N5946

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 916 OF 2006

BETWEEN:

KULUNIAS TOMAKALA
Plaintiff/Respondent Cross Defendant

AND:

NATIONAL DEVELOPMENT BANK
LIMITED
Defendant/Applicant/Cross Claimant

Kokopo: Oli, AJ
2014: 29th August
2015: 13th April

CIVIL JURISDICTION- Practice & Procedure –On an application by a defendant/applicant/cross claimant seek dismissal for want of prosecution - Discretionary matter - Principles applicable - Where lengthy delay - Balance of justice – Plaintiff/Applicants Cross Defendant did not demonstrate no inordinate delay to prosecute the matter - No positive action from defendant/applicant cross claimant to confirm trial date with plaintiff last effort to have the matter set down for trial – No order for dismissal – National Court Rules, O 10, r 5 and Listing Rules 2005 under r 15 (1) (a) & (2) (c).

Cases Cited:
Papua New Guinea Cases

Ronald Nicholas v Commonwealth New Guinea Timbers[1986] PNGLR 133,
Piara Pyakoal v Enga Provincial Government (Unreported Judgment 1821)
Umbu Waink & Martin Imbu Sambai v Motor Vehicles Insurance (PNG) Ltd & Anor (1997) N1630
Markscal Ltd v Robert Needham &Mineral Resources Development Company & Ors (1999) N1807

Overseas Cases

Witten v Lombard Australia Ltd (1968) 88 WN (Pt. 1) (NSW) 405, adopted and applied
Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229, adopted and applied
Birkett v James [1978] AC 297, adopted and applied.

Counsel:

Mr. Robert Asa, for the Plaintiff/Respondent Cross Defendant
Mr. Andrew Bemau, for the Defendant/Applicant Cross Claimant

RULING

13th April, 2015

1.	OLI, AJ.: This is an application by the Defendant/Applicant/ Cross Claimant, (Rural Development Bank Limited), filed on 25th August 2014, seeking an order to dismiss the entire proceedings for want of prosecution pursuant to Order 10 Rule 5 of the National Court Rules.

BRIEF FACTS

2.	The Plaintiff/Respondent/ Cross Defendant initiated this proceeding by filing an Originating Summons (OS No. 916 of 2006) on or about 19th December 2006, seeking declaratory orders to prevent the Defendant/Applicant/ Cross Claimant from selling the property known as Portion No. 890 Milinch Kokopo in the East New Britain Province (the "property"). The Plaintiff/Respondent/ Cross Defendant made the following statement highlighting the relevant facts surrounding the matter now before the court. The Plaintiff/Respondent/ Cross Defendant states that:

1.	Initially, the said property had been used by the Plaintiff/Respondent Cross Defendant as security when obtaining a loan from the Defendant/Applicant Cross Claimant.

2.	The Plaintiff/RespondentCross Defendantdefaulted in repaying its loan and despite numerous requests by the Defendant/Applicant Cross Claimant to settle its outstanding loan arrears, the Plaintiff/Respondent Cross Defendant failed to do so.

3.	The Defendant/Applicant Cross Claimant then opted to exercise its Mortgagee's right of redemption to sell the property to recoup the outstanding loan. Accordingly, a Public Tender advertisement was placed in the National Newspaper on 07th June 2006, in relation to the said property.

4.	The Plaintiff/Respondent Cross Defendant then filed the Originating Summons together with a Notice of Motion and supporting Affidavit on 19th December 2006, seeking to stay the sale of the property.

5.	The Plaintiff/RespondentCross Defendant was unsuccessful as the Court on 22nd December 2006 refused his application.

6.	The Court on 22nd December 2006 also issued certain directions for the further conduct of this matter, which the Plaintiff/Respondent Cross Defendanthas failed to comply with.

7.	As at the date of this application, the Plaintiff/Respondent Cross Defendant has not complied with the Order of 22nd December 2006 nor made any attempt to prosecute the matter further to this date.

