N3672

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1269 OF 2004

BETWEEN:

LUKE KYOKAL NIAP
Plaintiff/Cross Defendant

AND:

PAPUA NEW GUINEA HARBOURS LIMITED
First Defendant/Cross Claimant

AND:

INDEPENDENT PUBLIC BUSINESS CORPORATION
Second Defendant

Waigani: Hartshorn J.
2008: 18th November,
2009: 18th March

PRACTICE AND PROCEDURE - Application for Leave to Amend Statement of Claim – new cause of action not arising out of the same facts originally pleaded – new cause of action statute barred - Order 8 Rules 50(1) and 53(1) and (3) National Court Rules considered 

Facts:

The plaintiff commenced this proceeding seeking damages alleging that the first defendant had repudiated or breached his employment agreement. The plaintiff now seeks to amend his statement of claim by pleading amongst others, that the Harbours Board was privatized, that the first defendant succeeded and assumed the role and function of the Harbours Board, that pursuant to clause 17.5 of his employment agreement it was terminated and that he is entitled to be paid all entitlements for the remaining term of the agreement. The first defendant submits amongst others, that the proposed amendments raise a new cause of action based on different facts and that this new cause of action is time-barred pursuant to s.16 Frauds and Limitations Act.

Held:

1. The proposed amendments plead a new cause of action that does not arise out of the same or substantially the same facts that are originally pleaded in the statement of claim.

2. The new cause of action accrued from or about July 2002 and is now time-barred pursuant to s. 16 Frauds and Limitations Act.

3. The circumstances mentioned in Order 8 Rule 53(5) National Court Rules do not exist to enable this court to grant leave to make the amendments sought. 
 
4. Leave to amend the statement of claim in respect of proposed paragraphs 24, 25 and 26 is refused. 

5. The amendment sought to existing paragraph 8.4 of the statement of claim is permitted as it concerns the existing cause of action and is clearly made to rectify a mistake. 

6. The application to amend the defence is granted

7. The costs of vacating the trial date are to be costs in the cause.

Cases cited: 

Papua New Guinea Cases:

Joe Tipaiza v. James Yali (2006) N3178
John Pias v. Michael Kodi (2004) N2690 
The Papua Club Incorporated v. Nusaum Holdings & Ors (No. 1) (2002) N2273

Overseas Cases:

McGee v. Yeomans [1977] 1 NSWLR 273 

Counsel:
 
Mr. R. Pato and Mr. D. Mel, for the Plaintiff
Mr. J. Brooks, for the First Defendant

18 March, 2009

1. HARTSHORN J: Mr. Niap was employed as the General Manager of the Papua New Guinea Harbours Board commencing in October 2001. His employment was purportedly terminated in July 2004 by the successor to the Harbours Board, Papua New Guinea Harbours Ltd, the first defendant (PNGHL). Mr. Niap commenced this proceeding seeking damages alleging that PNGHL had repudiated or breached his employment agreement.

2. Mr. Niap seeks to amend his statement of claim. This is opposed by PNGHL. PNGHL seeks to amend its defence. This is not objected to by Mr. Niap. The trial date of 18th November 2008 was vacated but the question of costs was reserved. I will consider the application to amend the statement of claim first.

Proposed amendment to statement of claim

3. The amendments that Mr. Niap seeks to make to his statement of claim plead amongst others, that in July 2002, the Harbours Board was privatised and as a result, PNGHL succeeded and assumed the role and function of the Harbours Board, that pursuant to clause 17.5 of his employment agreement dated 25 March 2002, that agreement was terminated and that Mr. Niap is entitled to be paid all entitlements for the remaining term of the agreement from or about 16th July 2002 to about 18th October 2005.

4. Mr. Niap submits amongst others, that the amendments are necessary to enable the court to determine the real question in controversy between the parties, as to date the pleadings have focused mainly on the issue of whether the purported termination by PNGHL was lawful. Essentially, Mr. Niap is submitting that the effect of clause 17.5 of the employment agreement, which he now submits brought an end to the agreement and by virtue of which he is entitled to the balance of the agreement from 16 July 2002, was not pleaded.

