Ahmadiyya Muslim Mission v Bank of South Pacific Ltd (2005) N2845

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 25 May 2005
• Court: National Court
• Citation: (2005) N2845
• Year: 2005
• Judgement Number: N2845

Full Title: Ahmadiyya Muslim Mission v Bank of South Pacific Ltd (2005) N2845

National Court: Cannings J

Judgment Delivered: 25 May 2005

N2845

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 239 OF 2003

AHMADIYYA MUSLIM MISSION

Plaintiff

V

BANK OF SOUTH PACIFIC LTD

Defendant

KIMBE : CANNINGS J

20, 25 MAY 2005

RULING ON MOTION

Practice and procedure – writ of summons – notice of motion – application to dismiss proceedings – want of prosecution – National Court Rules, Order 4, Rule 36; Order 10, Rule 5 – court’s discretion – relevant considerations – delay of 21 months after close of pleadings – no reasonable explanation – prejudice to the defendant – defendant’s lawyers acted fairly; plaintiff’s lawyers were slack – interests of justice evenly divided – exercise of discretion in favour of defendant – order for dismissal.

Cases cited

Dan Kakaraya v Sir Michael Somare SC762

John Niale v Sepik Coffee Producers Ltd and Others (2004) N2637

Viviso Seravo v Jack Bahafo (2001) N2078

S Lupalrea for the plaintiff

K Imako for the defendant

CANNINGS J:

INTRODUCTION

This is a motion to dismiss the proceedings the plaintiff commenced against the defendant on the ground of want of prosecution.

BACKGROUND

Writ and statement of claim

On 26 February 2003 Lupalrea Lawyers of Kimbe filed a writ of summons on behalf of the plaintiff, a registered religious association. The Bank of South Pacific was and is the sole defendant.

The statement of claim attached to the writ alleges that in June 2002 a bank employee permitted a third party, named as “Harry Dago”, to fraudulently withdraw K13,480.00 from the plaintiff’s account at the Kimbe branch of Bank South Pacific by negotiating five forged cheques. It is claimed that the employee was negligent as he knew that the third party was not associated with the plaintiff, that the signatures used on the cheques were forgeries and that two authorised signatures were required on the cheques but only one was present. The plaintiff claims reimbursement of K13,480.00, interest and costs. The cause of action appears to be the common law tort of negligence.

Events since filing of writ

On 11 March 2003 the District Court at Kimbe convicted a person called “Harry Dako” (presumably the same person as the one referred to in the statement of claim) of a criminal offence. He was sentenced to two years imprisonment, all of which was suspended on condition that he reimburse or repay K12,800.00 to the Muslim Church, described as the complainant, within 12 months.

On 21 March 2003 the defendant filed a notice of intention to defend.

On 11 June 2003 the defendant filed a defence, denying that it was negligent and claiming that the plaintiff was guilty of contributory negligence by failing to ensure that its chequebook was kept in a safe place and that unauthorised persons did not have access to it.

On 8 July 2003 the plaintiff filed a reply to the defence. That marked the close of the pleadings (National Court Rules, Order 8, Rules 5, 6 and 23.)

19 August 2003 was six weeks after the close of the pleadings and therefore the date by which the plaintiff should have set the proceedings down for trial (National Court Rules, Order 10, Rule 5).

On 7 December 2004 the defendant’s lawyers wrote to the plaintiff’s lawyers putting them on notice that if they failed to progress the matter within seven days they would apply to dismiss the proceedings for want of prosecution.

The plaintiff’s lawyers did not respond to that letter and took no steps to progress the matter until 6 May 2005 when they filed a notice to set down for trial.

In the meantime on 28 April 2005 the defendant filed and served the notice of motion presently before the court, seeking to have the whole proceedings dismissed for want of prosecution. The motion is supported by affidavits of Kenneth Imako of 18 April 2005 and Kila Nouairi of 19 April 2005 (both deposing to the background facts) and Rex Noga of 20 May 2005 (deposing to service of the notice of motion and the other two affidavits).

