N7467

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 412 of 2017

BETWEEN:
HIDDEN VALLEY
SERVICES LIMITED
Plaintiff

AND:
RA 114 LIMITED
Defendant

Waigani: Hartshorn J.
2017: 5th July
2018: 18th September

Application for permanent stay of District Court proceeding

Cases Cited:

Michael Newall Wilson v. Clement Kubaram (2016) SC1489
Royale Thompson v. Sylvester Kalaut (2011) N4265

Counsel:

Mr. C. Joseph, for the Plaintiff

18th September, 2018

1.	HARTSHORN J. This is a decision on an application for a permanent stay of a District Court proceeding. The decision of this court, which was to grant the application for a permanent stay was delivered on 5th July 2017 with the written reasons to be delivered at a later date. I now deliver those reasons.

2.	I allowed the hearing of the Originating Summons to proceed in the absence of representation on behalf of the defendant, RA 114 Ltd, as I was satisfied that the defendant had been properly served with the court documentation. Further, I was satisfied that the defendant had been made aware of the hearing time and date of the Originating Summons and that its Managing Director was in receipt of the court documentation.

Background

3.	The plaintiff Hidden Valley Services Ltd, submits that a brief background to the commencement of this proceeding is as follows:

a)	on 2nd August 2013, the defendant and the plaintiff entered into a Waste Management Services Contract (contract) pursuant to which the plaintiff agreed to engage the services of the defendant company to dispose of waste from the premises of the plaintiff in Bulolo, Morobe Province;

b)	the term of the contract was for a period of 12 months and commenced on 1st August 2013 and expired on 31st July 2014. By an Agreement dated 27th January 2015 between the plaintiff and the defendant, the contract was renewed and extended to 30th June 2015; 

c)	pursuant to the terms of the contract which operated to 30th June 2015, the wages of the manager and the other employees of the defendant company were paid by the plaintiff. Further, the plaintiff paid to the defendant charges for the hire or use of a Tipper Truck and a Forklift which were used by the defendant to dispose of the waste. The plaintiff also paid the sum of K 1,920.00 per month for the administration costs of the defendant. These costs to the plaintiff were in excess of K10,000.00;

d)	further, pursuant to the terms of the contract, the plaintiff provided transportation and on site accommodation including meals at no cost to the employees of the defendant. The plaintiff also provided fuel to the defendant to use in the performance of the services under the contract, at no cost to the defendant. The costs to the plaintiff to provide those services were in excess of K10,000.00;

e)	the defendant issued invoices to the plaintiff on a monthly basis for work undertaken under the contract. In 2014 and 2015, the total sum of the invoices issued by the defendant to the plaintiff were in the sum of K 1,019,133.70;

f)	the plaintiff paid to the defendant a total sum in excess of K 1 million in the period commencing 2nd August 2013 when the contract was signed until the last payment of the defendants invoice made in about December 2015;

g)	when the contract expired on 30th June 2015, the plaintiff elected not to further renew the contract because the plaintiff amongst others, was not satisfied with the work performance of the defendant and wished to widely tender the provisions of the services required. A letter dated 1st March 2016 of Contract Completion was provided to the defendant;

h)	on 19th April 2017, the District Court in Bulolo, Morobe Province in proceeding Complaint No. 53 of 2017 – RA 114 Contract & 1 Other v. Morobe Mining Company & 4 Others (DC proceeding), made several orders ex parte after leave was granted to dispense with the requirement of service of an Application. Those Orders included an order that:

“the first, the second, the third and the fourth Respondents/Defendants is hereby ordered to re-instate the RA 11 Contract within 14 days of this order.”

