N5396

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA 122 OF 2008

BETWEEN:

PACIFIC EQUITIES & INVESTMENTS LIMITED
Applicant

AND:

IVAN POMALEU, Chairman of the
Securities Commission of PNG
First Respondent

AND:

MELANESIAN TRUSTEE SERVICES LIMITED
Second Respondent

Waigani: Hartshorn, J.
2011: 21st June,
: 17th August

Application to dismiss proceeding for want of prosecution

Cases cited: 

Burns Philp (NG) Ltd v. Maxine George [1983] PNGLR 55
General Accident Fire & Life Assurance Co Ltd v. Ilimo Farm (1990) PNGLR 331
Yema Gaiapa Developers Ltd v. Hardy Lee (1995) SC484
Joe Chan and PNG Arts v. Matthias Yambunpe (1997) SC537 
Attorney General, Minister for Justice and The State v. PNG Law Society (1997) SC530 
Bernard Juali v. The State (2001) SC667 
Donigi v. PNGBC (2002) SC691 
PNG Electricity Commission v. Joseph Amban (2004) N2666 
Obadia Buka v. Jude Baisi (2004) N2602
PNG Nambawan Trophy Ltd v. Dynasty Holdings Ltd (2005) SC811
State v. Raymond Turu (2008) SC904 
Pacific Equities & Investments Ltd v. Teup Goledu & Ors (2008) unreported CIA 19/06 delivered 14/7/08, Waigani 
Zachery Gelu v. Sir Michael T. Somare (2009) N3647

Counsel: 

Mr. P. Liskia, for the Applicant 
Mr. F. Kuvi, for the First Respondent
Mr. J. Poya, for the Second Respondent
Mr. J. Brooks, for National Superannuation Fund Ltd

17th August, 2011

1. HARTSHORN, J: The appellant Pacific Equities & Investments Limited (PEIL) commenced this proceeding on 1st August 2008. It is an appeal against the decision of the first respondent, the chairman of the Securities Commission of Papua New Guinea (Commission), to reappoint the second respondent, Melanesian Trustee Services Limited (MTSL), as the trustee of Pacific Balance Fund (PBF) and the Pacific Property Trust (PBT).

2. MTSL applies to dismiss the proceeding for want of prosecution under Order 4 Rule 36 (1) and various other National Court Rules. No issue is taken with the Rules under which application is made. Alternative orders sought are for a consent order to be set aside and an order that MTSL continue as trustee of PBF and PBT without interference, until further order or the determination of the proceeding. PEIL and the Commission oppose MTSL's applications.

3. The National Superannuation Fund Ltd (Nasfund), the largest Unit Holder in PBF, was given leave to appear and make submissions upon MTSL's application. I consider the application to dismiss for want of prosecution first.

Dismissal for want of prosecution

4. MTSL applies to dismiss the proceeding for want of prosecution as:

a)	on 31st March 2010 this court ordered amongst others, that this proceeding be progressed to a speedy trial as soon as possible,

b)	the lawyers for the Commission wrote to PEIL by letter dated 24th November 2010 informing that an application to dismiss the proceeding for want of prosecution without further notice would be filed due to the lack of interest shown by PEIL to progress the matter for hearing in compliance with the 31st March 2010 court order,

c)	the lawyers for MTSL wrote a letter dated 26th April 2011 to the lawyers for PEIL informing that an application to dismiss for want of prosecution would be filed without further notice,

d)	there is no evidence of any action taken by PEIL to prosecute the proceeding from the date of its filing on 1st August 2008 to 11th August 2009, the date of the filing of an application to dismiss the proceeding for non-compliance with the requirements of s. 219 District Courts Act (first dismissal application), a period of 1 year 10 days,

e)	from 31st March 2010 (the date when this court delivered its decision that the first dismissal application was unsuccessful) to 24th November 2010, the only explanation given for the proceeding not being progressed is that the staff of the National Court registry had failed to list the proceeding for directions for a trial date to be allocated. There is evidence of letters being written to the National Court registry but none of these letters were copied to the respondents,

