N11179

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS NO. 241 OF 2023

BETWEEN:
COLOMBUS INVESTMENT LIMITED
Plaintiff

AND:
JATHRO TUBAVAI in his capacity as Director of Transport & Civil Works, Division of Eastern Highlands Provincial Administration
First Defendant

AND:
ALLAN LOS in his capacity as the Provincial Administrator of Eastern Highlands Province
Second Defendant

AND:
SIMON TOMBA in his capacity as the Provincial Finance Manager of Eastern Highlands Provincial Administration
Third Defendant

AND:
EASTERN HIGHLANDS PROVINCIAL GOVERNMENT
Fourth Defendant

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

GOROKA: NUMAPO J
11 OCTOBER 2024; 12 MARCH 2025

CIVIL PRACTICE AND PROCEDURE – Application to amend Originating Summons – Amendment of Pleadings – Power to amend any document in the proceeding - Order 8 Rule 50 NCR – Leave of Court to amend must first be obtained –-Considerations on granting leave to amend pleadings is assessed on merits – Discretion to amend - Leave granted.

CaseS cited
Cropper v Smith (1884) 26 Ch D 700
Eki Investments Ltd v Era Dorina Ltd [2006] PGNC 145; N3176 
George v Motor Vehicles Insurance (PNG) Trust [1993] PGNC 62; PNGLR 477 
H. Tsuse and Sons Limited v, PNG Power Limited (11th April 2019) N8378
Michael Kewa v Elias Mai Kombo [2004] PGNC 83; N2688 
New Guinea Company Ltd v. Thomson [1975] PGNC 18; PNGLR 454
O’Neill v. Kaluwin [2015] PGNC 65: N5839
Pais v Kodi [2004] PNGNC 84 (Unreported).
Papua Club Inc. v Nusaum Holdings Ltd [2002] PGNC 50; N2273 

Counsel
W. Oa for the Plaintiff
N. Yomba for the first– fourth defendants

DECISION

1.	NUMAPO J:   The plaintiff commenced proceeding via a Notice of Motion filed on 25 April 2024 seeking to amend its Originating Summons pursuant to Order 8 Rule 50 of the National Court Rules (NCR). The main relief sought by the plaintiff in the Originating Summons filed on 08th September 2023 was for a declaratory order to compel the defendants to release the progressive payments to enforce the terms of the State contract entered into between the plaintiff and the defendants for the two road resealing projects in the township of Goroka. 

A.	PLAINTIFF’S CASE

2.	In support of its application to amend the Originating Summons, the plaintiff filed a draft amended Originating Summons supported by an affidavit and extracts of submission. Pending determination on the mode of proceeding, parties were directed by the court to commence mediation to reach an amicable solution. However, the plaintiff refused to withdraw its Notice of Motion seeking to amend the pleadings. Mediation failed and the matter was referred back to the court to deal with the motion.

3.	The plaintiff is a registered company and had executed two State contracts on 07th December 2021 for the upgrading and sealing of the Lopi Street and Doctors Street Roads within the Goroka Township. A total sum of K3.6 million was allocated for the two projects each costing K1.8 million each. It appears that the plaintiff was paid only K600, 000.00 under the arrangement of progressive payments with the K3 million still been withheld. The break-up is; K1.5 million for Lopi Street and K1.5 million for the Doctors Street. The plaintiff in its originating process filed the Originating Summons seeking declaratory orders and specific performance essentially to enforce the terms of the contract pertaining to payments. 

4.	On 08 September 2023, the plaintiff filed an Originating Summons pursuant to Order 4 Rule 3 of the NCR supported by an affidavit seeking declaratory orders to compel the defendants to release the progressive payments as per the terms of the contract. The lawyers for the 1st – 4th defendants have filed a notice of intention to defend whilst the State (fifth defendant) did not file any notice of intention to defend.  

5.	On 22 November 2023, His Honour Kandakasi DCJ issued self-executing orders given the straightforward nature of the case. The plaintiff was directed to send a settlement proposal to the defendants and the defendants to respond by 13 December 2023. Thereafter, on 20 December 2023, both parties are to discuss any matter in dispute and have them resolved and reduce the terms of settlement into a draft consent order for the court’s consideration and endorsement. Failing that, the matter shall return back to the court for determination. On 14 March 2024, the parties return to court with no success of a resolution. On 10 April 2024, a mediation was conducted however, the Governor Hon Simon Sia failed to attend and the mediation was further adjourned. On 25 April 2024, the plaintiff filed its Notice of Motion seeking to amend its Originating Summons filed on 08 September 2023.

