Brian Josiah v Stephen Raphael

• Jurisdiction: Papua New Guinea
• Judge: Kariko, J
• Judgment Date: 07 April 2016
• Citation: (2016) N7640
• Court: National Court
• Year: 2016
• Judgement Number: N7640

Full : WS NO. 4759 OF 2003; Brian Josiah for himself and & 81 others v Stephen Raphael, Acting Secretary for the Department of Defence and Col Kewa, Chief Personal Papua New Guinea Defence Force and Commodore Peter Ilau, Commander Papua New Guinea Defence Force and The Independent State of Papua New Guinea (2016) N7640

National Court: Kariko, J

Judgment Delivered: 7 April 2016

N7640

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 4759 OF 2003

BRIAN JOSIAH for himself and & 81 others

Plaintiffs

V

STEPHEN RAPHAEL, Acting Secretary for the Department of Defence

First Defendant

COL KEWA, Chief Personal Papua New Guinea Defence Force

Second Defendant

COMMODORE PETER ILAU, Commander Papua New Guinea Defence Force

Third Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fourth Defendant

Waigani: Kariko, J

2015: 9th October

2016: 7th April

PRACTICE & PROCEDURE – application to dismiss proceedings – O12 r 40 National Court Rules – relevant principles – claim by soldiers for unpaid allowances – service of section 5 notice – whether claims statute-barred – default in giving discovery – O9 r15(1) National Court Rules

EQUITY – equitable estoppel – whether State estopped by its conduct from paying the claims – equity cannot override statutory law

Cases cited:

Ace Guard Dog Security Services Limited v Lindsay Lai (2003) N2459

Curtain Brothers (PNG) Limited v UPNG (2005) SC788

Joe Kerowa v MVIL (2010) SC1100

Kerry Lerro v Phillip Stagg & Ors (2006) N3050

Olympic Stationery Limited v The State (2001) N2194

Phillip Takori & Ors v Yagari & Ors (2008) SC905

Rawson Construction Ltd & Ors v The State (2004) SC 777

Sao Gabi & State v Kasup Nate & Ors (2006) N4020

Simon Mali v The State (2002) SC 690

Tohian and The State v Tau Liu (1998) SC566

Legislation:

Claims By and Against the State Act 1996

Frauds & Limitations Act 1988

National Court Rules

Counsel:

Mr L Karri, for the Plaintiffs

Mrs M Ai, for the Defendants

RULING

7th April, 2016

1. KARIKO, J: The defendants (collectively, the State) have moved an application to dismiss the proceedings.

Brief background

2. The plaintiffs claim outstanding allowances dating back to the period from the 1970s to the 1990s that were to have been paid to them while overseas on training as soldiers of the PNG Defence Force. After 2001 progress in the plaintiffs’ claims gained momentum and were processed for payment by the State (through the Department of Defence and the Department of Finance), but the payments did not eventuate and this suit was then filed on 12th June 2003.

3. On 17th October, 2003 default judgement was entered in favour of the plaintiffs after the defendants failed to file their Defence. That decision was appealed to the Supreme Court on two main grounds, namely that the primary Judge failed to consider that:

(1) The proceedings were incompetent for want of a notice under section 5 of the Claims By and Against The State Act 1996 (the Claims Act); and

(2) The claims were statute-barred pursuant to section 16 of the Frauds & Limitations Act 1988 (the Frauds Act).

4. The Supreme Court in its decision of 1st March 2005 rejected the first ground holding that the lack of a section 5 notice must be properly pleaded in the Defence to be relied upon. However the appeal was allowed on the grounds that the primary Judge did not properly address his mind to the question of whether the claims may be statute-barred and further, it was not a liquidated claim so the damages ordered contravened section 12(3) of the Claims Act. The Court granted leave to the appellants (the defendants in these proceedings) to file their Defence within 7 days and the matter was remitted to the National Court.

