Tuwi v Goodman Fileder International Ltd [2016] PGSC 17; SC1500 (18 March 2016)

SC1500
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO.93 0F 2010

JACKSON TUWI & ONE HUNDRED TWENTY-SIX (126) OTHERS whose names appear at Schedule One (1) of the Statement of Claim suing for themselves
Appellants

AND:
GOODMAN FILEDER INTERNATIONAL LIMITED
First Respondent

CHEMICA LIMITED
Second Respondent

FARMSET LIMITED
Third Respondent

Waigani: David, Kariko &Murray, JJ
2014: 7^th July
2016: 18^th March

APPEAL –PRACTICE & PROCEDURE –dismissal of proceedings – whether representative action – procedural requirements for representative action – failure to comply with directions – computation of time – whether reasonable cause of action disclosed

Cases cited:

Eliakim Laki &Ors v Maurice Alaluku &Ors (2000) N2001
Kerry Lero trading as Hulu Hara Investments Ltd v Philip Stagg (2006) N3950 Peterson Borasu v Romilly Kila Pat(2012) N4738
Philip Takori v Simon Yagari (2008) SC905
Simon Mali v The State (2002) SC 690
Tigam Malevo v Keith Faulkner (2009) SC960
Wendel Nokopa v Inspector Augustine Wambe (2005) N2881

Overseas cases:

Duke of Bedford v Ellis [1900] UKLawRpAC 56; [1901] AC 1
Smith v Cardiff Corporation [1954] 1 QB 210

Legislation:
National Court Rules

Counsel:

Mr P Kak, for the appellants
Mr W Neill, for the respondents

DECISION

18^thMarch, 2016

1. BY THE COURT: This is an appeal against the decision of the National Court at Mt Hagen given on 25^th June 2010, whereby the learned primary Judge dismissed the entire proceedings WS No. 632 of 2006 for reasons that:
   
   • (1) The proceedings failed to comply with the legal requirements for filing a representative action;
   • (2) The appellants (then the plaintiffs) failed to comply with a previous directional order of the Court; and
   • (3) The proceedings disclosed no reasonable cause of action and were frivolous and vexatious.
     

Brief background

2. In the National Court proceedings, the appellants who comprise some 127 chicken farmers and who originate from the Western Highlands, Southern Highlands and Enga provinces sued the respondents for negligence alleging that between 2004 and 2005 they were sold poor quality stock feed which caused their chicken to be sick that they could not sell resulting in loss of business. They claimed that the first respondent Goodman Fielder International Limited (Goodman Fielder) supplied the sub-standard stock feed to the other respondents Chemica Limited (Chemica) and Farmset Limited (Farmset) who in turn sold it in their respective stores in Mt Hagen to the various farmers.
   

Grounds of appeal

3. There are 13 grounds of appeal (grounds (a) – (m)) contained in the Notice of Appeal but those grounds may be summarized broadly into 3 grounds - that the primary Judge erred in fact and law in deciding that:
   
   • (1) the National Court proceedings were representative in nature requiring strict compliance with the rules and the practice of the Court with respect to such actions (grounds (a) – (c));
     
   • (2) the appellants had failed to comply with an order of the Court made on 16^th November 2007 (grounds (d) – (f)); and
     
   • (3) the pleadings disclosed no cause of action (grounds (g) – (m)).
     
4. In our decision, we refer to and address the above three grounds and the issues raised by them.
   

Representative action

5. The pleadings in WS No. 632 of 2006 did not claim that Jackson Tuwi commenced the proceedings in a representative capacity. The proceedings were initiated by a writ of summons later amended that is headed “Jackson Tuwi and one hundred and twenty six (126) others whose names appear at Schedule One (1) of the Statement of Claim suing for themselves”.
   
6. The law in relation to representative proceedings was summarized by the Supreme Court in Tigam Malevo v Keith Faulkner (2009) SC960 and that is:
   
   • (1) all intended plaintiffs must be named in the originating process;
     
   • (2) each and every intended plaintiff must give specific instructions (evidenced in writing) to their lawyers to act for them; and
     
   • (3) any person in whose name proceedings are commenced and who claims to represent other intended plaintiffs must produce an authority to the Court to show that he was authorized by them to file proceedings as a class representative.
     
