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Baulana v Post & Telecommunication Corporation [1996] PGNC 35; N1473 (23 September 1996)

Unreported National Court Decisions

N1473

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 355 OF 1996
BETWEEN
JOHN BAULANA - PLAINTIFF
AND
THE POST & TELECOMMUNICATION CORPORATION - DEFENDANT

Lae & Goroka

Sawong J
23 August 1996
23 September 1996

PRACTICE & PROCEDURE - National Court - Motion to strike out proceedings - Grounds - Proceedings frivolous and vexatious - National Court Rules Order 12 Rule 40.

PRACTICE & PROCEDURE - National Court - Motion to stricke out proceedings - Wrong party named in proceedings.

Cases Cited

PNG Forest Product Pty Ltd & Inchape Berhad v The State [1992]PNGLR 85

Counsel

Mr D Poka for the Applicant/Defendant

Mr S Tedor for the Respondent/Plaintiff

23 September 1996

SAWONG J: By a Notice of Motion dated the 16th day of July 1996, the applicant sought the following orders:

1. The proceedings in the action hearing be dismissed for frivolity.

2. The plaintiff pay the defendant costs of the proceedings.

It also sought ancillary and consequential relief. In support of the Notice of Motion, Mr Poka filed an affidavit. The relevant paragraphs of the affidavit are set out in paragraphs 4, 5 & 6 inclusive:

“4. On perusal of the pleading of the Plaintiff, it appears that the Plaintiff is suing the Defendant for failure to prepare and to lodge relevant documents with the Public Officers Superannuation Fund (‘POSF’) to enable the Plaintiff to refund his contributions or entitlements made to the POSF. The Plaintiff says that due to the failure as alleged, he claims the sum of K33,600.00 being the alleged contribution or entitlements invested with POSF. The Defendant denies being liable to the Plaintiff for the amount of K33,600.00 as alleged by the Plaintiff. Further, the Defendant says that the Plaintiff should make his claim against POSF and not against it.

5. I am of the view and verily believe that if the Plaintiff is saying that the Defendant, for some reason or other, has failed to lodge relevant documentation with POSF to facilitate refunding or repayment of his contributions or entitlements, then his appropriate remedy is to seek an order of mandatory nature from the Court compelling the Defendant to carry out its duties as required under the law to do so. However, for the Plaintiff to seek a relief for damages against the Defendant in this sort of situation is inappropriate. If the plaintiff’s claim is for refund or repayment of his contribution or entitlements, the claim really should have made against POSF.

6. In the circumstances, the pleading on foot in the proceedings herein against the Defendant is frivolous and vexatious in that it discloses no cause of action against the Defendant and accordingly the action should be dismissed.”

Mr Tedor appeared for the Respondent/Plaintiff and objected to relief sought. He relied on his own affidavit of the 6th of August, 1996. I have read it. The main points in his affidavit is that the plaintiff has done all he can but the PTC has not done anything about it.

The facts as I find from all those affidavits are these. The Plaintiff/Respondent was employed by the applicant/defendant (hereinafter referred to as ‘PTC’). He was employed by the defendant in 1974 until he left the employee of defendant in 1993. Whilst he was employed by the defendant he has alleged to have joined the State Service and Superannuation Fund Board. My research indicates that no such organisation existed as at that time. However, a Public Officers’ Superannuation Board (POSF) was created by the Public Officers’ Superannuation Act Chapter No 66 (the “Act”). This Act came into existence in 1983. Be that as it may, the plaintiff/respondent alleges that he contributed to the POSF whilst and during the course of his employment with the applicant/defendant.

In his statement of claim in the writ of summons the plaintiff claims that because the defendant has not complied with its statutory obligations he has been deprived of receiving his contributions that he has contributed to the POSF. The specific allegation against the defendant is that the defendant has not despite, requests and undertakings, filed the required documents with POSF. He has therefore filed the writ claiming some K28,000 being his contributions to the POSF and interest of K5,600, a total of K33,600 from the defendant.

