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Hui v Bank of South Pacific [2019] PGNC 486; N8838 (10 April 2019)

N8838


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS 1550 of 2018


BETWEEN:
WESLEY HUI
First Plaintiff


AND:
JIMM TRADING
Second Plaintiff


AND:
BANK OF SOUTH PACIFIC
Defendant


Waigani: Thompson J
2019: 2nd & 10th April


MULTIPLICITY OF PROCEEDINGS – Res judicata – Issue estoppel – Abuse of process – Vexatious litigants.


Cases Cited:
Papua New Guinea Cases


Anderson Agiru v Electoral Commission (2002) SC 687
Arnold Amet v Peter Yama (2010) SC 1064
G R Logging v David Dotaona & Ors (2018) PGSC 34
Jacob Popuna & Anor v Ken Owa and Anor (2017) PGSC 3
John Hiwi v Rendle Rimua (2015) SC 1460
Michael Wilson v Clement Kuburan (2016) PGSC 7
Philip Takori v Simon Yagari & Ors (2008) SC 905
Smugglers Inn Resort Hotel Ltd v PNGBC (2006) PGNC 3
Telikom (PNG) Ltd v ICCC (2008) PGSC 5
Telikom (PNG) v Kila Rava and Ors (2018) PGSC 39
Waim No. 85 Ltd v The State (2015) SC 1405
Yama v PNGBC (2008) SC 922


Overseas Cases


Hunter v Chief Constable of the West Midlands Police and Ors [1981] UKHL 13; (1982) AC 529


Counsel


Mr S Wanis, for the Plaintiff.
Mr I Shepherd, for the Defendant


10th April, 2019


  1. THOMPSON J: The Defendant has applied to dismiss the proceedings, and for an order declaring the Plaintiffs as vexatious litigants in relation to the Defendant.
  2. The Plaintiffs oppose the application, on three grounds.
  3. First, the Plaintiffs submit that a defence of res judicata must be specifically pleaded in a defence, and rely on the dissenting decision of Injia CJ in Telikom (PNG) Ltd v ICCC (2008) PGSC 5. However, the majority in that case did not agree with that view. Further, in Waim No. 85 Ltd v The State (2015) SC 1405 and John Hiwi v Rendle Rimua (2015) SC 1460, the Supreme Court has held that there is no requirement for the filing of a defence before a Defendant can move to dismiss proceedings. This submission is rejected.
  4. Secondly, the Plaintiffs submit that Section 4 of the Underlying Law Act prevents the application of the doctrine of res judicata to the First Plaintiff’s claim for breaches of Constitutional rights, because it violates his constitutional rights, and it is not appropriate in the circumstances of PNG. They make an interesting argument that this is because people in PNG do not accept the concept of a final decision. This argument was not supported by evidence of custom or other evidence. But even if that was the case, it would mean that the entire judicial and court system would be inappropriate to the circumstances of PNG, because the role of the courts is to make final and binding decisions.
  5. The Supreme Court in Yama v PNGBC (2008) SC 922 and in G R Logging v David Dotaona & Ors (2018) PGSC 34 has determined that the principle of res judicata is recognized by the Constitution Schedule 2.8 (1) (d) as having been adopted as part of the underlying law of PNG. The Court’s subsequent application of the doctrine of res judicata is implicit acceptance that it is appropriate in the circumstances of PNG. This part of the Plaintiffs’ submission is rejected.
  6. The Plaintiff’s view of how res judicata is applied when considering a claim for compensation for breaches of constitutional rights, is misconceived. It is not a question of it infringing the First Plaintiff’s constitutional rights. Any person making such a claim for compensation is required to follow all prescribed processes and procedures and may be refused if the Plaintiff has not complied with all the requirements. Compliance with the requirements is not a violation of human rights. This part of the submission is rejected.

