Ellee v Las [2021] PGNC 283; N9134 (15 September 2021)

N9134

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO.108 OF 2020

BETWEEN:
JOHN ELLEE
Plaintiff

AND:
DAVID LAS
First Defendant

AND:
MOTOR VEHICLES INSURANCE LTD
Second Defendant

Waigani: David J
2021: 7^th July & 15^th September

PRACTICE & PROCEDURE – application for dismissal of proceedings for being frivolous or vexatious - relevant considerations - application refused – National Court Rules, Order 12 Rule 40(1).

Cases Cited:
Kerry Lerro v Philip Stagg (2006) N3050
Philip Takori v Simon Yagari (2008) SC905
Telikom PNG Limited v ICCC and Digicel PNG Limited (2008) SC906
Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & Ors [2008] PNGLR 22
Rex Paki v Motor Vehicles Insurance Limited (2010) SC1015
Michael Pundia v Jerry Kiwai (2011) N4427

Counsel:
Ganjiki Davidson Wayne, for the Plaintiff
Paul J. Othas, for the Second Defendant

RULING

15^th September, 2021

1. DAVID, J: INTRODUCTION: Three motions were brought before the Court for hearing. The first motion was filed by the plaintiff, John Ellee on 14 October 2020 seeking orders to remove the first defendant, David Las as a party to the proceedings and for summary judgment to be entered pursuant to Order 5 Rule 9 and Order 12 Rule 38 of the National Court Rules respectively. The second motion was filed by the second defendant, Motor Vehicles Insurance Ltd on 25 April 2021 seeking orders to dismiss the proceedings in their entirety; pursuant to Order 12 Rule 1 of the National Court Rules for failing to comply with mandatory requirements of Section 54(1) of the Motor Vehicles (Third Party) Insurance Act; and in the alternative, for being frivolous or vexatious pursuant to Order 12 Rules 1 and 40(1)(b) of the National Court Rules as the claim in negligence was based on the principle of vicarious liability as if the first defendant were an officer or agent of the second defendant. The third was an amended notice of motion filed by the plaintiff on 21 May 2021 seeking leave to amend the writ of summons and statement of claim pursuant to Order 8 Rule 50 of the National Court Rules.
   
2. The first motion was resolved by consent resulting in the Court making orders that:
   

1. The first defendant be removed as a party to the proceedings.

2. The application for summary judgment was abandoned and dismissed.
3. Costs of and incidental to the motion be in the cause.
   
3. In relation to the second motion, given the removal of the first defendant as a party to the proceedings pursuant to the first motion, the second defendant abandoned the first relief and only pursued the second and alternative relief.
   
4. The hearing of the third motion will depend on whether the proceedings survive.
   
5. In support of its application, the second defendant relies on the affidavits of:
   
   1. Paul Othas sworn on 23 April 2021 and filed on 25 April 2021 (first affidavit); and
   2. Paul Othas sworn and filed on 29 June 2021 (second affidavit).
      
6. In opposing the application, the plaintiff relies on the affidavits of:
   
   1. John Ellee sworn on 24 September 2020 and filed on 14 October 2020;
   2. Pehaytch Bovaro sworn on 25 September 2020 and filed on 14 October 2020;
   3. Morris Kanom sworn on 24 September 2020 and filed on 14 October 2020;
   4. Ganjiki D. Wayne sworn on 5 May 2021 and filed on 10 May 2021;
   5. Ganjiki D. Wayne sworn on 12 May 2021 and filed on 20 May 2021;
   6. Ganjiki D. Wayne sworn on 20 May 2021 and filed on 21 May 2021; and
   7. Ganjiki D. Wayne sworn and filed on 7 June 2021.
      

BRIEF BACKGROUND OF CLAIM

7. The substantive proceedings concern a claim for damages arising from the death of the deceased, a woman, in a motor vehicle accident on whom the plaintiff claims to have been dependent. The plaintiff commenced the proceedings as the biological father of the woman.

8. The plaintiff alleges that the deceased, Shaylyne Ellee, was killed in a motor vehicle accident while walking with a friend along the pedestrian footpath along Koura Way, Tokarara, Port Moresby in the National Capital District adjacent to the Tokarara Christian Fellowship premises on 21 April 2018. The plaintiff states that the deceased was walking along the footpath when she was run down by a motor vehicle driven negligently by the first defendant and while under the influence of alcohol. The plaintiff states that the motor vehicle, bearing registration number BEF 013 owned by Wek Kewa, was insured by the second defendant under Policy Number 9667449, and the second defendant is therefore liable to pay damages to him.

ISSUE

9. The main issue that I need to decide is whether the proceedings are frivolous or vexatious and therefore should be dismissed in their entirety.

SUBMISSIONS

10. Mr. Othas for the second defendant contends that the proceedings are frivolous or vexatious and should be dismissed as the claim is founded on the tort of negligence in conjunction with the principle of vicarious liability and no amount of amendment can cure the defects in the pleadings as they currently stand.

11. Mr Wayne of counsel for the plaintiff argues that the application has no merit and should be dismissed as:

1. The plaintiff’s claim is not predicated on the principle of vicarious liability;
2. The pleadings in the originating process and statement of claim demonstrate that the plaintiff has a cause of action in negligence and clearly set out the legal ingredients or the elements of the claim against the second defendant and the facts that support each element of the claim.
   

