Independent Public Business Corporation v Motor Vehicles Insurance Ltd [2022] PGNC 510; N10050 (28 November 2022)

N10050

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS (COMM) NO. 1252 OF 2010 (NO. 1)

BETWEEN:

INDEPENDENT PUBLIC BUSINESS CORPORATION
Plaintiff/First Cross Defendant to First Cross Claim

V

MOTOR VEHICLES INSURANCE LIMITED
First Defendant/Second Cross Defendant to First Cross Claim/ Second Cross Claimant

AND
NOMINEES NIUGINI LIMITED
Second Defendant/First Cross Claimant/First Defendant to the Second Cross Claim

AND
NATIONAL SUPERANNUATION FUND LIMITED
Third Defendant

AND
BENJAMIN TERENCE O’DWYER, TERRANCE JAMES O’DWYER AND BACKWELL LOMBARD CAPITAL PTY LTD
Second Cross Defendants to Second Cross Claim

AND
DR JOHN MUA
Third Cross Defendant to Second Cross Claim

AND
BERNARD FONG
Fourth Cross Defendant to Second Cross Claim

Waigani: Anis J
2021:10^th December
2022: 28^th November

NOTICE OF MOTION – seeking dismissal of proceeding for want of prosecution – Order 4 Rule 36(1), Order 10 Rule 5, Order 12 Rule 1 and Order 10 Rule 10A Rules 15 and 16 of the National Court Rules – consideration – exercise of discretion – consequential orders

Cases Cited:
Independent Public Business Corporation v Motor Vehicles Insurance Ltd and Ors (2021) N8718
Ronald Nicholas v Commonwealth New Guinea Timbers Pty Ltd [1986] PNGLR 133
Seravo v Bahafo (2001) N2078
John Niale v Sepik Coffee Producers Limited & Ors (2004) N2647

Counsel:
B Nutley, for the Plaintiff
R Bradshaw, for the First Defendant
E Parua, for the Second Defendant
J Brooks, for the Third Defendant

RULING

28^th November, 2022

1. ANIS J: The 3^rd defendant (applicant) applied to dismiss the proceeding for want of prosecution on 5 November 2021. The application was mentioned on 2 December 2021 and set down for hearing on 10 December 2021. The application was contested. I reserved my decision thereafter to a date to be advised.

2. This is my ruling.

BACKGROUND

3. I refer to my earlier decision on the matter, Independent Public Business Corporation v Motor Vehicles Insurance Ltd and Ors (2021) N8718 (IPBC ats MVIL), where at [3], [4] and [5], I set out the background of the matter. I adopt them herein as follows:

3. The plaintiff files this proceeding against the defendants on 7 October 2010. Initially, Nasfund, which is the applicant herein, was not a defendant to the proceeding. The defendants then were Motor Vehicles Insurance Limited (MVIL) and Nominees Niugini Limited (NNL), that is, the 1^st and 2^nd defendants. Nasfund (the applicant) was joined as a party on 24 June 2011 by a Court Order after the plaintiff had applied for that on 7 June 2011.

4. Briefly, the claim is this. The plaintiff seeks to challenge the validity of an Equity Monetisation Contract (EMC). The EMC was entered into between MVIL and NNL on or about 22 July 2009. Pursuant to the EMC, NNL lent to MVIL K100 million (the loan), which was monies it obtained from the applicant. As security for the loan, MVIL signed a Legal Mortgage of Shares contract (LMS) with NNL on or about 22 July 2009. Under the LMS or security contract, MVIL vested or mortgaged with NNS, 530,105,100 of its ordinary uncertified fully paid shares that it had at the material time with Bank South Pacific Limited (BSP). So, in summary, MVIL had put up as security, its shares that it had in BSP, in favour of NNL for the K100 million loan that NNL had agreed to and had loan to MVIL, the loan money which had been facilitated by the applicant. As it turned out, MVIL may have defaulted on or has breached the terms of the EMC. NNL proceeded to exercise its rights under the various agreements, and in so doing, transferred 193,972,790 of MVIL’s shares in BSP over to the applicant, to fully repay the loan.

5. This led to the plaintiff filing this proceeding. It claims that MVIL, as a majority state owned enterprise, had breached mandatory provisions under the Independent Public Business Corporation Act 2002 (IPBC Act), including s. 46B, when it transacted or made these dealings with NNL without the approval of the responsible Minister. Various amendments have been made since the original writ of summons and statement of claim was filed on 7 October 2010. This included defences and crossclaims filed by the parties to the proceeding. There had been various interlocutory applications filed and appeals made to the Supreme Court. I note that these were highlighted in the evidence and submissions of the applicant, the plaintiff, and the 1^st defendant. I will refer to them later below.

