John Hiwi for and on behalf of the Hides Landowners Association Inc v Rendle Rimua, Secretary, Department of Petroleum and Energy and Pepi Kimas, Secretary, Department of Lands and Physical Planning and the Independent State of Papua New Guinea and Esso Highlands Limited (2015) SC1460

• Jurisdiction: Papua New Guinea
• Judge: Cannings J, Kariko J, Bona J
• Judgment Date: 28 October 2015
• Court: Supreme Court
• Citation: (2015) SC1460
• Docket Number: SCA No 59 of 2013
• Year: 2015
• Judgement Number: Putupen & Associates Lawyers:Lawyers for the appellants Kubak & Kubak, Solicitors & Barristers:Lawyers for the 1st respondent Robert Mai & Company Lawyers:Lawyers for the 2nd respondents Warner Shand Lawyers:Lawyers for the 3rd respondent, T Pole Daniel Kop Lawyers:Lawyers for the 3rd respondent, B Mangope SC1460

Full Title: SCA No 59 of 2013; John Hiwi for and on behalf of the Hides Landowners Association Inc v Rendle Rimua, Secretary, Department of Petroleum and Energy and Pepi Kimas, Secretary, Department of Lands and Physical Planning and the Independent State of Papua New Guinea and Esso Highlands Limited (2015) SC1460

Supreme Court: Cannings J, Kariko J, Bona J

Judgment Delivered: 28 October 2015

SC1460

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO 59 OF 2013

JOHN HIWI FOR AND ON BEHALF OF

THE HIDES LANDOWNERS ASSOCIATION INC

Appellant

V

RENDLE RIMUA, SECRETARY,

DEPARTMENT OF PETROLEUM AND ENERGY

First Respondent

PEPI KIMAS, SECRETARY,

DEPARTMENT OF LANDS AND PHYSICAL PLANNING

Second Respondent

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Respondent

ESSO HIGHLANDS LIMITED

Fourth Respondent

Waigani: Cannings J, Kariko J, Bona J

2015: 3rd September, 28 October

PRACTICE AND PROCEDURE – Limitation periods – Whether an action seeking relief pursuant to three written agreements was “an action … On simple contract” – Frauds and Limitations Act, s16(1) – Whether an action should be regarded as a claim for “specific performance of a contract or for other equitable relief” – Frauds and Limitations Act, s18.

The appellant, who claimed that he was the executive of an incorporated landowners association, commenced proceedings by writ of summons in the National Court claiming payments totalling K74.5 million due to the landowners under three agreements with the respondents regarding a gas project. The appellant claimed that the agreements commenced operation in March-April 1990. He commenced the National Court proceedings in November 2009. The third respondent, the State, moved a motion in the National Court seeking dismissal of the proceedings on the ground that they were time-barred. The motion was upheld and the National Court dismissed the proceedings as being time-barred under Section 16(1)(a) of the Frauds and Limitations Act 1988, which provides that “an action that is founded on simple contract … shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued”. The National Court held that the cause of action was breach of simple contracts, which accrued at least 20 years ago, and that the proceedings were statute-barred. The appellant appealed against the order for dismissal of the proceedings, on the grounds that: (1) Section 16(1)(a) did not apply as: (a) the agreements that he was seeking to enforce were not ‘simple’ contracts; (b) the cause of action was not breach of contract; and (c) he was seeking specific performance of the agreements and therefore under Section 18 of the Frauds and Limitations Act (which provides that “Section 16 does not apply to any claim for specific performance of a contract …”) his claim was not caught by the six-year limitation period in Section 16(1); (2) the respondents had not filed a defence and should not have been permitted to argue that the proceedings were time-barred; (3) the primary Judge erred in law by criticising the appellant’s counsel for not putting submissions and authorities to the Court which were, in fact, put to the Court. The appellant sought orders quashing the order appealed from and remitting the matter to the National Court.

Held:

(1) The type of contract on which the appellant’s action was founded was “simple” contract (not a “specialty”).

(2) The cause of action pleaded in the appellant’s statement of claim could only properly be regarded as breach of contract.

(3) Actions only fall within Section 18 if the relief being sought is confined to specific performance, injunction or other equitable relief. Here, though the appellant sought specific performance of the three agreements, he also sought payment of K74.5 million (presumably as a debt) and damages for breach of contract and general damages, so the action did not fall within Section 18. It was caught by s16(1)(a).

