N8699
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO.1501 OF 2019 (CC4)

BETWEEN:
JACKSON KAIPAYA
First Plaintiff

AND:
ROSEWYN NOMBER STEVEN for herself, her children and for the Estate of DICK STEVEN (Deceased) of Central Claim at 68 Vadavada Settlement,
Taurama Road, NCD
Second Plaintiff

AND:
MICAH PAULI
Defendant

Waigani:  David, J
2020:  9th & 23rd December

PRACTICE & PROCEDURE – application for dismissal of proceedings – res judicata – issue estoppel- abuse of process of the Court.

Cases Cited:
Papua New Guinea Cases

National Executive Council v Public Employees Association [1993] PNGLR 264
Anderson Agiru v Electoral Commissioner v The State (2002) SC 687
NCDC v Yama Security Services Pty Ltd (2003) PNGLR 1
Application by Anderson Agiru (2003) SC704
Philip Takori v Simon Yagari (2008) SC905
Telikom PNG Ltd v ICCC (2008) SC906
Grand Chief Sir Michael Somare v Chronox Manek and Others (2011) SC1118
National Housing Corporation v Paul Asakusa & Anor (2012) SC1165
NCDC v Yama Security Services Ltd (2017) SC1606 
Steven v Pauli (2019) N8111

Overseas Cases

Takhar v Gracefield Developments Limited & Ors (2019) UKSC 13

Counsel:

Felix Unage, for the Plaintiffs
Gibson Bon, for the Defendant
RULING
23rd December, 2020

1.	DAVID, J:  INTRODUCTION: Two motions were before the Court.  One was the plaintiffs’ motion filed on 25 November 2019 seeking, among others, an order for vacant possession of a property comprising a three-storey high covenant building situated upon the land described as Central Claim 68 at Vadavada Settlement, Taurama Road, National Capital District (the Property). The other was the defendant’s motion filed on 5 March 2020 seeking, among others, orders; for the proceedings to be dismissed for being an abuse of the process of the Court pursuant to Order 8 Rule 27(1)(c) and (2) of the National Court Rules; and or that they were barred by the principles of res judicata.

2.	It was agreed that the defendant’s motion be heard first and its outcome would determine whether or not it was necessary for the plaintiffs to move their motion.  This is the ruling of the Court on the defendant’s motion. 

3.	The defendant’s motion is supported by two affidavits sworn by the defendant himself; one sworn on 10 December 2019 and filed on 12 December 2019 (first affidavit); and the other sworn and filed on 5 March 2020 (second affidavit). 

4.	In contesting the defendant’s motion, the plaintiffs rely on the; affidavit of Jackson Kaipaya sworn on 14 November 2019 and filed on 25 November 2019; affidavit of Felix Rayabrum sworn on 14 November 2019 and filed on 25 November 2019; and the affidavit of the second plaintiff, Rosewyn Nombe Steven sworn on 28 November 2019 and filed on 29 November 2019.

BRIEF BACKGROUND

5.	These proceedings were commenced by a writ of summons endorsed with a statement of claim filed on 25 November 2019 and subsequently amended by an amended writ of summons endorsed with a statement of claim filed on 11 December 2019.  The first plaintiff claims that; he is a close work associate of the deceased, Dick Steven (the deceased); a direct beneficiary of the estate of the deceased as a brother in-law; and a key witness to the signing of a Deed of Release between the deceased and the defendant dated 6 April 2017 (Deed of Release) through which the defendant was authorised to occupy the Property; use the Property by constructing rooms and subletting them to recover a debt owed by the deceased to the defendant in the sum of K268,100.00 on account of vehicle hire (the debt); and to vacate the Property once the debt was settled in full.  The second plaintiff is the widow of the deceased and sues for herself and her children as trustee and beneficiary of the estate of the deceased and also relies on Section 2(b), (c) and (d) of the Married Women’s Property Act 1953. 

