Amode HK Ltd v Anitua Housing Solutions Ltd (2020) N8281

• Jurisdiction: Papua New Guinea
• Judge: Anis J
• Judgment Date: 23 April 2020
• Citation: (2020) N8281
• Docket Number: WS No 849 of 2019 (COMM)
• Court: National Court
• Year: 2020
• Judgement Number: N8281

Full Title: WS No 849 of 2019 (COMM); Amode HK Ltd v Anitua Housing Solutions Ltd (2020) N8281

National Court: Anis J

Judgment Delivered: 23 April 2020

N8281

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS No. 849 of 2019 (COMM)

BETWEEN

AMODE HK LIMITED

Plaintiff

AND:

ANITUA HOUSING SOLUTIONS LIMITED

Defendant

Waigani: Anis J

2020: 17th March & 23rd April

NOTICE OF MOTION – Two applications – security for costs - leave to amend the statement of claim – Order 14 Rule 25(1)(a) and 26, National Court Rules – Order 8 Rule 50(1) – National Court Rules – preliminary point regarding Order 8 Rule 50(1) - whether it is correct or proper to also seek joinder or addition of a party under Order 8 Rule 50(1) - whether want of pleading correct source fatal or should warrant dismissal of application – whether it also amounts to abuse of process – Order 14 Rule 25(1)(a) – considerations for exercise of discretion discussed – whether the circumstances of the case or the interest of justice shall warrant or justify exercise of discretion to grant security for costs – assessment of security for costs - whether it should be set at two thirds of the estimated party/party costs or whether it should be less – exercise of discretion

Cases Cited:

SC Review No. 11 of 1999; Application to Review Pursuant to Constitution s155(2)(b); Application by David Lambu v Peter Ipatas and Edward Konu (The Provincial Returning Officer) and The Electoral Commission (No. 3)(1999) SC601

Yartlett v. New Guinea Motors Ltd [1984] PNGLR 155

In the matter of the Companies Act 1997, In the matter of Re JCA Lumber Co. (PNG) Limited (2015) N6040

Reynolds v. Walcott [1985] PNGLR 316

Counsel:

Mr A Mana, for the Plaintiff

Mr M Goodwin, for the Defendant

RULING

23rd April, 2020

1. ANIS J: Two applications returned before me for arguments on 17 March 2020. The first was by the defendant for security for cost, and the second was by the plaintiff for leave to amend the statement of claim. I reserved my ruling after that to a date to be advised.

2. Parties have been notified so I will rule on them now.

BACKGROUND

3. Briefly, the claim is one of breach of contract. The plaintiff claims that it had entered into a valid supply agreement (contract) with the defendant on 12 January 2018. Based on it, the plaintiff says it had supplied the defendant various types of pre-fabricated houses. The plaintiff says that according to the contract, the defendant was supposed to order a minimum of 8 pre-fabricated houses per month. On 24 April 2019, about a year later, the defendant terminated the contract.

4. The plaintiff’s complaint is this. It says before the contract was terminated, the defendant had on various occasions been ordering less than 8 houses per month which was contrary to the minimum requirement of 8 houses per month under the contract. The plaintiff says it suffered damages as a result of the alleged breaches. It claims that the defendant owes it a total debt of USD 2, 677, 000 or its equivalent in PNG Kina (PGK). The plaintiff says the sum represents the value of the short fall, that is, of all the less houses per month which the defendant had failed to order. They are calculated from the start of the contract to when it was terminated on 24 April 2019. The total number short fall of the pre-fabricated houses allege is 55.

MOTIONS

5. The main relief sought in the defendant’s notice of motion is this, and I quote, Pursuant to Order 14 Rule 25(1)(a) and 26 of the National Court Rules, the Plaintiff, a company registered in Hong Kong and ordinarily resident outside of Papua New Guinea, provide to the Defendant, security for costs in the sum of PGK332,450, and that the claim by the Plaintiff is stayed until the security is given.

