N3267

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 839 OF 2006

BETWEEN:

SIMON PORAITUK – DIRECTOR, PNG NATIONAL MUSEUM AND ART GALLERY
First Plaintiff/Respondent

AND:

BOARD OF TRUSTEES – PNG NATIONAL MUSEUM AND ART GALLERY
Second Plaintiff/Respondent

AND:

INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Plaintiff/Respondent

AND:

ALFRED HAGEN – DIRECTOR AERO ARCHEOLOGY LTD
First Defendant/Applicant

AND:

AERO ARCHEOLOGY LTD
Second Defendant/Applicant

AND:

BISMARK SHIPPING LIMITED
Third Defendant/Applicant

Waigani: Davani .J
2008:	 15, 20 February

PRACTICE AND PROCEDURE – previous order to convert proceedings to pleadings – plaintiff ordered to file statement of claim – partially complied with order.

PRACTICE AND PROCEDURE – Application to dismiss proceedings for non-	compliance with order – court to exercise judicial discretion.

Facts

The court had earlier ordered that Originating Summons proceedings be converted to pleadings, that the plaintiffs file a statement of claim within a certain time period and thereafter, for defendants to file their Defence.

The court also ordered that pleadings take their course, thereafter. However, the plaintiff subsequently filed a fresh Writ of Summons and Statement of Claim within the stipulated time period followed by the defendants filing their Notice of Intention to Defend and Defence.

The application before the court amongst others, is to dismiss proceedings because of non-compliance with court orders.

Held
There was partial compliance with the courts earlier orders. Considering the circumstances of the case, the court will exercise its judicial discretion not to dismiss proceedings but will make other orders. This is so because where justice requires, strict adherence to the rules can be dispensed with.

Counsel:

V. Narokobi, for the first and second Defendants/Applicants
D. Koeget, for the first and second Plaintiffs/Respondents
G. Odu, for the third Plaintiff/Respondent

RULING

20 February, 2008

1. DAVANI .J:	Before me is Notice of Motion filed by Narokobi Lawyers on 20 December, 2007, filed for and on behalf of the first and second respondents/applicants (‘applicant’).

2. The Notice of Motion seeks the following orders;

i.	That pursuant to O. 12 r. 1 of the National Court Rules and the inherent powers of the National Court, that the whole proceedings be dismissed for failing to comply with court orders of 14 September, 2007;

ii. 	That failing the dismissal of proceedings, the applicants are at liberty to export war relic known as the Swamp Ghost forthwith, following which the plaintiffs, its servants and agents to inform all State agencies to allow the export of the Swamp Ghost;

iii.	Further and in the alternative and pursuant to O. 12 r. 1 of the National Court Rules, the defendants shall pay security for costs of K100,000.00 within 14 days failing which the proceedings will stand dismissed and order 2 will then take effect;

iv.	Further and in the alternative pursuant to the orders of 14 September, 2007, that the proceedings should be dismissed pursuant to s. 16 of the Frauds and Limitations Act because the present proceedings have been converted to pleading and no equitable relief sought;

v.	Costs of the entire proceedings against the plaintiffs on a full indemnity basis;

vi.	Other orders of the court;

vii.	Abridgement of time.

3. The application was opposed by all respondents.

Background facts

4. This matter had earlier come before me on 31 July, 2007, sitting in my capacity as the Regular motions Judge. The motion before me then was by the applicants lawyers seeking that the whole proceedings be dismissed for being statute-barred, application made pursuant to s. 16 (1) (a) of the Fraud and Limitations Act 1998 or alternatively, that the proceedings be dismissed based on the doctrine of promissory estoppel. The applicants also sought orders amongst others that they be at liberty to export the Swamp Ghost, a war relic, the subject of this application. I published my reasons and made the following orders;

i.	Dismissed the applicants motion;
ii.	The originating summons filed on 13 December, 2006, be converted to pleadings;
iii.	An order that the plaintiff file a statement of claim within the next 30 days;
iv.	That the defendants file their Defence and cross-claim, if any, within the time period stipulated by the National Court Rules and for the pleadings to continue thereafter;
v.	Each party to pay their own costs of the application and the proceedings;
vi.	That time be abridged to time of settlement to take place forthwith.

5. Those orders were made because I was of the view that there were issues, facts and points of law raised in submissions which were not pleaded. For example;

-	reliance by the plaintiffs on defendants non-compliance with provisions of the Public Finance (Management) Act when it executed the Memorandum of Agreement and Assignment of Rights. The respondents Defence in relation to this was that the Memorandum of Agreement and Assignment of Rights were invalid.

-	The applicants raised equitable and legal Defences under the Goods Act and the doctrine of promissory estoppel which were not pleaded. 