ISSUE

3.	There are two pertinent issues that emanates in this case. They are:

1.	"Whether the application by Defendant/Applicant Cross Claimant seeking that the proceedings be dismissed for want of prosecution by Plaintiff/Respondent Cross Defendant."; and,

2.	Whether Defendant/Applicant Cross Claimant is entitled to its Cross Claim to recoup the loan outstanding owing by the Plaintiff/Respondent Cross Defendant.

LAW

4.	The law is well settled in this jurisdiction where an aggrieved party filing an application to dismiss the matter for want of prosecution. The relevant provision under National Court Rules is Order 10 Rule 5 of the National Court Rules provides which states that:

'where a Plaintiff does not, within six (6) weeks after the pleadings are closed, set the proceedings down for trial, the Court, on motion by any other party, may, on terms, dismiss the proceedings or make such other order as the Court thinks fit."(Emphasis mine)

5.	The Defence Counsel also submit that the National Court has an inherit jurisdiction to dismiss an action for want of prosecution where the delay on the part of the Plaintiff or his lawyers is so prolonged with no justifiable reason for the delay. In passing the Defence Counsel stated that there are numerous case law in this jurisdiction that deal with the issue of dismissal for want of prosecution. The court in exercising its discretional power on whether or not to dismiss the proceedings for want of prosecution, the Court can be guided by the case authorities referred to and will be discussed here after.

APPLICATION OF LAW TO THE FACTS 

6.	There are two issues that emanate from this case. I deal with each one of them now. The issue No. 1, is "Whether application by Defendant/Applicant Cross Claimant seeking that the proceedings be dismissed for want of prosecution by Plaintiff/Respondent Cross Defendant?"

7.	The Defendant/Applicant Cross Claimant has filed this application to dismiss the entire proceedings for want of prosecution, pursuant to Order 10 Rule 5 of the National Court Rules, on the basis that the Plaintiff/Respondent Cross Defendant has not taken any steps to prosecute the matter or to set the matter down for trial after six weeks when pleadings were closed, despite initiating the proceeding in or about December 2006. Since commencement of the action in December 2006, and Plaintiff/Respondent Cross Defendant, allegedly has not set the matter down for trial, is not less than 7 years since its commencement. Hence, defendant is at liberty to seek relief under Order 10 Rule 5 of the National Court Rules to dismiss the matter for want of prosecution. 

8.	The Plaintiff/Respondent Cross Defendant filed the Originating Summons and also filed interlocutory application to stay the public tender and sale of the property on or about 19th December 2006.The Plaintiff/Respondent Cross Defendant's subsequent application to stay the public tender and sale of the property was denied by the court on 22nd December 2006. Since 22nd December 2006 to the time Defendant/Applicant Cross Claimant filed this application on 25th August 2014 to dismiss the entire proceedings for want of prosecution, it is indeed, well over 7 years 6 months and 3 days, since the application was heard with specific Court directions being issued. It is alleged that the Plaintiff did not take any further steps to comply with the Order or to prosecute the matter to finality, resulting in the Defendant incurring unnecessary legal costs which would otherwise be avoided. The defence counsel made reference to a number of cases for their relevancy and appropriate application.

9.	In the case of Ronald Nicholas v Commonwealth New Guinea Timbers [1986] PNGLR 133, His Honour Woods J, held that:

"(1) 	The power of the Court to dismiss proceedings for want of prosecution should be exercised only where the Plaintiff's default has been intentional and contumelious or where there has been inordinate and inexcusable delay on his or his lawyers part giving rise to a substantial risk that a fair trial will not be possible or to cause serious prejudice to the Defendants. (Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 and Birkett v James [1978] AC 297,) adopted and applied.

(2) 	Where there has been a long delay in bringing the proceedings to trial a balance must be struck as between the plaintiff and the defendant and in the end the Court must decide whether or not, in the balance, justice demands that the proceedings should be dismissed. (Witten v Lombard Australia Ltd (1968) 88 WN (Pt 1) (NSW) 405 at 411, adopted and applied.)

