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Gireway v Hugo Cannings Co Ltd [2025] PGNC 519; N11670 (9 December 2025)

N11670

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 168 OF 2025 (IECMS)

BETWEEN:
ANNA GIREWAY
Plaintiff

AND
HUGO CANNINGS COMPANY LIMITED
Defendant

WAIGANI: WIMALASENA J
09 DECEMBER 2025

PRACTICE AND PROCEDURE – Notice of Motion – Application to dismiss proceedings – Time bar – Statute of Frauds and Limitations Act 1988, s 16(1)(a) – Cause of action in contract – Accrual of cause of action – Employment contract – Termination by redundancy – Whether cause of action accrues on date of dismissal or upon exhaustion of statutory employment dispute-resolution process – Simple contract or specialty – Frivolous and vexatious proceedings – Abuse of process.

Cases cited

Oil Search Ltd v Mineral Resources Development Corporation Ltd [2010] PGSC 12; SC1022
Gumu v Papua New Guinea Banking Corporation [2001] PGNC 16; N2288
Hiwi v Rimua [2015] PGSC 60; SC1460
Kerenga v PNG Power Ltd [2022] PGSC 120; SC2319
Lerro v Stagg [2006] PGNC 2; N3050

Counsel

Mr J. Palek, for plaintiff
Mr W. Nen, for defendant

RULING

1. WIMALASENA J: The Defendant filed a Notice of Motion on 02 December 2025 seeking dismissal of the proceedings for being frivolous and vexatious and for being an abuse of the Court process pursuant to Order 12 Rule 40(1)(b)(c), Order 12 Rule 1. The Defendant asserts that the proceeding is time barred pursuant to section 16(1)(a) of the Frauds and Limitation Act 1988.
   
2. The Plaintiff was employed by the Defendant company as the Quality Assurance Manager. On 03 March 2016, the Defendant issued a notification of redundancy to the Plaintiff and the dismissal took effect on 30 April 2026. On 20 April 2016, the Plaintiff and the Defendant entered into a Settlement and Release Agreement and on 10 May 2016 the Defendant was paid K 18,737.31 in full satisfaction of all obligations of the Defendant towards the Plaintiff. Subsequently, around May 2020, the Plaintiff lodged a verbal complaint with the Department of Labour and Industrial Relations. By a letter dated 29 May 2020 the Workplace Relations Officer wrote to the Defendant regarding the Plaintiff’s complaint. Despite repeated notices, the Defendant failed to participate in the statutory employment dispute resolution process.
   
3. Subsequently, The Plaintiff instituted this action on 14 May 2025, by way of a Writ of Summons and Statement of Claim. The Plaintiff seeks the following remedies:
   
   1. In the nature of a Declaration that the Plaintiff termination was forced redundancy hence, harsh, illegal and unlawful in the circumstances of this case.
   2. In the nature of a Declaration that the Defendant was not renumerated for the positions she held as QRMP Supervisor prior to her termination.
   100. General Damages for Three Thousand Two Hundred and Eighty-Four Kina Eighty-One Toea (K3, 284.81) as shortfall of the plaintiff final entitlements as calculated by Department of Labor & Employment Loss of Salary for the duties perform as QRMP Supervisor and QRMP Handing Hand and or other legal renumeration entitlements owing to the Plaintiff, to be calculated at trial.

D. General Damages for;

(i) Fifty Thousand Kina (K50. 000.000) part of plaintiff's Nasfund savings which was to pay off the balance of bank loan.

(ii) One Hundred and Forty-One Thousand Six Hundred Seventy-One Kina Sixty Toea (K1414, 671.60 her Nasfund savings which she was forced to used for the upkeep of the plaintiff and her family.

(iii)Three Hundred Thousand (K300, 000.00) for the loss of her property (land) valued at that time.

5. Interest at 8% on the principal sum recovered be calculated from the date of termination and paid to the plaintiff by the defendant.
6. The plaintiff's legal costs of and incidental to this proceeding be paid by the defendants.

G. Such other orders as the Court deems fit.

4. On 22 May 2025, the Defendant filed the Notice of Intention to Defend and filed its Defence on 01 July 2025. Among other things, the Defendant stated that the Plaintiff and the Defendant entered into a Settlement and Release Agreement on 20 April 2016, following the redundancy of the Plaintiff’s employment with the Defendant, and Clause 7 of the Agreement bars any claims or proceedings brought by the Plaintiff in respect of any matters arising out of the Agreement. In addition, the Defendant pleaded in the Defence that the action is time barred pursuant to Section 16 of the Frauds and Limitations Act and the Plaintiff is 3 years and 14 days out of time.
   
