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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
WS NO. 433 OF 2024
BETWEEN:
JLE PACIFIC ADVERTISING LIMITED
First Plaintiff
BETWEEN:
ANTONIO PEQUENA ENGUERO
Second Plaintiff
AND
DENNIS HERNANDEX TRINIDAD
First Defendant
AND
MA FE ELEPIRIA
Second Defendant
AND
SWAN DIAGNOSTIC CLINIC LIMITED
Third Defendant
LAE: DOWA J
13 DECEMBER 2024; 28 FEBRUARY 2025
PRACTICE AND PROCEDURE- application for dismissal of proceedings for disclosing no reasonable cause of action and for abuse of process - Order 12 Rule 40 of the National Court Rules-pleadings convoluted, vague and containing evidentiary material offending Order 8 Rules 8&9 of the National Court Rules- not a clear case for striking out the statement of claim on competency grounds-application refused.
PRACTICE AND PROCEDURE-application for interim injunctive orders-applicants must show a meritorious case, balance of convenience favors the grant-and interest of justice-the requirements not met-application refused.
Cases cited
PNG Forest Products v State [1992] PNGLR 84
Ronny Wabia v BP Exploration Co. Ltd [1998] PNGLR 8
Wabia v BP Petroleum (2019) N4337
Mt. Hagen Urban LLG v Sek No. 15 (2009) SC1007
National Provident Fund v Maladina & Others (2003) N2486
Wambunawa Holdings Ltd. v ANZ Bank (2020) N8310
Employers Federation v PNG Waters Workers (1982) N393
Counsel
K Kiendip for plaintiff
J Aku for the defendants
DECISION
Defendants’ Application
2. Pursuant to Order 12 Rule 1 of the National Court Rules, and Section 155 (4) of the Constitution, the Plaintiffs be permanently restrained from commencing another proceeding based on the same facts that constitute these proceedings.
3. Alternatively, the entire proceedings be stayed pending payment of the Defendants’ costs of WS No. 304 of 2024 pursuant to Order 8 Rule 67 of the National Court Rules, Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution.
4.Costs of the proceedings on a solicitor-client basis.
5.Any other or further Orders that the Court considers appropriate in the circumstances.
4. The Application is supported by the Affidavit of Dennis Hermandez Trinidad filed 24th October 2024.
Background Facts
5. The second Plaintiff and the first and second Defendants are citizens of the Republic of Philippines. The first Plaintiff is a company owned by the second Plaintiff and operates in Papua New Guinea. It is managed by the first Defendant as a Director and General Manager. The second Defendant was employed by the first Plaintiff as Account Officer. The second Plaintiff remained in the Philippines due to travel restrictions brought about by the Covid19 Pandemic. The second Plaintiff left the management of the first Plaintiff company to the first Defendant for the period 2020 to 2024.
6. It is alleged during management of the first Plaintiff company, the first and second Defendants conspired and (to use the words in paragraph 18 of the statement of claim) “devised various fraudulent schemes in which they wrongfully and maliciously conspired amongst themselves to defraud and to injure the Plaintiff company of its business where they systematically stole , misappropriated and embezzled the Plaintiff company funds and diverted these funds to their private accounts and for their own use and the setting up of the third Defendant company”. The total amount of money alleged to have been stolen or misappropriated is K 1,381,836.42.
7. The Plaintiff therefore seeks judgment for the monies lost. Apart from the judgment for damages, the Plaintiff seeks orders that the first and second Plaintiff be declared shareholders of the third Defendant company while the first and second Defendants be removed as directors and shareholders.
Submissions of the Parties
8. Mr Aku, counsel for the Defendants, submits that the proceedings be dismissed for the following reasons:
a. the statement of claim is thick and bulky.
b. the statement of claim is identical to an affidavit.
c. the statement of claim is convoluted, vague, too general and difficult to ascertain the cause of action.
d. Due to multiplicity of parties, it is difficult to ascertain the complaint made against each of the defendants named.
e. the statement of claim is scandalous and highly defamatory
f. It is identical and repeat of the proceedings in WS No 304 of 2024 between the same parties that was dismissed on10th October 2024.
9. In response, Mr. Keindip, counsel for the Plaintiffs, submits the statement of claim does disclose a reasonable cause of action. Counsel submits, the proceedings are for theft, conversion, misuse and misappropriation, of a substantial amount of money belonging to the Plaintiffs and urges the Court not to grant the orders sought by the Defendants.
The law
10. The application for dismissal is made under Order 12 Rule 40(1) of the National Court Rules. It reads:
” 40. Frivolity, etc. (13/5)
(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings
(a) no reasonable cause of action is disclosed; or
(b) the proceedings are frivolous or vexatious; or
(c) the proceedings are an abuse of the process of the Court,
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”
11. The caselaw on Order 12 Rule 40 of the National Court Rules is well settled. Refer: PNG Forest Products v State (1992) PNGLR 84–85, Ronny Wabia v BP Exploration Co. Ltd (1998) PNGLR 8, Wabia v BP Petroleum (2019)) N4337, Mt. Hagen Urban LLG v Sek No. 15 (2009) SC1007, National Provident Fund v Maladina & Others (2003) N2486; and Wambunawa Holdings Ltd. v ANZ Bank (2020) N8310.
12. The principles of law settled and emanate from the above cases are:
13. I will now proceed to consider the grounds raised by the Defendants for the dismissal.
Consideration
14. I have perused the statement of claim carefully. It has 26 pages. The claims are categorized under different categories of the
claim like misappropriation, illegal transfers, private purchases, transactions involving each of the three Defendants.
