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Kewa v Kombo [2004] PGNC 83; N2688 (15 October 2004)

N2688

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1036 OF 2000

MICHAEL KEWA AND OTHERS
Plaintiffs

V

ELIAS MAI KOMBO
Defendant

MT HAGEN : CANNINGS J
13, 15 OCTOBER 2004

RULING ON MOTION

PRACTICE – pleadings – application by defendant to amend defence – National Court Rules, Order 8, Rule 50 – whether application should be granted – discretionary matter for Court – identification of relevant considerations re exercise of discretion – application of considerations – previous application by defendant to dismiss proceedings on ground of breach of Frauds and Limitations Act, dismissed – National Court Rules, Order 8, Rule 14 – whether limitations period defence to be specifically pleaded – whether res judicata or issue estoppel applicable.

Case cited:
The Papua Club Inc v Nusaum Holdings Ltd and Others (2002) N2273

Counsel:
Mr P Yer for the plaintiffs
Mr P Dowa for the defendant

CANNINGS J:

INTRODUCTION

This is a ruling on a motion to amend a defence. The substantive case concerns a block of land in Mt Hagen. The plaintiffs claim that the defendant obtained a lease over the land in his own name, by fraud.

BACKGROUND

On 10 August 2000 a writ of summons was filed. The main relief sought by the plaintiffs is a declaration that the defendant’s lease, which has apparently been registered, be declared null and void.

On 25 August 2000 the defendant filed a notice of intention to defend.

On 22 September 2000 the defendant filed a defence. This is the document he now wants to amend.

On 19 December 2003 the defendant filed a notice of motion, seeking to have the proceedings summarily dismissed. The principal ground relied on was that the limitations period for bringing this sort of claim was breached. The plaintiffs were too slow in filing the writ, it was claimed.

On 11 August 2004 that motion was determined by Salika J in the National Court at Mt Hagen. His Honour dismissed the motion. He did not publish a written judgment but gave oral reasons for his ruling. The Court is informed by the affidavit of Peter J Yer, of Kopunye Lawyers, sworn on 6 October 2004 and filed on 7 October, that his Honour based his decision on Order 8, Rule 14 of the National Court Rules. That rule obliges a defendant to specifically plea a statute of limitations defence. As it had not been specifically pleaded, the plaintiff’s case could not be dismissed on that basis.

On 3 September 2004 the defendant filed a motion, seeking leave to amend the statement of defence by deleting paragraph 11 and replacing it with a new paragraph 11. The new paragraph seeks to specifically plead that the proceedings are statute-barred. That is the motion now before the Court.

DEFENDANT’S SUBMISSIONS

The defendant, who is the applicant in the present proceedings, relies on Order 8, Rule 50 of the National Court Rules. Mr Dowa, for the defendant, submits that this rule gives a broad discretion to allow parties to amend the pleadings. This can even be done during the course of a trial. In the present case, the trial has not started. No prejudice would be done to the plaintiffs. So the application should be granted.

PLAINTIFF’S SUBMISSIONS

Mr Yer, for the plaintiffs, strongly objected to the application. He said that the matter was foreclosed by Salika J’s ruling of 11 August 2004. The defendant argued the issue of the statute of limitations. His argument was dismissed. Res judicata or issue estoppel applies. That is, the plaintiffs say, that the defendant cannot have a second bite at the cherry.

FINDINGS OF FACT

I accept Mr Yer’s account of the proceedings before Salika J as accurate. Mr Dowa, for the defendant, did not take issue with the gist of Mr Yer’s affidavit of 6 October 2004.

RELEVANT LAW

Order 8, Rule 50 of the National Court Rules states:

(1) The Court may, at any stage of any proceedings, on application by any party or of its own motion, order, on terms that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such manner as the Court thinks fit.

(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings.

(3) Where there has been a mistake in the name of a party, Sub-rule (1) applies to the person intended to be made a party as if he were a party.

(4) This Rule does not apply to the amendment of a minute of a judgement or order.

Order 8, Rule 14 states:

In a defence or subsequent pleading the party pleading shall plead specifically any matter, for example, performance, release, any statute of limitation, fraud, or any fact showing illegality—

(a) which he alleges makes any claim, defence or other case of the opposite party not maintainable; or

(b) which, if not pleaded specifically, may take the opposite party by surprise; or

(c) which raises matters of fact not arising out of the preceding pleadings.

