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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS 342 OF 2004
BETWEEN:
URUMPA KEMESI CHAIRMAN OF YESIKI
INCORPORATED LANDGROUP 447
(Plaintiff)
AND:
SEDION WALAMBO FOR AND ON BEHALF OF MELIPU
YESIKI IN CORPORATED LAND GROUP
(First Defendant)
AND:
JOSEPH GABUT, SECRETARY DEPARTMENT OF
PETROLEUM & ENERGY
(Second Defendant)
AND:
FRANCIS KAUPA MANAGING DIRECTOR MINERAL
RESOURCES DEVELOPMENT COMPANY LIMITED
(Third Defendant)
AND:
YESIDI ILG 447
(Fourth Defendant)
AND:
SEDION WALAMBO FOR AND ON BEHALF OF MELIPU
YESIKI INCORPORATED LAND GROUP 447
(Cross-Claimant)
AND:
URUMPA KEMESI CHAIRMAN OF YESIKI
INCORPORATED LAND GROUP 447
(First Cross-Defendant)
AND:
JOSEPH GABUT, SECRETARY DEPARTMENT OF
PATROLEUM & ENERGY
(Second Cross-Defendant)
AND:
FRANCIS KAUPA MANAGING DIRECTOR MINERAL
RESOURCES DEVELOPMENT COMPANY LIMITED
(Third Cross-Defendant)
AND:
THE STATE
(Fourth Cross-Defendant)
Waigani : Davani, J
2006 : 23 and 30 May
: 26 July
PRACTICE AND PROCEDURE - Originating Summons - proceedings not converted to pleadings - Cross claim filed - leave must be obtained, to file cross claim – O.4 R.34 of National court Rules.
PRACTICE AND PROCEDURE – Originating Summons – Cross claim filed – whole proceedings discontinued with leave and on terms – orders entered – took effect immediately – effect of discontinuation, cross claim is also discontinued, unless terms imposed for its continuation – 0.8, R.47 of National Court Rules.
PRACTICE AND PROCEDURE – effect of discontinuance – proceedings at an end – no order to prohibit fresh action on same cause of action – fresh proceedings can be filed on same cause of action.
Cases Cited:
Pickthall v Motor Vehicles Insurance (PNG) Limited [1991] PNGLR 113,
Steven Charles Pickthall v Lae Plumbing Pty Ltd [1994] PNGLR 363,
Twain Pambuai v Anton Benjamin (2005) N2897
References:
Halsbury’s Fourth Edition Vol. 37
Cairns Australian Civil Procedure 19 (Third Edition)
The Supreme Court Practice 1991 Vol. 1
Counsel:
W. Hagahuno, for First Defendant
D. Hauka, for Plaintiff/Cross-Defendant
J. Abone, for Contemnor Martha Kaia (In OS 142/2005)
N. Eliakim, for Contemnors Bernard Pawih and Esther Yuyuge
26 July, 2006
RULING
1. DAVANI, J: Before me are several issues for determination which issues were raised on 23 May, 2006, when all counsel appeared before me on contempt proceedings filed by Mr Hagahuno for the first defendant and which proceedings were first mentioned before me on 17 May, 2006. It was at the hearing on 23 May, 2006, that Mr Hauka for the plaintiff, Mr Abone for Martha Kaia and Ms. Eliakim for Contemnors Bernard Pawih and Esther Yuyuge, pointed out to the court that there were stay orders in OS 142 of 2005 taken out on 20 April, 2006, effectively staying all proceedings. They also pointed out that on 10 June, 2005, this court had discontinued these proceedings. I then raised several issues for all counsel to make submissions on which they did and which are now before me for consideration and determination.
Issues
2. These issues are:
(i) Whether the stay order of 20 April, 2006 in OS 142 of 2005 affects the contempt proceedings filed by the first defendant herein, and all other applications for that matter;
(ii) Whether any other application including contempt proceeding can be filed on these proceedings considering these proceedings were discontinued by order of 10 June, 2005.
