Komati v Aki [2018] PGNC 88; N7165 (22 February 2018)

N7165

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No.1314 of 2015

BETWEEN:
SERAH KOMATI
Plaintiff

AND:
BEN AKI
Defendant

Waigani : David, J
2018 : 22 February

PRACTICE & PROCEDURE – application to dismiss proceedings for being an abuse of the process of the court – District Court proceedings struck out for being statute-barred – no appeal filed - fresh proceedings filed in the National Court – order to strike out is an adjudication of the court – nature of order seminal – order to strike out proceedings for being statute-barred is appealable – application granted - National Court Rules, Order 12 Rule 40(1)(c) – District Courts Act, Sections 146, 152 and 219(1).

Cases cited:

ABCO v Sakaip (1997) N1597
Anderson Agiru v The Electoral Commission & The State (2002) SC687
Application by Anderson Agiru (2003) SC704
Asoka Seneviratne v Graham Chaffey (2000) N2014
Dacany v Taia (2002) N2316
Javano v Lai (2010) N4140
Kerry Lerro v Philip Stagg (2006) N3050
Mong v Mong [1997] PNGLR 171
Opre Wama v Alice Palme (2012) N4714
Philip Takori v Simon Yagari (2008) SC905

Counsel:

Kevin Makeu, for the Plaintiff
Roselyn Endemongo, for the Defendant

RULING ON MOTION

22. February, 2018
    
1. DAVID, J: INTRODUCTION: By writ of summons endorsed with a statement of claim filed on 24 September 2015, the plaintiff claims, amongst others, damages for alleged breach of an agreement she entered into with the defendant in 2002 (2002 Agreement) in which the parties agreed for; each of them to provide capital to start up a transport or taxi business; purchase a used motor vehicle and operate it as a taxi; purchase new vehicles as business grew; and share the business income and profits. It is alleged that; the defendant has been managing their business since its inception and the business has grown without any involvement of the plaintiff; the defendant has not provided to the plaintiff any report about the business operations; and the defendant has not shared with the plaintiff any of the business income or profits.
   
2. In 2013, the plaintiff instituted a claim in the Port Moresby District Court in proceedings entitled Complaint No.434 of 2013, there as complainant, against the defendant (District Court proceedings) arising from the alleged breach of the 2002 Agreement. The District Court proceedings were struck out.
   

APPLICATION AND EVIDENCE

3. By a notice of motion filed on 19 April 2016, the defendant seeks the following orders:
   
   1. Pursuant to Order 1 Rule 15 of the National Court Rules, the defendant be granted leave to file his defence out of time.
   2. Pursuant to Order 12 Rule 40(1)(c) of the National Court Rules, the matter be dismissed for abuse of the process of the Court.
      
4. The defendant relies on his own affidavit filed on 25 May 2016 to support his application.
   
5. The plaintiff opposed the application. She relied on the affidavits of:
   
   1. Jojo Kaki sworn on 27 November 2015 and filed on 8 December 2015;
   2. Serah Komati sworn on 11 July 2016 and filed on 12 July 2016 (first affidavit);
   3. Serah Komati sworn and filed on 15 July 2016 (supplementary affidavit).
      

ISSUES

6. Two main issues arise from this application which require my decision and they are:
   
   1. Whether the defendant should be granted leave to file his defence?
   2. Whether the defendant has demonstrated that these proceedings are an abuse of the process of the Court?
      
7. I will address the second issue first as its outcome will determine whether or not I should address the first issue.
   

ABUSE OF PROCESS

Parties’ submissions

8. Ms Endemongo for the defendant submitted that the filing of these proceedings amounts to an abuse of the process of the Court on the grounds that:
   
   1. A similar claim was instituted by the plaintiff in the Port Moresby District Court against the defendant and was dismissed because it was statute-barred;
   2. The plaintiff unsuccessfully applied to the Port Moresby District Court to set aside the order;
   3. The Court does not have jurisdiction.
      
9. Mr Makeu for the plaintiff conceded that the District Court proceedings were instituted in 2013, but were dismissed for want of prosecution. The claim pursued by the plaintiff in the District Court was slightly different as it was limited to a claim for a civil debt whereas the statement of claim in the current proceedings went further than that as the plaintiff was claiming damages for her share of the business income and profits. The principle of res judicata did not apply as a result. It was therefore submitted that the proceedings were not an abuse of the process of the Court.
   

Law

10. Under Order 10 Rule 9A(15)(1)(a) and (2)(d), Order 8 Rule 27(1) and Order 12 Rule 40(1) of the National Court Rules, proceedings may be dismissed or pleadings struck out if they; do not disclose a reasonable cause of action; are frivolous and vexatious; or are an abuse of the process of the court.
    
