Renikam v Toyota Tsusho (PNG) (trading as Ela Motors) [2020] PGNC 481; N8832 (10 December 2020)

N8832

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 910 OF 2020

BETWEEN:
LOWALD RENIKAM, LOVELYN RENIKAM & DONALD RENIKAM trading as TALUENALU ESTATE REDEVELOPMENT
Plaintiff

AND:
TOYOTA TSUSHO (PNG) trading as ELA MOTORS
Defendant

Kokopo: Suelip AJ
2020: 8^th October & 10^th December

CIVIL – Practice and procedure – application to strike out plaintiffs Reply to Defence – application to dismiss proceedings for being frivolous and vexatious, and abuse of court process – application to remove plaintiffs for lack of standing – application to dismiss claim for being statute barred – consideration – exercise of discretion – application – cost in the cause

Papua New Guinea Cases

Covec (PNG) Ltd -v- Peter Kama (2020) SC1912

References

Goods Act Chapter No. 251

Counsel

J Kihanges, for the Plaintiff
G Gorua, for the Defendant

RULING

10 December, 2020

1. SUELIP AJ: In the Notice of Motion filed 24 January 2020, the defendant seeks orders as follows:

(a) pursuant to Order 12 rule 1 of the National Court Rules (NCR) the plaintiff’s Reply to Defence filed 27 September 2018 be struck out for being an abuse of the Court’s process.

(b) pursuant to Order 12 rule 40 NCR, the entire proceedings be dismissed for disclosing no cause of action for being frivolous and vexatious, and an abuse of Court process.

(c) pursuant to Order 5 rule 9 NCR, the plaintiff be removed from these proceeding for lack of standing.

(d) pursuant to section 16 of the Frauds and Limitations Act, the entire proceedings be dismissed for being statute barred.

(e) pursuant to Order 5 rule 9 NCR, the defendant be removed from the proceedings as it lacks the capacity to be sued in the name and style cited herein.

(f) costs.

2. This is my ruling on the defendant’s application.

Facts

3. Briefly, the facts of this matter are as follows. The plaintiffs are copra producers and operators of small passengers’ ferries in the New Ireland Province whilst the defendant carries on the business of selling cars, machineries, boats, and Toyota parts and accessories through out Papua New Guinea.

4. In July 2012, the plaintiffs obtained a loan of K146,753.80 from the National Development Bank and paid it to the defendant at the latter’s Kavieng sales office for the following items:

(a) A new Toyota land cruiser pick up 4.2, 4-wheel drive diesel valued at K118,632.80.

(b) A new Yamaha 19-foot boat and a new 25 horsepower Yamaha outboard motor engine valued at K16,131.00.

(c) A new Yamaha generator valued at K11,990.00.

5. On 6 August 2012, the defendant delivered to the plaintiffs the new land cruiser and advised the plaintiffs that the 19-foot Yamaha boat, the 25-horse power Yamaha outboard motor engine and the Yamaha generator were not available then and will be delivered to the plaintiffs at a later date.

6. Since then the plaintiffs had made many follow ups to claim the undelivered items. However, the defendant had either ignored, refused or was reluctant to deliver up the items to the plaintiffs and as a result, the plaintiffs suffered loss and damages because of the non-delivery.

7. The plaintiffs are now claiming the sum of K28,121.00 being the total of the unsupplied items, loss of income of K936,000.00 with costs and interest at 8% pursuant to Statute Interests on Debts and Damages Act.

Issues

8. Whether these proceedings should be dismissed for being frivolous and vexatious, and for being an abuse of process?

9. If not, whether these proceedings should be dismissed for lack of standing or for being statute barred?

The law

10. The bases for the defendant’s application are:

(i) Order 12 Rule 40(1) of the NCR which states:

40. Frivolity, etc.

(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.

(ii) Order 12 rule 1 NCR which states: -

ORDER 12. —JUDGEMENTS AND ORDERS.

Division 1. —General.

1. General relief. (40/1)

The Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating process.

(iii) Order 5 rule 9 of NCR which states: -

9. Removal of parties

Where a party –

(a) has been improperly or unnecessarily joined; or

(b) has ceased to be a proper or unnecessary party,

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

(iv) Finally, section 16(1) of the Frauds and Limitations Act which states in part as follows:

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

...

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

(2) An action for an account shall not be brought in respect of any matter which arose more than six years before the commencement of the action.

....

Defendant’s arguments

11. The defendant’s first argument is that the plaintiff’s statement of claim fails to plead important matters such as invoices and receipts to prove there was a sale between the parties.

12. The defendant says that these matters are now pleaded in the plaintiffs’ Reply to Defence (Reply). Further, the defendant says that the plaintiffs raise new allegations in paragraphs 3, 4, 5, 6, 7 and 8 of its Reply which were not previously pleaded in the Statement of Claim. The defendant argues that these new matters are inconsistent with the allegations in the Statement of Claim and raise a new cause of action. The defendant further argues that since pleadings have closed, it cannot file a defence to the new allegations.

13. The defendant relies on Covec (PNG) Ltd -v- Peter Kama (2020) SC1912 where the Supreme Court comprising of Kandakasi DCJ, Kassman and Toliken, JJ held:

“A reply only answers the defence, it cannot raise a new cause of action or allege any matter inconsistent with the allegation in the statement of claim: see Australian Civil Procedure Tenth Edition by BC Cairns.”

14. For this reason, the defendant wants this Court to strike out the plaintiffs Reply as it raises a new cause of action and therefore is inconsistent with the allegation in the Statement of Claim.

15. The second part of the defendant’s argument is that there is no record that the plaintiffs are its customers as there was never a transaction between the parties as pleaded in its defence. The defendant denies selling any items to the plaintiffs and because the plaintiffs lacked standing, the defendant submits that they cannot bring such action in their personal or business name.

