N10654

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
 
WS NO. 457 OF 2022

BETWEEN
GUARD DOG SECURITY SERVICES LIMITED 
 Plaintiff
   
AND
K K KINGSTON LIMITED 
 Defendant

Lae: Dowa J
2023:    1st August
2024:   2nd February

PRACTICE AND PROCEDURE- application for dismissal of proceedings for abuse of the process-alleged failure to appoint independent counsel to act for company in compliance with Order 4 Rule 5(2) of the NCR as propagated by Tritonia Rule forming part of underlying law-whether the proceeding is an abuse of the process because the Writ of Summons was signed and filed by a lawyer holding a Restricted Practising Certificate in the employ of the Plaintiff company-held no breach of the National Court Rules as employed lawyer was qualified to act for the Plaintiff by virtue of section 35 of the Lawyers Act 1986-Application refused.

Cases Cited:

Papua New Guinean Cases
Mt Hagen Urban LLG v Sek No.15 (2009) SC1007
Philip Takori v Simon Vagari (2008) SC905
Telikom PNG v ICCC & Digicel (PNG) Ltd (2008) SC906 
Kerry Lerro v Philip Stagg (2006) N3050
PNG Forest Products vs. State [1992] PNGLR 85
Ronny Wabia vs. BP Exploration Co. Ltd [1998] PNGLR 8 
Wabia vs. BP Petroleum (2019)) N4337 
National Provident Fund vs. Maladina & Others (2003) N2486 
 Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310

Overseas Cases
Tritonia Ltd-v-Equity and Law Life Assurance Society [1943] AC 584
Newton v Brisbane City Council (2014) QCA 242 
 Allied Irish Banks Plc v Aqua Fresh Fish Ltd (2015) IECH 184

 Counsel:
M Maburau, for the Plaintiff
J Kakaraya, for the Defendant

DECISION

2nd February 2024 

1.	DOWA J:	 This is a ruling on the Defendant’s application seeking dismissal of the proceedings. 

Brief Facts

2.	The Plaintiff is a company incorporated under the Companies Act. It carries on business of providing security services. The Plaintiff claims against the Defendant the sum of K 607,091.76 in these proceedings for unpaid invoices for security services rendered to the Defendant. The Defendant filed a Defence, generally denying the claim.

The Defendants application.

3.	By Notice of Motion, the Defendant seeks the following orders: 

“
1.	That these proceedings be dismissed generally pursuant to Order 12 Rule 1, Order 10 Rule 9A (15) (1) (a) and (2) (e) of the NCR for non-compliance with Order 4 Rule 5 (2) of the National Court Rules.

2.	Further and/or alternative to paragraph 1, the Plaintiff’s Writ of Summons filed 25 October 2022 and Amended Writ of Summons filed 5 June 2023 be struck out pursuant to Order 8 Rule 27 (1) (c) of the National Court Rules  as being an abuse of process in that the lawyer who has endorsed both Writs is the holder of the Restricted Practicing Certificate and does not act under the supervision of the holder of an Unrestricted Practicing Certificate as required by Section 37 (1) of the Lawyers Act 1986.

3.	Further and/or alternatively to paragraph 1 and 2, the proceedings be stayed permanently pursuant to Order 12 Rule 40 (1) (b) and (d) of the National Court Rules for being frivolous and vexatious and contrary to public policy.

4.	The Defendant’s costs of the proceedings be paid by the Plaintiff on an indemnity basis including the costs of this application, such costs to be taxed if not agreed.

……”
4.      The Defendant relies on the Affidavit of Fidelis Simon filed in support of the Notice of Motion. He is a legal clerk in the employ of Messers O’Brien Lawyers. He noted that both the Writ of Summons and the Amended Writ of Summons filed in the proceedings was filed by Manoel Mubarau, a lawyer employed by the Plaintiff. He conducted a search with the Papua New Guinea Law Society and found out that Ms Maburau is the holder of a Restricted Practising Certificate.

5.     The Defendant now alleges the proceedings are an abuse of the process as the lawyer who filed the proceeding is not qualified to commence proceedings for the Plaintiff company as required by the Lawyers Act and the National Court Rules.

     	 Issues

6.	The main issue for consideration is whether the proceeding is an abuse of the process because the Writ of Summons was signed and filed by a lawyer holding a Restricted Practising Certificate in the employ of the Plaintiff company. 

Submissions of Counsel

7.	The gist of the Defendant’s submission is that the the Plaintiff has issued this proceeding in breach of:

a)	Order 4 Rule 5 (2) of the National Court Rules; and
b)	The binding rule comprised in the underlying law received pursuant to Sch 2.2 of the Constitution and expressed in Tritonia Ltd-v-Equity and Law Life Assurance Society [1943] AC 584 (the Tritonia Case) that a corporation cannot go into court itself represented by a director, officer or employee or otherwise appear except by independent counsel.

