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National Capital District Commission v Internal Revenue Commission [2022] PGNC 443; N9990 (21 October 2022)

N9990

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (COMM) NO. 11 OF 2021 (NO. 8)

BETWEEN:
NATIONAL CAPITAL DISTRICT COMMISSION
Plaintiff

V

INTERNAL REVENUE COMMISSION
First Defendant

AND:
SAM KOIM in his capacity as the COMMISSIONER GENERAL OF INTERNAL REVENUE COMMISSION and in his capacity as Trustee of National Capital District Inland GST
Second Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND:
CENTRAL PROVINCIAL GOVERNMENT
Fourth Defendant

AND:
MOTU KOITA ASSEMBLY
Fifth Defendant

AND:
GULF PROVINCIAL GOVERNMENT
Sixth Defendant

AND:
EDITH LAUFA in her capacity as Trustee of National Capital District Inland GST Trust Account
Seventh Defendant

Waigani: Anis J
2022: 19^th & 21^st October

NOTICES OF MOTION – Applications to set aside Notice to Produce Documents and set aside 2 summonses – Order 11 Rule 2 and 5 – National Court Rules - considerations - ruling

Cases Cited:

National Capital District Commission v Internal Revenue Commission and Ors (2022) N9844
Titi Christian v. Rabbie Namaliu (1996) SC1583

Counsel:

D Wood with counsel assisting L Evore, for the Plaintiff
S Sinen with Counsel assisting G Wau, for the First and Second Defendants
R Uware, for the Third Defendant
G Wayne, for the Fourth Defendant
N Vada, for the Fifth Defendant
S Dewe, for the Sixth Defendant
M Mukwesipu, for the Seventh Defendant and R Frank and P Kini

RULING

21^st October, 2022

1. ANIS J: This decision follows after an earlier decision which I delivered on 19 October 2022. I heard, on 19 October 2022, 2 other preliminary applications that were presented by the plaintiff and by these 2 interested persons, namely, Ravu Frank and Peter Kini (2 interested persons).

2. The notice of motion by the plaintiff is dated 14 October 2022 (plaintiff’s NoM). The plaintiff seeks to, amongst others, set-aside a notice to produce that had been served on it by the 4^th defendant on 12 October 2022. The Notice to Produce (NTP) was filed on 22 September 2022. The notice of motion by the 2 interested persons was filed on 17 October 2022, that is, after they had been notified of summonses that were issued against them upon the request of the 4^th defendant. The summonses are Summons for Production and to Give Evidence. The 2 interested persons are represented by Mr Mukwesipu who is also counsel for the 7^th defendant.

3. Both applications were contested. The contesting parties were the plaintiff, the 5^th and 7^th defendants who were in favour of the 2 applications, and the 4^th and 6^th defendants who opposed the 2 applications. The other parties took neutral positions and refrained from making submissions. After the hearing, I reserved my ruling to today at 9:30am.

4. This is my ruling.

THE APPLICATIONS

5. The plaintiff’s NoM seeks 2 main relief as follows:

“3. Pursuant to Order 11 Rule 7(1) of the National Court Rules, the Notice to Produce issued to the National Capital District Commission filed on 22 September 2022 be set aside wholly for being an abuse of the Court process.

4. Costs of and incidental to this Notice of Motion be paid by Kessadale Lawyers and the Fourth Defendant on an indemnity basis.”
   

6. As for the 2 interested persons, their application seeks the following 3 main relief:

“3. Pursuant to Order 11 Rule 7(1) of the National Court Rules, the Summons for Production and to Give Evidence to Mr Ravu Frank filed on 22 September 2022 be set aside wholly for being an abuse of the Court process.

4. Pursuant to Order 11 Rule 7(1) of the National Court Rules, the Summons for Production and to Give Evidence issued to Mr Peter Kini filed on 22 September 2022 be set aside wholly for being an abuse of the Court process.
5. Costs of and incidental to this Notice of Motion be paid by Kessadale Lawyers and the Fourth Defendant on an indemnity basis.”
   

ISSUES

7. The main issues, in my view, are (i), whether the Court should set-aside the Notice to Produce that was issued to the plaintiff on the basis of abuse of the Court process, (ii), whether the Court should set-aside the 2 summonses that were issued to the 2 interested persons on the basis that the summonses are defective and or are an abuse of the Court process.

NOTICE TO PRODUCE

8. The plaintiff’s main argument is that the Notice to Produced issued by the 4^th Defendant is similar to earlier documents, namely, Notice to Admit Facts, Notice for Discovery, Notice to Answer Interrogatories and to Produce, that had been issued by the 4^th Defendant but which the Court had determined on 30 August 2022, that is, in National Capital District Commission v. Internal Revenue Commission and Ors (2022) N9844. It submits the 4^th defendant had applied for leave to appeal the said decision before the Supreme Court, but the leave application was refused. As such, it submits, amongst others, that the 4^th defendant is estopped from raising the matter further.