7. The appellants’ argument is that the National Court proceedings was not representative proceedings but rather proceedings commenced by each plaintiff in his own name and therefore it was not necessary to comply with requirements (2) and (3) noted above. The argument continues that there was no representative suing on behalf of others and that each individual plaintiff sued in his or her own name as is permitted under Order 5 Rule 2 National Court Rules which reads:
   

“2. Joinder of parties generally

Two or more persons may be joined as plaintiffs or defendants in any proceedings-

(a) where-

• (i) if separate proceedings were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and
  
• (ii) all rights to relief claimed in the proceedings (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or
  

(b) where the Court gives leave to do so.”

8. The appellants submit that in respect of the claims of each of them in the National Court proceedings, common questions of law or fact arose. They further submit that the title of the proceedings and the endorsement on the Statement of Claim do not state that one or more persons are representing others as the plaintiffs, and so the requirements in representative actions confirmed by Tigam Malevo v Keith Faulkner (supra) had no application.
   
9. His Honour the primary Judge addressed the issue as follows:
   

“In the present case, I reject the contention by the plaintiffs that the action is not a representative action. It is a representative action because the features of a representative action are so obvious in the amended writ of summons and statement of claim. First, the plaintiffs alleged that they are poultry farmers and that they fell victims of the negligent actions of the defendants when the defendants supplied defective stock feed to them. They alleged that when they fed the chooks with the defective stock feed, the chickens became unfit for sale or public consumption. As a result, they suffered loss. In my view, these matter show that, they have a common interest in the matter.”

10. We agree with his Honour’s observations and are not persuaded otherwise by the appellants’ submissions.
    
11. Order 5 Division 1 (Rules 1-17) National Court Rules deals with “Joinder of Causes of Action and Parties”. Order 5 Rule 2 provides in general terms for the joinder of parties. Parties may be joined as plaintiffs where if they filed separate proceedings, some common question of law or fact were to be raised or the relief sought arises out of the same transaction or series of transactions. We consider it a misconception to say that the manner or form in which the plaintiffs sued is permitted by Order 5 Rule 2. If that Rule is relied upon, each plaintiff is required to be named separately in the action. That is, it is necessary to individually and separately name and describe each plaintiff as a party, and in the present case each plaintiff would need to be named and described as the first plaintiff to the one hundred and twenty-seventh plaintiffs. Each plaintiff is thereby permitted to pursue his case as he considers in his best interests. He may wish to change legal representation so for example if the sixth, thirty-fourth and ninety-ninth plaintiffs each changed to new separate lawyers, then those new lawyers would enter appearance for those plaintiffs (properly described and identified respectively). As another example, if some of the plaintiffs decided to seek leave to withdraw their case, the Court may on granting leave consider awarding costs against them, but each of them would have to be described properly as a party against whom the order of costs is made.
    
12. Order 5 Rule 13 on the other hand provides the appropriate and convenient procedure for persons having the same interest to be represented by one of them in litigation. In our view which is the same as that of the primary Judge, the proceedings WS No. 632 of 2006 was a representative action by Jackson Tuwi as a chicken farmer and as lead plaintiff for himself and 126 other chicken farmers listed in Schedule 1 to the amended writ of summons.
    
13. We consider there was more than a matter of common questions of law or fact arising in the proceedings. There was a common interest, a common grievance, and the reliefs sought were for the benefit of all plaintiffs; Duke of Bedford v Ellis [1900] UKLawRpAC 56; [1901] AC 1 and Smith v Cardiff Corporation [1954] 1 QB 210 applied in Peterson Borasu v Romilly Kila Pat(2012) N4738. The plaintiffs claimed that each of them bought under-quality stock feed supplied by Goodman Fielder and sold by Chemica and Farmset to them which they fed to their chickens causing the poultry to be sick and resulting in loss and damage. Obviously each claim would need to be particularized setting out for example details of purchases of chicken, how many, on what dates, from which stores, the number of chickens diseased, and the losses suffered because in representative actions, the defendant is entitled to know what each plaintiff is claiming to properly defend the claims; Eliakim Laki & Ors v Maurice Alaluku & Ors (2000) N2001; Simon Mali v The State (2002) SC 690 and Tigam Malevo v Keith Faulkner (supra). It was proper therefore for the respondents to seek further and better particulars of the claims.
    
14. It is obvious that unless joined pursuant to Order 5 Rule 2 or included in a representative action, plaintiffs who wish to sue individually must each file a separate writ; Wendel Nokopa v Inspector Augustine Wambe (2005) N2881.
    
