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Andakelka Ltd v Petronas Ltd [2010] PGNC 4; N3976 (8 March 2010)

N3976


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS NO. 44 OF 2007


BETWEEN:


ANDAKELKA LIMITED
Plaintiff


AND:


PETRONAS LIMITED
First Defendant


AND:


HOMEGUARD LIMITED
Second Defendant


AND:


PEPI KIMAS, SECRETARY FOR DEPARMENT OF LANDS
AND PHYSICIAL PLANNING
Third Defendant


AND:


DR PUKA TEMU, MINISTER FOR LANDS
AND PHYSICIAL PLANNING
Fourth Defendant


AND:


THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant


Waigani: Davani .J
2010: 4th, 8th March


PRACTISE AND PROCEDURE – Originating Summons – application to dismiss proceedings – events overtaken matters pleaded – amended Originating Summons filed without obtaining leave – O.8 rr.50, 51, 53, 56, 57.


PLEADINGS – amended Originating Summons filed - new cause of action pleaded – fraud alleged –– disputed issues - incorrect mode of proceedings – leave to amend refused – proceedings to be dismissed – O.4 r.2; O.4 r.3(1)(2).


Facts


Plaintiff filed Originating Summons seeking declaratory orders. Five (5) years later, plaintiff filed amended Originating Summons pleading a new cause of action, being fraud. The first defendant applied to dismiss proceedings because over a period of 5 years, events had overtaken the original cause of action pleaded.


Issues


  1. Whether the plaintiff can continue to pursue the claim?
  2. If not, what alternatives does the plaintiff have?
  3. Whether the proceedings can be dismissed?

Reasons


  1. No, because events have overtaken the original action.
  2. Plaintiff can file a fresh set of proceedings.
  3. Yes, because in the draft amended Originating Summons, the plaintiff pleads a new cause of action being fraud. These are the alleged events that have overtaken the present pleaded cause of action.

Orders


  1. The proceedings are dismissed in their entirety.
  2. The plaintiff shall pay the first defendant’s costs of the proceedings on a full indemnity basis, to be taxed if not agreed.

Cases Cited:


Papua New Guinea Cases


Overseas cases


Other References


Counsel


S. Malaga, Lawyer for the Plaintiff/Respondent
R. Pato, Lawyers for the first Defendant/Applicant


8th March, 2010


DECISION


  1. DAVANI .J – Before me is Notice of Motion dated 6th January, 2010 and filed on 28th January, 2010 by Steeles Lawyers for and on behalf of the first defendant. Steeles Lawyers also act for the second defendant.
  2. Mr Malaga of Henaos Lawyers appears for the plaintiff and opposes the Notice of Motion.
  3. The Notice of Motion seeks orders for the dismissal of the entire proceedings pursuant to O.12 r.40 of the National Court Rules (‘NCR’) that;
  4. The Motion also seeks orders for costs on a solicitor/client basis and abridgment of time.

Background


  1. This case has a long history which commenced in 2007 when the plaintiff filed Originating Summons (‘OS’) on 6th February, 2007, seeking several declarations relating to property portion 2380 Granville, Port Moresby, National Capital District contained in State Lease Volume 20 Folio 233 (the ‘property’).
  2. It is necessary that I set out in full the full text of the OS because what is pleaded therein, will go towards determining whether this proceedings should remain or not. The OS reads;

"1. A Declaration that the plaintiff is the registered proprietor of the estate or interest in Portion 2380, Granville, Port Moresby, National Capital District, Volume 20 Folio 233.


  1. A Declaration that any purported dealings in the subject land being Portion 2380, Granville, Port Moresby, National Capital District, Volume 20 Folio 233 between the first defendant and second defendant or between the first defendant and the fifth defendant through the third defendant and fourth defendant are void and illegal for all purposes.
  2. A Declaration that the Notice to Show Cause dated 22 May 2001 and subsequent Notice of Forfeiture as per dated 07 January 2002 respectively issued by the third defendant over the subject land Portion 2380 Granville, Port Moresby, National Capital District, Volume 20 Folio 233 are void and illegal "ab initio".
  3. A Declaration that any notices purportedly issued by the fifth defendant through the office of the third defendant or Court orders procured or obtained by the first defendant in respect of the subject land being Portion 2380, Granville, Port Moresby, National Capital District, Volume 20 Folio 233 upon representation the first defendant is the duly registered proprietor of the subject land are void and of no legal effect for all purposes.
  4. An Order in the nature of Interim Injunctive Order prohibiting the defendants from any or further development of, dealings or transfers concerning the subject land being Portion 2380, Granville, Port Moresby, National Capital District, Volume 20 Folio 233 until the determination and adjudication of this matter.
  5. An order that the first and second defendants immediately cease all or any construction work on the subject land being Portion 2380, Granville, Port Moresby, National Capital District, Volume 20 Folio 233 and remove all equipment, machines, implements as well as workmen forthwith.
  6. An Order that the defendants severally and collectively pay costs and damages suffered by the plaintiff as a result of the purported Forfeiture Notice and subsequent related proceedings leading to the permanent and structural alteration of the subject land being Portion 2380, Granville, Port Moresby, National Capital District, Volume 20 Folio 233.
  7. Costs
  8. Interest at 8% pursuant to Statute.
  9. Such other orders the Court deems fit."
  10. The first defendant Petronas Limited (‘Petronas’) relies on the affidavit of Jason Loh sworn on 13th January, 2010 and filed on 28th January, 2010. Jason Loh is a Director of the first defendant.
  11. This application arises out of the plaintiff’s claim that the first defendant fraudulently obtained title to the property. The undisputed evidence is that the following has occurred todate;