MOTION

4. The applicant’s notice of motion, as stated, was filed on 5 November 2021 (NoM). It cites various sources to dismiss the proceeding, namely, Order 4 Rule 36(1), Order 12 Rule 1, Order 10 Rule 5, Order 10 Rule 9A(15)(2)(a) of the National Court Rules, and Order 10A Rules 15 and 16 of the National Court (Commercial List) Rules (NCR).

5. The applicant seeks dismissal on the entire proceedings including cross claims that have been filed for want of prosecution.

6. There is no contest on the cited sources of the NoM. I will proceed on that basis.

EVIDENCE

7. The plaintiff raises objections to the use of evidence by the applicant in relation to the application. It submits that no proper notice or warning is given as required under the rules thus the evidence is not properly before the Court for consideration or that it is disadvantaged because of such want of notice, thus the NoM should therefore be struck out on that basis.

8. I note the submissions from the parties.

9. The applicant has filed an affidavit of service, that is, sworn by Rocky Madi on 29 November 2021. The applicant, based on this evidence, refers to the affidavit of Ethal Heagi as the only supportive affidavit to the NoM. Ms Heagi’s affidavit, I note, does not indicate or attach evidence of notice being given to the other parties including the plaintiff of other evidence that the applicant will or intends to use at the hearing. Use of affidavits, whether it be in interlocutory or proper trial hearings, are governed by the Evidence Act Chapter No. 48 (Evidence Act). Section 35(1) states:

(1) Where a party to or a person interested in any legal proceedings before a tribunal to which this division applies desires to use in the proceedings an affidavit by a witness concerning particular facts as to which no order under section 34 has been made he may, not less than five clear days before the hearing, give notice, accompanied by a copy of the affidavit, to the party or person (if any) against whom it is to be used that he desires to do so.

10. Section 35 applies generally and to the use of affidavits at trials. In regard to notice of motion in civil proceedings, the rules require parties to give 3 or more clear days-notice to the other side before a hearing, and that includes filing and serving of affidavits in support. Order 4, Rule 42 and 49(11)(1) and 11(2) of the NCR reads in part:

42. Time for service of notice. (19/3)

Where notice of a motion is required to be served, it shall, unless the Court otherwise orders, be served not less than three days before the date named in the notice for hearing the motion.

......

11. Filing and Service of Motions.

(1) Motions must be served as soon as practicable on or after the day they are filed. Counsel must ensure that the motion is not listed, if he or she has not complied with the three (3) clear days of service. If the motion is listed, and the three (3) days service rule has not been complied with, the court will adjourn the motion.

......

12. Supporting affidavits.

(1) All affidavits in support of the Motion must be filed on the date of filing the Motion;

11. The key issue, based on the abjection, is notice. The applicant did not give notice of its intention to use other evidence other than the one that it has filed together with the NoM. I therefore uphold the plaintiff’s argument and in so doing, disallow the applicant to rely on additional affidavits where no notice has been given to the plaintiff for their use. The requirement to give notice to rely on a particular evidence importantly regards or upholds the fundamental requirement to observe fairness in hearings; to allow a party the right to be heard or respond in the matter, and I would refer to s 59 of the Constitution without further elaboration.

12. However, I note that Ms Heagi’s affidavit is properly before me thus the NoM shall proceed with that evidence.

ISSUES

13. The main issues, in my view, are as follows, (i), whether there was delay, (ii), if so, whether the delay was inordinate, (iii), whether there were reasonable explanations provided for the delay, and (iv), whether the Court should exercise its discretion and dismiss the proceeding.