SUBMISSIONS

Mr Poka has submitted that the whole proceedings should be dismissed on the basis that the claim is frivilous. He submitted, that the essence of the plaintiff’s claim is for monies he contributed to the POSF whilst employed by PTC. Mr Poka’s argument is that, as the plaintiff has contributed to the POSF the proceedings should be made against POSF and not PTC. Alternatively the appropriate relief would be for the plaintiff/respondent to seek orders to compel the defendant to attend to filing the relevant documents.

Mr Poka submits that the cause of action as shown in the Write of Summons is frivolous and vexatious as it discloses no cause of action. Consequently be submitted that the whole proceedings ought to be dismissed pursuant to Order 12 Rule 40 of the National Court Rules which reads:

“40. Frivolity, etc. (13/5)

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court, the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under Sub-rule (1).”

Mr Tedor on the other hand submits that, as the applicant/defendant has not complied with its Statutory obligations under the Act, plaintiff/respondent cannot make a claim against the POSF. He referred to Sections 27 to 36 of that Act as mandatory requirements on the part of the applicant/defendant to compile the necessary documents and submit them to the POSF to enable the plaintiff to claim his contributions from the POSF. He further submitted that under Section 36 of the Act no refund will be made until certain conditions are met.

Mr Tedor in essence submitted that as the applicant/defendant had failed to file the relevant documents and comply with its statutory obligations it was negligent and consequently the plaintiff’s cause of action was based on negligence. He submitted that the plaintiff’s claim was not frivolous and that the motion should be dismissed.

RULING

I have read and considered carefully the evidence and the submissions. The issue is wether the cause of action set out it the statement of claim is frivolous or vexatious. In my judgement the relevant paragraph of the statement of claim are paragraphs 3 to 7 inclusive which read:

“3. The Plaintiff joined the State Services & Statutory Authorities Superannuation Fund Board in January 1974, and remained therein a member of the State Services & Statutory Authorities Superannuation Fund Board until December, 1993, when the Defendant ceased paying him his wages. Thus the Plaintiff’s period of membership with the State Services & Statutory Authorities Superannuation Fund Board is nineteen (19) years which continued uninterrupted until the Plaintiff left the Defendant’s employment.

4. In the nineteen (19) year period of membership with the State Services & Statutory Authorities Superannuation Fund Board, the Plaintiff accumulated contributions totalling K28,000.00.

5. By the virtue of the Public Officers Superannuation Fund Board Act of 1993 amended, the Defendant is required to file with the State Services & Statutory Authorities Superannuation Fund Board documents comparison of an Application for Pension Form, a Separation Authority, Salary History Card and Marriage & Children’s Birth Certificates, if applicable.

6. The Defendant, despite advises and undertaking to the Plaintiff of due compliance with its statutory obligation to the Plaintiff under the Public Officers Superannuation Fund Board Act, aforesaid, has not filed the required documents with the State Services & Statutory Authorities Superannuation Fund Board, thereby causing the Plaintiff to suffer loss of his contributions.

Particulars:

Accumulated contributions to the State Services & Statutory Authorities Superannuation Fund Board for the period between January, 1974, and December, 1983 = K28,000.00.

Interest due for the period between December 1993, to March 30th, 1996, calculated at 8% per annum = K5,600.00.

Total = K33,600.00.

7. That despite requests by the Plaintiff for the Defendant to comply with his obligations under the Public Officers Superannuation Fund Board Act, 1993 amended, the Defendant has neglected, failed and or refused to comply with the Act thereby denying the Defendant his due contributions.

And the Plaintiff claims:

(a) K33,600.00;

(b) Interests pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act, Chapter No 52;

(c) Costs of these proceedings.”

Order 12 Rule 40 has been judicially considered in PNG, in PNG Forest Products Pty Ltd and Inchcape Berhad v the State [1992] PNGLR 85. The National Court there considered amongst other things, when and on what grounds the Court can properly exercise its discretion under this Rule.

