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Theresa's Pty Ltd v Rio Vista Pty Ltd [1998] PGNC 175; [1998] PNGLR 283 (13 May 1998)

[1998] PNGLR 283

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

THERESA’S PTY LTD; AND
PAPUA NEW GUINEA BANKING CORPORATION

V

RIO VISTA PTY LTD

WAIGANI: SEVUA J
13 March and 13 May 1998

Facts

In their originating summons the plaintiffs sought a declaration that they, their servants, agents, employees and tenants had a right of way over a driveway on a piece of land owned by the defendant. They further sought permanent injunction restraining the defendant, and its servants, agents, officers and employees from obstructing, preventing, or hindering the plaintiffs and their servants, agents, employees and tenants from entering and having excess to and enjoying a right of way over the said piece of land.

The defendant filed an application, pursuant to Rule 40(1) Order 12 of the National Court Rules, to dismiss the plaintiffs’ action. Rule 40(1) provides:

Held

1. The defendant did not establish any of the grounds stipulated under O 12 r 40(1) of the National Court Rules to warrant the court to dismiss the plaintiffs’ action.
   
2. An order dismissing proceedings on the ground that no reasonable cause of action is disclosed will only be made where it is plain and obvious that the claim is unsustainable or inconsistently bad. The plaintiffs have a cause of action. Application dismissed. PNG Forest Products Pty Ltd & Inchape Berhad v The State & Jack Genia [1992] PNGLR 85 followed.
   

Papua New Guinea cases cited

PNG Forest Products Pty Ltd & Inchape Berhad v The State & Jack Genia [1992] PNGLR 85.
Ronny Wabia v BP Exploration Co. Ltd, Department of Mining & Petroleum & The State [1998] PNGLR 8.

Other cases cited

Allen v Gulf Oil Refining Ltd [1980] UKHL 9; [1981] 1 All ER 353 [1981] AC 1000.
Attorney General of the Duchy of Lancaster v London & North Western Railway Co. [1892] UKLawRpCh 134; [1892] 3 Ch 274.

Dyson v Attorney General [1910] UKLawRpKQB 203; [1911] 1 KB 410.
Hubbuck & Sons Ltd v Wilkinson Heywood & Clark Ltd [1898] UKLawRpKQB 176; [1899] 1 QB 86 [1895-9] All ER 244.

Nagle v Feiden [1966] 1 All ER 689.

Wenlock v Moloney [1965] 2 All ER 821.

Counsel

D Hartshorn, for plaintiffs/respondents.
A Corren, for defendant/applicant.

13 May, 1998

SEVUA J. There are two pending applications before me. Pursuant to a direction issued by Deputy Chief Justice on 9th March 1998 during motions, I am to deal with the defendant’s motion prior to the plaintiffs’ motion.

The defendant’s notice of motion filed on 13th February 1998 seeks to have the plaintiffs’ action dismissed with costs.

Before I consider both counsels’ arguments, let me, at this juncture; refer to the substantive cause of action.

The plaintiffs’ originating summons filed on 9th February, 1998, seeks firstly, a declaration that the registered proprietor of the property contained in State Lease Volume 39, Folio 9701, described as Allotment 21, Section 63, Granville, National Capital District ("First Owner"), it’s servants, agents, employees and tenants, has a right of way over the land.

Secondly, the plaintiffs seek a permanent injunction restraining the registered proprietor of the property contained in State Lease Volume 30, Folio 7488, described as Allotment 20, Section 63 Granville, National Capital District, the defendant, its servants, agents, officers and employees from obstructing, preventing or hindering the first owner, the plaintiffs, their servants, agents, employees and tenants from entry and having access to and enjoying a right of carriageway over the land. It is not necessary to state the other orders sought by the plaintiffs.

The land in question is a driveway, which is part of Allotment 20, Section 63, the proprietor of which is, the defendant. The first plaintiff is the proprietor of Allotment 21, Section 63, and the adjoining land.

The matter in contention between the parties is the use of or right of access to the driveway by the first plaintiff. The driveway, which is 30 metres in length and 5.6 metres wide, is part of Allotment 20.

