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Masit v Uma [2021] PGNC 13; N8703 (20 January 2021)

N8703

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 537 OF 2018

BETWEEN:
FRANCIS MASIT
Plaintiff

AND:
DONNA UMA, CREDIT MANAGER, FINANCE CORPORATION LIMITED
First Defendant

AND:
FINANCE CORPORATION LIMITED
Second Defendant

Madang: Narokobi J
2020: 16^th November
2021: 20^th January

LENDERS AND CUSTOMERS – Duty of lender – Lenders have duty to be transparent and fair with their clients.

PRACTICE AND PROCEDURE – Proper Mode of Proceedings – Where Cause of Action is Negligence – Proceedings by Way of Pleadings Appropriate.

The plaintiff sues the defendants for the return of his vehicle which he bought with additional finance from the second defendant. Due to circumstances beyond his control, he could not keep up with the loan repayment and he was given 10 days to pay the arrears. He did not pay the arrears and his vehicle was forcefully removed from him and sold without his knowledge to recoup the arrears.

Held:

(1) The facts of the case suggest that the plaintiff’s cause of action is in negligence for breach of a lender’s duty of care to its customers to be fair and transparent, and for the remedy of damages for the breach, and it is therefore appropriate to commence proceedings by pleadings under Order 8 of the National Court Rules.

Cases Cited:

Rage Augerea v The Bank South Pacific Ltd (2007) SC869
Tigam Malewo v Keith Faulkner (2009) SC960

TRIAL

This is a trial on liability.

Counsel

Mr B Tabai, for the plaintiff
Mr J Lai, for the Defendants

JUDGEMENT

20^th January, 2021

1. NAROKOBI J: The Plaintiff by Originating Summons filed on 9 August 2018 seeks the following orders:
   
   1. “A declaration that the defendants’ repossession of the truck namely, Hino Twin steer 18 Ton Cargo truck, Registration No. KAH 601, from the Plaintiff on 17 June 2018 and their subsequent placing of the truck on tender is unreasonable, harsh and unlawful.
      
   2. An order that the defendants, their servants, and agents release the truck namely, Hino Twin steer 18 Ton cargo Truck, Registration No: KAH 601, to the plaintiff forthwith failing which they shall be liable for contempt of Court.
      
   3. Costs of the proceedings.
      
   4. Such further or other orders the Court deems fit.”
      
2. The Plaintiff seeks these orders on the basis that the defendants illegally repossessed a truck he purchased with additional finance from the second defendant. The plaintiff had fell into arrears by three months. The second defendant at that time had a loan agreement with the plaintiff. The vehicle was forcefully removed from the plaintiff after he failed to pay the arrears within 10 days of the notice of the arears. The truck was advertised and sold without the knowledge of the plaintiff.
   
3. After reading through the affidavit material filed by both parties, I have formed the view that the plaintiff’s claim is in relation to the breach of a lender’s duty of care to be fair and transparent with is customers. There are substantial disputes of facts. It appears to be a claim for negligence occasioned by a breach of a duty of care owed by the second defendant to the plaintiff. I gather this from reading the case of Rage Augerea v The Bank South Pacific Ltd (2007) SC869.
   
4. The plaintiff’s present claim is by way of originating summons seeking declaratory orders that the repossession of the vehicle was unlawful. Subsequent orders have been sought for the return of his vehicle. The uncontested evidence is that the vehicle has been sold to a third party, so events have overtaken the utility of the proceedings. It is more appropriate for the plaintiff to proceed on the basis of pleadings, with claims for negligence, damages and possible economic losses. Pleadings under Order 8 of the National Court Rules is the appropriate mode of proceeding when there is substantial dispute of facts and where the remedy of damages is sought (Tigam Malewo v Keith Faulkner (2009) SC960).
   
5. I will therefore dismiss the proceedings and order each party to bear their own costs. The plaintiff is at liberty to consider filing fresh proceedings claiming damages against the defendants in a statement of claim, asking for the value of the truck and economic losses.

Judgment and Orders accordingly

Tabai Lawyers: Lawyers for the Plaintiff
Thomas More Ilaisa lawyers & Attorney: Lawyers for the Defendants