11. Order 10 Rule 9A(15)(1) and (2)(d) of the National Court Rules states:
    

“15. SUMMARY DISPOSAL.
(1) The Court may summarily determine a matter:

a. on application by a party; or

b. on its own initiative; or

c. upon referral by the Registrar under (3) below.

(2) The Court may summarily dispose of a matter in the following situations:

1. for want of prosecution since filing the proceedings or since the last activity on the file; or
2. for a failure to appear at any of the listing or directions hearing by a party or his lawyer; or

100. for non-compliance of any order or directions previously made or issued by the Court at any of the listing processes.

4. under any of the grounds set out in Order 12 Rule 40 and Order 8 Rule 27 of the National Court Rules.
5. on any competency ground relating to non-compliance with the National Court Rules or any other relevant rules of Court......”
   

12. 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;

(b the proceedings are frivolous or vexatious;

(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).”

13. The Court’s power to strike out pleadings or stay or dismiss proceedings under any of the grounds specified in Order 8 rule 27(1) and Order 12 rule 40(1) is discretionary and also by its inherent jurisdiction, it has power to protect and safeguard any abuse of its processes.
    
14. Order 8 rule 27 is very similar to Order 12 rule 40. The principles to apply are therefore similar except that the outcomes are different. Under Order 8 rule 27, the Court may at any stage of the proceedings, on terms or otherwise, strike out the whole or any part of a pleading. Under Order 12 rule 40, the Court may stay the proceedings or dismiss the proceedings, either generally or in relation to any claim for relief in the proceedings. Evidence may be received by the Court on the hearing of an application for an order under both rules.
    
15. Those principles were summarised by Kandakasi, J in Kerry Lerro v Philip Stagg (2006) N3050 and endorsed by the Supreme Court in Philip Takori v Simon Yagari (2008) SC905 and they are set out below:
    

“1. Our judicial system should never permit a plaintiff or a defendant to be “driven from the judgment seat” in a summary way, “without a Court having considered his right to be heard.” A party has a right to have his case heard, as guaranteed by the Constitution and the laws of the land. The Rules are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before the Court. That right cannot be lightly set aside.

2. At the same time however, the law such as the Rules under consideration provide for and the Court has an inherent jurisdiction to protect and safeguard against any possible abuse of the processes of the Court.
3. The object of these rules are therefore “to stop cases which ought not to be launched — cases which are obviously frivolous or vexatious or obviously unsustainable.” In other words “the object of the rule was to get rid of frivolous actions.”
4. A claim may be frivolous if it can be characterized as so obviously untenable that it cannot possibly succeed or that the claim or defence is bound to fail if it proceeds to trial.
5. A claim or defence may be vexatious if the case amounts to a sham or one which cannot succeed and is one that amounts to harassment of the opposing party who is unnecessarily put to the trouble and expenses of defending or proving the claim.
6. With regard to the issue of disclosing a reasonable cause of action or defence, the Court must be clear that there are two (2) parts to the phrase “cause of action”. First, it entails a right given by law such as an entitlement to reasonable damages for breach of human rights under s.58 of the Constitution, commonly referred to as the “form of action”. Secondly, it entails the pleadings disclosing all the necessary facts which give rise to the form of action.
7. The phrase “cause of action” could thus be defined in terms of a legal right or form of action known to law with:
   

“every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. It does not comprise of every piece of evidence which is necessary to prove each fact, but every fact is necessary to be proved.”

8. A statement of claim or a defence (as the case may be) must therefore clearly plead the form of action by pleading the necessary legal elements or ingredients of the action and relevant and necessary facts (not the evidence) giving rise to the form of action. It follows therefore that, where a statement of claim or a defence is so ambiguous or lacking in particularity that it does not facilitate orderly and rational pleadings, which would enable the real issues to be identified, and instead leaves it to guess work, it should be struck out.
9. These rules provide a summary judgment procedure or remedy which is available to a plaintiff or a defendant, and one which vests and calls for an exercise of a discretion by the Court.
10. The discretion must be exercised sparingly and only in a case where the statement of claim or the defence (as the case might be) is “obviously and almost incontestably bad.” In other words this discretion can be exercised only in cases that “are plain and obvious so that the master or Judge can say at once that the statement of claim [or defence] as it stands, is insufficient, even if proved, to entitle the plaintiff [defendant] to what he asks for.
    
