Esso Highlands Ltd v Quinten Willie

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 23 April 2015
• Citation: (2015) N6010
• Court: National Court
• Year: 2015
• Judgement Number: N6010

Full : WS 1256 OF 2012; Esso Highlands Limited v Quinten Willie and Singhe Industries Limited and Sathyagith Hewa Munasinghe (2015) N6010

National Court: Hartshorn J

Judgment Delivered: 23 April 2015

N6010

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 1256 OF 2012

BETWEEN:

ESSO HIGHLANDS LIMITED

Plaintiff

AND:

QUINTEN WILLIE

First Defendant

AND:

SINGHE INDUSTRIES LIMITED

Second Defendant

AND:

SATHYAGITH HEWA MUNASINGHE

Third Defendant

Waigani: Hartshorn J.

2014: 9th, 11th August

2015: 23rd April

Applications pursuant to s. 155 (4) Constitution, Order 8 Rule

27(1)(b) and (c), and Order 14 Rule 2 National Court Rules

Cases cited:

Vari Gari v. Motor Vehicle Insurance Ltd (2005) Unreported and Unnumbered

White Corner Investments Ltd v. Haro (2006) N3089

Kerry Lero trading as Hulu Haro Investments Ltd v. Philip Stagg (2006) N3050

Philip Takori v. Simon Yagari (2008) SC905

National Council of Young Men’s Christian Association of Papua New

Guinea (Inc) v. Firms Services Ltd (2010) N4569

Louis Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1144

Kuman v. Digicel (PNG) Ltd (2013) SC1323

Counsel:

Mr. K. Imako, for the Plaintiff

Mr. C. Jaminan, for the Second and Third Defendants

23rd April, 2015

1. HARTSHORN J: This is a decision on applications by the second and third defendants and the plaintiff. The second and third defendants (Singhe defendants) apply to strike out the plaintiff’s statement of claim. Alternatively their application is amongst others to set aside injunctive relief and be granted leave to file their defences and cross claims out of time. These applications are opposed by the plaintiff, Esso Highlands Ltd. Esso also has an application to file its answer to interrogatories out of time and for the Bank of South Pacific Ltd to produce certain documents. The Singhe defendants do not oppose the application by Esso to file its answer but does oppose the application for the production of documents.

Background

2. Esso commenced this proceeding on 22nd November 2012 claiming amongst others, repayment of the sum of K1,172,841.59 which Esso alleges was fraudulently paid to the second defendant, Singhe Industries Ltd as a result of collusion between the first defendant, Quinten Willie and the third defendant, Sathyagith Munasinghe. Prior to the events giving rise to this proceeding, Esso had a contractual relationship with Singhe Industries in which Singhe Industries supplied certain specified goods to Esso from time to time which were used by Esso’s employees in its operations.

3. The Singhe defendants make application pursuant to Order 8 Rule 27 (1) (b) and (c) National Court Rules, s. 155 (4) Constitution and the inherent jurisdiction of this court for Esso’s statement of claim to be struck out as they submit that:

a) full particulars about each alleged fraudulent payment have not been given, such as the dates when the false invoices were issued, details of Esso’s forms authorising each payment, how each of the payments were fraudulently altered, and details of whether invoices paid had previously been paid and recycled, with different material descriptions and invoice numbers. Esso has only pleaded general methods of fraudulent conduct;

b) there are inconsistencies with the alleged fraudulent payments pleaded in the statement of claim and how these payments are described in the affidavit evidence of Robert Endsley and in the statement in answer to interrogatories filed on behalf of Esso;

c) there appear to be three cleared payments in the statement in answer to interrogatories. This means that the amount claimed of K1,172,841.59 in the statement of claim cannot be claimed;

d) the combination of the matters referred to in a), b) and c) above are indicative of Esso’s claim being obviously and almost incontestably bad. The pleadings are embarrassing and prejudicial as the Singhe defendants have to guess what is alleged against them.

4. Esso submits that its statement of claim clearly particularises the alleged fraud in paragraphs 3 and 4 of the statement of claim. Further, the requirements of Order 8 Rule 30 National Court Rules, that a party pleading shall give particulars of any fraud on which he relies, have been met.

5. Order 8 Rule 27 (1) (b) and (c) is as follows:

“(1) Where a pleading-

(a) ….

