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Ume v Watson [2020] PGNC 407; N8669 (30 November 2020)

N8669


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS No. 1530 OF 2019 (CCI)


BETWEEN:
PAUL UME
First Plaintiff


AND:
JONAH LUMBUWEH
Second Plaintiff


AND:
DAVID HAGARUAH
Third Plaintiff


AND:
SALLY WATSON
First Defendant


AND:
ARIO INVESTMENT LIMITED
Second Defendant


AND:
ZOGI DISTRIBUTORS LIMITED
Third Defendant


AND:
INVESTMENT PROMOTION AUTHORITY
Fourth Defendant


Waigani: Gavara-Nanu J
2020: 2nd September & 30th November


PRACTICE & PROCEDURE - Application to dismiss proceeding – Statement of claim - Pleadings - Whether reasonable cause of action disclosed - Whether proceeding frivolous and vexatious - National Court Rules; Order 12 r 40 – Estoppel by res judicata – Whether proceeding statute-barred - Frauds & Limitations Act, 1988; ss. 16, 17 & 18.


PRACTICE & PROCEDURE – Statement of claim – Fraud – Tort – Memorandum of understanding – Contents thereof – Intention of the parties - Question of fact – Effect thereof.


PRACTICE & PROCEDURE – Parties – Parties having a serious fall out - Statement of claim – Improper motive – Bad faith – Malice - Abuse of process.


Cases Cites:
Papua New Guinea Cases


Farid Nicholas Wakim v. Sobu Adachi Co. Ltd (1973) FC48
Jixing Industries Limited v. Aitape Metropolitan Forest Investment Limited (2013) SC1294
Jubilee Hambru v. Michael Baur & Ors (2007) N3193
Memkitts Investments Ltd v. Paul Depo Aikal (2019) N8053
Michael Newell Wilson v. Clement Kuburam (2016) SC1489
Mt. Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007
NCDC v. Geoffery Vaki (2015) N5956
The Papua Club Inc. Nusaum Holdings Limited & Ors (2004) N2603
Waigani Heights Development Limited v. Benjamin Mul & Ors (2018) N1762
William Maki v. Michael Pundia and PNG Motors [1993] PNGLR 337


Overseas Cases


Bater v. Bater [1950] 2 All ER 458
Carl-Zeiss-Stiftung v. Rayner & Keeler Ltd (No.2) [1966] 2 All ER 536
Esso Petroleum C. Ltd v. Southport Corporation [1956] AC 218
Neat Holdings Pty Ltd v. Karajan Holdings Pty Ltd (1992) ALJR 170
Ord v. Ord [1923] 2 KB 423
Palmer v Guadagni [1906] UKLawRpCh 114; [1906] 2 Ch. 494


Counsel:


R. Mek, for the Plaintiffs
E. Rere, for the Defendants


30th November, 2020


  1. GAVARA-NANU J: Pursuant to the notice of motion filed on 6 July, 2020, the defendants (applicants) seek orders that pursuant to Order 12 r 40 (1) of the National Court Rules (NCR); s. 16 (1) (a) and (2) of the Frauds and Limitations Act, 1988 (F&L, Act) and the inherent powers of the Court, this proceeding be dismissed for:

(a) being statute-barred;
(b) disclosing no reasonable cause of action;
(c) being frivolous and vexatious;
(d) being an abuse of process;
(d) Costs; and
(e) any further orders the Court may deem fit.


2. The determinative relief are sought in (a) to (c), relief sought in (d) and (e) are consequential upon any of the relief sought in (a) to (c) being granted.


3. The proceeding can be dismissed summarily if any one of the determinative relief sought in (a) to (c) is shown by the applicants.


4. The relief sought in (a) is based on s. 16 of the F & L Act, the application of which is subject to ss. 17 and 18. All these three provisions are reproduced below for ease of reference:


PART III—LIMITATION PERIODS FOR ACTIONS IN CONTRACT, TORT, ETC.


16. Limitation of actions in contract, tort, etc.
(1) Subject to Sections 17 and 18, an action—

(a) that is founded on simple contract or on tort; or
(b) to enforce a recognizance; or

(c) to enforce an award, where the submission is not by an instrument under seal; or

(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

(2) An action for an account shall not be brought in respect of any matter which arose more than six years before the commencement of the action.

