Westpac Bank PNG Ltd v Pom Ltd [2021] PGNC 124; N8893 (30 June 2021)

N8893

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 980 OF 2017

BETWEEN:
WESTPAC BANK PNG LTD
Plaintiff

V

POM LIMITED
First Defendant

AND:
JOHN KUMBA
Second Defendant

Waigani: Anis J
2021: 11^th & 30^th June

NOTICE OF MOTION – application to dismiss proceeding for want of prosecution – Order 10 Rule 15(1)(a), (2)(a) and Order 4 Rule 36(1) – National Court Rules – main argument centered around want of compliance of directional orders – who was at fault? – whether plaintiff is to be wholly blamed for non-compliance – interest of justice – exercise of discretion

Cases Cited:

PNG Electricity Commission v. Joseph Amban (2004) N2666
Joe Chan and PNG Arts v. Matthias Yambunpe (1997) SC537
Donigi v. PNGBC (2002) SC691
PNG Nambawan Trophy Ltd v. Dynasty Holdings Ltd (2005) SC811
Burns Philp (NG) Ltd v. Maxine George [1983] PNGLR 55
Yema Gaiapa Developers Ltd v. Hardy Lee (1995) SC484
Attorney General, Minister for Justice and The State v. PNG Law Society (1997) SC530
Bernard Juali v. The State (2001) SC667
General Accident Fire & Life Assurance Co Ltd v. Ilimo Farm [1990] PNGLR 331
State v. Raymond Turu (2008) SC904

Counsel:

Mrs J Kare, for the Plaintiff
Mr G Odu, for the First & Second Defendants

RULING

30^th June, 2021

1. ANIS J: I heard a contested application by the defendants to dismiss the proceeding for want of prosecution, on 11 June 2021. I reserved my ruling to a date to be advised.

2. The parties have been notified of today’s sitting so I will give my ruling.

BACKGROUND

3. The claim which is pending is enforcement of a mortgage property which had been secured by the plaintiff against a loan that had been advanced to the 1^st defendant. The plaintiff alleges default on the said loan agreement and is in the process of enforcing its rights under a memorandum of mortgage over the secured property. The 2^nd defendant is sued in his capacity as a guarantor to the loan. He has also put up as security his property which is described as Lot 146, section 139, Hohola, NCD (the property).

4. The proceeding appears ready for hearing.

NOTICE OF MOTION

5. The defendants’ notice of motion was filed on 12 May 2021 (NoM). The main relief sought was for the proceeding to be dismissed for want of prosecution under Order 10 Rules 15(1)(a), (2)(a) and Order 4 Rule 36(1) of the National Court Rules.

6. There is no contest on the relied sources of the NoM. But I note that there is no Order 10 Rule 15(1)(a) and (2)(a) as cited by the defendants in their NoM. But the rules do provide for Order 10 Rule 9A(15)(1)(a) and (2)(a). I will proceed on the basis that the latter was the intended rule the defendants had intended to rely on given that it was not contested.

7. The main delay or default, as claimed by the defendants, relates to a consented directional order that had been issued by the Court on 6 November 2019 (the directional orders). The orders read:

1. The Plaintiff shall file and serve any further affidavit material to be relied upon at Trial on the Defendants by 20 November 2019.
2. The Defendants shall file and serve any further affidavit in reply on the Plaintiff by 4 December 2019.
3. The Plaintiff shall prepare and forward a draft Statement of Agreed and Disputed Facts and Legal Issues for Trial to the Defendants with their comments by 13 December 2019.
4. The Defendants shall consider and forward the draft Statement of Agreed and Disputed Facts and Legal Issues for Trial to the Plaintiffs with their comments by 20 December 2019.
5. The Plaintiffs shall file and serve the settled Statement of Agreed and Disputed Facts and Legal Issues for Trial by 6 January 2020.
6. Parties shall file and serve further relevant Notices under the Evidence Act by 10 January 2020.
7. The matter will return to Court for further directions on 10 February 2020 at 9:30am.
   