5. On 02 December 2025 the Defendant filed this Notice of Motion seeking the following reliefs:
   
   1. Pursuant to Section 16(1)(a) of the Frauds and Limitations Act 1988 the entire proceeding is statute barred.
   2. Pursuant to Order 12 Rule 40(1)(b)(c), Order 12 Rule 1 the entire proceedings be dismissed for being frivolous and vexatious and for being an abuse of the Court process.
   3. The Plaintiff pays the Defendant’s costs of and incidental to this application and the proceedings on solicitor client basis.
      
6. A supporting affidavit was also filed by Leah Ove, the Human Resource Manager of the Defendant company on 02 December 2025. The parties filed written submissions and the counsel for both parties made oral submissions too, at the hearing of the Notice of Motion.
   
7. The question the Court must decide is whether the cause of action is time barred pursuant to Section 16(1)(a) of the Frauds and Limitation Act 1988. Section 16(1) (a) of the 1988 provides that, subject to Section 17 and 18, an action that is Frauds and Limitation Act founded on simple contract or on tort shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.
   
8. The Defendant asserts that if the Plaintiff claims that her employment contract was breached, the cause of action arose at the point when her termination became effective, i.e. on 30 April 2016. However, the Plaintiff submits that the cause of action accrued after the process under the labour laws were exhausted, relying on a letter dated 13 April 2021, issued by the Workplace Relationships Manager.
   
9. In Oil Search Ltd v Mineral Resources Development Corporation Ltd [2010] PGSC 12; SC1022 (30 April 2010) the Supreme Court formulated a three-step approach to determine whether an action involving alleged breach of contractual obligations is time-barred:
   

(a) identification of the cause of action;

(b) identification of the date on which the cause of action accrued;

(c) categorisation of the cause of action according to whether it is "founded on a simple contract" or "an action upon a speciality".

10. In order to identify the cause of action, it is necessary to consider what is pleaded in the Statement of Claim filed by the Plaintiff. Upon perusal of the Statement of Claim it appears that the Plaintiff seeks reliefs based on the termination of her employment contract on the ground of redundancy. Therefore, it is very clear that the cause of action relied upon by the Plaintiff arises from the alleged unlawful termination of her employment contract.
    
11. Secondly, it is imperative to determine the date on which the cause of action accrued. The main contention of the parties is the date on which the cause of action accrued. As it was earlier noted, the Defendant maintains that the cause of action accrued on 30 April 2016, when the Plaintiff’s termination became effective. The Plaintiff contends that the cause of action accrued only after she exhausted the statutory employment dispute resolution pathway.
    
12. It should be noted that the non-compliance with or exhaustion of the statutory provisions of the Industrial Relations Act and the Employment Act 1998 has no bearing on instituting an action for breach of an employment contract. Moreover, the Plaintiff was unable to identify any statutory provision that prevents a person from instituting an action for breach of an employment contract until the provisions of the Industrial Relations Act or the Employment Act have been exhausted. The Plaintiff relied on Gumu v Papua New Guinea Banking Corporation [2001] PGNC 16; N2288 (7 December 2001) to support the argument that the cause of action accrues only after the exhaustion of the statutory remedies. However, it should be noted that Gumu relates to a breach of statutory duty, and the Court held that time began to run for limitation purposes only when the employee discovered the employer’s failure. The Court also considered, by virtue of section 22 of Frauds and Limitations Act, whether the limitation period could be extended due to the employee’s disability. But in the present case the facts are materially different and there is no issue of discovery of a statutory failure, fraud or disability. Therefore, the reasoning in Gumu is of no relevance to the present case.
    
13. Thirdly, the Court must consider if the cause of action founded on a simple contract or is an action upon a speciality. The Defendant relied on Hiwi v Rimua [2015] PGSC 60; SC1460 (28 October 2015) where the Supreme Court discussed how limitation applies to simple contracts and speciality. The Supreme Court explained that a speciality is a contract in the form of a deed, in which case the limitation period is 12 years. A simple contract is subject to a limitation period of 6 years. It is very clear that, in the present case the employment contract is a simple contract and not a speciality.
    
14. As far as the Statement of Claim of the Plaintiff is concerned, it is crystal clear that the cause of action is squarely based on the alleged breach of the employment contract. As such, the limitation period must be calculated based on the date that the alleged breach, namely the date of the alleged unlawful termination of employment, which in this case was 30 April 2016. The Plaintiff instituted this action on 14 May 2025, and it is undoubtedly time barred as it is well beyond the 6 years limitation period, as contended by the Defendant.
    
15. In Kerenga v PNG Power Ltd [2022] PGSC 120; SC2319 (25 November 2022) the Supreme Court stated that “essentially, an action for breach of contract must be brought within six years from the date of accrual of the cause of action” while dismissing an appeal against a finding that a cross claim was time barred. The Supreme Court also confirmed that a cause of action accrues upon breach of a contract, and that time does not begin to run only after follow-ups and negotiations.
    
