N6606	
	PAPUA NEW GUINEA	
[IN THE NATIONAL COURT OF JUSTICE]

WS No.360 OF 2014

BETWEEN:
S & T CORPORATE SERVICES LIMITED
Plaintiff 

AND:
ALEX MAUN
First Defendant

AND:
DERIAN LIMITED
Second Defendant

Waigani:  Kariko, J
2015: 13th&17th February

PRACTICE & PROCEDURE – declarations – relevant factors –controversy must exist– abuse of process

Cases cited:
Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 

Legislation:
National Court Rules

Counsel:
Mr J Umbu, for the Plaintiff
Mr S Endehipa, for the Defendants

RULING

17th February, 2015

1.	KARIKO  J: The plaintiff  S&T Corporate Services Limited is registered as holding the State Lease in respect of the land described as Section 20 Allotment 6, Kiunga, Western Province (the Property), having had title transferred to it from Daru Trading Company Limited in June 2012.

2.	The first defendant Alex Maun is the owner of the second defendant company, Derian Limited. The defendants are interested in the Property and they presently occupy the adjoining allotment to the Property. The defendants claim the State Lease held by Daru Trading had been forfeited and cancelled so the purported transfer of the Property to the plaintiff was by fraud. The plaintiff is aware of this view of the defendants.

Claim & cross-claim

3.	In the statement of claim filed 16th April 2014, the plaintiff firstly seeks recovery of costs incurred in litigation in the District Court over the Property. It also seeks a declaration that it has indefeasible title over the Property.In response, the defendants filed a Defence and Cross-claim.The defendants have alleged in their defence that the title was obtained by fraud and this is the basis for the cross-claim which challenges the validity of the title.

Application

4.	An application has been moved by the plaintiff for the Defence to be struck out for not disclosing a defence (O12 r1,National Court Rules) and being an embarrassment (O8 r27,National Court Rules) and for the Cross-claim to be struck out for being frivolous and vexatious and an abuse of process (O12 r40,National Court Rules).

Declarations

5.	In the course of submissions and upon exchange between the bench and counsel, it became clear to me (and confirmed by counsel) that there is no actual legal dispute between the parties regarding the title to the Property. The plaintiff decided to seek a declaration that it has indefeasible title over the Property only because it knows the defendants are keen on the Property and the defendants suspect the validity of the plaintiff’s title and have been spreading “gossip” that has influenced the illegal settlers on the Property. The defendants on the other hand have raised the allegations of fraud simply as response to the plaintiff’s claim to indefeasibility of title. In the Cross-claim they seek several declarations the combined effect of which is that the transactions involving the Property including the transfer of title to the plaintiff are invalid. Both parties are therefore seeking declarations in their respective claims.

6.	The Courts have followed the case of Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 regarding factors that need to be established before a declaratory order can be made. One such factor is that there must be a controversy between the parties.

Conclusion

7.	To my mind, no controversy or legal dispute exists between the parties. Accordingly, I find the declaratory relief sought by the plaintiff to be an abuse of process. I also consider the plaintiff’s claim for recovery of costs to be an abuse of process as that matter should have been properly raised in the District Court. Further,I find the cross-claim by the defendants to be an abuse of process. The cross-claim would not have been made had the plaintiff not claimed the declaratory relief. Having failed to properly seek judicial review earlier regarding certain transactions by the State leading up to the transfer of title to the plaintiff (which transactions allegedly occurred between 2011 and 2012), the defendants have used the opportunity given by these proceedings to challenge the validity of title.It is my view too that the defendants do not have standing in respect of the issues raised in the cross-claim. 

Orders

8.	I dismiss the entire proceedings (including the cross-claim) for being an abuse of process. Each party shall bear its own costs.

_____________________________________________________________
Saulep Lawyers:   Lawyer for the plaintiff
Sampson Endehipa Partners & Co. Lawyers:  Lawyer for the defendants