Ah Koy v BMobile Ltd [2020] PGNC 27; N8205 (24 February 2020)

N8205

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 194 of 2019 (COMM)

BETWEEN:
JACQUELINE AH KOY, Executrix to the Estate of Michael Ah Koy, late
Plaintiff

AND:
BMOBILE LIMITED
Defendant

Waigani: Anis J
2020: 20^th & 24^th February

NOTICE OF MOTION – Dismissal of proceeding – Order 12 Rule 40(1)(a)(b) and (c) – National Court Rules – want of jurisdiction – whether an applicant who has defaulted in filing its defence can invoke the jurisdiction of the Court or take any steps without leave – Order 7 Rule 6 – National Court Rules - whether the action was time barred – section 16 – Frauds and Limitations Act 1988 – whether the cause of action was frivolous – clause 4.2 of the employment contract in the pleading considered to determine reasonable cause of action and frivolity.

Cases Cited:

Badastal Ltd v. Dr Puka Temu (2011) SC 1092
Waim No. 85 Ltd v. The State (2015) SC1405

Counsel:

Mr J Sirigoi, for the Plaintiff/Respondent
Mr C Joseph, for the Defendant/Applicant

RULING

24^th February, 2020

1. ANIS J: The defendant applied to dismiss the proceeding on 20 February 2020. The plaintiff’s counsel neither supported nor opposed the application. After the hearing, I reserved my ruling to a date to be advised.

2. Parties have been notified so I will rule on it now.

BACKGROUND

3. The plaintiff sues as an executrix for the estate of her late husband Michael Ah Koy. In 2010, her late husband worked as an employee of the defendant. He was employed under a written contract of employment for a period of 1 year (employment contract). He commenced work on 1 April 2010 till 31 May 2011 when his employment contract ended. The main claim pleaded in the statement of claim is in regard to what is described as gross bonus payment. The plaintiff claims that pursuant to clause 4.2 of the employment contract, her husband was entitled to the said bonus in the sum of USS $ 119, 025.96. The plaintiff claims the said sum remains due and owing.

4. The defendant did not file its defence within the time that is required under the National Court Rules for filing a defence. Instead, it filed the present notice of motion on 11 February 2020 (application). I note that the defendant later filed a notice of intention to defend, that is, on 10 February 2020.

MOTION

5. The defendant’s application is made pursuant to Order 12 Rule 40(1)(a)(b) and (c) of the National Court Rules. The said rule states, and I quote in part:

(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.

ISSUES

6. The issues are, (i) whether the applicant can invoke the jurisdiction of the Court despite the fact that it is in default of filing its defence, (ii), if so, whether the action is time barred because it was commenced after the 6^th year from the time the cause of action arose, (iii), if not, whether Bmobile is a state entity and if so, whether the claim should be dismissed because the plaintiff did not give a section 5 notice under the Claims By and Against the State Act 1996 before she filed the proceeding, and (iv), whether the plaintiff does not have a valid claim or whether the claim is frivolous and should be dismissed.

JURISDICTION

7. Order 7 Rule 6 of the National Court Rules states, and I quote:

6. Late notice. (11/6)

(1) A defendant may give a notice of intention to defend at any time without leave.

(2) Where a defendant gives a notice after the time limited for doing so, he shall not, unless the Court otherwise orders, be entitled to file a defence or do any other thing later than if he had given a notice of intention to defend within that time.

8. In the present case, the defendant has filed its notice of intention to defendant. However, it was filed outside of the time required for filing the said notice. “Can the defendant be in default of filing its notice of intention to defend?” The answer of course is, “no”. Let me elaborate. A defendant cannot be in default for filing its notice of intention to defendant within or outside the 30 days period required under the National Court Rules. But if it files its notice of intention to defendant after the 30^th day, it cannot file its defence without first obtaining leave from the Court. See cases: Luke Tai v. Australian and New Zealand Banking Group (PNG) Ltd (2000) N1979 and Jackson Walau v. Royal Wilson (2016) N6272. I had asked counsel at the hearing whether the Court can entertain the application given that the defendant may have been in default of filing its defence. Counsel submitted that his client can make the application in this manner, and counsel drew the Court’s attention to the Supreme Court’s decision in the case of Badastal Ltd v. Dr Puka Temu (2011) SC 1092. The Supreme Court held, and I quote in part:

(3) A defendant who has filed an appearance and a notice of intention to defend is entitled to make an interlocutory application.