LAW

14. I note that my power on whether I should summarily dismiss this matter is discretionary.

15. The case law on point include Ronald Nicholas v Commonwealth New Guinea Timbers Pty Ltd (1986) PNGLR 133, Seravo v Bahafo (2001) N2078, John Niale v Sepik Coffee Producers Limited & Ors (2004) N2647. The considerations for dismissal of a matter based on want of prosecution are various, including the following:

(i) The Plaintiff’s default is intentional or that it permits inordinate or inexcusable delay in prosecution of the claim [Ronald Nicholas v Commonwealth New Guinea Timbers Pty Ltd (supra)];

(ii) There is no reasonable explanation(s) provided for the delay [Ronald Nicholas v Commonwealth New Guinea Timbers Pty Ltd (supra)];

(iii) The delay has caused injustice or prejudice to the defendant [Ronald Nicholas v Commonwealth New Guinea Timbers Pty Ltd (supra)];

(iv) The Court should specifically look at the conduct of the parties and their lawyers [John Niale v Sepik Coffee Producers Limited & Ors (supra)];

(v) Dispensation or interest of justice consideration, [Ronald Nicholas v Commonwealth New Guinea Timbers Pty Ltd (supra) and John Niale v Sepik Coffee Producers Limited & Ors (supra)];

(vi) Failure to comply with court orders or directions (Order 10 Rule 9A(15)(2)(c) of the National Court Rules).

DELAY

16. In regard to the first issue, delay, I find that there was delay.

17. I also note the plaintiff and the first defendants’ query on delay which is this, that to assess the issue, whether the Court should consider delay premised only on the period that existed after the dismissal of the applicant’s earlier notice of motion to dismiss, or whether it should extend prior to that. The applicant’s earlier application for dismissal was refused on 28 January 2021 in IPBC ats MVIL.

18. To observe fairness, I propose to assess delay herein after 28 January 2021.

19. However, the relevant delay period is still arguable or discretionary, that is, (i), whether it should commence immediately on 28 January 2021, or (ii), whether it should commence on 4 March 2021, which was the date when the plaintiff’s notice of motion for leave to set the matter down for trial was filed (leave application), or (iii), whether it should commence on the date when the plaintiff’s notice of motion for leave to set the matter down for trial was withdrawn with leave of the Court on 5 November 2021.

20. That said, there was some delay in the matter, and premised on the first 2 scenarios above, it would be in the range of 7 to 9 months.

REASONS

21. The plaintiff gives its reasons in its evidence, that is, affidavit of Ranga Sawong filed on 9 December 2021. The evidence may be summarized as follows: The plaintiff’s leave application had returned on 7 May 2021, 25 June 2021, 12 July 2021, 23 August 2021, 24 September 2021, and 5 November 2021 before it was withdrawn together with a similar application by the first defendant.

22. These facts are on record and not disputed.

23. I also note that during the above period, the parties had also been attending to discovery matters. On 25 June 2021, I issued variation orders in regard to earlier orders of discovery that I had made on 7 May 2021. Again, these facts are on record and are not disputed.

24. In my view, there appears to be reasonable explanations provided by the plaintiff for the delay. I also note that there have been activities on the matter after March of 2021. This is not a case where nothing has occurred or that the matter had not progressed at all since January of 2021.

INTENTIONAL OR INORDINATE DELAY?

25. The pressing question then is this, whether there was intentional or inordinate delay. It may be difficult to establish intentional delay. But that said, the conduct of the parties may be looked at to see and determine whether there was such an intention, and if not or otherwise, whether there was inordinate delay.

26. I make these observations. Since the dismissal of the applicant’s earlier application to dismiss, the plaintiff terminated its lawyers and engaged a new law firm. It then terminated the new law firm and has engaged its current law firm. The first defendant has also done the same in terms of replacing its lawyers. The applicant submits that the Court should take that into account against these parties when making its assessment on whether to dismiss the proceeding. I observe generally that a party has a right to choose which lawyer or firm it prefers should act for it, him or her. That is a fundamental right that a party has in proceedings whether it be before the National or the Supreme Court, or whether it be before any court or tribunal for that matter (see ss 42(2)(b) and 59 of the Constitution). I therefore cannot see how that in itself can be a valid reason to dismiss a case.

27. The second factor I note is this. At the time of withdrawal of the plaintiff and the first defendant’s leave applications, it was made known in Court that the way forward would be to allow time to the plaintiff and the first defendant to review the claim or reconsider their approaches in the matter. It was also revealed by the plaintiff and the first defendant that the way forward may be to conduct split hearings, the first would be in relation to the plaintiff’s claim or the primary claim, and the second may be in regard to the crossclaim that is filed by the first defendant. These information were made known to the parties before the NoM was filed.