6.	It is alleged that the Deed of Release that was relied on by the defendant in proceedings filed in this Court on 19 August 2019 in WS No.966 of 2019, Rosewyn Nombe Steven and her 7 Children for the Estate of Dick Steven, Deceased of Vadavada Settlement, Portion 68, National Capital District v Micah Pauli (the second action) was highly questionable, fraudulent and therefore null and void as pages 2 and 3 containing the terms for conditional occupation of the Property by the defendant to recover the debt were missing and have been replaced by pages containing terms authorising and facilitating the transfer of the Property to the defendant which can be verified as fraudulent by the first plaintiff as a witness to the execution of the Deed of Release:  see copy Deed of Release, annexure C, defendant’s first affidavit and annexure C, affidavit of Jackson Kaipaya.  The second action was dismissed by Kariko, J on 18 September 2019 on the basis that; the second plaintiff who was the plaintiff in the second action lacked standing to challenge the validity of the Deed of Release as she was not a party to the deed; and that being the case, the second action was dismissed for disclosing no reasonable cause of action:  see copy of judgment, annexure A, defendant’s second affidavit.    

7.	The plaintiffs claim, among others: 

1.	A declaration that they are legal owners of the Property.
2.	A declaration that the second action and the decision of the Court made on 18 September 2019 in relation to the second action be set aside.
3.	A decree that as a result of fraud perpetrated by the defendant, the plaintiffs and their family be released from the debt allegedly owed by the deceased to the defendant and they immediately have vacant possession of the Property.
4.	K80,000.00 to restore the Property to its original state. 
5.	General damages.
6.	Exemplary damages.

LEGAL ISSUES

8.	The main legal issues are:

1.	Whether the proceedings are an abuse of the process of the Court to warrant dismissal?

2.	Whether the proceedings are barred by the common law principle or legal doctrine of res judicata to warrant dismissal?  

9.	I will address the second issue first.

RES JUDICATA
Defendant’s submissions

10.	The defendant contends that the doctrine of res judicata operates in his favour to bar these proceedings so they should be dismissed as all issues pertaining to these proceedings have been conclusively determined by this Court in two earlier proceedings filed in this Court by the same plaintiffs or their privies against the defendant.  The earlier proceedings include the second action and the other was commenced by WS 436 of 2019, Rosewyn Nombe Steven v Micah Pauli filed on 24 April 2019 (the first action).    

Plaintiffs’ submissions

11.	Contrary to the defendant’s assertions, the plaintiffs argue that these proceedings are not barred by the doctrine of res judicata as, relying on the English case of Takhar v Gracefield Developments Limited & Ors (2019) UKSC 13, the first action and the second action were founded on different cause(s) of action than that raised in these proceedings which was based on an allegation that the Deed of Release was null and void for fraud.  They state that these proceedings are founded on a fresh cause of action based on fraud that was independent of the cause of action asserted previously in the first action and the second action.

Consideration

12.	The doctrine of res judicata has been expressly adopted as part of the underlying law of Papua New Guinea by virtue of Schedule 2.8(1)(d) of the Constitution.   At common law, the defence of res judicata is a complete defence to an action:  per Injia, CJ in Telikom PNG Ltd v ICCC (2008) SC906.  Issue estoppel is an extension or species of res judicata: per Injia, CJ in Telikom PNG Ltd v ICCC (2008) SC906.   Usually, where a court upholds a defence of res judicata, it will also find that the proceedings are an abuse of process:  Application by Anderson Agiru (2003) SC704.  However, the rejection of a defence of res judicata will not necessarily result in rejection of a submission that the proceedings are an abuse of process of the court because an abuse of process can exist in many different ways:  National Executive Council v Public Employees Association [1993] PNGLR 264.

13.	The principles on res judicata which apply in this jurisdiction were succinctly summarised by Injia, CJ in Telikom PNG Ltd v ICCC (2008) SC906.  In order for the defence of res judicata to succeed, a party must demonstrate that:
	
	1.	the parties in both matters are the same;
	2.	the issues in both matters are the same;
	3.	the previous judgment or decision extinguished the foundations of the claim or the right to set up an action.  The result is therefore final and conclusive and it binds every other Court; and
	4.	a court of competent jurisdiction made the first decision.

