Tan Investment Ltd v Hock Heng Teo [2022] PGNC 43; N9495 (17 March 2022)

N9495

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS (COMM) NO 429 OF 2018

BETWEEN:

TAN INVESTMENT LIMITED
Plaintiff

V

HOCK HENG TEO ALSO KNOWN AS VINCENT TEO
First Defendant

AND:
REBECCA VALAHU ALSO KNOWN AS REBECCA TEO
Second Defendant

AND:
MOALE SIBONA
Third Defendant

AND:
RANU NAMONA LIMITED
Fourth Defendant

AND:
VALAHU SIBONA
Fifth Defendant

AND:
PENI SIBONA
Sixth Defendant

AND:
BRUCE ROBERT AHAB
Seventh Defendant

AND:
PHILIP N RAGU
Eight Defendant

AND:
MALAS VILA LIMITED
Ninth Defendant

AND:
TURAGU CONSTRUCTION LIMITED
Tenth Defendant

AND:
PHILIP N RAGU CONSTRUCTIONS LIMITED
Eleventh Defendant

Waigani: Anis J
2022: 11^th & 17^th March

NOTICE OF MOTION – seeking leave to file amended defence and leave to file defence out of time – preliminary issue – whether orders to extend filing and service of amended writ of summons and statement of claim had been granted – who has the burden to prove whether extension was granted and whether such burden has been discharged – effects on the application - exercise of discretion

Cases Cited:

Tan Investment Ltd v. Hock Heng and Ors (2021) N9029

Counsel:

D. Kints, for the Plaintiff
Z. Kamaso, for the First, Second, Third, Fourth, Fifth, Sixth, and Ninth Defendants

RULING

17^th March, 2022

1. ANIS J: On 11 March 2022, I heard arguments from the parties and reserved my ruling, on a notice of motion filed by the 1^st, 2^nd, 3^rd, 4^th, 5^th, 6^th, and 9^th defendants (defendants). The defendants had sought leave of Court to amend the defence of the 1^st, 2^nd, 3^rd and 4^th defendants. They had also sought leave of Court to allow the 5^th, 6^th and 9^th defendants to file their defence out of time.

2. This is my ruling.

BACKGROUND

3. I have set out the brief background of the matter in an earlier decision concerning this matter, that is, Tan Investment Ltd v. Hock Heng and Ors (2021) N9029, and so, I restate them herein:

3. The plaintiff is suing the defendants for alleged monies it claims belongs to it that had been misappropriated (embezzled) by the defendants or in particular, by the first defendant without its consent or authority over a period of time. Briefly, the first defendant had been employed by the plaintiff for about 10 years since 17 October 2005 as its branch manager for its business called “Starland Freezes”. It is alleged that he was paid an annual average salary of about K40,000 to K50,000 throughout the tenure of his employment. He was terminated sometimes in October of 2015. He was terminated after it was alleged that he, between June of 2012 and October of 2015, had misappropriated the plaintiff’s cash sales or monies which totaled K5,224,099.13. The plaintiff alleges that the first defendant had breached his fiduciary duty which was part of the terms of his contract of employment at the material time, and as a result misappropriated the plaintiff’s monies.

4. The plaintiff seeks to recover the said money plus assets and land which it claims were purchased by the first defendants through the alleged misappropriated funds.

NOTICE OF MOTION

4. The defendants’ notice of motion filed on 2 February 2022 (NoM) was moved pursuant to rules under the National Court Rules (NCR) which included Order 8 Rule 50(1) and Order 7 Rule 6(2). The parties do not contest the sources of the NoM so I will proceed to consider the issues.

PRELIMINARY ISSUE

5. At the hearing, a preliminary issue came to light, which is whether the Amended Writ of Summons and Statement of Claim (Amended Writ) was filed and served within the prescribed period as ordered by the Court.

6. Counsel for the defendants was not the then lawyers on record so did not assist except to submit that filing and service of the Amended Writ had occurred outside of the time as ordered by the Court. In response, the plaintiff’s counsel submits that the issue had been raised when the matter returned in October of 2021 and had been resolved, so it is a non-issue. Counsel submits that they had had issues with retrieving sealed copies of the Amended Writ which had caused the delay in servicing the defendants.

7. In considering this issue, I will make the following observations. So, on 15 July 2021, after hearing the plaintiff’s notice of motion filed on 17 June 2021, I made various orders. Term 2 of the orders read, Pursuant to Order 8 Rule 50(1) of the National Court Rules, the plaintiff is granted leave to amend the Writ of Summons and Statement of Claim and have it filed and served within (14) days. So, the 14^th day, if we compute time from 15 July 20121, is 29 July 2021, which means the expiry date was on 30^th July 2021. It is not disputed that the Amended Writ was filed on 3 August 2021. Therefore, the Amended Writ, pursuant to the Court Orders of 15 July 2021, appears invalid because it was filed outside of the time as ordered by the Court, that is, 5 days late.

