N9494

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS (COMM) NO 1124 OF 2017

BETWEEN:
CURTAIN BROS PAPUA NEW GUINEA LIMITED
Plaintiff

V

PAGA HILL DEVELOPMENT COMPANY (PNG) LIMITED
First Defendant

AND:
ANDAYAP NO. 5 LIMITED
Second Defendant

Waigani: Anis J
2022: 11th & 17th March

MOTION – Application to dismiss proceeding for want of prosecution with due dispatch and failure to set matter down for trial within 6 weeks after close of pleadings – Order 4 Rule 36(1) and Order 10 Rule 5 – National Court Rules – preliminary – whether correct sources invoked by the applicant – consideration – whether there was delay and failure by the plaintiff – want of evidence to explain delay and provide reasons – prejudice - exercise of discretion

Cases Cited:

NHC v. Yama Securities Services Pty Ltd [2000] PNGLR 69
Viviso Seravo v. Jack Bahafo (2001) N2078
Stanley Miam v. Joe Dai (2009) N3699
Freddy Kave v. Fred Yakasa (2014) N5692
Joyce Bernard and Ors v. Alex Tiri Aipa and Ors (2021) N889
Michael Pundari v. Niolam Security Ltd (2011) SC1123
Pauththuwadura Ajith Kumarasighe v. Bhuiya Enterprises Ltd (2017) N7046
Rarua and Ors v. Tatana Araira Development Association & Ors (2021) N8910
Jackson Walaun v. Royal Wilson (2016) N6272
Goma Ermuke v. MVIL (2009) N3719

Counsel:

Mr. P. Tabuchi, for the Plaintiff/Respondent
Mr. N. Gimaia, for the First and Second Defendants/Applicants

RULING

17th March, 2022

1.	ANIS J:	This was a contested motion hearing.  The defendants applied to dismiss the proceeding for want of prosecution on 11 March 2022.  I heard arguments from the parties and reserved on the matter.

2.	This is my ruling.

BACKGROUND

3.	The plaintiff filed its claim on 25 October 2017.  Its claim is this.  In 2014, it was engaged or contracted by the defendants to, amongst others, construct a 2 way all weather unsealed access road for a property known as Paga Hill estate which is situated in Port Moresby, NCD.  The main contract is described as Paga Hill Contract (PHK).  Clause 10 of the PHK states that if work is not completed within 7 months, then parties would meet to discuss and determine an equitable resolution or outcome.  It also states that if no amicable resolution is reached, then the defendants would transfer a portion of their land to the plaintiff which shall be equivalent to the value of the work that it had undertaken for the defendants under the PHK.  

4.	The plaintiff did not complete the work under the PHK and 7 months had passed.  So, on or about 22 July 2015, the plaintiff and the defendant met to discuss the matter.  An oral agreement (oral contract) was reached as a result of the meeting.  The plaintiff’s action herein is premised on this oral contract.  The alleged terms of the oral contract were as follows:

•	The work shall stop
•	The parties valued the work that had been undertaken by the plaintiff
•	The value of the work undertaken by the plaintiff was K10,000,000
•	If the defendants make immediate payment, the plaintiff will accept K6,000,000

5.	On 30 September 2015, the defendants paid the plaintiff K100,000.  No further payments were made after that.  The plaintiff was aggrieved and files this proceeding.  It says the defendants still owe it a further sum of K9,900,000.

MOTION

6.	As stated, the defendants have filed this application to dismiss the proceeding.  Their notice of motion is dated 25 February 2022 (NoM).  The main relief they seek is this, and I quote, Pursuant to Order 4 Rule 36(1) and Order 10 Rule 5 of the National Court Rules, the entire proceeding be dismissed.

PRELIMINARY ISSUES

7.	The plaintiff questions the jurisdictional basis for the NoM.  I will address them as preliminary issues.  The plaintiff firstly submits that Order 4 Rule 36 of the National Court Rules is a rule that only applies to proceedings that are commenced under an originating summons.  In this case, the plaintiff submits that its action was commenced by a writ of summons and statement of claim and not by an originating summons.  As such, it submits that Order 4 Rule 36 does not vest jurisdiction upon this Court pursuant to the requirements under Order 4 Rule 49(8).  The defendants submit otherwise.  They argue, amongst others, that the rule is the correct rule to rely on. 