B.	DEFENDANT’S CASE

6.	The defendants filed a Notice of Motion on 27 June 2024 seeking to dismiss the entire proceedings for the wrong mode of proceedings commenced by the plaintiff. Alternatively, the entire proceedings to be dismissed for being an abuse of Court process, pursuant to Order 12 Rule 40 (1) (c) of the NCR. 

7.	In its affidavit in support, the defendants stated that contracts were awarded to the plaintiff company to be performed concurrently which means that both Lopi Street and Doctors Street work to be done together within the same time frame as stated in the contract. This was based on the understanding that the plaintiff had the capacity to undertake the two jobs within the same time frame and have them completed on the same date. The intended completion date was 23 May 2022 with the project starting on 23 December 2021. The two projects were set to be completed in five (5) months as per the terms of the contract.  However, only the Doctors Street Road was 50% completed whilst very little work was done on the Lopi Street Road. For some unknown reasons, the plaintiff was not able to carry out work on the two roads simultaneously and complete the contract at the same time.  

8.	Plaintiff commenced proceeding with the Originating Summons seeking to cure the expiration of both contracts when there was a clear breach of the contract. Plaintiff failed to seek variations of the contract if it needed more time to complete the two road projects.

9.	Given the nature of the claim, the plaintiff should have commenced proceeding by way of a Writ of Summons and plead its claim in the Statement of Claim. Defendants would be able to defend the claim once the issues are identified and respond accordingly. Plaintiff’s mode of proceeding through an Originating Summons is wrong and amount to an abuse of process. Given that, the proceedings should be dismissed for abuse of process.  

10.	The contract was awarded to the plaintiff on the basis of the presumption that it had the capacity to perform the contracts. That the plaintiff had sufficient machineries, manpower and sufficient financial capacity to perform the contracts concurrently. The plaintiff failed to deliver on its part to fulfill the terms of the contract and is now seeking a declaration from the court to declare the both contracts as valid and enforceable when the conditions of the contract have been breached. 

C.	ISSUE

11.	Whether leave should be granted to amend the Originating Summons?

D.	AMENDMENT OF PLEADINGS

12.	The applicable law is Order 8 Rule 50 (1) & (2) of the NCR which states that:

(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.

13.	Order 8 r 50 essentially allows for amendment at any stage of the proceedings upon an application by a party to the proceedings or by the court on its own motion. Generally speaking, a party is entitled to amend its Statement of Claim or Statement of Defence at any time but that the leave of court must be obtained to amend any document in the proceeding. Granting of leave to amend is at the discretion of the court. 

14.	Principles of law developed through case laws relating to amendment of pleading is well settled in this jurisdiction. It sets our certain guiding principles the court must take into consideration before granting leave to amend. In New Guinea Company Ltd v. Thomson [1975] PGNC 18; PNGLR 454, Saldanha J (as he then was) held that; “whether leave to amend should be granted or not is a matter of discretion for the Court. Relevant matters for consideration in the exercise of this judicial discretion include:

(a)	“whether the amendment ought to be made for purposes of determining the real question in controversy between the parties…or of correcting any defect of error,

(b)	whether the amendment can be made without injustice or prejudice to the other party; and

(c)	the conduct of the parties.”

15.	Expounding further on these guidelines, his Honour succinctly sets out five considerations on amendment as follows: 

(i)	whether the amendment will enable the Court to determine the real question in controversy between the parties; 

(ii)	whether the amendments would correct any defect or error in the proceedings; 

(iii)	 whether the amendments will not cause prejudice or result in injustice to the other party; 

(iv)	(iv) whether the application is not made mala fide or bona fide and; 

(v)	(v) whether the other party will be compensated with costs for such amendments. 

16.	In George v Motor Vehicles Insurance (PNG) Trust [1993] PGNC 62; PNGLR 477, per Woods J. His Honour held, inter alia, “that the National Court Rules O. 8 r. 50 allows the Court to amend the pleadings at any stage of the trial, but leave to amend should be sought as early as possible after the need arises. Further, the Court will allow pleadings to be amended only if the party is not prejudiced. In exercising its discretion, the Court must act judicially…..” 

