Serowa v Independent State of Papua New Guinea [2016] PGNC 541; N8470 (23 May 2016)

N8470

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1304 of 2011

BETWEEN:
THOMAS SEROWA
First Plaintiff

AND:
T SEROWA LIMITED, trading as T SEROWA & CO
Second Plaintiff

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
First Defendant
AND:
MELPA PROPERTIES LIMITED
Second Defendant

AND:
Mr. PAUL TIMBI
Third Defendant

AND:
Mr. PAULUS KOIM KUNAI, trading as KUNAI & CO LAWYERS
Fourth Defendant

AND:
WAMP NGA HOLDINGS LIMITED, trading as WAMP NGA REAL ESTATE
Fifth Defendant

AND:
Mr. RIMA DUANA
Sixth Defendant

AND:
WESTERN HIGHLANDS DEVELOPMENT CORPORATION LIMITED
Seventh Defendant

AND:
WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Eighth Defendant

AND:
Mr. PAIAS WINGTI
Ninth Defendant

AND:
THE ROYAL PAPUA NEW GUINEA CONSTABULARY
Tenth Defendant

AND:
Commissioner TOAMI KULUNGA of Royal PNG Constabulary
Eleventh Defendant

AND:
Sergeant MOSES KALANDI, as OIC of the Footbeat Division of the Royal PNG Constabulary
Twelfth Defendant

AND:
Senior Constable Alex Orave, OIC of the National Security Unit of the Royal PNG Constabulary
Thirteenth Defendant

AND:
Mr. DAVID GUINN, trading as Guinn PKF Chartered Accountants
Fourteenth Defendant

Waigani: Hartshorn J.
2015: 2^nd June
2016: 23^rd May

PRACTICE AND PROCEDURE - Application to dismiss proceeding

Cases Cited:
Papua New Guinea Cases

Mahara Ignote v. Abraham Hualupmomi and the State [1996] PNGLR 308
Ronny Wabia v. BP Exploration Operating Co Ltd [1998] PNGLR 8
Tau Gumu v. Papua New Guinea Banking Corporation (2001) N2288
Justin Tkatchenko v. National Capital District Commission (2002) N2196 Pius Nui v. Mas Tanda (2004) N2765
Kiee Toap v. The State (2004) N2731,
Kiee Toap v Independent State of Papua New Guinea & Anor (2004) N2766
Lerro v. Stagg (2006) N3050
Titus Wambun v. Inspector D Yamasombi (2009) N3787
Louis Lucian Siu v. Wasime Land Group Incorporated (2011) SC1107
William Yano Kapi v. Kambang Holdings Ltd (2011) N4451
Ambi v. Exxon Mobil Ltd (2012) N4844
Sakura Marine Products Ltd v. Noah Taia (2014) N5673
Mamun Investment Ltd v. Onda Koim (2015) SC1409

Overseas Cases

Tampion v. Anderson [1973] VicRp 32; [1973] VR 321

Counsel:

Mr. T. Serowa in person
Mr. D. Joseph, for the Fourth Defendant

23^rd May, 2016

1. HARTSHORN, J. This is a decision on an application to dismiss this proceeding. The grounds relied upon are that the proceeding is statute barred, and that it is frivolous and vexatious. The application is by the fourth defendant and is opposed by the plaintiffs. The application is made pursuant to Order 12 Rule 40 National Court Rules.

Background

2. The plaintiffs, Mr. Thomas Serowa and Thomas Serowa trading as T. Serowa & Co commenced this proceeding on 20^th October 2011 by writ of summons and statement of claim. An amended writ of summons and statement of claim was filed on 13^th June 2013 (amended statement of claim). The plaintiffs’ seek amongst others, damages for loss of business, economic loss, defamation, destruction and loss of assets and malicious prosecution. The plaintiffs’ claims relate to Mr. Serowa being instructed to and undertaking an investigation into a company called Melpa Properties Ltd by the Western Highlands Provincial Government in or about May 2001. Mr. Serowa claims that the various actions of the defendants about which the plaintiffs’ complain are all in some way related to him undertaking his investigation.

This application

3. The first ground upon which the proceeding is sought to be dismissed is that pursuant to s. 16 Frauds and Limitations Act, the plaintiffs’ causes of action are statute barred.

4. Section 16 Frauds and Limitations Act, applies to an action founded on simple contract or tort, a reconnaissance, the enforcement of an award, and the recovery of any sum recoverable by virtue of an enactment other than a penalty or forfeiture. Such an action shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

5. The fourth defendant submits that the torts or wrongs allegedly committed by the second to ninth defendants in relation to the eviction of the plaintiffs’ from the Hagen Plaza Building, resulting in the closure of the plaintiffs’ business, loss of furniture, equipment and records, occurred between 2001 and 2002.