(3)	Accordingly, no order should be made in circumstances where eleven years had elapsed since proceedings claiming damages for wrongful dismissal had been commenced — the delay being occasioned mainly by the plaintiff having to leave Papua New Guinea for financial reasons and for reasons of employment, and then being caught up with the obtaining of an invalid pension, legal aid and with changing solicitors and conducting legal proceedings from a distance and where the defendant had as recently as November 1984 obtained an order for security for costs and had not previously taken any steps to forestall the proceedings."

10.	In Piara Pyakoal v Enga Provincial Government (Unreported Judgment 1821) it was held by Sawong, J. 

"That the facts and evidence show clearly that the Respondent has not acted promptly and diligently. In fact, he has not acted or done anything at all to prosecute this matter expeditiously. Orders were made to have the entire proceedings dismissed."

11.	The above sentiments were echoed in the case of Umbu Waink & Martin Imbu Sambai v Motor Vehicles Insurance (PNG) Ltd & Anor N1630, where the Court held amongst other things that:

(1)	"The power of the court to dismiss proceedings for want of prosecution should only be exercised where the plaintiff's default has been intentional and where there has been inordinate and inexcusable delay.

(2)	Where there has been lengthy delay in setting down for trial, Order 10 Rule 5 of the National Court Rules should be construed in favour of an application to dismiss for want of prosecution only where circumstances are such that there has been a long delay and where there is no reasonable explanation given by the plaintiff.

(3)	Accordingly, orders for dismissal of the proceedings should be made where almost some six years have elapsed since institution of the proceedings."

12.	In Markscal Ltd v Robert Needham and Mineral Resources Development Company & Ors N1807. it was held that:

1.	"A party who institutes legal proceedings is obliged to prosecute it without delay, has the duty to comply with orders relative to the proceedings, has the duty to comply with the rules, and has the duty to prosecute it to finality without undue delay and without causing prejudice to the defendant.

2.	There is no impediment to the granting of this application."

13.	From the above case authorities, the message coming out from these cases is this.The Plaintiff/Respondent Cross Defendant is obligated to prosecute the action with due diligence within a reasonable time commencing the action. If the passage of time hurts the Defendant/Applicant Cross Claimant in the preparation of his or her case or if it substantially affects the Defendant/Applicant Cross Claimant rights, then the Defendant/Applicant Cross Claimant may seek a dismissal with prejudice. A dismissal will not be granted if the failure to prosecute resulted from unavoidable circumstances, such as the death of the Plaintiff/Respondent Cross Defendant, and there is a delay in the appointment of a personal representative to continue the action. When the parties attempt to negotiate a settlement of the controversy, consequent delays in reaching an agreement will not provide a basis for dismissal with prejudice. If, however, a Plaintiff/Respondent Cross Defendant delays prosecution based on the mere possibilities of a settlement without demonstrating concrete efforts to achieve an agreement, a court may grant a dismissal upon Defendant's/Applicant Cross Claimant's motion. Whilst on the converse, Defendant/Applicant Cross Claimant must be free of any responsibility for delay when he or she seeks dismissal for failure to prosecute. A lawsuit will not be dismissed if the Defendant/Applicant Cross Claimant caused or contributed to the delay, such as if the individual leaves the province or country to avoid the trial.

14.	Whilst it is obvious that the Plaintiff/Respondent Cross Defendant appear to have not prosecute the matter with due diligence, and also offer no reasonable explanation as to the circumstances surrounding the delay experience, these considerations are not exhaustive, but court must observe the conduct of the defendant, as well, so that dismissal is not prejudicial to the Plaintiff/Respondent Cross Defendant for want of prosecution. (See Markscal Ltd v Robert Needham and Mineral Resources Development Company & Ors). It is highlighted in the above deliberations that when a party decides to take another party to court, he/she must be prepared to expeditiously prosecute the matter, rather than causing unexplained delays so as to keep the other party in suspense or cause unreasonable anxiety to the other party.

