Paki v PNG Sustainable Development Program Ltd [2024] PGNC 186; N10855 (20 June 2024)

N10855

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (HR) NO 3 OF 2023

REX LAM PAKI
First Plaintiff

SARAH MINA PAKI
Second Plaintiff

ORPHEUS NO 27 LIMITED
Third Plaintiff

V

PNG SUSTAINABLE DEVELOPMENT PROGRAM LIMITED
First Defendant

JOHN MALCOLM WYLIE, CEO, FIRST DEFENDANT
Second Defendant

PETER GRAHAM, CHAIRMAN, FIRST DEFENDANT
Third Defendant

CLOUDY BAY SUSTAINABLE FORESTRY LIMITED
Fourth Defendant

NICK RONIOTIS
Fifth Defendant

AGROS GLOBAL (PNG) LIMITED
Sixth Defendant

OPPA LIMITED
Seventh Defendant

LIFESE ENGINEERING PNG LIMITED
Eighth Defendant

IBRAHIM ELOMAR
Ninth Defendant

BILLAL ELOMAR
Tenth Defendant

Waigani: Cannings J
2024: 10^th May, 13^th & 20^th June

PRACTICE AND PROCEDURE – motion for summary dismissal of proceedings on grounds of failure to disclose reasonable cause of action, frivolity and vexatiousness and abuse of process – National Court Rules, Order 12, rule 40(1).

JUDGMENTS AND ORDERS – originating summons filed by plaintiffs seeking declarations that would have the effect of avoiding a foreign judgment registered for enforcement in Papua New Guinea – Reciprocal Enforcement of Judgments Act 1976.

HUMAN RIGHTS – claim for declarations that enforcement of a foreign judgment in Papua New Guinea would entail breaches of human rights of plaintiffs under Constitution, ss 37(1), 41(1) and 59.

The first plaintiff is a former director of the first defendant company, which is registered in Singapore. On 4 March 2020 the first defendant obtained judgment against the first plaintiff in the Singapore High Court for breach of fiduciary duties, by which he is liable to the first defendant in the sum of AUD6.6 million and PGK1.7 million plus interest. On 20 May 2021 the National Court granted an application by the first defendant under the Reciprocal Enforcement of Judgments Act 1976 and the judgment of 4 March 2020 was registered for enforcement in PNG. On 3 July 2023 the plaintiffs commenced proceedings by originating summons in the National Court against the first defendant and other defendants, seeking declarations that enforcement of the judgment of 4 March 2020 would be an unlawful act under s41(1) of the Constitution and entail a breach of the plaintiffs’ human rights under ss 37(1) (protection of the law) and 59 (principles of natural justice) of the Constitution and a declaration that the Reciprocal Enforcement of Judgments Act 1976 is unconstitutional due to its noncompliance with s 38(2) of the Constitution. On 11 October 2023 the first defendant applied by notice of motion under Order 12 rule 40(1) of the National Court Rules for summary dismissal of the proceedings on the grounds of failing to disclose a reasonable cause of action, frivolity and vexatiousness and for being an abuse of process. This is the judgment on that application.

Held:

(1) To the extent that the plaintiffs seek declarations, based on alleged breaches of ss 37, 41 and 59 of the Constitution, which would have the effect of avoiding the judgment of 4 March 2020, the proceedings amount to a challenge to the validity and enforceability of the judgment of 4 March 2020. The proceedings are an abuse of process as the plaintiffs have exhausted their rights of appeal under Singapore law against that judgment and have already applied unsuccessfully to set aside the registration of that judgment in the National Court and have not appealed or applied for leave for review of the judgment of the National Court refusing the application to set aside registration of that judgment. Further, the proceedings fail to disclose any reasonable cause of action and have no prospect of success and are frivolous and vexatious.

(2) To the extent that the plaintiffs seek a declaration that the Reciprocal Enforcement of Judgments Act is unconstitutional, the proceedings are an abuse of process as the National Court has no jurisdiction to make such a declaration, which could only be made by the Supreme Court, upon application under s 18(1) of the Constitution made in accordance with Division 4.1 of the Supreme Court Rules 2012.

(3) The proceedings were summarily dismissed with costs.

Cases Cited

Joe Kape Meta v The State (2012) N4598
Morobe Provincial Government v John Kameku (2012) SC1164
Newsat Ltd v Telikom PNG Ltd (2007) N3449
Petrus and Gawi v Telikom PNG Ltd (2008) N3373
PNG Sustainable Development Program Ltd v Rex Lam Paki (2022) N9462
PNG Sustainable Development Program Ltd v Rex Lam Paki [2022] SGHC 188
Rex Lam Paki v PNG Sustainable Development Program Ltd [2023] SGHC(A) 24
Toap v The State [2004] 1 PNGLR 25

Counsel

G P Manda, for the Plaintiffs
E Andersen & S Supro, for the First Defendant

20^th June 2024

1. CANNINGS J: This is my ruling on an application by the first defendant, PNG Sustainable Development Program Ltd, made by notice of motion filed on 11 October 2023, to dismiss these proceedings, OS (HR) 3 of 2023.

