N3178

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1555 OF 2004

BETWEEN:

JOE TIPAIZA and JAMES HELA PORA
for themselves and on behalf of
220 OTHERS of the FINCH/HUMADE ROAD
SETTLEMENT (MADANG)
Plaintiff

AND:

JAMES YALI – 
GOVERNOR OF MADANG PROVINCE
First Defendant

AND:

BUNAG KIUP –
 Chairman – Madang Provincial Government
Law & Order Committee
Second Defendant

AND:

ANTHONY WAGAMBIE – 
The Commander – 
Task Force Members of Goroka Police
Third Defendant

AND:

SAM INGUBA – Commissioner of Police
Fourth Defendant

AND:

THE INDEPENDENT STATE
OF PAPUA NEW GUINEA
Fifth Defendant

Madang: Davani, J
2006: 11, 15 August

PRACTICE AND PROCEDURE - application seeking leave to amend statement of claim – application to be made at any stage of proceedings – O.8 r.50(1) of National Court Rules. 

PRACTICE AND PROCEDURE - proposed amendments raise new cause of action – action statute barred – leave to amend granted, as long as proposed amendment is based on same facts as originally pleaded.

PRACTICE AND PROCEDURE- leave to amend statement of claim – defendant to be awarded costs of amendment – likely prejudice in costs – defendants must prove the prejudice.-

Cases Cited: 

Papua New Guinea Cases:

New Guinea Company Ltd v Thomason [1975] PNGLR 454
The PapuaClub Inc. v Nusaum Holdings Ltd. (No. 1) (2002) N2273

Overseas Cases:

Green v Rozen [1955] 2 All ER 797
Cropper v Smith (1883) 26 Ch. D 700
Tildesey v Harper (1876) 10 Ch. D 393 
Halsbury’s 4th Ed. Vol. 36

Text:

The Supreme Court Practice 1991’ Vol. 1

Counsel:

B. Waipek, for the Plaintiff/Applicant
C. Makail, for First & Second Defendants/Respondents
F. Cherake, for Third, Fourth & Fifth Defendants/Respondents

15 August, 2006 

RULING

1. DAVANI .J: By notice of Motion filed on 12 May, 2006 by Kunai & Co Lawyers, for and on behalf of the plaintiffs/applicants (‘applicants’), the applicants sought leave to amend statement of claim pursuant to O.8 R.50(1) of the National Court Rules (‘NCR’). O.8 R.50 (1) reads;

"50. General (20/1)

 (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. The application is opposed by all defendants.

Background

3. The original Writ of Summons and statement of claim was filed on 17 November, 2004. (‘WSSC’). Therein, the applicants, who squat in settlements in and around Madang town, sued the defendants, more particularly that policemen allegedly under the third defendant’s command, for ‘trespassing’ upon various portions of land in and around Madang Town, and destroyed homes and properties to the alleged value of K3,998,946.67.

Applications for leave to amend

4. The application is supported by the affidavit of Joe Tipaiza one of the named plaintiffs, affidavit sworn on 10 May, 2006 and filed on 12 May, 2006. Mr Tipaiza deposed to and attached consent National Court orders dated 28 July, 2000, taken out in proceedings OS 10 of 1998 instituted in the National Court Waigani. These proceedings involved the settlers, as plaintiffs and the State, Secretary for Lands and the Department of Madang, as defendants. He also deposed to and attached to that affidavit a document titled "Memorandum of Agreement on the eviction of illegal settlers from Madang Town", executed on 19 May, 2000. (‘Memorandum’). The parties to the Memorandum were the Madang Provincial Government and the Madang Settlement Committee. Various Representatives of these bodies executed the Memorandum for and on behalf of the Provincial Government and the Settlement Committee.

5. To that affidavit is attached the form of the amended statement of claim which pleads the consent order of 28 July, 2000 and the Memorandum. I discuss in greater detail below, the consent orders and the Memorandum. 

6. Also attached to that affidavit is another court order taken out in proceedings O.S 708 of 2002 in the National Court Waigani, between this same plaintiff and others for and on behalf of the Tari Community against the Governor of the Madang province, the Madang Provincial Government and the Chairman of the Madang Provincial Governments law and Order Committee. This was a conditional stay order. 

7. The principles on the grant of leave to amend statement of claim has been discussed in many cases, the earliest reported case in this jurisdiction being New Guinea Company Ltd v Thomason [1975] PNGLR 454, judgment delivered by Saldanha .J on 23 December, 1975. This was an application for leave to amend under O.11 r.2 of the old Supreme Court Rules which provided that "the court or a Judge may, in any course or matter, at any stage of the proceedings, allow or direct either party to alter or amend the Writ of Summons, or any endorsement thereon, or any pleadings or other proceedings in such manner and on such terms as may be just."