Res judicata


  1. Thirdly, the Plaintiffs submitted that the doctrine of res judicata was not applicable here, because none of the Plaintiffs’ previous proceedings had been dismissed on the merits. The Defendant submits that the issues raised in these proceedings are subject to the doctrines of both res judicata and issue estoppel. These issues have been covered in great detail in many cases, including Michael Wilson v Clement Kuburan (2016) PGSC 7, Jacob Popuna & Anor v Ken Owa and Anor (2017) PGSC 3, G R Logging v David Dotaona & Ors (2018) PGSC 34 and Telikom (PNG) v Kila Rava and Ors (2018) PGSC 39. It is therefore necessary to consider the various proceedings.
  2. A perusal of the relief sought in para 37 of the statement of claim here, shows that the Plaintiffs are claiming compensation for breaches of Constitutional rights, damages for loss of business, and general damages, arising out of the privatization of the PNGBC in 2001 and the subsequent sale of the Plaintiff’s property in 2002.
  3. The statement of claim sets out a chronology of events from the Plaintiff’s point of view, commencing from a mortgage taken out in 1999, to privatization of the PNGBC in 2001, the sale of the Second Defendant’s properties in 2002, and the liquidation of the Second Plaintiff in 2003. It refers to two sets of proceedings with associated Supreme Court appeals issued between the same parties in 2001, concerning the Defendant’s intention to sell the Plaintiff’s properties, and refers to some proceedings issued after the sale of the properties, in both the National and Supreme Courts.
  4. After this chronology, the Plaintiffs plead in para 34 (6) that because of the privatization of the PNGBC, the Defendant had no power to sell the Second Plaintiff’s property.
  5. As a result, the Plaintiff pleads in paras 35 and 36 that the Defendant breached the First Plaintiff’s rights under Section 37 of the Constitution, which is the right to the full protection of the law. He does not identify the subsequent subsections of Section 37 which he alleges were breached, and those subsections relate mainly to criminal processes, and not to civil matters. The First Plaintiff also pleads that the Defendant breached his rights under Section 53 of the Constitution, relating to protection from the unjust deprivation of property.
  6. The Defendant has produced affidavit evidence of numerous earlier proceedings which have been issued by the Plaintiffs against the Defendant since 2002. Those proceedings contain many references to earlier proceedings which had been issued by the Plaintiffs against the Defendant including WS 308 of 2001, and proceedings issued by the Defendant against the Plaintiffs including OS 655 of 2001. It appears from the references to these earlier proceedings, that they were determined on their merits against the Plaintiffs, and that they authorized the Defendant’s actions in selling the Plaintiff’s property. It was after the Plaintiffs failure in these proceedings to stop the Defendant from selling the Plaintiff’s property, that the subsequent proceedings were issued. Very briefly, they are as follows:

OS 2 of 2002 – Second Plaintiff v Privatization Commission, seeking to restrain the PNGBC from exercising its rights to sell the Second Plaintiff’s property,

WS 1580 of 2002 – First Plaintiff v Defendant, claiming damages for loss of property and business and general damages, arising out of the privatization of the PNGBC and subsequent sale of the Second Plaintiff’s property in 2002.

WS 58 of 2003 – First Plaintiff v Defendant, claiming damages for loss of property and business and general damages, arising out of the privatization of the PNGBC and subsequent sale of the Second Plaintiff’s property in 2002.

WS 145 of 2003 - Second Plaintiff v Defendant, claiming damages for loss of property and business and general damages, following the privatization of the PNGBC and subsequent sale of the Second Defendant’s property in 2002.

WS 322 of 2004 - Beecroft No. 51 Ltd v Defendant, claiming damages for loss of property and business on premises rented from the Second Plaintiff, and general damages, arising out of the sale of the Second Plaintiff’s property in 2002.

WS 1274 of 2005 – Second Plaintiff v Defendant, claiming damages for loss of property and of business and general damages, arising out of the privatization of the PNGBC and subsequent sale of the Second Plaintiffs property in 2002.

MP (HR) 1 of 2015 – First Plaintiff v Defendant, claiming damages for loss of property and business and compensation for breaches of the First Plaintiff’s Constitutional rights under Sections 36, 41, 42, 44, 53, 57, 58 and 59, and breaches of the Privatization Act, arising out of the privatization of the PNGBC and subsequent sale of the First Plaintiff’s property in 2002.

WS 1262 of 2015 – First and Second Plaintiffs v Defendant, claiming general damages arising out of the privatization of the PNGBC and the sale of the First and Second Plaintiff’s property in 2002.

WS 1009 of 2016 - First and Second Plaintiffs v Defendant, claiming damages arising out of Court orders made in relation to the sale of the First and Second Plaintiffs property in 2002.

WS 1550 of 2018 - First and Second Plaintiffs v Defendant, claiming damages for loss of property and business and general damages, and damages for breach of Constitutional rights under Sections 37 and 53 arising out of the privatization of the PNGBC and subsequent sale of the First and Second Plaintiff’s property in 2002.

