Nae Ltd v Curtain Bros Papua New Guinea Ltd

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn, J
• Judgment Date: 12 March 2015
• Citation: (2015) N6124
• Court: National Court
• Year: 2015
• Judgement Number: N6124

Full : OS 225 of 2014; Nae Limited (1-21320) v Curtain Bros Papua New Guinea Limited (1-1815), Curtain Bros Holdings (NG) Limited (1-2647) and Clough Niugini Limited (1-1251) trading as Clough Curtain Joint Venture (6-80953) and Alex Tongayu in his capacity as the Registrar of Companies (2015) N6124

National Court: Hartshorn, J

Judgment Delivered: 12 March 2015

N6124

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS 225 of 2014

BETWEEN:

NAE LIMITED (1-21320)

Plaintiff

AND:

CURTAIN BROS PAPUA NEW GUINEA LIMITED (1-1815),

CURTAIN BROS HOLDINGS (NG) LIMITED (1-2647)

and CLOUGH NIUGINI LIMITED (1-1251) trading as

CLOUGH CURTAIN JOINT VENTURE (6-80953)

First Defendant

AND:

ALEX TONGAYU

in his capacity as the

Registrar of Companies

Second Defendant

Waigani: Hartshorn, J

2014: 10th July

2015: 12th March

APPLICATION TO DISMISS PROCEEDING

Cases cited:

Papua New Guinea Cases

Mango v. Chow Po Khoon (2005) N2907

Re Charlie Carter Pty Ltd v. the Shop, Distributive and Allied Employees’ Toap v. The State and Ors [2004] PNGLR 25

Overseas Cases

Gunns Ltd v. Marr [2005] VSC 251

Hunter v. Chief Constable of the West Midlands Police and Others [1982] AC 529

Association of Western Australia and Ors [1987] FCA 135

Counsel:

Mr. G. Manda and Ms. A. Kimbu, for the Plaintiff

Mr. M. M. Varitimos Q.C. and Mr. P Tabuchi, for the First Defendant

12th March, 2015

1. HARTSHORN J: This is an application to dismiss the proceeding or to strike out the statement of claim for disclosing no reasonable cause of action, for being frivolous or vexatious or for being an abuse of the process of the court. It is opposed by the plaintiff.

Background

2. This is a dispute concerning two purported contracts between the plaintiff and the first defendant. The plaintiff commenced proceedings by originating summons. In the originating summons the plaintiff seeks declaratory relief pursuant to various sections of the Fairness of Transactions Act (FTA) and s. 155 (4) Constitution in respect of the purported contracts. Consequentially, the plaintiff seeks orders for damages on a quantum meruit basis or pursuant to s. 155 (4) Constitution, that both contracts be reviewed, and that the parties enter into mediation for settlement.

3. Pursuant to a consent order, the plaintiff filed a statement of claim. The relief claimed in the statement of claim is not the same as that claimed in the originating summons although the relief does comprise declaratory relief under the FTA and damages on a quantum meruit basis.

Preliminary

4. The plaintiff questions this court’s jurisdiction to hear the application as:

a) it was ordered by consent on 19th May 2014, that amongst others, the matter shall return for confirmation of conclusion of mediation or further orders at 9:30 am on 10th July 2014; and further

b) pursuant to s. 7 (1) FTA, there has not been a mediated order that has failed.

5. As to the consent order argument, it was not ordered that, “the matter shall only return for confirmation of conclusion of mediation or further orders.” Moreover, it was ordered that the matter shall return for, “… or further orders.” Consequently this contention is rejected.

6. As to the s. 7 (1) FTA argument, s. 7 (1) is as follows:

“(1) In all proceedings under this Act, a Court shall in the first instance, attempt to arrive at an amicable settlement that conforms with the primary object of this Act and only after a mediated order has failed the Court may proceed to exercise its jurisdiction under Section 8.”

7. The plaintiff contends, if I understand correctly, that only after a mediated order has failed, is the court able to proceed to exercise its jurisdiction under s. 8 FTA. This begs the question, what if there is no mediated order? I have difficulty with the view that the purpose of this section was to prevent the court exercising its jurisdiction under s. 8 until first, there is a mediated order, and secondly, that mediated order has failed.

8. In any event, the jurisdiction that this court is being requested to exercise is in relation to an application to dismiss or strike out under the National Court Rules. It is not being requested to exercise its jurisdiction under s. 8 FTA.

9. In this instance, it is common ground that, and a Mediators Certificate has been filed to the effect that, the parties participated in a mediation but were unable to resolve the issues in dispute. As the parties have attempted, but have been unsuccessful in settling the proceeding, to any extent that the court may have been, in my view the court should not now be precluded from exercising its jurisdiction in respect of this matter. For the above reasons the preliminary contentions of the plaintiff are rejected.

Application to dismiss or strike out

10. The first defendant seeks to dismiss the proceeding pursuant to Order 12 Rule 40 as:

a) the proceeding is an abuse of process, as there are major disparities between the relief sought in the originating summons and the relief sought in the statement of claim. Neither a defendant nor the court, it is submitted, should be required to deal with a case where there are disparities in the relief sought between the originating summons and the statement of claim.

b) no reasonable cause of action is disclosed to support the relief claimed in the statement of claim. Even if all of the material facts contained in the statement of claim were proved, the plaintiff could not succeed in obtaining the relief sought therein. Further, the statement of claim is more in the nature of a statement of evidence, much of which is irrelevant, and submissions, rather than being a pleading that pleads material facts in accordance with proper pleading principles.

Abuse of process

11. As to the contention of the first defendant that there are major disparities between the relief sought in the originating summons and the statement of claim, counsel for the plaintiff submitted that what the plaintiff was seeking in the statement of claim did not deviate from what was sought in the originating summons. The plaintiff’s claim is an action under s. 5 FTA.

12. Notwithstanding that the first defendant makes application pursuant to Order 12 Rule 40 National Court Rules to dismiss the proceeding on the ground amongst others, that it is an abuse of process, the following classic statement of Lord Diplock in the House of Lord’s decision of Hunter v. Chief Constable of the West Midlands Police and Others [1982] AC 529, as to the inherent jurisdiction of a court to deal with an abuse of its process is worthy of reproduction:

“This is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied;……… It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power.

13. In this instance, the first defendant contends that it should not be required to deal with a case where there are disparities in the relief that the plaintiff seeks in the originating summons and the statement of claim. That there are disparities is clear. Examples of this are that in the originating summons, amongst others, ten declarations are sought concerning two purported contracts, other orders are sought for damages and that the two contracts be reviewed, and that the parties enter into mediation. In the statement of claim, two declarations and damages in varying amounts, are sought.

14. From a perusal of the documentation, the declarations in the originating summons are sought pursuant to s. 1(a) (i) and (ii), 1(b), 4, 5 (2) (b) and 12 FTA as well as s. 155 (4) Constitution. The declarations in the statement of claim however are sought pursuant to s.8 FTA and the FTA generally. It is clear that the submission of the plaintiff that what it seeks in the statement of claim does not deviate from what is sought in the originating summons, is not correct.

15. The lawyers for the first defendant by letter dated 17th June 2014 wrote to the lawyers for the plaintiff and amongst others, requested whether the plaintiff was seeking the relief sought in the statement of claim, and was abandoning the relief sought in the originating summons that was not being sought in the statement of claim.

16. By letter dated 18th June 2014, the lawyers for the plaintiff replied. In regard to the query concerning the relief claimed, they stated that they reserved their right to respond as they considered it is not appropriate to discuss “strictly or legalistically” at that stage of the mediation. So instead of replying to the lawyers for the first defendant and clarifying...