Geru Holdings Limited v James Kruse of Deloitte Touche Tohmatsu and Bank of South Pacific Limited (2019) N7867

• Jurisdiction: Papua New Guinea
• Judge: David, J
• Judgment Date: 10 April 2019
• Court: National Court
• Citation: (2019) N7867
• Docket Number: OS (CC4) No.657 of 2017
• Year: 2019
• Judgement Number: N7867

Full Title: OS (CC4) No.657 of 2017; Geru Holdings Limited v James Kruse of Deloitte Touche Tohmatsu and Bank of South Pacific Limited (2019) N7867

National Court: David, J

Judgment Delivered: 10 April 2019

N7867

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS (CC4) No.657 of 2017

BETWEEN:

GERU HOLDINGS LIMITED

Plaintiff

AND:

JAMES KRUSE of DELOITTE TOUCHE TOHMATSU

First Defendant

AND:

BANK OF SOUTH PACIFIC LIMITED

Second Defendant

Waigani: David, J

2019: 4 & 10 April

PRACTICE & PROCEDURE – application for dismissal of proceedings generally– relevant considerations – multiplicity of proceedings – abuse of process - application granted

Cases Cited

Anderson Agiru v Electoral Commission and The State (2002) SC687

William Duma v Yehiura Hriehwazi (2004) N2526

Kerry Lerro v Philip Stagg (2006) N3050

Philip Takori v Simon Yagari (2008) SC905

Telikom PNG Limited v ICCC & Digicel (PNG) Limited (2008) SC908

Treatise Cited:

Papua New Guinea Civil Procedure in the National Court by Injia et al

Counsel:

Camillus M. Gagma, for the Plaintiff

Ian Raymond Shepherd, for the First Defendant

RULING

10 April, 2019

1. DAVID, J: INTRODUCTION: This is a ruling on two contested applications. One is moved by the first defendant pursuant to a notice of motion filed on 8 February 2019 seeking principally an order under Order 12 Rule 40(1)(a), (b) or (c) of the National Court Rules and/or the inherent jurisdiction of the Court that the proceedings be dismissed generally. The other is moved by the plaintiff pursuant to a notice of motion filed on 28 November 2018 seeking three main orders and they are; to amend the originating summons filed on 16 August 2017 (the originating summons) under Order 8 Rules 50 and 53 of the National Court Rules; for leave to join Peter Kama in his capacity as director and shareholder of both Geru Holdings Ltd and Piunde Ltd (In Liquidation) as second plaintiff in these proceedings pursuant to Order 5 Rules 2, 3 and 4 of the National Court Rules; and for the second defendant to produce to the Court and the plaintiff, copies of the statements of loan account for three loan accounts for Piunde Ltd (In Liquidation) that constitute the total loan default sum of K3.39 million within seven days of the order pursuant to Section 155(4) of the Constitution and Order 9 Rule 12 of the National Court Rules.

EVIDENCE

2. The first defendant relies on the affidavits of:

1. Asher Waffi filed on 8 February 2019; and

2. Ian Raymond Shepherd filed on 31 August 2017.

3. The plaintiff relies on the affidavits of:

1. Peter Kama filed on 16 August 2017;

2. Peter Kama filed on 18 May 2018;

3. Peter Kama filed on 18 October 2018; and

4. Peter Kama filed on 28 November 2018.

4. The plaintiff also made reference to the originating summons.

5. I have considered the parties’ evidence.

OBJECTION TO USE OF AFFIDAVIT

6. The plaintiff objects to the use of the affidavit of Asher Waffi by the first defendant on the basis that; the second defendant has not filed any notice of intention to defend the proceedings; while Asher Waffi was an employee of the second defendant, he has no personal knowledge of matters concerning these proceedings and those in OS No.797 of 2015 and WS No.428 of 2017 so the facts he deposes to are hearsay and even amount to perjury; the affidavit contains submissions, analysis of facts deposed to in the affidavits relied on by the plaintiff, opinion and not percipient; the affidavit filed is a result of conspiracy between lawyers for the first and second defendants to suit their own convenience.