5. Counsel for Mr. Niap relies upon the cases of The Papua Club Incorporated v. Nusaum Holdings & Ors (No. 1) (2002) N2273, John Pias v. Michael Kodi (2004) N2690 and Joe Tipaiza v. James Yali (2006) N3178.

6. He submitted that the proposed amendments should be permitted as the amendments are to enable the court to determine the real questions in controversy between the parties, they will correct a defect in the pleadings, they will not cause real prejudice or injustice to the defendants, the application is not made mala fide, the defendants can be fairly compensated with costs and that Mr. Niap is not prevented by his conduct or the manner in which the proceedings have progressed from being permitted to amend his pleadings.

7. PNGHL opposes the amendments as it submits amongst others, that they raise a new cause of action based on different facts and that this new cause of action is time-barred pursuant to s.16 Frauds and Limitations Act.

Law

8. Order 8 Rule 50(1) National Court Rules pursuant to which Mr. Niap applies is:

(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.

9. Order 8 Rule 53(1) and (5) are:

(1)	Where any relevant period of limitation expires after the date of issue of a writ of summons and after that expiry an application is made under Rule 50 for leave to amend the writ by making the amendment mentioned in any of Sub-rules (2), (3), (4) or (5), the Court may in the circumstances mentioned in that Sub-rule make an order giving leave accordingly, notwithstanding that that period has expired.

(5)	Where a plaintiff, in his writ of summons, makes a claim for relief on a cause of action arising out of any facts, the Court may order that he have leave to make an amendment having the effect of adding or substituting a new cause of action arising out of the same or substantially the same facts and a claim for relief on that new cause of action.

10. The above Rules provide that an amendment adding a new cause of action may be permitted to a writ of summons notwithstanding that a relevant period of limitation has expired so long as it arises out of the same or substantially the same facts. 

11. Order 8 Rules 51 and 53 National Court Rules are the equivalent of Part 20 Rules 1 and 4 of the New South Wales Supreme Court Rules. A significant difference however, is that Part 20 Rule 4(7) specifically provides that the powers of the Court under Part 20 Rule 1 (our Order 8 Rule 50(1)) are not limited by Part 20 Rule 4 (our Order 8 Rule 53). This requires the New South Wales Supreme Court when considering proposed amendments that would otherwise be refused for not meeting the criteria in Part 20 Rule 4, to have regard to other factors such as hardship to the plaintiff if the amendments were to be refused, prejudice to the defendants if the amendments were to be allowed, any fault of the parties and any other such circumstances, and if justice requires, to permit the amendments: McGee v. Yeomans [1977] 1 NSWLR 273.

12. There is no equivalent provision in our National Court Rules that provides that Order 8 Rule 50(1) is not limited by Order 8 Rule 53. On a plain and ordinary reading, it is clear that Order 8 Rule 50(1) is limited by Order 8 Rule 53.

13. Consequently, where any relevant period of limitation expires after the date of issue of a writ of summons and after that expiry an application is made under Order 8 Rule 50 for leave to amend the writ by making the amendments mentioned in Order 8 Rule 53(2)-(5), the court may in the circumstances mentioned in any of those Sub-rules give leave accordingly. If however, the proposed amendments do not meet the circumstances mentioned in any of those Sub-rules, the court is unable to grant leave sought under Order 8 Rule 50.

14. The cases cited by counsel for Mr. Niap did not consider Order 8 Rule 53 National Court Rules. In the case of Joe Tipaiza v. James Yali (supra) although Order 8 Rule 53 does not appear to have been considered, the Court allowed an amendment to a statement of claim where the cause of action was statute barred as the new cause of action was considered to be based on the same facts that were originally pleaded.

