Nominees Niugini Ltd v Motor Vehicles Insurance Ltd N7343

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 06 January 2017
• Court: National Court
• Year: 2017
• Judgement Number: N7343

Full : WS 1300 of 2013; Nominees Niugini Limited v Motor Vehicles Insurance Limited & WS 1252 of 2010; Independent Public Business Corporation of Papua New Guinea v Motor Vehicles Insurance Limited and Nominees Niugini Limited and National Superannuation Fund Limited and Benjamin Terence O’Dwyer, Terence James O’Dwyer and Backwell Lombard Capital PTY Ltd and Dr John Mua and Bernard Fong (2017) N7343

National Court: Hartshorn J

Judgment Delivered: 6 January 2017

N7343

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 1300 of 2013

BETWEEN:

NOMINEES NIUGINI LIMITED

Plaintiff

AND:

MOTOR VEHICLES INSURANCE LIMITED

Defendant

WS 1252 of 2010

BETWEEN:

INDEPENDENT PUBLIC BUSINESS CORPORATION

OF PAPUA NEW GUINEA

Plaintiff

AND:

MOTOR VEHICLES INSURANCE LIMITED

First Defendant/First Cross Claim Defendant/Second Cross Claimant

AND:

NOMINEES NIUGINI LIMITED

Second Defendant/First Cross Claimant/First Cross Defendant to Second Cross Claim

AND:

NATIONAL SUPERANNUATION FUND LIMITED

Third Defendant

AND:

BENJAMIN TERENCE O’DWYER. TERENCE JAMES O’DWYER and BACKWELL LOMBARD CAPITAL PTY LTD

Second Cross Defendants to Second Cross Claim

AND:

DR JOHN MUA

Third Cross Defendant to Second Cross Claim

AND:

BERNARD FONG

Fourth Cross Defendant to Second Cross Claim

Waigani: Hartshorn J

2016: 10th February

2017: 6th January

Application to dismiss proceeding - Application for consolidation or joinder

Cases Cited:

Kerry Lerro v. Stagg & Ors (2006) N3050

Motor Vehicles Insurance Ltd v. Nominees Niugini Ltd (2015) SC1435

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

Siu v. Wasime Land Group Incorporated (2011) SC1107

Takori v.Yagari & Ors (2008) SC905

Counsel:

Mr. R. Mulina, for Nominees Niugini Limited in both proceedings;

Mr. E.G. Anderson, for Motor Vehicles Insurance Limited in both proceedings;

Mr. K. Imako, for Independent Public Business Corporation in WS 1252 of 2010;

Mr. J. Brooks, for National Superannuation Fund Limited in WS 1252 of 2010.

6th January, 2017

1. HARTSHORN J: This is a decision on contested applications to dismiss proceeding WS 1300 of 2013 and an application for proceeding WS 1300 of 2013 to be consolidated or join ed with proceeding WS 1252 of 2010. Both applications were heard together.

Background

2. In proceeding WS 1300 of 2013 Nominees Niugini Limited (NNL) claims against Motor Vehicles Insurance Limited (MVIL) the sum of K22,261,650.00 or alternatively damages for a breach of warranties under an Equity Monetisation Contract (EMC). Default judgement was entered against MVIL in the sum of K 22,261,650.00, but the Supreme Court amongst others, allowed MVIL’s appeal and quashed the default judgment.

3. Proceeding WS 1252 of 2010 concerns the EMC between MVIL and NNL. The Independent Public Business Corporation (IPBC) seeks amongst others to set aside the EMC as it is claimed that it was entered into in breach of certain statutory requirements.

These applications

4. MVIL applies for dismissal and opposes consolidation or joinder. NNL applies for consolidation or joinder and opposes dismissal. The Independent Public Business Corporation and National Superannuation Fund Limited, parties to proceeding WS 1252 of 2010, oppose consolidation or joinder of WS 1300 of 2013 with WS 1252 of 2010.