The evidence


  1. Mr Malaga relies on the affidavit of Hii Eii Sing sworn on 31st January, 2007 and filed on 6th February, 2007. He also relies on his own affidavit sworn on 8th December, 2009 and filed on 18th December, 2009. His other affidavit that he relies on is that sworn on 6th February, 2010 and filed on 26th February, 2010.
  2. The first defendant relies on the affidavit of Jason Loh that I referred to above.

Analysis of evidence and the law


  1. Mr Malaga submits that his client was unable to take any action challenging the forfeiture of the UDL because of a Court Order of 21st March, 2007 staying any further steps being taken in OS 44 of 2007 pending payment of costs and damages by his client to the applicant, in OS 353 of 2006.
  2. The issue before me are these;
(i) Whether the plaintiff can continue to pursue this claim?
  1. Mr Malaga pointed out to the Court that he filed an Amended Originating Summons on 3rd March, 2010. Mr Malaga did so without firstly obtaining leave of the Court because he submitted, he can do so at any time. That submission is partially correct. In this case, leave of the Court must be obtained because the proceedings have come a long way and secondly, the amended OS pleads an entirely different cause of action from that pleaded in the OS filed on 6th February, 2007. I say this because in the amended OS, the plaintiff pleads as follows, the underlining being Mr Malaga’s;

"1. A Declaration that the plaintiff is the registered proprietor of land known as Portion 2380 Granville Fourmil Port Moresby, being land contained in State Lease Volume 20, Folio 233 or any land that was subsequently subdivided from the said land and new land description and certificate of title issued by the Registrar of Titles.


  1. A Declaration that the purported forfeiture of the said land from the plaintiff by the third defendant, Secretary for Lands, on 07 July 2007 is void ab initio as it was in breach of provisions of Section 122(2)(b0, (3) and (4) and Section 124 of the Land Act 1996.
  2. A Declaration that the purported issue of Licence No. 0-6104 by the third defendant to the first defendant on 28 June 2004 in respect of the land after it was forfeited from the plaintiff was void ab initio and contrary to provisions of Sections 125(1) and 126 of the Land Act 1996.
  3. A Declaration that the purported grant of an urban development lease of the said land to the first defendant by the Lands Department on 24 March 2005 is void ab initio as it was done contrary to provisions of Sections 68, 69, 104, 105, 106 of the Land Act 1996.
  4. A Declaration that any subsequent dealings with the land including transfer of title of the subdivided lots by the first defendant after Portion 2380 Milinch Granville Fourmil Port Moresby was subdivided is void ab initio.
  5. An Order that the first and second defendants immediately cease all or any construction work on the subject land and remove all equipment, machines, implements as well as workmen forthwith.
  6. An Order that the first, second, third and fifth defendants severally and collectively pay damages to the plaintiff for loss suffered by the plaintiff as a result of the purported forfeiture of the land from the plaintiff.
  7. An Order for costs.
  8. An Order for interests to be calculated from the date of forfeiture of the land from the plaintiff.
  9. Such further or other orders deem fit by the Court."
  10. The Orders sought are effectively for relief on actions taken by the first and second defendants on the property in relation to the forfeiture of the UDL and the subdivision. However, the amended OS does not particularise what it claims are the fraudulent acts by the third and fourth defendants. The only time it can do that is if it properly pleads the fraud. Does the NCR allow that?
  11. Order 8 rule 50 of the NCR is the general provision on amendments, that an applicant may apply at any stage of the proceedings to amend any documents in the proceedings or the Court may of its own motion, do so. The Court can also give leave to amend as it thinks fit. The determining factor in relation to the grant of amendments is that they should be made for the purpose of determining the real questions in issue (O.8 r.50(2) of the NCR).
  12. So, a party can amend a pleading without leave (O.8 r.51) or a party must apply for leave (O.8 r.53). The amendments can be simple (O.8 r.56) or the amendments can be made by the filing of a fresh document (O.8 r.57).
  13. In this case, the plaintiff has filed a fresh document pleading a new cause of action. Order 8 r.53(5) states that if a party is adding or substituting a new cause of action arising out of the same facts, the Court may order that he has leave to do so. This rule reads;

"53. Statute of limitation. (20/4)


...


(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 addition 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.

