Asian Pacific Insurance Brokers Ltd v BSP Financial Group Ltd [2025] PGNC 133; N11261 (28 April 2025)

N11261

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO OF 71 OF 2022 (COMM)

ASIAN PACIFIC INSURANCE BROKERS LIMITED
Plaintiff

V

BSP FINANCIAL GROUP LIMITED
Defendant

WAIGANI: ANIS J
18 FEBRUARY, 28 APRIL 2025

NOTICE OF MOTION – Application for Defence to be struck out and judgment on liability to be entered premised on purported failure to comply fully with request for discovery and interrogatories – Order 9 Rules 15(1)(b) and 25(1)(b) – National Court Rules – whether this is a case where it is appropriate under the circumstances of the case that orders should be made to strike out the defendant’s defence and judgment on liability should be entered with damages to be assessed – consideration - ruling

Cases cited
Kenken v National Airports Corporation Ltd [2022] SC2247
Esekia Tolubang and 1 or v. Hilda Hialolo and 1 Or (2023) N10396
Tuka v. Toyota Tsusho (2023) N10419
Michael Newall Wilson v. Clement Kuburam (2016) SC1489
Application by Pastor Hanua Gadiki v. Gaudi Logae Clan and 1 Or (2021) SC2102
Tan Investment Ltd v. Hock Heng Teo and Ors (2022) N9495

Counsel
W Yep for the plaintiff
L M David for the defendant

DECISION

1. ANIS J: I heard the plaintiff’s notice of motion filed 10 December 2024 (NoM) on 18 February 2025 before I reserved my decision to a date to be advised.

2. This is my ruling.

BACKGROUND

3. The relevant facts are these: The plaintiff filed this proceeding on 28 October 2022 asserting, amongst others, breach of contract and negligence. The plaintiff is an insurance broker firm. The dispute that led the plaintiff to file this proceeding concerns alleged actions or want of actions by its former Chief Executive Officer Robert Ralewa and the defendant. It claims that between 2017 to January of 2018 (material time), Mr. Ralewa, without its knowledge and authority, and with the assistance of the defendant, depleted or misappropriated its bank accounts held by the defendant, to the tune of K921,800 (Funds). The bank accounts concerned are described as follows, (i), BSP account number 1000587613 (trust account), and (ii), BSP account number 1000386454 (operating account).

4. The plaintiff asserts that Mr. Ralewa filled out the defendant’s online internet banking forms without its knowledge and consent and later transacted the Funds to his company’s account. His company is called Arjay Corporation Limited (ACL). It claims that the defendant breached its own various stipulated online banking business terms and conditions when it facilitated the transactions at the material time. It also claims the defendant was negligent, that it had conspired with Mr. Ralewa to defraud the Funds from its 2 accounts, and that its actions or inactions breached the provisions of the Anti Money Laundering and Counter Terrorism Financing Act 2015 (AMLCTFA) thus constitutes breach of statutory duty.

5. The defendant filed its Defence on 13 February 2023. It denies the allegations. It says at the material time that the Funds were withdrawn, the transactions were normal; that no breaches occurred in regard to its banking terms and conditions. The defendant states, amongst others, that Mr. Ralewa, at the material time, was the Chief Executive Officer and shareholder of the plaintiff. The defendant also says that the plaintiff had opted to use the defendant’s Online Business Banking Facility (OBBF/Facility). And the defendant states that premised on a completed Online Business Banking Application Form dated 30 September 2016 (OBBAF), which it says had been filled by the plaintiff, Mr. Ralewa had ‘Master User’ status over the 2 accounts of the plaintiff to make banking transactions using the defendant’s Facility. Overall, the defendant says that the transactions complained of were governed by (i), the OBBF, (ii), the defendant’s OBBF terms and conditions, and (iii), the defendant’s Electronic Terms and Conditions (ET&C). The defendant also denies that it was (i), negligent, (ii), that it had conspired with Mr. Ralewa to defraud the plaintiff and, (iii), that it breached various provisions including s.28(a)(b)(c) and (d) of the AMLCTFA.

6. On 21 March 2024, the defendant obtained various interim injunctive orders against the plaintiff from, amongst others, intimidation, harassment and negative publications against it and its staffs and employees. The orders continue to remain binding on the parties.