The brief facts from the head notes is as follows. The plaintiff’s motion by way of a Writ of Summons sought the continuance of an exparte order made on 20 December 1991 restraining the defendants from further dispositions of timber and logging rights which were the subject matter of their spending (substantive) case, in which they claimed specific performance and damages under a contract they entered into.

The defendant’s, in response, sought motions that the plaintiff’s statement of claim be struck out on the ground that if failed to disclose a cause of action.

In his considerations on Or 12 Rule 40, Sheehan J said this at 87 - 88:

“The protection of the law guaranteed by the constitution and laws of Papua New Guinea, carry with them the right for persons to present petitions and actions before the courts of this country for the protection of rights and resolution of disputes with others. In short, a party has the right to have his case heard. Those rights cannot be lightly set aside.”

The Rules of Court in particular the Rules of the National Court are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before court. For the same reason, and in the interests of justice, the rules include prohibitions against abuse of the court process.

Thus O 12 r 40 reads:

“(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under sub-rule (1) of this Rule.”

Quite apart from this rule, the court also has an inherent jurisdiction to protect itself from abuse of its process. Thus, if the court is satisfied that the conditions of this rule have been satisfied, it may strike out that offending action. It can in appropriate cases, therefore, prevent a party from presenting its case in court of from defending one brought against it. But the refusal to try a party’s claim or the striking out of its defence is not lightly done, and there has been a long history of case law determining what is a “reasonable” cause of action or defence and what is “frivolous or vexatious.”

There is a long and very full history of decided cases where one party or another has sought to strike out the proceedings of an opponent to obviate the need for trial. As long ago as 1887 in Republic of Peru v Peruvian Guano Company Chitty J said:

“if, notwithstanding defects in the pleading...the Court is of the view that a substantial case is presented the Court should, I think decline to strike out that pleading: but when the pleading discloses a case which the Court is satisfied will not succeed, then it should strike it out and put a summary end to the litigation.”

This line of reasoning was followed in the decision of the Court of Appeal in Hubbuck and Sons Ltd v Wilkinson, Heywood & Clerk Ltd [1898] UKLawRpKQB 176; (1899) 1 QB 86 at 91, where Lord Lindley MR was emphasising the distinction between seeking to have action decided on a preliminary point of law and moving to have it stuck out for want of a reasonable cause of action:

“Two courses are open to a defendant who wishes to raise the question whether, assuming a statement of claim to be proved, it entitled the plaintiff relief. One method is to raise the question of law as directed by Order XXV, r 2; the other is to apply to strike out the statement of claim under Order XXV, r 4. The first method is appropriate to cases requiring argument and careful consideration. The second and more summary procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands is insufficient, even if proved, to entitle the plaintiff to what he ask.”

My research over the short period of time discloses there does not exists such a body called State Services and Statutory Authorities Fund Board. There is in existence the Public Officers’ Superannuation Fund Board. That Board is created by statute, namely by the Public Officers’ Superannuation Act Chapter No 66.

Mr Tedor relied heavily on the provisions of Sections 27 to 36 inclusive of the Act during submissions. I set out in full the provisions of those sections.

“27. Exclusion of certain declared persons

The Minister may, on the recommendation of the Public Services Commission, declare that a person is not entitled to contribute, to the Fund.

28. Medical examinations

(1) Subject to Subsections (2) and (3), a person is not entitled to contribute, and shall not contribute, to the Fund until the Board is satisfied, after receiving a report from a medical practitioner approved by the Board, that his health and physical condition are such as to to justify his being accepted as a contributor for full benefits under this Act.

(2) Subsection (1) does not apply to a person who was, immediately before the commencement date:

(a) a contributor to the Retirement Benefits Fund; or

(b) a member of the Police Force.

(3) Where the Board is not satisfied, as required by Subsection (1), as to the health and physical condition of a person who is otherwise eligible to be a contributor, the person may nevertheless elect to contribute to the Fund for reduced benefits as set out in Part VI.2.