(4) The date on which a cause of action in breach of contract accrues is the date of the first alleged breach of contract, which in this case was pleaded to be November 1990. The action should have been commenced by November 1996. As it was not commenced until November 2009, its date of commencement exceeded the statutory limitation period by 13 years. The National Court did not err in concluding that the proceedings were time-barred.

(5) The respondents were not prohibited, by their failure to file a defence, from submitting that the proceedings should be dismissed as being time-barred. No error was committed by the National Court in hearing and determining the respondents’ motion before hearing the appellant’s motion for default judgment. The question of the order in which competing motions are heard is a matter of discretion for the primary Judge and here the discretion was exercised carefully and properly.

(6) The primary Judge gave the appellant’s counsel’s submissions the attention they deserved and made fair criticism where appropriate. There was no procedural unfairness or other error of law.

(7) The appeal was dismissed with costs.

Cases cited:

The following cases are cited in the judgment:

Bank of South Pacific v Leahy (2002) N2263

Fred Angoman v IPBC of PNG (2011) N4363

John Hiwi v Rendle Rimua, Pepi Kimas and The State WS No 1442 of 2009, 03.05.13, unreported

Letina Rau v Albert Kone (2014) N5804

Louis Medaing v Ramu Nico Management (MCC) Ltd (2011) SC1144

Mamun Investment Ltd v Nixon Koi (2015) SC1409

Michael Nunulrea v PNG Harbours Ltd (2005) N2790

Midland Bank v Hett, Stubbs & Kemp [1978] 3 All ER 571

Oil Search Limited v Mineral Resources Development Corporation Ltd (2010) SC1022

Otto Benal Magiten v Kopina Raka [2002] PNGLR 121

Waim No 85 Limited v The State (2015) SC1405

APPEAL

This was an appeal against dismissal of civil proceedings for being time-barred under the Frauds and Limitations Act, Section 16.

Counsel:

M Nasil , for the appellant

P Nii, for the first respondent

D Doiwa , for the third respondent

28th October, 2015

1. BY THE COURT: This is an appeal against an order of the National Court in civil proceedings, dismissing the proceedings for being time-barred under the Frauds and Limitations Act, section 16.

NATIONAL COURT PROCEEDINGS

2. The National Court proceedings, WS No 1442 of 2009, were commenced in November 2009 by the appellant, John Hiwi. He claimed that he was the executive of Hides Landowners Association Inc. He commenced proceedings for and on behalf of that Association, against four defendants: Rendle Rimua (Secretary of the Department of Petroleum and Energy), Pepi Kimas (Secretary of the Department of Lands and Physical Planning), the State and Esso Highlands Ltd, who are now the respondents to this appeal.

3. In his statement of claim the appellant claimed payments totalling K74.5 million due to the landowners under three agreements with the respondents regarding the Hides Gas project. He claimed that the agreements were entered into at Goroka and commenced operation in March-April 1990. On 19 April 2013 the third respondent, the State, moved a motion in the National Court, constituted by Justice Davani, seeking dismissal of the proceedings on the ground that they were time-barred.

4. Her Honour upheld the motion and dismissed the proceedings as being time-barred under Section 16(1)(a) of the Frauds and Limitations Act 1988, which provides that “an action that is founded on simple contract … shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued”. Her Honour held that the cause of action was breach of simple contracts, which accrued at least 20 years ago, and that the proceedings were statute-barred (John Hiwi v Rendle Rimua, Pepi Kimas and the State WS No 1442 of 2009, 03.05.13, unreported).

THE APPEAL

5. The appellant has appealed on 14 grounds, one of which (No 9) has been abandoned. The remaining overlap considerably. We quote them verbatim, before summarising them:

(1) The learned judge erred in law and in fact in dismissing the entire proceedings when the cause of action was not statute or time barred.

(2) The learned judge erred in law in dismissing the entire proceedings pursuant to Section 16 of the Frauds and Limitations Act 1988 when the cause of action was not founded on a simple contract.

(3) The learned judge erred in law and fact in dismissing the proceedings as being time barred pursuant to Section 16 of the Frauds and Limitations Act 1988 when the claim or action was essentially seeking specific performance of the Agreements of 31 March 1990 and that is allowed by Section 18 of the Act.

(4) The learned judge erred in law and fact by failing to enquire properly and establish when the cause of action actually accrued before deciding to dismiss the proceedings for being statute barred.

(5) The learned judge erred in law and fact in dismissing the proceedings as being time barred...