Chronology of Pleadings
3. Below is a chronology of pleadings filed, before this application. These are:
(i) 29 June, 2004 – Plaintiff filed originating summons in these proceedings seeking the following orders:
- An order restraining the first defendant from receiving any royalties or equity benefits under the name Yesiki Incorp. Land Group in the Kutubu Pipeline Project or Gobe Petroleum project.
- A declaration that there is no court order in OS 179 of 2002 entitling the first defendant to 50 percent benefit.
(ii) 26 August, 2004 – the first defendant filed Defence and Cross-Claim.
(iii) 1 September, 2004 – the plaintiff filed Reply to Defence and Cross-Claim.
(iv) 23 September, 2004 – the plaintiff filed an Amended Originating Summons.
(v) 16 March, 2005 – All parties took out consent orders to this effect, that:
All payments accruing and due to Yesiki ILG 447 shall not be paid to the parties herein but instead, paid into the National Court Trust Account, until issues in this proceedings and any other related proceedings have been resolved.
(vi) 24 May, 2005 – The court ordered that Yesiki Incorporation Land Group ILG No. 447 be named as one of the defendant’s in these proceedings. They were subsequently named as fourth defendant.
(vii) 10 June, 2005 – The court granted consent orders that:
(1) Leave be granted for the whole proceedings (OS 342 of 2004) to be discontinued.
(2) That K16,170.00 be paid out of the National Court’s Trust Account from the K320,000.00 royalty monies held in trust and to be paid to Dennis Lawyers for settlement of legal fees.
(3) That Williams Attorneys be granted leave to file an Affidavit enclosing his Bill of Costs which will be paid from the K320,000.00 held in trust.
(4) That the balance of monies in trust, after settlement of legal fees, will continue to be held in trust, by the court, until further orders in proceedings OS 426 of 2004".
4. I should point out that the above orders were consented to by Mr Hagahuno for the first defendant.
5. In this application, Mr Hauka for the plaintiff and Mr Abone for Martha Kaia both support Ms Eliakim’s submission that the whole proceedings have been discontinued and that parties or a party cannot seek other orders on these proceedings but can do so on fresh proceedings. However, Mr Hagahuno submits otherwise. He submits that the court should still enquire into the conduct of the contemnors because the contemnors breached a valid order of the court (of 16 March, 2005), when they executed a deed of release purportedly for and on behalf of the fourth defendant as well as the Independent State of Papua New Guinea and released the sum of K103,468.80 contrary to the orders of 16 March, 2005. He submits this because the orders of 160A March, 2005 directed and ordered that all benefits and/or payments accruing and due to Yesiki Clan from Gobe and Kutubu projects be paid into the National Courts Trust Account until this and all related proceedings are concluded or until further orders.
6. I discuss first, the first issue.
(i) First Issue - Whether or not any other application, including contempt proceedings can be filed under these proceedings considering proceedings were discontinued by order of 10th June, 2005.
7. Ms Eliakim referred the court to the three (3) authorities which I set out in full below.
1. Pickthall -v- Motor Vehicles Insurance (PNG) Limted: [1991] PNGLR 113
The plaintiff had accepted payment into court of the maximum amount allowed under the Motor Vehicles (Third Party) Insurance Act paid by the Trust (MVIL) and filed a Notice of discontinuance of proceedings against the Trust (MVIL). They then applied to amend the statement of claim in the discontinued proceedings to recover excess damages from the vehicle owner, who was never a party to the discontinued proceedings.
His Honour Brown, J held, amongst others, that the joinder of parties in any proceedings under Order 5 Rule 2 of the NCR is not available once proceedings are discontinued.
He further held that proceedings to which Order 8 Rule 66 of the NCR applies must be fresh proceedings. He refused the plaintiff’s application for leave to amend the statement of claim, on those grounds.
2. Steven Charles Pickthall -v- Lae Plumbing Pty Ltd [1994] PNGLR 363
The appellant appealed the decision of Pickthall -v- MVIL (Supra) to the Supreme Court. The respondent then subsequently filed an Objection to Competency of that appeal.
