Karisa v Rahman [2020] PGNC 282; N8621 (9 November 2020)

N8621

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS(COMM) NO. 530 OF 2018

BETWEEN:
BONGA KARISA
Plaintiff

V

AMIN RAHMAN
First Defendant

AND:
BISMILLAH HOLDINGS LIMITED
Second Defendant

AND:
VINCENT GEORGE
Third Defendant

Waigani: Anis J
2020: 7^th October & 9^th November

NOTICE OF MOTION –– application by the first and second defendants to dismiss – want of merit claim based, amongst others, on time bar – s. 16(1)(a) – Frauds and Limitations Act 1988 – preliminary considerations – whether writ of summons and statement of claim was amended following due process - whether purported amended statement of claim filed valid – whether naming of additional parties had followed due process – regardless, what is the present status of the proceeding? - Who is or was the party(s) and whether there is any valid proceeding pending before the Court?

PRACTICE AND PROCEDURES – distinction of the processes – adding parties to proceedings and amending pleadings – Order 5 Rules 4(2), 8 and 13 – National Court Rules – Order 8 Rule 51(1) – National Court Rules

Cases Cited:

Eki Investments Ltd v. Era Dorina Limited (2006) N3176
Tepend Jack v. MVIT (2008) N3342
Niugini Mining Ltd v. Joe Bumbandy (2005) SC804
Kulili Kokonas Estate Ltd v. Samson Soaliga (2016) N6239

Counsel:

Mr A D Lora, for the Plaintiff
Mr S D Uyassi, for the First and Second Defendants
No appearance by the Third Defendant

RULING

9^th November, 2020

1. ANIS J: The first and second defendants (the defendants) applied to dismiss the proceeding, on 7 October 2020. The application was contested. I heard the arguments and 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 is the previous owner of a commercial property. The property is described as Section 357 Allotment 3, Hohola (Gerehu) National Capital District (the land). The land once had a commercial building which was rented out to Telikom (PNG) Limited for its Gerehu Post Office. It was also rented to Bank South Pacific Limited where it used to have its Gerehu branch there. The building became vacant and sometimes later, it was burnt to the ground, that is, except for some of its burnt-out structures which had remained on the land. The plaintiff acquired the land on 12 June 2009. He sold the land to the second defendant on 1 August 2012 for a sum of K2,000,000. It is the said sale that the plaintiff complains of, and he files this proceeding.

4. The plaintiff filed its original writ of summons and statement of claim on 14 May 2018 (the original writ). In the original writ, the plaintiff only sued the first defendant. He, however, kept back the original writ without serving it on the first defendant. The plaintiff later filed an amended writ of summons and statement of claim (the amended writ) on 31 March 2020. In the amended writ, the plaintiff includes the names of and also sues, the second and third defendants. He has served the amended writ on the 3 defendants.

5. The plaintiff claims that the land has been acquired by the second defendant from him, through actual fraud, that is, by alleged actions or conducts of the 3 defendants. The plaintiff seeks cancellation of the contract of sale of the land, and he requests that the title to the land be restored to his name. He also seeks various damages including an unspecified claim for a liquidated sum of K95,840,420.00. The defendants deny the claim. As for the second defendant, it says that it purchased the land for a sum of K2,000,000. It claims that other advances had been paid to the plaintiff which had to be deducted from the purchase price. It says at settlement, it paid the plaintiff the final balance of K1,864,250 which the plaintiff accepted. The first defendant is the managing director of the second defendant. The third defendant is said to be the agent that had been engaged to facilitate the conveyancing exercise.

NOTICE OF MOTION

6. The defendants’ notice of motion was filed on 31 August 2020 (NoM). In brief, they seek to dismiss the proceedings generally or against them in the matter. They submit that the claim is time barred against the second defendant. They also submit that the proceeding should be dismissed because there is no valid cause of action disclosed by the plaintiff.

7. I note that no challenge is made to the sources of the relief so I will proceed on to address the merit of the application.

ISSUES

8. In my view, the main issues are:

(i) Whether the defendants are properly joined as parties to the proceeding;

(ii) Whether the amended writ was duly filed and is properly before the Court;

(iii) Subject to issues (i) and (ii) above, whether the findings are fatal or have significant consequences to the pleadings or the cause of action;

(iv) If so, what consequential orders should be made? Whether the proceeding should be struck out or dismissed in its entirety;

(v) Whether the proceeding should be dismissed against the second defendant because it is time-barred pursuant to s. 16(1)(a) of the Frauds and Limitations Act 1988;

(vi) Whether the proceeding should be dismissed against the first defendant because he is a nominal defendant being employed by the second defendant.

PRELIMINARY ISSUE - JOINDER

9. I raised the issue of whether leave had been sought before the second and third defendants were joined as parties to the proceeding, as a preliminary matter with both counsel. The plaintiff submits that leave was not necessary or required because he did not serve the original writ on the first defendant after it was filed. As such, he submits that he was entitled to name additional parties and amend the original writ in the manner as he had done, and by filing the amended writ.

10. The defendants agree that that was the case in terms of how they have become parties to the proceeding. However, I note with respect that both counsel were unable to properly assist the Court on the preliminary issue.

11. What do the court rules say? With that, I refer to Order 5 of the National Court Rules. To me, the relevant rules for this purpose are Order 5 Rule 4(2) and Order 5 Rule 8. They read:

4. Leave under Rules 1, 2 and 3. (8/4)

......

(2) A plaintiff may apply for leave under Rule 1, 2 or 3(2) before or after filing his originating process and may apply without serving notice of the motion on any person on whom the originating process has not been served.

......

