Waim No 85 Ltd v Independent State of Papua New Guinea [2015] PGSC 34; SC1405 (29 January 2015)

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RENDLE RIMUA, SECRETARY, DEPARTMENT OF PETROLEUM & ENERGY
Second Respondent

Waigani: Cannings J, Kassman & Murray, JJ
2014: 16 December 2014
2015: 29 January

PRACTICE AND PROCEDURE – whether late filing of notice of intention to defend means leave of Court required to file notice of motion for dismissal of proceedings – National Court Rules, Order 7, Rules 2, 6(2).

PRACTICE AND PROCEDURE – Claims By and Against the State Act 1996, Section 5 – requirement to give notice of intention to make claim against the State within six months after occurrence – identification of date of occurrence.

PRACTICE AND PROCEDURE – effect of dismissal of motion, seeking dismissal of proceedings, for want of prosecution – whether another notice of motion seeking same relief can be filed – whether abuse of process, res judicata.

The appellant (then the plaintiff) commenced proceedings in the National Court, seeking damages exceeding K100 million against the respondents (then the defendants), the State and the Secretary for Petroleum & Energy, for breach of trusts, contracts and other arrangements under which the appellant was representing the interests of 17 incorporated land groups that were expecting to receive royalties and other benefits from the State in connection with a petroleum project. The respondents filed a notice of intention to defend after the time prescribed by the National Court Rules for doing so. The National Court then upheld a motion by the first respondent, the State, and entirely dismissed the proceedings before trial because of the appellant's failure to give notice to the State of its intention to make a claim against it, in accordance with Section 5 of the Claims By and Against the State Act. The National Court also found that the claim was time-barred under the Frauds and Limitations Act and that the statement of claim was unfathomable and incomprehensible. The appellant appealed on 18 grounds, which fell into five categories of alleged errors of law committed by the primary Judge: (1) misapplication of Section 5 of the Claims By and Against the State Act; (2) allowing the first respondent to move the motion for dismissal without prior leave of the Court contrary to Order 7, Rule 6(2) of the National Court Rules; (3) misapplication of the Frauds and Limitations Act; (4) failing to find that the first respondent was guilty of an abuse of process by moving a motion for dismissal of the proceedings in the same terms as an earlier motion which had been dismissed for want of prosecution; (5) procedural unfairness, to the detriment of the appellant.

Alan Stevens v Kopi Larapa (2013) N5425
Badastal Ltd v Dr Puka Temu (2011) SC1092
Ivan Saun v Chief Inspector Hodges Ette (2005) N3031
Joe Kerowa v MVIL (2010) SC1100
Luke Tai v Australia and New Zealand Banking Group (PNG) Ltd (2000) N1979
Mark Ekepa v William Gaupe (2004) N2694
MVIL v Sossie Joe (2007) SC863
Paradise Contractors Ltd v Milne Bay Provincial Government (2010) N3975
Peter Yama v PNGBC Ltd (2008) SC922
Titi Christian v Rabbie Namaliu OS No 2 of 1995, 18.07.96, unreported
Waim No 85 Ltd v The State and Secretary, Department of Petroleum & Energy WS No 1688 of 2009, 13.03.09, unreported

This was an appeal against a decision of the National Court to dismiss proceedings commenced in the National Court.

1. BY THE COURT: The appellant, Waim No 85 Ltd, appeals against a decision of the National Court to dismiss proceedings it had commenced against the respondents, the State and the Secretary of the Department of Petroleum and Energy.

2. On 22 November 2006 the appellant (then the plaintiff) commenced proceedings by writ of summons (WS No 1688 of 2006) in the National Court. It sought damages exceeding K100 million against the respondents (then the defendants), for breach of trusts, contracts and other arrangements under which the appellant was representing the interests of 17 incorporated land groups that were expecting to receive royalties and other benefits from the State in connection with the Gobe Petroleum Project. The respondents filed a notice of intention to defend after the time prescribed by the National Court Rules for doing so.

3. On 13 March 2009 the National Court, constituted by Justice Davani, upheld a motion by the first respondent and entirely dismissed the proceedings before trial due to the appellant's failure to give notice to the first respondent of its intention to make a claim against the State, in accordance with Section 5 of the Claims By and Against the State Act 1996. The Court also found that the claim was time-barred under the Frauds and Limitations Act 1988 and that the statement of claim was unfathomable and incomprehensible (Waim No 85 Ltd v The State and Secretary, Department of Petroleum & Energy WS No 1688 of 2009, 13.03.09, unreported).

