Lilume v Finance Corporation Ltd [2022] PGNC 335; N9823 (1 August 2022)

N9823

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 56 OF 2021

BETWEEN:
SOLOMON LILUME
Plaintiff

AND:
FINANCE CORPORATION LIMITED
Defendant

Goroka: Mugugia, AJ
2022: 21^st, July, 1^st August

PRACTICE AND PROCEDURE – Application to join person as a party in this proceedings – National Court Rules, Order 5, Rule 8(1)(b) – Whether person whose joinder as a party is necessary.

PRACTICE AND PROCEDURE – Application to amend Writ of Summons and Statement of Claim – National Court Rules, Order 8, Rule 50(1) – Whether leave should be granted -Power of the Court to grant leave is discretionary – Consideration of the guiding principles on the question of leave to amend pleading.

PRACTICE AND PROCEDURE – Application to withdraw Notice to Set Down for Trial filed - National Court Rules, Order 12, Rule 1 relied on.

Case Cited:

Papua Club Inc. v. Nusaum Holdings Ltd. (2002) N2273
Kewa v. Kombo (2004) N2688

Counsel:

K. Lafanama, for the Plaintiff
G. Gendua, for the Defendant

RULING

1^st August, 2022
1. MUGUGIA, AJ: This is my ruling on the Plaintiff’s application by Notice of Motion filed on 15 July 2022, seeking three main orders, namely, withdrawal of the Notice to Set Down for Trial filed on 21 June 2022 (first order), amendment of the Writ of Summons and Statement of Claim filed on 18 February 2021 (second order), and joinder of one Emmanuel Indavu as a party in this proceedings (third order). I heard the application on 21 July 2022. The application was opposed by the Defendant.

2. The supporting Affidavits relied on by the Plaintiff at the hearing were:

(i) Affidavit in Support of Application of Solomon Lilume sworn on 30 June 2022 and filed on 15 July 2022; and

(ii) Affidavit of Karen Lafanama sworn on 30 June 2022, and filed on 15 July 2022.

3. The Defendant relied on the Affidavit of Pokup Kepiniu sworn and filed on 28 June 2022.
4. Both parties provided written submissions to assist the Court.

FACTUAL BACKGROUND

5. The Plaintiff’s claim is that he requested a loan of K128,194.25 from the Defendant. This amount was for the payment of a Toyota Coaster 26 Seater Bus (vehicle) from the Ela Motors Branch in Goroka. The parties entered into a Chattel Mortgage Agreement on 17 March 2017. The Defendant advanced the amount requested by the Plaintiff. Part of the agreement was that the Plaintiff was required to repay a total of K169,964.21 over a period of twenty three (23) months, at a monthly rate of K7,389.75. The Plaintiff purchased the vehicle and operated it as a PMV. The Plaintiff used the takings from his PMV service to repay the loan. The Plaintiff alleged that he repaid most of the loan. He had an outstanding of K15,307.75. He operated his PMV service for one year, two months before the vehicle was repossessed by the Defendant without his knowledge from the Ela Motors workshop on 30 May 2018. The Plaintiff wanted to make three separate payments of K6,000.00, K8,000.00 and K15,000.00 to the Defendant’s Goroka Branch Manager but he refused to accept the payments. The Plaintiff filed this proceedings on 18 February 2021, claiming a reimbursement of K61,482.80, general damages for unnecessary emotional and psychological stress, special damages in the amount of K562.00 and interest.

ISSUES

6. The issues that arise from the Plaintiff’s motion are:

(i) Whether the Notice to Set Down for Trial filed on 21 June 2022 should be withdrawn.

(ii) Whether the Plaintiff should be granted leave to amend his Writ of Summons and Statement of Claim filed on 18 February 2021.

(iii) Whether Emmanuel Indavu should be added as a party to the proceedings.

7. I will deal with the issues in reverse order, starting with Issue (iii).

SHOULD EMMANUEL INDAVU BE ADDED AS A PARTY TO THE PROCEEDINGS?

8. The National Court Rule relied on by the Plaintiff is Rule 8(1)(b) of Order 5. Pursuant to Rule 8(1)(b), where a person who is not a party 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. The question is whether the joinder of Emmanuel Indavu is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on.
9. The Plaintiff’s evidence in support of the order for joinder is that Emmanuel Indavu is the Defendant’s Branch Manager who had directly dealt with him when he applied for the loan. This evidence is corroborated by Ms Lafanama’s affidavit evidence. She confirmed receiving instructions from her client. Her evidence is that Emmanuel Indavu negligently dealt with her client since her client was an unsophisticated person. The Plaintiff’s submission is that Emmanuel Indavu is the Defendant’s agent who was directly involved with the loan application. His addition as a party to the proceedings will better assist the Court in determining the real questions in the matter. The Plaintiff seeks to join him as the First Defendant in this proceedings.

