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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS No. 290 OF 2020
BETWEEN:
DAVID AU DIGAL
Plaintiff
AND:
KAURE INVESTMENTS LIMITED
First Defendant
AND:
NATIONAL HOUSING CORPORATION
Second Defendant
AND:
JV INTER LIMITED
Third Defendant
Goroka: Mugugia, AJ
2022: 17th March
PRACTICE AND PROCEDURE – motion to remove party - Order 5, Rule 9 of the National Court Rules - whether party is a proper party – whether party is a necessary party - consideration of pleadings in the statement of claim and relief sought - allegations made against applicant in pleadings – relief sought against applicant – applicant is a proper and necessary party - applicant’s presence in the proceedings is necessary to determine the issues in dispute between the parties - motion refused.
Cases Cited:
Pundia v. Kiwai (2011) N4427
Erave v. Homosi, (2020) SC2121
Counsel:
A. Kuria, for the Plaintiff
E. Minok, for the First Defendant
N. Amoiha, for the Third Defendant
No appearance, for the Second Defendant
RULING
17th March, 2022
1. MUGUGIA, AJ: I heard the First Defendant’s motion filed on 7 February 2022. The First Defendant’s lawyer Mr. Minok made his client’s application, seeking an order pursuant to Order 5, Rule 9 of the National Court Rules to have his client removed as a party to the proceedings. Mr. Minok had erroneously stated the wrong jurisdictional basis in the motion. This, he submitted was a typographical error. The other parties’ lawyers took no issue with this. I granted Mr Minok leave to rely on Order 5, Rule 9 to make his client’s application. The supporting affidavit was the Affidavit in Support of Epeo Minok filed on 7 February 2022. There was no strong opposition to this motion by the other parties’ lawyers.
BACKGROUND
2. The Plaintiff’s claim in these proceedings relates to fraud. He claims that he is the proprietor of Section 7 Allotment 3, Goroka, Eastern Highlands Province. He made an application to the Second Defendant (NHC) to acquire the adjacent property described as Section 7 Allotment 4. The NHC offered to sell the property to the Plaintiff at K12,000.00. This offer was made to the Plaintiff in a letter dated 12 December 2000. The Plaintiff was required to make a 10% deposit. NHC delayed in preparing and forwarding a draft contract for sale to the Plaintiff. The property was transferred to the First Defendant on 6 August 2012.
3. The Plaintiff had filed a previous National Court proceedings referenced as WS No. 640 of 2016, David Au Digal v. Kaure Investments Limited and National Housing Corporation. This was a claim for breach of contract and fraud against the First and Second Defendants. While this proceeding was on foot, the First Defendant sold and transferred the property to the Third Defendant. The transfer was registered on 16 March 2017. The National Court handed down its decision on 26 November 2018.
ISSUE
4. The issue before me for determination is, “whether this Court should make an order to remove the First Defendant from these proceedings?”
THE LAW
5. Order 5, Rule 9 states:
"9. Removal of parties.
Where a party –
(a) has been improperly or unnecessarily joined; or
(b) has ceased to be a proper or necessary party,
the Court, on application by any party or of its own motion, may, on terms, order that he cease to be a party and make orders for the further conduct of the proceedings."
6. In the case of Pundia v. Kiwai (2011) N4427, Makail J dealt with applications by the third and fifth defendants to be removed as defendants from the proceeding. For the third
defendant, His Honour held that:
“The third defendant was a proper party to the proceeding as the pleadings in the statement of claim alleged that the first
defendant colluded with him to remove the plaintiffs as shareholders of the second defendant and/or was negligent in the discharge
of his duty when he accepted the first defendant's application for change of shareholders and removed the plaintiffs as shareholders
of the second defendant. The third defendant's application for removal as a party was accordingly refused.”
7. His Honour had considered the pleadings in the plaintiff’s statement of claim.
8. In Erave v. Homosi, (2020) SC2121, the Supreme Court stated at paragraph 29 as follows:
“29. A “necessary party” is one whose presence in the suit is indispensable to the very existence of the suit and against whom no order can be passed. A “proper party” on the other hand, is one in whose absence an effective order can be passed, but whose presence is necessary for a complete and final decision on the question involved in the suit.”
SUBMISSIONS FOR THE FIRST DEFENDANT (APPLICANT)
9. Mr Minok submitted that his client was a party to a previous proceeding refereed as WS No. 640 of 2016, David Au Digal v. Kaure Investments Limited and National Housing Corporation which involved fraud against his client. His client should be removed from this proceeding for three reasons. Firstly, the First Defendant has satisfied the judgment in WS No. 640 of 2016. He referred the Court to Annexure “A” in the supporting affidavit which was the Court Order of 26 November 2018. Secondly, the issue of fraud against the First Defendant was dealt with in WS No. 640 of 2016. The Goroka National Court had dealt with the issue of fraud and found the First and Second Defendants not liable. Thirdly, the First Defendant was wrongly named in this proceedings.
CONSIDERATION
10. During submissions, I asked Mr Minok if there was any evidence of the writ of summons filed in WS No. 640 of 2016. Mr Minok submitted that there was none annexed to the supporting affidavit. Only the Court order of 26 November 2018 was in evidence. There was no evidence of the decision made on 26 November 2018 before me. This was not helpful at all because I was unable to confirm the cause of action in the previous proceeding, and the relief sought, to confirm the truth in Mr Minok’s assertion that the issue of fraud against his client was dealt with by the National Court, and his client and the Second Defendant were found not liable.
11. I ask myself these two questions:
(i) Is the First Defendant a proper party in the current proceedings?
(ii) Is the First Defendant a necessary party in the current proceedings?
12. I answer both questions in the affirmative. I set out my reasons below.
13. In the current proceedings, the Plaintiff raised allegations against the First Defendant in his statement of claim endorsed to the writ of summons filed on 20 May 2020. The Plaintiff sought relief against the First Defendant in his Prayer for Relief in the statement of claim.
14. The First Defendant filed its defence to the claim on 19 October 2020. It pleaded the defence of res judicata in its defence. The Plaintiff’s Reply to this defence filed on 5 November 2020 raised allegations against the First Defendant.
15. I find that the First Defendant is a proper party because the pleadings in the statement of claim raised allegations against it.
16. Since the First Defendant has filed a defence, triable issues have arisen. I am of the view that the First Defendant’s involvement in this proceedings will assist the Court to determine the issues in dispute between all the parties at the trial of this matter. The First Defendant is therefore both a proper and necessary party, and should not be removed as a defendant from the proceedings. For these reasons, I will refuse the First Defendant’s motion.
COURT ORDERS
17. I make the following orders:
1. The First Defendant’s motion filed on 7 February 2022 is refused.
2. I make no order as to costs.
3. Time is abridged.
The Court orders accordingly.
________________________________________________________________
A. Kuria: Lawyer for the Plaintiff
E. Minok: Lawyer for the First Defendant
N. Amoiha: Lawyer for the Third Defendant
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