4. There are 18 grounds of appeal, one of which (No 9) was abandoned at the hearing of the appeal. The remaining 17 fall into five categories of alleged errors of law committed by the primary Judge:

5. At the hearing of the appeal Mr Furigi for the appellant urged us to categorise the grounds of appeal in a different way, but we decline to do so. We agree with Mr Tanuvasa for the first respondent that the appellant should be confined to the grounds of appeal set out in the notice of appeal. It should not be permitted to repackage its appeal or introduce new grounds, without notice to the other parties and without the leave of the Court. Though we have found it useful to place the grounds into five categories, we will set them out as they appear in the notice of appeal and determine them in seriatim.

29 June 2006	Appellant gave notice to first respondent under the Claims By and Against the State Act Section 5
3 July 2006	Acting Attorney-General acknowledged receipt of Section 5 notice
22 November 2006	Writ of summons filed
26 November 2006	Amended writ of summons filed
7 June 2007	Notice of intention to defend filed
19 August 2008	First respondent filed first notice of motion seeking dismissal of proceedings
5 November 2008	First respondent's motion of 19/8/08 dismissed for want of prosecution
2 December 2008	First respondent filed second notice of motion seeking dismissal of proceedings
5 February 2009	Appellant filed notice of motion seeking dismissal of first respondent's notice of motion filed 2/8/08
27 February 2009	First respondent's notice of motion filed 2/12/08 and appellant's notice of motion filed 5/2/09 heard
13 March 2009	Decision of National Court the subject of appeal, handed down: proceedings entirely dismissed.

The Court erred in fact to rule that the appellant was out of time in giving the Section 5 notice when it failed to take into account that the appellant had a seven year trusteeship agreement with 17 ILGs and that this seven years time period for these 17 ILGs lapsed between 3 October 2006 and 4 May 2007, meaning that the Section 5 notice by letter from the appellant served on the Acting Attorney-General Fred Tomo on 30 June 2006 and acknowledged by him was given within the seven-year contractual period meaning the 6 months time limitation period had not yet commenced to accrue.

8. The principal reason the primary Judge dismissed the proceedings was the appellant's failure to comply with Section 5 of the Claims By and Against the State Act, which states:

(1) No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this Section by the claimant to—

(a) the Departmental Head of the Department responsible for justice matters; or

(a) within a period of six months after the occurrence out of which the claim arose; or

(b) where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or

(b) leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 am and 12 noon, or 100 pm and 4.06 pm, or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act (Chapter 321).

9. Her Honour held, after examining the 'lengthy and confusing' and 'badly pleaded' statement of claim, that the appellant's causes of action were the alleged breaches of trust and constitutional rights and alleged torts and other unlawful conduct committed by the State upon commencement of operation of the Oil and Gas Act 1998. Her Honour held that that Act commenced operation on 18 February 1999, and that was the date on which the causes of action accrued. That meant that the appellant had a period of six months, until 18 August 1999, to give notice to the State under Section 5. The appellant did not give notice until 30 June 2006, which was well outside the six-month period.

10. The appellant argues that her Honour misconstrued the date on which the cause of action accrued or of "the occurrence out of which the claim arose" (for the purposes of Section 5(2)). It argues that because it had a seven-year trusteeship agreement with the 17 ILGs that lapsed between October 2006 and May 2007, the occurrence out of which the claim arose occurred within or before that period. Therefore the Section 5 notice, which was given on 30 June 2006, was within the six-month period.

11. We find the appellant's argument to be flawed. According to the statement of claim it is not the breach or lapse of the seven-year trusteeship agreement that is the cause of action or the occurrence out of which the claim arose. It is the enactment or more particularly the commencement of the Oil and Gas Act which gave rise to the causes of action. That was "the occurrence" out of which the claim arose. We agree with the primary Judge that the date of that occurrence was 18 February 1999. Hence notice under Section 5(2) had to be given by 18 August 1999. It was not given until 30 June 2006, which was almost seven years late.