ISSUES

8. I note that the directional orders of 6 November 2019 were granted by consent of the parties. Both parties were represented at the time when the orders were handed up and endorsed by the Court.

9. As such, the real issues in my view, are as follows, (i), whether the plaintiff was the only party that was at fault or whether both parties were jointly at fault for not complying with the terms of the directional orders, (ii), since the directional orders were entered by consent, then who is responsible to extend its terms or to ensure that the directional orders were complied with or not breached, (iii), whether the plaintiff had played its part in terms of taking steps to vary or extend the orders, and (iv), whether the interest of justice requires that the matter should be summarily dismissed without a trial proper.

LAW

10. The Court’s power to dismiss or not to dismiss a proceeding of this nature is discretionary. Case law has also identified various considerations where the Court should, as oppose to obliged to, consider. See cases: PNG Electricity Commission v. Joseph Amban (2004) N2666, Joe Chan and PNG Arts v. Matthias Yambunpe (1997) SC537, Donigi v. PNGBC (2002) SC691, PNG Nambawan Trophy Ltd v. Dynasty Holdings Ltd (2005) SC811, Burns Philp (NG) Ltd v. Maxine George [1983] PNGLR 55, Yema Gaiapa Developers Ltd v. Hardy Lee (1995) SC484, Attorney General, Minister for Justice and The State v. PNG Law Society (1997) SC530, Bernard Juali v. The State (2001) SC667, General Accident Fire & Life Assurance Co Ltd v. Ilimo Farm (1990) PNGLR 331 and State v. Raymond Turu (2008) SC904. The considerations include the following:

(i) the plaintiff’s default is intentional or is allowing for an inordinate and inexcusable delay in the prosecution of his claim.

(ii) there is no reasonable explanation given by the Plaintiff for the delay.

(iii) the delay has caused injustice or prejudice to the Defendant.

(iv) the conduct of the parties and their lawyers warrants.

(v) it is in the interest of justice.

NON-COMPLIANCE

11. In general, there is no dispute that the directional orders were not fully complied with by the parties. Terms 1 and 2 of the directions refer to filing of further affidavits by the parties. It is not an absolute requirement for filing of affidavits. If the plaintiff did not file further affidavits by 20 December 2019, then it would be for the defendants to file further affidavits if they so wish, otherwise that should be the end of the evidence required of the parties. On that basis, and for this purpose, I do not find any breaches there.

12. In regard to terms 3, 4 and 5 of the directional orders, I note that there has been non-compliance firstly by the plaintiff, that is, by failing to furnish a draft statement of agreed and disputed facts and legal issues to the defendants for their consideration as required by term 3 of the directional orders. Terms 4 and 5 are irrelevant for this purpose because they were dependent upon compliance with term 3. So, I do find that the plaintiff had failed in that regard.

13. I turn to term 6 of the directional orders. That was a matter for the parties to do had they filed any other affidavits, or if they wished to rely at trial on previous affidavits that they had already filed. I note from the Court file that notices to rely on affidavits and notices for cross-examinations had been given by both parties prior to the issuance of the directional orders. This was so because that matter had been set down for trial on 17 September 2019. It appeared to have been vacated. As such, directional order 6 was aimed at any new affidavits that the parties may wish to file. They have not done so which, in my view, renders directional order 6 inapplicable. I therefore find no breaches by the parties for this purpose.

14. Directional order 7 required the parties to return to Court for further directions at 9:30am on 10 February 2020. Court file endorsement shows that only the plaintiff appeared on that day. The defendants did not appear in Court on that day. For this purpose, I find that the defendants failed to comply with direction 7. I must comment here that had both parties been present in Court on 10 February 2020, it was possible that further directions could have been issued to cure or extend time for compliances, and perhaps that matter would have progressed to trial earlier.

15. In the end and in answer to the first issue, I find that both parties failed to comply with the directional orders.

DELAY

16. This matter has been delayed for sometime now. It was set down for hearing on 17 September 2019. The matter was not heard. Directional orders were then issued on 6 November 2019. And I have found that both parties have contributed to failure to observe the directional orders.