(b) has a tendency to cause prejudice, embarrassment or delay in

the proceedings; or

(c) is otherwise an abuse of the process of the Court,

the Court may at any stage of the proceedings, on terms or otherwise, order that the whole or any part of the pleading be struck out.”

6. Counsel for the Singhe defendants submits that Esso has not pleaded the particulars of the fraudulent conduct of the Singhe defendants that procured each of the alleged payments or the facts relating to the Singhe Industries’ account with Westpac Bank showing the payments received. Further, the inconsistencies between what is pleaded and what is deposed to by Robert Endsley on behalf of Esso and what is contained in a spreadsheet attached to Esso’s answer to interrogatories, renders Esso’s pleadings as embarrassing and prejudicial to the Singhe defendants as they are left to guess what Esso is alleging against them.

7. The Singhe defendants cite the Supreme Court case of Kuman v. Digicel (PNG) Ltd (2013) SC1323. In that case the Court relied upon the Supreme Court case of Philip Takori v. Simon Yagari (2008) SC905 which approved principles explained in the National court case of Kerry Lero trading as Hulu Haro Investments Ltd v. Philip Stagg (2006) N3050. Reliance is placed by the Singhe defendants on the following passages. In Lero v. Stagg (supra) the court said:

“A statement of claim or a defence (as the case may be) must therefore clearly plead the form of action by pleading the necessary legal elements or ingredients of the action and relevant and necessary facts (not the evidence) giving rise to the form of action. It follows therefore that, where a statement of claim or a defence is so ambiguous or lacking in particularity that it does not facilitate orderly and rational pleadings, which would enable the real issues to be identified, and instead leaves it to guess work, it should be struck out.”

and in Takori v. Yagari (supra), the Court said:

“Going by the arguments of the State, it is clear that, the attack on the Appellants’ statement of claim is really on the insufficiency of pleadings more than a total failure to disclose a reasonable cause of action. There is provision in the Rules in particular O 8 r36, r50 and r51 to take care of and remedy these kinds of problems. It is not only a good practice but also fair and equitable for a defendant faced with such a bad pleading as might have been the case here, to request for further and better particulars from the party responsible for such poor pleadings or to amend the pleadings and plead with clarity and with all of the appropriate particulars. When such a request is not appropriately responded to or ignored, the party making the request would be entitled to apply to the Court for appropriate orders including remedial orders for any failures to comply with any such orders, at the cost of the defaulting party.”

8. Esso submits that paragraphs 3 and 4 of the statement of claim pleads facts relating to the commission of the fraudulent activity and particularises the alleged fraud. Order 8 Rule 30 National Court Rules which amongst others requires a party pleading to give particulars of any fraud on which he relies, has been complied with it is submitted, and to plead any further would amount to pleading evidence which is prohibited.

9. From a perusal of paragraphs 3 and 4, it is the case that particulars of how the alleged fraud was perpetrated are given. Further, payments that were made but on alleged fraudulent invoices are listed. I am satisfied that a cause of action is disclosed, although that is not the subject of this application. As to there not being sufficient particulars, as the Supreme Court said in Takori v. Yagari (supra), if a party is of the view that there is an insufficiency in pleading, “There is provision in the Rules in particular O 8 r36, r50 and r51 to take care of and remedy these kinds of problems.”

10. As to the inconsistencies about which complaint is made, they arise in evidence. In this regard and in respect of the application of the Singhe defendants pursuant to Order 8 Rule 27 (1) (b) and (c), I refer to the following passage of Lay J. in Vari Gari v. Motor Vehicle Insurance Ltd (2005) Unreported and Unnumbered, referred to in White Corner Investments Ltd v. Haro (2006) N3089, with which I respectfully agree:

“The jurisdiction of the Court under O8 r27 is to see if the pleadings plead an almost incontestably bad cause of action which cannot possibly succeed, and cannot be cured by amendment (PNG Forest Products Pty Ltd and Inchcape Berhad v The State and Jack Genia [1992] PNGLR 85), assuming the truth of the facts pleaded in the statement of claim (Gabriel Apio Irafawe

v Yawe Riyong (N1915)), and to a lesser extent, in the defence, as explained by any evidence adduced on the...