12. The fact that the Acting Attorney-General Fred Tomo acknowledged the notice by letter dated 3 July 2006 is of no consequence. Mr Tomo simply stated "the notice of intention to sue is acknowledged and we await your further actions in this regard". He did not state that the State was accepting the notice or agreeing that it was given within time or indicating that the State would not rely on its lateness in defence of the claim.

13. Even if he had made statements or given indications to that effect it is doubtful that that would have made any difference. As a general principle an estoppel cannot be invoked in respect of a statutory condition precedent such as the requirement to give notice under Section 5(2) (Joe Kerowa v MVIL (2010) SC1100). We cannot see any exceptional circumstances that would warrant departure from that principle. Ground 1 is dismissed.

The Court erred in fact and law to dismiss the appellant's court proceedings against the second respondent when the second respondent had not yet filed its notice of intention to defend and had not filed its application seeking leave to file its defence outside of time.

15. This is the first of seven grounds of appeal that relate to the late filing of the notice of intention to defend. The appellant served the writ of summons on the respondents on 23 November 2006. Consistently with Order 4, Rule 11(b)(i) of the National Court Rules the writ stated that the respondents had 30 days after service within which to give a notice of intention to defend, ie until 23 December 2006 (the court vacation period that commenced on 20 December 2006 was included in the reckoning of time under Order 2, Rule 3(3) of the National Court Rules). The respondents filed their notice of intention to defend on 7 June 2007, more than five months after the prescribed date.

16. Those are all matters of fact on which the parties agree. It is the consequence of the late filing of the notice of intention to defend on which the parties disagree.

17. This ground of appeal is centred on the second respondent, the Secretary for Petroleum & Energy. We point out that the second respondent was unrepresented at the hearing of the appeal. Mr Tanuvasa of the Office of Solicitor-General appeared only for the first respondent, the State.

18. The appellant argues that the primary Judge erred by dismissing the proceedings against the second respondent when the second respondent had not filed a notice of intention to defend. This argument is based on a false premise. Notice of intention to defend was given on 7 June 2007 in the name of both respondents. It was filed by Posman Kua Aisi Lawyers and stated:

TAKE NOTICE THAT the First and Second Defendants ... intend to defend this action.

19. We note that the notice of motion for dismissal of the proceedings (filed on 2 December 2008), which was heard on 27 February 2009 and resulted in dismissal of the proceedings on 13 March 2009, was filed in the name of the first respondent only. Though the second respondent did not file a separate notice of intention to defend, there was no rule or any law in place to say that he had to file his own notice. The notice actually filed was sufficient. Ground 2 is dismissed.

The Court erred in fact to entertain the first and second respondent when the second respondent had not filed its notice of intention to defend and when both respondents had fallen short of filing an application for leave to take any steps pursuant to Order 7, Rule 6(2) of the National Court Rules.

21. This ground is twofold. First it is argued that the primary Judge erred by 'entertaining' both respondents when the second respondent had not filed a notice of intention to defend. Secondly it is argued that the primary Judge erred by 'entertaining' both respondents as neither of them had sought the leave of the Court under Order 7, Rule 6(2).

22. We have already dealt with the first argument in ground 2 above. The second respondent gave a notice of intention to defend as the notice filed on 7 June 2007 covered the second respondent.

23. The second argument is based on Order 7, Rule 6(2) but it is important to put this sub-rule in the context of the whole of Order 7, Rule 6, which states:

(1) A defendant may give notice of intention to defend at any time without leave.

(2) Where a defendant gives a notice after the time limited for doing so, he shall not, unless the Court otherwise orders, be entitled to file a defence or do any other thing later than if he had given a notice of intention to defend within that time.

24. The argument is that the motion seeking dismissal of the proceedings should not have been entertained as the first respondent had not sought or been granted the leave of the Court to take any step in the proceedings and such leave was necessary as the notice of intention to defend was given after the time limited for doing so. We reject this argument as it involves a misconstruction of the provision. Rule 6(2) does not say that a defendant who gives a late notice of intention to defend cannot file a defence or do any other thing or take any step without the leave (or more correctly an order) of the Court. It simply says that where the Rules limit the time for taking some step, such as filing a defence, the time is not extended by virtue of having filed a late notice of intention to defend.