9. The 4^th defendant denies the claim. It submits, amongst others, that it is entitled to request for this information; that to deny it that right would prejudice its defence in the substantive matter.

10. The Notice to Produce is attached as Annexure RF1 to Mr Frank’s affidavit. It reads in part:

“1. Meeting Minutes of Special Meeting of the Board of the National Capital District Commission No. SCF 01/2021 held on the 27^th of April 2021.

2. All CCTV footage for City Hall Annex starting 6:00am to 11:59pm on the 27^th of April 2021, in Compact Disc (CD) of the appropriate electronic storage device.
   
3. All records of all payments made by NCDC to Gulf Provincial Government since 2004 pursuant to the then s. 33(1) of the National Capital District Commission Act 2001 in force prior to enactment of the National Capital District Commission (Amendment) Act 2021.
   
4. All records of all payments made by NCDC to the Central Provincial Government since 2004 pursuant to the then s. 33(1) of the National Capital District Commission Act 2001, in force prior to the enactment of the National Capital District Commission (Amendment) Act 2021.
   
5. All records of all payments made by NCDC to the Motu Koitabu Assembly since 2004 pursuant to the then s. 33(1) of the National Capital District Commission Act 2001, in force prior to the enactment of the National Capital District Commission (Amendment) Act 2021.”
   

11. I make the following observations. Firstly, I note that this request by the 4^th defendant is made belatedly or at the time of the trial of the matter. Secondly, I note that the main requests which are items 1 and 2, had been made earlier and I had ruled on it on 30 August 2022. At [18], [21] and [22], I stated

“18. The 4^th defendant’s various requests contained in the 5 notices may be summarised as follows. The 4^th defendant is requesting the plaintiff and the 5^th defendant, to confirm whether the Deputy Chairman of the plaintiff and one board member Francis Koaba, were present on a special board meeting No. SFC 01/2021 or had received notice of the said meeting. It was from the said meeting that the plaintiff’s lawyers Ashurst Lawyers were said to have been engaged to represent the plaintiff. So, the 4^th defendant, it seems, is seeking to confirm if the plaintiff had duly engaged its lawyers to act for it in the matter. The 4^th defendant also requested the plaintiff to produce a copy of the plaintiff’s 2022 Budget document based on a reference that was made in one of the plaintiff’s evidence, that is, the sworn affidavit of Augustine Ravi which was filed on 27 July 2022.

......

21. When I compare these to the 5 notices that were issued by the 4^th defendant to the plaintiff and the 5^th defendant, I do not find them to be of any relevance to the main issues that are in contentions between the parties. Answering these questions or queries raised in these notices will not in any way assist the Court determine the main issues that are to be argued which are express as indicated in the relief that are being sought.

22. The plaintiff’s lawyers have instructions to act for it in the matter. The 4^th defendant however is dissatisfied or ‘unimpressed’ about this it seems, and it is seeking confirmation through these various notices that it has issued. So, essentially, the 4^th defendant is questioning an internal or administrative affair of the plaintiff, that is, it wants to know whether the plaintiff has duly appointed its lawyers to act for it in this matter. The immediate question that comes to my mind this. What business or right does the 4^th defendant have in the first place to make such query into the internal affairs of the plaintiff? I find that the 4^th defendant has no standing whatsoever to inquire into the administrative or internal affairs of the plaintiff, that is, on how it conducts its affairs including appointment of lawyers or firms to act for it whether it be in legal matters or otherwise. But even if I may be proven wrong in this regard, the next issue is whether such information is at all relevant to the central issues. Again, I would still find against the 4^th defendant in this regard.”

12. In regard to records that are sought under items 3, 4 and 5 of the Notice to Produce, I observe that these are not relevant to the issues for trial. I have also covered what the issues would be in my decision of 30 August 2022. And I will again say that these requests are baseless or irrelevant to the main issues; that answering them will be futile to the main issues.

13. My findings therefore on the first issue is this. I find the belated conduct and request by the 4^th defendant to amount to abuse of the Court process. I find the 4^th defendant’s conduct and the conduct of its lawyer Mr Wayne deliberate, that is, to abuse the Court process. No such request had been made known to the Court prior to the matter being set down for trial. Evidence adduced shows that the 4^th defendant had made similar requests earlier. And when its requests were denied by the Court on 30 August 2022, it appealed to the Supreme Court in SCA No. 152 of 2022. And when its appeal was refused, the 4^th defendant presented its Notice to Produce to the plaintiff just days before the trial of this matter, that is, despite having filed the notice several weeks earlier on 22 September 2022.