15.	The court having heard legal arguments from both Counsels and perused relevant case laws, the court is mindful of the fact that in order for court to be satisfied that Plaintiff/Respondent Cross Defendant has unreasonably contributed to the unjustifiable delay, it is necessary to recite the relevant chronological history of this litigation and the facts relating to its antiquity.

Chronological Historical Events in this Matter.

•	On 1982- Loan Agreement between Plaintiff/Respondent Cross Defendant and Defendant/Applicant Cross Claimant was concluded for a principal amount of K4,887.00. 

•	On 13th March 1986 – In consideration for the above loan, the Plaintiff/Respondent Cross Defendant pledged the Land (Portion 890 Warangoi, ENBP) as the security to the Defendant/Applicant Cross Claimant pursuant to a Deed of Mortgage dated 13th March 1986.

•	On 10th March 2006 – Letter of Demand by Defendant/Applicant Cross Claimant to Plaintiff/Respondent Cross Defendant demanding payment of outstanding amount of K15, 101.35 inclusive of principal and interest. 

•	On 19th December 2006 - Originating Summons commence by Plaintiff/Respondent Cross Defendant against Defendant/Applicant Cross Claimant filed.

•	On 19th December 2006 - Motion by Plaintiff/Respondent Cross Defendant against Defendant/Applicant Cross Claimant to Restrained Defendant/Respondent by way of an injunction from tendering the Property known as Portion 890 Warangoi, ENBP, not to disturb the possessory rights of the Plaintiff/Applicant until such time the court determine the proceedings.

•	On 22nd December 2006 – the motion by Plaintiff/Respondent Cross Defendant was unsuccessful, however, the court issue certain directions for Plaintiff/Respondent Cross Defendant to take steps to progress the matter to trial.

•	On 4th April 2006 – Notice of Default issue to Plaintiff/Respondent Cross Defendant by Defendant/Applicant Cross Claimant filed.

•	On 9th June 2006 – Tender Notice No. H/Q 45/2006 on Mortgage Sale in the daily media print issued by Defendant/Applicant Cross claimant.

•	On 12th July 2007 – Notice of Intention to Defend by Defendant/Applicant Cross Claimant filed.

•	On 2nd October 2007 – Defendant/Applicant Cross Claimant file Defence & Cross Claim.

•	On 17th August 2007 – Motion by Plaintiff/Respondent Cross Defendant seek Court Order to amend the Statement of Claim. Order granted.

•	On 17th August 2007 – Defendant/Applicant Cross Claimant file Extract Submission

•	On 11th September 2007 – Amended Statement of Claim pursuant to Court Order of 17th September 2007. 

•	On 2nd October 2007 – Defendant/Applicant Cross Claimant file Defence & Cross Claim filed

•	On 1st November 2007 – Plaintiff/Respondent Cross Defendant file reply to the Defence &Cross claim.

•	On 14th May 2010 – Notice of Motion by Defendant/Applicant Cross Claimant seeking eviction order against the Plaintiff/Respondent Cross Defendant filed.

•	On 23rd June 2010 – Consent Notice To Set Down Matter For Trial that all pleadings are closed

•	On 4th July 2014 Consent Directions by both Counsels to perform certain tasks from 1st July 2014 and both counsels will return on the 29th August 2014 for Pre-Trial Conference to set a date for trial.

•	On 30th July 2014 Applicant Cross Claimant to rely on affidavit of John Kundil Goimba sworn 30th July 2014.

•	On 18th August 2014 – Notice pursuant to section 35 of the Evidence Act by Defendant

•	On 29th August 2014 – Notice of Motion by Defendant/Applicant Cross Claimant, who claim that Plaintiff/Respondent has breached Order 12 Rule 1 of the National Court Rules and Rule 15 (1) (a) & 2 (c) of the Listings Rules 2005 for non-compliance of Court Order of 4th July 2014 filed.

