Ere v National Housing Corporation [2016] PGNC 311; N6515 (27 September 2016)

N6515

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 261 of 2016

BETWEEN

AMOS ERE
for himself and on behalf of all Tenants and
Occupants of Tokara NHC Hostel Section
227 Allotment 192, Hohola, National Capital
District as Listed under Schedule “A” of the
Originating Summons

Plaintiff

AND

NATIONAL HOUSING
CORPORATION
First Defendant

AND

AEES REAL ESTATE
LIMITED
Second Defendant

Waigani: Hartshorn J.
2016: 9^th & 27^th September

Application to Dismiss Proceeding

Cases cited:

Ainsworth v. Criminal Justice Commission [1992] HCA 10; (1991-1992) 175 CLR 564

Bernard Kosie v. John Kapi Natto (2016) unreported
SCA 55/15 delivered 6/5/16
Bernard Kosie v. John Kapi Natto (2015) N6263
Dr. Onne Rageau v. Kina Finance Ltd (2015) N6175
Eliakim Laki v. Maurice Alaluku, Secretary Department of Lands [2000] PNGLR 392
Independent State of Papua New Guinea v. Central Provincial Government (2009) SC977

Kiee Toap v. The State (2004) N2731, N2766

Kerry Lerro v. Stagg (2006) N3050
Louis Medaing v. Ramu Nico Management (MCC) Ltd (2010) N4158

Michael Gene v. Hamidian Rad [1999] PNGLR 444
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007
Nae Ltd v. Curtain Bros Papua New Guinea Ltd (2015) N6124
National Fisheries Authority v. New Britain Resources Development Ltd (2009) N4068
Ok Tedi Mining Ltd v. Niugini Insurance Corporation and Others (No 2) [1988-89] PNGLR 425

Pius Pundi v. Chris Rupen (2015) SC1430
Placer Dome (PNG) Ltd v. Yako (2011) N4691

PNG Forest Products Pty Ltd v. The State [1992] PNGLR 85

Puri Ruing v. Allan Marat (2012) N4672

Rabaul Shipping Ltd v. Rupen (2008) N3289
Simon Mali v. Independent State of Papua New Guinea [2002] PNGLR 548
Siu v. Wasime Land Group Incorporated (2011) SC1107

Tigam Malewo v. Faulkner (2007) N3357

Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906

Takori v.Yagari & Ors (2008) SC905
Tigam Malewo v. Faulkner(2009) SC960
United States of America v. WR Carpenters (Properties) Ltd [1992] PNGLR

185
Wan Global Ltd v. Luxurflex Ltd (2012) SC1199
Wilfred Mamkuni v. Ly Cuong-Long and Jant Ltd (2011) N4674

Overseas case:

The Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd [1921] 2 AC 438
Tampion v. Anderson [1973] VicRp 32; [1973] VR 321

Counsel:

Mr. O. Dekas, for the Plaintiffs
Mr. A. Luke, for the First Defendant
Mr. A. Waira, for the Second Defendant

27^th September, 2016

1. HARTSHORN J: This is a decision on a contested application to dismiss this proceeding. The application to dismiss is made by the second defendant Aees Real Estate Ltd (A.R.E.) and supported by the first defendant, the National Housing Corporation (NHC). It is opposed by the plaintiffs, Amos Ere for himself and on behalf of all tenants and occupiers of Tokarara NHC Hostel Allotment 192 Section 227 Hohola, National Capital District.

Background

2. A.R.E. is the registered proprietor of the property known as Allotment 192 Section 227 Hohola, National Capital District, being all of the land referred to in State Lease Volume 30 Folio 86 (property). A.R.E. purchased the property from NHC on 1^st March 2016.

3. Amos Ere and the persons he purportedly represents live or occupy the hostel building on the property. A.R.E. sought to evict Amos Ere and the occupiers of the hostel from the property.

4. Amos Ere commenced this proceeding by originating summons seeking declaratory relief and consequential orders. The declaratory relief sought is to the effect that the property is a dwelling pursuant to s. 1 National Housing Corporation Act, that A.R.E. is not a person to whom NHC was entitled to sell the property, that the sale of the property to A.R.E. is illegal and that the transfer of title of the property to A.R.E. be cancelled.

