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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
WS NO 794 OF 2014 (COMM)
PAKO F&C HOLDINGS (PNG) LIMITED
Plaintiff
V
CLOUDY BAY SUSTAINABLE FORESTRY LIMITED
(IN RECEIVERSHIP) (1-732)
Defendant
WAIGANI: ANIS J
16, 22 APRIL 2025
JOINDER APPLICATION – Order 5 Rule 2(b) and 5(8)(1) – National Court Rules – matter at the enforcement stage – whether joinder of applicant necessary after the completion of the proceeding – consideration - ruling
Cases cited
Pako F & C Holdings (PNG) Ltd v. Cloudy Bay Sustainable Forestry Ltd (2021) N9141
Pako F&C Holdings Ltd v. PNG Sustainable Development Program Limited and Cloudy Bay Sustainable Development Ltd (2025) N11204
Barry v. Luma (2017) SC1639
Wallbank v State [1994] PNGLR 78
Kitogara Holdings Pty Ltd v National Capital District Interim Commission & Ors [1988-89] PNGLR 346
Telikom PNG Ltd v. Independent Consumer and Competition Commission and 1 Or (2008) SC906
Amben and 1 Or v. Maru and Ors (2015) SC1422
Mokono v. Water PNG Limited (2023) N10354
Counsel
M Andrew, for the plaintiff
M T Goodwin, for the defendant
J Nigs, for an interested party
DECISION
1. ANIS J: This was a hearing of an application by PNG Sustainable Development Program Limited (PNGSDPL/applicant) to be joined as a party or a defendant in the proceeding. The notice of motion filed 19 December 2024 (NoM) was heard on 16 April 2025 before I reserved my ruling to a date to be advised.
2. The parties have been notified so I will rule on the matter.
BACKGROUND
3. The substantive proceeding is complete, and the matter is at the enforcement stage. Final orders of the Court was made on 20 September 2021. The plaintiff had sued the defendant for breach of contract in 2014. On 12 July 2018, Hartshorn J held the defendant liable, and the matter was adjourned for assessment of damages. On 20 September 2021, after conducting the assessment hearing, I ordered the defendant to pay the plaintiff damages in the sum of K117,480, 118.92 plus interest and costs. See: Pako F & C Holdings (PNG) Ltd v. Cloudy Bay Sustainable Forestry Ltd (2021) N9141.
4. So, the matter was completed on 20 September 2021. On 14 June 2024, by Court Order, the defendant was placed under receivership. Andrew Pini was appointed as its Receiver to manage the affairs or properties of the defendant. The Receiver has appeared on behalf of the defendant at this hearing. His instruction, through his counsel Mr. Goodwin, is that the defendant takes a neutral position in the NoM.
5. PNGSDPL was once the owner or sole shareholder of the defendant. In 2014, it sold all its shares to 2 companies, namely, Lifese Engineering (PNG) Limited and Oppa Limited (2 companies) for K40 million. PNGSDPL, the 2 companies, and the defendant executed an agreement called Share Sale Agreement (SSA). The 2 companies paid K15 million for the shares. The balance of K25 million remained outstanding. Premised on the arrangement between the parties, all the shares of PNGSDPL in the defendant that the 2 companies had intended to purchase, were mortgaged to PNGSDPL as securities. Two separate share mortgages were signed between the 2 companies and PNGSDPL (2 share mortgage agreements). Also mortgaged to PNGSDPL, premised on the said arrangement, was a property that was owned by the defendant, a land described as State Lease, Volume 27 Folio 91 Portion 2486 (Portion 2486). Portion 2486 is presently registered to the name of the defendant. PNGSDPL appears to have a secured mortgage over Portion 2486. See case: Pako F&C Holdings Ltd v. PNG Sustainable Development Program Limited and Cloudy Bay Sustainable Development Ltd (2025) N11204.
MOTION
6. The applicant’s NoM was moved pursuant to Order 5 Rules 2(b) and 8(1) of the National Court Rules (NCR) which reads:
2. Joinder of parties generally. (8/2)
Two or more persons may be joined as plaintiffs or defendants in any proceedings-
(a) where –
(i) if separate proceedings were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and
(ii) all rights to relief claimed in the proceedings (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or
(b) where the Court gives leave to do so.
.......
8. Addition of parties. (8/8)
(1) Where a person who is not a party-
(a) Ought to have been joined as a party; or
(b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on,
the Court, on application by him or by any party or of its own motion, may, on terms, order that he be added as a party and make orders for the further conduct of the proceedings. [Underlining mine]
ISSUES
7. The issues, in my view, are (i), whether the applicant ought to have been joined as a party, and (ii), whether the applicant is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated on.