17.	Gavara-Nanu J, in Papua Club Inc. v Nusaum Holdings Ltd [2002] PGNC 50; N2273 [2002] PNGLR 42 stated, amongst others, that: “The Court’s power under this rule, is discretionary and broad, and in exercising that discretion, the Court has a duty to do so judicially and on proper principles, so that justice is done in the case”. 

18.	Canning J, in Michael Kewa v Elias Mai Kombo [2004] PGNC 83; N2688 and Pais v Kodi [2004] PNGNC 84 (Unreported) added three more principles to the above list as follows: 

(vi) “that the party applying to amend his pleadings is not prevented by its conduct or the manner in which the proceedings have progressed from being permitted to amend its pleadings; 

(vii) that the interest of justice warrants the amendment sought; and 

 (viii) that the proposed amendment will enable an efficient and effective determination of the issues between the parties.” 

The above eight considerations have been used as guidelines by the Courts in a number of subsequent cases in deciding whether or not to grant leave to amend. 

E.	DISCRETION TO AMEND

19.	In addition to the guidelines that were developed through the case law, the court also has the discretion to amend pleadings on application. 

20.	Rules of Court typically afford judges a broad discretion, upon terms, to permit amendments to pleadings at any stage of the proceedings. Order 8 Rule 50 of the NCR is no exception. It generally states that the Court may at any stage of the proceedings, on application by any party or of its own motion, order that any document in the proceedings be amended, or that the party have leave to amend any document in the proceedings in either case in such manner as the Court sees fit. 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 including avoiding multiplicity of proceedings. The discretion of the court to grant leave to amend evolved out of the recognition of the traditional role of the judges to do justice according to law; H. Tsuse and Sons Limited v, PNG Power Limited (11th April 2019) N8378.

21.	The authoritative statement to grant leave to amend in the exercise of such discretion is found in the opinion of Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 at 710 -711 as follows: 

“Now I think that it is well established principle that the object of Courts is to decide the rights of parties, and not to punish them for mistakes they make in the conduct of their cases….I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party….as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have t corrected, if it can be done without injustice, as anything else in the case is a matter of right.”

22.	Kandakasi J (as he then was) adopted the view taken in Cropper (supra) in Eki Investments Ltd v Era Dorina Ltd [2006] PGNC 145; N3176 and held that; “O. 8 r. 5 (1) of the NCR provides for amendment to pleadings. The provision gives the Court wide discretion to allow for amendments at any stage of the proceedings….” 

23.	One of the reasons for amendment is to bring to the fore the real questions to be determined and it should be readily granted so long as such an amendment will not cause any prejudice or injustice to the other party as was held in New Guinea Company Ltd v Thomason (supra). 

24.	Generally, a party to a proceedings is entitled to amend his statement of claim or defence, whatever the case may be, at any time, on an application seeking leave of court to do so. The court in the exercise of its discretion under O. 8 r. 50 shall, in the appropriate circumstances, grant leave to amend. Putting it simply, leave to amend should be readily given when an application is made if the Court is of the view that the amendment would do justice to the case. 

F.	PRESENT CASE

25.	Plaintiff applied for leave to amend the Originating Summons filed on 08 September 2023. In his Affidavit of Support, the Managing Director of the plaintiff company, Jireh Maburau stated that due to change of circumstances with respect to the reprint of the cheque for payment it has become necessary to amend the pleadings. 

26.	The Originating Summons originally filed was to seek relief in the nature of declarations and specific performance for the release of the balance progressive payments as per the terms of the contract. This is no longer an issue with the reprinting of the cheque for K4.5 million as consolidation payment. K1.5 million for the Lopi Street Road and K3 million for the Doctors Street Road Project payable to the plaintiff. Given that, it is now no longer necessary to seek declaratory orders hence, plaintiff seeks leave to amend the Originating Summons and proceed with the claim under a Writ of Summons and a Statement of Claim to seek other relief relating to the outstanding payment.