8. His Honour held the following principles in relation to applications seeking leave to amend. He said;

1.	That the grant of leave to amend or not, is a matter of discretion for the court.
2.	That the relevant matters for consideration in the exercise of this judicial discretion include;

(i)	whether the amendment ought to be made for the purpose of determining the real question in controversy between the parties…or of correcting any defect of error.

(ii)	Whether the amendment can be made without injustice to the other party.

(iii)	The conduct of the parties.

9. Recently, his Honour Gavara-Nanu .J outlined in The Papua club Inc. v Nusaum Holdings Ltd. (No. 1) (2002) N2273, the general principles applied by courts when considering whether to grant leave to amend statement of claim or not. These are; 

(i)	where the amendment is to enable the court to determine the real question in controversy between the parties; or 

(ii)	where the amendment is to correct any defect or error in the proceedings; and 

(iii)	that such amendment will not cause real prejudice or injustice to the other party; and 

(iv)	that the application for such amendment is not made mala fide; and

(v)	that the other party can be fairly compensated with costs for such amendment.

Analysis of evidence and the law

10. Both Messrs Makail and Cherake for the defendants submit that the amendments proposed by the plaintiffs effectively means that the plaintiff is bringing in a new cause of action (on breach of contract) which will prejudice the defendants in that they will incur a lot more in costs which the plaintiffs are unable to provide.

11. Mr Waipek for the applicants did not make submission on the law, although asked by the court. He only submitted that all the issues must be put before the court before the matter goes to trial. He submitted further that the court orders and Memorandum are what all parties entered into and obtained since the commencement of the evictions in 2000, and that it is only appropriate that these events and orders be pleaded in the statement of claim because they all relate to the eviction, which is pleaded in the original action.

12. I note that the OS proceedings that the plaintiffs took out earlier referred to the Madang Provincial Government’s alleged illegal evictions. It was under OS 10 of 1998, that the former Chief Justice sanctioned the court orders of 28 July, 2000, which briefly, stated that the Memorandum "

, …is hereby sanctioned as an order of this court to govern the eviction of illegal squatters from the town of Madang. 2. The eviction exercise shall be undertaken and effected in accordance with the Memorandum of Agreement. …".

13. And on reaching this agreement, it then gave rise to a new agreement and constitutes a fresh cause of action. That means parties could not proceed on the original action. (See Green v Rozen [1955] 2 All ER 797). 

14. By the applicants reliance on the Memorandum (and orders), they are seeking to enforce the Memorandum and orders. And they say that because the Memorandum was not complied or was breached, that they have suffered damages. But the Memorandum states that the lands on which the settlers dwell or reside is State land. And the original action is one of trespass and destruction of property. Whereas the amendments sought is for damages arising from breach of agreement and orders, two entirely different actions. And what does the law say about such a situation?

15. There is extensive discussion under the rule on Amendments (O.20 rr.5-8) in ‘The Supreme Court Practice 1991’ Vol. 1, under the part on ‘amendments of writ of pleading with leave’ and ‘amendment of certain other documents’. As to the general principles for grant of leave to amend, it states at pg. 365 (20/5 – 8/6) that;

 "it is a guiding principle of cardinal importance on the question of amendment that, generally speaking, all such amendments ought to be made "for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings".

It states further at pg. 365;

 "It is a well established principle that the object of the court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights…I know of no kind of error or mistake, which if not fraudulent or intended to overreach, the court ought not to correct if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace … it seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected if it can be done without injustice, as anything else in the case is a matter of right" (per Bowen L.J. in Cropper v Smith (1883) 26 Ch. D 700, pg. 710-711)."

‘The Supreme Court Practise 1991’ Vol. 1 states further at pg. 365;

 "In Tildesey v Harper (1876) 10 Ch. D 393, pp. 396, 397, Brawell L.J. said: "my practice has always been to give leave to amend unless I have been satisfied that the party applying was acting mala fide, or that, by his blunder, he had done some injury to his opponent which could not be compensated for by costs or otherwise". "However negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs. (per Brett M.R. Clarapede v Commercial Union Association (1883) 32 W.R. 262, pg. 263; Weldon v Neal (1887) 19 Q.B.D. 394, pg. 396…)".

16. The Memorandum contains schedule of the time frame within which the parties were to ensure the smooth movement of squatters from Madang Town to their respective provinces or to resettle them. It is obvious that even after 19 May, 2000, and even after an exhaustive schedule on time frame was agreed to, that the settlers are still in Madang.

17. To date the defendants have not sought enforcement of the Memorandum. But what is agreed to by all parties as at 19 May, 2000, is that;

 - all persons occupying identified illegal settlements as listed, should be evicted within twelve (12) months by mid 2001.

- genuine settlers would be resettled.