The Supreme Court upheld the objection because it held that there was no basis for the interlocutory application as the proceedings had been discontinued. The Supreme Court held that because the appellant had discontinued the whole proceedings against the trust, that it cannot now, join the respondent in an action or proceedings which no longer exists. Instead, the respondent should commence fresh proceedings against the respondent if he so wishes.
3. Twain Pambuai -v- Anton Benjamin (2005) N2897
In this case, there were two (2) motions in two (2) related matters which were OS 12 of 2005 and OS 731 of 2005. The motion in OS 12 of 2005, filed on 30 June, 2005 by the plaintiff, sought to reinstate proceedings which had been discontinued with leave of the court, on 25 February, 2005.
The defendant moved on a motion filed in OS 731 of 2005 which sought to set aside court orders of 21 July, 2005, which orders had been obtained by the plaintiff.
First, the court had to determine whether proceedings OS 12 of 2005 had been discontinued and if so, that the interim order of 12 January, 2005 was non-existent. Which then meant the interim order taken out in OS 731 of 2005 on 21 July, 2005 was not properly done and should be set aside.
His Honour Injia DCJ, held that an order granting leave, as with any other order, takes effect when it is entered by the Registrar and upon entry, the order is enforceable on its own terms except where the Court expressly stipulates terms or conditions precedent to be complied with before the order takes effect. If no such terms or conditions are stipulated in the order, then the order granting leave is effective on its own terms and proceedings remain discontinued as from the date the orders take effect.
His Honour then found that the orders of 25 February, 2005 were a final order, which was enforceable on its own terms and that it took effect when the order was entered by the Registrar on 28 February, 2005. Hence, the proceedings in OS 12 of 2005 inclusive of notices, interim orders and direction given therein during the currency of the proceedings stood discontinued or withdrawn as from 28 February, 2005.
8. In this case, the order to discontinue was in these exact terms:
"1. Leave is granted that the whole of the proceedings in OS 342/2004 is hereby discontinued.
9. In that case, the order to discontinue was made on terms. Halsbury’s Fourth Edition Vol. 37 par. 283 states this:
"On the hearing of the application for leave the court may order the action or counterclaim to be discontinued or any particular claim made in it to be struck out as against any or all of the parties against whom it is brought or made, on such terms as to costs, the bringing of a subsequent action or otherwise as it thinks must stop."
10. Halsbury’s (supra) states further at par. 284:
"Discontinuance of the action or withdrawal of part of a claim without leave is no bar to a subsequent action for the same cause of action and does not of itself operate as a release of the claims although it may operate as an election. Nor is discontinuance or withdrawal with leave a bar to a subsequent action unless the order giving leave expressly prohibits the bringing of a fresh action."
11. Again, the effect of discontinuance is described in Cairns "Australian Civil Procedure" (Third Edition) at pg. 397 as this:
The effect of the discontinuance of an action is not the same as judgment. New proceedings are allowed on the same cause of action...
A discontinuance is not the same as a stay. While it seems that a stay may be lifted in proper circumstances, a valid discontinuance puts an end to the action. The defendant makes and enforces payment of costs. But apart from that the action is at an end once it is discontinued. The effect is the same whether the action is discontinued with or without leave. However, this generality must be qualified to this extent. If the court gives leave for the plaintiff to discontinue, it may impose a condition that no further proceedings be commenced on the same cause of action. A further qualification should perhaps also be noted ..." (my emphasis)
12. In this case, leave was granted for the proceedings to be discontinued and orders made on terms, that both counsels’ costs be paid and that the balance of monies should be held until further orders in proceedings OS 426 of 2005 (parties named in the order).
13. It is appropriate that I mention submissions made by Mr Hagahuno in opposition to submissions by other counsel. He submitted that although the action was discontinued, his client is a cross-claimant and that according to O.8 r.47 of the National Court Rules, (‘NCR’) the cross-claim continues. O.8 R.47 reads:
"47. Separate Prosecution.