16. The next question to be determined is whether the proceedings are therefore frivolous or vexatious and constitute an abuse of the process of the Court. The Plaintiff instituted this action almost nine (9) years outside the limitation period. The claim is clearly time-barred and, therefore, has no prospect of success. In those circumstances, the proceeding is frivolous in nature. Furthermore, the Plaintiff continued with this action despite being put on notice by the Defendant that the cause of action is time-barred. The continuation of a manifestly untenable action has obviously caused the Defendant unnecessary expense, inconvenience, and predicament, and is therefore vexatious. Allowing the Plaintiff to maintain a proceeding that is time-barred and untenable would also be a waste of the Court’s time and resources. Undoubtedly, initiating and maintaining such an action therefore constitutes an abuse of the process of the Court.
    
17. Order 12 Rule 40 provides that:
    

“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-

1. No reasonable cause of action is disclosed; or
2. The proceedings are frivolous or vexatious; or

100. The proceedings are an abuse of the process of the Court,

4. The Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.
   

18. In Lerro v Stagg [2006] PGNC 2; N3050 (20 April 2006), Kandakasi J (as he then was) discussed several authorities and set out a list of principles relating to the dismissal of proceedings under Order 12 Rule 40:
    

[13] These long list of cases clearly set out the relevant guiding principles when an application is made under O.12 r.40 and or O.8 r.27(1) of the Rules. As far as I am able to tell, the principles emerging from these lines of cases are as follows:

1. Our judicial system should never permit a plaintiff or a defendant to be "driven from the judgment seat" in a summary way, "without a Court having considered his right to be heard." A party has a right to have his case heard, as guaranteed by the Constitution and the laws of the land. The Rules are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before the Court. That right cannot be lightly set aside.
2. At the same time however, the law such as the Rules under consideration provide for and the Court has an inherent jurisdiction to protect and safeguard against any possible abuse of the processes of the Court.
3. The object of these rules are therefore "to stop cases which ought not to be launched — cases which are obviously frivolous or vexatious or obviously unsustainable." In other words "the object of the rule was to get rid of frivolous actions."
4. A claim may be frivolous if it can be characterized as so obviously untenable that it cannot possibly succeed or that the claim or defence is bound to fail if it proceeds to trial.
5. A claim or defence may be vexatious if the case amounts to a sham or one which cannot succeed and is one that amounts to harassment of the opposing party who is unnecessarily put to the trouble and expenses of defending or proving the claim.
6. With regard to the issue of disclosing a reasonable cause of action or defence, the Court must be clear that there are two (2) parts to the phrase "cause of action". First, it entails a right given by law such as an entitlement to reasonable damages for breach of human rights under s.58 of the Constitution, commonly referred to as the "form of action". Secondly, it entails the pleadings disclosing all the necessary facts which give rise to the form of action.
7. The phrase "cause of action" could thus be defined in terms of a legal right or form of action known to law with:

"every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. It does not comprise of every piece of evidence which is necessary to prove each fact, but every fact is necessary to be proved."

8. A statement of claim or a defence (as the case may be) must therefore clearly plead the form of action by pleading the necessary legal elements or ingredients of the action and relevant and necessary facts (not the evidence) giving rise to the form of action. It follows therefore that, where a statement of claim or a defence is so ambiguous or lacking in particularity that it does not facilitate orderly and rational pleadings, which would enable the real issues to be identified, and instead leaves it to guess work, it should be struck out.
9. These rules provide a summary judgment procedure or remedy which is available to a plaintiff or a defendant, and one which vests and calls for an exercise of a discretion by the Court.
10. The discretion must be exercised sparingly and only in a case where the statement of claim or the defence (as the case might be) is "obviously and almost incontestably bad." In other words this discretion can be exercised only in cases that "are plain and obvious so that the master or Judge can say at once that the statement of claim [or defence] as it stands, is insufficient, even if proved, to entitle the plaintiff [defendant] to what he asks" for.
    
19. In the instant case the Defendant raised the issue that the action is time barred in its Defence and furthermore, put the Plaintiff on notice by letter dated 08 August 2025 that the Defendant would seek cost on an indemnity basis if the action was not discontinued by the Plaintiff. Nevertheless, the matter proceeded to the hearing of the Notice of Motion filed on 02 December 2025.
    
20. Accordingly, I make the following orders:
    
    1. The cause of action is time barred pursuant to Section 16(1) of the Frauds and Limitation Act 1988.
    2. The entire proceeding is dismissed as it is frivolous and vexatious and constitutes an abuse of the process of the Court.
    3. The Plaintiff shall pay Defendant costs on solicitor-client basis and costs to be taxed, if not agreed.
    4. The time for entry of these orders is abridged to take place forthwith upon the court signing the orders.

_______________________________________________________________
Lawyers for the plaintiff: John W Palek Lawyers
Lawyers for the defendant: Pacific Legal Lawyers