(3) Subject to Subsection (4), an action upon a specialty shall not be brought after the expiration of twelve years commencing on the date when the cause of action accrued.

(4) Nothing contained in Subsection (3) shall be construed as affecting any action for which a period of limitation is specified by any other Act, and that subsection shall be read and construed accordingly.

(5) An action shall not be brought upon any judgment after the expiration of twelve years commencing on the date when the judgment became enforceable.

(6) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years commencing on the date when the interest became due.

(7) Subject to Subsection (8), an action to recover any penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of any enactment shall not be brought after the expiration of two years commencing on the date when the cause of action accrued.

(8) For the purpose of Subsection (7) the word "penalty" does not include a fine to which any person is liable on conviction of a criminal offence.

  1. Actions within the admiralty jurisdiction of the National Court.

(1) Subject to Subsection (2), Section 16 does not apply to any cause of action—
(a) that is within the admiralty jurisdiction of the National Court; and
(b) that is enforceable in rem.

(2) Notwithstanding Subsection (1), Section 16(1) applies to, and in relation to, an action to recover seamen's wages.
18. Claims for specific performance, etc.

Section 16 does not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief.


5. The relief sought in (b) to (c) are based on Order 12 r 40 of the NCR, which is in these terms:


40. Frivolity, etc


(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings-

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of process of the Court, the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under Sub-rule (1).


6. This case has a long history going back to the late 70s when the father of the first defendant, late James Douglas Watson (Mr. Watson), formerly a British citizen arrived in Goroka, Eastern Highlands Province and settled at Arekaiufa village in the Unggai Bena District. Mr. Watson was given a village girl to marry by the village elders, but the girl could not bear children, so the village elders decided to give another girl to him as his second wife. From the second wife, Mr. Watson had three children, the first defendant being the eldest.


7. Mr. Watson died on 15 September, 2010. On 7 February, 2011, the first defendant was granted probate as the sole Executor and Trustee of her late father’s estate.


8. Mr. Watson was a successful businessman, having incorporated a number of companies with their subsidiaries to drive his businesses. Locals were involved in the businesses in various capacities.


9. The three plaintiffs claim to have been directly involved in formal capacities as directors and or shareholders in the companies Mr. Watson incorporated in the 90s.


10. The plaintiffs who also claim to be relatives of the second wife have also placed reliance on a Memorandum of Understanding (MOU), signed by Mr. Watson and the second plaintiff on behalf of their respective companies, namely Pacific Fruit Pty Ltd and K.K.D; on 9 June, 1993, with the aim of working together. Pursuant to the MOU, the second plaintiff was engaged as a manager.


11. Towards the later years of Mr. Watson’s life and before his passing, the relationship between Mr. Watson and the plaintiffs soured to such an extent that the plaintiffs took out a court proceeding against Mr. Watson in O.S No. 160 of 2009 in which the plaintiffs questioned the validity of Mr. Watson’s Papua New Guinea citizenship. In an earlier proceeding in OS No. 484 of 2008, the first and the third plaintiffs with others took Mr. Watson and his company, New Guinea Fruit Company Pty Ltd to court, claiming they were the rightful owners of Mr. Watson’s businesses, including businesses ran by Zogi Distributors Ltd, a subsidiary company.


12. After the passing of Mr. Watson, another court proceeding was instituted this time solely by the second plaintiff, Jonah Lumbuweh Trading as Kuru Katope Dealers (K.K.D). The proceeding was against the first defendant, New Guinea Fruit Company Pty Ltd and Zogi Distributors Ltd in WS No. 201 of 2012. In that proceeding, the second plaintiff claimed ownership of the defendants' businesses. The claim was partly based on the above MOU.


13. The claims in proceeding WS No. 201 of 2012, were tried before Justice Yagi, in Goroka. His Honour in his decision which was delivered on 25 August, 2016, dismissed the proceeding for being statute-barred. Following excerpts of his Honour's judgment are pertinent:


“In my opinion the claim by the plaintiff is for payment of the shares and the profits in the joint venture business and therefore constitutes a claim of account. For this reason, s. 16 (2) applies which renders the claim statute barred.


In the alternative, the claim is based on a simple contract. The action was commenced after the expiration of the 6 years time limit and therefore it is also time barred by virtue of s. 16 (1) (a).


In the circumstances, the claim is frivolous and vexatious and moreover is an abuse of process. It is trite law that this Court must protect its processes from being abused. The proceeding is therefore dismissed with costs”.