A cross claim may proceed not withstanding that judgment is entered on the Writ of Summons or any other cross-claim in the proceedings or that the proceedings on the Writ of Summons or any other cross claim are stayed, dismissed or discontinued."
14. I would accept Mr Hagahuno’s submissions if these were made known to the court when I endorsed the consent orders of 10 June, 2005. In fact, on 10 June, 2005, both counsel did not make reference to the cross claim or that orders be made that the cross claim continue. In fact, the affidavit material filed attest to that. I refer to these affidavits one of which is that of Urumpa Kemesi sworn on 25 May, 2005. He is the plaintiff in these proceedings and his affidavit deposes to, the following:
"C. After the court ruling to add my ILG as one of the defendants, I consulted my lawyer to advise him that I did not intend to dispute against my own clan in this court case. I therefore want to withdraw or stop this court case now or stop all the claims against the defendants and just pursue only one court case (OS No. 142/05).
D. My reasons for stopping this court case are that:
(1) I am the chairman of the Yesiki ILG No. 447 and I cannot take issue against my own land group. That was not my intention when filing this court case. The evidence of my ILG chairmanship is in my own ILG certificate Annexed ‘A’ to this affidavit. My name is stated as the chairman of the Yesiki ILG, and I am still the chairman with no changes to date. I am advised by my lawyer that any replacement of me as the chairman will only take place by the issuing of a new ILG certificate in accordance with s.5 of the land groups Incorporation Act. Before that is to be issued the procedure under the Constitution of the Yesiki ILG must first be complied with.
(2) In these court proceedings, I am claiming restraining orders to stop the first defendant from pursuing his claim for benefits out of my ILG share of royalty and equity payments in the Kutubu and Gobe projects by using some kind of an agreement that I signed with him for 50% sharing without my consent as the chairman of the Yesiki ILG No. 447. Other restraining orders is directed on the other defendants from dealing with him. If restraining orders are pursued against the defendants, which now includes my own ILG who is now the 4th defendant, I will only be fighting against myself or my own ILG members. This was not my intention when I filed this court case in the first place. I see myself therefore in a conflict of interest situation with my own ILG now.
(3) I see that, the claim for restraining the 1st defendant and others in dealing with my ILG royalty and equity monies is now no longer relevant issue to be pursued in this court. The more important issue which is affecting my rights as the ILG chairman is the case involving the election of Martha Kaia and others as the Committee members of my ILG. This is the case of OS No. 142/05. To avoid double court actions, I want to settle one thing first, that is to maintain my status as the principle owner of my customary land and the chairman of my own Yesiki ILG No. 447 then the other concerns should come later. In other words, since the filing of this court case, some events have overtaken my initial intentions that I had in putting up this court challenge against the 1st, 2nd and 3rd defendants. The case is therefore no longer necessary to be pursued the way it is now until those other issues of leadership and ILG management is now sorted out.
(4) To avoid continuing escalation of costs, I want to now stop this court action and try to settle the leadership issue or management of my ILG issues first and find ways to reduce costs.
(5) I see that the first Defendant is claiming to be my Yesiki ILG clansmen which I have always opposed and never agreed. But he seems to be still claiming as my clansmen. This is also the case for Martha Kaia and the others who claim themselves to be part of my clan. That is why they keep disturbing me and my ILG from the share of my Kutubu and Gobe project benefits. To resolve this issue of whether they are my clan members or not, I must deal with it first in the way by custom under the Land Groups Incorporation Act first and then that should resolve all those disputes of claiming against me by these people who I always say are not my clan members.
(6) It is therefore proper that I stop this court case and go back to the village and sortt these claims of who is my clan members and who are not clan members or who has rights to be my clan members by custom first before I can have my way clear from any interference from them.
15. This affidavit, filed by Mr Hauka for and on behalf of the plaintiff confirms that the plaintiff wished to discontinue the whole proceedings.