8. I have considered submissions by Mr Kints that the issue of late filing had been resolved by the parties on 12 August 2021. Mr Kints has sworn an affidavit in response to this NoM which is document no. 128 filed on 15 February 2022. I have considered this evidence. However, I note that there are no specific deposition by counsel on how the Court had dealt with the issue of late filing of the Amended Writ. I note that perhaps submissions may have been made to explain the late filing or receipt of sealed copies of the Amended Writ from the registry as submitted by counsel. However, there is no formal order in place that captures this submission by the plaintiff. I am satisfied therefore that no formal order has been made that expressly varied or addressed term 2 of the Court Order of 15 July 2021. As such and until such time the said order is re-visited or varied, it remains binding.

EFFECTS

9. The effects of my finding on the preliminary issue are as follows. Firstly, the only valid originating process would be the original writ of summons and statement of claim filed on 25 April 2018. Secondly, as per term 1 of the Court Orders of 15 July 2021, leave has been granted to add the 7 named defendants to the proceeding. The said order remains valid despite failure by the plaintiff to fully comply with order 2. Thirdly, the defendants cannot be in default of filing their amended defence or defence to the proceeding.

10. At the outset therefore, the NoM and relief sought by the defendants are unwarranted or unnecessary.

11. This is a type of case which should, in my view, call upon a judge or the Court, to consider and exercise its powers under its own volition or make such other orders as it deems fit. The reasons for doing so should include, (i), good administration of the matter that is before the Court, (ii), interest of justice, (iii) if all the parties, including the Court, will benefit with such orders or directions with the aim to progress the matter to trial or a finality.

12. I am inclined to follow this option, and I will do so based on the 3 reasons as alluded to above. I note that the plaintiff would have the option to reapply to file an amended originating process after this. And this may take up more time and resources for both parties. The defendants are also adamant to defend the matter by coming to the Court with the present NoM, to seek leave of the Court to amend their defence and file new defence for those that have not yet done so. That was the status quo, as understood by the parties, before the issue of compliance of term 2 of the Court Order of 15 July 2021 was raised and now determined by this Court. Good administration of the matter and interest of justice, in my view, require that I should issue orders to assist the parties settle on the pleadings, so that the matter could progress to a hearing. Such orders or directions would save cost, time and would benefit the parties and the Court, in terms of progressing the matter to a hearing stage.

SUMMARY

13. Instead of granting the relief sought, I decline the NoM, but on the same token, will issue directions for the parties to progress the matter to trial. The directions will include variation of term 2 of the Court Order of 15 July 2021; directions will be issued in relation to the reckoning of service of the already filed Amended Writ; directions will be issued for the service of the Amended Writ on those defendants yet to be served; and directions will be issued on the next return date.
COST

14. An order for cost is discretionary. In the present case and given the outcome, I will order each party to bear their costs of the application.

ORDERS OF THE COURT

15. I make the following orders:

1. I decline to grant the relief sought in the Notice of Motion filed on 2 February 2022.
   
2. I issue the following directional orders, which are related or consequential:
   

(i) Term 2 of the Court Order of 15 July 2021 is varied to the extent that the due date for filing the Amended Writ of Summons and Statement of Claim is extended to 3 August 2021.

(ii) Term 2 of the Court Order of 15 July 2021 is varied to the extent that service of the Amended Writ of Summons and Statement of Claim (that is filed on 3 August 2021) upon the defendants outside the required period as prescribed under term 2 of the Court Order of 15 July 2021, shall be regarded or reckoned as due service upon each of the defendants.

(iii) The plaintiff shall be at liberty to serve any other defendants who have not yet been duly served with the Amended Writ of Summons and Statement of Claim (that is filed on 3 August 2021) whereupon the normal pleading period as provided for under the National Court Rules shall apply.

(iv) Each of the defendants already served with the Amended Writ of Summons and Statement of Claim (that is filed on 3 August 2021) shall file and serve their Amended Defence or defence within 21 days from the date of this Order, that is, before or by 7 April 2022.

(v) The matter shall return for Directions Hearing at 9:30am on Thursday 14 April 2022.

3. The parties shall bear their own costs of this application.
   
4. Time for entry of these orders is abridged to the date and time of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly.

________________________________________________________________
Jema Lawyers: Lawyers for the Plaintiff
Marubu Lawyers: Lawyers for the First, Second, Third, Fourth, Fifth, Sixth and Ninth Defendants