8.	Counsel for the Defendant submits that whilst Maburau is a lawyer, she is otherwise excluded from acting for the Plaintiff in Court because she: 

a)	lost that right when she became an employee of the Plaintiff, and her acts are those of the Plaintiff which is directly offensive to the rule in the Tritonia Case; and

b)	holds a Restricted Practicing Certificate and her conduct as lawyer without the constraints of supervision of an Unrestricted Practicing Certificate holder is directly offensive of sections 37 (1) and 39 (4) of the Lawyers Act.

9.	 Counsel submits further that the act of noncompliance constitutes a nullity and not merely an irregularity and that the proceedings be dismissed for being frivolous, vexatious and abuse of the process under Order 12 Rule 40 (1) and Order 10 Rule 9A (15) of the NCR.

10.	 Ms Maburau, lawyer for the Plaintiff, opposes the application, submitting:

a.	A solicitor for the purposes of Order 4 Rule 5 (2) is defined by Order 1 Rule 6 of the NCR as a person admitted to practice as a lawyer under the Lawyers Act 1986.  She is admitted as a lawyer under section 35 of the Lawyers Act and holds a Restricted Practising Certificate and is qualified to act as lawyer for the Plaintiff.

b.	As employed lawyer for the Plaintiff, she does not have to be under supervision of the holder of Unrestricted Practising Certificate for the purposes of section 37 (1) of the Lawyers Act.

c.	That the Defendants have failed to demonstrate how the proceedings are frivolous and vexatious and is filed against public policy reasons.

Consideration of the Issues
 
11.	The Court notes the Defendant’s submission that the proceedings have been issued in breach of the Lawyers Act, the National Court Rules and the underlying law governing commencement and maintaining an action by a company, in that a company cannot itself by its employee issue a Writ under its own hand and to represent itself in litigation before the Court.

12.	The relevant Rule alleged to have been breached is Order 4 Rule 5 (2) of the National Court Rules. It reads:

   “5    Right to sue in person. (4/4)
(1) Subject to Sub-rule (2), to Rule 6(1) and to Order 5 Rule 20(2) (disability), any person may proceed in the Court by a solicitor or in person.
(2) Except as provided by or under any Act, a corporation may not commence or carry on any proceedings otherwise than by a solicitor.”

13.	A “solicitor” is defined by Order 1 Rule 6 of the NCR as a person admitted to practice as a lawyer under the Lawyers Act 1986. Likewise, section 3 of the Interpretation Act defines a lawyer as a person who has been admitted as a lawyer under the Lawyers Act 1986.

14.	Section 35 (1) of the Lawyers Act is relevant. It states:

“(1) A person shall not practise as a lawyer unless–
(a) he has signed the Roll; and
(b) he is the holder of a current restricted or unrestricted practising certificate.”

15.	 In the present case there is no dispute that Ms. Maburau who signed and filed the Writ of Summons for the Plaintiff is a lawyer holding a Restricted Practising Certificate in accordance with section 35 of the Lawyers Act. She is employed by the Plaintiff as an in-house lawyer. The Defendant contends that as an employee of the Plaintiff she cannot act as lawyer for the Plaintiff for the purposes of Order 4 Rule 5 (2) of the NCR as she is prohibited by the binding Rule in Tritonia Case which stands for the authority that a corporation cannot go into Court itself represented by a director or employee except by independent counsel. 

16.	In my view there is no breach of the Lawyers Act nor the National Court Rules by the Plaintiff when it commenced the proceedings by its employed lawyer. Ms. Maburau is a qualified lawyer meeting the requirements under section 35 (1) of the Lawyers Act. As a certified lawyer, she endorsed and filed the Writ of Summons meeting the requirements of Order 4 Rule 5 (2) of the NCR. Rule 5(2) does not expressly prohibit an employed lawyer of a company from commencing or carrying on its Court proceedings nor does it expressly require a lawyer with an Unrestricted Practising Certificate to act for it. More importantly, the Rule does not mandatorily require an independent counsel to act for a corporation. 

17.	Besides, the word “may” in the Rule denotes a less stringent requirement   for a lawyer to act for a corporation in Court proceedings. The rule provides a helpful guide for companies involved in litigation. This is understandable. A company once registered is a separate legal entity under section 16 of the Companies Act.  The Companies Act and a company constitution are the brains and heart of a company. The directors are the limbs, who carry on the functions of the company, a legal person. In this setting, an employed lawyer is well suited to act for and represent the company. 