f)	PEIL has not written to the respondents explaining the difficulties it was having in 	expediting the proceeding. There is no evidence of personal attendances at the National Court registry or telephone conversations with registry personnel that occurred in attempts to expedite the proceeding,

g)	there is no evidence of responses to the 2 warning letters that were written to the lawyers for PEIL and no evidence of attempts to expedite the proceeding from 24th November 2010 to 26th April 2011,

h)	from the date of filing of the application to dismiss, there is no evidence of any steps taken by PEIL to expedite the proceeding,

i)	PEIL has defaulted in taking steps to progress the appeal for over 2 years 9 months,

j)	the delay in the proceeding being prosecuted has caused prejudice to MTSL as its powers, functions, duties and responsibilities are restricted by interim orders made on 12th June 2009 (Consent order).

5. PEIL opposes the application as:

a)	PEIL's lawyers have been writing to the National Court registry requesting that the proceeding be listed for directions and for the allocation of a trial date,

b)	despite this correspondence and various attendances by PEIL's lawyers at the 	registry, the registry staff have failed to list the matter before the court. This is a reasonable explanation for the delay,

c)	MTSL filed an application on 19th November 2010 seeking to set aside the Consent order but this has not been prosecuted. This has contributed to the delay,

d)	despite this, PEIL's lawyers have continued to write to the National Court registry seeking to secure a hearing for directions and the allocation of a hearing date but to no avail,

e)	the letter of warning sent by MTSL did not give PEIL an opportunity to do anything as the application to dismiss was filed a few days after the warning letter was issued,

f)	the delay is not intentional or inexcusable,

g)	the delay has not caused injustice or prejudice to MTSL,

h)	it is in the interest of all parties that this appeal should be heard so that a precedent is set,

i)	the conduct of PEIL and its lawyers does not warrant the proceeding being dismissed for want of prosecution,

j)	it would be unfair and not in the interests of justice for this proceeding to be dismissed for want of prosecution.

6. In addition, Nasfund submitted that the first dismissal application was unsuccessful and since then PEIL had been writing to the National Court registry to have the matter listed, any delay has not been inordinate or contumelious, MTSL filed another motion in the proceeding but has not prosecuted it, the only relevant delay is 6 months, a reasonable explanation for the delay has been provided, there is no evidence of prejudice, MTSL's conduct has been lacking in "clean hands", MTSL at no time engaged with PEIL or requested PEIL to progress the proceeding, it is not in the interests of justice and the balance of convenience does not favour the dismissal of the proceeding.

Law

7. PEIL submits that for an order for dismissal for want of prosecution to be sought successfully the court may consider amongst others, whether:

"a) the plaintiff's default is intentional or is allowing for an inordinate and inexcusable delay in the prosecution of his claim;
b) there is no reasonable explanation given by the Plaintiff for the delay.
c) the delay has caused injustice or prejudice to the Defendant.
d) the conduct of the parties and their lawyers warrants.
e) it is in the interest of justice.

8. PEIL relies upon numerous cases including, PNG Electricity Commission v. Joseph Amban (2004) N2666, Joe Chan and PNG Arts v. Matthias Yambunpe (1997) SC537, Donigi v. PNGBC (2002) SC691, PNG Nambawan Trophy Ltd v. Dynasty Holdings Ltd (2005) SC811, Burns Philp (NG) Ltd v. Maxine George [1983] PNGLR 55, Yema Gaiapa Developers Ltd v. Hardy Lee (1995) SC484, Attorney General, Minister for Justice and The State v. PNG Law Society (1997) SC530, Bernard Juali v. The State (2001) SC667, General Accident Fire & Life Assurance Co Ltd v. Ilimo Farm (1990) PNGLR 331 and State v. Raymond Turu (2008) SC904.

9. The requirements for a successful dismissal application for want of prosecution and the relevant principles contained in the above cases are similar to numerous other decisions in this jurisdiction on the question. In this regard I also refer to the discussion of the relevant law in my decision in Pacific Equities & Investments Ltd v. Teup Goledu & Ors (2008) unreported CIA 19/06 delivered 14/7/08, Waigani.

