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Digal v Kaure Investments Ltd [2022] PGNC 67; N9503 (18 March 2022)

N9503

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 290 OF 2020
BETWEEN:
DAVID AU DIGAL
Plaintiff

AND:
KAURE INVESTMENTS LIMITED
First Defendant

AND:
NATIONAL HOUSING CORPORATION
Second Defendant

AND:
JV INTER LIMITED
Third Defendant

Goroka: Mugugia, AJ
2022: 17^th, 18^th March

PRACTICE AND PROCEDURE – Order 10, Rule 21(a) of the National Court Rules – questions sought to be heard and determined separately – application seeking leave - whether leave should be granted - applicable principles - application of principles to present case - application refused.

Cases Cited:
Papua New Guinea Cases

Timothy Lim Kok Chuan v. Simon Goh Say Beng (2004) N2753

Overseas Cases

Carlo Nobili S.p.A. Rubinetterie v Militaire Nominees Pty Ltd. [2004] WASC 47.

Counsel:

A. Kuria, for the Plaintiff
E. Minok, for the First Defendant
N. Amoiha, for the Third Defendant
No appearance for the Second Defendant

RULING

18^th March, 2022

1. MUGUGIA, AJ: I heard the Third Defendant’s application seeking leave pursuant to Order 10, Rule 21(a) of the National Court Rules to have certain questions to be heard and determined separately as a stated case on 17 March 2022. This was by way of notice of motion filed on 18 February 2022. Mr Amoiha appeared as Town Agent for Henaos Lawyers and made the application. He relied on submissions drafted by Henaos Lawyers. Counsel representing the Plaintiff opposed the application. There was no strong opposition from the First Defendant’s lawyer.
   
2. The questions raised are as follows:
   

Question 1: Whether the Plaintiff is estopped or precluded from instituting and prosecuting this matter by operation of the principle of res judicata following this Court’s judgment in WS No. 640 of 2016, David Au Digal v. Kaure Investment limited and National Housing Corporation delivered on 26 November 2018.
Question 2: Alternatively, whether the Plaintiff is estopped from raising the issues he is raising in this proceeding by operation of the principle of issue estoppel as these issues were already heard and determined in WS No. 640 of 2016, David Au Digal v. Kaure Investment Limited and National Housing Corporation.

Question 3: Alternatively, whether this Court is functious officio after rendering its judgment in WS No. 640 of 2016, David Au Digal v. Kaure Investment Limited and National Housing Corporation on 26 November 2018.

Question 4: Whether the Plaintiff’s interests, be it legal, equitable or otherwise in relation to the property the subject of this proceeding ceased or came to an end following this court’s decision delivered on 26 November 2018 in WS No. 640 of 2016, David Au Digal v. Kaure Investment Limited and National Housing Corporation.

BACKGROUND

3. The Plaintiff’s claim in this proceedings relates to fraud. He claims that he is the proprietor of Section 7 Allotment 3, Goroka, Eastern Highlands Province. He made an application to the Second Defendant (NHC) to acquire the adjacent property described as Section 7 Allotment 4. The NHC offered to sell the property to the Plaintiff at K12,000.00. This offer was made to the Plaintiff in a letter dated 12 December 2000. The Plaintiff was required to make a 10% deposit. NHC delayed in preparing and forwarding a draft contract for sale to the Plaintiff. The property was transferred to the First Defendant on 6 August 2012.
   
4. The Plaintiff had filed a previous National Court proceeding referenced as WS No. 640 of 2016, David Au Digal v. Kaure Investment Limited and National Housing Corporation. This was a claim for breach of contract and fraud against the First and Second Defendants. While this proceeding was on foot, the First Defendant sold and transferred the property to the Third Defendant. The transfer was registered on 16 March 2017. The National Court handed down its decision on 26 November 2018.
   
5. The Plaintiff says that the issue in this case is whether the Third Defendant is a bona fide purchaser for value or an innocent buyer of the property, and the issue in the previous proceeding (WS No. 640 of 2016) was whether the purported sale and transfer of the property by the Second Defendant to the First Defendant was fraudulent and therefore unlawful.
   

ISSUE

6. The issue for determination is whether leave should be granted to the Third Defendant.
   

THE LAW

7. In our jurisdiction, the power to make orders for a question to be decided separately is contained in Order 10, Rule 21(a) of the National Court Rules which provides that:

“21. Order for decision.

The Court may make orders for

(a) the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.”