8.	Order 4 Rule 36 and Order 4 Rule 49(8) state:

36.  Want of prosecution. (5/12)

(1)  Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may stay or dismiss the proceedings.
(2)	  Sub-rule (1) applies, with any necessary modifications, in relation to a cross-claimant as it applies in relation to a plaintiff.
……
8.  Form of Motions.
All Motions must contain a concise reference to the Court’s jurisdiction to grant the orders being sought. Motions not containing such reference will not be accepted for filing. If accepted by the Registry staff without such reference, and it goes before the motions judge, the Court may strike out the motion for being incompetent and for lack of form.
……

9.	There are various case authorities that discuss Order 4 Rule 36, some of which have been referred to by counsel for the plaintiff.  I will refer to those that have come to my attention.  Firstly, in NHC v. Yama Securities Services Pty Ltd [2000] PNGLR 69, Sevua J, held:

Order 4 Division 4 of the Rules deal with originating summons. Rule 36(1) deals with want of prosecution. It provides that “when a plaintiff ………………does not prosecute the proceedings with due despatch, the Court may stay or dismiss the proceedings.” [Underlining mine].

10.	In cases that followed after that, including Viviso Seravo v. Jack Bahafo (2001) N2078, Stanley Miam v. Joe Dai (2009) N3699, Freddy Kave v. Fred Yakasa (2014) N5692, and Joyce Bernard and Ors v. Alex Tiri Aipa and Ors (2021) N8891 have been consistent with the interpretation that Order 4 Rule 36 could only be invoked in proceedings that are commenced under an originating summons.  Counsel for the defendants submitted to the Court to not bind itself from these decisions on the basis that these were National Court decisions.  I, however, and with respect, reject this argument.  In my view, Order 4 Rule 36 is express and it cannot be interpreted in any another way.

11.	I therefore uphold the plaintiff’s submission in that regard.

12.	The plaintiff also challenges the second source of the NoM, that is, Order 10 Rule 5 of the National Court Rules.  It reads:

Where a plaintiff does not, within six weeks after the pleadings are closed, set the proceedings down for trial, the Court, on motion by any other party, may, on terms, dismiss the proceedings or make such other order as the Court thinks fit. [Underlining mine]

13.	The plaintiff says the defendants did not file a defence at all.  It submits that they are in default which is why it has filed a notice of motion for default judgment which is currently pending hearing.  Consequently, it submits that since pleadings have not closed, Order 10 Rule 5 was not available to them.  Thus, by invoking the rule, it submits, the notice of motion is therefore incompetent pursuant to Order 4 Rule 49(8) of the National Court Rules.

14.	The defendants do not dispute the fact that they have not filed their defence.  However, in reply, they submit that that does not stop them from making the application given the delay and various other failures by the plaintiff to progress the matter to a hearing.  In regard to the Order 10 Rule 5 argument, the defendants submit this.  They say, contrary to the understanding of the plaintiff of the rule and the facts, that pleadings generally shall close after the date of the last filed pleadings in a matter.  In the present case, they submit, the statement of claim would have been the last pleading document filed.  As such, they submit, pleadings closed after the 30th or the 44th day of the pleading time requirement for them to file their notice of intention to defend and defence.  Therefore, they submit that they have correctly invoked Order 10 Rule 5 as a source for their NoM.

15.	The answer to this argument by the plaintiff, in my view, may be found in the National Court Rules.  Order 8 Rule 23 is relevant for this purpose and reads:

23.  Close of pleadings. (15/22)

(1)  The pleadings on a statement of claim shall, unless the Court otherwise orders, be closed, as between any plaintiff and any defendant, on the date of expiry of the last of the times fixed by or under these Rules for filing a defence or reply or other pleading between those parties on the statement of claim.

16.	This express rule is confirmed by the case law, and I would, as references, point to the following: Michael Pundari v. Niolam Security Ltd (2011) SC1123 and Pauththuwadura Ajith Kumarasighe v. Bhuiya Enterprises Ltd (2017) N7046.  The plaintiff refers this Court to the case of Rarua and Ors v. Tatana Araira Development Association & Ors (2021) N8910.  I have considered the case.  All I can say is that the Court therein did not consider and make a specific finding on the question of when pleadings shall end by applying the rules as discussed herein, as well as, as considered by the cases that I have referred to above, one of which is a Supreme Court decision.

17.	The Writ of Summons and Statement of Claim filed herein was served on the defendants on 2 November 2017.  The defendants filed their Notice of Intention to Defend shortly after on 9 November 2017.  So, this meant that they had 44th days to file their defence as the notice was filed within 30 days.  See case:  Jackson Walaun v. Royal Wilson (2016) N6272.  The 44th day fell on 16 December which was on a weekend so the last day was on the Monday next which was on 17 December 2017.  See Order 1 Rule 14(4), National Court Rules.  So, pleadings in the present case closed on 18 December 2017.  