10. I now consider the factors referred to in paragraph 7 above in determining this application.

Delay

11. The proceeding was commenced on 1st August 2008. There is no evidence as to the steps taken by PEIL to prosecute the proceeding from its commencement to the time of the first dismissal application. The first dismissal application did not involve a consideration of whether PEIL had prosecuted the proceeding with due despatch and so this question, from the commencement of the proceeding, should be considered in this application. Further, there has not been any material progression of the proceeding since the court delivered its decision upon the first dismissal application. The proceeding was filed almost 3 years ago and notwithstanding the order of this court on 31st March 2010 that the proceeding be progressed to a speedy trial as soon as possible, this has not occurred. The only evidence of an attempt to progress the proceeding is that of the numerous letters written to the National Court registry. I am satisfied after considering evidence and submissions on the point that there has been inordinate delay in prosecuting the proceeding since it was commenced.

Explanation for the delay

12. There is no evidence or satisfactory explanation given by PEIL for the delay up to the filing of the first dismissal application. There is an explanation though, from about the time of the delivery of this court's decision on the first dismissal application on 31st March 2010 onwards. That is that there is evidence of numerous letters being written to the National Court registry by PEIL's lawyers requesting to have the proceeding listed. What is of concern with this explanation is that if one letter sent is unanswered, then perhaps another letter should be sent but if there is no reply to that second letter, then a notice of motion should be filed seeking appropriate relief, such as directions or having the matter set down for trial. To my mind, it is not satisfactory to continue to send letters when they are not being answered and especially as they are not progressing the proceeding when the court has ordered that the proceeding be progressed as soon as possible. As to blaming the National Court registry staff, in Zachery Gelu v. Sir Michael T. Somare (2009) N3647, I said in regard to a similar submission that;

"it is all too easy to blame Court staff. It is not appropriate in my view, for an applicant to sit and wait for a reply. It was always open to the applicants to file a notice of motion seeking further directions or a hearing date if they believed that by writing to the Registry or the Associate they were not obtaining satisfaction."

13. In this instance, to continue to send letters, 8 in total, for almost 1 year when they all remained unanswered, is not indicative of proper action being taken to progress the proceeding and does not support a submission that there is a reasonable explanation for delay.

14. As to the action of MTSL in not prosecuting an interlocutory motion as contributing to the delay, in my view that also is not a reasonable explanation when regard is had to the fact that the onus is on the plaintiff to prosecute its claim with due diligence and that it is the plaintiff who should take the necessary steps in the proceeding to have it ready for trial: Obadia Buka v. Jude Baisi & Anor (2004) N2602.

15. After considering the evidence and submissions, I am satisfied that as to the inordinate delay in prosecuting the proceeding, PEIL has not given any or any reasonable explanation for the inordinate delay.

Injustice or prejudice

16. Notwithstanding that MTSL consented to the Consent order in June 2009, MTSL submits that the delay in prosecuting the proceeding has caused prejudice to MTSL in regard to its powers, functions, duties and responsibilities as they continue to be restricted by the Consent order. MTSL submits that as trustee of PBF and PPT, it cannot fully discharge its powers, functions, duties and responsibilities in accordance with the respective Trust Deeds for the interests of the Unit Holders. Further, MTSL submits that PEIL, by merely filing this proceeding and not prosecuting it, prejudices MTSL's right to have the proceeding heard without delay. PEIL merely submits that MTSL has not suffered injustice or prejudice by the delay. Nasfund submits that there is no evidence of prejudice and that for this court to exercise its discretion to dismiss the proceeding, it must be satisfied that MTSL will suffer real and substantial prejudice if the proceeding is allowed to continue.