25. That this is the effect of Rule 6(2) is made clear by the Supreme Court decision in MVIL v Sossie Joe (2007) SC863. MVIL was the defendant in the National Court. It filed a late notice of intention to defend and when it attempted, within the period of 44 days after service of the writ, to file its defence, the Registrar refused to accept it, taking the position that leave of the Court was required. The Supreme Court held that the Registrar was wrong. Rule 6(2) did not mean that if notice of intention to defend was filed late, leave of the Court was required to take any step in the proceeding. Leave was only required if the time for taking that step had expired. The Court (Injia CJ, Manuhu J, Hartshorn J) stated:

The natural and ordinary meaning of Order 7, Rule 6(2), in our view, is quite clear. It is to ensure that the defendant does not have further time to file a defence or do any other thing because he gave a notice of intention to defend after the prescribed time. It does not penalise the defendant by requiring him to seek the leave of the Court to file his defence if he has failed to file his notice of intention to defend within time.

26. Their Honours distinguished the facts of the case before them with those in Luke Tai v Australia and New Zealand Banking Group (PNG) Ltd (2000) N1979. In Tai the defendant filed a defence without the leave of the Court, 20 months after the time permitted by the Rules. The fact that it gave a late notice of intention to defend was not held against it. It was the fact that its defence was filed late and without the leave of the Court that put it in default of the Rules. The effect of Order 7, Rule 6(2) was that the late notice of intention to defend did not extend the time for filing a defence. That was a different scenario to that in Joe, where the defence was not filed late.

27. The effect of filing and serving a notice of intention to defend was to confer on the first respondent the right to take any step in the proceedings, provided the step was taken in compliance with the Rules and in particular within time limits imposed by the Rules (Badastal Ltd v Dr Puka Temu (2011) SC1092). Neither the National Court Rules nor any other law imposes a time limit on a defendant for filing a motion for dismissal of proceedings. The first respondent therefore had the right to make interlocutory applications such as moving a motion for dismissal of the proceedings.

28. We note that the primary Judge referred to both Joe and Tai. Her Honour's analysis of those decisions accords with ours and is endorsed as correct. We find no error in her Honour 'entertaining' the motion for dismissal of the proceedings. The first respondent was not required to obtain the leave or an order of the Court before filing a notice of motion for dismissal or moving such a motion. Ground 3 is dismissed.

The Court erred in law or in fact in holding that the first respondent had a right to file an application to dismiss the plaintiff's writ without first applying for leave to file its defence when they had filed their notice of intention to defend outside the time allowed under the Claims By and Against the State Act and Order 7, Rule 2 of the National Court Rules, to file an application other than a defence and when they had further not yet sought leave of the Court to file its defence outside of the statutory time period pursuant to Order 7, Rule 6(2) of the National Court Rules.

30. The appellants argue that the primary Judge erred in holding that the first respondent had a right to file an application to dismiss the proceedings when it failed to comply with three procedural requirements, in that it had:

31. This Act does not impose any time limit for filing a notice of intention to defend. It says little about such notices. The only provision of the Act that is indirectly relevant is Section 9 (filing of defence by the State), which states:

Notwithstanding anything in any other law, in any proceedings for a claim against the State, the time within which the State shall be required to file a defence or appear in response to a summons on complaint (as the case may be) shall be—

(i) where the statement of claim is endorsed on the writ—before the expiry of 60 days after the date of expiry of the time limited for it to give notice of intention to defend; or

(ii) where the statement of claim is not endorsed on the writ—before the expiry of 60 days from the date of service of the statement of claim; or

(b) where a cross-claim is made against the State—before the expiry of 30 days from the date of service of the cross-claim; or

(c) in an application under Section 57 of the Constitution—before the expiry of 90 days from the date of service of the application; or

(d) in a claim made in the District Court—before the expiry of 90 days from the date of service of the summons,

or such further time as the court before which the action is instituted, upon sufficient cause being shown, allows.

32. Section 9 has the effect amongst other things of allowing the State further time within which to file a defence. For example in the case of defendants other than the State, the time for filing a defence is limited, where the statement of claim is endorsed on the writ, by Order 8, Rule 4(a) of the National Court Rules, to 14 days after the date of expiry of the time limited for the defendant to give notice of intention to defend. In the most common situation of a writ being served in Papua New Guinea, the defendant will have by virtue of Order 4, Rule 11(b)(i) of the National Court Rules, at least 30 days to give a notice of intention to defend and at least 44 days (30 + 14) to file a defence.