(6) This rule has effect in relation to an Originating Summons as it has effect in relation to a Writ of Summons."
  1. No doubt, this Rule also applies to Originating Summons.
  2. As to amendments of pleadings without leave of the Court, if the amendments are simple, then it can be done without leave of the Court. Additionally, it will only apply to amendments, the object of which is to correct mere or accidental mistakes, errors, slips or omissions. On the other hand, where the amendments consist of either addition, omission or substitution of a party or of an alteration of the capacity of the party suing or being sued or of the addition or substitution of a new cause of action, application must be made for leave to amend. Par.20/5–8/22 of the Supreme Court Rules states this in relation to amendments adding a cause of action pleading fraud;

"20/5-8/22. Fraud, adding allegation of - Although it has been stated that it is "the universal practice, except in the most exceptional circumstances, not to allow an amendment for the purpose of adding a plea of fraud where fraud has not been pleaded in the first instance: (per Lord Esher M.R. in Bentley v. Black (1893) 9 T.L.R. 580; c.f. Hendriks v. Montagu (1893) 17 Ch.D. 638, pg.642; Symonds v. City Banks (1885) 34 W.R. 364; Lever v. Goodwin [1887] W.N. 107, C.A.) yet such an amendment is allowed at an early stage; and in special circumstances at the trial though an adjournment would usually be granted, see Riding v. Hawkins [1889] UKLawRpPro 10; (1889) 14 P.D. 56. But such an amendment should not be allowed by the Court of Appeal (Bradford, etc, Building Society v. Borders [1941] 2 All E.R. 205)"


  1. The Supreme Court Practice 1985 are the Rules from which PNG’s NCR are promulgated.
  2. I find that it is not proper for the plaintiff to continue to pursue this claim on the amended OS because it is a new cause of action altogether and also one of fraud.
  3. Additionally, the amended OS pleads a lot of disputed issues which cannot be raised in an originating summons, but can be raised in a writ of summons (see Order 4 Rules, 1, 2, 3(1) (2) (a) (b) (c) of the NCR).

(ii) If not, what alternatives does the plaintiff have?


  1. The plaintiff can file new fresh proceedings, preferably a writ of summons and statement of claim, seeking the reliefs sought in the amended OS.

(iii) Whether the proceedings can be dismissed?


  1. Mr Pato submits that on the present OS 44 of 2007, that events have overtaken the relief sought. In fact, when the plaintiff lost its statutory right of appeal prescribed under s.142 of the Land Act and when the proceedings for judicial review were dismissed, the plaintiff should have immediately filed a fresh set of proceedings or even applied for leave to amend, at that time. Accepting that the plaintiff was tied down by the Court Order to pay costs referred to earlier, if the plaintiff was genuinely interested in challenging the named defendants, more particularly the third and fourth named defendants, it would have paid the outstanding costs and proceeded with action against the defendants. It did not.
  2. The 28 days appeal period within which the plaintiff was to have lodged its appeal against the Land Board’s decision, has long expired, i.e since 7th January, 2002. Jason Loh deposes in his affidavit that the proceedings are preventing the first defendant, from focussing its energy and concentration in the development of the multimillion housing estates. Mr Pato submits that these present proceedings are causing unnecessary anxiety and frustration to those others involved with the first defendant, i.e bankers, businesses associates, partners’ prospective purchasers of the property and also previous purchasers.
  3. Additionally, the original cause of action pleaded no longer exists as over the period of time since 2002, the first defendant has moved on and the status has now changed.
  4. The law and the test in relation to whether proceedings can be dismissed, is whether it is plain and obvious from the pleadings that the Court can say at once that the Statement of Claim as it stands, is insufficient even if proved, to entitle the plaintiff to the Orders or "no reasonable cause of action is disclosed if the purported cause of action pleaded is obviously and incontestably bad" (See Odeta Ltd v. Ambusa Copra Oil Mill Ltd (2001) N2186; PNG Forest Products Ltd & Inschape Berhard v. The State & Genia [1992] PNGLR 85; Ronney Wabia v. BP Exploration & Ors N1697; Dyson v. Attorney-General [1910] UKLawRpKQB 203; [1911] KB 410).
  5. I have already reviewed the OS and note the original cause of action is obviously and incontestably bad. Additionally, I cannot give leave to amend because of the reasons raised.
  6. I will order that the proceedings be dismissed because they are frivolous and vexatious and are an abuse of the Court’s process.
  7. As to costs, the first defendant, through its lawyer, forewarned the plaintiff by letter of 14th December, 2009 to withdraw the proceedings but was not done. Therefore, costs will be awarded on an indemnity basis.
  8. The plaintiff, no doubt is raising claims of fraud by all the defendants, in relation to the manner in which title to the property was forfeited. It should firstly reconsider filing proceedings claiming fraud by those involved. The NCR specifically provides at O.8 r.30 that a party pleading fraud shall give particulars of any fraud, misrepresentation, breach of trust, wilful default or undue influence on which he relies. And again, if the plaintiff is to plead fraud as a cause of action, then O.4 r.2(1)(b) will apply which is that proceedings shall be commenced by Writ of Summons. And that is a matter for the plaintiff.

Formal orders


  1. These are the formal orders of the Court;

___________________
Henaos Lawyers: Lawyer for the Plaintiff
Steeles Lawyers: Lawyer for the first and second Defendants

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