16. To these principles, His Honour added:
    

“[T]he pleadings must be so bad and or vague and is not a case of lack of particulars or a lack of better pleading which cannot be cured by a request and or orders for further and better particulars and or amendment respectively under O.8, rr. 36, 50 or 51 of the Rules. Lack of particulars or lack of better pleadings is distinctly separate from a failure to disclose a reasonable cause of action or an action that is frivolous, vexatious or harassment. As such, clear and separate consequences follow. There is provision under the rules for requesting and or orders for further and better particulars or better pleadings as opposed to a right in a defendant or an opposing party to apply for a dismissal straightaway. A party must be careful not to ask for and the Court must stop to ensure that it is not being asked to dismiss a claim because of lack of particulars or lack of proper pleading which can be cured by appropriate amendments to the pleadings. Regard must also be had to the fact that the Rules are not an end in themselves but a means to an end and by reason of which a strict compliance of the Rules can be dispensed in the interest of doing justice in accordance with O.1, r.7 of the Rules in appropriate cases.”

17. The Supreme Court in Anderson Agiru v The Electoral Commission & The State (2002) SC687 also summarised the basic principles to apply when considering whether the proceedings were an abuse of process of the court as follows:
    

“Those principles in essence are that, the court’s inherent power is its authority to do all things that are necessary for the proper administration of justice. Such inherent power consists of all powers reasonably required to enable the court to perform efficiently its judicial functions and to protect its dignity and integrity. Essential to those inherent powers is the court’s duty to protect itself by ensuring that vexatious litigants do not abuse the court’s process by instituting frivolous or vexatious suits. It behoves litigants therefore to carefully choose their causes of action before they commence proceedings in this court purporting to enforce their rights. The court should summarily dismiss the proceedings it considers frivolous, vexatious or is an abuse of process. (see generally, Ronney Wabia v BP Exploration Operating Co. Ltd & Ors, Unreported National Court Judgment N1697 dated 28 March 1998).

In The State v Peter Painke [1976] PNGLR 210, O’Leary AJ emphasized that:

“mere motive, however reprehensible, will not be sufficient” (to constitute abuse of process) it must be shown that, in the circumstances in which the interposition of the court is sought, the remedy would be unsuitable, and would enable the person obtaining it fraudulently to defeat the rights of others, whether legal or equitable.”

The court must ensure that a multiplicity of proceedings is not commenced by unsuccessful litigants. That is that a litigant having selected one mode of proceeding and having failed to obtain a remedy, cannot generally be entitled to then institute an alternative proceeding seeking the same remedy that was denied in the earlier proceeding.”

Reasons for ruling

18. From the evidence before the Court and submissions of counsel, it is not disputed that the plaintiff instituted the District Court proceedings seeking, among others, monetary relief.
    
19. The plaintiff’s evidence is that her claim was not entirely the same as that claimed in these proceedings. Rather, the claim was for a civil debt regarding her initial financial contribution to the business and her claim in these proceedings concerned her share of the business income and profits: plaintiff’s first affidavit. The claim arose from an alleged agreement to start a taxi business the plaintiff claims to have entered into with the defendant in 2002. Her initial contribution was K2,000.00. The plaintiff also states that the District Court proceedings were struck out on 20 May 2014 for want of prosecution because neither she nor her legal representative from the Legal Training Institute attended court that day. So since the substantive claim was not determined on its merits, she was entitled to pursue these proceedings.
    
20. On the other hand, the defendant’s evidence is that; the plaintiff’s cause of action pursued in these proceedings is the same as that pursued in the District Court proceedings; the District Court proceedings were struck out as they were statute-barred; an attempt by the plaintiff to have the order to strike out the District Court proceedings set aside was refused; and, if aggrieved, the plaintiff’s remedy to challenge the decision of the District Court was by way of an appeal to the National Court and not by instituting fresh proceedings in the National Court pursuing the same cause of action.
    
21. The parties have produced copies of court orders granted by the District Court in connection with the District Court proceedings on 20 May 2014 and entered on 21 May 2014 and on 10 September 2014 and entered on 10 September 2014.
    
22. The order made on 20 May 2014 states that the “Case was struck out”. It does not state the reason why the “case” was struck out, i.e., whether the “case” was struck out for want of prosecution or because it was statute-barred.
    
23. The order made on 10 September 2014 is in the following terms:
    

“1. The Complainant’s application to set aside the Order of 20 May 2014 is refused and that Order of the 20^th May 2014 is confirmed.

2. The case was statute-barred and was filed out of time.

3. Costs of this application against the Complainant/Applicant.” (sic)

24. The parties have failed to produce in evidence a copy of the relevant originating process, namely the complaint. It was incumbent upon either of the parties to produce a copy of the complaint to support their arguments for and against the application to dismiss the proceedings for abuse of the process of the Court. The significance of producing a copy of the complainant is for the purposes of making a comparison with the claim in these proceedings and that claimed in the District Court proceedings and for the Court to appropriately address the conflicting evidence presented by the parties regarding this issue. If the parties were unable to produce a copy of the complaint, the production of a copy of the relevant summons or default summons in evidence for the Court’s consideration would have been useful too. The District Court orders alluded to already are insufficient for purposes of making a proper comparison of the substantive claim in the current proceedings and that pursued in the District Court proceedings.
    