33. Section 9 provides that the State has 60 days, not 14 days, after the date of expiry of the time for giving a notice of intention to defend. In the scenario just described the State would have 90 days (30 + 60) within which to file and serve a defence. Section 9 does not, however, change the expiry of the time for giving a notice of intention to defend. It is the same for all defendants.

34. This Rule does not set a time for filing a notice of intention to defend. That time is set by Order 4, Rule 11, which states:

The time to be limited for a defendant to give a notice of intention to defend shall be—

(a) in the case of service of an originating summons under Rule 26—not later than the date for hearing stated in the summons; or

Subject to these Rules, a person shall not, except by leave of the Court, take any step in any proceedings unless, before taking the step, he has filed originating process in the proceedings or has given a notice of intention to defend in the proceedings.

36. Order 7, Rule 2 simply says that if a defendant has not given a notice of intention to defend, it cannot take any step – which would include filing a motion to dismiss the proceedings – without the leave of the Court.

37. The appellant appears to be arguing that Rule 2 complements Order 7, Rule 6(2) by requiring that the leave of the Court was required in the present case before the first respondent moved the motion for dismissal of the proceedings. However, Rule 2 does not apply here as the first respondent did give a notice of intention to defend. It did so on 7 June 2007, well before filing the notice of motion for dismissal on 2 December 2008. It did not offend against Order 7, Rule 2.

38. This Rule does not require a defendant who has given a late notice of intention to defend to seek leave of the Court to file a defence out of time before moving the Court for dismissal of the proceedings. A defendant who has given notice of intention to defend can file a notice of motion seeking dismissal of the proceedings at any time, irrespective of whether a defence has been filed or whether leave to file a late defence has been obtained. The appellant has misunderstood Order 7, Rule 6(2). Its correct operation is explained in the reasons we gave for dismissing ground 2.

39. We find that the first respondent committed no breaches of procedural requirements and that the primary Judge committed no errors of law in the manner contended for. Ground 4 is dismissed.

The Court erred in law in hearing the first respondent's notice of motion filed on 2 December 2008 to dismiss the proceedings for want of Section 5 notice under the Claims By and Against the State Act when the respondents had not yet obtained leave of the Court or an order to file a late defence pursuant to Order 7, Rule 6(2) of the National Court Rules.

This is a rehash of the argument in grounds 3 and 4(c). The argument is misconceived. Ground 5 is dismissed.

In considering the fact that the respondents' notice of intention to defend was filed well out of time, the Court erred in law or in fact in that the Court failed to apply proper consideration as to the issue of lateness and or delay by the first and second defendants to file their appearance and defence and thereby erroneously allow the motion for dismissal when the motion challenging the appellant's claim was filed hopelessly out of time contrary to Order 7, Rule 6(2) of the National Court Rules.

This is a rehash of the argument in grounds 3, 4(c) and 5. The argument is misconceived. Ground 6 is dismissed.

The Court erred in law and in fact to rule that the appellant was out of time pursuant to the Frauds and Limitations Act and dismissed the proceedings for this reason when the plaintiff's contracts from which the action arose was still current at the time the proceedings were instituted by the appellant.

43. The appellant argues that the primary Judge dismissed the proceedings as the appellant was 'out of time' under the Frauds and Limitations Act. In fact, because of the finding of breach of Section 5 of the Claims By and Against the State Act, her Honour found it unnecessary to consider in detail the issue of whether the action was statute-barred or time-barred under the Frauds and Limitations Act.

44. Her Honour, however, made it sufficiently clear that in light of her finding that the date on which the cause of action accrued was 18 August 1999 (as explained in ground 1 above), the claim was indeed time-barred by virtue of Section 16(1) (limitation of actions in contract, tort, etc) of the Frauds and Limitations Act, which states:

(c) to enforce an award, where the submission is not by an instrument under seal; or

(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

45. Under Section 16(1) the appellant had until 18 August 2006 to file the writ. In fact it was filed on 22 November 2006, a little over four months late. As we found in our determination of ground 1, the primary Judge did not err in finding that the cause of action arose on 18 August 1999. Her Honour did not err by not taking into account that the appellant's contracts with the 17 ILGs were allegedly still current when the proceedings were instituted. Ground 7 is dismissed.