15. The statement of claim shows the first Defendant is a former Director of the Plaintiff company. The first and second Defendants were authorised by the second Plaintiff to run the Plaintiff company. The Plaintiff company was under their control for more than three years.
16. The alleged illegal transfers and payments appear to be a mixture of unauthorised payments, and the day-to-day expenses incurred in the normal running of the business.
17. In my view, the pleadings offend Order 8 Rules 8 and 9 of the National Court Rules. Rules 8 and 9 read:
“8. Facts, not evidence (15/7)
(1) A pleading of a party shall contain only a statement in a summary form of the material facts on which he relies, but, subject to these Rules, not the evidence by which those facts are to be proved.
(2) Sub-rule (1) has effect subject to this Division and to Order 4 Division 2 (originating process) and to Division 2 (particulars).
9. Brevity (15/8)
A pleading shall be as brief as the name of the case admits”
18. The rules are clear. The pleadings must contain only a brief statement in a summary form of the material facts. This is to make it clear to the opposing party to understand the allegations and plead his defence appropriately.
19. In the present case, the facts are convoluted, and general in nature. It would make it difficult for the Defendants to plead a defence to each of the allegations which are multiple and convoluted.
20. I find the form and manner of pleading offends the Rules on pleadings and is therefore an abuse of the Court Rules and processes.
21. What orders should the Court make. Order 1 Rule 8 of the National Court Rules provide that noncompliance of the Rules does not render the proceedings void unless the Court so directs. The Court has therefore a discretion to strike out the statement of claim and dismiss the proceedings or allow the proceedings to continue with directions for amendment to the statement of claim.
22. If the Court strikes out the proceedings, it will be the second time for the same reasons. The first proceeding in WS No 304 of 2024 between the same parties was struck out on 10th October 2024 (2024, N11033). I am not inclined to dismiss the proceedings the second time. Such a decision may have the adverse effect of completely shutting the Plaintiff out of any possible claim they may have against the Defendants. Instead, I will direct the Plaintiff to amend the statement of claim. This is because parts of the claim in the statement of claim show allegations of payments being made for purposes other than furthering the interests of the Plaintiffs. The Plaintiffs shall be given an opportunity to amend the statement of claim by removing all payments involved in the day-to-day expenses of the business and set out clearly the moneys that were unlawfully used to the detriment of the Plaintiffs.
23. The Defendants will not be prejudiced as they will have the opportunity to defend the proceedings. This is not a clear case for dismissal under Order 12 Rule 40 of the National Court Rules. In respect of the Defendants’ contention that the proceedings are an abuse of the process because of the earlier decision in WS No 304 of 2024, it should be noted for the record that the Court expressly granted the Plaintiff to file fresh proceedings if they desired and thus it shall not be held against the Plaintiffs.
24. For the foregoing reasons, the Defendants’ application be refused.
The Plaintiff’s application
25. By Notice of Motion filed 21st October 2024, the Plaintiff applies for the following orders:
1.That pursuant to Order 12 Rule 1 and Order 14 Rule 9 and 10 of the National Court Rules:
a. That the first and second Defendants’ passports be delivered to the Assistant Registrar of the National Court of justice, Lae, forthwith either voluntarily or through the Office of the Sheriff and be held by the Assistant Registrar until further orders.
b. That an interim injunction be issued to restrain the first and second Defendants from leaving Lae and the jurisdiction of PNG until further Orders of the Court.
c. That the first and second Defendants be restrained from accessing the third Defendant’s Bank Account No. 7029891780 at Bank South Pacific Ltd without the approval and authority of the second Plaintiff, until further Orders.
d. That the first and second Defendants be restrained from sending monies overseas from their personal accounts and from the third Defendant Company’s account until further orders.
e. Alternatively, an interim injunction be issued against the third Defendant’s Account No 7029891780 at BSP Lae to be restricted from operating until further Orders.
2.Such other orders the Court deems appropriate.
3.Costs
26. The Plaintiff relies on the Affidavit of Antonio Pequena Enquero filed 21st October 2024.The main complaint is that the first and second Defendants diverted funds from the first Plaintiff’s account to the third Defendants account. The third Defendant company is set up by the first and second Defendants using the Plaintiff company funds. Mr. Enquero deposes that the actions of the first and second Defendants are criminal in nature and the matter has been reported to police and they would be arrested soon. The Plaintiffs fear that the two Defendants may travel out of the country without facing prosecution and continue to use funds held in credit for the third Defendant.
27. The principles to be considered in an application for an interlocutory order as stated in the case Employers Federation v PNG Waters Workers (1982) N393 are:
28. In the present case, the statement of claim is convoluted and is now the subject of amendment. The pleadings are yet to be ascertained and settled. In the circumstances, it is not a clear case for the grant of interim injunctive orders.
29. Moreover, the nature of the orders sought are more appropriate in Criminal proceedings. If the Defendants are criminally charged, appropriate applications can be made in the Crimes Court for the injunctive orders.
30. For these reasons, the application for the interlocutory injunctive orders is refused.
Costs
25. The general rule on cost is costs follow the event. Although the Defendants have not succeeded in their application, it was necessitated
by bad pleadings on the part of the Plaintiffs. The Defendants are entitled to their cost and so shall be ordered.
Orders
26. The Court orders that:
________________________________________________________________
Lawyers for the plaintiffs: Gamoga Lawyers
Lawyers for the defendants: Jaku Lawyers
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