8. Gavara-Nanu J made this statement in Timothy Lim Kok Chuan v. Simon Goh Say Beng (2004) N2753:
   

Order 10 r 21 of the National Court Rules is similar to Order 31 r 2 of the New South Wales Supreme Court Rules. From the discussions of this Rule in Ritchie’s Supreme Court Procedure New South Wales-; Vols. 1 and 2, at p 2661, following instances or conditions emerge, upon satisfaction of which, certain issues or questions arising in the proceedings may be determined separately from the other issues or questions:-

1. Where there is a preliminary question of fact or law that is critical to the disposition of the proceedings, so that if decided one way, it will necessarily dispose of the proceedings.
2. Where resolution of separate question may result in early resolution of the proceedings or by narrowing the disputed issues, avoid significant additional expenses or delay.
3. Where issues are clearly separable.
4. Where liability issue can be determined ahead of the final assessment of damages.
   

Following instances also emerge from the discussions of that Rule, which would operate as a bar to certain questions or issues in the proceedings from being determined separately:-

1. Where the question proffered for separate determination involves the whole subject matter of the proceedings.
2. Where the question involves alternative causes of action or defences.
3. Where the question to be determined would require findings of fact on matters likely to be contentious on remaining issues in the proceedings.
4. Where the question may involve the credibility of witnesses which is material to remaining issues in the proceedings (and thus would require the question to be dealt with by another judge).
5. Where the parties propose that the question be determined on the basis of limited agreed facts.”
   
9. My research on the relevant law led me to the Western Australia case of Carlo Nobili S.p.A. Rubinetterie v Militaire Nominees Pty Ltd. [2004] WASC 47. In this case, McKechnie J gave the following summary of the principles:
   
   • A separate trial of issues is only appropriate in clear and simple cases.
   • Separate trials of issues should only be embarked upon when the utility, economy and fairness are beyond question.
   • The fact that the resolution of a separate trial may determine the litigation is relevant.
   • Separate trials of issues may be appropriate where it is likely to save expense and inconvenience.
   • There is a focus in the Rules of the Supreme Court on the expedition of determination of matters before the Court and separate trials of issues may advance the expedition.
   • A possibility that the determination of issues tried separately may lead to settlement should be taken into account even though the issues may not finally dispose of the action.
   • In many cases the formulation of specific questions to be tried separately, from and in advance of other issues, will assist in the resolution of the matters in issue if the questions are capable of final answer in accordance with the judicial process.
   • Separate trials are inappropriate where the result depends on complex issues of fact or when a preliminary question is one of mixed fact and law.
   • The procedure should be confined generally to cases where facts are complicated and the legal issues short, otherwise it can be a treacherous shortcut.
   • Separate trials may be productive of delay, extra expense and uncertainty of outcome, which they are intended to avoid. Saving some time is often illusory when the parties have the necessity of making full preparation and factual matters relevant to one issue are relevant to others which overlap.
   • There is potential for further appeals.
     

In that same case, McKechnie J stated:

“The emphasis is on the possible saving of costs and the speedy resolution of matters. That is most likely to occur where the preliminary issue is relatively simple and is not enmeshed in factual controversy. Ultimately, the question is whether the court is satisfied that it is 'just and convenient' for an order for a separate trial to be made.”

PARTIES’ SUBMISSIONS

Third Defendant’s Submissions

10. Mr Amoiha relied on the Third Defendant’s submissions drafted by Henaos Lawyers which were handed up to Court at the hearing. These are the Third Defendant’s submissions:
    
11. For Question 1, the submission is that the question is based on the fact that the Plaintiff has come to Court for the second time using the same set of facts which were already heard and determined by this court in WS No. 640 of 2016. The facts are similar. The cause of action in both cases is fraud. In WS No. 640 of 2016, the Court declined to grant the relief for specific performance and ordered damages to be paid by the First and Second Defendants to the Plaintiff. Damages were already paid. The Plaintiff is claiming specific performance in the current proceedings with damages. The issue of res judicata arose which the Court needs to determine separately.
    
12. For Question 2, the submission is that this question rests on the issue of whether or not there was fraud involved in the transaction between the First and Second Defendants, and that issue was dealt with in WS No. 640 of 2016. This Court is estopped from dealing with the same issue again for the second time. Reference was made to the pre-requisites in relation to the doctrine of issue estoppel which were set out in National Housing Corporation v. Paul Asakusa & 1 Other (2012) SC1165. The question on the principle of issue estoppel is clearly not only a preliminary issue but a threshold issue that this Court needs to determine before the substantive issues raised in this proceeding.
    