The Court erred in law to dismiss the appellant's court proceedings against the first respondent on the issue of compliance with Section 5 of the Claims By and Against the State Act when there was evidence that the appellant had complied with that statutory requirements because of the fact of its acceptance by the then Acting Attorney-General Fred Tomo and therefore the Court's proper consideration should have only been to give leave to the first respondent to file its defence out of time at this stage of the proceedings.

47. The appellant argues that its Section 5 notice was 'accepted' by the Acting Attorney-General and therefore the only issue the primary Judge should have been concerned about was whether the first respondent should have been granted leave to file a defence out of time.

48. We have already considered this argument in our determination of ground 1. The Acting Attorney-General Mr Tomo did not accept the notice in the sense of taking no issue with its lateness. He simply acknowledged receiving it. It was an act of courtesy, not an indication that he took no issue with it being given late.

49. Besides that, as we said in our determination of ground 1, if Mr Tomo had stated or indicated that there was no problem with the Section 5 notice, that would not have made any difference. As a general principle an estoppel cannot be invoked in respect of a statutory condition precedent such as the requirement to give notice under Section 5(2) (Joe Kerowa v MVIL (2010) SC1100). We cannot see any exceptional circumstances here that would warrant departure from that principle. Ground 8 is dismissed.

The Court erred in law or in fact in overlooking and not considering the fact that the first respondent had abused the court process to refile an application in similar terms which was earlier dismissed for want of prosecution and that the dismissal order was entered and is still current and the proper recourse was for the respondents to apply to set aside the dismissal order before proceedings to pursue its notice of motion, therefore wrongly held that respondents' application was properly before the court.

52. The appellant argues that the primary Judge erred by 'not considering' the fact that the motion that her Honour upheld, resulting in dismissal of the proceedings, was in similar terms to an earlier motion that had sought the same relief but which had been dismissed for want of prosecution.

53. It is not correct to say that the primary Judge did not consider these matters. Her Honour did consider them, in some detail, setting out the facts and applying the law in a clear and coherent fashion. Her Honour pointed out that the first respondent's notice of motion filed on 2 December 2008 was in similar, but not the same, terms as a notice of motion, also seeking dismissal of the proceedings, filed on 19 August 2008. She noted, having considered a written submission by the appellant, that the earlier motion was dismissed for want of prosecution on 5 November 2008. Her Honour then dealt with the primary argument put by the appellant: that the motion of 2 December 2008 raised issues that were res judicata.

54. Res judicata is the common law principle that provides a defence against a party who brings back to court a matter that has already been determined. Her Honour held that the principle did not apply here as the order for dismissal of the earlier motion was made without a full hearing on the merits.

55. We agree with her Honour's treatment of these issues. An essential prerequisite for a matter to be regarded as res judicata is that the earlier judicial determination followed a hearing on the merits of the matter which is before the court in the later hearing. In Peter Yama v PNGBC Ltd (2008) SC922 the Supreme Court stated, following the leading Supreme Court decision in Titi Christian v Rabbie Namaliu OS No 2 of 1995, 18.07.96, unreported, that the following elements must be resolved in the affirmative if res judicata is to apply:

56. We highlight element (e): the earlier decision must have determined the question that is before the Court at the later hearing. The importance of this element has been emphasised in a number of National Court decisions, for example Mark Ekepa v William Gaupe (2004) N2694, Ivan Saun v Chief Inspector Hodges Ette (2005) N3031 and Alan Stevens v Kopi Larapa (2013) N5425.

57. Here, the central issue before the primary Judge, arising from the notice of motion filed on 2 December 2008, was whether proceedings should be dismissed for failure to comply with Section 5 of the Claims By and Against the State Act. That issue had never been determined before. It was not even heard when the notice of motion filed on 19 August 2008 was dismissed for want of prosecution on 5 November 2008. The issue was certainly not res judicata.

58. As for the argument that the primary Judge should have required the first respondent to apply to have the dismissal order of 5 November 2008 set aside before hearing its notice of motion filed on 2 December 2008, her Honour addressed this issue in the following terms:

Should the defendant [ie the first respondent] set aside the order for dismissal then later refile a fresh motion for dismissal? The order [of 5 November 2008] to dismiss the defendant's amended motion was done ex parte. The defendant had two alternatives. It could have applied to set aside those orders then later refile the same motion. But it could also file an entirely fresh motion, though not in the same terms as the one earlier dismissed. The latter has occurred here. The dismissed motion is not in the same terms as the motion now before me. There are no obstacles preventing the defendant or any other party from refiling a fresh, new motion.