27.	Defendants objected to the amendment and asked the court to dismiss the entire proceeding for abuse of process pursuant to Order 12 Rule 40 (1) (c) of the NCR. The fact that the plaintiff used a wrong mode of proceeding to pursue its claim is sufficient ground in itself to dismiss the proceeding. Plaintiff did not withdraw its Notice of Motion when the matter went to mediation. The matter was referred back to the court. Plaintiff should have known that where there are numerous issues or facts requiring determination, it should use the correct mode of proceedings. This case involves a number of issues and facts to be determined yet the plaintiff decided to commence the proceeding through an Originating Summons seeking only one relief of declaratory orders. It prevents the determination of issues and in such situation, the court may dismiss the proceeding; United State of America v. WR Carpenter (Properties) Ltd [1992] PNGLR 185. 

G.	FAILURE TO COMPLY WITH THE RULES

28.	A failure to comply with the rules as to pleading, both in form and content, is generally treated as an irregularity and does not render a proceeding invalid. On an application by a party or by both parties or on the court’s own motion, a defect can be corrected so long as it does not prejudice a party or both parties. The ultimate sanction is to dismiss the action. However, the courts generally avoid denying a party their day in court. The more common sanction is one of costs with an order to re-plead within a designated time frame. 

29.	A court is likely to strike out a pleading if:

(i)	It discloses no reasonable cause of action/defence
(ii)	It has the tendency to prejudice/delay a fair trial
(iii)	It is unnecessary or scandalous
(iv)	It is described as frivolous or vexatious; or
(v)	It tantamount to an abuse of court process.

30.	There is no specific provision in the NCR that provides for amendment of Originating Summons. However, O 8 R 50 gives the court the general power to amend ‘any document in the proceedings’ including the Originating Summons. This view was held in O’Neill v. Kaluwin [2015] PGNC 65: N5839. The court held that; “the Court can grant leave to a Plaintiff to amend an originating summons under Order 8 Rule 50 (1) of the National Court Rules for 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.”

H.	FINDINGS

31.	I have considered the plaintiff’s application seeking leave to amend the Originating Summons and the defendant’s objection to amendment and their application to dismiss the entire proceeding for being an abuse of process. Defendants relied solely on the wrong mode of proceeding as the basis for their application to dismiss the proceeding. 

32.	In determining whether or not to grant leave to amend, I return to the guiding principles set out in New Guinea Company v. Thomson (supra); Michael Kewa v Elias Mai Kombo (supra), and Pais v. Kodi (supra) on the following guidelines:

(i)	Whether the amendment will enable the court to determine the real question in controversy between the parties? – the proposed amendment will bring to fore the real question in the dispute to be determined.

(ii)	Will the amendment cause any prejudice or result in injustice to the other party? – There is no evidence suggesting that the amendment will cause any prejudice or injustice to the defendants.

(iii)	Is the application seeking amendment made mala fide or bona fide? – I am satisfied that the application is made bona fide and in good faith with no ulterior motives.

(iv)	Is the amendment in the interest of justice? – Interest of justice demands that the issues in a dispute are properly identified, raised and pleaded. 

(v)	Will the other party be compensated with costs for the amendment? – Court will require the Applicant to provide the usual undertaking as to damage and pay the costs of the proceeding if the issue of costs arises.

(vi)	Is the Applicant prevented by its conduct from being permitted to amend its pleadings? – Not necessarily. The change of circumstances in the way in which a new cheque was raised to replace the stale cheque previously issued, the issues have now changed and the plaintiff is entitled to amend the pleadings. 

(vii)	Will the propose amendment enable an efficient and effective determination of the issues between the parties? – When the issues are properly identified and the question in controversy clearly established, the court will deal with the case effectively and efficiently.

I.	ORDER

33.	I make the following Orders: 

(i)	Application for leave to amend the Originating Summons filed on 08 September 2023 is granted pursuant to Order 8 Rule 50 of the NCR.

(ii)	Plaintiff/Applicant is given seven (7) days from the date of this Order to amend the aforementioned summons.

(iii)	Plaintiff/Applicant is to file and serve the amended Writ of Summons and Statement of Claim within fourteen (14) days from the date of this Order.

(iv)	Costs be in the cause.
__________________________________________________________________  
Lawyer for the plaintiff: Palem Onom Lawyers
Lawyer for the first – fourth defendants: Adam Ninkama Lawyers