JKT Lim Ltd v Moua [2024] PGNC 12; N10655 (2 February 2024)

N10655

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 323 OF 2023

BETWEEN
JKT LIM LIMITED
Plaintiff

AND:
SAMSON BAL MOUA
First Defendant

AND:
JAY L W CONTRACTORS LIMITED
Second Defendant

AND:
HARIET KOKIVA in her capacity as the REGISTRAR OF COMPANIES
Third Defendant

Lae: Dowa J
2023: 8^th September
2024: 2^nd February

PRACTICE AND PROCEDURE- application for dismissal of proceedings for abuse of process - Order 12 Rule 40 of the National Court Rules-issues raised in the pleadings were determined in earlier proceedings-principles of res judicata applied - clear case for summary dismissal-application granted-proceedings dismissed.

Cases Cited:
Mt Hagen Urban LLG v Sek No.15 (2009) SC1007
Philip Takori v Simon Vagari (2008) SC905
Telikom PNG v ICCC & Digicel (PNG) Ltd (2008) SC906
Kerry Lerro v Philip Stagg (2006) N3050
PNG Forest Products vs. State [1992] PNGLR 85
Ronny Wabia vs. BP Exploration Co. Ltd [1998] PNGLR 8
Wabia vs. BP Petroleum (2019)) N4337
National Provident Fund vs. Maladina & Others (2003) N2486
Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310
Titi Christian v Rabbie Namaliu (1996) SC1583
National Airline Commission v Lysenko [1990] PNGLR 266
AGC (Pacific) Ltd v Sir Albert Kipalan (2000) N1944
Kundu Consultants Ltd v The State (2001) N2128

Counsel:
No appearance, for Plaintiff
S B Moua, for first Defendant in person

DECISION

2^nd February 2024

1. DOWA J: This is a ruling on the first Defendants Notice of Motion to dismiss the proceedings under Order 12 Rule 40(1) of the National Court Rules.

Facts

2. The Plaintiff is a company operating in Lae, Morobe Province. It alleges, it has substantial interest in a property described as Allotment 6 Section 258, Lae. The Plaintiff owns the adjoining property, Allotment 5 Section 158, Lae.

3. Allotments 5 was sold to the Plaintiff. Around 2011, Mr Moua who held himself out as owner of Allotment 6 agreed to sell the property to the Plaintiff for K1.2 million. Prior to completing the agreement, it was discovered that the property was not registered in the name of Mr Moua. Mr Moua however assured the Plaintiff that he would secure the title and eventually transfer the property to the Plaintiff. Mr Moua then allowed the Plaintiff to move onto the property where the Plaintiff is alleged to have done substantial improvement on the land to the value of K2 million. The Plaintiff also alleges it paid K320,000 to Mr Moua for his services.

4. At all material times, the property, Allotment 6 was a vacant land. It was issued a title in the name of Pioneer Development Corporation Ltd. Pioneer Development Corporation Ltd was deregistered in 1995. The Plaintiff alleges, due to an irregular and questionable amalgamation deal, Pioneer Development Corporation Ltd.’s name was replaced by Bernika Enterprises Limited on the title to the property. The title was then transferred by Bernika Enterprises Ltd to JAY LW Contractors Ltd, the second Defendant.

5. Mr Samson Moua who had interest in the property challenged the transfer between Bernika Enterprises Ltd and JAY LW Contractors Ltd in the National Court in proceedings, WS No. 534 of 2013- Samson Bal Moua -v- Bernika enterprises Ltd. On 8^th April 2019, the Court ordered by consent of the parties that the transfer be nullified, and the title and ownership of the property was vested in the Registrar of Companies, the third Defendant.

6. The Registrar of Companies then offered to sell the property to Samson Moua at K40,000.00 who did not take up the offer. The property was then sold to JAY LW Contractors Limited for K400,000.00.

7. The Plaintiff alleges, neither Samson Moua nor the Registrar of Companies, brought it to the attention of the Plaintiff of the offer for the sale of the property. The Plaintiff had been in occupation of the property and had substantial improvement done to the property since 2009. The Plaintiff alleges it was not given an opportunity to bid for the property.