16.	The litigation history of the case does reflect that the Plaintiff/Respondent Cross Defendant did demonstrate initiative to prosecute the matter to date, though it has taken a little while to get to that stage of the proceedings. This is confirming by Plaintiff/Respondent Cross Defendant entering into Consent Directions Order sanctioned by the court on 4th July 2014. But the motion filed by the defendant/applicant cross claimant, appear to seek two reliefs of the same outcome but under different Rules. The first relief is seeking the court to have the matter dismissed for want of prosecution under Order 10 Rule 5 of the National Court Rules. However, the second aspect of the relief sought with the same outcome but relates to the non-compliance with Court Direction Order issued on 4th July 2014 by the Plaintiff/Respondent Cross Defendant pursuant to Rules 15 (1) a & (2) c of the Listings Rules 2005 to both parties.

17.	Whilst the submission by Defendant/Applicant Cross Claimant is sound in seeking a relief during the course of the prosecution of this matter by Plaintiff/Respondent Cross Defendant, however Defendant/Applicant Cross Claimant made no particular reference to non-compliance with particular directions that comprise of that court direction issued on 4th July 2014 therein, and thereby failed to articulate in particular the provision that forms the basis upon which the breach is contained under Rule 15 (1) a &(2) c of the Listings Rules 2005 of the Court. I am therefore placed in a very awkward position to appreciate and be able to see where the Plaintiff/Respondent Cross Defendant has failed to cause undue delay in prosecuting the matter as well as non-compliance under Rule 15 (1) a & (2) c of the Listings Rules 2005.

18.	I form this conclusion on the basis of the chronological history of events that went through the litigation of this matter as dictated by the conduct of each party in the proceedings that lead up to and including 29th August 2014. According to the Court Direction issued on 4th July 2014, this was the date that both parties were obliged to return for Pre-Trial Conference to set the matter down for trial, unless there were some unfinished matters as per the court order that a party may require immediate Courts attention. However, as it turns out on 29th August 2014 when parties return for Pre-Trial Conference, the court was face with the Motion by Defendant/Applicant Cross Claimant before the court seeking orders to dismiss the matter for want of prosecution and further seek orders to enter judgment in favour of the Defendant/Applicant Cross Claimant through its cross claim. What Defendant/Applicant Cross Claimant has done, in my view, has hijacked the process to its advantage, but chooses not to go through the normal trial proper to address legal issues raised in their respective defence in the substantive matter and defence in the cross claim. 

19.	The motion by Defendant/Applicant Cross Claimant to dismiss the proceedings for want of prosecution, is based on wrong premise and it is prejudicial to the Plaintiff, who returns on the 29th August 2014 to secure a trial date or to be told by the defence counsel by highlighting the particular orders for non-compliance of certain court directional orders and point out the detrimental effect that it will have on the progressing of the Defendant/Applicant Cross Claimant interest and allow the court to assess or consider the non-compliance issue on its own merit, whether matter be set for trial or otherwise, in the interest of justice.

20.	I am of the view, that the substantive nature of the case and in the interest of justice and justice of the case outweigh the application by the Defendant/Applicant Cross Claimant to dismiss the proceedings for want of prosecution. For example; the Plaintiff/Respondent Cross Defendant raises a defence that he does not owe the defendants any loan outstanding to date. If that is the case, and the records of loan repayment held by Plaintiff/Respondent Cross Defendant is correct, the Defendant/Applicant Cross Claimant's right to exercise mortgage options for recovery of property in question by default would be invalid. If, in the alternative that the Plaintiff/Respondent Cross Defendant does owe the Defendant/Respondent Cross Claimant, whether interest charge much higher than the initial lower interest rate charge after the expiry of the loan period by default, is the latter the higher interest rate charge is the right or correct rate according to the agreement per se. 

21.	These are few obvious legal issues ought to be tried during the trial proper, but will still remain unresolved because of the Defendant/Applicant Cross Claimant application under Order 10 Rule 5 of the National Court Rules. I therefore see fit in this case, in the interest of justice and the justice of the case so require that it is appropriate and fitting to use my discretional power to refuse the application by Defendant/Applicant Cross Claimant against the Plaintiff/Respondent Cross Defendant motion to dismiss the matter for want of prosecution pursuant to Order 10 Rule 5 of the National Court Rules and under Rule 15 (1) (a) & (2) (c) of Listings Rules 2005. 