16. The third part of the defendant’s argument is that the plaintiffs cannot sue the defendant in the name as cited on the Statement of Claim because there is no such legal entity as “Toyota Tsusho (PNG) trading as Ela Motors”. The defendant says the word “Limited” is missing in the defendant’s name.

17. The defendant’s last argument is that this claim is statute barred as it was filed outside the time and therefore, this claim should be dismissed pursuant to section 16 of the Frauds and Limitations Act.

The plaintiff’s response

18. In response, the plaintiffs say firstly, that there are no new matters raised in their Reply. They say the only difference is that the matters in their Reply are more specific than what is pleaded in the Statement of Claim.

19. The plaintiffs say further that a reply is not a means to an end in these proceedings. They say that a Statement of Agreed and Disputed Facts with Legal Issues will eventually address the legal issues which can be determined at that stage.

20. As regards the defendant’s argument that there is a failure to disclose a reasonable cause of action, the plaintiffs say that their cause of action is an alleged breach of contract of sale. They say there is evidence of acceptance of an offer and consideration was paid for the items, most of which have not been delivered to date.

21. In respect of the argument by the defendant about the plaintiffs’ lack of standing to bring these proceedings, counsel submits that the plaintiff is a business group, and their father is Laupa Shadrach Renikam, is named as the customer in the defendant’s record. The plaintiffs say it was an honest mistake on the part of the author of the Statement of Claim in not naming the correct plaintiff but that it can be cured in their application to join their father as a party to this proceeding.

22. Counsel concedes the plaintiffs are not the correct entity to bring this claim but their application to join the correct party is pending the Court’s deliberation. Counsel submits that the plaintiff should be not be driven from the judgment seat for this reason only. Hence, he submits that this proceeding should not be dismissed at this stage.

23. Counsel did not make any submissions on the defendant’s arguments regarding the name of the defendant as cited on the originating process or on this claim being statute barred.

Consideration

24. In respect of the first argument by the defendant that new matters raised in the plaintiffs Reply to Defence, I have read the Reply and I see that it is a detailed document which raises only one new pleading on the Goods Act. The question I ask now is this. Is this new pleading inconsistent with the Statement of Claim?

25. The particulars in the Reply are essentially that the items paid for have not been delivered apart from the vehicle, the land cruiser. The pleading on the Goods Act does not allege new matters except to support paragraph 7 of the Statement of Claim. It is therefore not inconsistent with the Statement of Claim.

26. Further, if the defendant says there are new matters pleaded in the Reply, their relief would be the striking out of the Reply, not the entire claim. Perhaps, more importantly, a reply is a pleading that is optional, and which is not crucial to the entire pleadings. It may or may not be filed by a party, and failure to file a reply cannot itself be a valid ground to use to either allege default or dismiss a proceeding.

27. As regards the argument that the plaintiffs fail to disclose a cause action, it is clear from the pleadings that although the plaintiffs’ paid for 4 items from the defendant, only one item was delivered. The affidavits by Laupa Shadrach Renikam and Lowald Renikam filed 24 February 2020 and 1 September 2020 respectively, depose that the other 3 items have not been delivered to date. As such, there is prima facie evidence that supports the cause of action. I must make it clear that this is not a trial, and I am not making a final determination except to point out to the evidence that the plaintiffs intend to rely on, which have been filed, to make this determination, which is that there appears to be a valid cause of action.

28. Further, the receipts attached to the defendant’s counsel’s affidavit merely proved that monies were received as payment for the items. The receipts are not proof that the items were delivered.

29. In relation to the defendant’s contention that the defendant cannot be sued in the name cited on the Statement of Claim without the word “Limited”, that, in my view, appears to be a minor error. The plaintiffs correctly named the defendant but did not add on the word “Limited”. There is no other entity similar or identical to the defendant and the omission of a word will not cause confusion nor prejudice in any way.

30. Counsel for the plaintiffs did concede that the plaintiffs are not the correct party to bring this proceeding but they have an application to correct that anomaly where they are seeking leave to add the correct party to the proceeding. It is in all fairness and in the interest of justice that they are given the opportunity to include the correct party.

31. As regards the last argument that this claim is time barred, the defendant conceded during submissions that the claim arose on or about 6 August 2012 and this claim was ‘conveniently’ filed on 6 August 2018. The period in between is exactly 6 years. The claim therefore was filed within time.

Conclusion

32. The plaintiffs have a genuine claim, and they must be given an opportunity to prosecute their claim despite their short falls in having the correct parties named and their filing of a detailed Reply.

33. There is only one new pleading in the Reply and that is the Goods Act. However, this new pleading is not inconsistent with the pleadings in the Statement of Claim. In fact, it only goes to support what is already pleaded in the Statement of Claim.

34. Further, the defendant’s name on the writ omits the word ‘Limited’ but that is not prejudicial to anyone, especially the defendant. It is therefore a minor error that can be easily corrected along with naming the right plaintiff in the application already filed by the plaintiffs.

35. Finally, this matter is not statute barred as it was filed right on time and therefore, within the 6-year limit.

Orders

36. The Orders of the Court are: -

(i) The defendant’s application to strike out the plaintiff’s Reply to Defence is refused.

(ii) The defendant’s application to dismiss the proceeding is refused.

(iii) Costs be in the cause of the proceeding.

(iv) Time for entry of these orders is abridged until date of settlement by the Assistant Registrar which shall take place forthwith.

The Court orders accordingly.
________________________________________________________________
Warner Shand Lawyers : Lawyers for the Plaintiffs
Ela Motors In House Lawyers: Lawyers for the Defendant