25. Notwithstanding that, the Court must do the best it can based on the evidence that is available before it. It is abundantly clear that the District Court proceedings were struck out on 20 May 2014, but as to whether they were struck out for want of prosecution or because they were statute-barred is not so clear. It appears from the plaintiff’s evidence that the order to strike out the District Court proceedings were made in her absence and no evidence to the contrary was produced by the defendant. The second order of the orders made on 10 September 2014 which states that ‘[t]he case was statute-barred and was filed out of time’ is expressed in the past tense. So in the literal sense, a reasonable inference to draw would be that on 20 May 2014, the District Court proceedings were struck out as the “case” was statute-barred. That would give credence to the defendant’s version of what transpired on 20 May 2014. The order on 20 May 2014 was confirmed by the first order of the orders made on 10 September 2014. The plaintiff’s attempt to resurrect the District Court proceedings by applying to set aside the order of 20 May 2014 was thwarted when the District Court refused her application as is demonstrated by the first order of the orders of 10 September 2014.
    
26. Should the plaintiff have availed herself of the appeal procedure under Part XI (Sections 219-246) of the District Courts Act? Section 219(1) of the District Courts Act permits a person aggrieved by an order of a District Court, including an adjudication of a court or an order to dismiss a complaint to appeal to the National Court. Usually there is a distinction drawn as to the effect of the phrase “strike out” and term “dismissal” on legal proceedings that are terminated either way. It seems that that distinction may be immaterial for purposes of Section 219(1) because the phrase “adjudication of a Court” is all encompassing.
    
27. To my mind, the nature of an adjudication of a Court will determine if it is appealable. I have considered Sections 146 and 152 of the District Courts Act together with Section 219(1) in reaching that conclusion. I have considered Asoka Seneviratne v Graham Chaffey (2000) N2014 where Injia, J (as he then was), with respect, opined that interlocutory rulings of a District Court are not appealable when one reads Sections 146, 152 and 219 of the District Courts Act together. His Honour said that an appeal under Section 219 only applies to final orders of the District Court. I agree.
    
28. Whilst the District Court proceedings were struck out and not dismissed, the nature of the orders granted in this particular case relevantly were adjudications of the court which were appealable by virtue of Section 219(1). The nature of the orders made being seminal, they are, in my view, final orders.
    
29. The underlying reason why the plaintiff ought to have appealed the orders of the District Court was that a substantive judicial pronouncement was made demonstrated by the order of 10 September 2014 whereby it confirmed and ordered that the claim was statute-barred. A closer examination of the statement of claim in the current proceedings shows that the plaintiff’s claim for damages is founded or emanates from the alleged breach by the defendant of the 2002 Agreement therefore it will attract similar scrutiny and the issue of whether or not the claim was statute-barred will still arise which could have been determined on appeal.
    
30. So I am of the view that the plaintiff, as a person who was aggrieved by the adjudication or orders of the District Court ought to have lodged an appeal under Part XI (Sections 219-246) of the District Courts Act for which strict compliance is required: Dacany v Taia (2002) N2316, Javano v Lai (2010) N4140, ABCO v Sakaip (1997) N1597, Mong v Mong (1997) PNGLR 171. The District Court is a creature of statute whose practice and procedure is prescribed by the District Courts Act therefore appeal procedures must be complied with: Opre Wama v Alice Palme (2012) N4714.
    
31. On the question of res judicata raised by the plaintiff, usually, where a court upholds a defence of res judicata, it will also find that the proceedings are an abuse of the process of the court: Application by Anderson Agiru (2003) SC704. In the present case, since the District Court proceedings were struck out in the absence of the plaintiff and not dismissed on the merits, the principle of res judicata does not apply. I accept the plaintiff’s submissions in that regard.
    
32. Based on the foregoing reasons, the plaintiff, having not appealed the relevant orders issued in the District Court proceedings, I am satisfied that these proceedings are an abuse of the process of the Court.
    

DEFENCE

33. Having reached the above conclusion, it is now not necessary to address the remaining issue.
    

ORDER

34. The formal orders of the Court are:
    
    1. The entire proceedings are dismissed on the ground that they are an abuse of the process of the Court.
    2. The plaintiff shall pay the defendant’s costs to be taxed if not agreed.
       

________________________________________________________________
Niuage: Lawyers for the Plaintiff
Jerry Kiwai : Lawyers for the Defendants