6. The subject matter of these proceedings is a war relic, aircraft, described as a Boeing B-17E no. N.41-2446 otherwise known popularly as the Swamp Ghost. This war relic is a second World War US Air Force flying fortress. It was salvaged from the Agiambo swamp in the Oro province and transported to Lae where it is awaiting transportation to the United States of America.

7. The Swamp Ghost crash landed in the Agiambo swamp on 23 February, 1942 when it ran out of fuel after a bombing operation on a Japanese installation in Rabaul. 

8. It lay in the Agiambo swamp for 64 years and was re-discovered by a Royal Australian Airforce Helicopter crew in 1972. Since then war veterans, aeroplane enthusiasts, historians and philanthropists have shown interest to salvage and restore the aircraft for display purposes. In 1999, the PNG National Museum and Arts Gallery entered into a Memorandum of Agreement (MOA) with a Californian based aircraft registration company known as Military Aircraft Restoration Corporation (‘MARC’) permitting it to salvage and remove the Swamp Ghost to the United States of America (‘USA’) to be restored for display purposes in the USA. This agreement was executed by Mr Soroi Eoe on behalf of the PNG National Museum and Arts Gallery, the first plaintiff in these proceedings. This Memorandum of Agreement is before the court attached to the affidavit of Camillus Narokobi, sworn on 17 November, 2006. 

9.     On 2 November, 2001, MARC entered into a Memorandum of Assignment with Aero Archaeology Ltd, a company based in Pennsylvania, USA. In that Memorandum of Assignment, the MARC assigned all its rights and obligations it had in the Swamp Ghost over to Aero Archaeology Ltd (‘AAL’). This Memorandum of Assignment was consented to by the PNG National Museum & Art Gallery. 

10.    On 10th November, 2005, the first plaintiff issued an Export Permit No. 05/007 to Mr. Alfred Hagen, the Director of AAL granting AAL approval to export the Swamp Ghost. 

11.    On 16th June 2006, AAL and a team of engineers, salvaged the Swamp Ghost, dismantled it and transported it to Lae, where the aircraft parts are stored in a container in the third defendants premises, awaiting export to the USA.

12.    On 24 May, 2006, the Public Accounts Committee (PAC) made interim findings and held, amongst others, that the PNG National Museum & Art Gallery, immediately cease all dealings with foreign salvagers until a political decision is made concerning the export of "war surplus." (see pg. 12 of annex. ‘C’ to Simon Poraituk’s affidavit sworn and filed on 13.11.06).

13.    By letter of 23 May, 2006, the first plaintiff requested Mr. Alfred Hagen of Aero Archaeology Ltd and the Director General of the PNG Internal Revenue Commission to halt the export of the Swamp Ghost, pending deliberations and decision by the National Government on the fate of the Swamp Ghost.

14.    By originating summons filed on 13 November, 2006, the plaintiff as the Director of Papua New Guinea National Museum and Art Gallery and the Board of Trustees of the PNG National Museum and Art Gallery, applied to the Court for Declarations that;

-	The Board of Trustees of the PNG National Museum and Art Gallery do not have powers or authority to enter into a contract with Aero Archeology Limited, the second defendant, with respect to the sale of the Swamp Ghost;

-	That the said Board of Trustees do not have power or authority to sell or dispose of State property which includes the Swamp Ghost;

-	That the Memorandum of Agreement of 1999 executed between the Board of Trustees and the Military Aircraft Restoration Corporation is null and void and unenforceable in law;

-	That consent given to the Memorandum of Assignment in 2001 executed between the Military Aircraft Restoration Corporation and Aero Archeology Limited by Mr Soroi Eoe, then director of the Board of Trustees of PNG National Museum and Art Gallery, is null and void and unenforceable in law;

-		The Memorandum of Agreement of 1999 executed between the Board of Trustees of the PNG National Museum and Arts Gallery and Military Aircraft Restoration Corporation and consent given to the Memorandum of Assignment to 2001 executed between Military Aircraft Restoration Corporation and Aero Archeology Limited, by Mr Soroi Eoe the then Director of the Board of Trustees of PNG National Museum and Arts Gallery was in contravention with the procedures and processes under the Public Finance Management Act 1995.

- 	the Memorandum of Agreement 1999 executed between the Board of Trustees of PNG National Museum and Arts Gallery and Military Aircraft Restoration Corporation and the consent given to the Memorandum of Assignment of 2001 executed between Military Aircraft Restoration Corporation and Aero Archeology Limited by Mr. Soroi Eoe the then Director of the Board of Trustees of PNG National Museum and Arts Gallery, does not bind the State. 

The application and issues 

15.     Instead of filing a statement of claim, in compliance with my orders, the respondents proceeded to file a fresh writ of summons and statement of claim described as WS 1181 of 2007. This they did on 15 October, 2007. The applicant thereafter, filed Notice of Intention to Defend on 4 December, 2007 and Defence on 12 December, 2007. 

