PNG Forest Products Pty Ltd and Inchcape Berhad v The Independent State of Papua New Guinea and Jack Genia, The Minister for Forests

• Jurisdiction: Papua New Guinea
• Judge: Sheehan J
• Judgment Date: 04 March 1992
• Court: National Court
• Citation: [1992] PNGLR 85
• Year: 1992
• Judgement Number: N1058

National Court: Sheehan J

Judgment Delivered: 4 March 1992

N1058

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

PNG FOREST PRODUCTS PTY LTD AND INCHCAPE BERHAD

V

THE INDEPENDENT STATE OF PAPUA NEW GUINEA AND JACK GENIA, MINISTER FOR FORESTS

Waigani

Sheehan J

4 March 1992

PRACTICE AND PROCEDURE — National Court — Motion to strike out claim — Grounds — No reasonable cause of action disclosed — Allegation of abuse of court process — National Court Rules Order 12 r 40.

PRACTICE AND PROCEDURE — National Court — Motion to strike out claim — Privity of contract — Illegality of clause pleaded — Whether purported claim relies on an unlawful letter on a ministerial discretion.

PRACTICE AND PROCEDURE — National Court — Plaintiffs' motion for continuance of restraining order.

Facts

The plaintiffs' motion by way of a writ of summons sought the continuance of an ex parte order made on 20 December 1991 restraining the defendants from further dispositions of timber and logging rights which were the subject matter of their pending (substantive) case, in which they claimed specific performance and damages under a contract they entered into.

The defendants, in response, sought motions that the plaintiffs' statement of claim be struck out on the ground that it failed to disclose a cause of action. In the alternative, the defendants sought orders to have the first plaintiff dismissed from the proceedings on the grounds that no privity of contract existed between that plaintiff and any of the defendants since it was not a party to any contract between them.

The defendants' motion was dealt with first.

Issues

1. Whether the plaintiffs' statement of claim fails to disclose any cause of action and, therefore, should be struck out under Order 12 r 40 National Court Rules. It reads:

" (1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:

(a) no reasonable cause of action is disclosed;

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under sub-rule (1) of this Rule."

2. Whether the first plaintiff has any cause of action against the defendants.

3. Whether the plaintiffs' motion for the continuance of an ex parte order of 20 December 1991 restraining the defendants from further disposition of the timber and logging rights (the subject of their substantive case) can be upheld.

Held

1. A party has a right to have his case heard, as guaranteed by the Constitution and the laws of this country. Such a right cannot be lightly set aside. Hence, the National Court Rules are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before the court. For the same reason and in the interest of justice, the rules include prohibitions against abuse of the court process.

2. Quite apart from the powers given to the court by the National Court Rules O 12 r 40 to strike out or stay any proceedings which:

a) do not disclose a reasonable case of action; or

b) are frivolous or vexatious; or

c) are an abuse of the court process,

the Court also has an inherent jurisdiction to protect itself from abuse of its process.

If the court is satisfied that the conditions of O 12 r 40 are or have been established, it may strike out that offending action. Hence, it can in appropriate cases prevent a party from presenting its case in court or from defending one brought against it. But the refusal to try a party's claim or the striking out of its defence is not lightly done, and there has been a long history of case law determining what is a "reasonable" cause of action or defence and what is "frivolous or vexatious". See Republic of Peru v Peruvian Guano Company (1887) 36 Ch D 489 per Chitty J, Hubbuck and Sons Ltd v Wilkinson, Heywood & Clerk Ltd [1899] 1 QB 86 per Lord Lindley MR;

3. An action should only be struck out in cases where "the cause of action is obviously and almost incontestably bad."

4. There is a distinction between seeking to have an action decided on a preliminary point of law and moving to have it struck out for want of a reasonable cause of action. See Hubbuck and Sons Ltd v Wilkinson Heywood and Clerk Ltd [1899] 1 QB 86 per Lord Lindley MR; Lonrho plc v Fayed [1991] 3 All ER 303 per Lord Bridge.

5. On the plaintiffs' motion for continuance of the restraining orders, if the orders were not continued, there would be no specific performance of the contracts pleaded if the plaintiffs succeed at trial. Furthermore, at this stage, there appears to be no prejudice to any party in continuing the orders sought. Accordingly motion granted.

Cases Cited

Allen v Gulf Oil Refining [1981] 1 All ER 353.

Dyson v AG [1911] 1 KB 410.

Hubbuck and Sons Ltd v Wilkinson, Heywood & Clerk Ltd [1899] 1 QB 86.

Lonrho plc v Fayed [1991] 3 All ER 303.

Nagle v Feilden [1966] 1 All ER 689.

Republic of Peru v Peruvian Guano Company (1887) 36 Ch D 489.

Counsel

E Anderson, for plaintiffs.

P Harricknen and J Wanjik, for defendants.

4 March 1992

SHEEHAN J: On 19 December 1991 the PNG Forest Products Pty Ltd, the first plaintiff, and Inchcape Berhad, the second plaintiff commenced proceedings against the State as first defendant and the Minister of Forests, the Honourable Mr Jack Genia, as second defendant. They claimed specific performance and damages under a contract between the parties regarding certain timber and logging rights in the Morobe Province.

The Court now has motions before it from both plaintiffs and defendants.

The plaintiffs' motion is for the continuance of an ex parte order made on 20 December 1991 restraining the defendants from further disposition of the timber and logging rights the subject of their claim.

The defendants' motions seek that the plaintiffs'...