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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 1252 OF 2010 (COMMS)
INDEPENDENT PUBLIC BUSINESS CORPORATION
OF PAPUA NEW GUINEA
Plaintiff/First Cross Defendant to First Cross Claim
V
MOTOR VEHICLE INSURANCE LIMITED
First Defendant/Second Cross Defendant to
First Cross Claim/Second Cross Claimant
AND
NOMINEE NIUGINI LIMITED
Second Defendant/First Cross-Claimant/First Defendant to
Second-Cross Claim
AND
NATIONAL SUPERANNUATION FUND LIMITED
Third Defendant
AND
BENJAMIN TERENCE O’DWYER, TERENCE JAMES O’DWYER
AND BLACKWELL LOMBARD CAPITAL PTY LTD
Second Cross-Defendants to Second Cross-Claim
AND
DR. JOHN MUA
Third Cross-Defendant to Second Cross-Claim
AND
BENARD FONG
Fourth Cross-Defendant to Second Cross-Claim
Waigani: Anis J
2023: 9th & 14th June
NOTICE OF MOTION – Order 10 Rule 21 of the National Court Rules – request for split trials on various issues – whether circumstances warrant such orders – whether plaintiff has demonstrated sufficient or exceptional circumstances – Order 5 Rule 10(2) – National Court Rules and s. 6 of the Kumul Consolidated Holdings Act 2002 – change of name of the plaintiff – not pursued – ruling
Cases Cited:
Papua New Guinean Cases
IPBC v. MVIL and Ors (2021) N8718
Timothy Lim Kok Chuan v. Simon Goh Say Beng (2004) N2753
Overseas Cases:
Victoria in Dunstan -v- Simmie & Co. Pty Ltd [1978] VicRp 62; [1978] V.R 669
Emma Silver Mining Company v Grant [1879] UKLawRpCh 75; (1878) 11 Ch D 918
Evereth v Ribbands [1952] 2 QB 198
Counsel:
Mr. B. Nutley, for the Plaintiff
Mr W Mininga, for the First Defendant
Mr. J. Liskia, for the Second Defendant
Mr. J. Brooks, for the Third Defendant
RULING
14th June, 2023
1. ANIS J: I heard the plaintiff’s Notice of Motion filed 1 June 2023 (NoM) on 9 June 2023. It was contested by the second and third defendants. I reserved my ruling to today at 1:30pm.
2. This is my ruling.
MOTION
3. The NoM seeks the following relief:
“1. Pursuant to Order 10 Rule 21 of the National Court Rules, there shall be a split trial to determine the issues in the proceedings in the following manner:
Trial One
1.1 The issue of legality of the Equity Monetarization Contract (EMC) and the Legal Mortgage of Shares and security documents in the EMC be determined be determined (sic) first.
1.2 The issue of remedies available to the parties in the event that the transactions under the EMC and the Legal Mortgage of Share are declared illegal, void and of no effect.
Trial Three (as required)
1.3 The issues in the Cross-Claims filed by the Defendants be determined.
Trial Four (as required)
1.4 Finally, the issue of quantum of damages to be determined.
......”
BACKGROUND
4. I have briefly summarised the background of the matter in my earlier decision in IPBC v. MVIL and Ors (2021) N8718. They are captured at paras 4 and 5 as follows:
“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 NNL, 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 1st defendant. I will refer to them later below.”
ISSUES
5. I note that at the hearing, the plaintiff decided that it would not pursue or press on with the second relief re change of name. Counsel submitted that the plaintiff’s intention to seek relief 2 was in reaction to one of the pleadings in the third defendant’s defence where the third defendant took issue with the plaintiff’s name. But counsel submitted that that was something that would be addressed at the hearing.
6. This then leaves me with the only issue which is whether I should order split trials for this matter.
SPLIT TRIALS
7. Order 10 Rule 21 states:
“21. Order for decision. (31/2)
The Court may make orders for—
(a) the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings; and
(b) the statement of a case and the question for decision.”
8. The Court’s power herein is discretionary. But let me turn to the case authorities for guidance. Justice Gavara-Nanu J, in Timothy Lim Kok Chuan v. Simon Goh Say Beng (2004) N2753, stated:
Order 10 r 21 is a facility which provides the extreme course, which if invoked would dispose of the proceedings entirely. Therefore every care must be taken in deciding whether it should be invoked at all, in a particular case. In my view, it should be used or applied sparingly and only in clear and exceptional cases and where any or all of the four instances or conditions stated above which allow for granting of leave are fully satisfied. In such cases, the court has an unfettered and inherent discretion which must be exercised in favour of granting leave. See, Everett -v- Ribbands and Another [1952] 1 K.B 112. See also Carl Zeiss Stiftung -v- Herbert Smith & Co. and Others [1969] 1 Ch. 93.
