Timothy Lim Kok Chuan v Simon Goh Say Beng and Madam Tong So Chin (2004) N2753

• Jurisdiction: Papua New Guinea
• Judge: Gavara–Nanu J
• Judgment Date: 16 August 2004
• Court: National Court
• Citation: (2004) N2753
• Year: 2004
• Judgement Number: N2753

Full Title: Timothy Lim Kok Chuan v Simon Goh Say Beng and Madam Tong So Chin (2004) N2753

National Court: Gavara–Nanu J

Judgment Delivered: 16 August 2004

N2753

PAPUA NEW GUINEA

[National Court of Justice at Waigani]

WS 415 of 2004

BETWEEN

TIMOTHY LIM KOK CHUAN

Plaintiff

AND

SIMON GOH SAY BENG

First Defendant

AND

MADAM TONG SO CHIN

Second Defendant

Waigani: Gavara-Nanu, J

2004 : 13th & 16th August

PRACTICE AND PROCEDURE –National Court Rules, Order 10 r 21 – Circumstances in which leave may be granted for any questions or issues in the proceedings to be tried separately from other questions or issues – Criteria for granting such leave.

Cases cited:

CBS Productions Pty Ltd -v- O’Neill (1985) I NSWLR 601.

Coenen -v- Payne [1974] 2 All ER 1109.

Everett -v- Ribbands and Another [1952] 1 K.B 112.

Carl Zeiss Stiftung -v- Herbert Smith & Co. and Others [1969] 1 Ch. 93.

Dunstan -v- Simmie & Co. Pty Ltd [1978] V.R 669.

Counsel:

T. Manjin, for plaintiff.

K. Kua, for defendants.

GAVARA-NANU, J: The defendants have by a Notice of Motion filed on 5th August 2004, applied for leave to have certain questions determined separately. The questions principally relate to the issue of whether the contract pleaded in the Statement of Claim is legal.

The questions raised are:-

1. Whether the plaintiff is estopped from calling evidence on the contract pleaded in the Statement of Claim pursuant to s.19 of the Stamp Duties Act, and for failing to lodge a Statement for assessment and payment of appropriate duty as required under ss. 48A and 48B of that Act ?

2. Alternatively, whether the purpose and effect of the plaintiff’s non compliance with ss.48A and 48B was to avoid or evade paying stamp duty, thus thereby rendering the contract illegal and therefore null and void pursuant to s.92 of the Act?

3. Whether the contract or the understanding allegedly entered into between the plaintiff and the defendants, all of whom were non citizens at all material times was a foreign enterprise, and thus is unlawful and void pursuant to s. 41A of the IPA Act?

Ordinarily, under the purported contract, the defendants are obliged to sell their business interests to the plaintiff.

The application is made pursuant to Order 10 r 21 of the National Court Rules.

The defendants’ questions also arise because no duty was paid by the plaintiff on the contract which was in breach of s.5 of the Stamp Duties Act.

Mr Kua submitted that the contract is illegal because the plaintiff being a non citizen was bound by the requirements of

s. 41A of the Investment Promotion Authority Act, 1992, to obtain a certificate to carry on business in Papua New Guinea in the nature of the maters pleaded in the Statement of Claim. The defendants argued that the plaintiff did not obtain such certificate before doing business with the defendants.

Mr Kua further submitted that by reason of the breaches of the Stamp Duties Act and the Investment Promotion Act, the contract is illegal and thus unenforceable. For that same reason, the defendants argued that the contract could not be pleaded in the Statement of Claim.

The application here is only seeking leave to have the questions or the issues raised by the defendants determined separately from the other issues in the proceedings.

The plaintiff’s main argument is that the contract was oral and therefore it was incapable of being stamped, and thus this application by the defendants is misconceived and has no basis in law.

The defendants’ reply to that argument is that, the plaintiff was still obliged to lodge a Statement for assessment, so that an appropriate amount in duty could be determined by the Collector of Stamp Duties on the contract which the plaintiff was obliged to pay.