The defendant has correctly filed and served a fresh, new motion. The evidence is also that the plaintiff did not raise any objections, hence the defendant's motion proceeding this far.

59. We see no error in her Honour's treatment of this issue. We note that a year after the decision being appealed against, her Honour in a different case addressed the same issue. In Paradise Contractors Ltd v Milne Bay Provincial Government (2010) N3975 her Honour dismissed a notice of motion which was filed on the same day and in the same terms as a notice of motion dismissed for want of prosecution earlier that day. In the circumstances of that case her Honour found that the party filing the notice of motion should have first moved a motion under Order 12, Rule 8 of the National Court Rules to set aside the order for dismissal of the first motion before filing another motion in the same terms. The facts of that case, where the second motion was in the same terms as the first motion, can be distinguished from the facts of the present case, where the second motion was in similar, but not the same, terms as the first motion.

60. We agree with her Honour's reasoning and conclusions on both the res judicata issue and on the issue of whether the first respondent was obliged to apply for and obtain an order setting aside the order of 5 November 2008 before filing the notice of motion on 2 December 2008. Her Honour correctly held that the subject matter of the notice of motion filed on 2 December 2008 was not res judicata and that the first respondent was not required to set aside the order of 5 November 2008 before filing the notice of motion on 2 December 2008. Ground 10 is dismissed.

That the Court erred in law and in fact in dealing with a dismissed motion refiled in the same terms without considering the issue of abuse of court process when such was the appropriate consideration and not the issue of res judicata as held by the Court because there is in existence a dismissal order that required to be set aside or reviewed.

62. The appellant argues that the primary Judge erred by focussing on the issue of res judicata rather than the issue of abuse of process.

63. This is a repetition of ground 10 and we reject the argument. Her Honour correctly emphasised that the appellant's earlier motion for dismissal was not heard or determined on its merits. The doctrine of res judicata did not apply. Her Honour also dealt with the argument that there was an abuse of process due to the first respondent's failure to apply to set aside the order of 5 November 2008. It was correctly found that there was no abuse of process. Ground 11 is dismissed.

The Court in dealing with the issue of res judicata on the refiling of the first respondent's application after dismissal, erred in law or in fact in not considering the appellant's objections against the first respondent's notice of motion based on abuse of process and not on principles of res judicata, and therefore further erred in finding that the first respondent's application was properly before the Court to be dealt with.

There was a substantial breach of natural justice when the Court did not hear at all and consider the appellant's notice of motion filed on 5 February 2009 seeking to dismiss the first respondent's notice of motion filed on 2 December 2008 on the basis that respondents had not obtained leave of the court to file a defence and were not entitled to do anything later than if they had given their notice of intention to defend within that time.

66. The appellant argues that the primary Judge breached the principles of natural justice by not hearing and considering its notice of motion filed on 5 February 2009. It was through that notice of motion that the appellant sought orders that the first respondent's notice of motion filed on 2 December 2008 be dismissed on the ground that the respondents had not obtained leave to file a defence out of time.

67. This argument is based on the false premise that the primary Judge did not hear or consider the appellant's motion. Her Honour made it clear in the opening two sentences of her judgment that she had heard and considered the appellant's motion. Her Honour stated:

Before me are two notices of motion filed by Henaos Lawyers [for the appellant] on 5 February 2009 and Posman Kua Aisa Lawyers [for the first respondent] on 2 December 2008.

Henaos Lawyers' motion seeks to dismiss the motion filed by PKA Lawyers for failure to apply for leave to take any steps in the proceedings, because they had not filed a notice of intention to defend with the time period prescribed by the National Court Rules.

68. At paragraph 14 of the judgment, under the heading 'Preliminary Issues', her Honour stated:

In its notice of motion the plaintiff [the appellant] claims or alleges that the defendant [the first respondent] is before this Court without its leave and should not be allowed to appear. It presented written submissions in relation to this issue.

The issue as I stated earlier is whether the defendants can appear if they have not filed a notice of intention to defend within the time period required by the Rules.

