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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
WS NO 1252 OF 2010 (COMM)
KUMUL CONSOLIDATED HOLDINGS
First Plaintiff/First Cross-Defendant to First Cross-Claim
V
MOTOR VEHICLES INSURANCE LIMITED
First Defendant/Second Cross-Defendant to First Cross-Claim/Second Cross-Claimant
NOMINIEES NIUGINI LIMITED
Second Defendant/First Cross-Claimant/First Defendant to Cross-Claim
NATIONAL SUPERANNUATION FUND LIMITED
Third Defendant
BENJAMIN TERENCE O’DWYER, TERENCE JAMES O’DWYER AND BACKWELL LOMBARD CAPITAL PTY LTD
Second Cross-Defendants to Second Cross-Claim
DR. JOHN MUA
Third Cross-Defendant to Second Cross-Claim
BERNARD FONG
Fourth Cross-Defendant to Second Cross-Claim
WAIGANI: ANIS J
3 SEPTEMBER, 24 OCTOBER 2025
NOTICE OF MOTION – motion seeking leave to amend cross-claim – Order 8 Rule 50(1)(2) – National Court Rules – whether amendment, (i), necessary to determine real question in controversy and or effective and efficient determination of the matter, (ii), to correct a defect, (iii), will not cause prejudice, (iv), is made bona fide, (v), can be made with an order for cost, (vi), is not negated by conduct of the parties, and (vii), warranted in the interest of justice – consideration - ruling
PRACTICE AND PROCEDURES – Interpretation and application of Order 8 Rule 53(1) – National Court Rules – whether sub-rules (2), (3), (4) and (5) apply in the event there is dispute raised as to whether a cause of action is time-barred – what then would be the correct approach to address the matter – should the proposed pleadings be allowed to preserve the arguments – consideration - ruling
Cases cited
Kuso Maila Anda Ltd v. United Pacific Corporation (2021) N8895
Michael Kewa v Elias M. Kombo (2004) N2688
Niap v. PNG Harbours Ltd (2009) N3672
The Papua Club Inc. v Nasaum Holdings Ltd (2002) N2273
Counsel
B Nutley, for the plaintiff
R Bradshaw, for the first defendant
E Mapusa, for the second defendant
I Molloy with counsel assisting M Henao, for the third defendant
DECISION
1. ANIS J: This was an application (Notice of Motion/NoM) by the first defendant (Applicant) seeking leave to amend its cross-claim. The NoM was contested by the second and third defendants, namely, Nominees Niugini Limited (NNL) and National Superannuation Fund Limited (Nasfund). I reserved my ruling after the hearing on 3 September 2025 to a date to be advised.
2. This is my ruling.
BACKGROUND
3. The plaintiff files this proceeding on 7 October 2010.
4. The plaintiff seeks to challenge the validity of an Equity Monetisation Contract (EMC). The EMC was signed between the Applicant and NNL on or about 22 July 2009. Pursuant to the EMC, NNL lent the Applicant K100 million (the loan) from monies NNL obtained from Nasfund. As security for the loan, the Applicant signed a Legal Mortgage of Shares contract (LMoS) with NNL on or about 22 July 2009. Under the LMoS or security contract, the Applicant mortgaged 530,105,100 of its ordinary uncertified fully paid shares that it had at the material time with Bank South Pacific Limited (BSP) with NNL. In summary, the Applicant had put up as security, its shares that it had in BSP, in favour of NNL for the K100 million loan that NNL had agreed to and had loaned to it, the loan money which had been facilitated by Nasfund. As it turned out, the Applicant may have defaulted on or breached the terms of the EMC. NNL then proceeded to exercise its rights under the various agreements, and in so doing, transferred 193,972,790 of the Applicant’s shares in BSP over to Nasfund, to fully repay the loan.
5. That led to the plaintiff filing this proceeding. It claims that the Applicant, as a majority state owned enterprise, had breached mandatory provisions under the Independent Public Business Corporation Act 2002 (IPBC Act) including s. 46B, when the Applicant transacted or made these dealings with NNL without the approval of the Minister responsible. Various amendments have been made since the original writ of summons and statement of claim was filed on 7 October 2010. This included defences and crossclaims filed by the parties to the proceeding. There had been various interlocutory applications filed and heard, and appeals made to the Supreme Court over the past years. I note that these were highlighted in the evidence and submissions of the parties. I may refer to them later where necessary.
