N9012

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 749 OF 2020

BETWEEN:
ANDREW LEYHEN
Plaintiff

AND:
PELGENS LIMITED
Defendant

Lae: Dowa J
2021: 19th and 29th July

PRACTICE AND PROCEDURE – application by defendant to dismiss proceedings – grounds of - Plaintiff’s proceedings has no reasonable cause of action, being frivolous and vexatious,cannot be sustained or even allowed to proceed to trial - whether the pleadings fail to disclose a reasonable cause of action – whether the  plaintiff sufficiently pleaded particulars and elements of malice pleaded-whether proceedings are so frivolous or vexations, that it is untenable – consideration of – plaintiffs proceedings cannot be sustained, plaintiffs have no reasonable cause of action – proceedings dismissed
Cases Cited

PNG Forest Products v. State [1992] PNGLR 85
Ronny Wabia v BP Exploration Co. Ltd [1998] PNGLR 8
Wabia v BP Petroleum (2019) N4337
Mt. Hagen Urban LLG v Sek No. 15 (2009) SC1007
National Provident Fund v Maladina & Others (2003) N2486
Wambunawa Holdings Ltd. v ANZ Bank (2020) N8310
Demba Kalo v Comnie Akaya and Others (2007) N3213
Londe Tole v Joe Kongi (2019) N7728
Kipahi v Nambos (2020) N8437
Papua New Guinea v Tole (2002) SC694
John Rasta Kekere v John Bangkok (WS No. 598 of 2019)	

Counsel

S. Toggo, for the Plaintiff
W. Bue, for the Defendant

RULING

29th July, 2021

1.	DOWA J:	This is a ruling on an application by the Defendant to dismiss the proceedings under Order 12 Rule 40 (1) of the National Court Rules.

2.  	By Notice of Motion the Defendant applies to the Court for the dismissal of the Plaintiff’s proceedings on the grounds of being frivolous, vexatious and an abuse of the process of Court.

3.   	The Defendant relies on the following documents in the application:

a)	Notice of Motion filed 5th July 2021. 
b)	Affidavit of Theo Pelgen filed 5th July 2021.
c)	Affidavit of Seigmund Pelgen filed 5th July 2021.

4.	The Plaintiff relies on his own affidavit filed 30th April 2021 in defending the application.

	BACKGROUND FACTS

5.	The Plaintiff is a former employee of the Defendant company.  He was employed by the Defendant over a period of 25 years.  On 27th November 2012, he was terminated from his employment.  Prior to his termination the Plaintiff was employed as store Manager.

6.	The Plaintiff was terminated on grounds of fraud and stealing.  The Defendant laid a complaint with the fraud division of the Lae Police Station for fraud and stealing from the Defendant.
 
7.    	On 5th April 2013, the Plaintiff was charged by the police for stealing cash to the value of K77,077.52 between 2nd June 2012 and 1st November 2012 from the Defendant’s store at China Town, Lae, under Section 372 (7) (a) of the Criminal Code Act. 

8.    	On 7th August 2013, the Plaintiff was committed by the Lae District Court to stand trial in the National Court.

9.	On 15th April 2016, the Plaintiff was acquitted by the National Court when the State Prosecutor offered no evidence to prove the charge.

10.   	The Plaintiff alleges in his statement of claim that the complaint and prosecution of the criminal charge by the Defendant against him was false and malicious.  As a result, he suffered loss and damage. 

	ISSUES

11.	The issue for consideration is whether the Plaintiff’s proceedings are frivolous and vexatious, disclosing no reasonable cause of action.

	SUBMISSION OF COUNSEL

12. 	Ms. David of counsel for the Defendant submitted the statement of claim does not disclose any cause of action.  The Plaintiff did not plead any particulars of malice in the statement of claim.  She relies on case authorities in Demba Kalo v Comnie Akaya and Others (2007) N3213, Londe Tole v Joe Kongi (2019) N7728, Ronny Wabia vs. BP Exploration (1998) PNGLR 8, and PNG Forest Products Ltd vs. The State (1993) PNGLR 85.