This application

5. A.R.E. applies pursuant to Order 12 Rule 40 (a), (b), and (c) National Court Rules to dismiss this proceeding. A.R.E. submits that the proceeding should be dismissed as amongst others:

a) the plaintiffs lack the requisite standing to seek the substantive relief that they do and so the proceeding is frivolous;

b) the plaintiffs have admitted that A.R.E. has a valid title to the property;

c) the proceeding was filed by the plaintiffs without good faith;

d) A.R.E. has a valid title which is indefeasible;

e) the property is not subject to s. 37 National Housing Corporation Act and NHC may deal with the property as it thinks fit;

f) the representative requirements of the National Court Rules have not been complied with by the plaintiffs and so the proceeding is an abuse of the court process;

6. The plaintiffs submit that the proceeding should not be dismissed as:

a) they are legal tenants, their tenancy agreements are still current, they have the right to live on the property and so they have standing to bring the proceeding;

b) the proceeding was filed in good faith;

c) any admission made as to A.R.E. having a valid title is irrelevant, and in any event was only made by some of the plaintiffs;

d) NHC did not comply with s. 37 National Housing Corporation Act and so A.R.E.’s title is being challenged on this basis;

e) the plaintiffs can give their consent to this proceeding being commenced;

f) the property has different legal descriptions, the Prime Minister has issued a moratorium on the sale of properties by NHC and if the plaintiffs are evicted it will be unfair, contrary to the Constitution and against their human rights.

Law

Order 12 Rule 40 National Court Rules

7. There are numerous authorities in respect of the principles which apply to applications under Order 12 Rule 40 National Court Rules and I refer to the following cases in this regard: Kerry Lerro v. Stagg & Ors (2006) N3050, Takori v.Yagari & Ors (2008) SC905, Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 and Siu v. Wasime Land Group Incorporated (2011) SC1107. The Court in Mount Hagen v. Sek (supra) in paragraphs 27 to 30 conveniently sets out the requirements of Order 12 Rule 40 (1) (a), (b) and (c) as follows:

“27. The terms “vexatious”, “frivolous”, “abuse of the process of the Court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori & The State (2006) N3050; Philip Takori & Others v. Simon Yagari & 2 Others (2008) SC 905. These cases say the same thing.

28. The law with regard to an application for dismissal of proceedings based on O.12 r.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori’s case (supra).

29. The phrase ‘disclosing a reasonable cause of action’ consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i) A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

(ii) The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii) The purpose of O.12 r.40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv) A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.

(v) A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

30. In an application under O.12 r.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded.”

Representative proceeding requirements

8. Order 5 Rule 13 (1) National Court Rules provides for representative actions and is as follows:

“Where numerous persons have the same interest in any proceedings the proceedings may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them”.

9. In Simon Mali v. Independent State of Papua New Guinea [2002] PNGLR 548, the Supreme Court stated amongst others, that in all actions or proceedings of a representative nature, all of the intended plaintiffs must be named and duly identified in the originating process and pursuant to Order 5 Rule 8 National Court Rules, each and every intending plaintiff must give specific instructions evidenced in writing to their lawyers to act for them. Tigam Malewo v. Keith Faulkner (2009) SC960 confirmed the representative principles stated in Simon Mali v. State (supra).
   
10. Further, any person in whose name proceedings are commenced and who claims to represent other intended plaintiffs must produce an authority to the Court to show that he was authorised by them to file proceedings as a class representative. Other authorities on point include: Eliakim Laki v. Maurice Alaluku, Secretary Department of Lands [2000] PNGLR 392; Louis Medaing v. Ramu Nico Management (MCC) Ltd (2010) N4158 and Wilfred Mamkuni v. Ly Cuong-Long and Jant Ltd (2011) N4674.
    