6. I turn to the plaintiff’s notice of motion. The main relief sought therein is this, and I quote in part, Pursuant to Order 8 Rule 50(1) of the National Court Rules, leave be granted to the Plaintiff to amend the Statement of Claim filed on 27 February 2019.

PRELIMINARY ISSUE

7. The defendant raised a preliminary issue in regard to the plaintiff’s application. It argues that Order 8 Rule 50(1), which is the cited source of the application, is an incorrect source thus makes the application incompetent and should be dismissed. It submits that the plaintiff plans to make substantial amendments to the originating process; that it is not a case of a simple amendment. The defendant also submits this. It argues that the plaintiff also proposes, by relying on the same source, to include a new party to the proceeding. It submits that the plaintiff is asking the Court to exercise its power under a wrong rule; powers which the Court does not have to grant such a relief. It submits that the correct source is Order 5 Rules 2, 4(1) and 8(1) of the National Court Rules which the plaintiff has not invoked in its application.

8. The plaintiff in response submits as follows. It submits that the source cited is the correct source for amendments. It submits that its aim is to ensure that all matters of facts are sufficiently pleaded so as to assist the Court determine the real questions in the matter. In regard to the claim that an incorrect rule has been pleaded to join a party, the plaintiff simply submits this. It says it was done to save time and cost of filing a separate application; it submits that to file separate applications would create more work which is why the joinder is also sought in this fashion. It submits that even if the Court rejects the manner in which joinder is sought herein, the plaintiff would make a separate application anyway thus the approach now should be allowed.

9. Let me begin by looking at Order 8 Rule 50(1). It states:

50. General. (20/1)

(1) The Court may, at any stage of any proceedings, on application by any party or of its own motion, order, on terms that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such manner as the Court thinks fit.

10. Also relevant for this purpose is Rule 3, which reads:

(3) Where there has been a mistake in the name of a party, Sub-rule (1) applies to the person intended to be made a party as if he were a party.

11. I note the submissions and case law on point that have been presented by counsel. In my view, the answer to all these is simple. Whilst I agree with counsel for the plaintiff that Order 8 Rule 50(1) is the correct source for amending a pleading, I note that that is not the only reason why the plaintiff has invoked the said rule. The plaintiff has also relied on it join or add a party to the proceeding, that is, Anitua Limited. Evidence of the draft amended writ of summons and statement of claim (draft amended writ) is attached to the affidavit of Joseph Webb (Document No. 24).

12. I will remark that the draft amended writ is 38 pages long whilst the present writ of summons and statement of claim consists of 6 pages. The proposed amendment clearly appears substantive in nature. It proposes to contain an enormous amount of pleaded facts. But apart from my remark, I will not spend any more time looking into the competency, correctness, sufficiency or otherwise of the draft amended writ. I do not think that this is the time for it. I say this for the following reasons. Firstly, I uphold the defendant’s submission that I may not have jurisdiction to consider joinder of a party together or whilst at the same time considering whether to grant leave to the plaintiff to amend its amended pleading. The closest this Court can go in terms of its powers under Order 8 Rule 50 to consider both matters may be under sub-rule (3). However, I note that this is not a case of a mistake to the name of party to the proceeding. It is quite clear from the draft amended writ that the plaintiff proposes to add Anitua Limited, which is a new party, as the second defendant in the proceeding.

13. I uphold the defendant’s submission that the correct rule to ask the Court to invoke to join or add a party to the proceeding, is Order 5 Rules 2, 4(1) and 8(1) of the National Court Rules. It reads, and I quote in part:

2. Joinder of parties generally. (8/2)

Two or more persons may be joined as plaintiffs or defendants in any proceedings —

(a) where —

(i) if separate proceedings were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and

(ii) all rights to relief claimed in the proceedings (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or

(b) where the Court gives leave to do so.

……

4. Leave under Rules 1, 2 and 3. (8/4)

(1) The Court may grant leave under Rule 1 or 2 before or after the joinder and may grant leave under Rule 3(2) before or after the non-joinder.

……

8. Addition of parties. (8/8)

(1) Where a person who is not a party —

(a) ought to have been joined as a party; or...