Jimm Trading Limited v John Maddison and Richard Busby and Bank South Pacific Limited and Barry Tan and Stephen Tan and Neville Seeto and TST 4 Mile Limited and TST 4 Mile Trading Limited (2006) N3174

• Jurisdiction: Papua New Guinea
• Judge: Kandaksi, J
• Judgment Date: 03 November 2006
• Court: National Court
• Citation: (2006) N3174
• Docket Number: WS NO 145 OF 2003
• Year: 2006
• Judgement Number: N3174

Full Title: WS NO 145 OF 2003; Jimm Trading Limited v John Maddison and Richard Busby and Bank South Pacific Limited and Barry Tan and Stephen Tan and Neville Seeto and TST 4 Mile Limited and TST 4 Mile Trading Limited (2006) N3174

National Court: Kandaksi, J

Judgment Delivered: 3 November 2006

N3174

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 145 OF 2003

BETWEEN

JIMM TRADING LIMITED

Plaintiff

AND

JOHN MADDISON

First Defendant

AND:

RICHARD BUSBY

Second Defendant

AND

BANK SOUTH PACIFIC LIMITED

Third Defendant

AND

BARRY TAN

Fourth Defendant

AND

STEPHEN TAN

Fifth Defendant

AND

NEVILLE SEETO

Sixth Defendant

AND

TST 4 MILE LIMITED

Seventh Defendant

AND

TST 4 MILE TRADING LIMITED

Eighth Defendant

Waigani: Kandaksi, J.

2006: 3April,3 November

PRACTICE & PROCEDURE – Application to dismiss proceedings for failure to disclose cause of action, being frivolous, vexatious and abuse of the process of the Court – Earlier application declined and plaintiff granted leave to amend pleadings with particulars – Amended statement of claim failing to comply with previous orders and failing to plead with particulars and pleading serious allegations against a non party - Issues raised could have been raised in earlier proceedings – Mortgagee and registered charge holder exercising its rights with endorsement of the Court – Proceedings failing to disclose a sustainable cause of action in non compliance of orders of the Court and amounting to an abuse of the Court’s process – Proceedings dismissed.

PRACTICE & PROCEDURE — Res judicata — Various decisions and orders made under various National and Supreme Court proceedings – Plaintiff had opportunity to raise issues raised in current proceedings in previous proceedings but did not – Current proceedings res judicata.

PRACTICE & PROCEDURE – Application for default judgment – Application made despite issue taken on sufficiency of pleadings – Good basis to question sufficiency of plaintiff’s pleadings – Application dismissed as misconceived.

COMPANY LAW – Actions of servants and agents of a company - Company correct party to sue for – Not share holders and servants or agents - Servants or agents of companies out on a frolic and detour of their own attract personal liability - Unless personal liability of shareholders and servants and or agents of a company is demonstrated it is inappropriate to sue shareholders and servants and agents of a company or an employer – It may be appropriate to servants or agents of larger companies or employers.

PARTIES & CAUSES OF ACTION – Actions of servants and agents of a company - Company correct party to sue for – Not share holders and servants or agents - Servants or agents of companies out on a frolic and detour of their own attract personal liability - Unless personal liability of shareholders and servants and or agents of a company is demonstrated it is inappropriate to sue shareholders and servants and agents of a company or an employer – It may be appropriate to servants or agents of larger companies or employers.

MORTGAGES – Mortgagee’s rights – Mortgagor defaulting in repayment of loans and other financial advances – Demands to make good the default not adhered to – Mortgagee exercising its powers to enforce its security – No dispute on default – Mortgagee entitled to exercise its powers.

Cases Cited:

National Airline Commission v. Lysenko [1990] PNGLR 226.

Lup Iohoi v. MVIT [1993] PNGLR 360.

Motor Vehicles Insurance (PNG) Trust v. James Pupune, [1993] PNGLR 370.

Timothy Peter Neville and Peter John Dalton Neville v. The Privatization Commission (26/11/01) N2184.

Wyatt Gallagher Bassett Limited v. Benny Diau (16/08/02) N2277.

Ome Ome Forests Ltd v. Ray Cheong & Ors (08/10/02) N2289.

Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali & Anor;

Wilson Thompson v. National Capital District Commission and The City Manager (11/10/04) N2686.