MOTION
6. The NoM seeks the following main relief:
7. The Applicant’s NoM is supported by an affidavit deposed by Michael Makap, the Chief Executive Officer of the Applicant, on 30 July and filed 31 July 2025.
ISSUE
8. The main issue of course is whether the Applicant has demonstrated good reasons, as established in the case law, for this Court to exercise its discretion and grant leave to the Applicant to file its draft Amended Cross-Claim which is attached to Mr. Makap’s affidavit.
SOURCE/COURT’S POWER
9. The Court’s power to grant leave to amend pleadings is discretionary.
10. The source pleaded in the NoM is not in issue. Order 8 Rule 50(1) and (2) of the National Court Rules (NCR) states:
50. General. (20/1)
(1) The Court may, at any stage of any proceedings, on application by any party or of its own motion, order, on terms that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such manner as the Court thinks fit.
(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings. [Underlining mine]
11. The key elements there are that the proposed amendments (i), must be necessary, (ii), are proposed to determine real issues in a matter depending on how a proceeding has unfolded, (iii), are intended to correct a defect or error, and (iv) are necessary or intended to avoid multiplicity of proceedings.
12. These should be the guidelines for the Court to consider.
LAW
13. Case law has also set out factors that Courts of first instances should consider in applications for leave to amend pleadings. They are set out in The Papua Club Inc. v Nasaum Holdings Ltd (2002) N2273 and Michael Kewa v Elias M. Kombo (2004) N2688 as follows:
14. A National Court considering exercise of its discretion on such matters need not tick off all the boxes. In Kuso Maila Anda Ltd v. United Pacific Corporation (2021) N8895, the Court said which I adopt herein:
9. There are various applicable factors that a Court may take into account, in such applications as this. They are set out cases like Papua Club Inc. v Nasaum Holdings Ltd (2002) 2273 and Michael Kewa v Elias M. Kombo (2004) N2688, to name a few. The Court’s power remains discretionary, and I note that I need not tick all the requirements for this case. The only change which the plaintiff seeks to change is the day when the contract was signed. I note the evidence and the submissions of the parties herein. The error, to me, appears as a mere oversight on the part of the plaintiff or its lawyers. Instead of typing in, 12th October 2007 at paragraph 5 of the ASoC, it is stated as 1st October 2007. Should I refuse leave because of this minor oversight? What is the real prejudice given that cost would be an obvious consideration that may be sought or awarded where required? Whether the change is necessary? The answers to these questions all favour the plaintiff.
CONSIDERATION
15. I note the submissions of the parties, including the case authorities that have been cited, in support as well as in opposing the NoM.
16. A draft copy of the proposed Amended Second Cross-Claim (PASCC) is attached as Annexure E to Mr. Makap’s affidavit. I observe that the intended amendment concerns facts that the Applicant intends to allege to make as part of its alternative claim. The Applicant intends to claim (in the alternative) that if the Court finds the EMC and LMoS voidable or valid, then the parties to these agreements are bound by their terms and conditions. It intends to plead that it did not default on its obligations under the EMC that would have entitled NNL to exercise its rights under the LMoS as it had done in the matter where it transferred the Applicant’s mortgaged shares in BSP to the tune of 193,972,790 to Nasfund. The Applicant also intends to plead (in the alternative) that NNL did not permit it to exercise its right of redemption which is stipulated in the LMoS.
17. I have observed a number of sound arguments raised by Mr. Molloy for Nasfund who made submissions against the inclusion of the PASCC, and as well as Mr. Bradshaw’s response. The main observation I make is this. I consider the arguments by Nasfund and the Applicant on time bar and merit of the proposed intended claim, to have substance and legal basis. These may therefore require further scrutiny by the Court when all the evidence for trial are adduced, thus, now may not be the opportune time to make the arguments on their merits, that is, whether it be on time-bar or merit of the alternative claim. We are, with this NoM, at the stage where the Applicant is seeking leave so that the proposed factual circumstances, as contained in the PASCC, may be formally included into its pleadings. The Applicant is not, by this NoM, asking the Court to make a finding on the intended facts and on what the law says in that regard. The obvious rationale behind that is because the intended facts are not yet formally before the Court for consideration. This is not the time, in my view, to argue the actual merits of a particular proposed facts that have not yet formed part of the pleadings of the Applicant.
