Breckwoldt & Co (NG) Pty Ltd v Harold Gnoyke [1974] PNGLR 106

• Jurisdiction: Papua New Guinea
• Judge: Lalor J:
• Judgment Date: 30 June 1974
• Court: Supreme Court
• Citation: [1974] PNGLR 106
• Year: 1974
• Judgement Number: FC61

Full Title: Breckwoldt & Co (NG) Pty Ltd v Harold Gnoyke [1974] PNGLR 106

Full Court: Clarkson J, Prentice J, Lalor J

Judgment Delivered: 30 June 1974

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

BRECKWOLDT & CO. (N.G.) PTY. LTD.

V

GNOYKE

Port Moresby

Clarkson Prentice Lalor JJ

27 May 1974

29-30 May 1974

30 June 1974

APPEAL — When appeal lies to Full Court — Interlocutory orders — Leave to appeal required — Supreme Court (Full Court) Act 1968, s. 20 (3) (b) (iii) The relevant portion of s. 20 of the Supreme Court (Full Court) Act, 1968, is as follows: —

s. 20 (3) No appeal lies to the Full Court —

(b) without leave of the Judge or of the Full Court, from an interlocutory judgment made or given by a Judge except —

(i) where the liberty of the subject or the custody of infants is concerned;

(ii) in cases granting or refusing an injunction or appointing a receiver; and

(iii) in such other cases prescribed by the Rules of Court as are in the nature of final decisions.1.

APPEAL — Interference with discretion of primary judge — Wrong principle of law — Stay of proceedings — Two suits standing on same basis but raising distinct causes of action — Same plaintiff — Same defendant — No findings made in first suit — Substantial miscarriage of justice.

PRACTICE AND PROCEDURE — Stay of proceedings — Two suits standing on same basis but raising distinct causes of action — Same plaintiff — Same defendant — No res judicata or issue estoppel.

The appellant/plaintiff brought an action against the respondent for money had and received, alleging therein that the respondent, whilst an employee of the appellant had withdrawn outside the ambit of his authority, certain moneys of the appellant, and had appropriated them to his own use. The respondent's counterclaim for damages for wrongful dismissal and for an amount said to be due for a bonus was denied. After the hearing of this action was commenced the appellant brought a second action against the respondent seeking a declaration that certain shares bought by the respondent in a rival company should be held on trust for the appellant and damages for breach of contract. On appeal against an order made on summons perpetually staying the second proceedings.

Held

(1) the application should be treated as one for leave to appeal against an interlocutory order which has not been prescribed under s. 20 (3) (b) (iii) of the Supreme Court (Full Court) Act, 1968 as being in the nature of a final order.

(2) (Lalor J. dissenting), the situation involving as it did two suits, which though both standing upon the same basis, a contract of service, raised distinct causes of action, involved different claims for relief, and contained differential issues (albeit with some common factual issues) and in which there were no findings yet made, no question of res judicata or issue estoppel had arisen.

(3) (Lalor J. dissenting), the judge ordering the stay, exercised his discretion upon a wrong principle when he found that the plaintiff was in "breach of the principle referred to in Henderson v. Henderson (1843) 3 Hare 100, 67 E.R. 319, that it has omitted to bring forward the whole of the case that it ought to have brought forward", the Henderson case being a case of res judicata or issue estoppel.

(4) (Lalor J. dissenting), as substantial injustice might well be done if the appellant was prevented from litigating a claim which could not be said to be frivolous, the order to stay the proceedings in the second action should be set aside and the application reheard by the trial judge before completion of the first action.

Test in Australian Coal and Shale Employees' Federation v. The Commonwealth (1953), 94 C.L.R. 621 applied.

(Per Prentice J.) The powers given and the duties in regard thereto imposed by s. 4 (6) of the Judicature Act of Queensland are available in the Supreme Court of Papua New Guinea pursuant to s. 10 of the Courts and Laws Adopting Ordinance of 1888.