Timothy Peter Neville and Peter John Dalton Neville v. Privatisation Committee [Privatization Commission] (04/11/04) N2724.

Kerry Lerro v. Philip Stagg as Chairman of Central Tenders Board & Ors (20/04/06) N3050.

Counsel:

Mr. D. Wood, for the First, Second and Third Defendants/Applicants.

Mr. R. Lindsay, for the Fourth to the Eighth Defendants/Applicants

Mr. P. Parkop, for the Plaintiff/Respondent.

3 November, 2006

1. KANDAKASI J: There are three motions before me. The first one is a motion filed by the first to the third defendants (the Bank) initially on 18th and later amended on 24 March 2005. The second is one filed by the fourth to the eighth defendants (other defendants) on 29 March 2005. The final motion is by the plaintiff (JTL) filed on 1 April 2005.

2. The motion of the Bank seeks a dismissal of JTL’s amended statement of claim and therefore JTL’s claim with costs for:

(a) a failure to disclose a reasonable cause of action;

(b) an abuse of the Court’s process;

(c) a failure to comply with orders made by this Court on 14th May 2003; and

(d) vexatious and scandalous proceedings against the Bank and a non party, Mr. Peter Mills.

3. The motion of the other defendants seeks in the first part a strike out or a dismissal of the JTL’s amended statement of claim filed on 28 May 2005, with costs for failure to comply with the orders of this Court made on 14 May 2003. Failing that application, they seek leave of the Court for them to file and serve their defence outside the time periods stipulated by the Court in its orders of 14 May 2003.

4. Of course, JTL opposes these applications arguing that, its amended statement of claim does disclose a reasonable cause of action; the proceedings are not an abuse of the Court’s process and are not vexatious and scandalous. Also, it argues that, it has fully complied with the terms of the orders of 14 May 2003. Further or in the alternative, it argues that, if the Court finds parts of its pleadings vexatious and scandalous, the Court should exercise the offending pleadings instead of dismissing the entire proceedings. At the same time, JTL argues that, the defendants are in default of the order of 14 May 2003, requiring them to file and serve their defenses within 14 days from the date of the service of the amended statement of claim, which period JTL says has expired without the defendants filing and serving their defenses. Accordingly, JTL seeks judgment in default against the defendants, per its notice of motion filed on 1 April 2005.

5. In its notice of motion, JTL also takes objection to the affidavits of Derek Wood, John Maddison and Robert Lindsay and seeks to have them struck out. In seeking that relief, JTL claims these affidavits contain hearsay, opinions, comments and submissions. A number of affidavits have been filed and it was incumbent on JTL to specify which of the affidavits it is opposed to. JTL did not seriously pursue this point in its written submissions and oral presentation, by identifying the relevant affidavits and point out to offending paragraphs and the basis for the objections over each of them. I take it therefore, that this part of JTL’s motion has been abandoned. Nevertheless, I will allow myself to be guided by the facts deposed to in the other uncontested affidavits as well as the facts in the affidavits objected to.

6. The positions taken by the parties present the following issues for this Court to determine:

(a) Does the amended statement of claim fail to disclose a reasonable cause of action?

(b) Are the proceedings an abuse of the Court’s process?

(c) Are the proceedings vexatious and scandalous?

(d) Has JTL failed to comply with orders made by this Court on 14 May 2003? and

(e) Are the defendants in default of the orders of 14 May 2003?

7. There is quite a history of litigation as between JTL and the Bank from which these issues arise. It is thus necessary to understand the background in order to properly determine the issues presented. Accordingly, I turn to a consideration of the relevant factual background first.

Background

8. The Bank and JTL have filed separate statements of agreed and disputed facts as well as backgrounds to the litigation between the JTL and the Bank. These statements set out the relevant factual background. From these statements, there is no dispute that in August 1999, the Bank, then known as PNGBC Limited trading as Papua New Guinea Banking Corporation, provided at the request of JTL an overdraft facility in the sum of K400,000 as well as a loan of K3.3 million. The loan was for a period of 5 years with a monthly repayment of K88, 000. On 5 December 1999, JTL asked for and the Bank provided a further loan of K600,000. These overdraft and loan facilities were secured by various registered fixed and floating charges, registered mortgages over four real estates or property and an unlimited guarantee given by a...