15. We also accept the submission for the respondents that Consent Orders endorsed by the Court on 16^th November 2007 was to ensure compliance, essentially, with Order 5 Rule 13 and therefore an acknowledgement by the Court and the parties that the proceedings was, in fact, a representative action. In particular, orders numbered 4 and 6 made specific reference to Order 5 Rule 13. Those orders state:
    

“4. Pursuant to Order 5 Rule 13 of the National Court Rules, within 14 days of the date of this Order, the plaintiffs provide a written authority or authorities to the defendants’ lawyers which demonstrates that the plaintiffs’ lawyer was instructed by each person listed as a plaintiff in Schedule 1 of the Statement of Claim (filed on 23^rd May 2006) to act for them.

................................................................................................

6. Pursuant to Order 4 Rule 8 and Order 5 Rule 13 of the National Court Rules, within 14 days of the date of this Order, the plaintiffs amend their Writ of Summons and Statement of Claim at Schedule 1 (filed on 23^rd May 2006), to name and identify each plaintiff (including each plaintiff’s full name, address and occupation).”

(Our underlining)

16. In the circumstances we find no error in the primary Judge’s determination that the proceedings were a representative action. The appellants had the opportunity through the Consent Orders of 16^thNovember 2007 to cure the defective writ of summons, but the opportunity was not taken. The failure to comply with those orders and in particular orders No. 4 and 6 meant the writ of summons remained incompetent as a representative action for not meeting the procedural requirements for such an action. We therefore dismiss the first ground of appeal, and on this point alone we would dismiss the whole appeal.
    
17. While we think it is then not necessary to address the other grounds of appeal, we will do so, albeit briefly, for the sake of completeness.
    

Failure to comply with directions

18. The second ground of appeal relates to the finding that the appellants failed to comply with the directional orders of 16^th November 2007 “within 14 days”.
    
19. The primary Judge determined that the last day for compliance lapsed on 29^th November 2007 and because the appellants complied on 30^th November 2007 instead, they were out of time by a day. In calculating the final day for compliance, his Honor took into account the date of the orders, 16^th November 2007, as the first day.
    
20. The appellants submitted this was an error and we accept the submission. Order 1 Rule 14 National Court Rules provides amongst others that where a period of time longer than a day is fixed by an order to be calculated from the date of the order, the date of the order shall not be counted. We would therefore uphold the second ground of appeal.
    

Reasonable cause of action

21. The final ground of appeal asserts that the pleadings failed to disclose a reasonable cause of action. The appellants asked this Court to consider the Amended Statement of Claim together with the Amended Further and Better Particulars they filed on 30^th November 2007 to find for the appellants on this issue.
    
22. We note that the National Court’s directions of 16^th November 2007 included an order for the appellants to provide further and better particulars .It is obvious to us that that those particulars were not considered by the primary Judge for the reason that he earlier found they were filed a day late. In our view, it follows that His Honor fell into error in not considering the Amended Further and Better Particulars because of his incorrect finding.
    
23. The discretionary power to summarily dismiss claims alleged to be frivolous or vexatious or are alleged not to disclose a reasonable cause of action must be exercised sparingly and only if the pleadings are “‘obviously and almost incontestably bad”; Kerry Lero trading as Hulu Hara Investments Ltd v Philip Stagg (2006) N3950 and Philip Takori v Simon Yagari (2008) SC905. In our view, it is arguable the Amended Statement of Claim read together with the Amended Further and Better Particulars discloses a reasonable cause of action, namely a claim of negligence and that the pleadings are not “obviously and almost incontestably bad”. If the duty of care allegedly owed by each respondent to the appellants was not clearly set out as argued by the appellants, the National Court would have had discretion to direct that those allegations be properly pleaded. However the proceeding did not reach the stage where that point could be argued because his Honour erroneously disregarded the Amended Further and Better Particulars We would uphold the third ground of appeal.
    

Conclusion

24. The end result is that we dismiss this appeal as the primary Judge correctly dismissed the National Court proceedings for the reason that it was a representative action that did not comply with the requirements for the filing of such an action.
    

Order

25. This Court orders that:
    
    • (1) The appeal is dismissed.
      
    • (2) The decision of the National Court given on 25^th June 2010 in proceeding WS No. 632 of 2006 is confirmed.
      
    • (3) The appellants shall pay the respondents’ costs of this appeal, to be taxed if not agreed.
      

________________________________________________________________

Paulus M. Dowa Lawyers : Lawyer for the appellants
Ashurst Lawyers : Lawyer for the respondents