2. The first plaintiff, Rex Lam Paki, is a former director of the first defendant company, which is registered in Singapore. On 4 March 2020 the first defendant obtained judgment against the first plaintiff in the Singapore High Court for breach of fiduciary duties, by which he is liable to the first defendant in the sum of AUD6.6 million and PGK1.7 million plus interest.

3. On 20 May 2021 the National Court granted an application by the first defendant under the Reciprocal Enforcement of Judgments Act 1976 and the judgment of 4 March 2020 was registered for enforcement in PNG.

4. On 3 July 2023 the plaintiffs commenced proceedings by originating summons in the National Court against the first defendant and other defendants, seeking declarations that enforcement of the judgment of 4 March 2020 would be an unlawful act under s 41(1) of the Constitution and entail a breach of the plaintiffs’ human rights under ss 37(1) (protection of the law) and 59 (principles of natural justice) of the Constitution. The plaintiffs also seek a declaration that the Reciprocal Enforcement of Judgments Act 1976 is unconstitutional due to its noncompliance with s 38(2) of the Constitution.

5. On 11 October 2023 the first defendant applied by notice of motion under Order 12 rule 40(1) of the National Court Rules for summary dismissal of the proceedings on the grounds of failing to disclose a reasonable cause of action, frivolity and vexatiousness and for being an abuse of process.

6. Order 12 rule 40(1) states:

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.

ARE THE PROCEEDINGS AN ABUSE OF PROCESS?

7. I will first deal with the parts of the originating summons that seek declarations that enforcement of the judgment of 4 March 2020 is an unlawful act for the purposes of s 41 of the Constitution and entail a breach of the plaintiffs’ human rights under ss 37(1) (protection of the law) and 59 (principles of natural justice) of the Constitution.

8. Section 41 (proscribed acts) states:

(1) Notwithstanding anything to the contrary in any other provision of any law, any act that is done under a valid law but in the particular case—

(a) is harsh or oppressive; or

(b) is not warranted by, or is disproportionate to, the requirements of the particular circumstances or of the particular case; or

(c) is otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind,

is an unlawful act.

(2) The burden of showing that Subsection (1)(a), (b) or (c) applies in respect of an act is on the party alleging it, and may be discharged on the balance of probabilities.

(3) Nothing in this section affects the operation of any other law under which an act may be held to be unlawful or invalid.

9. Section 41 proscribes (ie prohibits) and gives protection against seven sorts of acts (Morobe Provincial Government v John Kameku (2012) SC1164, Petrus and Gawi v Telikom PNG Ltd (2008) N3373; Joe Kape Meta v The State (2012) N4598). 10. Even if done under a valid law and notwithstanding anything to the contrary in any law, an act is unlawful if it is, in the particular case:

• harsh; or
• oppressive; or
• not warranted by the requirements of the particular circumstances; or
• disproportionate to the requirements of the particular circumstances; or
• not warranted by the requirements of the particular case; or
• disproportionate to the requirements of the particular case; or
• otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind.
  

11. Under s 41(2) the burden of showing that another person has committed an act falling within one of the seven categories of acts proscribed by s 41(1) is on the party alleging it.

12. Section 37(1) states:

Every person has the right to the full protection of the law, and the succeeding provisions of this section are intended to ensure that that right is fully available, especially to persons in custody or charged with offences.

13. Section 59 states:

(1) Subject to this Constitution and to any statute, the principles of natural justice are the rules of the underlying law known by that name developed for control of judicial and administrative proceedings.

(2) The minimum requirement of natural justice is the duty to act fairly and, in principle, to be seen to act fairly.

14. In support of the claim for a declaration as to s 41, the originating summons pleads amongst other things that the judgment of 4 March 2020 was obtained without a full hearing on the merits, that the plaintiffs did not submit to the Singapore court’s jurisdiction, that the plaintiffs pleaded with the first defendant for understanding but the first defendant “remained merciless”, that there are “suspicious interlocking settlement deeds” executed in Australia and PNG between the first, second, third and fourth defendants, which question the proceeding taken against the plaintiffs in the Singapore High Court that resulted in the judgment of 4 March 2020.

15. In support of the claim for a declaration as to s 37, the originating summons pleads amongst other things that enforcement of the judgment of 4 March 2020 will deny the plaintiffs the full protection of the law by reason of the matters pleaded in support of the declaration as to s 41.

