Waralo Business Group Inc v Mokono [2017] PGNC 332; N7034 (16 June 2017)

N7034

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 756 of 2016

BETWEEN:
WARALO BUSINESS GROUP INC.

Plaintiff

AND:
MARK MOKONO
Defendant

Waigani: Hartshorn J
2016: 24^th August, 21st October
: 18th November
2017: 16^thJune

Costs of the proceeding

Counsel:

Mr. R. Ababa, for the Plaintiff
Mr. S. Tolo, for the Defendant

16^th June, 2017

1. HARTSHORN J: This is a decision as to who should bear the costs of this proceeding given that the plaintiff has discontinued it.
2. It is submitted on behalf of the plaintiff that as its counsel obtained leave to discontinue this proceeding from this court on 24^th August 2016, and because of the circumstances of this case, each party should bear their own costs.

3. The defendant submits that it is entitled to its costs of the proceeding as the plaintiff discontinued without the consent of the plaintiff in circumstances where the pleadings had closed, it had an application to dismiss the proceeding pending and a substantial amount of work had been performed in defending this proceeding. Further, if leave had been granted to the plaintiff to discontinue, that fact should have been reflected in the endorsement on the court file by my Associate.

Background

4. The plaintiff, an Incorporated Business Group claimed that the defendant, the owner of a parcel of land, had falsely represented to the Business Group that he had bought the land in the name of the Business Group so that the Business Group would pay for the development of the land. The Business Group then claimed that it spent money developing the land. The Business Group commenced this proceeding seeking amongst others, K1.3 million or the transfer of the land into the name of the Business Group.

The law

5. Order 8 Rule 61 National Court Rules is as follows:

“61. Discontinuance. (21/2)

(1) A party making a claim for relief may discontinue proceedings so far as concerns the whole or any part of any claim for relief by him-

1. (a) where the pleading is not closed-without leave or consent; and
2. (b) where a judgement has not been entered- with the consent of all other parties; and
3. (c) at any time- with the leave of the Court.”

6. Order 22 Rule 17 National Court Rules is as follows:

“17. Discontinuance. (52/16)

(2) Where, under Order 8 Rule 61, a party to any proceedings discontinues the proceedings without leave as to the whole or any part of the relief claimed by him against any other party, the discontinuing party shall, unless the Court otherwise orders, pay the costs of the party against whom the discontinued claim is made, occasioned by the discontinued claim and incurred before service of notice of the discontinuance.”

7. From a perusal of Order 22 Rule 17, where a party discontinues without leave, irrespective of whether leave is required under Order 8 Rule 61, that party shall pay the costs of the party against whom the discontinued claim is made, unless the court otherwise orders.

8. If the discontinuing party discontinues with leave, the argument is that the discontinuing party does not have to pay the costs of the party against whom the discontinued claim is made, unless the court otherwise orders.

9. It is necessary, first, to determine whether leave to discontinue was granted.

10. In this instance, the plaintiff submits that its counsel obtained leave to discontinue from this court on 24^th August 2016. As the endorsement on the court file and the notes that I made in my civil notebook at the time do not indicate that leave was granted, I requested evidence on this point.

11. Counsel for the plaintiff Mr. Ababa, deposes in an affidavit filed 9^th November 2016 that amongst others, that on 24^th August 2016, he, “... formally sought leave of the Court to discontinue the proceedings which His Honour granted and directed me to file a Notice to Discontinue.” Then, “... I only sought leave of the court to discontinue proceedings.” and again, “... The Plaintiff had sought leave of the court to which leave was granted....”

12. Also in submissions Mr. Ababa submits that, “I formally sought leave of the court to which leave was granted....” Mr. Ababa also calls into question the actions of my former associate.

13. I have obtained a copy of the transcript of the hearing on 24^th August 2016 from the Court Reporting Service. From a perusal of it, it is clear that Mr. Ababa did not seek leave to discontinue. Indeed, the word “leave” is not mentioned. Mr. Ababa appears to have said that he had been instructed to withdraw the proceedings and he had notified the other side. Further, I did not grant the plaintiff leave to discontinue.

14. I ordered that the matter be adjourned to the Registry. It was then a matter for Mr. Ababa to file a notice of discontinuance and to follow the provisions of the National Court Rules. This would have included filing a notice of motion seeking leave to discontinue if he could not obtain the consent of the defendant. I further mention that there is nothing in the transcript that could form the basis for Mr. Ababa’s questioning of the actions of my former associate.

15. As leave was not granted for the plaintiff to discontinue, the next question is whether the plaintiff should pay the costs of the proceeding or whether each party should bear their own cost, as contended by the plaintiff.

16. The plaintiff relies upon the content of an affidavit deposed to by Tayago Hamono, the Chairman of the plaintiff. He deposes that amongst others that he instructed the withdrawal of the proceedings as:

(a) the plaintiff is currently undergoing some financial constraints due to cash flow problems;
(b) the pivotal evidence to support the plaintiff’s claim was lost in a fire in a tribal fight.

17. To my mind, as these reasons for the discontinuance are not as a result of actions of the defendant, the defendant should not be denied its costs. The decision to commence this proceeding was the plaintiff’s decision. It must have known when it made that decision, the likely costs involved and its ability to meet those costs. Further, its lawyers should have advised them not to instigate proceedings, if it did not have the necessary evidence.

18. Consequently, in the circumstances, I am not persuaded that the usual award of costs on a discontinuance should be departed from. That is, the plaintiff discontinuing should pay the costs of the defendant.

Orders

19. The formal orders of the court are:

(3) The plaintiff shall pay the defendant’s costs of and incidental to this proceeding, to be taxed if not otherwise agreed;
(4) Time is abridged.

______________________________________________________
Rageau Manua and Kikira: Lawyers for the Plaintiff
Jerewai Lawyers: Lawyers for the Defendant