Whilst the court must use its discretion with caution in invoking Order 10 r 21, the court must also be ready to use the facility where it is just and convenient and for the purposes of speedy and effective disposition of a case. Only then would the benefit provided by the facility can be fully realized by the litigants and the courts.
9. His Honour also referred to the case Victoria in Dunstan -v- Simmie & Co. Pty Ltd [1978] VicRp 62; [1978] V.R 669 where he stated:
In making these observations, I find support in the observations made by the Supreme Court of Victoria in Dunstan -v- Simmie & Co. Pty Ltd [1978] VicRp 62; [1978] V.R 669. At 671, the court said:
“...Nevertheless it remains true that it is a power to be exercised with great caution.
...Nevertheless, although every case must depend upon its own facts, it will as a general rule only be appropriate to order that a preliminary issue be isolated for determination before trial where the determination of the issue in favour of the plaintiff or the defendant will put an end to the action, or where there is a clear line of demarcation between issues and the determination of one issue in isolation from the other issues in the case is likely to save inconvenience and expense.
...The question or issue to be isolated must of course, appear clearly from pleadings and this means that, before an order is made, the parties must take special care to ensure that all aspects of the matter are raised.”
10. And finally, I refer to this case, Emma Silver Mining Company v Grant [1879] UKLawRpCh 75; (1878) 11 Ch D 918 (with Evereth v Ribbands [1952] 2 QB 198) which was cited by the third defendant in its submission, which is also relevant in my view, where Jessel MR stated:
“where a plaintiff has chosen to frame a case his case in this way, and has chosen to join several Defendants, because they are more or less connected with some part of the subject matter of the action, although not connected with the whole of it, that is the mode in which he has elected to frame his case for his own convenience, and it does not then at all follow as a matter of course that he is at liberty to retire from it as to any portion of the case and say I should like to try one part of it only, and to leave the Defendant afterwards to be subject to a second or third trial to try the rest of it. I think the Defendant has, generally speaking, a right to answer, You ought to have thought of this before you brought your action or put in your statement of claim; If you wanted any part of the action to be tried separately you should have brought a separate action”
EVIDENCE
11. The plaintiff relies in support of its NoM the affidavit of Erastus Kamburi filed 1 June 2023. I have considered the said evidence.
CONSIDERATION
12. I also note the submissions of the parties.
13. In my view, the primary consideration in regard the first proposed triable issues as identified by the plaintiff, that is, The issue of legality of the Equity Monetarization Contract (EMC) and the Legal Mortgage of Shares and security documents in the EMC......”, is whether determining them will fully resolve the other claims or cross-claims that are pleaded herein.
14. I will get straight to my decision. In summary, I intend to uphold the submissions of the third defendant on this particular issue. I note, as submitted to by the third defendant, that the proposed first hearing may not necessarily be a simple question of law only. I note that the issue may constitute a series of questions based on fact and law, and perhaps also, that crucial facts for consideration may require or involve certain Cross-Defendants in the proceeding. I note that there are at least 3 documents that are captured under the first proposed issues for trial. This therefore may not necessarily mean that there will be one or a single question that the Court will be asked to consider. If I am wrong in that regard then I must say that I do not have all the information which should have come from the plaintiff to assist me in that regard.
15. I also note that there are various defences, crossclaims and cross-defences filed in the matter. When I consider Mr Kamburi’s evidence, I am not satisfied that the evidence sufficiently addresses the point that everything falls on the first proposed triable issues. With respect, no clarity is provided in respect of each defence, or crossclaim, or cross-defence, and of how the proposed issues would sufficiently answer them. I also take into account the fact that not all the parties agree that the first proposed trial will resolve the matter or substantially resolve all the meritorious issues that are pending.
16. I must say that I was not convinced when counsel for the plaintiff argued that conducting split trials will save the Court more time. With respect, and for the reasons as I had alluded to counsel, that may not very well be the case. What is certain, if the Court is minded to proceed in this fashion (as proposed in the plaintiff’s NoM) is the real risk of protracted hearings including multiple appeals. The history of this case also shows appeals as a major contributing factor to the delays and of this matter reaching a finality.
17. The matter is now 13 years old which is quite a substantial delay. As such, I am not minded to make orders if there are real risks of further delays in regard to the final determination of the matter. To do so otherwise or without regard to the circumstances of this case, may constitute exercising discretion against the interest of justice.
SUMMARY
18. I am therefore not inclined to exercise my discretion in regard to the NoM. I refuse to make the orders sought therein.
COST
19. An order for cost is discretionary. In this case, I am minded to order cost to follow the event, that is, on a party/party basis to be taxed if not agreed.
ORDERS OF THE COURT:
20. I make the following orders:
The Court orders accordingly
________________________________________________________________
Goodwin Bidar Nutley: Lawyers for the Plaintiff
Bradshaw: Lawyers for the First Defendant
Geroro: Lawyers for the Second Defendant
Ashurst: Lawyers for the third Defendant
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