17. I am not of the view that the authorities by which this court is bound, are to the effect that before a court is able to dismiss a proceeding for want of prosecution, there must be a finding that the respondent will suffer real and substantial prejudice if a proceeding is allowed to continue. I am satisfied however, that MTSL has suffered prejudice as a consequence of the delay in this proceeding's prosecution. The evidence of Mr. Kennedy Wemin is that PEIL, the Commission and Nasfund have variously not complied with the Consent order and that MTSL cannot effectively perform its duties as trustee of PBF and PPT whilst the Consent order remains in force. The Consent order remains in force until the final determination of the proceeding and I have already found that there has been inordinate delay in the prosecution of the proceeding.

Conduct of the parties

18. PEIL submits that its conduct and that of its lawyers does not warrant the proceeding being dismissed as they took action to progress the proceeding by constantly writing to the National Court registry and also attending at the registry. I have referred to this submission already. Although there is no evidence of the attendances, if they did occur, it reinforces the point that PEIL's lawyers were not having success with their approach and a notice of motion should have been filed seeking directions or a hearing date.

19. As to the conduct of MTSL, PEIL submits that its conduct in not prosecuting a motion to set aside the consent order, is such that this proceeding should not be dismissed as MTSL's conduct contributed to the delay in the prosecution of this proceeding. Nasfund submits that MTSL in not prosecuting that motion is lacking in "clean hands". Further, by relying upon the letter of the Commission warning of an intention to dismiss the proceeding, MTSL's conduct is questionable. Nasfund also submits that MTSL did not request PEIL to progress the proceeding and merely wrote to PEIL advising of its intention to seek to dismiss the proceeding a few days before filing its motion seeking dismissal. Further, MTSL should not have let "sleeping dogs lie".

20. Following a perusal of the evidence, I am not satisfied that the conduct of PEIL and its lawyers can be considered to be the conduct that this court expects of a plaintiff that properly prosecutes its case. PEIL and its lawyers should be aware of the standard of conduct required given the reference in its lawyer's submissions to PEIL having 2 other proceedings dismissed for want of prosecution by the Supreme and National Courts. Further, I am not satisfied that the conduct of MTSL and its lawyers is such that it warrants the proceeding not being dismissed when it otherwise should be. I make these observations again with reference to the point that the onus is upon the plaintiff to prosecute its claim with due diligence and it is the plaintiff who should take the necessary steps to have it ready for trial.

Interest of justice - balance of convenience

21. PEIL submits that it would be unfair to dismiss the proceeding as the delay to prosecute was clearly caused by the National Court Registry staff. Nasfund submits that the balance of convenience does not favour the dismissal of the proceeding as MTSL has delayed, MTSL let sleeping dogs lie, did not give PEIL sufficient notice and is not established obvious prejudice.

22. After considering all the evidence and submissions and the circumstances of this case, my finding that there has been inordinate delay without any or any reasonable explanation, that MTSL has suffered some prejudice and that the conduct of PEIL and its lawyers is not the conduct that this court expects of and on behalf of a plaintiff who properly prosecutes his claim, especially when this court has already ordered that the proceeding be progressed to a speedy trial as soon as possible, I am of the view that it is in the interests of justice and the balance of convenience favours that this proceeding be dismissed for want of prosecution.

23. Nasfund has submitted that it clearly has an interest in maintaining the Consent order and that if this court were to dismiss the proceeding for want of prosecution the effect or entry of such orders should be delayed to enable Nasfund to make an application for a similar order as the Consent order in other proceedings. In the absence of strenuous objection by PEIL on this point, I shall delay the effect or entry of orders for 14 days.

Orders

24. The formal Orders of the Court are: 

a)	 this proceeding is dismissed.
b)	the applicant shall pay the costs of the respondents of and incidental to the proceeding.
c)	the time of entry of these orders shall be the time of entry by the Registrar which shall not take place until 14 days after the date on which the Registrar signs the minute of these orders.
_____________________________________________________

Stevens Lawyers: Lawyers for the Applicant
Elemi Lawyers: Lawyers for the First Respondent
Gubon Lawyers: Lawyers for the Second Respondent
Gadens Lawyers: Lawyers for National Superannuation Fund Ltd