Appeal

This was an appeal against an order, made on summons by a judge in Chambers, perpetually staying proceedings. Relevant facts relating to the history of the litigation involved appear in the judgment of Prentice J.

Counsel

W. F. Libling, for the appellant/plaintiff.

J. A. Griffin and R. V. Gyles, for the respondent/defendant.

Cur. adv. vult.

30 June 1974

CLARKSON J: This is an application for leave to appeal to the Full Court from an order finally staying this action.

At the hearing rulings on motions to amend the application by adding particulars and to object to the competency of the application were reserved and the whole matter was argued.

The plaintiff company carries on business in Papua New Guinea and the defendant was its Port Moresby manager. The termination of this relationship in February 1973 has led to litigation between the parties consisting of two actions, the first of which has come to trial but is not yet finished and the second of which is the action in which the stay order now under appeal has been made.

In the first action the plaintiff claimed $9,000 as moneys had and received by the defendant for the use of the plaintiff. The particulars refer to a cheque "wrongly drawn" by the defendant on the plaintiff's bank account for this amount. The defence was merely a denial that the defendant had received any sum for the use of the plaintiff but the plaintiff was content to join issue on it.

At the same time the defendant counterclaimed for damages apparently for wrongful dismissal and for an account of certain bonus moneys payable and for payment thereof. As to the bonus moneys, the counterclaim set up under the employment agreement there was payable to the defendant a bonus "calculated in the central accounts division of the plaintiff in Rabaul, payment of the bonus being permitted after verification and release only".

The counterclaim then goes on, in effect to concede that the plaintiff has not caused its central accounts division in Rabaul to calculate and verify the proper amount of the bonus which however the defendant says exceeds $9,000.

It will be seen that at that stage of the pleadings it is not clear whether the defendant admits having received $9,000 or any sum from the plaintiff nor, if he did, whether it relates to the bonus which on the taking of the account will, it is alleged, exceed $9,000.

Notwithstanding this situation, the plaintiff proceeded to plead to the counterclaim. It alleged breaches by the defendant of implied and express terms of the agreement and it may be inferred that those breaches are said to justify termination of the contract by the plaintiff although I note that it is denied that the defendant was dismissed by the plaintiff.

The defendant joined the issue with the defence to the counterclaim.

I do not wish to comment unnecessarily on the inadequacy of the pleadings in the first action, the trial of which is, we are told, almost completed but I have found it necessary to say what I have because it is necessary for us to identify the issues in the first action. I think it appears clear enough that there is a claim for $9,000 for moneys had and received and a counterclaim for damages for breach of contract and that both claim and counterclaim are denied.

On 22nd February, 1964, the plaintiff pursuant to order amended its defence to the counterclaim in the first action to allege, inter alia, that the defendant wrongfully and in breach of his contract obtained and negotiated a benefit for himself "which was in the scope of his work ...". Three days later the plaintiff issued the writ in the second action claiming, inter alia, a declaration that certain shares in Pacific Frozen Foods Pty. Ltd. held by the defendant are held upon trust for the plaintiff. The hearing of the first action had already commenced on 20th February. No application has been made by the plaintiff to amend the statement of claim in the first action by adding the causes of action alleged in the second and it is of little use for us to speculate why the plaintiff and its advisers have adopted the course they have.

The defendant then applied to stay proceedings in the second action on the grounds that they were vexatious and oppressive and otherwise constitute an abuse of this Court's process.

The defendant's affidavit in support of the motion set up two grounds in support. The first was that certain evidence already given in the first action taken in conjunction with the fact that the plaintiff did not in the first action claim the relief sought in the second action demonstrated that the proceedings in the second action "have been issued for the purpose of intimidation and not for the purpose of vindicating any legal right".

Secondly it was said that the evidence given in the first action demonstrated that the plaintiff had "no chance of success in the present proceedings."

If I may say so, and I say it with great respect, it is unfortunate that the motion was not brought on before the judge trying the first action who was familiar...