14. Mr. Rere of counsel for the applicants submitted that the plaintiffs’ claims are statute-barred because they are based on tort and simple contract under s.16 (1) (a) and (2) of F and L Act. He argued that the plaintiffs’ purported cause of action arose more than six years before this proceeding was instituted on 2 December, 2019, as such the claims are statute-barred and should be dismissed.


15. The plaintiffs allege fraud against the applicants claiming they deceitfully transferred and diverted assets and profits owned and made by the businesses to themselves, thus depriving the plaintiffs of such benefits. The plaintiffs claim monetary compensation based on their claim that they were business partners with Mr. Watson. This claim is based partly on the MOU.


16. In regard to the first defendant, the plaintiffs claim she fraudulently appointed herself as the sole director of the companies operated previously by Mr. Watson and deceitfully assumed ownership of all the assets and profits of the companies of which they claim to be directors and shareholders.


17. Mr. Mek of counsel for the plaintiffs on the other hand submitted that the plaintiffs’ claims are not statute-barred under s.16 of F & L Act, because the plaintiffs are claiming equitable relief, and are exempted from being statute-barred under s.18 of F & L Act.


18. Mr. Mek further submitted that plaintiffs are seeking relief - “like restitution on the basis of quantum meruit and or unjust enrichment”. The plaintiffs also seek restitution and monetary compensation against the defendants for enriching themselves at their expense, and seek orders that the first defendant replenish the monies she misappropriated in money laundering. The plaintiffs also seek an order that the first defendant’s appointment as the director of New Guinea Fruit Company Pty Ltd and its subsidiary companies like Zogi Distributors Ltd is null and void. They also seek compensation for anxiety, hardship and inconvenience allegedly caused to them by late Mr. Watson and the first defendant.


19. There is no dispute that the plaintiffs’ claims are based on fraud (tort). Paragraph 13 of the Statement of Claim pleads the purported particulars of fraud alleged against Mr. Watson before his death. It is convenient at this juncture to state that, given the fact that Mr. Watson passed away on 15 September, 2010, these, and all other claims against him by the plaintiffs are clearly statute-barred as they happened well over six years before 2 December, 2019.


20. The end result is that all the claims against Mr. Watson are frivolous and vexatious. See, Memkitts Investments Ltd v. Paul Depo Aikal (2019) N8053; Waigani Heights Development Limited v. Benjamin Mul & Ors (2018) N1762 and Mt. Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007.


21. The claims against the first defendant are also based on fraud, the purported particulars of which are also pleaded in paragraph 16 of the Statement of Claim. Looking at the pleadings, they are very general. The pleadings do not specify and show clearly the nature of the alleged fraudulent activities by the defendants and when they occurred. The plaintiffs have also not pleaded the particulars of the alleged money laundering and unjust enrichment by the first defendant. Also, although the plaintiffs have alleged that the first defendant had forged late Mr. Watson’s signature to effect changes to the IPA records and the bank accounts for New Guinea Fruit Company Pty Ltd and Zogi Distributors Ltd, they have not pleaded the particulars of the alleged forgery by the first defendant. The plaintiff have also not pleaded the particulars of other alleged fraudulent dealings by the first defendant in regard to the companies in which the plaintiffs claim to be shareholders and or directors.


22. Order 8 r 30 of the NCR is very specific in its requirements in regard to pleading fraud. The requirements make it mandatory for a party alleging fraud to plead particulars of fraud. The Rule is in these terms:


30. Fraud, etc.


A party pleading shall give particulars of any fraud, misrepresentation, breach of trust, wilful default or undue influence on which he relies.


23. The requirements of this Rule were discussed by Woods J, in William Maki v. Michael Pundia and PNG Motors [1993] PNGLR 337. His Honour among others said:


“An allegation of fraud is a very serious allegation, and the courts have required strict adherence to requirements for pleadings in such cases. Courts have never allowed general allegations of fraud. Courts have required that a person pleading fraud should set out facts, matters and circumstances relied on to show that the party charged had or was actuated by a fraudulent intention. The acts alleged to be fraudulent must be stated fully and precisely with full particulars. It is not enough just to say that the person lied or swore a false affidavit. The facts, matters and circumstances which make such statements lies must be particularized.

....Surely, the rule is no such hardship. If the plaintiffs know anything, then they can and should plead it”. (My underlining).