10. The Defendant’s submissions are that the Plaintiff brings a claim for unjust exercise of repossession powers against the Defendant, and is seeking damages against the Defendant. The Plaintiff is not seeking any damages or relief against Emmanuel Indavu. Emmanuel Indavu performed his duties in his course of employment as Manager of the Defendant’s Goroka Branch, and therefore the Defendant is vicariously liable. There is no utility in joining Emmanuel Indavu as a defendant unless the Plaintiff is suing him in his personal capacity outside the scope of his employment. If any final orders are made for payment of damages, the only party that will satisfy those orders for payment is the Defendant and not Emmanuel Indavu. In the circumstances, this Court ought to refuse the joinder of Emmanuel Indavu as a party to this proceeding.

11. I am of the view that the joinder of Emmanuel Indavu is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on. My reasons for forming this view are:

(a) The pleadings disclose a cause of action against Emmanuel Indavu. He is the Defendant’s Branch Manager who exercised his powers on behalf of the Defendant to repossess the vehicle from the Plaintiff.

(b) The Chattel Mortgage Agreement entered into by the parties on 17 March 2017 was signed by Emmanuel Indavu on behalf of the Defendant. He is the responsible agent of the Defendant who was directly involved with the Plaintiff. He has direct knowledge of what happened.

(c) The Plaintiff is claiming a reimbursement of K61,482.80 and other consequential relief from the Defendant. Emmanuel Indavu’s action or inaction may have had a direct impact on the alleged losses incurred by the Plaintiff. His joinder in this proceedings will assist the Court in determining the issue of liability, that is, whether the Defendant is liable or not.
12. Whether to make an order to add a party/person is a matter of discretion. The joinder of Emmanuel Indavu will not prejudice the Defendant. His involvement will assist the Defendant. In the exercise of my discretion, I will order that Emmanuel Indavu be added as the First Defendant in this proceedings.

SHOULD THE PLAINTIFF BE GRANTED LEAVE TO AMEND HIS WRIT OF SUMMONS AND STATEMENT OF CLAIM FILED ON 18 FEBRUARY 2021?

13. The Plaintiff seeks to amend his Writ of Summons and Statement of Claim filed on 18 February 2021. The jurisdictional basis relied on his motion is Order 8, Rule 50(1) of the National Court Rules, which states:

“The Court may, at any stage of any proceedings, on application by any party or of its own motion, order, on terms that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such manner as the Court thinks fit.”

14. The Plaintiff’s evidence show that after the filing of the Notice to Set Down for Trial, the Plaintiff gave further instructions which included facts. His instructions clearly showed that the Plaintiff was dealt with negligently by the Branch Manager (Emmanuel Indavu) at the time of applying for the loan. Mr Indavu never explained the terms and conditions of the Chattel Mortgage Agreement, and the repayment period of the loan amount to the Plaintiff. Ms Lafanama’s affidavit evidence corroborates her client’s evidence. Based on the instructions received, she advised her client that there was a need to amend the statement of claim to include the negligent conduct of the Defendant, and add the Branch Manager as a party to the proceedings. The draft Amended Writ of Summons is annexed to the Plaintiff’s affidavit.

15. The Plaintiff referred to the cases of Papua Club Inc. v. Nusaum Holdings Ltd. (2002) N2273, and Kewa v. Kombo (2004) N2688. Ms Lafanama applied the relevant considerations from these cases to the facts of the present case, and submitted that the amendment will enable the Court to go beyond the Chattel Mortgage Agreement in determining the meeting of minds between the parties at the time the agreement was signed. The amendment will clarify whether the Plaintiff was aware of the terms and conditions in relation to default and repossession as set out under the agreement. The amendment seeks to correct a defect. The Defendant will only be prejudiced in relation to cost. The application is made bona fide. The interest of justice lies with the Plaintiff in pleading all the facts to enable the Court to determine the issues arising. The Plaintiff has agreed to bear any costs. The amendment is proper. In the interest of justice, an order to amend the Writ of Summons and Statement of Claim should be made by the Court.
16. On the other hand, the Defendant submitted that the draft Amended Writ of Summons raises a new cause of action in negligence, in addition to the existing cause of action (unjust exercise of repossession powers). The Plaintiff falls short of satisfying the requirements of Order 8, Rule 53(5) of the National Court Rules in that he is bringing new facts to support his new cause of action in negligence. Further, the amendments the Plaintiff is seeking are not to correct any defect of, and provide further and better particulars of the existing cause of action. The matter has progressed to trial and was infact set down for trial. It is not in the interest of justice and prejudicial to the Defendant for the pleadings to be amended. The appropriate route for the Plaintiff is to commence a new proceeding in negligence against the Defendant unless he relies on the same facts pleaded earlier.