28. The third factor I note or take into account is this. The applicant submits that the first defendant has now filed a notice of motion to refer the matter to mediation. The said fact is not denied. The said application was filed on 1 December 2021. The first defendant’s intention is to (i), refer the matter to mediation, and if that fails, (ii), for the matter to be conducted as split trials or hearings. Whether that would be the proper way forward, it is yet to be determined, that is, in the event that I refuse to exercise my discretion and dismiss the NoM.

29. The fourth factor I note is this. The NoM herein is primarily made against the plaintiff. And I note that there are crossclaims filed and I refer in particular to the separate crossclaims that are filed by the first and second defendants. I note that the plaintiff is a cross-defendant to one of the crossclaims. Will these parties be prejudiced if I exercise my discretion? Or whether interest of justice requires that the claims be heard together so that all the issues are properly addressed by the Court. And whether cost would be an appropriate remedy that may be imposed under the circumstances? These are the questions that I shall take into account.

30. The fifth and final factor I take into account is this. I give due regard to my earlier decision in IPBC ats MVIL. In refusing the applicant’s application, I stated, amongst others, the following which I also adopt herein as relevant considerations:

18. When I weigh all these, I will say this. There is a significant delay in this matter in that 10 years have lapsed and the matter is still pending a hearing date. This fact is evident by looking at the history of the matter and does not require proof. That said, I now turn to the reasons for the delay. The main causes of the delay, as stated, have arisen by parties exercising their rights to raise various challenges or seek various relief by way of interlocutory processes. Various appeals have arisen as a result and which have all been dealt with by the parties. At this juncture, it seems that the matter will now progress to trial. In my view, I do not find that the delays have been unreasonably or unfairly caused by the plaintiff. This is quite a complex matter with additional parties who have filed cross-claims. I cannot see how I can simply dismiss the matter in the manner as proposed by the applicant. Pleadings show that the applicant may not be a party that had direct participation in the matter or the contractual arrangements. But it shows that the applicant appeared to have provided funds which had been used by the 2^nd defendant to facilitate the transactions which are now the subject of the disputes that are before this Court. This is not the time to decide the merits and extent of the liabilities (if any) of the applicant, which obviously should be left to the trial proper.

19. I am therefore not persuaded that this is a matter that should be summarily dismissed, or that the proceedings should be dismissed without proper considerations. The other reason why I am disinclined to dismiss the matter is this. The transaction involves monies that exceeds K100 million. As such, it should in my view be properly trialed and parties should be required to prove or disprove their claims. The next reason is this. The 2^nd defendant has filed a cross-claim against the plaintiff and the second cross defendants namely, Benjamin Terrence O’Dwyer, Terrance James O’Dwyer and Blackwell Lombard Capital Pty Ltd. It is quite difficult therefore to dismiss the proceedings generally in the manner as proposed by the applicant. I note that no detailed or proper submission was made by the applicant in that regard. And again, given the complexity of the matter, it is, in my view, fair and just that all the issue, claims and cross-claims, should be heard on their merits rather than in a summary fashion.

SUMMARY

31. When I weigh all these up, I am not minded to grant the applicant’s NoM. I find the reasons not to dismiss the proceeding to outweigh the reasons that I should.

32. But having said that, let me send out this stern warning to the plaintiff and the first defendant, that if there are further delays in progressing this matter to trial, I will not hesitate to summarily dismiss the entire proceedings including the crossclaims. I note that I have this power under Order 10 Rule 9A (15)(1)(b) & (2) of the NCR, or under my inherent jurisdiction. Just because a Court considers that a matter may be meritorious, complex or involves a substantial amount of money, is ‘no ticket’, so to speak, to continue to delay or prolong the final hearing of the matter.

COST

33. A cost order remains discretionary. In this case, I will order each party to bear their own cost.

ORDERS OF THE COURT

34. I make the following orders:

1. The third defendant’s Notice of Motion filed on 5 November 2021 is refused.
   
2. The parties to pay their own cost of the application.
   
3. The matter shall return at 9:30am on Friday 2 December 2022 for mention or hearing of outstanding applications that have been filed by the parties. If parties are ready to move their applications on that day, then due notices must be given to the other parties and evidence of that filed in that regard. If parties will not be ready by then, all parties shall nevertheless appear to assist the Court progress the matter forward.
   
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.
________________________________________________________________
Goodwin, Bidar Nutley: Lawyers for the Plaintiff
Bradshaw Lawyers: Lawyers for the First Defendant
Leahy, Lewin, Lowing and Sullivan: Lawyers for the Second Defendant
Ashurst PNG: Lawyers for the Third Defendant