RELEVANT CONSIDERATIONS RE EXERCISE OF DISCRETION

The effect of Order 8, Rule 50 is to give the Court a discretion, when it is required to determine an application for an order to amend a document, including any pleadings. There have been many PNG cases on such applications. They were conveniently summarised by Gavara-Nanu J in The Papua Club Inc v Nusaum Holdings Ltd and Others (2002) N2273. In that case the Court granted an application by the plaintiff to amend its statement of claim on the third day of a trial that was due to last more than four days.

His Honour extensively reviewed the authorities, both in PNG and overseas, and succinctly summarised the policy considerations underlying the evidently broad discretion given to the Court by Order 8, Rule 50. There have even been cases in which parties have been granted leave to amend their pleadings after the parties have closed their cases.

His Honour summarised, at pages 12-13, five considerations the Court should weigh in the balance when determining such applications. They are:

1. Will the amendment enable the Court to determine the real question in controversy between the parties?
   
2. Will the amendment correct any defect or error in the proceedings?
   
3. Will the amendment cause real prejudice or injustice to the other party?
   
4. Is the application for such amendment made mala fide or bona fide?
   
5. Can the other party be fairly compensated with costs for the amendment?
   

To those considerations I would add:

6. Is the party prevented by its conduct or the manner in which the proceedings have progressed from being permitted to amend its pleadings?
   
7. Where do the interests of justice lie?
   
8. Is the proposed amendment efficacious? That is, is it a proper amendment?
   

APPLICATION OF RELEVANT CONSIDERATIONS

I apply the above considerations to the present case.

1. The proposed amendment will tend to enable the Court to determine whether the defendant has a proper defence based on the statute of limitations. That is an important principle of law and on the face of the file it is apparent that it is an issue that is at least arguable. The plaintiffs assert that the defence can easily be dispatched. But it remains to be decided.
   
2. The failure to plead the statute of limitations is a serious pleading error, which is open to be corrected.
   
3. There will be no prejudice or injustice to the plaintiffs, in the sense that they will not be ambushed. There will be no procedural fairness.
   
4. I consider that the application is being made bona fides, to correct an error or oversight in the defence.
   
5. The plaintiffs can be compensated by an order for costs. The previous cases show that parties who are successful with similar applications have to pay the other side’s costs. And I propose to make an order for costs in this case, against the defendant.
   
6. I do not consider that the defendant is prevented by its conduct from amending its pleadings. I have carefully considered Mr Yer’s submission regarding the effect of Salika J’s recent orders. It is apparent that his Honour did not address the statute of limitations defence on its merits. The defendant wanted to have the proceedings dismissed on that basis. But his Honour would not allow it. That is all that happened. Neither res judicata nor issue estoppel applies.
   
7. I consider that the interests of justice lie in allowing the defendant to amend his defence. History shows that the courts in PNG have been quite flexible when dealing with these sorts of applications.
   
8. The proposed amendment is not, however, a proper one. The proposed amendment raises a new defence as to "Section 12 of the Statutes of Frauds and Limitations Act". There is no such Act in PNG. The relevant legislation is the Frauds and Limitations Act 1988. That Act repealed the Frauds and Limitations Act (Chapter 330). Section 12 of the 1988 Act is about personal estates of deceased persons. It appears incapable of being relevant to the issues in the present case. Perhaps Section 16 – limitations of actions in contract tort etc – is relevant. But that is a matter for the defendant to consider. The proposed amendment is not efficacious.
   

RESULT OF WEIGHING RELEVANT CONSIDERATIONS

All of the considerations except the last one favour the granting of the application made by the defendant. It makes sense for the issue about the limitations period to be permitted to be raised. The problem is, however, that the proposed amendment refers to a non-existent law. It would not be proper to allow the amendment.

I must therefore refuse this application. However, as indicated above, an amendment of the type which the defendant is seeking to make appears desirable. The defendant is therefore at liberty to make a fresh application, which relies on the correct law.
ORDER

• The defendant’s motion filed on 3 September 2004 is refused.
  
• The defendant is at liberty to file a new notice of motion, seeking the same general type of amendment sought by the above motion.
  
• The defendant shall pay the plaintiffs’ costs of these proceedings, to be taxed if not agreed.

_________________________________________________________

Lawyers for the plaintiffs : Kopunye Lawyers
Lawyers for the defendant : Dowa Lawyers