REASONS FOR RULING

12. The legal principles that apply in relation to applications to dismiss proceedings under Order 12 Rule 40(1) of the National Court Rules are well settled and have been the subject of many decisions in both the Supreme Court and the National Court such as Philip Takori v Simon Yagari (2008) SC905; Telikom PNG Limited v ICCC & Digicel (PNG) Limited (2008) SC906; and Kerry Lerro v Philip Stagg (2006) N3050. The relevant principles are found in those cases.

13. A claim may be frivolous if:

1. It can be characterized as so obviously untenable that it cannot possibly succeed; or
2. It is bound to fail if it proceeds to trial.
   

14. Proceedings are vexatious where:

1. The case amounts to harassment of the opposing party;
2. The opposing party is unnecessarily put to the trouble and expense of defending proceedings which are either a sham or which cannot possibly succeed.
   

15. The Court’s power to stay or dismiss proceedings under any of the grounds specified in Order 12 Rule 40 (1) is discretionary and also by its inherent jurisdiction, it has power to protect and safeguard any abuse of its processes.
16. Under Order 12 Rule 40, the Court may stay the proceedings or dismiss the proceedings, either generally or in relation to any claim for relief in the proceedings. Evidence may be received by the Court on the hearing of an application for an order under this rule.

17. In the present case, I accept Mr Wayne’s submissions on this issue. Events have overtaken. The first defendant has been removed as a party to the proceedings. The plaintiff’s substantive claim essentially is in negligence brought under Section 54(1) of the Motor Vehicles (Third Party) Insurance Act and is only against the second defendant now. In all the circumstances, I am satisfied that the proceedings are neither frivolous nor vexatious.

COSTS ON LAWYER-CLIENT BASIS
18. The plaintiff seeks against the second defendant costs on a lawyer-client basis. The party seeking costs on a lawyer-client basis must put relevant material or evidence before the Court: Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & Ors (2008) PNGLR 22 at 28. The practice of forewarning a lawyer against whom costs is proposed to be sought under Order 22 Rule 65 of the National Court Rules is a good practice and a relevant consideration in the exercise of discretion and it should be followed in every case: Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & Ors (2008) PNGLR 22 at 28.

19. The plaintiff gave notice in writing of his intention to seek costs on a lawyer-client basis through his lawyers’ letter to the second defendant’s lawyers dated 27 May 2021: annexure D, Paul Othas’ second affidavit.

20. The jurisdiction to award costs on a lawyer-client basis is conferred on the Court by Order 22 Rule 65 of the National Court Rules: see also Order 22 Rule 35 of the National Court Rules. That is where a lawyer’s conduct is the subject of complaint.

21. Sometimes the terms “lawyer-client basis” or “indemnity basis” are used interchangeably. That can be discerned from the decision of the Supreme Court in Rex Paki v Motor Vehicles Insurance Limited (2010) SC1015 where the court said:

“An order for costs on an indemnity basis may be made where the conduct of a lawyer or a party to the proceedings is so improper, unreasonable or blameworthy that he should be so punished by such an order. The question is whether the conduct of the appellant in this matter is such that it caused the respondent to incur unnecessary costs.”

22. The considerations (although not exhaustive) upon which the discretion may be exercised were expounded by Injia, DCJ (as he then was) in Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & Ors (2008) PNGLR 22 at 25-26 and these include:

1. Has the legal representative against whom complaint is made acted improperly, unreasonably or negligently?
2. If so, did such conduct cause unnecessary costs?
3. If so, is it in all the circumstances, just, to order the legal representative to compensate any party to proceedings for the whole or any part of the relevant cost?
   

23. Makail J illustrates further what the considerations are in Michael Pundia v Jerry Kiwai (2011) N4427.

24. There are many different kinds of cases in which costs have been awarded on lawyer-client basis and some of them are set out in Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & Ors (2008) PNGLR 22 at 26-27 and they are:

1. Bringing proceedings which are mischievous, unmeritorious, hopeless, vexatious and a clear abuse of process.
2. Running a defence case on complete lack of defence or no basis at all on the facts or the law.
3. Wilful and deliberate defiance of court order.
   4. Failure by the respondents’ lawyers to appear at the hearing of an

appeal.

25. The power to be exercised nevertheless is always discretionary and to be exercised only in a clear case: see Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & Ors (2008) PNGLR 22; Rex Paki v Motor Vehicles Insurance Limited (2010) SC1015; Order 22 Rule 4(1) of the National Court Rules.

26. In the exercise of the Court’s discretion, I find that the plaintiff has not made out a clear case that warrants costs to be awarded on a lawyer-client basis.

ORDER

27. The formal orders of the Court are:

1. The second defendant’s application to dismiss the proceedings for being frivolous or vexatious is refused and dismissed.
2. The second defendant shall pay the plaintiff’s costs of and incidental to the second defendant’s notice of motion filed on 25 April 2021 on a party and party basis, which shall, if not agreed, be taxed.

_______________________________________________________________
Kessadale: Lawyers for the Plaintiff
Paul Othas: Lawyers for the Second Defendant