Lawrence Mango and Joseph Salang v Peter Chow Po Khoon and Peter and PNG Group Limited (2005) N2907

• Jurisdiction: Papua New Guinea
• Court: National Court
• Date: 14 October 2005
• Citation: (2005) N2907
• Docket Number: WS No 1132 of 2004
• Year: 2005

Full Title: WS No 1132 of 2004; Lawrence Mango and Joseph Salang v Peter Chow Po Khoon and Peter and PNG Group Limited (2005) N2907

National Court: Cannings J

Judgment Delivered: 14 October 2005

1 Practice and procedure—application for summary disposal of proceedings—whether statement of claim, or proceedings generally, disclosed no reasonable cause of action—whether proceedings frivolous or vexatious—National Court Rules, O8, r27 (embarrassment etc); O12, r40 (frivolity etc)—tests to apply.

2 Attorney–General of the Duchy of Lancaster v London & North Western Railway Co [1892] 3 Ch 274, Kiee Toap v The State (2004) N2731, Mt Hagen Airport Hotel Pty Ltd v Gibbes [1976] PNGLR 216, Ronny Wabia v BP Exploration Operating Co Ltd [1998] PNGLR 8 referred to

The plaintiffs claimed to be directors and shareholders of the second defendant, a company that carries on business at Kandrian. The first defendant is the manager of the company. The plaintiffs brought proceedings against the defendants, claiming that the first defendant had excluded them from involvement in the management and affairs of the company and that the company had not paid any dividends to shareholders for three years. The plaintiffs claimed that they were entitled to a sum of money, representing the value of their shares in the company, and damages. The defendants brought a motion to strike out the statement of claim and generally dismiss the proceedings on the ground that no reasonable cause of action was disclosed and that the proceedings were frivolous and vexatious.

Held:

(1) Whenever a plaintiff brings a case to court, the originating document must demonstrate that the plaintiff has a cause of action. The document must clearly set out the legal ingredients or the elements of the claim and the facts that support each element of the claim. Failure to do so means no reasonable cause of action is disclosed.

(2) Other tests to be applied include: whether it is plain and obvious that the statement of claim, even if proved, will not entitle the plaintiff to what is being sought; whether the statement of claim is so ambiguous or lacking in particularity that it does not facilitate orderly and rational pleadings; and whether the statement of claim just leaves a defendant guessing as to what the plaintiff's allegations are.

(3) If a pleading or a proceeding can be categorised in any of those ways, it will not disclose a reasonable cause of action and the court will have a discretion whether to strike out the pleading or dismiss the entire proceedings.

(4) Proceedings are frivolous if the plaintiff's claim is so obviously untenable that it cannot possibly succeed or if the plaintiff would be bound to fail if the matter went to trial.

(5) Proceedings are vexatious where the case amounts to harassment of the defendant or the defendant is being put to the trouble and expense of defending proceedings which are either a sham or which cannot possibly succeed.

(6) In the present case, the statement of claim, and the proceedings generally, were properly categorised as above, thus no reasonable cause of action was disclosed and the pleading and the proceedings were ripe to be struck out and dismissed. The proceedings were also frivolous and vexatious.

(7) There being no appearance by the plaintiffs, the defendants satisfied the court that it should exercise its discretion to summarily dispose of the proceedings; and the proceedings were dismissed, generally.

Notice of Motion

This was an application on notice seeking orders to strike out a statement of claim and to dismiss the proceedings commenced by the plaintiffs.

Ruling on Motion

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Cannings J:

INTRODUCTION

This is a ruling on an application by the defendants to strike out a statement of claim and dismiss the proceedings, on the grounds that no reasonable cause of action was disclosed and that the proceedings were frivolous and vexatious.

BACKGROUND

This case is about a company called 'Peter and PNG Group Ltd', which operates a retail business at Kandrian, West New Britain Province. This company is the second defendant.

The plaintiffs, Lawrence Mango and Joseph Salang, say that they and the first defendant, Peter Chow Po Khoon, are directors and shareholders of the company. The first defendant is...