22.	I arrive at the above conclusion because, whilst there has been a long delay in bringing the proceedings to trial, however, a balance must be struck as between the Plaintiff/Respondent Cross Defendant and the Defendant/Applicant Cross Claimant and in the end the Court must decide whether or not, in the balance, justice demands that the proceedings should be dismissed. (See Ronald Nicholas v Commonwealth New Guinea Timbers). Whilst this matter may have gone down the ADR track, for parties to attempt to negotiate a settlement of the controversy, consequent delays in reaching an agreement will not provide a basis for dismissal with prejudice. 

23.	If, however, a Plaintiff/Respondent Cross Defendant delays prosecution based on the mere possibilities of a settlement without demonstrating concrete efforts to achieve an agreement, a court may grant a dismissal upon Defendant/Applicant Cross Claimant's motion. Whilst on the converse, Defendant/Applicant Cross Claimant must be free of any responsibility for delay when he or she seeks dismissal for failure to prosecute. It is trite law that a lawsuit will not be dismissed if the defendant caused or contributed to the delay, such as if the individual leaves the province or country to avoid the trial. 

24.	In this case the matter was returnable on 29th August 2014 for Pre-Trial Conference (PTC), there is commitment by both parties to have the matter after Pre-Trial Conference and secure an agreed trial date. The directional court order to have the matter returnable on 29th August 2014, is not the basis for delay in prosecution by Plaintiff/Respondent Cross Defendant nor does it give the Defendant/Applicant Cross Claimant the right to seek dismissal for failure to prosecute the matter. Though, failure to comply with the directional court orders issued on 4th July 2014, as alleged by the Defendant/Applicant Cross Claimant, is subject to courts deliberation on merit and with reasons. But the date set for PTC is for the parties to come prepared and secure a trial date so that each party will have their day in court through a proper trial process to thrash out all issues highlighted in defence and on behalf of the Plaintiff/Respondent Cross Defendant.

25.	However, as it turned out this did not happen because defendant/applicant cross claimant applied to have the proceedings dismissed for want of prosecution, and the court having to use its discretional power, hereby refused the application. I therefore rule accordingly.

26.	The court is left with the outstanding issue as highlighted under issue No. 2. That is whether Defendant/Applicant Cross Claimant is entitling to its Cross Claim to recoup the loan outstanding owing by the Plaintiff/Respondent Cross Defendant. Since, I have ruled against the defendant/applicant cross claimant application to dismiss the proceedings for want of prosecution, it is only proper that the issue No. 2 will be addressed together with other relevant legal issues during the trial proper on a date to be fixed by the court.

27.	The application by Defendant/Applicant Cross Claimant against the Plaintiff/Respondent Cross Defendant to dismiss the matter for want of prosecution pursuant to Order 10 Rule 5 of the National Court Rules and under Rule 15 (1) (a) & (2) (c) of Listings Rules 2005, is hereby refused.

28.	The court orders accordingly.

ORDER

29.	The court accordingly makes the following orders:

1.	The application by Defendant/Applicant Cross Claimant to have the matter dismissed for want of prosecution under Order 10 Rule 5 of the National Court Rules and under Rule 15 (1) (a) & (2) (c) of Listings Rules 2005, is refused.

2.	The matter is returned to the Registry for listing in the next call-over for parties to secure a new trial date.

3.	The Cost of this proceeding be met by each party.

4.	The time for entry of these Orders be abridged to the time of settlement by the Registrar which shall take place forthwith.

________________________________________________________

Warner Shand Lawyers: Lawyer for the Plaintiff/Respondent Cross Defendant 
In-House Lawyer - National Development Bank Limited: Lawyer for the Defendant/Applicant Cross Claimant