9. I note however that the Supreme Court did not discuss its reasoning in much detail. But in its much recent decision, that is, in the case of Waim No. 85 Ltd v. The State (2015) SC1405, the Supreme Court held and I quote in part:

(2)Though the respondents gave notice of intention to defend the proceedings after the time prescribed for doing so, they were not required to obtain leave of the Court before filing a notice of motion for dismissal of the proceedings. Order 7, Rule 6(2) of the National Court Rules did not require that they obtain leave. The primary Judge properly allowed the motion to be moved and determined in favour of the respondents.

10. I am bound by these case authorities. I therefore find that I have jurisdiction to hear the application, that is, despite the fact that the notice of intention to defend may have been filed outside the 30 days period from the date of service of the originating process, and despite the fact that the applicant has or may have defaulted in filing its defence. I also note that the applicant does not require leave to file an application such as this.

FRIVOLITY

11. I prefer to deal with this issue, that is, whether the cause of action is without merit or is frivolous, as the second matter. The plaintiff’s cause of action is based upon clause 4.2 of the employment contract. As pleaded in the statement of claim, it reads and I quote:

4.2 The Employee shall also be entitled to receive annual or other discretionary bonuses. These bonuses shall be such amounts as the Board in its absolute discretion, may from time to time determine. The Employee acknowledges the Employee has no right to receive a bonus and will not acquire such a right merely by virtue of having received one or more bonus payments during the course of the Employee’s employment.

(Underlining mine)

12. Despite the fact that the clause starts off with the use of the word “shall also be entitled” concerning bonuses which the plaintiff’s late husband shall be entitled to under the employment contract, the same clause also has other qualifications. And if read as a whole, they would ‘water down’, so to speak, the said entitlement. Let me elaborate. At the end of the first sentence of clause 4.2, it reads “discretionary bonuses”. Then in the second sentence, it makes the bonuses to be at the “absolute discretion” of the defendant. And finally, the third sentence of clause 4.2 is express, and it states, The Employee acknowledges the Employee has no right to receive a bonus and will not acquire such a right.

13. Clause 4.2 appears precise. The plaintiff’s late husband did not have a right to bonuses under his employment contract; even though he was entitled to it, it was to be at the absolute discretion of the defendant, that is, whether or not to grant bonuses to him. In this case, it seems that the defendant decided not to offer him a bonus after his employment contract ended on 31 May 2011.

TIME BAR

14. Let me consider this next issue, namely, time bar. The relevant provision of course is section 16 the Frauds and Limitation Act 1988 (FLA). It states, and I quote:

16. Limitation of actions in contract, tort, etc.

(1) Subject to Sections 17 and 18, an action—

(a) that is founded on simple contract or on tort; or

(b) to enforce a recognisance; or

(c) to enforce an award, where the submission is not by an instrument under seal; or

(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

15. The defendant’s claim that the action is time barred is not challenged. I uphold the defendant’s submission in this regard. I find that the claim is in fact time barred. The cause of action arose on 31 May 2011, that is, on the date when the plaintiff’s late husband’s employment contract ended. This fact (i.e., the duration of the employment contract) is not disputed as it is pleaded in the statement of claim. The required period for commencing a claim for breach of contract such as this case, is 6 years. The plaintiff’s claim was filed on 14 March 2019, which is well over the 6 years period.

SUMMARY

16. For these reasons, I see no need to address the other issues. This matter will be dismissed on the basis of want of reasonable cause of action and frivolity, and on the basis that the cause of action is time-barred.

COST

17. An award of cost is discretionary. Cost will follow the event based on the standard cost scale. The plaintiff will pay the defendant’s cost of the proceeding on a party/party basis which may be taxed if not agreed.

ORDERS OF THE COURT

18. I make the following orders:

1. The proceeding is dismissed.
   
2. The plaintiff shall pay the defendant’s cost of the proceeding on a party/party basis which may be taxed if not agreed.
   
3. Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly.
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Albatross Law: Lawyers for the Plaintiff

Ashurst PNG Lawyers: Lawyers for the Defendant