18. Other considerations that I take into account favourably for the Applicant include the following:
Order 8 Rule 53
19. However, I must also consider separately Order 8 Rule 53 of the NCR which was raised by Nasfund. It reads:
53. Statutes of limitation. (20/4)
(1) Where any relevant period of limitation expires after the date of issue of a writ of summons and after that expiry an application is made under Rule 50 for leave to amend the writ by making the amendment mentioned in any of Sub-rules (2), (3), (4) or (5), the Court may in the circumstances mentioned in that Sub-rule make an order giving leave accordingly, notwithstanding that that period has expired.
(2) Where notice of a motion for leave to make an amendment is filed within 14 days after the date of issuing the writ of summons, the Court may give leave to make the amendment whatever the nature of the amendment may be.
(3) Where there has been a mistake in the name of a party and the Court is satisfied that the mistake was not misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, the Court may make an order for leave to make an amendment to correct the mistake, whether or not the effect of the amendment is to substitute a new party.
(4) Where, on the date of issuing a writ of summons, the plaintiff is entitled to sue in any capacity, the Court may order that the plaintiff have leave to make an amendment having the effect that he sues in that capacity.
(5) Where a plaintiff, in his writ of summons, makes a claim for relief on a cause of action arising out of any facts, the Court may order that he have leave to make an amendment having the effect of adding or substituting a new cause of action arising out of the same or substantially the same facts and a claim for relief on that new cause of action.
......
20. Nasfund submits that the Applicant’s proposed amendments and cause of action, if accepted, would be time-barred. As such, Order 8 Rule 53(5), which is most applicable to the Applicant’s situation where leave may be warranted, it submits, does not apply because the facts of the proposed cause of action are not the same or substantially similar. Nasfund relied on various cases including Niap v. PNG Harbours Ltd (2009) N3672. In conclusion, Nasfund submits that the Court should not exercise its discretion and grant the NoM.
21. I note the submissions of the parties.
22. Sub-rules (2), (3), (4) and (5) are to be read subject to Order 8 Rule 53(1). The key words relevant for consideration in this case begins as follows “Where any relevant period of limitation expires after the date of issue of a writ of summons”. Order 8 Rule 53(1), in my view, applies in situations where it is not disputed or where parties are at common ground that the relevant period of limitation has expired after the date of issue of a writ of summons or a crossclaim. In this case, the Second Cross-Claim was filed on 27 April 2015. The Applicant denies or disputes that its proposed amended cause of action would be time-barred if it is permitted to be pleaded; it also denies that its present cause of action is time-barred (after its filing); and I note that I heard submissions from the parties in that regard. The said disagreement between the parties, in my view, precludes the application Order 8 Rule 53(1). It does not, however, mean that the matter is resolved. What it means, in my view, is that the proposed PASCC may be permitted into the pleadings and the defendants may be at liberty to raise that as an issue in their responding pleadings, and if that occurs then it may be a matter for the trial Court to consider.
23. For these reasons, I reject the submissions of Nasfund on this issue for now. I also observe that the case of Niap v. PNG Harbours Ltd (2009) N3672 is similar but distinguishable premised on my observations and findings.
SUMMARY
24. In summary, I will exercise my discretion and grant the NoM. I will also issue consequential orders for NNL to file its amended defence within 14 days after the expiry date of 7 days that the Applicant will be required to file and serve its PASCC.
COST
25. An order for cost in these types of applications is discretionary. I am minded to award cost of the NoM in favour of NNL and Nasfund on a party/party basis to be taxed if not agreed.
ORDERS
26. I make the following orders:
The Court orders accordingly
________________________________________________________________
Lawyers for the plaintiff: Goodwin Bidar Nutley
Lawyers for the first defendant: Bradshaw
Lawyers for the second defendant: Geroro
Lawyers for the third defendant: Ashurst
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