8. Addition of parties. (8/8)

(1) Where a person who is not a party —

(a) ought to have been joined as a party; or

(b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on,

the Court, on application by him or by any party or of its own motion, may, on terms, order that he be added as a party and make orders for the further conduct of the proceedings.

12. Addition of parties is different and not the same thing as amending the pleadings in an originating process like a writ of summons and statement of claim. In this case, the plaintiff, after filing the original writ, decided to include additional parties as well as amend the pleadings, that is, to his original writ. Is that the correct process? Or is it correct to file the amended writ in the manner as done by the plaintiff, and in the same process or act, name new parties or defendants to the proceeding? Or whether the correct process should have been to seek leave of the Court first, as required under Orde 5 Rule 4(2) of the National Court Rules.

13. The rules, in my view, are clear, and there can be no doubt that after one files an originating process, regardless of whether it is served on the defendant(s), the said plaintiff is required to obtain leave of the Court before he or she may add additional parties to the proceeding. And such an application is permitted ex parte as of right. In this case, the plaintiff had assumed or was under the premise that since he had not served the first defendant with the original writ, that he was at liberty to amend the original writ to include additional parties. The said premise, in my view, is misconceived and incorrect. I will explain. A writ of summons and statement of claim may be amended before the close of pleadings. This is stated under Order 8 Rule 51(1) of the National Court Rules, that is, and I quote in part, A party may, without leave, amend any pleading of his once at any time before the pleadings are closed. The said rule applies only to pleadings. It has no application to naming of additional parties to a proceeding. The plaintiff should have, pursuant to the various provisions under Order 5 and in particular Order 5 Rules 4(2) and 8 of the National Court Rules, sought leave of the Court, to add the second and third defendants into the proceeding. See case: Eki Investments Ltd v. Era Dorina Limited (2006) N3176. He has failed in that regard when he instead simply added them onto the amended writ that he filed. An illustrative comparison would be like in a case where a party has been wrongly named in a proceeding. The correct process, pursuant to Order 5 Rule 9 of the National Court Rules, would be to apply to the Court to ask that he or she be removed as a party. One cannot simply file an amended writ of summons and statement of claim to remove the party that is wrongly named. That is disallowed by the court rules.

14. So, at this juncture and based on my findings, the second and third defendants are not or cannot be regarded as, parties to this proceeding. Leave had not been sought and granted by this Court for them to be added or named as parties to the proceeding. The first defendant, who was the only defendant in the original writ, remains as the only defendant in the amended writ, that is, subject to my further considerations below.

15. I must say that the above findings on the preliminary matter, does not stop there. We also have this undisputed fact that the original writ was never served on the first defendant. Again, the original writ was filed on 14 May 2018. The amended writ was filed on 31 March 2020, that is, 1 month 14 days before the expiry date of the original writ. The amended writ was served on the first and second defendants on 9 April 2020, and on the third defendant on 11 May 2020.

16. Order 4 Rule 13 reads:

13. Validity for service. (7/7)

(1) For the purpose of service an originating process shall be valid for two years from the date on which it is filed.

(2) The Court shall not extend the period of two years mentioned in Sub-rule (1).

(3) This Rule does not prevent the plaintiff from commencing fresh proceedings by filing another originating process.

17. The question I have is this. Can the plaintiff file an amended writ without an order from the Court? Again, the plaintiff relies on his submission that he was entitled to file his amended writ since pleadings had not concluded, that is, within the meaning of Order 8 Rule 51(1) of the National Court Rules. I see 2 flaws with this argument. The first is this. It is not, in my view, correct to say in this instance, that pleadings have not closed which was why the plaintiff was entitled to file his amended writ without leave or an order from the Court. To say such (i.e., that pleadings have not closed) can also only mean that pleadings had opened on a specific date earlier in the matter. This was not the case here. The original writ was never served on the first defendant. As such, it cannot be said that pleadings had commenced or started in the first place. I say this because computation of time for pleadings can only begin or begins, as at the date of service of an originating process or a writ of summons and statement of claim like in this case. The original writ was never served so pleadings, in my view, never commenced before the amended writ was filed. The amended writ is therefore, in my view, void and without basis. It should never have been accepted for filing in the first place.

18. The second flaw is. Based on the above findings and considerations, the original writ had remained on foot until 15 May 2020 which was the date when it expired. No order had been sought for its extension nor was a fresh writ of summons filed to date. See cases: Tepend Jack v. MVIT (2008) N3342; Niugini Mining Ltd v. Joe Bumbandy (2005) SC804 and Kulili Kokonas Estate Ltd v. Samson Soaliga (2016) N6239. The original writ, in my view, has expired and to this day, remains void or irregular.

SUMMARY

19. I propose to grant the defendants’ NoM and dismiss the proceeding on the preliminary consideration or basis that there is no proceeding that is properly constituted that is before this Court. The original writ that had been filed on 14 May 2018 remained on foot but expired on 15 May 2020 after it was not served on the first defendant within 2 years as required by Order 4 Rule 13 of the National Court Rules.

20. Because of my findings, it is not necessary for me to proceed further and address the remaining issues.

COST

21. Cost awards in this matter is discretionary. I will order cost to follow the event applying the normal party/party cost scale. The third defendant was not present at the hearing of the NoM. He did not participate in various past attendances so the cost order will not cover him.

ORDERS OF THE COURT

22. I make the following orders:

(i) The proceeding is dismissed in its entirety.

(ii) The plaintiff shall pay the first and second defendants’ costs of the proceeding on a party/party basis which may be taxed if not agreed.

(iii) Time for entry of these orders is abridged to the date and time of settlement by the Registrar which shall take place forthwith.

The Court orders accordingly.
________________________________________________________________
Andano David Lorawi: Lawyer for the Plaintiff
S Douglas Uyassi: Lawyer for the First and Second Defendants