WHAT IS THERE TO ADJUDICATE ON?
8. The immediate question that comes to mind and which was put to counsel for PNGSDPL at the hearing is this; what is there to resolve or adjudicate on as far as the proceeding is concerned?
9. The purpose of Order 5, premised in the manner in which the provisions are set out, and in my view, is to join parties or a party to a proceeding whilst the substantive matter or proceeding is pending and not after when the proceeding has concluded where a final decision has been handed down. The fundamental reason for joining a party as a defendant to an active proceeding or a cause of action, is premised on the principle of natural justice or the right to be heard, which is provided for under s.59 of the Constitution. This is to ensure that persons that are or may be affected in relation to a dispute that is put before the Court, get an opportunity to have their say before a final decision is reached.
10. With that, I must say that there are basic but fundamental reasons why joining a party after a substantive matter has been concluded is or may be against due process of law. The first reason is the doctrine of finality in litigation or the public policy consideration. They dictate or require finality in litigation. See cases: Barry v. Luma (2017) SC1639 and Wallbank v State [1994] PNGLR 78. The substantive matter, including the issues, have been decided by a court of competent jurisdiction. And following due process of the law, unless the substantive matter in this proceeding had been successfully appealed against, the decision that was reached by the primary Court was final and immutable.
11. The second basic fundamental reason is the principle of res judicata. See cases: Telikom PNG Ltd v. Independent Consumer and Competition Commission and 1 Or (2008) SC906, Amben and 1 Or v. Maru and Ors (2015) SC1422 and Mokono v. Water PNG Limited (2023) N10354. The fundamental facts and issues that had been raised by the parties in this proceeding had been decided by a court of competent jurisdiction. This matter was closed on or about 20 September 2021.
12. I also take into account this consideration which I believe is also relevant for this purpose. An aggrieved party who is not named in a proceeding but is affected by its final decision may appeal against that decision directly to the Supreme Court. This is provided under s.17 of the Supreme Court Act (SCA). The Supreme Court in the case of Kitogara Holdings Pty Ltd v National Capital District Interim Commission & Ors [1988-89] PNGLR 346 addresses that. By majority decision (Kapi DCJ and Woods J), the Court held that s.17 of the SCA operates so as to provide a right of appeal to any “person” whose interests are affected by or who is aggrieved by the order of the court and who might have been joined as a party to the proceedings.
13. Having stated these reasons, I should be in a position to decline the NoM.
14. However, there is one more consideration where it may be a remiss of me if I do not address or take that into account, which is this. A main premise of PNGSDPL’s interest in seeking to join in this proceeding is this. It asserts that it has secured mortgages over (i) Portion 2486 and (ii) the shares of the defendant, the latter, pursuant to the 2 share mortgage agreements. And it is concerned that the defendant, through its appointed Receiver, is planning to dispose of these asserts in the near future. It makes reference to a pending notice of motion that was filed by the defendant on 4 December 2024 (defendant’s NoM) in which the Receiver intends to dispose of the shares of the defendant in his bid to recoup monies to settle the company’s debts.
15. I note the submissions of the parties in that regard.
16. I must say that I am not swayed by the submissions of the applicant to change my initial views. I had stated at the hearing that PNGSDPL’s said interest appeared separate and distinct, and that perhaps it should be addressed as a separate matter then through this closed proceeding. Evidence adduced by the applicant shows that it has executed agreements that included the defendant, namely, the SSA and one of the 2 share mortgage agreements. Evidence adduced also shows that the applicant appears to hold a secured mortgaged over Portion 2486.
17. In my view, these are separate arrangements or dealings that should be addressed by the applicant with the defendant or the Receiver separately from this closed proceeding. If the applicant wishes to assert or enforce its rights over these securities, then that would be a matter for it to do so.
SUMMARY
18. In summary, I will decline to grant PNGSDPL’s NoM to be joined as a party to this closed matter.
COST
19. An order for cost remains discretionary. For this case, I will order cost to follow the event on a party/party basis to be taxed if not agreed.
ORDERS
20. I make the following orders:
The Court orders accordingly
________________________________________________________________
Lawyers for the plaintiff: Andrews
Lawyers for the defendant and the receiver: Goodwin Bidar Nutley
Lawyers for PNG Sustainable Development Program Ltd: Dentons
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