Order 10 r 21 of the National Court Rules is similar to Order 31 r 2 of the New South Wales Supreme Court Rules. From the discussions of this Rule in Ritchie’s Supreme Court Procedure New South Wales-; Vols. 1 and 2, at p 2661, following instances or conditions emerge, upon satisfaction of which, certain issues or questions arising in the proceedings may be determined separately from the other issues or questions :-

1. Where there is a preliminary question of fact or law that is critical to the disposition of the proceedings, so that if decided one way, it will necessarily dispose of the proceedings.

2. Where resolution of separate question may result in early resolution of the proceedings or by narrowing the disputed issues, avoid significant additional expenses or delay.

3. Where issues are clearly separable.

4. Where liability issue can be determined ahead of the final assessment of damages.

Following instances also emerge from the discussions of that Rule, which would operate as a bar to certain questions or issues in the proceedings from being determined separately:-

1. Where the question proffered for separate determination involves the whole subject matter of the proceedings.

2. Where the question involves alternative causes of action or defences.

3. Where the question to be determined would require findings of fact on matters likely to be contentious on remaining issues in the proceedings.

4. Where the question may involve the credibility of witnesses which is material to remaining issues in the proceedings (and thus would require the question to be dealt with by another judge).

5. Where the parties propose that the question be determined on the basis of limited agreed facts.

These instances or conditions provide relevant guides in deciding whether Order 10 s. 21 of the National Court Rules can be invoked in a particular situation.

Looking at the Statement of Claim, it is clear that the claims against the defendants are totally based on the oral contract made between the parties on or about July 2000.

In other words, the claims of specific performance, general damages and reimbursement of monies allegedly paid to the defendants in the Statement of Claim are all based on the oral contract, which the defendants argue is illegal and therefore unenforceable.

The questions raised here have been pleaded by the defendants in their Defence and they are fundamental to the plaintiff’s claims.

The plaintiff has only addressed one aspect of the questions raised by the defendants and that is whether the contract was capable of being stamped. The plaintiff has not addressed the other two aspects, namely, whether he was still obliged to lodge a Statement for assessment so that an appropriate duty for him to pay could be assessed on that oral contract, as required under ss.5, 48A and 48B of the Act, and whether he had breached s. 41A of the Investment Promotion Authority Act, in carrying on business whilst being a foreigner, without an appropriate certificate.

The pertinent question now is - have the defendants satisfied all or any of the four instances or conditions emerging under Order 31 r 2 of the New South Wales Supreme Court Rules, which are also the conditions precedent or criteria upon which leave may be granted for the questions or the issues raised by the defendants to be determined separately under Order 10 r 21 of the National Court Rules? In deciding this question, I find the case of CBS Productions Pty Ltd -v- O’Neill (1985) 1 NSWLR 601, which considered Order 31 r 2 of the New South Wales Supreme Court Rules helpful. At 606, Kirby P. in stating the criteria or test to be applied in deciding whether a question should be determined separately said:

“A matter is “ripe” for separate and preliminary determination where it is a central issue in contention between the parties, the resolution of which will either obviate the necessity of litigating altogether or substantially narrow the field of controversy”.

Then at 607, his Honour in re-emphasizing the significance and the benefits of the facility under the Rule said:

“Thirdly, it is my view that the court should be facilitative in the matter of separate decisions on questions arising in the course of the trial. The rules now provide for it. Where the exceptional circumstances exist that make it sensible to do so (and no reason exists to suggest the contrary) the procedure can be beneficial. It can contribute not only to the prompt disposal of crucial issues in the litigation (sometimes resulting in disposal of the whole action and even judgment for a party). It can also contribute to the saving of time and costs where an authoritative decision narrows the issues for trial substantially, excluding the necessity to explore factual matters which, on one determination of a preliminary question, are entirely unnecessary. Such may be the present case. Additionally, there is a practical consideration. If the court provides an authoritative determination of the key question in difference between the parties, it is quite likely that it will, in some cases at least, contribute to the settlement of the litigation because the parties know the basis upon which the remaining disputes will be dealt with by the court”

Then at 608, his Honour said :

“These observations apply with equal force to the new facility for the separate...