8. Aggrieved by the decision and actions of the Defendants, the Plaintiff appealed the decision of the third Defendant under section 408 of the Companies Act, in proceedings- CIA No 5 of 20022-JKT LIMITED v HARIET KOKIVA, as Acting Registrar of Companies, JAY LW CONTRACTORS LIMITED AND SAMSON MOUA. During hearing this application, the Court was advised by the first Defendant that the Appeal CIA No 5 of 2022 was dismissed on 11^th August 2023. The Court was handed up a copy of the written judgment of his Honour Dingake J.

Motion For Dismissal

9. I now turn to the first Defendant’s application. By Notice of Motion, the first Defendant applies for the dismissal of the proceedings under Order 12 Rules 1 and 40 of the National Court Rules for:

a. lack of standing (locus standi).

b. proceedings disclosing no reasonable cause of action.

c. proceedings are frivolous and vexatious.

d. proceedings are an abuse of the process.

e. proceedings tend to cause prejudice, and embarrassment.

Evidentiary basis of the first Defendant’s application

10. The first Defendant’s application for the dismissal of proceedings is for frivolity and abuse of process. He submits that the current proceedings are a duplication of the proceedings in CIA of 2022 which has been dealt with and is an abuse of the process.
    
11. It is necessary to set out the evidentiary matters relied on by the first Defendant. The first Defendant, Samson Bal Moua, relies on his Affidavit sworn and filed 29^th June 2023 in support of the application. He also relies on two other affidavits he filed in previous related proceedings in WS No 534 of 2021 -Jay LW Contractor Ltd v Samson Bal Moua & others and CIA No 5 of 2022- In the matter of the Companies Act Between JKT Lim Limited v Registrar of Companies, Jay LW Contractors & Samson Bal Mua.
    
12. This is the summary of Mr. Moua’s evidence. He deposes he has an equitable interest in the property, Allotment 6 Section 158 Lae, Morobe Province. The property is a vacant land. The land is adjacent to his property, Allotment 5. He moved into the property early 2000 with the permission of the Lands Division of the Morobe Provincial Administration. He started developing the property. He was then liaising with the Lands Division for the consolidation of the lease with Allotment 5. For him to be granted a consolidated title, the state lease for Allotment 6 must be surrendered. While working on the consolidation of the leases, he learnt that the property was sold by one Bernika Enterprises Ltd to the second Defendant, JAY LW Contractors Limited.
    
13. He made enquiries with Lands Department and learnt that the original lease was granted to Pioner Development Corporation Limited, which was a deregistered company. Under suspicious amalgamation process, Pioner Development Corporation Ltd.’s name was replaced by Bernika Enterprises Ltd as owner of the property which subsequently sold the property to Jay LW Contractors Limited. Alleging foul play in the transfer initiated by Bernika Enterprises Ltd, Mr. Moua, instituted proceedings in WS No. 534 0f 2013- Samson Bal Moua v Bernika Enterprises Limited & Jay LW Contractors & other, seeking orders to nullify the transfer. On 8^th April 2019, the parties reached agreement and signed a consent order. Under the terms of the consent order, the transfer between Bernika Enterprises Ltd and JAY LW Contractors Ltd was nullified, and the subject property was vested with the Registrar of Companies.
    
14. On 31^st August 2020 the Registrar of Companies sold the property to the second Defendant after the first Defendant was given the right of refusal to buy the property. Aggrieved by the decision of the Registrar of Companies and the conduct of the first Defendant, the Plaintiff appealed the decision of the Registrar of Companies in the proceedings CIA No 5 of 2022. The statement of claim and the reliefs sought in CIA No 5 of 2022 are in identical terms to that of the current proceedings.
    
15. The proceedings in CIA No 5 of 2022 was heard by his Honour Dingake J and delivered his decision on 11^th August 2023, dismissing the proceedings.
    
