Noka Builders Ltd v National Development Bank Ltd [2018] PGNC 446; N7561 (2 November 2018)

N7561

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 131 OF 2018(CC1)

BETWEEN
NOKA BUILDERS LIMITED
Plaintiff

AND
NATIONAL DEVELOPMENT BANK LIMITED
Defendant

AND
NATIONAL DEVELOPMENT BANK LIMITED
Cross-Claimant

AND
NOKA BUILDERS LIMITED
Cross-Defendant

Waigani: Dingake J
2018: 14 June, 5 July & 3 September

Cases Cited:

Mount Hagen Urban ILG v Sek No. 15 Ltd [2009] SC1007

Counsel:

Mr. David Levy, for the Applicant
Mr. Clayton Joseph, for the Respondent

2 November, 2018

1. DINGAKE J: This is an application to dismiss the Cross Claim by the defendant on the basis that it is an abuse of Court process pursuant to Order 12 Rule 40 (1) (c) and Order 8 Rule 27 (1) (c) of the National Court Rules.
2. On the date set for the hearing of this application by the plaintiff and the defendant’s notice of motion for leave to be granted for the defendant to amend its defence filed on the 13^th of June, 2018, the defendant’s application was granted, and judgment with respect to the plaintiff’s application, following argument, was reserved.
3. The background facts to this application are that the parties hereto had entered into building contracts, which the defendant terminated on the 8^th of November, 2011, before the completion of the buildings.
4. During the progress of the contracts and before termination, the plaintiff had raised three (3) sets of invoices, issued on the 19^th of September, and 10^th of November, 2011, respectively.
5. The current proceedings, WS No. 131 of 2018, related to failure of the defendant to settle invoices issued on the 10^th of November, 2011. The total sum claimed in this proceedings was K314,348.49.
6. The invoices issued on the 19^th of September, 2011, were subject to different proceedings registered in the National Court in Lae, in proceedings WS No. 1213 of 2018. The total sum for the proceedings before the National Court in Lae was K621,473.88.
7. The defendant filed a defence and a cross-claim in WS No. 1231 of 2018, that is the same as in this current proceedings.
8. The National Court in Lae, on the 20^th of October, 2016, entered judgment in favour of the plaintiff in the amount sought with 8% interest and costs of proceedings and also dismissed the defendant’s counter-claim.
9. Aggrieved by the decision of the National Court dismissing the claim, the defendant successfully appealed the decision and the matter of the counter-claim was remitted to the National Court for re-trial.
10. The plaintiff upon realising that the counter-claim before the National Court in Lae, was materially identical with the counter-claim in this proceedings filed the current notice of motion, that the cross-claim be dismissed as an abuse of Court process.
11. At the time of filing this application, proceedings in Lae, WS No. 1213 of 2012, were still pending prosecution following an Order of a re-trial by the Supreme Court on the 1^st of November, 2017.
12. The cross-claim was eventually dismissed by the Lae National Court on the 22^nd of May, 2018, for want of prosecution.
13. The defendants have filed an appeal against the decision of the Lae National Court dismissing the cross-claim, which appeal is pending the determination by the Supreme Court.
14. It is beyond dispute that the cross-claim in proceedings WS No. 1231 of 2012, is materially similar as in WS No. 131 of 2018.
15. Order 8 Rule 27 of the National Court provides:

“27. Embarrassment, etc. (15/26) (1)

Where a pleading —

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings; or

(c) is otherwise an abuse of the process of the Court,

the Court may at any stage of the proceedings, on terms or otherwise, order that the whole or any part of the pleading be struck out.

(2) The Court may receive evidence on the hearing of an application for an order under Sub-rule (1).” (Emphasis mine)

16. Order 12 Rule 40 of the National Court Rules states:
    • (1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings –
      • (a) No reasonable cause of action is disclosed; or
      • (b) The proceedings are frivolous or vexatious; or
      • (c) The proceedings are an abuse of the process of the Court;

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under sub-rule (1).

17. Order 7 Rule 27 of the National Court Rules gives a Court wide powers, to, among other things, dismiss proceedings that “otherwise are an abuse of the process of the Court.”
18. The purpose of Order 12 Rule 40 has been said to be to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable (Mount Hagen Urban ILG v Sek No. 15 Ltd [2009] SC1007).
19. A frivolous claim is one that can be characterized as obviously untenable and bound to fail.
20. A vexatious claim is the one that could be said to be a sham and cannot succeed, and that its effect is merely to harass the opposing party and put that party into unnecessary expense in defending or proving the claim.
21. It seems to me that the plaintiff’s cross-claim in WS No. 1231 of 2012, being materially identical to one in WS No. 131 of 2018, suggests in effect that the counter-claim in this current proceedings was intended or had the effect to put the plaintiff in unnecessary expense and unduly harass it – how else does the defendant explain this conduct of an uniform answer to two distinct claims.
22. I am fully conscious that this Court should be cautious not to drive any litigant away from the judgment seat in a summary manner, however, this case is one in which, the Court must exercise its discretion as prayed by the plaintiff.
23. In the result the Court orders as follows:
    • (1) The defendant/cross-claimant’s cross-claim filed on 12^th April, 2018 be dismissed for abuse of Court process pursuant to Order 12 Rule 40 (1) (c) and Order 8 Rule 27 (1) (c) of the National Court Rules.
    • (2) The defendant/cross-claimant, pay the plaintiff/cross-defendant’s costs of this application and the cross-claim on a party to party scale.
    • (3) The time for the entry of these orders be abridged to the date of settlement of these Orders by the Registrar which shall take place forthwith.

_______ ____________________________________________________
Manase & Co. Lawyers : Lawyers for the Applicant
Ashurst PNG Lawyers : Lawyers for the Respondent