16. As for the first defendant, the transcript of proceedings of that day, 10 June, 2005 which is attached to the affidavit of Mr Hagahuno sworn on 20 October, 2005 attest to his agreement with the plaintiff to discontinue these proceedings on terms. Both Messrs Hauka and Hagahuno were in court when the application to discontinue was made. I set out the exchange between the bench, (myself) and both Messrs Hauka and Hagahuno which confirms that it was the intention of both counsel that the whole of the proceedings be discontinued and on the terms the both consented to. These are as follow:
"Mr Hauka: What is before your Honour this morning is basically a short application by my client seeking leave of the court to discontinue the proceedings, discontinue the whole of the proceedings.
Her Honour: The whole proceedings?
Mr Hauka: Yes your Honour. And in support of that application-it is an application filed by a Notice of Motion on 31 May, 2005.
Her Honour: Is leave opposed Mr Hagahuno?
Mr Hagahuno: No your Honour. We are not opposing the ...
Her Honour: Okay. It is just a issue of costs or what?
Mr Hauka: Yes your Honour.
Mr. Hagahuno: The issue of costs had been agreed to.
Her Honour: Okay.
Mr Hagahuno: It is just the issue of monies that are held in these proceedings. Now that these proceedings have been withdrawn-we have discussed with my learned friend – my client has filed another proceeding and we have consented that the monies be transferred into those proceedings until those proceedings are ...
Mr Hauka: And ...which we do not oppose and we have orders for endorsement to that effect.
Her Honour: Okay, let me see. So, why are you withdrawing 342?
Mr Hauka: Your Honour, basically for two reasons or three reasons. Basically, my client firstly, is the chairman of one land group, Yesiki Land Group. It is by order of His Honour Judge Lay, the land group has become one of the defendants in the proceedings.
Her Honour: In the other proceeding?
Mr Hauka: In the same proceedings, and he cannot be able to sue his own land group. That is the first reason. And the second reason is being that, to reduce costs and to avoid ...
Her Honour: Fourth Defendant, yes. Yes, allright.
Mr Hauka: We seek, your Honour, to endorse the orders as to costs. But we have no objections to have the funds held in court, to be held until other proceedings are filed by – involving the same parties is finally determined.
..." (my emphasis)
17. The transcript then went on to set out further exchanges between Mr Hauka and myself in relation to payment of costs from monies held by the Registrar. And throughout, when Mr Hagahuno made submissions, he did not point out that the cross claim was to remain even after his costs were paid. In fact Mr Hauka when seeking confirmation of my orders, asked:
"Mr Hauka: Yes. Your Honour, we finally seek your Honour’s directions here. The first order would be, leave is granted for the whole of the proceedings to be discontinued?
Her Honour: Yes
..." (my emphasis)
18. And Mr Hagahuno did not raise any objections when this was pointed out and confirmed.
19. Again, in an affidavit sworn by Mr Hagahuno on 14 July, 2005 seeking payment of his costs from funds held in trust and clarification of the consent orders of 10 June, 2005 in relation to payment of his costs from those funds, he deposed to this:
"2. That on the 10th June 2005, I appeared before the National Court at Waigani in an application by the plaintiffs seeking leave of the court to discontinue these proceedings.
20. Again I emphasize that Mr Hagahuno does not mention continuation of the cross claim. This would have been his opportunity to raise that. But as agreed between Mr Hauka and himself, the whole proceedings were to be discontinued and costs to be paid from funds held in trust. It appears Mr Hagahuno was not forthright in his dealings with Mr Hauka. And Mr Hagahuno appears to also have had a ‘memory lapse’ in relation to what transpired that day. And again, by an affidavit of Mr Hagahuno sworn on the 6 July, 2005 which was apparently filed in support of the application to discontinue, he deposes to this;
"2. That on the 10th of June, 2005, I appeared before the National Court at Waigani in an application by the plaintiff seeking leave of the court to discontinue these proceedings.