6. The plaintiffs’ plead in their amended statement of claim and make submissions to the effect that the time limit for their causes of action commenced from 25^th October 2005 when their notice of intention to make a claim pursuant to s. 5 Claims By and Against the State Act (Claims Act) was acknowledged by the Secretary for Justice and Attorney General and that an extension of time under s. 5 Claims Act had been granted.

7. The plaintiffs also submit, if I understand correctly, that because their rights to sue were in some way precluded by prosecutions against them and they did not become aware of their causes of action until later dates, the time within which they were to commence proceedings did not commence until they became aware of their causes of action on those later dates. They rely on the case of Tau Gumu v. Papua New Guinea Banking Corporation (2001) N2288.

Consideration

8. As to the plaintiffs’ submission concerning an extension of time because of the operation of the Claims Act, there is no evidence of any grant of an extension of time as pleaded. In any event, s. 5(2) Claims Act does not provide for the grant of an extension of the time within which an action founded on tort may be brought under s. 16 Frauds and Limitations Act, but merely a grant of an extension of time within which a notice in writing of an intention to make a claim under s. 5 Claims Act may be given. Further, the acknowledgement of a receipt of a purported notice given under s. 5 Claims Act does not mark the commencement of the period of time within which an action founded in tort shall be brought under s. 16(1) Frauds and Limitations Act. There is no merit in this argument of the plaintiffs.

9. As to the plaintiffs’ submissions that time did not begin to run until they became aware of their causes of action, and their reliance in this regard upon Tau Gumu v. PNGBC (supra), the decision in Tau Gumu v. PNGBC (supra) was not followed by the Supreme Court, of which I was a member, in the case of Mamun Investment Ltd v. Onda Koim (2015) SC1409. In Mamun Investment Ltd (supra), the Court held that a cause of action accrues and time shall begin to run, under s. 16(1) Frauds and Limitations Act, irrespective of the plaintiff’s knowledge of that fact. This court is bound by the decision in Mamun Investment Ltd (supra). Consequently, this argument of the plaintiffs does not have merit.

10. From the pleading in the amended statement of claim, paragraphs 234, 235 and 265(1) it is apparent that the causes of action relating to, “... confiscation, detention and destruction ...” and the, “... annihilating actions brought upon the accounting firm’s business and its assets and records ....” accrued on 1^st December 2002 and 27^th March 2003. Also in paragraphs 234, 235 and 265(2) and (3), the causes of action relating to defamatory publications accrued on 21^st August 2002 and 9^th February 2004.

11. As the writ of summons and statement of claim were not filed until 20^th October 2011, these causes of action, all of which are founded in tort, have not been brought before the expiration of six years commencing on the date on which the causes of action accrued. Consequently I am satisfied that all of the causes of action of the plaintiffs’ in this proceeding apart from those for malicious prosecution are statute barred and should be dismissed.

12. As to the various purported causes of action for malicious prosecution which are referred to in paragraphs 225 to 226.150 of the amended statement of claim, I now consider the fourth defendant’s application to dismiss in respect of these purported causes of action on the ground that they are frivolous and vexatious.

Law

13. 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.”

14. The elements of the tort of malicious prosecution are that:

a) the defendant is responsible for the institution of proceedings against the plaintiff;

b) the defendant has instituted the proceedings without reasonable and probable cause;

c) the defendant was motivated by malice or some other improper purpose; and

d) the criminal proceedings have been resolved in favour of the plaintiff:

Mahara Ignote v. Abraham Hualupmomi and the State [1996] PNGLR 308, Justin Tkatchenko v. National Capital District Commission (2002) N2196, Pius Nui v. Mas Tanda (2004) N2765, Titus Wambun v. Inspector D Yamasombi (2009) N3787 and William Yano Kapi v. Kambang Holdings Ltd (2011) N4451 and Sakura Marine Products Ltd v. Noah Taia (2014) N5673.

15. In paragraph 226 of the amended statement of claim, the plaintiffs’ plead amongst others that:

“Plaintiffs suffer..... from the explosion of multiple malicious prosecutions or prosecutions otherwise provoked by malicious acts and acts identified as unjustified retributive prosecutions and governance against the Plaintiffs, ....”

16. The plaintiffs then set out 28 different proceedings that they appear to plead as being malicious prosecutions. From a consideration of those proceedings, 22 of them were commenced by the plaintiffs or either of them. Three of these were appeals to the Supreme Court and two of these were appeals to the National Court. These 22 proceedings do not contain one of the essential elements necessary for a successful action for malicious prosecution. That is that these 22 proceedings were not instituted or continued by any of the defendants to this proceeding. The 22 proceedings were instituted by the plaintiffs or either of them. Further, as the plaintiffs or either of them initiated the 22 proceedings, it cannot be the case that the defendants or any of them have instituted the proceedings without reasonable or probable cause or that the defendants or any of them were motivated by malice or some other improper purpose. As a result, the causes of action for malicious prosecution that are grounded upon these 22 proceedings are bound to fail if they proceed to trial. Such claims are frivolous, vexatious and an abuse of the process of the court: Ronny Wabia v. BP Exploration Operating Co Ltd [1998] PNGLR 8, Kiee Toap v. The State (2004) N2731, N2766, Lerro v. Stagg (2006) N3050, Tampion v. Anderson [1973] VicRp 32; [1973] VR 321, Louis Lucian Siu v. Wasime Land Group Incorporated (2011) SC1107, Ambi v. Exxon Mobil Ltd (2012) N4844. Consequently these causes of action for malicious prosecution that are grounded upon these 22 proceedings should be dismissed accordingly.