16. Prior to the filing of the CIA No 5, the Plaintiff filed a crossclaim in proceedings WS No 534 of 2021 instituted by the second Defendant between the same parties. The Plaintiff discontinued the crossclaim on 6^th May 2022.
    
17. The first Defendant deposes that the current proceedings be dismissed because the issues raised in the proceedings between the parties is a duplication of the proceedings in CIA No 5 of 2022 which has been dealt with and concluded.
    

Plaintiffs’ Claim

18. The Plaintiff’s lawyers made no appearance in Court to respond to the first Defendant’s application even though he was served with the notice of the application. Despite the non-attendance by the Plaintiff, I will refer to the pleadings against each of the parties to ascertain whether the first Defendants application is sustained.
    
19. The Plaintiff’s claim is succinctly set out in paragraphs 2 to 8 above and there is no need to repeat same.
    

Issues

20. The main issue for consideration is whether the proceedings be dismissed for frivolity and abuse of the process under Order 12 Rules 1 and 40 (1) of the NCR.
    

The law under Order 12 Rule 40 of the NCR.

21. The application for dismissal is made under Order 12 Rule 40 (1) of the National Court Rules. It reads:

” 40. Frivolity, etc. (13/5)

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings;

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”

22. The law on applications under Order 12 Rule (40) of the National Court Rules is settled in this jurisdiction in cases such as Mt Hagen Urban LLG v Sek No.15(2009) SC1007, Philip Takori v Simon Yagari (2008) SC905, Telikom PNG v ICCC & Digicel (PNG) Ltd (2008) SC906 and Kerry Lerro v Philip Stagg (2006) N3050.
    

23. Order 12, Rule 40 of the NCRs is constructed and defined by the Supreme Court (per Takori v Yagari) in following terms:

1. A claim may be disclosing no reasonable cause of action if the facts pleaded does not clearly show all necessary facts and legal elements to establish a claim known to law.
   
2. A claim maybe frivolous if it can be shown that it is obviously untenable that it cannot possibly succeed or is bound to fail it if proceeds to trial.
   

100. Proceedings are vexatious where the case is a sham, amounting to harassment of the opposing party, or where the opposing party is put to unnecessary trouble and expense of defending the case.
     

24. And I will add that proceedings are an abuse of the process where there is misuse or unjustified or unreasonable use of the legal system, proceedings, or process to further a cause of action which may be wrongful, unmeritorious or for an improper purpose.
    
25. The Court cannot readily dismiss a case on poor pleading or for lack of disclosing a reasonable cause of action or for abuse of process unless it is shown that the case is clearly frivolous or vexatious or an abuse of the process and that it is unlikely to succeed even it proceeds to trial. Refer: PNG Forest Products vs. State (1992) PNGLR 84–85, Ronny Wabia vs. BP Exploration Co. Ltd (1998) PNGLR 8, Wabia vs. BP Petroleum (2019)) N4337, Mt. Hagen Urban LLG vs. Sek No. 15 (2009) SC1007, National Provident Fund vs. Maladina & Others (2003) N2486; and Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310.
    
26. The arguments raised by the first Defendant is commonly known as res judicata. It means a matter that has been adjudicated by a competent Court and therefore may not be pursued further by the same parties.
    
27. The law and principles on the doctrine of res judicata are set out by the common law. They are adopted and applied in the cases; Titi Christian v Rabbie Namaliu (1996) SC1583, National Airline Commission v Lysenko [1990] PNGLR 266; AGC (Pacific) Ltd v Sir Albert Kipalan (2000) N1944, Kundu Consultants Ltd v The State (2001) N2128 and Telikom PNG Ltd v ICCC (2008) SC906.
    
28. The basic principles emerge from these cases are that, for the defence of res judicata to succeed, a party relying on the doctrine must show:
    

i. The parties in both cases are the same.

ii. The issues(s) in both cases are the same.

iii. The previous judgment extinguished the foundation of the claim or the right to set up the action. The result is final and conclusive, and it binds every other Court.

iv. A Court of competent jurisdiction made the first decision.

29. I will apply the above considerations to determine the current application.
    

Are the Parties in both cases the same?