13. For Question 3, the submission is that the question is based on the proposition in law that once a court has passed judgment or made a decision, it has discharged its function or duty and therefore lacks further power to make further rulings or take other actions. The National court already made a decision in WS No. 640 of 2016. Reference was made to the decision which is Annexure “A” in Wesley Bigi’s affidavit. This means that this Court is functious officio.
    
14. For Question 4, the submission is that this question is based on the premise that after the Court delivered its decision in WS No. 640 of 2016, the Plaintiff’s interest in the subject property ceased or came to an end there and then. He cannot raise his dying interest over the property again in the present proceedings.
    
15. In conclusion, the submission is that it is clear that the principles in Timothy Lim Kok Chuan v. Simon Goh Say Beng (2004) N2753 are met in this application. Leave should therefore be granted for the proposed questions to be determined separately as stated case.
    

Plaintiff’s Submissions

16. Mr Kuria for the Plaintiff, opposed the Third Defendant’s application, arguing that the application is misconceived. In relation to Question 1, the issue of res judicata was raised in the defence, and submissions can be made at the trial. In relation to Questions 2, 3 and 4, the issues in the present case and WS No. 640 of 2016 are not the same. The issue in the present case is whether the Third Defendant is a bona fide purchaser. The only issue to be tried at the trial is whether the Third Defendant is a bona fide purchaser. There is no separate issue. This application should be dismissed with cost because it is misconceived.
    

First Defendant’s Submissions

17. Mr Minok for the First Defendant submitted that they will be putting a separate application for res judicata before the Court, and the questions raised now and their client’s application can be dealt with together in the future. The questions should be dealt with separately.
    

CONSIDERATION

18. I have considered the submissions of Counsel, the relevant Court documents before me and the law applicable.
    
19. I noted at the outset that the Affidavit in Support of Wesley Bigi filed on 18 February 2022 did not state clearly and precisely the reasons why leave should be granted to the Third Defendant. The affidavit is a short one with six paragraphs. Reference was made to the notice of motion, and the questions raised in the motion. No reasons were given or stated in the affidavit to support the order sought in the motion.
    
20. I have closely considered the principles set out by McKechnie J in the case of Carlo Nobili S.p.A. Rubinetterie v Militaire Nominees Pty Ltd. [2004] WASC 47. I have also considered the case of Timothy Lim Kok Chuan v. Simon Goh Say Beng (2004) N2753, where Gavara-nanu J set out the instances or conditions. Upon satisfaction of these instances or conditions, certain issues or questions arising in the proceedings may be determined separately from the other issues or questions.
    
21. Applying the principles of law to the material submitted in the present case, I am not satisfied that it is appropriate for leave to be granted to the Third Defendant.The main reason is that I am of the view that all issues inaproceeding should be heard and determined together. All issues should be tried and decided at the same time.
    
22. I ask myself this question: “Is this a clear and simple case for a separate trial of issues to be heard?” I remind myself that a separate trial of issues is appropriate for simple and clear cases. Allegations of fraud are made in this proceedings. This is not a clear and simple case for a separate trial of issues. It is a case of fraud which is serious in nature. The issue concerning fraud should be determined at the substantive hearing.
    
23. Question 1 relates to the principle of res judicata which was raised in the Third Defendant’s defence filed on 19 October 2020. Questions 2, 3 and 4 involve matters which have not been raised by the Third Defendant in its defence. I am of the view that these matters are now raised by the Third Defendant because they were not raised in its defence. Questions 2, 3 and 4 involve alternative defences which operate as a bar.
    
24. Having considered the evidence and having heard the submissions of the parties, I consider that the questions raised by the Third Defendant should not be isolated for a separate determination before the trial. If the questions are isolated and tried separately, it will not assist this Court in the resolution of the matters in issue. I am of the view that the preliminary determination of the questions raised will not facilitate the just, quick and cheap resolution of the proceedings. This application should be refused, and directions given for the progression of the matter to the substantive hearing. As such, I do not consider it appropriate that leave be granted to the Third Defendant.
    

CONCLUSION

25. I am of the opinion that the interests of justice will be better served if the trial and determination of all the issues of fact and law take place at the substantive hearing. I am not satisfied that it is just and convenient for leave to be granted. For these reasons, I refuse the application by the Third Defendant.
    

COURT ORDERS

26. I make the following orders:
    

1. The Third Defendant’s application for leave is refused.

2. Costs are to be paid by the Third Defendant.

3. Time for entry of these orders is abridged to the date and time of settlement of these

orders by the Registrar which shall take place forthwith.

The Court orders accordingly.
________________________________________________________________
A. Kuria: Lawyers for the Plaintiff
E. Minok: Lawyers for the First Defendant
N. Amoiha: Lawyer for the Third Defendant