17. As to the remaining six causes of action for malicious prosecution:

a) Proceeding WS 655 of 2003, between Melpa Properties Ltd v. Thomas Serowa trading as T. Serowa & Co is pleaded to be amongst others, for certain rental arrears. Notwithstanding that this proceeding is not a criminal proceeding, or a civil proceeding for bankruptcy or for winding up, it was commenced by one of the defendant’s in this proceeding, there is a reference in the pleading to it being brought maliciously and the proceeding was determined in favour of the defendant, a plaintiff in this proceeding. I am not satisfied that the cause of action for malicious prosecution grounded on this proceeding could not possibly succeed and would be bound to fail.

b) As to proceeding WS 454 of 2003, David Guinn trading as Guinn PKF Chartered Accountants v. Thomas Serowa trading as T Serowa & Co, again, notwithstanding that this proceeding is not a criminal proceeding, or a civil proceeding for bankruptcy or for winding up, it was commenced by one of the defendant’s in this proceeding and there is a reference in the pleading to it being brought maliciously although it is not apparent whether this proceeding has finally been determined. I am not satisfied that the cause of action for malicious prosecution grounded on this proceeding could not possibly succeed and would be bound to fail.

c) As to the two proceedings commenced by the Commissioner General of Internal Revenue Commission against T Serowa Ltd, WDC 171-174 of 2006, and against Thomas Serowa, WDC 101-104 of 2006, the Commissioner General of Internal Revenue Commission is not named as a defendant in this proceeding. Further, both proceedings were determined against the plaintiffs in this proceeding. Notwithstanding that appeals have been commenced and appear yet to be determined, the fact that a court has determined against the plaintiffs to my mind, is evidence that the Commissioner General of Internal Revenue Commission had probable cause to commence the proceedings and so it cannot be successfully alleged that the proceedings were brought without probable cause and maliciously. For these reasons, I am of the view that the cause of action for malicious prosecution grounded on these proceedings could not succeed and are bound to fail.

d) As to proceeding SCA 95 of 2003 between Western Highlands Provincial Government and the plaintiffs, it is pleaded that this is an application for leave to appeal from a decision in proceeding WS 1597 of 2003 which was commenced by the plaintiffs. The application for leave to appeal was dismissed it is pleaded on 6^th August 2004. Malicious prosecution is a tort and so s. 16(1) Frauds and Limitations Act applies. Even if the date that the cause of action accrued is taken as 6^th August 2004, the plaintiffs are not in time to prosecute a cause of action for malicious prosecution grounded on this proceeding. This cause of action for malicious prosecution grounded on this proceeding could not succeed and is bound to fail.

e) As to WS 1228 of 2003, Pacific Hires Ltd v. Thomas Serowa trading as T Serowa & Co, Pacific Hires Ltd is not named as a defendant in this proceeding. Consequently, a cause of action for malicious prosecution grounded on this proceeding is bound to fail.

Conclusion

18. From the above, pursuant to Order 12 Rule 40 National Court Rules, all of the plaintiffs’ claims for relief should be dismissed apart from the plaintiffs’ alleged claims for malicious prosecution founded on proceeding WS 655 of 2003 between Melpa Properties Ltd v. Thomas Serowa trading as T. Serowa & Co against the second defendant and WS 454 of 2003 between David Guinn trading as Guinn PKF Chartered Accountants v. Thomas Serowa trading as T Serowa & Co against the fourteenth defendant.

Orders

19. As to the notice of motion of the fourth defendant filed 6^th May 2014, the Court orders as follows:

a) All of the plaintiffs’ claims for relief are dismissed apart from the plaintiffs’ alleged claims for malicious prosecution founded on proceeding WS 655 of 2003 between Melpa Properties Ltd v. Thomas Serowa trading as T. Serowa & Co against the second defendant and WS 454 of 2003 between David Guinn trading as Guinn PKF Chartered Accountants v. Thomas Serowa trading as T Serowa & Co against the fourteenth defendant;

b) The plaintiffs’ shall pay the fourth defendant’s costs of and incidental to the proceeding;

c) Time is abridged.
_____________________________________________________________
T. Serowa in person
Kunai & Co Lawyers: Lawyers for the Fourth Defendant