7. So, and if we fast forward to the present, the facts that have occurred that has resulted in this NoM being filed may be summarised as follows:

• On 14 November 2023, the plaintiff filed a notice for discovery;
• The plaintiff discarded the notice after it was objected to by the defendant;
• Then on 20 June 2024, the plaintiff filed a fresh notice for discovery (NFD);
• On the same day, the plaintiff also filed a notice for interrogatories (NFI);
• Both notices were served on the defendant on 21 June 2024;
• The defendant was required to file its responses to the 2 notices by 5 July 2024;
• The defendant requested the plaintiff to grant it extension of time to file its responses to the 2 notices;
• The plaintiff agreed to an extension, and the due date was extended to 19 July 2024;
• The defendant did not file its responses within the extended period;
• The defendant requested the plaintiff to grant it a further extension to respond to the 2 notices by 30 August 2024;
• The plaintiff refused the defendant’s request;
• So, on 15 October 2024, the plaintiff filed a notice of motion where it sought default judgment in similar terms like the present NoM;
• The notice of motion was moved on 21 October 2024. The Court, however, refused the motion and instead issued orders which included the following:
  
  2. The defendant shall file and serve its verified list of documents before or by 12pm on Friday 1 November, failing which its defence shall be struck out and judgment shall be entered in favour of the plaintiff.
     
  3. Term 2 of the plaintiff’s notice of motion is granted by consent of the parties that is for the matter to be referred to mediation.
     
  4. Parties to prepare and finalize the proposed mediation orders and return to Court for their endorsement at 1:30pm on Friday 1 November 2024.
     
• On 1 November 2024, the matter returned before the Court, and the Court made the following orders:
  
  1. Parties are to comply fully with discovery and interrogatories before or by 1:30pm on Friday 20 November 2024.
     
  2. Term 4 of the Court Order of 21 October 2024 is extended forthwith for compliance before or by 29 November 2024.
     
  3. Time is abridged.
     
• The defendant filed its reponses (Verified List of Documents and Verified Statement in Answers to Interrogatories) on 1 November 2024;
• The plaintiff was dissatisfied with the responses, and thus it files this NoM.
  

MOTION

8. The main relief sought in the NoM read:

2. Pursuant to Order 9 Rule 15(1)(b) of the National Court Rules, the Defendant’s Defence filed on 13^th February 2024 be struck out and judgment on liability be entered against the Defendant accordingly.
   
3. Pursuant to Order 9 Rule 22(3) and (4) of the National Court Rules, that the Defendant’s Verified Statement in Answer to the Interrogatories filed on 1^st November 2024 did not give answers in substance and is highly evasive in response to the Plaintiff’s Notice to Answer Interrogatories, with no valid objections.
   
4. Consequent to term 3 and pursuant to Order 9 Rule 25(1)(b) of the National Court Rules, the Defendant’s Defence filed on 13^th February 2024 be struck out and that judgment on liability be entered against the Defendant accordingly.
   

LAW

9. Order 9 Rules 15, 21, 24 and 25 of the National Court Rules (NCR) reads in part as follows:

15. Default. (23/15)

(1) Where a party makes default in filing or serving a list of documents or affidavit or other document, or in producing any document as required by or under this Division, the Court may make such order as it thinks fit, including—

(a) if the party in default is a plaintiff—an order that the proceedings be stayed or dismissed as to the whole or any part of the relief claimed by him in the proceedings; or

(b) if the proceedings were commenced by writ of summons and the party in default is a defendant—an order that his defence be struck out and that judgement be entered accordingly.

.......

21. Order to answer. (24/5)

(1) The Court may, at any stage of any proceedings, order any party to file and serve on any other party (whether the interrogating party or not)—

(a) a statement in accordance with Rule 22 in answer to interrogatories specified or referred to in the order relating to any matter in question in the proceedings; or

(b) a statement as mentioned in Paragraph (a) verified by affidavit.

(2) The Court shall not make an order under Sub-rule (1) unless satisfied that the order is necessary at the time the order is made.

.......

24. Insufficient answer. (24/8)

(1) Where a party fails to answer an interrogatory sufficiently, the Court may—

(a) if he has made an insufficient answer—order him to make a further answer verified by affidavit in accordance with Rule 23; or

(b) order him or any of the persons specified in Rule 23(b) to (d), as the nature of the case requires, to attend to be orally examined.

(2) Sub-rule (1) does not limit the powers of the Court under Rule 25.

......

25. Default. (24/9)

(1) Where a party makes default in compliance with an order under Rule 21 or 24 to file or serve a statement or affidavit, the Court may make such order as it thinks fit, including—

(a) if the party in default is a plaintiff—an order that the proceedings be stayed or dismissed as to the whole or any part of the relief claimed by him in the proceedings; or

(b) if the proceedings were commenced by writ of summons and the party in default is a defendant—an order that his defence be struck out and that judgement be entered accordingly.