RELEVANT LAW

The defendant bases its motion on Order 4, Rule 36 of the National Court Rules, (want of prosecution) which states:

(1) Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may stay or dismiss the proceedings.

(2) Sub-rule (1) applies, with any necessary modifications, in relation to a cross-claimant as it applies in relation to a plaintiff.

However as I pointed out to Mr Imako, for the defendant, when the motion was heard, that rule falls within Division 4.4 of the Rules (originating summons) which by virtue of Order 4, Rule 23 (application) applies only to proceedings commenced by originating summons. The present proceedings were commenced by writ of summons. Therefore the appropriate rule is Order 10, Rule 5 (want of prosecution). That rule falls within Division 10.1 (setting down for trial) which by virtue of Order 10, Rule 1 (application) applies to proceedings commenced by writ of summons.

Order 10, Rule 5 states:

Where a plaintiff does not, within six weeks after the pleadings are closed, set the proceedings down for trial, the Court, on motion by any other party, may, on terms, dismiss the proceedings or make such other order as the Court thinks fit.

I do not think that the plaintiff has been prejudiced by the confusion about what rule is relied on. There is no material difference between Order 4, Rule 36 and Order 10, Rule 5. They both deal with the power of the court to dismiss proceedings on the ground of want of prosecution. The general principles to apply in deciding both sorts of applications are, if not the same, very similar. Similar principles apply in the case of applications to dismiss, for want of prosecution, appeals from the District Court to the National Court and from the National Court to the Supreme Court. (See, for example Viviso Seravo v Jack Bahafo (2001) N2078, National Court, Kandakasi J, and Dan Kakaraya v Sir Michael Somare SC762, Supreme Court, Los J, Sawong J, Cannings J, respectively.) Therefore I will deal with the motion as if it were an application to dismiss the proceedings under Order 10, Rule 5.

DEFENDANT’S SUBMISSIONS

The defendant is the party moving the motion. Mr Imako asserts that there has been an inordinate and unreasonable delay in prosecuting the case and suggests that this is maybe because of Harry Dago’s conviction in the District Court and the order that he repay the plaintiff K12,800.00. The defendant put the plaintiff’s lawyers on notice almost six months ago that it would move this motion unless something was done. The defendant waited a reasonable time. The plaintiff did nothing and has not provided a reasonable explanation. If the matter is allowed to go to trial this could easily result in the plaintiff receiving a double-payment as it already has the benefit of the District Court order that Harry Dago repay the money to the plaintiff. The delay has caused prejudice to the defendant.

PLAINTIFF’S SUBMISSIONS

Mr Lupalrea for the plaintiff submitted that the apparent delay had come about because the defendant had not filed a notice for further and better particulars. That was the hold-up in the case and the other problem was that the lawyers had not been communicating. The case can be easily expedited. It is now just a matter of giving it a date and filing and serving a notice of trial. The issues are important. The plaintiff is claiming gross negligence by the defendant, a large bank, and there is a suggestion of collusion between a bank employee and the perpetrator of a fraud. The plaintiff is a small religious organisation. It is important that the court ensures that justice is done.

RELEVANT CONSIDERATIONS

The basic preconditions for the exercise of the court’s power under Order 10, Rule 5, are satisfied in this case. First the plaintiff has not within six weeks after the close of pleadings set the matter down for trial. Secondly, another party has given notice of a motion to dismiss the proceedings. The court’s power is discretionary. It must be satisfied that the circumstances make it just and proper for the proceedings to be dismissed.

In Seravo v Bahafo Kandakasi J summarised the considerations to be taken into account in dealing with such applications. His Honour stated, at page 4:

It is now clear law especially in the context of O.10 r.5 of the NCRs that an application for a dismissal of proceedings for want of prosecution may be granted if:

1. The plaintiff's default is intentional or is allowing for an inordinate and inexcusable delay in a prosecution of his claim;

2. There is no reasonable explanation given by the plaintiff for the delay; and

3. That the delay has cause injustice or prejudice to the defendant.

This is apparent from cases like that of Ronald...