13. 	Mr. Toggo of counsel for the Plaintiff submits, the Plaintiff has pleaded a reasonable cause of action in malicious prosecution.  He refers to the case of Kipahi v Nambos (2020) N8437, in support of his submissions.

LAW

14.  	The relevant rule of the National Court Rules is Order 12 Rule 40 (1), which reads:

	“40.	Frivolity, etc. (13/5)

	(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 the 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.”

15.	The Law on Order 12 Rule 40 of the National Court Rules is well settled in the Supreme Court in Mt Hagen Urban Local level Government v Sek No.15 (2009) SC1007 in paragraphs 27-30:

“27. The terms “vexatious”, “frivolous”, “abuse of the process of the court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Phillip Stagg, Valentine Kambori& The State (2006) N3050; Phillip Takori& Others v. Simon Yagari & 2 Others (2008) SC 905. These cases say the same thing.

28.	The law with regard to an application for dismissal of proceedings based on O.12 R.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Phillip Takori’s case (supra).

29.	The phrase ‘disclosing a reasonable cause of action’ consists of two parts: cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i) A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

(ii) The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii) The purpose of O.12 r.40 is to give the court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv) A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.

(v) A vexatious claim is on that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense is defending or proving the claim.

 In an application under O.12 R.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded.” 

16.	In respect of pleadings, the Supreme Court settled the law on pleadings in the case, Papua New Guinea v Tole (2002) SC694.  At page of their judgment, the Court said:

“First Two Issues – Pleadings

The first two issues are closely related. They involve the issue of pleadings so they are being dealt with together. The law on pleadings in our jurisdiction is well settled. The principles governing pleadings can easily be summarized in terms of, unless there is foundation in the pleadings of a party, no evidence and damages or relieves of matters not pleaded can be allowed. This is the effect of the judgements of this Court in Motor Vehicles Insurance (PNG) Trust v. John Etape [1995] PNGLR 214 at p.221 and Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370 at pp. 373 –374. These judgements re-affirmed what was always the position at common law and consistently applied in a large number of cases in our country. The list of such cases is long but reference need only be made to cases like that of Repas Waima v. Motor Vehicles Insurance Trust [1992] PNGLR 254 and Carmelita Mary collins v. Motor Vehicles (PNG) Insurance Trust [1990] PNGLR 580 at p. 582 for examples only.

This position follows on from the objects behind the requirements for pleadings. As the judgement in Motor Vehicles Insurance (PNG) Trust v. James Pupune (supra) at p. 374 said in summary, pleadings and particulars have the object or functions of:

"1. 	they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it;

2.	they define the issues for decision in the litigation and, thereby, enable the relevance and admissibility of evidence to be determined at the trial; and

3.	they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. See Dare v. Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664."

	It is clear law that, where a plaintiff’s claim is special in nature, such as a claim for loss of salaries or wages, they must be specifically pleaded with particulars. Unless that is done, no evidence of matters not pleaded can be allowed and relief granted. That is apparent from the judgements in the James Pupune and John Etape cases. These cases adopted and applied principles enunciated in those terms in authorities such as Ilkiw v. Samuel [1963] 2 All ER 879, per Diplock L J at pp. 980-891 and Pilato v. Metropolitan Water Sewerage and Drainage Board (1959) 76 WN (NSW) 364, per McClemens J at 365. This follows in turn from the fact that, our system of justice is not one of surprises but one of fair play. Reasonable opportunity must be given to each other by the parties to an action to ascertain fully the nature of the other’s case so that, if need be, a defendant can make a payment into Court.”