24. In Neat Holdings Pty Ltd v. Karajan Holdings Pty Ltd (1992) ALJR 170, the High Court of Australia said clear and cogent or strict proof was necessary - “where so serious a matter as fraud is to be found”.


25. Similar observations were made by Lord Denning in Bater v. Bater [1950] 2 All ER 458, where his Lordship said:


“...A civil court when considering a charge of fraud will naturally require for itself a higher degree of probability than that which it would require when asking if negligence is established. It does not adopt so high a degree as a criminal court even when considering a charge of a criminal nature, but still it does require a degree of probability which is commensurate with the occasion”.


26. These principles were discussed extensively in The Papua Club Inc. v. Nusaum Holdings Limited & Ors (2004) N2603.


27. It is an established principle that pleadings must be clear, precise and unambiguous so that the party against whom allegations are made knows what to meet and give the party opportunity to prepare his case to meet those allegations. The pleadings should define with clarity and precision the issues for trial. The pleadings should have two objectives. First is to apprise the opposing party of what allegations or claims to meet. Second is to apprise the court of the issues for trial. See, Jubilee Hambru v. Michael Baur & Ors (2007) N3193. The pleadings should also simplify and narrow down the issues and thereby diminish the expenses for the court and the parties and minimize delay, especially where oral testimony is to be given. The properly prepared pleadings should give fair and sufficient notice of the issues to the opposing party and thereby avoid taking the opposing party by surprise. It is also significant to bear in mind that pleadings are not to be treated as a game of skill between advocates. The way and the manner in which pleadings are framed should ensure that the parties understand the issues, and more significantly, apprise the court fully of the issues for trial. See, Palmer v. Guadagni [1906] UKLawRpCh 114; [1906] 2 Ch. 494 and Esso Petroleum C. Ltd v. Southport Corporation [1956] A.C. 218.


28. The pleadings in regard to alleged fraud against the defendants in my view lack clarity and precision. They are ambiguous and are very general, the end result is that the pleadings do not disclose a reasonable cause or causes of action. The proceeding is therefore frivolous and vexatious. See, Memkitts Investments Limited v. Paul Depo Aikal & Ors (supra).


29. I also find that the claims raised issues which are res judicata because these are same issues which were raised and disposed of in proceedings OS No. 484 of 2008 and WS No. 201 of 2012. According to the affidavit of the first plaintiff, the plaintiffs discontinued proceeding OS No. 484 of 2008 for which they were ordered by the court to pay the defendants’ costs. The defendants in that case were, Mr. Watson and New Guinea Fruit Company Pty Ltd. All the issues were dealt with and disposed of by the court by ordering costs against the plaintiffs.


30. In regard to proceeding WS No. 201 of 2012, same issues as those in proceedings OS No. 484 of 2008 were raised and tried before Justice Yagi in Goroka. His Honour in a written decision which is Annexure “H” to the first defendant’s affidavit, dismissed all the claims for being statute-barred. In that proceeding the defendants were the first defendant, Ario Investment Limited, Zogi Distributors Ltd and Investment Promotion Authority (IPA). It is obvious that IPA was joined as a defendant because it was privy to the first three defendants especially in respect of the incorporation of the above two defendant companies by the defendants. In his decision, the learned judge also discussed the MOU, which the plaintiffs relied on for their claims for monetary compensation. His Honour found that the MOU was statute-barred. The same issues are raised in this proceeding.


31. I find the description given to res judicata in the 16th Volume of the Halsbury's Laws of England appealing and pertinent. It describes res judicata this way:


“The most usual manner in which questions of estoppel have arisen on judgments inter partes has been where the defendant in an action raised a defence of res judicata, which he could do where former proceedings for the same cause of action by the same plaintiff had resulted in the defendant’s favour, by pleading the former judgment by way of estoppel. In order to support that defence it was necessary to show that the subject matter in dispute was the same (namely that everything that was in controversy in the second suit as the foundation of the claim for relief was also in controversy or open to controversy in the first suit), that it came in question before a court of competent jurisdiction, and that the result was conclusive so as to bind every other court.