18. Clearly, there is no commercial value to the Memorandum. 

19. But the defendants carried out eviction exercises because terms of the Memorandum were not complied with. And we have seen that by entering into the Memorandum, there is now a cause for which the parties can seek relief, in the event it is breached, hence a new cause of action. But, I am of the view that it is also for the defendants benefit that the memorandum be pleaded because they in turn can respond by their Defences as to why the eviction exercises were carried out and whether properties were destroyed as alleged. In fact, when I review this claim in its totality, all parties’ success or not is dependent very much on the literal interpretation of the Memorandum as against the evidence, which is why it must be pleaded.

20. What about the defendants’ submissions that the amendments sought are to include a separate cause of action being breach of contract. Although the Memorandum does not have any commercial value, there are strong indications that the terms of the Memorandum may have been breached. And if so, can this claim be included in the amendments sought?

21. First, if the plaintiffs seek to rely on the Memorandum, any claim relying on it is now statute-barred. The Memorandum is dated 19 May, 2000. The consent order is dated 28 July, 2000. The Memorandum itself is a contract. Section 16 (1) (a) of the Frauds and Limitations Act 1988 states that any action founded on simple contract "…shall not be brought after the expiration of six (6) years commencing on the date on which the cause of action accrued." In this case, six years lapsed or expired on 28 July, 2006. Does the plaintiff have any hope of pleading the Memorandum and orders? The Supreme Court Practice 1991, Vol. 1, states this at p.371;

 "Adding or substituting new cause of action – the court has power to grant or allow an amendment after the expiry of any relevant period of limitation notwithstanding that the effect of the amendment will be to add or substitute a new cause of action provided that the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment …

In each case, the question is, are the facts alleged in the amendments sought to be made the same or substantially the same as those alleged to support a cause of action already pleaded?"

22. Obviously, the facts alleged in the amendments sought to be made in this case are the same as the facts supporting the earlier action pleaded. And the court will refuse an amendment that "…would change the action into one of a substantially different character which would more conveniently be the subject of a fresh action". (p. 373 of the Supreme Court Practice). This is not such a case. And I am led to believe that Mr Makail’s submissions have that effect, that the plaintiffs suggested amendments are more conveniently commenced by a fresh action. And I do not accept that based on the above reasoning. 

23. In fact, I can conclude on perusal of the original statement of claim and the draft amended statement of claim, that the plaintiffs are taking a different approach by the amendments sought, but relying on the same facts, and that is accepted practice in law. Halsbury’s 4th Ed. Vol. 36 at pg. 54 (par.69) confirms this. It states;

 "Where the amendment sought does not constitute the addition of a new cause of action nor raise a different case, but amounts to no more than a different approach to the same facts based on the same cause of action, the amendment will be allowed even after the expiry of the limitation period".

Will the defendants suffer any prejudice by the amendments?

24. On perusing the file, I observed that the defendants had to apply for leave to file their Defences out of time and when this leave was granted, they were ordered to pay the costs of the proceedings, including security for costs of K50,000.00, which the defendants have paid. The issue now is the prejudice to be suffered by the defendants which is the costs to be incurred in the filing of amended Defences and other associated and related costs. Mr Makail submits that the plaintiffs are unable to pay these costs. And he does not support these submissions with evidence, most probably relying on the fact that the plaintiffs are squatters and settlers. And because the defendants have not put before me material substantiating their claims of the plaintiffs inability to pay, I am unable to conclude that prejudice to the defendants will occur.

25. As to the other factors, in relation to the grant of leave to amend;

1.	I find that the proposed amendments will enable the court to determine the real question in controversy between the parties.
2.	That the defendants are seeking to plead the Memorandum and orders, important components of the eviction exercise, which omission in the original statement of claim is an error by the plaintiff.
3.	The plaintiff is genuine in this application.
4.	And the defendants can be compensated, in costs. 

Orders

26. I make the following orders.

1.	The plaintiff has leave to file amended statement of claim in the form attached to the affidavit of Joe Tipaiza sworn on 10 May, 2006;
2.	That the Writ of Summons and Amended Statement of Claim shall be filed and served within 14 days from today, on or before 28 August, 2006;
3.	Thereafter, all defendants have leave to file and serve amended Defences and cross-claims if any, within 30 days, on or before 27 September 2006, and that thereafter, the pleadings shall take their normal course.
4.	That the plaintiffs shall pay all defendants costs of the amendment, to be taxed if not agreed.
5.	Time is abridged to time of settlement to take place forthwith.

_______________________________________
Kunai Lawyers: Lawyer for the Plaintiff/Applicant
O’Brien Lawyers: Lawyers for the First & Second Defendants.
Solicitor-General: Lawyer for the Third, Fourth & Fifth Defendants