16.    The issues before me are the following;

1.	Whether the respondents have complied with my orders;

2.	If not, should the proceedings be dismissed and other orders made.

17.     The issues posed will assist in determining whether the respondents have breached the terms of the order or whether there is a discretion in the court in making orders other than those sought by the applicants.

18.     I should also point out that this matter is of national importance, that the Swamp Ghost is a World War II relic which is the subject of much controversy involving the plaintiffs and the defendants. My decision of 14 September, 2007 sets out the history of this matter which I have set out in full again because it will assist those reading this decision, to understand why I make the orders I now make.

19.    The rule relied on by Mr Narokobi is O. 12 r. 1 of the National Court Rules (NCR) which reads as follows;

"1. General relief. (40/1)
The Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgment or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgment or order in any originating process."

20.    This rule falls under the part on judgment and orders. It goes further to state at O. 12 r. 4 (5) that;

"where a judgment or order requires a person to do an act within a specified time, the court may, by order, require him to do the act within another specified time."

21.    In this case, the respondents filed a writ of summons and statement of claim, rather than a statement of claim as I ordered. Should the respondents have strictly filed a statement of claim rather than a fresh writ. What is the effect of that? Halsbury’s 4th Ed. at par. 66 states this;

"where the plaintiff is required to serve a statement of claim on a defendant and he failed to do so, the defendant, after the expiration of the period limited for service of the statement of claim, may apply to the court for an order to dismiss the action, and the court may dismiss the action or make such other order on such terms that he thinks just." (my emphasis)

22.    This is not a case where the plaintiffs did not comply with the court’s orders. They did file a statement of claim within the ordered time period, on separate fresh proceedings thereby incurring extra expense. They in fact, only partially complied with my orders.

23.	Mr Koeget for the respondent explained that he did so because of my reference throughout in my published reasons that actions of this nature are more appropriately commenced by Writ of Summons and Statement of Claim. However, my formal orders read differently. I find that to be a misunderstanding on Mr Koeget’s part, a misunderstanding that can be compensated for in costs orders to the applicant.

24.    It is now settled law that the National Court Rules are not an end in themselves but are a means to an end in all matters going before it. They are only a code of practice. There is no doubt that where justice so requires, strict adherence to the rules can be dispensed with (Anthony John Polling v MVIT [1986] PNGLR 230). The evidence is that although the respondents did not file a statement of claim on the Originating Summons proceedings, this did not prejudice the defendants in any way. The records show that thereafter, the defendants proceeded to file a Notice of Intention to Defend and Defence. The respondents partly complied with the orders. They did not default in the strict sense. Therefore I must exercise my discretion properly by ensuring that justice is seen to be done for all parties.

25.    The nature of the matter is such that it must immediately proceed to trial. It is now up to both counsel to ensure that the relevant affidavit materials are filed in support of the claims that either one has. If counsel are of the view that the matter is ready for trial, then they should file the relevant affidavit material. Alternatively, they can rely on affidavit material already filed.

26.    As I stated earlier, this matter is of national importance. Striking out the statement of claim will not ensure and enable the proper hearing of this matter because the plaintiffs have not defaulted in the strict sense. The matter must proceed.

27.    The dismissed orders I make will apply to pars. 1, 2, 4 and 5 of Narokobi Lawyers Notice of Motion. However, I will give liberty to the applicant to re-list its application for security for costs i.e. par. 3 of the Notice of Motion, but on seven (7) days notice to the plaintiffs/respondents, if it chooses to do so.

28.    I note Mr Narokobi’s submissions also in relation to the inadequacy of the statement of claim. If counsel is of that view, he should consider carefully whether the application he proposes to make will progress the matter.

29.    In the proper exercise of my judicial discretion, I will not dismiss the statement of claim but will make the following orders set out below.

30. In relation to costs, it is the respondent’s action that has brought on this application. They must pay the costs of the application.

Formal orders

1.	Paragraphs 1, 2, 4 and 5 of the Notice of Motion filed by Narokobi Lawyers on 20 December, 2007, are dismissed;
2.	The applicant is at liberty to re-list the hearing of par. 3 of the said Notice of Motion, but on seven (7) days notice to the plaintiffs/respondents;
3.	Proceedings WS 1181 of 2007 is now consolidated with OS 839 of 2006;
4.	If parties intend relying on any affidavit materials filed in OS 839 of 2006, they should take out formal orders to that effect in the Listings related Motions Court;
5.	All respondents shall pay the applicants costs of this application, to be taxed if not agreed.

Narokobi Lawyers: Lawyer for the first and second defendants/applicants
Gubon Lawyers: Lawyer for the first and second plaintiffs/respondents
Solicitor-General: Lawyer for the third plaintiff/respondent