  1. Each of the earlier matters were dismissed, except for WS 1009 of 2016 which was discontinued with costs. A number of the matters involved numerous appeals to the Supreme Court on interlocutory and final decisions, including on SCA 110 of 2001, in which the Court dismissed the Second Plaintiff’s application to restrain the Defendant from taking the Second Plaintiff’s property, and ordered the Sheriff to proceed, SCA 8 of 2002, SCM 4 of 2003, and SCA 102 of 2017. Each of the Plaintiff’s appeals were dismissed.
  2. The claims raised in the present proceedings involve the same parties, and make the same claims for damages for loss of property and business and general damages, and compensation for breaches of Constitutional rights, as in the earlier proceedings, and all arise out of the same facts, namely, the privatization of the PNGBC in 2001 and subsequent sale of the Plaintiff’s property in 2002.
  3. In the earlier decisions on WS 145 of 2003 reported as N3174, and on WS 1274 of 2005 delivered on 2 June 2017, Kandakasi J held that it is sufficient for res judicata to arise if the parties are substantially the same, the issues are substantially the same, the decision or judgment was determined by a Court of competent jurisdiction, and the decision or judgment was final. He said that he had no hesitation in finding that the proceedings gave rise to the application of both res judicata and issue estoppel.
  4. In the present case, there is no doubt that the parties are the same, the issues are the same, the previous proceedings were determined by Courts of competent jurisdiction, and the decisions were final. However, although copies of each of the findings in each of the earlier decisions have not been produced, it can be inferred from the documents which have been produced, that the majority of the proceedings since 2002 were dismissed for failing to disclose a cause of action, or being an abuse of process, or for want of prosecution, and so were not dismissed on their merits.
  5. It is also possible to infer from the documents which have been presented, that the proceedings which were issued before the sale of the property in 2002, on WS 308 of 2001 and OS 655 of 2001, were determined on the merits, against the Plaintiffs. The central issues arising out of the privatization of the PNGBC and sale of the Plaintiff’s properties may have been determined on their merits, against the Plaintiffs. However, as the decisions in those cases are not in evidence, I am unable to find conclusively that they were determined on their merits so as to now attract the doctrine of res judicata.

Issue Estoppel

  1. In relation to issue estoppel, in the two earlier proceedings determined by Kandakasi J, the Court made a number of findings of fact and law against the Plaintiffs, including that the Supreme Court on 12 July 2002 dismissed the Plaintiff’s application for an injunction to restrain the Defendant from executing a writ of possession and directed the Sheriff to execute the writ of possession, which was subsequently validly done (para 12 in N3174), that the seizure of the other goods and assets of the Second Plaintiff was done under the Defendant’s registered charge (para 26), that the Defendant exercised its powers and rights under the mortgages and charges and it was clear that there was no impediment to it taking those steps (except for the order of Sakora J which was set aside) (para 28), that the Defendant proceeded to exercise its powers under its registered mortgage and charges with the approval and endorsement of the Supreme Court (para 31), that the Second Plaintiff’s claim that the Defendant did not have any authority to execute the writ of possession is baseless (para 43), and the dismissal of the Plaintiff’s appeal on SCA 110 of 2001 effectively ended any right in the Second Plaintiff to challenge the Defendant’s power and right to sell the property (para 51).
  2. These are the same issues of fact and law raised in the present proceedings. As they have already been determined in those earlier proceedings, an issue estoppel may arise. As set out in the G R Logging case, it will arise when, for the purpose of some other claim, a state of fact or law is alleged, the existence of which was decided by the judgment or order of a Court of competent jurisdiction. A party cannot then in subsequent proceedings, seek to raise the issue of fact or law which had previously been determined in the earlier proceedings.
  3. However, I do not express a final opinion on the application of res judicata or issue estoppel, as it is not necessary in order to determine the Defendant’s application.