18.	As such and in summary, I find the defendants’ citation of Order 10 Rule 5 as a source under its NoM, to be competent.  In so doing, I dismiss the plaintiff’s argument in this regard.

19.	I will now address the main issue based on the defendants’ claim that the plaintiff did not set down the proceeding for trial within 6 weeks after the close of pleadings, that is, as of or after 17 December 2017.

COMMON GROUND

20.	It is not disputed that this matter has not been set down for trial.  It is also not disputed that there has been delays in progressing the matter to trial, and that in the past, the matter had been listed for summary determination.

ISSUES

21.	The main issues, in my view, are as follows, (i), whether the delay was intentional or inordinate, (ii), whether the plaintiff has provided a reasonable explanation for the delay, and (iii), whether the defendants have suffered injustice or prejudice.

ORDER 10 RULE 5

22.	There are various requirements and considerations that are regarded by the Courts in this jurisdiction when dealing with Order 10 Rule 5 applications such as the present NoM.  I have considered them, but for this purpose, I prefer to adopt, as my own, what David J has stated in Goma Ermuke v. MVIL (2009) N3719: 

28.  The power of the Court to dismiss proceedings on the ground of want of prosecution is discretionary. The discretion is to be exercised having regard to all the circumstances of a case:  see Kai Ulo & 2 Ors v. The State [1981] PNGLR 148 and Burns Philp (New Guinea) Limited v. Maxine George [1983] PNGLR 55.  

29.  A long line of cases have discussed the law from which emerge a number of well-established principles.  These principles were succinctly summarised by His Honour, Justice Kandakasi in the case of Vivisio Seravo.  There, His Honour said:

“It is now clear law especially in the context of O.10 r.5 of the NCRs that an application for a dismissal of proceedings for want of prosecution may be granted if:

1.	The plaintiff's default is intentional or is allowing for an inordinate and inexcusable delay in a prosecution of his claim;
2.	There is no reasonable explanation given by the plaintiff for the delay; and
3.	That the delay has caused injustice or prejudice to the defendant.

This is apparent from cases like that of Ronald Nicholas v. Commonwealth Niugini Timbers Pty Ltd [1986] PNGLR 133 which has been followed in a number of other cases such as Umbu Waink & Anor v. Motor Vehicles Insurance (PNG) Trust and The State (15/08/97) N1630. I consider those principles relevant and therefore they apply in the context of O.4. r.36 (1), in the absence of any authority to the contrary.”

30.  In Kai Ulo, the Supreme Court said that the onus is on an applicant to establish a prima facie case of delay and the onus then shifts to the respondent to give a satisfactory explanation for the delay.

31.  Matters relevant to determining whether there was inordinate or undue delay or whether satisfactory explanation for the delay had been established were suggested by the late Justice Kapi (as he then was) in Kai Ulo and by the Supreme Court in Burns Philp (New Guinea) Limited.  These are:

·	the mechanics of producing appeal papers such as typing, compilation of appeal book and shortage of staff, etc;
·	the availability of reasons and transcript of evidence;
·	the length of and reasons for the delay on the appellant's part;
·	the extent to which, having regard to any delay, evidence likely to be adduced may lose its cogency;
·	any negotiations between the parties.

32.  Other factors to be used as guides are:-

·	that the court should also look at the conduct of the parties and their lawyers: John Niale v Sepik Coffee Producers Ltd & Ors (2004) N2637;
·	the duty of the court to give paramount consideration to the dispensation of justice under s 158 (2) of the Constitution: Ahmadiyya Muslim Mission.  

33.  In Roland Nicholas v. Commonwealth New Guinea Timbers Pty Ltd [1986] PNGLR 133, it was said that where there was a long delay in progressing the proceedings to trial, a balance must be struck as between the plaintiff and the defendant and in the end the Court must decide whether or not in the balance, justice demands that the proceedings should be dismissed.

CONSIDERATION

23.	When I apply these requirements to the present case, I make these observations.  Firstly, delay period would commence on or about 18 December 2017.  The plaintiff would have about 6 weeks from that date to set the matter down for trial.  The 6 weeks would be about 2 months thus cover the months of January and February of 2018.  So, to compute a delay period, I will start from March 2018 to the date of filing the NoM which is 3 March 2022.  The delay period therefore is 3 years 11 months or say close to 4 years.