29. Married women

(1) This section does not apply to or in relation to women who are heads of families for the purposes of:

(a) Part IX of the Public Service Act, or

(b) Part XI of the Teaching Service Act, or

(c) Part IV of the Police Force Act.

(2) A married woman who became after the commencement date, or becomes, employed by the State or an approved authority is not entitled to contribute, and shall not contribute to the fund.

(3) For the purposes of this Act, a female contributor who married after the commencement date, or marries, shall be deemed to have resigned on the date of her marriage.

30. Commencement and cessation of contributions

(1) Subject to Section 34, except as otherwise provided by this Act a contributor shall contribute to the Fund as from the commencement date or as from the prescribed date, whichever is the later.

(2) For the purposes of Subsection (1), the prescribed date is:

(a) in the case of a person who became a contributor by virtue of Section 26 the date of the notice under that section; and

(b) in the case of any other person the date of his appointment.

(3) Subject to Section 41 (4), the contributions of a contributor cease to be payable immediately after the last fortnightly payment of salary due before the last anniversary of his initial contribution before he attains the age of retirement.

31. Rate of contributions

A contributor shall contribute to the Fund at the rate of 6% of his salary.

32. Deduction of contributions

(1) Subject of Subsection (2) and to Section 35, the contributions of a contributor shall be deducted from his salary at the time of each payment of salary.

(2) Where the whole or part of a contribution is not deducted from salary in accordance with Subsection (1), the arrears may be:

(a) paid by the contributor; or

(b) deducted from any amounts subsequently payable to the contributor in such amounts and during such periods as the Board determines.

33. Payment of increased contributions

Subject to Section 34, where the salary of a contributor is increased, contributions payable by him in respect of his increased salary are payable from the date from which the increased salary is payable.

34. Payments from pay-days

Where the date from which any amount of contribution would be payable under this Division is not a pay-day, the amount is payable from the next pay-day.

35. Contributions on certain leave

(1) Where a contributor is granted leave without pay, or at a rate less than the full rate of pay, on account of illness, the Board may, on application by the contributor, direct that the contributions payable by him during the period of the leave be paid in such amounts and during such period as the Board determines.

(2) Where:

(a) a contributor is granted leave without pay otherwise than on account of illness; and

(b) the period of the leave is counted as part of his service for the purposes of his employment,

the contributor

(c) shall, for the purposes of this Act, be deemed to have received the salary that he would have received if he had not been absent on the leave; and

(d) is liable to pay the contributions that he would have paid if he had not been so absent, in such amounts and during such period as the Board determines.

36. Candidates at elections

(1) Where a contributor who is:

(a) an officer or employee of the Public Service; or

(b) a member of the Teaching Service; or

(c) a member of the Police Force,

retires or resigns from his employment in order to become a candidate for election to the Parliament, he shall, for the purposes of this Act, be deemed to be on leave without pay until:

(d) he is elected; or

(e) he becomes again employed by the State otherwise than as a casual, exempt or temporary employee; or

(f) he becomes engaged in employment otherwise than as specified in Paragraph (e); or

(g) the end of the period of two months after the declaration of the result of the election, whichever first occurs.

(2) A person to whom Subsection (1) (d), (f) or (g) applies shall, for the purposes of this Act, be deemed to have retired or resigned as from:

(a) the date of his election; or

(b) the date on which he becomes engaged in employment as specified in Subsection (1) (f); or

(c) the end of the period referred to in Subsection (1) (g), as the case may be.

(3) A person to whom Subsection(1) (e) applies shall, for the purposes of this Act, be deemed to have ceased to be on leave without pay as from the date on which he is employed by the State as specified in that paragraph.

(4) Subject to Subsection (5), a contributor who has retired or resigned in order to become a candidate for election to the Parliament and who:

(a) is not declared, on the day of nomination under the Organic Law on National Elections, to be a candidate; or

(b) withdraws his nomination after that day, shall, for the purposes of Subsection (1), be deemed to have failed to be elected.