14.	Issue estoppel arises where the causes of action are different, but the parties or their privies are the same and the same issue is raised and conclusively determined by the Court: per Injia, CJ in Telikom PNG Ltd v ICCC (2008) SC906; National Housing Corporation v Paul Asakusa & Anor (2012) SC1165.   In order for the defence of issue estoppel to succeed, a party must demonstrate that:
1.	the parties or their privies are the same;
2.		the same issue is raised in both proceedings; 
3.		the decision was final; and 
4.	a court of competent jurisdiction made the first decision.
15.	Both the doctrine of res judicata and issue estoppel are a reflection of the general principle of finality in litigation.  Where parties are aggrieved by a decision of a court, except in limited circumstances, they are not to go back to the same Court that made the decision. To challenge that decision, they will have to go to a superior court going by the hierarchy of courts eg, from the National Court to the Supreme Court.   

16.	Prior to the filing of these proceedings, two other proceedings were filed in this Court.  Copies of the statements of claim in both the first action and the second action are in evidence:  annexures E and F respectively, defendant’s first affidavit.

17.	As to the first action, the Court dismissed it on 16 August 2019:  annexure A, defendant’s first affidavit.

18.	As to the second action, the Court dismissed it on 18 September 2019:  annexure B, defendant’s first affidavit.

19.	In the first action, among other things, fraud in connection with the Deed of Release was alleged.  Rosewyn Nombe Steven was the sole plaintiff.  Substantially similar relief as those claimed in these proceedings were sought. It is not entirely clear from the evidence available as to the basis upon which the Court dismissed the first action.  In the circumstances, it suffices to only rely on the basis for dismissal of the second action to determine whether or not these proceedings are res judicata and should be dismissed.

20.	In the second action, among other things, fraud in connection with the Deed of Release was again alleged.  The plaintiff in these proceedings is Rosewyn Nomber Steven and her children for the Estate of the Deceased of Central Claim at 68 Vadavada Settlement, Taurama Road.  Again, substantially similar relief as those claimed in the first action and these proceedings were sought. As I have alluded to earlier, the second action was dismissed by the Court per Kariko, J on 18 September 2019 for lack of standing and abuse of the process of the Court.  

21.	The plaintiffs strongly rely on the affidavit of Felix Rayabrum, a police officer and Forensic Document Examiner attached to the Police Forensic Science Investigation Unit at Gordon’s, Port Moresby, to which is attached a written statement dated 14 October 2019 containing his findings concerning an examination he allegedly conducted relative to the signatures purportedly of the deceased found on a copy of the Deed of Release to substantiate their allegation of fraud.  

22.	Are the parties in the earlier proceedings the same?   Yes.  The second plaintiff was a party.  As to the first plaintiff, he is a privy as he is so closely connected to one of the parties namely, Rosewyn Nombe Steven and her 7 Children for the Estate of Dick Steven of Central Claim 68 Vadavada Settlement, Taurama Road. The first plaintiff filed an affidavit in support of the first action:  annexure D, defendant’s first affidavit. 

23.	Are the issues in the matters the same?  Yes.  The issue of standing still arises.  In addition, if the first plaintiff is not a privy, then the first plaintiff is not a party to the Deed of Release and cannot sue on it.  A deed of release is a contract or an agreement and according to the law of contract a person cannot sue or be sued on a contract unless he or she is a part as was correctly stated by Kariko, J in the dismissal of the second action: Steven v Pauli (2019) N8111, NCDC v Yama Security Services Pty Ltd (2003) PNGLR 1, NCDC v Yama Security Services Ltd (2017) SC1606.  

24.	A married woman is capable of acquiring, holding and disposing of property and capable of making herself and being made liable in respect of a tort, contract, debt or obligation and capable of suing and being sued as if she were not married, independent of her husband, under Section 2 of the Married Women’s Property Act, 1953.   A husband and wife may acquire, hold and dispose of property jointly or as tenants in common and make themselves or be made jointly liable in respect of a tort, contract, debt or obligation and of suing and being sued in tort or in contract or otherwise as if they were not married under Section 3 of the Married Women’s Property Act, 1953.  A husband and wife may exercise jointly a joint power given to them under Section 4 of the Married Women’s Property Act, 1953.  Property that is devolved on a married woman belongs to her in all respect as if she were not married and may be disposed of accordingly under Section 5(1)(b) of the Married Women’s Property Act, 1953.