. 17. In NPR v Maladina, Kandakasi J, (as he then was) said:

“The law on pleadings generally is settled in our jurisdiction.  A clearest statement of the law is by the Supreme Court in Motor Vehicles Insurance (PNG) Trust vs. John Etape, in these terms:
	
“besides requiring that certain matters be pleaded specifically, the rules also contain a number of provisions which require a party to furnish in or with his pleadings, particulars of his claim or defence or other matter pleaded.  The function of particulars is ‘to let (a party) know what case he will have to meet and to enable him to know what evidence he ought to be prepared with’.  The object is ‘to ensure as far as is practicable, that proceedings between parties would result in a determination of the rights of the parties according to law and to limit if not eradicate the number of cases in which technologies can cause the proceedings to miscarry.  Generally speaking, justice will be more readily and speedily attained if each party is fully aware of the precise nature of the allegations made by the other’.

Particulars are in fact an extension of the pleadings – they control the generality of the pleadings.  In Pilato vs. Metropolitan Water Sewerage and Drainage Board, McClements J said at 365 – ‘Pleadings define the issues in general terms.  Particulars control the generality of the pleadings and restrict the evidence to be led by the parties at the trial and give the other party such information as may enable him to know what case he will be met with at the trial and prevent surprise.  Evidence enables the tribunal within the ambit of the general definition of the issues, affected by the pleadings and limited by the particulars, to decide where the truth lies’.”

18.   	However, the Court cannot readily dismiss a case on poor pleading unless it is shown that the case is clearly frivolous or vexatious and that it is unlikely to succeed even if it proceeds to trial.  Refer:  PNG Forest Products v State (1992) PNGLR 84–85, Ronny Wabia v BP Exploration Co. Ltd (1998) PNGLR 8, Wabia v BP Petroleum (2009)) N4337, Mt. Hagen Urban LLG v Sek No. 15 (2009) SC1007, National Provident Fund v Maladina & Others (2003) N2486; and Wambunawa Holdings Ltd. v ANZ Bank (2020) N8310.

19. 	In Wambunawa Holdings (supra), I restated this position at paragraphs 15 and 16 of my judgment as follows:

	“15.  In the case, PNG Forest Products vs. State (1992) PNGLR 84-85 the Court adopting some English Court phrases stated that a court be slow and cautious in entertaining applications for dismissal of proceedings on the grounds of a party disclosing no reasonable cause of action.  A Plaintiff should not be driven from the judgment seat unless the case is “unarguable” or the cause of action is “obviously and almost incontestably bad, or plainly untenable.  In that case, the Court also said the Court has a discretionary power to dismiss if the proceedings are an abuse of the Court process.”

	“16.  On the other hand, there are other string of cases that developed the principle that, where the case is vexatious or frivolous and that it is unlikely to succeed, the case can be summarily determined.  Ronny Wabia vs. BP Exploration Co. Ltd (1998) PNGLR 8, and Wabia vs. BP Petroleum (2009) N4337 and National Provident Fund Board vs. Maladina & Others (2003) N2486.”  

20.     It is clear the decision to dismiss a proceeding for lack of pleading remains a discretionary matter for the Court. 

	CONSIDERATION OF THE ISSUES

21.  	A perusal of the statement of claim shows the Plaintiff’s case is for malicious prosecution.  The law on malicious prosecution is settled.  Refer:  Demba Kalo v Comnie Akaya and Others (supra) and Kipahi v Nambos (2020) N8437.  To succeed in a malicious prosecution, the Plaintiff must meet four (4) elements:

	a)	institution of a criminal proceeding by the Defendant.
	b)	termination of the criminal proceedings in the Plaintiff’s favour.
	c)	a lack of probable cause to support the charges.
	d)	malice.

22. 	In respect of the fourth requirement of malice, the Plaintiff is required to plead and prove with appropriate evidence.  In the present case, the relevant part of the statement of claim pleading malice is in paragraph 12. Paragraph 12 reads:
	
	“The actions of the Defendant was fuelled by malice and ill will, the particulars of which are:-

(1)		They refer the Plaintiff to the police without any evidence against to 	justify that action.