The proposed amendments

Cause of action

15. Do the proposed amendments plead a new cause of action? Counsel for Mr. Niap submits that the proposed amendments do not plead a new cause of action. There are existing issues between the parties, Mr. Niap’s employment agreement has already been pleaded and 2 of the main issues are whether Mr. Niap was lawfully terminated and the quantum of damages payable, if he was.

16. As it is, the statement of claim pleads that PNGHL is in breach of the employment agreement as it purported to terminate Mr. Niap’s employment in July 2004 when only the National Executive Council had the power. The only reference to clause 17 and 17.4 of the employment agreement is in relation to a termination of it by the National Executive Council. There is no reference to clause 17.5.

17. The proposed amendments plead that the Harbours Board was privatised, PNGHL succeeded, the employment agreement was terminated pursuant to clause 17.5 in July 2002 and Mr. Niap is entitled to be paid the remainder of the term of the employment agreement. It is clear that this is a new cause of action that is being pleaded based upon clause 17.5 and its operation, when the Harbours Board was privatized, and not the purported termination in July 2004 by PNGHL.

Facts

18. Do the facts upon which this new cause of action is based, arise out of the same or substantially the same facts? The facts that are the same are the employment agreement and the parties. The new cause of action arises out of a different clause in the employment agreement and the operation of that clause at a different time as a result of a different event. I am satisfied that this new cause of action does not arise out of the same or substantially the same facts that are originally pleaded in the statement of claim.

Limitation

19. Given that on the proposed amendments, Mr. Niap’s new cause of action accrued from or about July 2002, it is now time-barred pursuant to s. 16 Frauds and Limitations Act.

20. As the proposed amendments plead a new cause of action that is not based upon the same or substantially the same facts already pleaded and the time within which the new cause of action is to be commenced has expired, the circumstances mentioned in Order 8 Rule 53(5) National Court Rules do not exist to enable this court to grant leave to make the amendments sought as new paragraphs numbered 24, 25 and 26 in annexure "A" to the affidavit of Dane Mel sworn 12 November 2008. Accordingly, leave to amend the statement of claim in respect of those proposed paragraphs is refused. The amendment sought to existing paragraph 8.4 of the statement of claim is permitted as it concerns the existing cause of action and is clearly made to rectify a mistake. Costs of and incidental to the application are to be paid by the plaintiff to the first defendant.

Proposed amendments to defence

21. As to the proposed amendments to the defence of the first defendant, as previously referred to, Counsel for Mr. Niap informed the court that he did not object to those proposed amendments. Accordingly the application to amend the defence is granted. Costs are in the cause.

Costs of vacation of trial date

22. The trial date being vacated was necessitated by the court hearing the applications of the parties to amend their pleadings on 18th November 2008, the actual trial date. Counsel for Mr. Niap filed a motion seeking to amend and for the trial date to be vacated on 13th November 2008. Counsel for PNGHL filed a motion seeking to amend and alternatively for the trial date to be vacated, on 17th November 2008. In the circumstances, the costs of vacating the trial date are to be costs in the cause.

Orders

23. 	

a)	Leave is granted to the Plaintiff to amend paragraph 8.4 of the statement of claim in the form annexed to the affidavit of Dane Mel filed on 13th November 2008 within 7 days of today.

b)	Leave to make all other amendments to the statement of claim as sought in the Plaintiff’s notice of motion filed on 13th November 2008 is refused.

c)	Costs of and incidental to the hearing of the notice of motion filed on 13th November 2008 are to be paid by the Plaintiff to the First Defendant.

d)	Leave is granted to the First Defendant to amend its defence in the form annexed to the affidavit of Jason Brooks filed on 17th November 2008 within 7 days of today.

e)	Costs of and incidental to the notice of motion filed 17th November 2008 are costs in the cause.

f)	Costs of the trial date being vacated are costs in the cause.

_________________________________________
Steeles Lawyers: Lawyers for the Plaintiff 
Gadens Lawyers: Lawyers for the First Defendant