17. The relevant delay period, for this purpose, should be calculated as at the date when the matter had returned for directions on 10 February 2020, to the date of filing this notice of motion on 12 May 2021. That would be a delay of about 15 months. A lot had transpired before the directional orders period and it would be speculative to go back and see who was supposed to do what, who failed to take steps and so forth.

18. Did the plaintiff provide a reasonable explanation for the delay? I refer to the affidavit of Mrs Noki filed on 16 April 2021. Bradshaw Lawyers filed their Notice of Change of Lawyers on 18 February 2020. On 20 February 2020, they wrote to the defendants’ former lawyers Biliou Lawyers notifying them of a pending notice of motion that would return on 28 February 2020. The pending motion had been filed by the plaintiff’s former lawyers Dentons Lawyers where they had intended to extend the directional orders. When the matter returned on 28 February 2020, only the plaintiff appeared. The defendant did not attend Court. The plaintiff sought leave to withdraw the notice of motion on the basis that the parties would further discuss to progress the matter. In March of 2020, June of 2020, September of 2020, January of 2021, and 29 March 2021 the plaintiff wrote letters to the Commercial Track Leader to relist the matter for directions hearing for the parties to progress the matter.

19. It cannot therefore be said that the plaintiff set back and did nothing. I refer to the affidavit of Mr Kumba for the defendants filed on 12 May 2021. There is no evidence of steps taken by the defendants to progress the matter. Evidence and Court record shows that the defendants had been absent at various Court sanctioned hearings, and only to file this notice of motion to dismiss the matter.

CONSIDERATIONS/FINDINGS

20. When I weigh all of the above, I will say the following. Firstly, I find that there was delay generally in the progress of the matter. But in relation to the material period of 15 months, I find that the plaintiff did take steps in trying to relist the matter down for directions. At the material time, I also find that the defendant had failed to make 2 court appearances, the first was on the return date of the directional orders and the second was on the date that had been set for the plaintiff’s application where it had intended to seek extension of the directional orders.

21. I do not find the delay inordinate or deliberate. I find that the plaintiff has provided evidence to show what steps it had taken to progress the matter, and that the real delay was by the registry in not listing the matter down for over a year. There is also evidence of no show by the defendants which, to an extent, had frustrated or delayed the matter as it had been to date. In regard to prejudice, I note that the claim is by the plaintiff which is based on allegations of default by the defendants to loan monies that had been advanced by the plaintiff. And the defendants are currently occupying the property which had been provided as security for the loan where the plaintiff is also seeking to foreclose on. The plaintiff is the one that is prejudiced or would suffer the most, that is, if this Court is minded to and grants the orders to dismiss the claim. This is also a case where, in my view, interest of justice shall apply or be taken into account. In my view, it would not be in the best interest of justice if I summarily dismiss the proceeding at this juncture. A lot is at stake here and the parties should all have their day in Court to properly present their case with evidence so that a final determination is made, whether it be for the plaintiff or the defendants.

EXERCISE OF DISCRETION

22. For these reasons, I will decline the defendants’ NoM.

COST

23. An order for cost is discretionary. Because there were failures by the parties in progressing the matter and also for not complying with the directional orders that had been issued, it is only fair that I order each party to bear their own costs of this NoM.

24. I will also issue consequential orders and extend time for the parties to finalise the statement of agreed and disputed facts and legal issues, and also time for the parties to file any further affidavits before the matter shall return for status conference.

ORDERS OF THE COURT

25. I make the following orders

1. The defendants’ notice of motion filed on 12 May 2021 is dismissed in its entirety.
   
2. The parties to settle and file a statement of agreed and disputed facts and legal issues before or by 6 July 2021.
   
3. The parties to file and serve any further affidavits which they wish to rely on at trial before or by 13 July 2021.
   
4. The matter shall return for status conference at 9:30am on Thursday 15 July 2021.
   
5. Each party shall bear its own cost of the notice of motion.
   
6. Time for entry of these orders is abridged to the time and date of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly
________________________________________________________________
Bradshaw Lawyers: Lawyers for the Plaintiff
Titus Lawyers: Lawyers for the Defendants