16. In support of the claim for a declaration as to s 59, the originating summons pleads amongst other things that enforcement of the judgment of 4 March 2020 would amount to a breach of the duty of the first defendant to “act fairly and in principle to be seen to act fairly” as that judgment did not result from a full trial and a proper and full hearing on the validity of a contract between various defendants that evidently formed the basis of the causes of action underlying that judgment.

17. It is apparent that the plaintiffs are, by seeking declarations based on alleged breaches of ss 37, 41 and 59 of the Constitution that would have the effect of avoiding the judgment of 4 March 2020, challenging the validity and enforceability of that judgment.

18. They are doing that more than three years after the date of that judgment (4 March 2020) and more than two years after its registration in the National Court (20 May 2021).

19. This is an abuse of process, for two reasons. First, the plaintiffs have exhausted their rights of appeal under Singapore law against that judgment. The first plaintiff made an application to the same judge (Coomaraswamy J) who gave the judgment of 4 March 2020 to set aside the judgment. His Honour dismissed the application on 1 November 2021 on grounds of decision published in detail on 30 August 2022 in PNG Sustainable Development Program Ltd v Rex Lam Paki [2022] SGHC 188. The first plaintiff then appealed against the dismissal of his application to set aside the judgment of 4 March 2020 to the Appellate Division of the Singapore High Court. The appeal was dismissed on 24 April 2023 on grounds of decision published in detail on 4 July 2023 in Rex Lam Paki v PNG Sustainable Development Program Ltd [2023] SGHC(A) 24.

20. Secondly, the plaintiffs have already applied to set aside the registration of the judgment of 4 March 2020 in the National Court. Their application was refused by Tamade AJ on 23 February 2022 (PNG Sustainable Development Program Ltd v Rex Lam Paki (2022) N9462). They have not appealed or applied for leave for review of that judgment of the National Court. They have therefore exhausted their right to challenge the registration of the judgment in PNG under the Reciprocal Enforcement of Judgments Act.

21. Having exhausted or failed to fully utilise their opportunities under both Singapore and PNG law to challenge the judgment of 4 March 2020, it is an abuse of process to commence fresh proceedings that seek declarations that enforcement of the judgment in PNG would be an unlawful act under s 41 of the Constitution and would entail a breach of human rights under ss 37 and 59 of the Constitution.

OTHER GROUNDS FOR DISMISSAL OF THE PROCEEDINGS

22. I consider that these proceedings fail to disclose any reasonable cause of action and have no prospect of success.

23. The argument about the judgment of 4 March 2020 being entered without a “full hearing on the merits”, which forms the basis of the claim for a declaration as to s 41 unlawfulness, was dealt with by Coomaraswamy J in his refusal of the application to set aside the judgment of 4 March 2020. His Honour found that the judgment of 4 March 2020 was properly entered on admissions of fact and that a full hearing on the merits was not required. The Appellate Division of the Singapore High Court agreed.

24. The argument about denial of the full protection of the law under s 37 of the Constitution has no basis in fact or law. The plaintiffs had rights under Singapore law to challenge the judgment of 4 March 2020 but have exhausted or failed to utilise them. They also had rights under PNG law to challenge the registration of judgment in PNG. They tried unsuccessfully in the National Court to set aside the registration of the judgment. They have taken no other steps to challenge the decision of Tamade AJ of 23 February 2022.

25. The argument about denial of a fair hearing under s 59 of the Constitution also has no basis in fact or law.

26. These arguments, which underpin the claims for declarations under ss 41, 37 and 59 of the Constitution are doomed to fail. The proceedings are therefore frivolous.

27. The proceedings are also vexatious, as the proceedings are calculated to put the first defendant to unnecessary time and expense in defending the proceedings (Toap v The State [2004] 1 PNGLR 25).

THE CLAIM FOR A DECLARATION THAT THE RECIPROCAL ENFORCEMENT OF JUDGMENTS ACT IS UNCONSTITUTIONAL

28. To the extent that the plaintiffs seek a declaration that the Reciprocal Enforcement of Judgments Act is unconstitutional, the proceedings are an abuse of process as the National Court has no jurisdiction to make such a declaration, which could only be made by the Supreme Court, upon application under s 18(1) of the Constitution made in accordance with Division 4.1 of the Supreme Court Rules 2012 (Newsat Ltd v Telikom PNG Ltd (2007) N3449).

CONCLUSION

29. The motion for dismissal of the proceedings will be granted. Costs will follow the event.

ORDER

(1) The first defendant’s application by notice of motion filed 11 October 2023 for dismissal of the proceedings is granted.

(2) The proceedings are entirely dismissed.

(3) The plaintiffs shall pay the first defendant’s costs of the proceedings on a party-party basis, which shall, if not agreed, be taxed.

__________________________________________________________________
Greg Manda Lawyers: Lawyers for the Plaintiffs
Dentons PNG: Lawyers for the First Defendant