Declaratory relief

11. As the plaintiffs’ seek declaratory relief, it is necessary to consider the factors that are required to be established before a declaratory order can be made. These factors are set out in The Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd [1921] 2 AC 438. This case has been referred to in various cases including Ok Tedi Mining Ltd v. Niugini Insurance Corporation and Others (No 2) [1988-89] PNGLR 425; Placer Dome (PNG) Ltd v. Yako (2011) N4691; Independent State of Papua New Guinea v. Central Provincial Government (2009) SC977; Dr. Onne Rageau v. Kina Finance Ltd (2015) N6175 and National Fisheries Authority v. New Britain Resources Development Ltd (2009) N4068.
    
12. The factors are:
    

a) There must exist a controversy between the parties;

b) The proceedings must involve a right;

c) The proceedings must be brought by a person who has a proper or tangible interest in obtaining the order;

d) The controversy must be subject to the court’s jurisdiction;

e) The defendant must be a person having a proper or tangible interest in opposing the plaintiff’s claim;

f) The issue must be a real one. It must not be merely of academic interest, hypothetical or one whose resolution would be of no practical utility.

13. In the High Court of Australia decision, Ainsworth v. Criminal Justice Commission [1992] HCA 10; (1991-1992) 175 CLR 564, Brennan J. referred to the Russian Commercial case (supra) and said that notwithstanding the wide discretion that exists in deciding whether a declaration should be made, it was not appropriate to grant a declaration if there was no real controversy to be determined.
    
14. Also, recently, the Supreme Court in considering the issue of standing to seek declaratory orders in Pius Pundi v. Chris Rupen (2015) SC1430 held amongst others that:
    

“A declaration is a discretionary remedy that should only be granted where there exists a real controversy between the parties to the proceedings, a legal right is at issue, the party seeking it has a proper or tangible interest in obtaining it, the controversy is within the court’s jurisdiction, the defendant has a proper or tangible interest in opposing the plaintiff’s claim and the issues involved are real, and not merely of academic interest or hypothetical.”

Whether proceeding should have been commenced by way of judicial review

15. The first issue I consider is whether this proceeding is an abuse of process as it should have been commenced by way of judicial review. This specific issue was not raised by the parties however this court has inherent power to dismiss proceedings which are an abuse of process: PNG Forest Products Pty Ltd v. The State [1992] PNGLR 85, and is able to dismiss a proceeding of its own volition: United States of America v. WR Carpenters (Properties) Ltd [1992] PNGLR 185.
    
16. In their originating summons, the plaintiffs’ seek various declarations. One of which is that the sale of the property from NHC to A.R.E. is illegal. An order is then sought, that due to the illegality of the sale, the transfer of the Title or State Lease from NHC to A.R.E. be cancelled. The other declarations sought are ancillary to this declaration and order sought.
    
17. This declaration in substance or in effect is seeking to achieve what should be achieved by seeking orders in the nature of certiorari, after applying for and being granted leave for judicial review. The practical effect of the declarations, if granted, would be that the decision of NHC to transfer the property would be quashed.
    
18. To determine whether the decision of NHC should be quashed, the court must review it and the circumstances concerning its making. The plaintiffs have not however made application for judicial review in accordance with Order 16 National Court Rules. This proceeding was commenced pursuant to Order 4 National Court Rules.
    
19. Notwithstanding, that the declaratory relief sought by the plaintiffs does not state that they seek an order in the nature of a prerogative writ such as certiorari, when the purpose and substance of the proposed relief are

considered, in addition to the language of the proposed relief, it is my view

that orders in the nature of a prerogative writ are sought.

20. As orders in the nature of a prerogative writ are sought, but application has not been made pursuant to Order 16 National Court Rules, the application for the relief sought is an abuse of process. In this regard I refer to Michael Gene v. Hamidian Rad [1999] PNGLR 444, Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906, my decisions in Wan Global Ltd v.

Luxurflex Ltd (2012) SC1199 and Puri Ruing v. Allan Marat (2012) N4672,

and the decision of Lay J. in Rabaul Shipping Ltd v. Rupen (2008) N3289.

(See also Bernard Kosie v. John Kapi Natto (2015) N6263, an appeal from

which was refused in Bernard Kosie v. John Kapi Natto (2016) unreported

SCA 55/15 delivered 6/5/16).