[Underlining mine]

CONSIDERATION

10. What jumps out to me immediately from the above relevant facts leading to the present NoM is this. At the time that the NoM was filed, which was on 10 December 2024, terms 3 and 4 of the Court Order of 21 October 2024, which were extended on 1 November 2024, had not been complied with or that they continue to remain outstanding. In other words, the parties may already be liable for breaching them.

11. I observe that time had been extended for the parties, who had consented to refer the matter for mediation, to prepare the final draft mediation orders for the Court to endorse before or by 29 November 2024.

12. This, in my view, is paramount and cannot simply be brushed aside to make way for the parties to take the next step forward or to try to use other Court options as they may please. Court Orders, where they have not been set aside, are binding and must be adhered to, and failure to comply with a court order may be a basis for the Court to dismiss the proceeding: See case: Kenken v National Airports Corporation Ltd [2022] SC2247 Esekia Tolubang and 1 or v. Hilda Hialolo and 1 Or (2023) N10396 and Tuka v. Toyota Tsusho (2023) N10419.

13. In regard to the NoM, I make the following observations:

• The defendant has complied with the last set of directions and has filed its List of Documents and Answers to Interrogatories;
• The complaint by the plaintiff in the NoM is its assertion on insufficiencies in the answers that were provided or disclosed by the defendant;
• Complaints of insufficiency of discovery or interrogatories, made by a party, may be enforced by making an application under Order 9 Rule 24 of the NCR; applying to strike out a defence without allowing a matter to proceed to trial, premised on complaints of insufficiencies in discovery or interrogatories, may constitute a harsher penalty against the defaulting party;
• The allegations raised in the proceeding also involve allegations of fraud or conspiracies; such allegations are serious and would normally require a proper hearing to establish rather than to have them determined in a summary manner;
• I had already determined that there was a serious defence on merit when I granted the interim injunctive orders against the plaintiff; of course this was not an absolute finding but that may be viewed favourably for the defendant in regard to the NoM;
• The NoM was filed and moved without regard to the earlier orders where the parties had agreed to refer the matter to for mediation; the parties had agreed to prepare and bring the draft mediation orders for the Court to endorse by 29 November 2024;
• The deliberate filing of the NoM without regard to earlier orders of the Court which remains binding suggests abuse of the Court process;
• This Court is the Court of Justice and fairness, and on the same note, it must protect its process from abuse: Michael Newall Wilson v. Clement Kuburam (2016) SC 1489 and Application by Pastor Hanua Gadiki v. Gaudi Logae Clan and 1 Or (2021) SC2102;
• This is a case where, like in the case of Tan Investment Ltd v. Hock Heng Teo and Ors (2022) N9495, I may invoke my powers and make orders as I see fit instead of granting the NoM. At para. 11 in Tan Investment, I stated, which I adopt herein, as follows:
  

11. This is a type of case which should, in my view, call upon a judge or the Court, to consider and exercise its powers under its own volition or make such other orders as it deems fit. The reasons for doing so should include, (i), good administration of the matter that is before the Court, (ii), interest of justice, (iii) if all the parties, including the Court, will benefit with such orders or directions with the aim to progress the matter to trial or a finality.

14. When I take into account the above considerations, I refuse the hear or otherwise grant the NoM because I find it, (i), to be an abuse of the court process, (ii), to be made in breach of the Court’s earlier orders which continue to remain binding between the parties, that is, orders that required the parties to finalise draft consent orders for mediation, (iii), baseless because term 1 of the orders concerning discovery and interrogatories, which was made on 1 November 2024, has been complied with by the defendant, and (iv), wanting in fairness given that the fairest way forward, in my view, would be to follow what the parties have agreed upon which is to refer the matter for mediation to try to resolve the issues amicably.

SUMMARY

15. In summary, I will refuse the plaintiff’s NoM and instead, and to enforce this Court’s earlier orders, refer the matter to mediation. I will direct the parties to prepare draft consent orders for mediation and have that brought to the Court to endorse in Chambers within 14 days from the date of this order.

COST

16. An order for cost is discretionary. I will order each party to bear their own costs.

ORDERS

17. I make the following orders:

1. The plaintiff’s notice of motion filed 10 December 2024 is refused.
   
2. The parties to settle a draft mediation order as previously ordered, and have that brought to the attention of my Chambers for endorsement within 14 days from the date of this order.
   
3. Each party to bear their own cost of this application.
   
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

________________________________________________________________
Lawyers for the plaintiff: Yep Legal

Lawyers for the defendant: Pacific Legal Group