Jimm Trading Ltd v John Maddison

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, J
• Judgment Date: 02 June 2017
• Citation: (2017) N6749
• Court: National Court
• Year: 2017
• Judgement Number: N6749

Full : WS No 1274 of 2005; Jimm Trading Ltd v John Maddison and Richard Busby and Bank South Pacific and Barry Tan and Steven Tan and Neville Seeto and T.S.T. 4 Mile Ltd and T.S.T. 4 Trading Ltd (2017) N6749

National Court: Kandakasi, J

Judgment Delivered: 2 June 2017

N6749

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

W. S. No1274 of 2005

BETWEEN

JIMM TRADING LTD

Plaintiff

AND:

JOHN MADDISON

First Defendant

AND:

RICHARD BUSBY

Second Defendant

AND:

BANK SOUTH PACIFIC

Third Defendant

AND:

BARRY TAN

Fourth Defendant

AND:

STEVEN TAN

Fifth Defendant

AND:

NEVILLE SEETO

Sixth Defendant

AND:

T.S.T. 4 MILE LTD

Seventh Defendant

AND:

T.S.T. 4 TRADING LTD

Eight Defendant

Waigani: Kandakasi, J

2006: 08th May

2016: 24th November

2017: 02nd June

PRACTICE & PROCEDURE – Pleadings – Claim based on fraud - Need to plead with precision and sufficiently particulars clearly disclosing a cause of action against each named defendant – Prior proceedings between parties – Plaintiff obliged to sufficiently plead how the common law doctrines of res judicata and issue estoppel do not apply – Failure to – Proceedings open to dismissal.

PRACTICE & PROCEDURE – Motion seeking to dismiss proceedings without a defendant firstly filing and serving a formal defence – No such requirement – A defendant is entitled to seek dismissal of proceedings by motion as of right provided the defendant has file and served notice of intention to defendant within prescribed time limits – Leave of Court required if notice of intention to defend filed outside the required time limits for its filing.

PRACTICE & PROCEDURE – Abuse of process – Multiple proceedings out of one event – Relevant and applicable principles – Need to avoid duplication of proceedings – Duty of a plaintiff to issue one proceedings against all possible defendants and possible causes of action – Failure to – Conclusion of one proceedings out of one event concludes all other possible causes of action against all possible defendants – Principle of res judicata and issue estoppel – Application of – Plaintiff not at any liberty to issue fresh proceedings after conclusion of earlier proceedings

MORTAGES – Rights and duties and responsibilities of mortgagors and mortgagees – Mortgagors right of redemption – Mortgagee exercising rights and powers with approval or endorsement of the Courts – Contract with third party resulting in mortgagee sale and transfer – Whether mortgagor has any right to challenge validity of sale on grounds other than fraud – Right of redemption - Relevant principle – Right of redemption ceases upon execution of contract of sale with a third party – Mortgagors rights and powers – Damages only available remedy in the absence of fraud.

LAND LAW – Mortgagee sale – Transfer and registration of title in third party – Except only on grounds of deliberate fraud to extinguish mortgagor’s right of redemption, execution of contract of sale by mortgagee with third party extinguishes mortgagors right of redemption – Whether a mortgagor has any right to seek to set aside transfer of title – Correct way to seek a set aside of a transfer and its registration? - Judicial review against the Department of Lands in proceedings seeking declaratory orders – Whether the issuance of a writ of summons seeking to set aside a transfer and registration of a transfer a correct mode? – Where fraud is involved writ of summons correct mode.

COMPANY LAW – Mergers or change of names of companies – Effect of – Continuity in existence of company under relevant and correct name respectively under previous and new or merged name – Effect on liabilities and assets – Company has the requisite power and authority to function under the respective names at the relevant times – All relevant contractual and other obligations continue under the new company name.

Cases Cited:

Papua New Guinea Cases

Jimm Trading Ltd v. Maddison (2006) N3174

Titi Christian v. Rabbie Namaliu (1996) SC1583

Telikom PNG Ltd v. Independent Consumer and Competition Commission (2008) SC906

The Government of Papua New Guinea and Davis v. Barker [1977] PNGLR 386

South Pacific Post Pty Ltd v. Ikenna Nwokolo [1984] PNGLR 38

John Peng v. The State [1982] PNGLR 331

Abiari v. The State [1990] PNGLR 250

James Pari v. The State [1993] PNGLR 173

Rawson Construction Ltd v. Department of Works (2005) SC777

Ben Kairu v. The State (2005) SC782

Tamara Player Tomscoll v. The State (2012) SC1208

MVIT Ltd v. Yama Security Services Ltd (2009) SC1004

Golobadana No 35 Ltd v. Bank of South Pacific Ltd (2002) N2309

National Fisheries Authority v. New Britain Resources Development Ltd (2015) N6078

Open Bay Timber Ltd v. Hon Lucas Dekena (2013) N5109

MVIT v. John Etape [1994] PNGLR 596

PNGBC v Jeff Tole (2002) SC694.