Where res judicata is pleaded by way of estoppel to an entire cause of action, rather than to a single matter in issue, it amounts to an allegation that the whole legal rights and obligations of the parties are concluded by the earlier judgment, which may have involved the determination of the question of law as well as findings of fact. To decide what questions of law and fact were determined in the earlier judgment the court is entitled to look at the judge’s reasons for his decision and his notes of the evidence, and is not restricted to the record, but, as a general rule, the judge’s reasons cannot be looked at for the purpose of excluding from the scope of his formal order any matter which, according to the issues raised on the pleadings and the terms of the order itself, is included in it”.


32. In Ord v. Ord [1923] 2 KB 432 at 439, Lush J in discussing res judicata at 439 said:


“There is no difficulty in seeing what, in its strict and proper sense, the plea of res judicata means. The words “res judicata” explain themselves. If the res – the thing actually and directly in dispute-has been already adjudicated upon, of course by a competent court, it cannot be litigated again”.


33. Then Lord Guest in Carl-Zeiss-Stiftung v. Rayner & Keeler Ltd (No.2) [19660 2 All ER 536 in expressing the same principle said:


“...The rule of estoppel by res judicata, which is a rule of evidence, is that where a final decision has been pronounced by a judicial tribunal of competent jurisdiction over the parties to and the subject-matter of the litigation, any party or privy to such litigation as against any other party or privy is estopped in any subsequent litigation from disputing or questioning such decision on the merits”.


34. The plaintiffs' claims are res judicata because the issues and the parties in this proceeding are same as those in the above two proceedings.


35. Thus, having regard to the above principles, in my view to raise a defence of estoppel by res judicata, the person raising it must show that the issue for litigation had already been disposed of by an earlier decision of a tribunal or court of competent jurisdiction. From this, the following requirements emerge as the criteria to be met for a defence of estoppel by res judicata:


i. the earlier decision was judicial; and

ii. the decision was announced or by order of the court; and

  1. the decision or order was by a tribunal or a court of competent jurisdiction over the same parties and the same subject-matter or issues; and
  2. the decision was final and disposed of all the issues once and for all; and
  3. the decision determined the same issues or subject-matter as those raised in the later litigation; and
  4. the parties in the later litigation were parties or privy to the parties in the previous litigation, the decision of which had disposed of the issues being raised in the later litigation.

36. All the above requirements or tests are met in this case, in that the issues in this case are same as those raised in proceedings OS 484 of 2008 and WS No. 201 of 2012. The parties in this proceeding are same as those in proceedings OS No. 484 of 2008 and WS No. 201 of 2012 either personally or by privy. This proceeding is therefore frivolous and vexatious.


37. I also find that this proceeding is an abuse of process. In Michael Newell Wilson v. Clement Kuburam (2016) SC 1489, I gave a broader and perhaps more embracing description of what may constitute abuse of process:


"The types of abuses of process may vary from case to case but to establish an abuse of process there must be evidence showing that the processes of the court have been improperly used; or have been used for an improper purpose; or have been used in an improper way; or that such abuse of process have resulted in the right of the other party being denied, defeated or prejudiced: National Executive Council v. Public Employees Association [1993] PNGLR 264 and The State v. Peter Painke [1976] PNGLR 210".


38. In making this observation, I find the following background facts pertinent in so far as the plaintiffs have, to my mind, instituted this proceeding with improper and ulterior motives. According to the first plaintiff, tensions between Mr. Watson and the plaintiffs started to "build up" in early 2009, thus resulting in the plaintiffs instituting proceeding OS No. 160 of 2009, in which the plaintiffs challenged the validity of Mr. Watson’s PNG citizenship and his work permit. The then Minister for Foreign Affairs and Trade; then Secretary for Foreign Affairs and Trade; then Director for Immigration and Citizenship, the State and Mr. Watson were named as defendants in that proceeding. But two years before that, Mr. Watson instituted proceeding WS No. 1309 of 2007, against the first plaintiff. Mr. Watson claimed K100,000.00 in damages against the first plaintiff for defamation after the first plaintiff who at the time was employed at the National Court in Goroka, circulated a letter to the public accusing Mr. Watson of working and living illegally in PNG. The first plaintiff deposes in his affidavit that the proceeding was never prosecuted by Mr. Watson, he claims Mr. Watson only wanted to intimidate him.


39. The plaintiffs accused Mr. Watson of doing things for himself and claimed that they were not rewarded or compensated for what they gave to Mr. Watson’s businesses. When Mr. Watson passed on, the plaintiffs thought and expected Mr. Watson’s children including the first defendant to or would reward them and include them in their businesses but they did not and that disappointed the plaintiffs. Notably, sometime after Mr. Watson's passing, the plaintiffs also asked the first defendant to administer Mr. Watson’s estate but the first defendant refused.