7. Mr Shepherd of counsel for the first defendant contends that the first defendant is entitled to use the affidavit of Mr Waffi largely under Section 61 of the Evidence Act as matters he deposes to in his capacity as legal officer of the second defendant are matters to his knowledge concerning the business records of the second defendant. In addition it is argued that; Mr Waffi has appeared before Kariko, J for the second defendant bank in proceedings entitled WS 428 of 2015 and is aware of the background of those proceedings; the plaintiff continues to serve the second defendant with court documents concerning these proceedings; it is outrageous and offensive for counsel to suggest that he and Mr Waffi are involved in a conspiracy for their convenience.

8. The National Court decision of William Duma v Yehiura Hriehwazi (2004) N2526 states that affidavits must contain facts and not opinions (unless it is expressed to be expert opinion), arguments and submissions.

9. Where there is a scandalous, irrelevant or otherwise oppressive matter in an affidavit, the matter may be struck out or the affidavit may be taken off the file: Order 11 Rule 28 of the National Court Rules.

10. While there is some merit in the plaintiff’s argument regarding the contents of the affidavit in light of the decision in William Duma v Yehiura Hriehwazi, I reject the plaintiff’s objection on the basis that:

1. Taking Section 35 of the Evidence Act as a guide, no notice was given by the plaintiff to the first defendant before the hearing that it objects to the use of the affidavit so the plaintiff is taken to have consented to its use by the first defendant in support of its application;

2. Otherwise an objection ought to have been made promptly and as soon as possible after the service of the affidavit whether it was served with the motion or not.

3. Mr Waffi has sworn the affidavit as a legal officer for the second defendant and appears to depose to matters coming to his knowledge about proceedings in OS No.797 of 2015 and WS No.428 of 2017 (which is still on foot pending the outcome of an appeal to the Supreme Court against a ruling of Kariko J) in the course of his employment;

4. The Court file shows that the second defendant has participated in these proceedings before including on the occasion when the plaintiff moved an application seeking an order in the nature of an injunction on 10 October 2017;

5. The affidavit was filed by the first defendant in support of its application;

6. Affidavits in supporting of a motion are required to be filed on the date of filing the motion (Order 4 Rule 49(12) National Court Rules) and there is no evidence brought before me to show that the requirement for service of motions and affidavits under the National Court Rules were not complied with (Order 4 Rules 42 & 44) hence giving the plaintiff no opportunity to raise its objection;

7. The plaintiff has not shown to the Court which part or parts of the affidavit contains submissions.

8. It is not suggested that the contents of the affidavit are scandalous, irrelevant or otherwise oppressive.

9. Matters contained in the affidavit which do not meet the requirements mentioned in William Duma v Yehiura Hriehwazi will be disregarded.

OBJECTION TO COMPETENCY OF MOTION

11. The plaintiff contends that the motion is incompetent and should be struck out as the first defendant relies on multiple grounds under Order 12 Rule 40(1). They should not be lumped together as they are distinct and alternative grounds with different requirements and there should be an election as to which ground is relied on. Consequently, the application was ambiguous and confusing and has left the plaintiff guessing as to the grounds of the application it was argued.

12. The first defendant’s submissions demonstrate that the application to dismiss the proceedings is strongly predicated upon Rule 1(c). In addition, it also relies on the inherent jurisdiction of the Court.

13. I have not been referred to any case authority or rule(s) in the National Court Rules that supports the proposition that is advanced. The nearest assistance I can draw from in deliberating on the point in contention is from the treatise, Papua New Guinea Civil Procedure in the National Court by Injia et al at p.281 where the learned authors state:

“Each of the grounds under Rule 40 are alternative grounds which should be specifically pleaded in the notice of motion as a distinct ground. They should not be lumped together.”

14. I think what this means is that when a party relies on Rule 40(1) in its motion, the pleading must not be incomprehensible, ambiguous and does not inform the opposite party what it is alleged against him. The terms of the motion are clear.

15. Order 12 Rule 40(1) sets out alternative grounds upon which proceedings may be stayed or dismissed generally or in relation to any claim for relief in the proceedings where it appears to the Court that; no reasonable cause of action is disclosed; or the proceedings are frivolous or vexatious; or the proceedings are an abuse of process of the Court. The National Court Rules do not make express provision prohibiting reliance on all three grounds under Rule 40(1) by way of alternative pleading. I have not found any case authority both by the Supreme Court and the National Court supporting the proposition advanced by the plaintiff. In the absence of such a prohibition, I am of the view that reliance on all three alternative grounds are in order so the motion is competent and...