Harry Tovon v. Carl Malpo (2016) N6240

TST Holdings Pty Ltd v. Thomas John Pelis [2000] PNGLR 186

Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali & Anor; Ome Ome Forests Ltd v. Ray Cheong & Ors (2002) N2289

Kerry Lerro v. Philip Stagg as Chairman of Central Tenders Board & The State (2006) N3050.

William Powi v. Niugini Building Supplies Ltd (2016) SC1501

Philip Takori v. Simon Yagari (2008) SC905

Mount Hagen Urban Local Level Government v Sek No. 15 Ltd (2009) SC1007

Jackson Tuwi v. Goodman Fileder International Ltd (2016) SC1500

Michael Kuman v. Digicel (PNG) Ltd (2013) SC1232

MVIL v. Sossie Joe (2007) SC863

Waim No 85 Ltd v. The State (2015) SC1405

John Hiwi v. Rendle Rimua (2015) SC1460

Able Construction Ltd v. W.R. Carpenter (PNG) Ltd (2014) N5636

Richard Wapua v. Poss Lopkopa (2009) SC1048

Dan Salmon Kakaraya v. The Ombudsman Commission of Papua New Guinea (2003) N2478

Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906

Gene v. Hamidian-Rad [1999] PNGLR 444

Overseas Cases cited:

Jonesco v. Beard [1930] AC 298

Pilato v. Metropolitan Water Sewerage and Drainange Board (1959) 76 W.N. (NSW) 364

Other sources cited:

Halsbury Laws of England (4th Ed) Vol. 9, paragraph 57.

Counsel:

P. Parkop, for the Plaintiff

I.R Shepherd, for the Defendants

02nd June, 2017

1. KANDAKASI J: This is the latest of several proceedings issued by the Plaintiff, Jimm Trading Ltd (JTL) against the Bank South Pacific Ltd (the Bank) and the other defendants. JTL failed in four earlier separated proceedings,

WS 1580 of 2002, WS 58 of 2003, WS 145 of 2003 and WS 322 of 2005.

11 some going as high as the Supreme Court. In those proceedings, JTL unsuccessfully tried to stop the Bank from exercising its mortgagee powers over a property described as Lots 7 and 11, Section 387, Hohola, National Capital District (the property) which JTL gave as security for a loan to it from the Bank. JTL defaulting on its loan repayments triggered the Bank’s action. In this proceeding, JTL claims the Bank acted fraudulently for two main reasons. Firstly, the Bank sold the property to a non-existent company. This is something JTL says it discovered after the conclusion of the earlier proceedings. Secondly, JTL claims, the Bank breached court orders preventing the sale. The First, Second, Fourth, Fifth and Sixth Defendants have been named as Defendants only on account of being employees and or shareholders and directors respectively of the Third, Seventh and Eight Defendants.

Parties Arguments

2. In their response, the Defendants filed and eventually moved a motion for a dismissal of this proceeding. They argue that this proceeding constitutes an abuse of the process of the Court, or are frivolous and or vexatious because:

(a) all earlier proceedings were determined against JTL and they effectively authorized the Bank’s actions;

(b) the earlier proceedings finally concluded all claims arising out of the Bank’s exercise of its mortgagee rights and powers and as such JTL is precluded from issuing this proceeding despite the alleged discovery of new facts;

(c) the main relief claimed is against the Registrar of Titles without naming him as a party and in any case it should have been by judicial review proceeding and not by a writ of summons; and

(d) the claim of fraud has not been properly pleaded with sufficient particulars despite the requirements for such pleadings by the National Court Rules (“the Rules”).

3. In the event that their application fails, the Bank and the other Defendants apply for security for costs to be paid into Court by JTL. This proceeds on the basis that the sole shareholder or owner of JTL is not a PNG national and is indebted to the Bank in access of K1.7 million.

4. JTL in opposing the application, first argues that, the Bank and its officers’ application is an abuse of process itself because it is not preceded by a formal defence to its claim. Secondly, it argues that, the cause of action in this proceeding is separate...