30. There is no dispute that the parties in the current proceedings, WS No 323 of 2022 and in the earlier proceedings CIA No 5 of 2022 and WS No 534 of 2021 are the same.
    

Are the cause of action and issues the same.

31. I have compared the statement of claim and the reliefs sought in WS 323of 2022 with that of WS No 534 of 2021 and CIA No 5 of 2022 thoroughly. They are identical and in similar terms, although the allegations against each of the Defendants varies. It is therefore necessary to look at the details of the complaints against each of the parties.
    

Samson Bal Moua-first Defendant

32. The complaint against the first Defendant is this. The first defendant misled the Plaintiff in believing that he was the owner of the subject property. It paid rent to the first Defendant for some years commencing 2009. In 2014 the Plaintiff agreed to buy the property from the first Defendant. However, it learnt then that the first Defendant was not yet registered owner but had prospects of being granted a state lease. The first Defendant was then appointed as agent by the Plaintiff to secure the title. The first Defendant was given money for his services. The Plaintiff alleges further that the first defendant failed to bring to the attention of the Registrar of Companies that it had an equitable interest in the property and was not given an opportunity to buy the property as it has put substantial improvement on the property and was occupying same for many years.
    
33. The Court notes that these allegations were previously pleaded in the Plaintiffs crossclaim in proceedings WS No 534 of 2021. The Plaintiff did not pursue with the crossclaim against the Defendants. It discontinued the proceedings on 6^th May 2022. The allegations were again raised in proceedings in CIA of 2022. The proceedings were dismissed on 11^th August 2023. In my view, the proceedings against the first Defendant have been substantially and effectually determined. It now becomes an abuse of the process to continue the proceedings against the first Defendant.
    

JAY LW Contractors-Second Defendant

34. The allegations against the second Defendant relate to loss of property especially a fleet of motor vehicles which the Plaintiff could not remove from the property when it was evicted from the property by virtue of an eviction order issued by the District Court on 17^th June 2021. The Plaintiff is also making a claim for monies spent on developing the property at the invitation of the first Defendant, Samson Bal Moua, who held himself out as owner of the property.
    
35. The allegations were first raised in a crossclaim filed by the Plaintiff against all the defendants including JAY LW Contractors Ltd in proceedings WS No. 534 of 2021. The Plaintiff discontinued the crossclaim against the Defendants on 6^th May 2022. The allegations were also raised in the proceedings CIA No 5 of 2022. CIA No 5 was dismissed on 11^th August 2023. Clearly, the Plaintiffs claim has been dealt with and it is an abuse of the process for the Plaintiff to maintain this proceeding against the second Defendant. Besides, the Court notes there is no clear and reasonable cause of action pleaded against the second Defendant.
    

Harriet Kokiva-Registrar of Companies-the third Defendant

36. The Plaintiff alleges that the Registrar of Companies failed in her statutory duty to dispose of the property in open and transparent manner. The Plaintiff alleges that the transfer of title to the second defendant was secretive and fraught with fraud. The Plaintiff alleges further that that it was not given an opportunity to tender for the property as it was the occupant of the property for more than 10 years.
    
37. These allegations are the same as those raised in CIA No 5 of 2022. The Plaintiff was the Appellant in that proceeding against the Registrar of Companies. The matter was heard, and a decision was delivered by his Honour Dingake J on 11^th August 2023, dismissing the proceedings. It becomes an abuse of the process for the issues to be heard again. Again, a previous crossclaim made against the Registrar of Companies in WS No 534 of 2021 was discontinued by the Plaintiff.
    
38. In my view, the current proceedings are an abuse of the process against all the parties. The Plaintiff filed proceedings by way of cross claim against all the Defendants in WS No 534 of 2021. It discontinued the crossclaim. It filed an appeal in CIA No 5 of 2022 against all the Defendants which was dismissed after a hearing on 11^th August 2023.
    

Did the earlier Court effectively deal with the issues raised in the current proceedings.