(2)		The Defendant and their witnesses failed to attend court and give 	evidence.

(3)		There was no evidence given against the Plaintiff.”

23. 	The Defendant specifically denies malice in paragraph 6 of its Defence.  Paragraph 6 of the statement of defence reads:

(a)		The Defendant had laid a Police complaint against the Plaintiff as 	a result of “missing monies” from daily takings which the Plaintiff, 	who was the Store Manager for Pelgens Supermarket – China 	Town, Lae, 	knowingly and intentionally failed to count when 	reconciling daily takings at the end of each day;

(b)		The management of the Defendant became aware of the Plaintiff’s 	conduct through an internal audit.
(c)		Given that the circumstances gave rise to the criminal offence of 	stealing, the Defendant laid a Police complaint against the   Plaintiff.

(d)		The Plaintiff’s criminal charge was prosecuted by the Police at the 	District Court and by the Office of the Public Prosecutor, Lae in the National Court.

(e)		Unbeknown to the Defendant, the National Court had dismissed the matter.

(f)		To this date, neither the Police nor the Office of the Public 	Prosecutors, Lae have given an explanation to the Defendant as to 	the dismissal of the Plaintiff’s criminal charge; and

(g)		The Defendant has over-whelming evidence against the alleged 	conduct of the Plaintiff; however, the Police and the Office of the 	Public Prosecutors, Lae had failed to notify the witnesses of the 	Defendant of the trial date.

24.  	It is clear from the pleadings and evidence filed by the parties that the Plaintiff was charged with a criminal offence under section 372 (7) of the Criminal Code Act on complaint by the Defendant.  The Defendant lodged a complaint against the Plaintiff for stealing K77,077.52 from its store at China Town, Lae.  The Defendant therefore had probable cause for lodging the complaint.  The Plaintiff was committed to stand trial at the National Court by the District Court on 7th August 2013 after being satisfied with the evidence filed before the Committal Court.  On 15th April 2016, the National Court acquitted the Plaintiff after the Prosecutor offered no evidence.  The evidence of Theo Pelgen and Seigmund Pelgen show, they were not called to give evidence by the Prosecutor.  It appears from the pleadings and the evidence, there was no trial and finding of facts by the National Court.

25.	Be that as it may, for the Plaintiff to succeed, the onus is on him to plead particulars of malice.  Order 8 Rule 31 of the National Court Rules requires specific pleading of particulars of malice.  Order 8 Rule 31 reads:

	“31.	Condition of mind. (16/3)

(1)		A party pleading any condition of mind shall give particulars of the 
facts on which he relies.

(2)		In Sub-rule (1) “condition of mind”, includes any disorder or 
disability of mind, any malice and any fraudulent intention, but does not include knowledge.”

26.   	In Kipahi v Nambos (supra), Kandakasi DCJ discusses the necessity to plead and provide evidence to establish the essential elements of malice to prove malicious prosecution.  At paragraphs 24 – 25 of his judgment, his Honour says:

	“24.  Hence, modern malicious prosecution theory and practice allows for balancing of four competing policy interests.  These are namely; (1) the need to encourage honest accusers; (2) resolving litigation quickly and finally; (3) deterring groundless suits; and (4) compensating victims of groundless suits or prosecution:  Groundless Litigation, at 1220.  Through these developments, it has now become clearly established that there are four critical elements that must be met to succeed in a modern-day malicious prosecution claim.  These are:

(1)	institution of a criminal proceeding by the defendant.
(2)	Termination of the criminal proceeding in the plaintiff’s favour.
(3)	a lack of probable cause to support the charges; and
(4)	malice.”