Abuse of Process


  1. The application under Order 12 Rule 40 is that the proceedings are frivolous, vexatious and an abuse of process.
  2. The cases on summary dismissal show that the law is well established. The Court has an inherent jurisdiction to “watch over and intervene in their processes and procedures to ensure that they are not abused” – see Arnold Amet v Peter Yama (2010) SC 1064, Philip Takori v Simon Yagari & Ors (2008) SC 905 and Telikom v ICCC & Digicel (2008) SC 908. The discretion to summarily dismiss “... can be exercised only in cases that are plain and obvious so that the ... judge can say at once that the statement of claim ... as it stands is insufficient, even if proved, to entitle the Plaintiff... to what he asks for.”
  3. All the cases are clear that there must be finality in litigation. In the Telikom case, the Supreme Court adopted the statement in Hunter v Chief Constable of the West Midlands Police and Ors [1981] UKHL 13; (1982) AC 529, whereby any Court has an inherent power “... to prevent misuse of its procedures in a way which, although not inconsistent with the literal application of the procedural rules, would nevertheless be manifestly unfair to a party ... or would otherwise bring the administration of justice into disrepute among right-thinking people.”
  4. In Jacob Popuna’s case, the Court held that the dismissal of an appeal for want of prosecution by the Supreme Court, is a final determination, and an application for review raising the same grounds as in the appeal, amounts to an abuse of process, and it was immaterial that the appeal was summarily dismissed and not determined on its merits.
  5. In the Telikom case, the Court found that an abuse of process will exist when the Plaintiff loses one set of proceedings and comes back to Court for a “second bite at the cherry” to prosecute the same cause of action.
  6. In Michael Wilson’s case, the Court found that it has a duty to protect its processes from being abused, which must be decided against all the facts and circumstances of the case.
  7. A person commencing a multiplicity of proceedings, commits an abuse of process unless very good reasons are shown – See Telikom PNG Ltd v Independent Consumer and Competition Commission (2008) SC 906.
  8. There has clearly been a multiplicity of proceedings by the Plaintiffs against the Defendant. The Court must ensure that a multiplicity of proceedings is not commenced by unsuccessful litigants. Having selected one mode of proceeding and having failed to obtain a remedy, a litigant cannot generally be entitled to then institute an alternative proceeding seeking the same remedy that was denied in the earlier proceeding – See Anderson Agiru v Electoral Commission (2002) SC 687.
  9. The fact that these proceedings are by the same parties, involving the same issues of either damages for the sale of the Plaintiff’s property and/or compensation for breaches of constitutional rights as in at least 10 earlier proceedings, all of which have been dismissed, is sufficient per se to show that these proceedings are frivolous and vexatious.
  10. Even if the dismissal of the earlier proceedings did not bar the Plaintiffs from bringing fresh proceedings, those proceedings must be valid proceedings which disclose a reasonable cause of action. They cannot be simply repeats of the earlier unsuccessful proceedings, as this would amount to an abuse of process.
  11. The present position is that the First and Second Plaintiffs have not succeeded in any of their earlier proceedings claiming damages for loss of property and business, and for general damages, arising out of the privatization of the PNGBC in 2001 and the sale of the Plaintiff’s property in 2002. Claims for such damages are not claims for equitable relief, and any such fresh claims are long since time-barred by s. 16 of the Frauds and Limitations Act.
  12. Although the Plaintiffs may have the literal right under the Rules to bring fresh proceedings after the dismissal of earlier proceedings, it is manifestly unfair to the Defendant to allow this to happen repeatedly over a period of nearly twenty years. This is the sort of conduct which brings the administration of justice into disrepute among right-thinking people.
  13. The overall facts and circumstances show that it is vexatious and harassment to continue to bring proceedings which force the Defendant to maintain its records far beyond the legal requirement of six or seven years, force the Defendant to defend proceedings when relevant staff have left their employment or died, as has happened here, and force the Defendant to incur considerable expense in defending the initial proceedings, the interlocutory applications, the appeals and slip rules involved in those repeated proceedings.
  14. In the various proceedings issued before 2002, the Plaintiffs were not successful on the core issue which gave rise to the proceedings since 2002, namely, the Defendant’s entitlement to sell the Plaintiff’s property. Despite this, the Plaintiffs have issued at least 10 proceedings against the Defendant since then, and when the National Court has found against them, they have appealed to the Supreme Court. When the Supreme Court has found against them, they have simply issued fresh proceedings in the National Court.
  15. These latest proceedings contain the similar or same pleadings which have been found previously to fail to disclose a good cause of action. Having considered the statement of claim here, I find that it also fails to disclose a reasonable cause of action. The pleadings are based on matters which occurred in 2001 and 2002, and which are therefore time-barred by statute. The proceedings cannot succeed and are bound to again fail. To repeatedly bring such proceedings is vexatious, and I find that these proceedings are an abuse of process.

Vexatious Litigants


  1. The Defendant next applies for the Plaintiffs to be declared vexatious litigants in relation to the Defendant. The principles relating to vexatious litigants are fully set out in Smugglers Inn Resort Hotel Ltd v PNGBC (2006) PGNC 3. They are:
  2. Having regard to the brief chronology of proceedings set out earlier, and to the findings set out earlier in relation to abuse of process, the answer to each of the four questions setting out each of the above four principles, is “yes”. Since 2002, the litigants have issued proceedings and sued the same Defendant repeatedly, in reliance on essentially the same causes of action, which have little or no basis in law and which are now time-barred, have issued numerous challenges to earlier decisions on appeal, and the combined effect is to have subjected the Defendant to disproportionate inconvenience, harassment and expense.
  3. In the Smugglers Inn Resort Hotel case, the Court refused to declare the Plaintiffs vexatious litigants, as only two proceedings had been struck out, and since they were struck out, the litigants had given no indication of commencing further similar proceedings.
  4. In the present case, since their first proceedings were struck out or dismissed, the litigants have issued another 9 proceedings, and this is a clear indication that unless prevented by the Court, they will continue to issue further similar proceedings against the Defendant.
  5. In the circumstances, a vexatious litigant order is necessary to prevent the commencement of further vexatious proceedings unless the litigants first obtain leave of the Court, by showing that they have an arguable case.

Conclusions


  1. For the above reasons, I make the following orders:

________________________________________________________________
Morgens Lawyers: Lawyer for the Plaintiff
Ashurst Lawyers: Lawyer for the Defendant

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