18.	Whilst the rule in Tritonia Case relied on by counsel for the Defendant may form part of the underlying law in this jurisdiction, it is of persuasive value only and not binding on this Court. There is no judicial authority in PNG considering the broader application of the Tritonia Rule for the purposes of Order 4 Rule 5 (2). In the hierarchy of laws in this country under section 9 of the Constitution, the Acts of Parliament and subordinate rules made thereunder take precedence over overseas case authorities forming part of the underlying law. By virtue of section 35 (1) of the Lawyers Act, Ms. Mabarau is qualified to act for the Plaintiff for the purposes of Order 4 Rule 5(2) of the NCR. 

19.	The Court notes the submissions of counsel for the Defendant that the Tritonia Rule is good law for policy objectives as applied and expounded in other overseas cases, Newton v Brisbane City Council (2014) QCA 242 and Allied Irish Banks Plc v Aqua Fresh Fish Ltd (2015) IECH 184 and others relied on by counsel. Based on the   policy considerations in Allied Irish Banks, the Defendant submits further that as an employed lawyer, Ms. Maburau, would have a conflict of interest and her professional duties to the Court and her colleagues are impaired.
 
20.	Whilst the policy considerations listed in Allied Irish Banks appear to be sound propositions, they are not of universal application. There is no evidence that Ms. Maburau has a conflict of interest by acting for her employer. I do not consider her being lawyer for the Plaintiff would dimmish her ethical and professional duties to the Court and her colleagues. 

21.	I am also mindful of the contention by the Defendant that Ms Maburau is not practicing under the supervision of a holder of an Unrestricted Practising Certificate and her acts are in breach of section 37 of the Lawyers Act. In my view she is not in breach of section 37 (1) of the Lawyers Act, because there is no evidence that she is practising on her own account, nor in partnership with another lawyer nor holding moneys in trust for another person. She is employed by the Plaintiff to perform legal duties as lawyer for the Plaintiff. She is simply acting for and representing her employer in the proceedings. 

22.	Finally, I note the submissions of Defence counsel that this Court has the power to dismissing the proceedings for frivolity and abuse of the process under the National Court Rules especially Order 12 Rule 40 (1) for the alleged noncompliance of Order 4 Rule 5(2).

22. The law on applications under Order 12 Rule 40(1) of the National Court Rules is settled in this jurisdiction in cases such as Mt Hagen Urban LLG v Sek No.15 (2009) SC1007, Philip Takori v Simon Vagari (2008) SC905, Telikom PNG v ICCC & Digicel (PNG) Ltd (2008) SC906 and Kerry Lerro v Philip Stagg (2006) N3050. 

23. Order 12 Rule 40 (1) of the NCR is constructed and defined by the Supreme Court (per Takori v Yagari) in following terms: 

a)	A claim may be disclosing no reasonable cause of action if the facts pleaded does not clearly show all necessary facts and legal elements to establish a claim known to law.

b)	A claim maybe frivolous if it can be shown that it is obviously untenable that it cannot possibly succeed or is bound to fail if it  proceeds to trial.

c)	Proceedings are vexatious where the case is a sham, amounting to harassment of the opposing party, or where the opposing party is put to unnecessary trouble and expense of defending the case. 

24.	Adding to the above list, proceedings are an abuse of the process where there is misuse or unjustified or unreasonable use of the legal system, proceedings, or process to further a cause of action which may be wrongful, futile, unmeritorious or for an improper purpose. 

25.	It is important to note that the Court cannot readily dismiss a case on poor pleading or for lack of disclosing a reasonable cause of action or for abuse of process unless it is shown that the case is clearly frivolous or vexatious or an abuse of the process and that it is unlikely to succeed even if it proceeds to trial.  Refer:  PNG Forest Products vs. State (1992) PNGLR 84–85, Ronny Wabia vs. BP Exploration Co. Ltd (1998) PNGLR 8, Wabia vs. BP Petroleum (2019) N4337, Mt. Hagen Urban LLG vs. Sek No. 15 (2009) SC1007, National Provident Fund vs. Maladina & Others (2003) N2486; and Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310.

  Conclusion 

26.	 In the end, the Court has reached a conclusion based on the reasons given above, that the current proceedings are not an abuse of the process. They are not frivolous or vexatious. The claim is for recovery of outstanding invoices for security services rendered, which is contested. The Plaintiff has an arguable case and shall be given the opportunity to prosecute it and shall not be driven from the judgment seat prematurely. Accordingly, the Defendants application for dismissal shall be refused in its entirety.

Costs

27.	 The Defendants application is refused and therefore as a matter of course, the Defendant shall pay the Plaintiffs cost of defending the application. The Court will award cost in favour of the Plaintiff. 

Orders

28. The Court orders that:

1.	The Defendant’s application is refused.
2.	The Defendant shall pay the Plaintiff’s cost of the application to be taxed, if not agreed.
3.	The matter will return to Court for directions on 9th February 2024. 
4.	Time be abridged.
_______________________________________________________________
Manoel Mabarau-in-house Lawyer:	Lawyer for the Plaintiff
O”Briens Lawyers:	Lawyers for the Defendant