14. I therefore dismiss the Notice to Produce on the basis of abuse of the Court process for the stated reasons. If I am proven to be wrong (which I say otherwise), I would also dismiss the Notice to Produce based on the doctrine of issue estoppel. See case: Titi Christian v. Rabbie Namaliu (1996) SC1583. I find that the 4^th defendant is rehashing the same issues or matters that had been dealt with by this Court. Thirdly, I would also dismiss the Notice to Produce particularly in regard to items 3, 4 and 5 on the basis that they are irrelevant or baseless to the main issues for trial. I find that their request has also caused this unnecessary delay which has now affected the trial of this matter.

SUMMONSES

15. I now turn to the second issue. The summonses in question are contained in the affidavits of Mr Ravi and Mr Kini respectively.

16. I note the submissions made by the parties in regard to the issue.

17. The summonses were purportedly issued under Order 11 Rule 2 of the National Court Rules (NCR). The rule reads:

“2. Power to issue. (37/2)

The Court may, in any proceedings, issue a summons to give evidence or a summons for production as a summons both to give evidence and for production in Form 42, 43, 44, 45 or 46, or in such other form as the Court may direct for the attendance on any trial or other occasion of the person named before the Court, officer, examiner or other person having authority to take evidence.”

18. I note that the summonses begin with this, “THE COURT ORDERS that you.....”.

19. This issue is not difficult to determine.

20. Firstly, I note that I did not issue an order for issuance of summonses against these 2 interested persons under Order 11 Rule 2 of the NCR. On that basis, and given the wording and content of the summonses, I note that these summonses were issued in breach of Order 11 Rule 2. The 4^th defendant’s argument that they were issued under Order 11 Rule 5 is, with respect, baseless, that is, by looking at the wording and formatting of the summonses. Whether they were prepared in error or otherwise, they are what they are as filed and issued. I must also add that in so doing, they appear fraudulent or deceitful in nature, and perhaps even contemptuous. I, however, make these as remarks.

21. I will dismiss the 2 summonses for the stated reasons. Even if I am proven to be wrong (which I say otherwise), the purposes required in the summonses for summoning the 2 interested persons were in regard to the issue of whether the plaintiff had validly engaged their lawyers, and I would have also dismissed them for the same stated reasons I gave in relation to the first issue.

SUMMARY

22. In summary, I will grant the 2 applications filed by the plaintiff and the 2 interested persons. I will also order the trial of the matter to continue on dates to be set either by agreement or by the Court.

COST

23. An award of cost herein is discretionary.

24. The applicants request that cost should be ordered on an indemnity basis against Kessadale Lawyers and the 4^th defendant. The 4^th defendant did not make any submissions in response to this matter.

25. I am inclined to make a cost order in the manner as submitted by the applicants. In my view, counsel for the 4^th defendant, as an officer of the Court, knew or ought to have known that the issue of whether the plaintiff had validly engaged its lawyers had been decided by this Court. Despite that and despite the 4^th defendant’s appeal on the matter which was dismissed on competency grounds, counsel had to prepare these notices and summonses, for his client, again knowing fully well that they had been dealt with or that they were frivolous or baseless, again and I will simply refer to what I have stated in my earlier decision of 30 August 2022.

26. The actions of Mr Wayne and his client, with respect, have done nothing more except frustrate valuable time that could have been spent on the trial of the matter, which will now have to be rescheduled.

27. I will therefore order the 4^th defendant and Mr Wayne’s firm, to pay costs of the applications jointly or severally on an indemnity basis to be taxed if not agreed.

ORDERS OF THE COURT

28. I make the following orders:

1. I grant both applications.
   
2. I set aside and dismiss the Notice to Produce that was issued to the plaintiff which was filed on 22 September 2022.
   
3. I set aside and dismiss the purported summonses that were issued to Ravu Frank and Peter Kini which were filed on 22 September 2022.
   
4. The 4^th defendant and Mr Wayne or Kessadale Lawyers shall jointly or severally pay the plaintiff’s and the Mr Frank and Mr Kini’s costs of their applications on an indemnity basis which may be taxed if not agreed.
   
5. Time for entry of these orders is abridged to the date and time of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly.

________________________________________________________________
Ashurst: Lawyers for the Plaintiff
IRC In-house Counsel: Lawyer for the First and Second Defendants
Solicitor-General: Lawyer for the Third Defendant
Kessadale: Lawyers for the Fourth Defendant
In-house counsel: Lawyer or the Fifth Defendant
Jema Lawyers: Lawyers for the Sixth Defendant
Mukwesipu: Lawyers for the Seventh Defendant and Mr Frank and Mr Kini