25.	The second plaintiff relies on Section 2(b), (c) and (d) of the Married Women’s Property Act, 1953 which was not relied on in the first action and the second action as another basis to address the question of standing to found a claim against the defendant based on the Deed of Release alleging fraud.  The assertion that the second plaintiff may potentially have standing by virtue of Section 2(b), (c) and (d) of the Married Women’s Property Act, 1953 falls flat in the face of the second plaintiff because as found by Kariko, J in the second action, she is not a party to the Deed of Release and lacks standing to challenge the validity of the deed; and there was no evidence, as it is the case here, to demonstrate that the deceased raised any issues regarding the deed between the date of its execution and prior to his death.   In addition, in the deed; the deceased states that he was the sole owner of the Property; and he does not specifically mention that he held the Property in trust for the second plaintiff and their children or that it was jointly owned or as tenants in common. 

26.	 Did the previous judgment or decision extinguish the foundations of the plaintiffs’ claim or the right to set up an action? Yes, by the decision of Kariko, J in the second action on standing and want of a reasonable cause of action. I have considered the plaintiffs’ argument based on Takhar v Gracefield Developments Limited & Ors (2019) UKSC 13 which is persuasive and their reliance on the evidence of fraud, but the question as to whether or not a party has standing to commence legal proceedings is a threshold issue which cannot be ignored as it determines whether or not a matter is properly before the Court.  I reject the plaintiffs’ argument in that regard.

27.	 Did a court of competent jurisdiction make the decision?  Yes, per Kariko, J in the second action.  As I have alluded to earlier, I was not certain on the evidence available as to the basis of the Court’s dismissal of the first action.

28.	These proceedings are res judicata; they should not be pursued by the same parties or their privies and therefore must be dismissed.

29.	In case I am wrong in the application of the doctrine of res judicata to the circumstances of this case (which I think I am not), I am satisfied to the required standard that all essential elements of issue estoppel, being a subset of res judicata, have been met and considered in favour of the defendant.

ABUSE OF PROCESS
30.	The Court has an inherent jurisdiction to protect and safeguard its own processes and protect its dignity and integrity from any possible abuse by its users or litigants:  National Executive Council v Public Employees Association of PNG [1993] PNGLR 264, Philip Takori v Simon Yagari (2008) SC905, Grand Chief Sir Michael Somare v Chronox Manek and Others (2011) SC1118, Anderson Agiru v Electoral Commissioner v The State (2002) SC 687.  As I have upheld the defendant’s argument on res judicata, it follows that the proceedings are an abuse of the process of the Court.
31.	In addition, one of the relief that is sought by the plaintiffs is an order to set aside the decision of the Court made by Kariko, J on 18 September 2019 in the second action.  The judgment of the Court there was made after a contested hearing and the judgment of the Court was final in nature.    Clearly, this Court has no jurisdiction to make such an order so seeking that relief is in itself an abuse of the process of the Court.
COSTS
32.	As to the question of costs, it is a discretionary matter.  The defendant seeks an order that the costs of the motion and the entire proceedings be paid by Mr. Unage and his law firm, Unages Lawyers on a full indemnity basis.  I am not satisfied that the defendant has made out a case to the required standard to warrant departure from the general rule that costs follow the event, ie, the successful party has its costs paid for by the losing party on a party to party basis, for such an order to be made.   

ORDER

32.	The Court’s orders are:

1.	The defendant’s application to dismiss the entire proceedings is granted.
2.	The entire proceedings are dismissed.
3.	The plaintiffs shall pay the defendant’s costs of and incidental to the application moved pursuant to the defendant’s notice of motion filed on 5 March 2020 and the entire proceedings which shall, if not agreed, be taxed.
4.	Time is abridged. 

Ruling and orders accordingly.

_______________________________________________________________Unages: Lawyers for the Plaintiffs	
Gibson Bon: Lawyers for the Defendant