“25.  The fourth requirement of malice has been defined as a requirement for a plaintiff in a malicious prosecution case to plead and then prove by appropriate evidence the defendant’s subjective state of mind at the relevant time of the alleged malicious prosecution. This has to do with the defendant’s intention or purpose behind his or her initiation of the relevant prosecution.  That intention or purpose must be for reasons other than bringing a criminal offender to justice.  Thus, pleading and establishing this element is a critical component for a claim n malicious prosecution:  Ryan, at 779.”

27.    	After referring to several cases decided in this jurisdiction and overseas, his Honour concludes his discussion at paragraph 32 of his judgment, where he said:

	“32.  The foregoing discussions of the law, make it clear that the element of malice is critical element.  Malice has to do with the concerns the accuser’s motivation for bringing the failed criminal proceedings.  Most of the time it is difficult to know what is in one’s mind, except only to infer from one’s actions or inactions.  Motives or intentions of an accuser are matters that are personal and are best known to him or herself.  Given that, it would be most difficult for the victim of any malicious prosecution to succeed in a claim of vicarious liability against an accuser’s employer or principal, because the plaintiff will need to plead with sufficient particulars mind set and motivation of two different persons.  To succeed in a claim based on malicious prosecution against accuser and his employer, the victim plaintiff has a duty to clearly and succinctly plead with particulars the bases for also claiming malice against his or her accuser’s employer or principal.”
	
28.    	It is clear from the statement of claim that the Plaintiff has not pleaded that the criminal proceedings were without any reasonable and probable cause.  He has not pleaded that the Defendant was motivated by malice or some improper purpose.  He did not plead that the Defendants had a desire or motive to cause harm to him other than bringing him to justice for theft of K77,077.52.

29.    The Defendant is a victim of a crime allegedly committed by the Plaintiff. Was the Defendant wrong in lodging a complaint with the police and initiating these proceedings.

30.	In the case John Rasta Kekere v John Bangkok (WS No. 598 of 2019) (July 2021) I said, a victim of crime be given liberty to report a crime without fear of repercussion.  At paragraph 17 of the judgment, I said:  

’17.  I note the actions of the defendant and the police may have caused some embarrassment and inconvenience to the Plaintiff but that is all. They are not sufficient reason to establish liability against the defendant. In my view, a victim of crime and witnesses of crime be encouraged to come forward and report incidents of crime freely to those in authority like the police. They should not be subjected to fears of possible repercussions. It will be up to the police and those in authority to investigate and process those complaints and take further action where necessary. This is exactly what happened in the present case.”

CONCLUSION

31.    	For the Plaintiff to succeed he must plead a clear case of malice. Without a proper pleading, there is no foundation for calling of evidence.  The statement of claim does not disclose any cause of action. It is therefore frivolous and vexatious and abuse of the process.   It is not worth serious attention. It would prove to be a futile exercise to allow the matter to proceed to trial.  At this juncture I must add, I have read the affidavit of the Plaintiff filed 30th April 2021.  He has not provided any evidence of malice, or ill will against the Defendant except for laying the complaint of stealing. In my view, even if the matter is allowed to proceed to trial it is unlikely to succeed.   The proceedings are therefore an unnecessary harassment on the Defendant who is being put to the trouble and expense of defending the proceedings.

32. 	It is in the interest of both parties to end the proceedings now to avoid litigation cost for a prolonged untenable litigation.

33.  	For reasons given, I will uphold the application and dismiss the proceedings.

COST

34.	Cost is a discretionary matter.  The Defendant has succeeded its application and is therefore entitled to its cost.

	ORDERS

35.      The Court orders that:

(1)	The Plaintiff’s proceeding is dismissed for disclosing no reasonable cause of action, is frivolous and vexatious.

(2)	The Plaintiff shall pay the cost of the proceedings, to be taxed, if not agreed.

(3)	Time of entry of these Orders is abridged to take place forthwith upon the Court signing the Orders.

______________________________________________________________
Daniels & Associates Lawyers:	Lawyer for the Plaintiff
David & David Co. Lawyers:	Lawyer for the Defendant