21. Consequently, for the above reasons this proceeding should be dismissed as an abuse of process.
    

Whether representative proceeding requirements met

22. Notwithstanding the above, I will consider the representative proceeding issue.
    
23. In this instance it is not in dispute that there is no evidence before the

court that each and every plaintiff has given specific written instructions to

their previous or present lawyers for them to act for them in this proceeding.

Further, there is no evidence that each and every plaintiff has given specific

written authority to Amos Ere for him to represent them in, and to file this

proceeding.

24. The plaintiffs submit that they have given consent and seek leave to

rectify the proceeding. The requisite written instructions and authorities

should have been given to enable the proceeding to be filed and should have

been filed. The plaintiffs have had sufficient time to file evidence of their

compliance with the requirements.

25. Given that the representative requirements are mandatory, and that the lawyers for the plaintiffs should be well aware of such requirements, the

court is entitled to form the view that the plaintiffs have not given their

requisite authority.

26. In such circumstances, purportedly issuing a proceeding with authority when no proper authority is given is in my view manifestly unfair to the defendants and an abuse of process. I refer in this regard to my decision of Nae Ltd v. Curtain Bros Papua New Guinea Ltd (2015) N6124. Such a proceeding should never be instituted as it brings the administration of justice into disrepute.
    
27. Further, the court has an overriding discretion to prevent representative proceedings, otherwise properly commenced from proceeding. This is

provided for in Order 5 Rule 13 National Court Rules. This was recognised

by Davani J in Tigam Malewo v. Faulkner (2007) N3357 and confirmed by

the Supreme Court in Tigam Malewo v. Faulkner (2009) SC 960.

28. Consequently, as the plaintiffs have failed to meet the mandatory

representative requirements as referred to, this proceeding should be

dismissed as an abuse of process of the court.

The declaratory relief sought

29. As referred to, the plaintiffs seek various declarations. The primary

declaration sought concerns the sale of the property from NHC to A.R.E. the

other declarations sought are ancillary and based on the allegation that the

property was a Dwelling pursuant to s. 1 National Housing Corporation Act.

30. From a perusal of all of the declarations sought and the other relief

claimed in the originating summons, there is no claim that any of the

plaintiffs are entitled to, or have any right to the property, whether that be

for instance a right to remain on the property by virtue of a tenancy

agreement or a right to purchase the property. Further there is no claim that

any of the plaintiffs has a right of any nature which entitles them to sue

either NHC or A.R.E.

31. In the absence of any claim stated in the originating summons to any

right of the plaintiffs in the property or at all, there does not exist a

controversy between the parties, the proceeding does not involve a right,

(because no right has been claimed in the originating summons) and the

proceeding has not been brought by a person who has a proper or tangible

interest in obtaining the substantive orders sought. These three factors are

some of the factors that must exist before a declaration will be granted. As

these factors do not exist in this instance, the plaintiffs are not entitled

to the declaratory relief sought.

32. It is evident that the substantive relief sought in this proceeding would not be granted. When a proceeding is bound to fail, it has been held to be frivolous: Ronny Wabia v. BP Exploration Operating Co Ltd [1998] PNGLR 8, Kiee Toap v. The State (2004) N2731, N2766, Lerro v. Stagg (2006) N3050 and Tampion v. Anderson [1973] VicRp 32; [1973] VR 321.
    

Conclusion

33. Consequently, as I have found that the proceeding is an abuse of process for not being brought pursuant to Order 16 National Court Rules and

because the plaintiffs have failed to meet the mandatory representative

requirements, and further, that the proceeding should be dismissed as it is

frivolous, it is not necessary to consider the other submissions of counsel

apart from as to costs.

Costs

34. A.R.E. seeks its costs on a solicitor client basis to be paid by the former lawyers and current lawyers of the plaintiffs. I will consider further

argument on the question of these costs sought, on a date to be fixed.

Orders

35.

1. This proceeding is dismissed;
   
2. The costs of and incidental to this proceeding are reserved for hearing on a date to be fixed;
   

100. Time is abridged.

_____________________________________________________________
Murray & Associates : Lawyers for the Plaintiffs
National Housing Corporation : Lawyers for the First Defendant
Cappollo Lawyers : Lawyers for the Second Defendant