Relevant law applicable.
17. The National Court has power under Order 8, Rule 50 of the National Court Rules to grant leave to amend pleadings at any stage of the proceedings. The power to grant leave is an exercise of judicial discretion and must be exercised based on proper principles of law.

18. In Papua Club Inc. v. Nusaum Holdings Ltd. (supra), Gavara-nanu J stated these guiding principles that the Court should consider when faced with an application for leave to amend a pleading:

“(1) Where the amendment is to enable the Court to determine the real question in controversy between the parties, or

(2) Where the amendment is to correct any defect or error in the proceedings, and

(3) That such amendment will not cause real prejudice or injustice to other party, and

(4) That the application for such amendment is not made mala fide, and

(5) That the other party can be fairly compensated with costs for such amendment.”

19. Cannings J added three more considerations in the case of Kewa v. Kombo (supra). They are:

“(6) Is the party prevented by its conduct or the manner in which the proceedings have progressed from being permitted to amend its pleadings?

(7) Where do the interests of justice lie?

(8) Is the proposed amendment efficacious? That is, is it a proper amendment?”

20. I have considered the parties’ evidence and submissions. I apply the considerations set out in the two decided cases to the case before me.

(1) Will the amendment enable the Court to determine the real question in controversy between the parties? Yes.

(2) Will the amendment correct any defect or error in the proceedings? Yes.

(3) Will the amendment cause real prejudice or injustice to the Defendant? No, the amendment will not result in injustice and prejudice to the Defendant.

(4) Is the application for such amendment made mala fide or bona fide? It is made bona fide.

(5) Can the other party be fairly compensated with costs for such amendment? Yes.

(6) Is the party applying prevented by its conduct or the manner in which the proceedings have been progressed from being permitted to amend its pleadings? The Plaintiff has taken all necessary steps to prosecute the matter. The Court may, at any stage of any proceedings, on application by any party order that any party have leave to amend any document in the proceedings. In the interest of justice, the Plaintiff should be permitted to amend his pleadings.

(7) Where do the interests of justice lie? The interests of justice lie in granting the application for the purpose of determining the real questions in controversy between the parties that arise in the proceedings.

(8) Is the proposed amendment efficacious? That is, is it a proper amendment? It is a proper amendment.

21. In the exercise of my discretion, I will grant the order sought by the Plaintiff to amend his Writ of Summons and Statement of Claim filed on 18 February 2021.

Should the Notice to Set Down for Trial filed on 21 June 2022 be withdrawn?

22. The Plaintiff relied on Order 12, Rule 1 of the National Court Rules. The Plaintiff’s submission is that the order to withdraw the Notice to Set Down for Trial relies on the second and third orders sought in the Plaintiff’s notice of motion. If the Court in its discretion grants these orders then the Notice to Set Down for Trial filed on 21 June 2022 should be withdrawn.

23. I have decided that Emmanuel Indavu be added as the First Defendant in this proceedings. I have also decided to grant the order sought by the Plaintiff to amend his Writ of Summons and Statement of Claim filed on 18 February 2021. It is fair in the circumstances to order that the Notice to Set Down for Trial filed on 21 June 2022 be withdrawn. I order that it be withdrawn.

CONCLUSION
24. Based on the reasons given above, and in the exercise of my discretion, I will grant the orders sought by the Plaintiff in his Notice of Motion filed on 15 July 2022. Costs will be ordered against the Plaintiff.

FORMAL ORDERS:

25. The formal orders of the Court are:

1. The Notice to Set Down for Trial filed on 21 June 2022 is withdrawn.

2. Emmanuel Indavu is added as the First Defendant in this proceedings.

3. The Plaintiff is granted leave to file his amended writ of summons within seven (7) days.

4. The Plaintiff shall pay the Defendant’s costs.

5. Time for entry of these orders is abridged to the date and time of settlement of these

orders by the Registrar which shall take place forthwith.

Ruling and Orders accordingly.
_______________________________________________________________
K. Lafanama: Lawyer for the Plaintiff
G. Gendua: Lawyer for the Defendant