Running directly parallel to the driveway is a narrow strip of land approximately a metre in width, which is part of Allotment 21. This little strip of land is subleased to the defendant for 99 years commencing 25th August 1986. It seems the reason for this sublease is that part of the improvements on the defendant’s land encroached on the first plaintiff’s land. I should qualify this by explaining that the sublease was between the defendant and Pogal Pty Ltd, the former proprietor of Allotment 21. Pogal Pty Ltd then transferred Allotment 21 to the first plaintiff on 25th May 1987.

The first plaintiff’s right of access to the driveway was created by an easement executed between the defendant and the first plaintiff on 19th August 1994.

The term of the easement is "for a term of years being one day less than the term of the First Owner’s State Lease, but determinable at the will of either party by giving three months written notice to terminate." The defendant has given three months notice, which expired on 15th March 1998.

Mr Corren has raised a number of issues. These are: that the easement was not registered as required by s 95(11)(b) of the Land Registration Act (Ch. No. 191) is therefore defective; whether Allotment 21 will be completely cut off and "land locked"; whether the plaintiffs have any right at law or equity to prevent the defendant from closing the driveway thus terminating the easement and the question of easement of necessity involving the dominant tenement and the serviant tenement test.

Throughout the defendant’s submissions, no reference at all was made to Order 12 Rule 40(1), which deals with the Court’s discretionary power to stay or dismiss proceedings, which disclose no reasonable cause of action for frivolity, vexation and abuse of the Court’s process. I am of the view that the basis for the defendant’s application is Order 12 Rule 40(1) of the rules. Mr Corren in the end conceded that although he had not referred to Order 12 Rule 40, the substance of his arguments was based on that rule.

In the light of the view I have taken, and in view of Mr Corren’s concession, I consider that the legal issues raised by Mr Corren in this application are not relevant at this juncture. These issues are relevant in the substantive hearing. Accordingly, I am of the view that what the defendant has raised in his submissions before me should be left to the trial proper.

As far as I am concerned, the issue before me is whether the plaintiff’s suit should be dismissed. In determining this issue, it is relevant to consider whether the proceedings instituted by the plaintiffs disclose no reasonable cause of action, or are frivolous or vexatious or an abuse of the process of the Court. Whilst I think the defendant had argued some of these issues to seek dismissal of this suit, I maintain that the legal issues raised are quite substantial and they relate to the substantive relief, which the plaintiffs are seeking in their originating summons.

I have already alluded to the existence of two collateral legal documents apart from the State Lease over the two adjourning property, Allotment 20 and Allotment 21. These documents give rise to the parties’ rights to and over the two strips of land that I have referred to. The relief claimed by the plaintiffs is substantive and I have no doubt they will provide substantive legal arguments at the appropriate time. In my view, the plaintiffs’ cause of action is based on a legal right or interest yet to be determined. Can one say therefore that the plaintiffs’ suit disclose no reasonable cause of action? I do not think so.

In my view, in order for the Court to exercise its discretionary power conferred by the rules, or its inherent powers under its inherent jurisdiction, the applicant must establish one of the grounds for stay or dismissal found in rule 40(1) Order 12. In the present application, I find that the defendant has not established any of these grounds. I consider that, for an applicant to succeed in an application for stay or dismissal under Order 12 Rule 40(1), he has the onus of proof, and he must establish any of the grounds in rule 40(1)(a) to (c) before the Court exercises its discretion in his favour.

The defendant has embarked on this summary procedure to stop the case from proceeding to trial. There are numerous cases dealing with staying or dismissal of proceedings based on Order 12 Rule 40(1), which is basically identical to Order 25 Rule 4 of the English Rule of the Supreme Court 1803 and the NSW Supreme Court Rules 1970.

Lindley, MR; in Hubbuck & Sons Ltd v Wilkinson Heywood & Clark Ltd [1898] UKLawRpKQB 176; [1899] 1 QB 86 at 90-91, [1895-9] All ER 244 at 247, in discussing the two courses open to a defendant in situation where the pleadings show no cause of action or defence, said of the second option, which is the summary procedure as the present application; "it is only appropriate to cases which are plain and obvious so that the master or Judge can say at once that the statement of claim as it stands, is insufficient, even if proved, to entitle the plaintiff to what he asks." I note this case was referred to by Sheehan, J in PNG Forest Products Pty Ltd & Inchape Berhad v The State and Jack Genia [1992] PNGLR 85, which I will refer to later.