69. Her Honour proceeded to deal with the argument. She found that the first respondent was able to move its motion for dismissal of the proceedings without the leave of the Court as it had given a notice of intention to defend. It was of no consequence that the notice was given after the time prescribed by the Rules. Her Honour did not breach the principles of natural justice. Ground 13 is entirely misconceived and is dismissed.

The Court wrongly applied the principle of law in the case of Motor Vehicle Insurance Ltd v Sossie Joe (2007) SC863 to the facts of this case in that when a defendant files his notice of intention to defend outside the prescribed time he requires leave of the court under Order 7, Rule 6(2) of the National Court Rules to file a defence or do anything later than filing the notice of intention to defend.

This is a rehash of the argument in grounds 3, 4, 5 and 6. The primary Judge considered the Supreme Court's decision in MVIL v Sossie Joe (2007) SC863 and applied it correctly. Ground 14 is dismissed.

The Court erred in finding that the appellant had not objected at all to the respondent's notice of motion when in fact the appellant did file a motion on objection stating the reasons and grounds of objection and submissions on the objections, which the Court did not take into consideration.

72. This is another ground of appeal that is based on a false premise. It is alleged that the primary Judge made a finding that the appellant had not objected to the first respondent's notice of motion and did not take the appellant's objection to the Court hearing the first respondent's motion into consideration. As we pointed out in our determination of ground 13 the primary Judge did hear and determine the appellant's notice of motion. Her Honour did not find that the appellant had not objected. Her Honour did not fail to take the appellant's objections into consideration. Ground 15 is dismissed.

The Court erred in law in considering the substantive nature of the action when the motion before the court was interlocutory applications in nature. [sic]

74. This ground makes little sense. It seems to be argued that because the first respondent had made an interlocutory application the Court was not permitted to consider the substantive nature of the action. This is nonsensical. Ground 16 is dismissed.

The Court erred in law in dismissing the appellant's court proceedings against the respondents based on the first respondent's motion filed when the second respondent had not yet filed an appearance or sought leave to file defence out of time.

76. The appellant argues that the primary judge should not have dismissed the proceedings against the second respondent as the motion for dismissal was filed by the first respondent; the second respondent had not filed an appearance or sought leave to file a defence out of time.

77. We have already dealt with the proposition that the second defendant did not give a notice of intention to defend. In our determination of ground 2, we found that in fact the notice of intention to defend filed on 7 June 2007 was in the name of both respondents.

78. As to the proposition that the second respondent had not sought leave to file a defence out of time, this is factually correct. However, that had no bearing on the right of the first respondent to file a notice of motion seeking dismissal of the entire proceedings. It exercised that right and the primary Judge properly heard and determined the motion and dismissed the entire proceedings. Ground 17 is dismissed.

The Court further erred in law or in fact in that coming to the decision it did, it failed to properly consider and take into account various payments by the first respondent in settlement of the appellant's claim amounting to K2,572,851.00 acquiescing to and admitting the appellant's claim under its various contracts, thereby satisfying the requirements of part payments under the Frauds and Limitations Act.

80. We have encountered particular difficulty understanding this ground of appeal. The submissions of Mr Furigi provided little enlightenment. It appears to be an argument that the proceedings should not have been dismissed as the first respondent paid the sum of K2,572,851.00 towards the appellant's claim. The first respondent was acquiescing to and admitting the claim and this brought the part-payment requirements of the Frauds and Limitations Act into operation.

81. We uphold the submissions of Mr Tanuvasa that this ground should be dismissed as there is no evidence of such a sum being paid. There was no evidence of that allegation of fact before the National Court and there is no evidence of it before the Supreme Court. If there were such evidence and even if it were agreed by the parties that such a sum was paid by the State to the appellant it would not necessarily follow that the first respondent has acquiesced to or admitted the claim. The reference to the 'part-payment requirements of the Frauds and Limitations Act' is so vague, it does not warrant consideration. Ground 18 is dismissed.

82. We have dismissed all the grounds of appeal. It follows that the appeal must be dismissed. The order of the National Court remains intact, so the National Court proceedings remain dismissed. Costs will follow the event.

Judgment accordingly.
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Furigi Lawyers: Lawyers for the Appellant
Solicitor General: Lawyer for the First Respondent

Supreme Court of Papua New Guinea

Waim No 85 Ltd v Independent State of Papua New Guinea [2015] PGSC 34; SC1405 (29 January 2015)