24.	So, I ask myself this first question.  Was the delay or default by the plaintiff intentional or inordinate and inexcusable?  The burden to negate this question or test rests with the plaintiff after the defendant establishes a case of delay.  There is clearly delay established in the matter, and the delay appears inordinate.  The plaintiff has, however, not filed any affidavit in response to the NoM.  The only affidavit filed is in response to the substantive matter, that is, the affidavit of Justin McGann which was filed on 9 March 2022.  I find as a matter of fact that the plaintiff has filed no evidence in response to the allegations made by the defendants in their NoM.  As such, I am not satisfied that the plaintiff has discharged its burden of proof which has shifted to it in regard to the first element, that is, on whether the delay was intentional or inordinate and inexcusable.  Without that and any evidence to rebut the evidence of the defendants, which was deposed to by Gudmundur Vidar Fridriksson filed on 3 February 2022, I find that the delay may also be intentional.  I dismiss submission reasons provided by the plaintiff counsel which I consider are unsubstantiated.  In my view, the plaintiff ought to have given evidence to show and prove that it had not intentionally delayed progressing the matter to trial; and that the delay was not inordinate or inexcusable.  The plaintiff, in my view, has failed in that regard.

25.	The next element or consideration is this, and I ask this next question.  Did the plaintiff fail to give a reasonable explanation for the delay?  Again, the defendants have established the delay and they have submitted that no valid or reasonable explanation was provided by the plaintiff.  This requirement, in my view, was not difficult to establish by the defendants given that no evidence was filed by the plaintiff to oppose the NoM.  For the same reasons I give in regard to the first element or consideration, I will say the same here.  I find that the plaintiff has failed to file any evidence to explain or state its reasons for the vast or long delay or about 4 years, that is, of why it had not progressed the matter to trial.  Such conduct by the plaintiff, in my view, also goes to show that it is not serious about bringing this matter to a finality.  It also shows contempt to the Court in that the plaintiff has used the Court process to bring its claim and has kept the Court (and the defendants) waiting for almost 4 years to hear the matter, and when challenged, refuses to give its reasons.

26.  The 3rd requirement or consideration is prejudice.  This, in my view, is not difficult to assess.  Obviously, the delay of 4 years would have had negative effect on the defendants and their businesses.  I also note that the allegation or claim is based on the oral contract.  And the alleged event where the parties were said to have met whereupon the terms of the oral contract were allegedly negotiated and agreed to, occurred sometime ago on or about 22 July 2015.  If we compute from there, that will be 6 years 7 months ago.  In my view and for obvious reasons, the plaintiff had a duty to ensure that its claim is heard without undue delay.  Extended delays will always put at risk the availability of witnesses to testify, and if they do appear in Court to testify, the veracity of their evidence may also be at great risk of being compromised due to loss of or faded memory because of the length of delay.

27.	I find that the defendants have established or discharged this requirement against the plaintiff.  And on the contrary, I find that the plaintiff was unable to negate this requirement.

OTHER CONSIDERATION

28.	The other consideration I take into account which favours the defendants is this.  This is second occasion where the matter has been listed for summary determination or disposal.  The Court had on its own volition listed the matter for summary determination due to want of activity on the Court file.  The matter was listed for summary determination on 17 April 2021.  It was not dismissed because the plaintiff had appeared on that day to give its reasons.  His Honour Hartshorn J, then ordered the mater to be removed from the summary determination list.  I observe that that did not prompt the plaintiff to take active steps to progress the matter to trial.

EXERCISE OF DISCRETION

29.	In summary, I will exercise my discretion and dismiss this matter.  I am satisfied on the balance of probabilities that the plaintiff has intentionally delayed the matter.  I am also satisfied that the delay was inordinate and inexcusable; that no reasonable explanation was given by the plaintiff through any tendered or filed evidence; and I find that the defendants have and will likely suffer prejudice because of the delayed actions or conduct by the plaintiff in prosecuting the matter.

COST

30.	An award of cost is discretionary.  I will order cost to follow the event on a party/party basis to be taxed if not agreed.

ORDERS OF THE COURT

31.	I make the following orders:

1.	The proceeding is dismissed in its entirety.

2.	The plaintiff shall pay the defendants’ costs of the proceeding on a party/party basis which may be taxed if not agreed.

3.	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

________________________________________________________________
Young & Williams Lawyers:		Lawyers for the Plaintiff
Liria Lawyers & Forensic Services:	Lawyers for the Defendants