40. There is undisputed evidence that Mr. Watson was granted PNG citizenship on 9 August, 1989. The plaintiffs did not question Mr. Watson’s PNG citizenship status until 2009, about 20 years later, which to my mind was motivated by the fallout they had with Mr. Watson. I am also of the view that proceeding OS No. 484 of 2008, in which the plaintiffs made similar complaints against Mr. Watson was motivated by their fallout with Mr. Watson and their growing resentment and dislike for Mr. Watson. I also have no doubt that WS No. 201 of 2012 was similarly actuated by the ill feelings and malice the plaintiffs had towards Mr. Watson. They were only expressing and couching their grievances differently in each proceeding they instituted. Same can be said about this proceeding. It was actuated by the first defendant’s decision to do things herself, and not to involve them, which was perfectly valid and lawful as the sole Executor and Trustee of her late father's estate.


41. What the plaintiffs did not seem to understand was that pursuant to the grant of probate to the first defendant, she had every right and authority to administer the estate of her father according to her father’s will. The plaintiffs’ ignorance in this regard appears obvious from their request to the first defendant to administer Mr. Watson’s estate.


42. To my mind, it is plain enough that the plaintiffs are using this proceeding to continue to express their disappointments towards Mr. Watson and now the first defendant. Thus, the proceeding is clearly actuated by improper motive and malice. This amounts to an improper use of the court processes and it is a clear abuse of process. See, Michael Newell Wilson v. Clement Kuburam (supra).


43. The plaintiffs also placed reliance on the MOU. Generally speaking, an MOU by its very nature is no more than understandings of certain things by those who make it. Whether a MOU is binding or not will depend on its terms, this would be a question of fact. See, Jixing Industries Limited v. Aitape Metropolitan Forest Investment Limited (2013) SC 1294, and NCDC v. Geoffery Vaki (2015) N5956. The terms of an MOU should disclose the intention of those who made it. If the terms show that the MOU is intended to be binding then the terms of the MOU will also give rise to rights and obligations for the parties under the MOU.


44. Having regard to these principles, whether the MOU in this case was binding or not also depended on its terms. As I said, generally speaking it was no more than an understanding between Mr. Watson and the second plaintiff about certain things and to work together in their business. In that sense, it was more of a working arrangement for them See, Farid Nicholas Wakim v. Sobu Adachi Co. Ltd (1973) FC48 (A Pre-Independence Full Court Judgment- Delivered 22 May, 1973) and Jixing Industries Limited v. Aitape Metropolitan Forest Investment Limited (supra). That said, it was possible that based on the MOU, legally binding agreements could subsequently be entered into by the parties. For example, contracts of employment or lease of equipment or machinery and so on. See, Farid Nicholas Wakim v. Sobu Adachi Co. Ltd (supra).


45. But assuming the terms of the MOU were such that it was meant to have a binding effect, as Justice Yagi found in proceeding WS 201 of 2012, again as found by his Honour it still would not assist the plaintiffs’ cause because the MOU is statute-barred. Furthermore, by law the MOU could not have a perpetual effect. No form of agreement can be made perpetual or be made open-ended. See, The Papua Club Inc. v. Nusaum Holdings Limited (supra). In this case a company which was part of the MOU was subsequently deregistered and one of its signatories has since passed on. These would have had the effect of automatically terminating the MOU.


46. The second plaintiff had also by his own alleged fraudulent conduct after the MOU was signed, which were subject of another court proceeding between the parties, breached the MOU. This would have also had the effect of terminating the MOU. In these circumstances, whichever way the MOU was looked at, it is clearly of no assistance to the plaintiffs and they cannot rely on it.


47. For the foregoing reasons, the proceeding is dismissed in its entirety.


48. The Orders of the Court are as in the terms of paragraphs 1 and 2 of the applicants' notice of motion filed on 6 July, 2020.


49. The plaintiffs will pay the applicants' (defendants’) costs of and incidental to the proceeding which if not agreed, are to be taxed.


Orders accordingly.
Corrs Chambers Westgarth: Lawyers for the Applicants/Defendants
Dowa & Piam Lawyers: Lawyers for the Respondents/Plaintiffs


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