(5) In a case referred to in Subsection (4), the period referred to in Subsection (1) (g) commences to run on the day of nomination or, if the nomination is withdrawn after the day of nomination, the day on which it is withdrawn.

(6) Where a person is deemed under his section to be on leave without pay for any period, he is not he Fund in respect of that period.”

I have read sections 27 to 36 and I am of the view that Sections 27 to 36 are not relevant because those provisions deal with the exclusion, or commencement and cessation of contributions, rate of contributions, deductions of contributions, payment from paydays, contributions on certain leave and candidate and elections. He emphasised Section 36 as the mandatory provision. Section 36 relates to candidates or contributors who retires or resigns from his employment in order to become a candidate for elections to the Parliament. It does not create obligations on the employer. I consider that the relevant and the applicable provisions in regard to the refund of contributions to a contributor is Section 42, 43 and 44 of the Act. Section 42, 43 and 44 read as follows:

“Section 42

INVALIDITY PENSIONS

Where the services of a contributor are terminated on the ground of invalidity or physical or mental incapacity to perform his duties, not due to his own wilful action, he is entitled, as from the date of termination, to receive a pension equal to fifty percent of:

(a) the average salary that he received during the three years’ immediately before the termination; or

(b) where he had less than three years’ service before termination, the average salary that he received during his service.

Section 43

BENEFITS ON RETRENCHMENT

(1) A contributor who is retrenched before he attains the age of 55 years is entitled to receive:

(a) a lump sum equal to 2.5 times the amount of the contributions paid by him; or

(b) at the discretion of the contributor, a pension certified by the actuarial member of the Board to be the actuarial equivalent of that sum.

Section 41 applies to and in relation to a contributor who is retrenched after he reaches the age of 55 years as though he had retired on the date of his retrenchment.

Section 44

REFUNDS OF CONTRIBUTIONS

(1) A contributor who resigns, is retired or is dismissed in circumstances other than those referred to in the preceding provisions of this Division shall be paid an amount equal to the amount of the contributions paid by him.

(2) Where a contributor who has received a refund under Subsection (1) again becomes a contributor, he shall contribute t the Fund as required by this act but is not entitled to any further benefit in respect of his previous service.”

It is quite clear that Section 42 relates to payment of contributions to an invalid. Section 43 relates to a contributor who is retrenched before he attains age of 55 years. And Section 44 refers to refund of contributions to a contributor.

I consider that Mr Tedor’s submissions are misconceive and misleading. Consequently I do not accept his submissions and I reject them. The provisions of the Act he relied on do not create any statutory obligations on the Defendant all. Furthermore, in my judgement even upon reading the statement of claim it is not based on negligence.

I accept Mr Poka’s submissions. I am of the view that the cause of action is frivolous and vexatious. I consider that the appropriate course of action would have been for the plaintiff to seek orders to compel the defendant applicant to furnish him with the relevant documents to enable him to complete it and sign it and have the relevant authority or authorised person from the defendant organisation to do its part and have the documents forwarded to the POSF for payment of his contributions.

I consider that the proceedings are misconceived. There is nothing in the Act which prohibits the contributor from suing the POSF if the POSF refuses to refund his contributions. I am of the view that the proper cause of action does not lie against the applicant/defendant but would lie against the POSF. Of course if the applicant/defendant failed to do its part to enable the contributor to file the necessary documents with the board, then an appropriate cause of action may filed against the applicant/defendant. In the circumstances I consider that the whole of the proceedings against the applicant/defendant is frivolous and vexatious. Consequently I uphold the application and dismiss the proceedings.

I order that the plaintiff/respondent pay the applicant’s costs, such costs are to be agreed, if not to be taxed.

Lawyers for the applicant/defendant: Milner & Associates

Lawyers for the respondent/plaintiff: S Tedor