(my emphasis)
21. Dennis Lawyers letter to the Registrar of the 6 of June, 2005 referred to in Mr Hagahuno’s affidavit, states this:
"We act for the plaintiff in this matter. We advise that, our motion seeking to discontinue the proceedings was fixed by the registry to the 15/6/05 at 9:30 am. However, after serving the motion and supporting affidavit, the parties have given consent to the matter to be discontinued on the term of the motion we filed.
It would therefore be in the interest of all parties that this matter be brought forward and we propose that, you fix it for Friday 10/6/05 at 9:30am since it is a consent matter, we will have the consent signed for the court to endorse which will not take any more than 10 or 15 minutes. Could you therefore place the matter on the motions listing for Friday 10/6/05 before Her Honour Justice Davani.
Yours faithfully,
(Signed)
___________________
Dennis Lawyers".
22. So this tells me that at no time was it Mr Hagahuno’s intention to retain the cross claim. Again, as is the law and as reaffirmed and confirmed in "The Supreme Court Practice 1991", Vol. 1, O.21, R.5 at pg. 88:
"21/2 – 5/13 Effect of discontinuance and withdrawal
The discontinuance of an action or the withdrawal of part of a claim without leave is no bar to a subsequent action for the same cause of action ... The effect is the same where the discontinuance is with leave, unless the order giving the leave expressly prohibits the commencement of a fresh action...
The plaintiff may therefore commence a new action for the same cause, to which such discontinuance will be no defence; but unless he does so in good time, his laches may be a bar ...
But when the plaintiff has to obtain leave, it is only by the discretion of the court that he can discontinue with the right of bringing another action".
(ii) Second issue – Whether the stay order of 20 April, 2005 in OS 142 of 2005 affects the contempt proceedings filed by the first defendant herein, and all other applications, for that matter;
23. It also means that stay orders taken out in OS 142 of 2005 do not affect OS 342 of 2004 because these proceedings are now discontinued. But the terms or orders made on the application to discontinue still apply, that is, the balance of monies will be held in court until further orders in OS 426 of 2004.
Filing of Cross-Claim on Originating Summons
24. Ms Eliakim also pointed out to the court that the first defendant should not have filed a cross-claim on these proceedings because these proceedings were commenced by way of Originating Summons. And I accept that because unless, orders had been made earlier on in the proceedings that the proceedings continue on pleadings, (see O.4, R.35 of NCR), that the first defendant cannot and should not have filed a cross-claim. And even if an order had not been made under O.4, R.35, that the plaintiff should have first, obtained leave of the court to cross-claim for any relief (see O.4, R.34 (1), (2) and (3) of NCR) and the court on granting that leave will then issue directions as to the manner of the cross claim to be filed (see O.4, R.34 (3) of NCR). But this was not done by Mr Hagahuno. 25. Neither is there any order from the court confirming that such directions were issued. So effectively, the cross-claim was improperly issued.
26. But the plaintiff did not raise issue as to the propriety of the cross claim, having accepted it since its filing. And I will conclude this part by saying that the cross claim was and is clearly, irregularly and improperly before the court.
Conclusion
27. I conclude that although O. 8 r. 47 states that a cross claim may proceed, not withstanding the discontinuation, that it is a matter of discretion. In this case, at no time did the first defendant and his lawyer intend that the cross claim remain after the discontinuance because that is not reflected in the affidavit material, transcripts that I referred to and submissions from counsel that I heard.
28. And as to costs, the first defendant has, by his actions in filing contempt proceedings, despite orders by consent to discontinue proceedings, has brought all parties to court, thereby their incurring costs which could have been avoided. The first defendant must pay all parties costs of this application.
29. The court orders that;
__________________________________________________________________
Parkil Lawyers: Lawyer for Contemnor, Martha Kaia
Williams Attorneys: Lawyer for the First Defendant
Dennis Lawyers: Lawyer for the Plaintiff
Young & Williams: Lawyer for Contemnors, Bernard Pawih & Esther Yuyuge
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