Preliminary

5. As to the application for consolidation or joinder, it is made pursuant to Order 5 Rules 1 and 2 National Court Rules. NNL, the applicant, in written submissions, submits that there is no specific or primary provision that enables this court to consolidate proceedings except by invoking this court’s inherent jurisdiction. This submission in my view is correct. NNL has not however concisely referred to this court’s inherent jurisdiction in its notice of motion and it therefore is in breach of Order 4 Rule 49(8) National Court Rules as its motion does not contain a concise reference to the court’s jurisdiction to grant an order for consolidation.

6. Further, Order 5 Rules 1 and 2 National Court Rules only provide for jurisdiction in respect of causes of action and parties, not “proceedings”. Consequently, the notice of motion for consolidation or joinder should be struck out.

7. Notwithstanding this, I will proceed on the basis that the notice of motion is not struck out. I will consider the application for dismissal first as if it is successful, it will not be necessary to hear the application for consolidation or joinder.

Application for dismissal

8. In proceeding WS 1300 of 2013, MVIL applies pursuant to Order 12 Rule 40 (1)(a) and (c) National Court Rules for the proceeding to be dismissed on the basis that no cause of action is disclosed and that it is an abuse of the process of the court, or that pursuant to Order 8 Rule 27 (1) (a) and (c) National Court Rules, the statement of claim be struck out for not disclosing a reasonable cause of action and for it otherwise being an abuse of the court process.

9. Alternatively, MVIL seeks that it be granted leave to file and serve its defence within 14 days, pursuant to Order 1 Rule 15 (1) and Order 7 Rule 6 (2) National Court Rules.

10. MVIL submits that the above orders should be made as amongst others:

a. The Supreme Court in its decision in SCA 44 of 14 delivered on 25th June 2015, being Motor Vehicles Insurance Ltd v. Nominees Niugini Ltd (2015) SC1435, after a thorough consideration of NNL’s statement of claim, concluded at [35] that the statement of claim failed to disclose a cause of action;

b) This court is bound by that Supreme Court decision and NNL has not amended or made application to amend its statement of claim;

c) The relief sought in the statement of claim is “plainly untenable”.

11. NNL submits that proceeding WS 1300 of 2013 should not be dismissed as amongst others:

a) This court should only strike out an action where “the cause of action is obviously and almost incontestably bad”. The cases of PNG Forest Products Pty Ltd v. The State [1992] PNGLR 85, Michael Kuman v. Digicel (PNG) Ltd (2013) SC1232 and Kerry Lerro v. Philip Stagg (2006) N3050 are relied upon;

b) The pleadings in the statement of claim, if inadequate can be cured by amendment;

c) MVIL has not exhausted other avenues to allow NNL to rectify its pleadings such as filing a request for further and better particulars;

d) NNL has filed the application for consolidation or joinder in WS 1252 of 2010.

Law

Order 12 Rule 40 National Court Rules

12. There are numerous authorities in respect of the principles which apply to applications under Order 12 Rule 40 National Court Rules and I refer to the following cases in this regard: Kerry Lerro v. Stagg & Ors (2006) N3050, Takori v.Yagari & Ors (2008) SC905, Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 and Siu v. Wasime Land Group Incorporated (2011) SC1107. The Court in Mount Hagen v. Sek (supra) in paragraphs 27 to 30 conveniently sets out the requirements of Order 12 Rule 40 (1) (a), (b) and (c) as follows:

“27. The terms “vexatious”, “frivolous”, “abuse of the process of the Court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori & The State (2006) N3050; Philip Takori & Others v. Simon Yagari & 2 Others (2008) SC 905. These cases say the same thing.

28. The law with regard to an application for dismissal of proceedings based on O.12 r.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori’s case (supra).

29. The phrase ‘disclosing a reasonable cause of action’ consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i) A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

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

(iii) The purpose of O.12 r.40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

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

(v) A vexatious claim is one that...