5. The State filed a Defence pursuant to the Supreme Court order pleading that the plaintiffs’ claims are not only incompetent for lack of a section 5 notice under the Claims Act, but also for being filed outside the time-limit allowed by the Frauds Act.

6. During the Discovery process the defendants gave discovery while the plaintiffs have yet to respond to the Notice for Discovery served on them by the State on 9th June 2005.

Application to dismiss

7. In this application the defendants contend that:

(1) The proceedings are incompetent and are an abuse of process as the plaintiffs failed to give notice of their claims under section 5 of the Claims Act, and should be dismissed under O12 r40(1)(c) of the National Court Rules;

(2) The claims are statute-barred as they were filed well outside the 6 year time-limit prescribed by section 16 of the Frauds Act, and therefore do not disclose a cause of action warranting dismissal also pursuant to O12 r40(1)(c); and

(3) The plaintiffs defaulted in giving discovery and that renders the proceedings liable for dismissal under O9 r15(1) of the National Court Rules.

O12 r40 - Principles

8. The applicable principles in relation to applications under O12 r40 are well settled; see for example Kerry Lerro v Phillip Stagg & Ors (2006) N3050 and Phillip Takori & Ors v Yagari & Ors (2008) SC905. These principles include:

(1) The purpose of O12 r40 is to give the Court power to terminate actions or claims which are clearly frivolous or vexatious or untenable.

(2) The Court should be cautious and slow in exercising its discretionary power to summarily dismiss a claim.

(3) The phrase “a reasonable cause of action” means a legal right or form of action known to law.

(4) The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(5) A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed if it proceeds to trial.

(6) A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

Section 5 notice

9. Section 5 of the Claims Act provides, among others, that a claim against the State must be made within six months after the claim arose. A notice of an intention to make a claim pursuant to that section is a condition precedent to issuing proceedings against the State; Tohian and The State v Tau Liu (1998) SC566. It is mandatory that the notice is given to the State prior to issuing the proceedings; Olympic Stationery Limited v The State (2001) N2194.

10. The State submitted that no section 5 notice was served in respect of the plaintiffs’ claims. Evidence was produced to confirm that the Case Management System of the Department of Justice & Attorney-General does not contain any record of receipt of a section 5 Notice in relation to the present proceedings. A print-out from the computer database of the initiating page of the present court action indicates the Solicitor-General’s file was opened on 19th June 2005, which happens to be a week after service of the writ on the State. The field for date of receipt of a section 5 notice however is blank.

11. The plaintiffs have not produced a copy of the notice they allege in their statement of claim was served on 30th April 2003. They argued that the State has not conclusively proved that the notice was not given and that it should have produced extracts of the register of inward correspondence for the period around 30th April 2003 to confirm the State’s position. That argument is misconceived. The onus is on the plaintiffs to prove their claims and that includes satisfying the Court on the balance of probabilities of the relevant facts supporting their claims. That includes proving that a section 5 notice was served. The State has presented credible evidence in support of its argument whereas the plaintiffs merely rely on their pleadings, which of course is not evidence.

12. I find that no section 5 notice was given to the State prior to commencing this litigation.

13. Even if a section 5 notice was given on 30th April, 2003, that would have been outside the time-limit within which to give such notice. Section 5(2)(a) requires the notice to be given within 6 months of when a claim arises. As I note later in discussing section 16(1) of the Frauds Act, the claim for unpaid entitlements, being the cause of action, accrued when each plaintiff completed his overseas training, which between all the plaintiffs ranged from between 9 to 28 years prior to 2003. I also note in that discussion that the plaintiffs say that the cause of action started to run in 2001. If that is correct, the supposed section 5 notice of 30th April, 2003 is not valid as it was served out of time.

Statute-bar

14. Section 16(1)(a) of the Frauds Act states that “Subject to Sections 17 and 18, an action … that is founded on simple contract or on tort … shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.” Sections 17 and 18 are irrelevant for purposes of the present case.

15. The claims are for unpaid entitlements. The State emphasized that the incidental allowances were due to the plaintiffs while on training overseas. The...