In Dyson v Attorney General [1910] UKLawRpKQB 203; [1911] 1 KB 410 at 414, 419, Fletcher Moulton LJ was of the view that it should be confined to cases where the cause of action was ‘obviously and almost incontestably bad. He said, "To my mind, it is evident that our judicial system should never permit a plaintiff to be "driven from the judgment seat" in this way without any Court having considered his right to be heard, except in cases where the cause of action was obviously and almost incontestably bad." In Nagle v Feilden [1966] 1 All ER 689 at 697 [1966] 2 QB 633 at 651, Salmon LJ said, "it is well settled that a statement of claim should not be struck out and the plaintiff driven from the judgment seat unless the case is unarguable. Accordingly, it is necessary to consider whether or not this plaintiff has an arguable case."

Lord Wilberforce said in, Allen v Gulf Oil Refining Ltd [1981] 1 AII ER 353 at 355, [1981] AC 1000 at 1010-1111; "My Lords, I and other of your Lordships have often protested against the procedure of bringing, except in clear and simple cases, points of law for preliminary decision. The procedures indeed exist and are sometimes useful. In other cases ... they do not serve the cause of justice....".

An order dismissing proceedings on the ground that no reasonable cause of action is disclosed will be made only in plain and obvious cases where the claim is obviously unsustainable. That, in essence, is the principle in Hubbuck’s case. It is not sufficient ground to dismiss cases where the proceedings disclose some cause of action, even though the case may be weak or not likely to succeed. See: Wenlock v Moloney [1965] 2 All ER 821.

In my recent decision in Ronny Wabia v BP Exploration Co. Ltd, Department of Mining & Petroleum and The State [1998] PNGLR 8, I advert to cases that discuss the grounds in Order 12 Rule 40(1) of our rules. Some of those aspects are covered by the PNG Forest Products case referred to earlier and I adopt those cases and discussions here. In Attorney General of the Duchy of Lancaster v London and North Western Railway Co. [1892] UKLawRpCh 134; [1892] 3 Ch 274, at 277, Lindley LJ, in relation to Order 25 Rule 4 of the 1883 English Rules of the Supreme Court said, "the object of the rule is to stop cases which ought not to be launched - cases which are obviously frivolous or vexatious or obviously unsustainable." In the same case, also at 277, Lopes LJ said, "the object of the rule was to get rid of frivolous actions."

In the PNG Forest Products’ case, it was held inter alia that, "an action should only be struck out in cases where the "cause of action is obviously and almost incontestably bad." It is my view that in the present case, the cause of action is not one that can be described as such.

Furthermore, the applicant has not satisfied me that one or any of the conditions in Order 12 Rule 40(1) has been established and I am mindful that he has the onus.

Having looked at the plaintiffs’ originating process, I cannot see how the defendant could say the plaintiffs’ claim disclose no cause of action. In my view, the relief sought indicates quite clearly that the plaintiffs have a cause of action. Whether or not they succeed in the end is another matter. I am not determining that issue now.

For these reasons, I have reached the conclusion that it would be inappropriate to dismiss the plaintiffs’ suit at this stage, and that the case must accordingly proceed to trial. In the circumstance, it would be inappropriate to embark upon any discussion of the legal issues canvassed in Mr Corren’s submissions. I would emphasise, as I have alluded to, those issues point to serious questions to be tried at the trial and they are inappropriate to be determined here and now.

Finally, I granted an interim injunction on 13th March against the defendant.

That injunction was granted, not on the basis that it is one of the plaintiffs’ principal relief, but on the premise that the plaintiffs’ rights were to be affected as at 15th March, 1998, and I was not in a position to give a decision before that date, this application having been completed at 6.35 pm on Friday evening, 13th March. In view of the orders, I am going to make, it will be quite inappropriate in my view, to lift the injunction.

This application is therefore dismissed, and I order that the defendant pay the plaintiffs’ costs of this application. I further order that the interim injunction granted on 13th March be extended until the trial. The matter will therefore be referred to the Registrar for assignment to a Judge for listing and trial.

Lawyer for the plaintiffs/respondent: Shepperds.
Lawyer for the defendant/applicant: AG Corren & Co.