39. Whilst the crossclaim in proceedings in WS 534 of 2021 was discontinued with consent of parties, the proceeding, CIA No 5 of 2022 was dismissed by the National Court (per Dingake J) on 11^th August 2023 in a written judgment. The decision was arrived at after a substantive hearing on the merits of the case. His Honour examined the evidence presented by the parties and concluded that the Plaintiff failed to prove its case on the balance of probabilities.
    
40. Order 12 Rule 40 (1) of the National Court Rules allow for dismissal of proceedings in clear cases on application by a party to the proceedings. There is no doubt that the decision of 11^th August 2023 is final. It put to rest the matters of controversy between the parties. The decision is conclusive and binding on this Court.
    
41. The decision is made by a Court of competent jurisdiction, This Court has no power or jurisdiction to deal with the matter again on the same issues that were effectively dealt with and concluded by the Court in its decision of 11^th August 2023 in CIA No 5 of 2023. Only the Supreme Court has power to review the decision of the first Court that dismissed the proceedings.
    
42. I conclude based on the reasons and matters discussed above that the current proceedings are an abuse of the process. The first Defendant has raised a meritorious argument in law which the Court cannot ignore and shall grant the orders sought in the interest of justice. While it is not desirable to terminate the Plaintiff’s proceedings early, the Court has a duty to protect its process.
    

No Reasonable Cause of action, frivolous and vexatious

43. There is a second reason why these proceedings be dismissed. The pleadings and evidence filed by the first Defendant show the Plaintiff settled on a property it did not own. The property was a state lease owned by someone other than the first Defendant. Both the Plaintiff and the first Defendant knew at least by 2010 or thereabouts that the property was owned by JAY LW Contractors Ltd, the second Defendant whose ownership was challenged by the first Defendant in proceedings WS No 534 of 2013. The Plaintiff knew from legal advice that the land was not owned by the first Defendant yet chose to occupy the land and put improvements on it despite objections from the second Defendant. The Plaintiff was illegally occupying the property.
    
44. The property was registered in the name of the second Defendant from 17^th June 2011 until it was remitted to the Registrar of Companies by an order of Court (by consent of parties) on 8^th April 2019 in proceedings WS No 534 of 2013. The second Defendants name on the title was cancelled and vested in the Registrar of Companies on 21^st September 2019. On 31^st August 2020, about a year later the property was sold and transferred back to the second Defendant. It is clear, most of the relevant time between 2010 and 2020, the Plaintiff and first Defendant knew or ought to have known that the legal title was vested with the second Defendant except for the one-year period between 4^th April 2019 and August 2020. Yet the Plaintiff chose to remain on the property and even refused to give up possession to the second Defendant resulting in or necessitating summary ejectment proceedings by the second Defendant.
    
45. The Plaintiff does not have a clear interest in the property recognized in law. Where a party moves onto a property, especially a state land, and puts on improvements without the owner’s consent, he does it at his own risk and the Court shall be slow in giving recognition to such claims. To do so otherwise is only encouraging illegal occupation and improper acquisition of the limited state-owned land in this country.
    
46. The Plaintiff’s conduct is mischievous, and the proceedings are vexatious. It is the Court’s view that even if this matter proceeds to trial, it is bound to fail.
    
47. In conclusion and based on the foregoing reasons, the proceedings shall be dismissed for being frivolous, vexatious, abuse of the process and disclosing no reasonable cause of action pursuant to Order 12 Rules 1 and 40 (1) of the National Court Rules.
    

Costs

48. The first Defendant seeks cost of the application. It is a discretionary matter. There is no reason why cost should not follow the event. The Plaintiff shall be ordered to pay the costs of the Defendants.
    

Orders

49. The Court orders that:

1. The first Defendant’s application is granted.
2. The Plaintiff’s proceeding is dismissed.
3. The Plaintiff shall pay the Defendants’ costs to be taxed if not agreed.
4. Time be abridged.

_______________________________________________________________
Albright Lawyers: Lawyers for the Plaintiff
Samson Bal Moua: First Defendant in person.
Simon Sengi Lawyers: Lawyers for the Second Defendant
Malis Miningi: Lawyer for the Third Defendant