff
Henaos Lawyers: Lawyers for the Defendant