i)	although the plaintiff, Hidden Vally Services Ltd is not formally named as a defendant in the DC proceeding, it is clear from the above mentioned matters that the plaintiff is the only party that can respond to the claim or any claim which may be properly pleaded by RA 114 Ltd in regard to the contract. It is also clear that the correct name of the second complainant in the DC proceeding is RA 114 Limited.
This application
4.	The plaintiff submits that a permanent stay of the DC proceeding should be granted as it is an abuse of process as:
a)	the value of the contract the subject of the DC proceeding exceeds K10,000.00 contrary to s. 21(1)(a) District Courts Act;
b)	the contract lawfully came to an end and the plaintiff had no obligation to renew it;
c)	the defendant was granted substantive relief in the DC proceeding which cannot be sought in an interlocutory application;
d)	the parties named in the proceeding are not privy to the contract;
e)	the parties named in the proceeding do not have the capacity to sue or be sued;
f)	there is no likelihood of success. The contract has come to an end and the relief of reinstatement or specific performance of the contract is not available;
g)	the plaintiff has suffered prejudice as its right not to continue the contractual relationship has been adversely affected by the relief of reinstatement that was obtained fraudulently in an ex parte interlocutory application;
h)	the National Court can permanently stay the District Court proceeding.
Consideration
5.	Section 24(2) District Courts Act upon which amongst others, the plaintiff relies is as follows:
“(2)	The National Court may at any time before verdict or judgement, with or without an application from an interested person in that behalf, make an order staying proceedings before a District Court and ordering that the proceedings be taken before the National Court, if the proceedings are such that they could have been instituted before the National Court in the first instance.”

6.	The first consideration is whether the DC proceeding is such that it could have been instituted before the National Court in the first instance. Section 21(1)(a) District Courts Act provides amongst others, that the District Court has jurisdiction where the amount of the claim or the amount or value of the subject matter of the claim does not exceed K10,000.00. From a perusal of the evidence, it is clear that the value of the contract the subject of the DC proceeding is in excess of K10,000.00 and that payments made to the defendant under the contract had exceeded K 1 million.
7.	I am satisfied therefore that the DC proceeding is such that it could have been instituted before the National Court in the first instance. Further, I am satisfied that the DC proceeding should have been instituted in the National Court in the first instance as the value of the subject matter of the claim exceeds K 10,000.00. This precludes the District Court having jurisdiction in the matter pursuant to s. 21(1)(a) District Courts Act.
8.	Given this finding, it is not necessary to consider the other grounds upon which the plaintiff relies. I consider however, the ground that pursuant to the inherent or supervisory jurisdiction of this court, the DC proceeding should be permanently stayed for being an abuse of process.
9.	The plaintiff relies upon a passage by Davani J in Royale Thompson v. Sylvester Kalaut (2011) N4265 at [81]:
“81.	The power of a superior court under its supervisory jurisdiction to stay criminal as well as civil proceedings in an inferior court on the ground that they are an abuse of process, was recognised in Miller v. Ryan (supra) at 110; R v Bow Street Magistrates; exparte Mackeson (1981) 75 Cr App R 24 and R v. Chief Constable of Merseyside Police; exparte Calvely [1986] 2 WLR 144; [1986] 1 All ER 257.”
10.	By virtue of this statement, and having regard to s. 24(2) District Courts Act, I am satisfied that this court does have a supervisory jurisdiction over the District Court.

11.	From a perusal of the other grounds relied upon by the plaintiff; that the contract had lawfully ended and there was no obligation upon the plaintiff to review it; that the relief sought was not available; that the parties to the DC proceeding are not privy to the contract and do not have the legal capacity to sue or be sued; and taking into account the evidence and submissions made, I am satisfied that there is no likelihood of the DC proceeding succeeding. The proceeding is also an abuse of process in my view and falls within the following statement concerning abuse of process by Gavara Nanu J. in the Supreme Court decision of Michael Newall Wilson v. Clement Kubaram (2016) SC1489. His Honour made this statement at [35] after reviewing various authorities:

“The types of abuses of  process may vary from case to case but to establish an abuse of process there must be evidence showing that the processes of the court have been improperly used; or have been used for an improper purpose; or have been used in an improper way; or that such abuse of process have resulted in the right of the other party being denied, defeated or prejudiced: National Executive Council v. Public Employees Association [1993] PNGLR 264 and The State v. Peter Painke [1976] PNGLR 210.”

12.	In this instance the processes of the District Court have been improperly used or have been used for an improper purpose and in an improper way. Consequently I am satisfied upon a consideration of the evidence, the submissions, and the authorities to which I have made reference, that the plaintiff is entitled to the relief that it seeks as the District Court did not have jurisdiction to hear the DC proceeding and the DC proceeding was an abuse of process. Given this it is not necessary to consider the other submissions of counsel.

Orders

13.	The orders sought in paragraphs 1, 2 and 4 of the Originating Summons are granted.

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Ashurst Lawyers: Lawyers for the Plaintiff