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Sakelu v Vanimo Forest Products Ltd [2016] PGNC 539; N8363 (8 February 2016)

N8363

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 223 OF 2014

BETWEEN:
MICHAEL SAKELU, TOM BAIS, PETER APOI,
THOMAS KUMUSI & JOSEPH KELANGE &
forty other customary owners of land
within blocks 3, 4, and 5 of the
Vanimo Timber Project Area
Plaintiffs

AND:
VANIMO FOREST PRODUCTS
LIMITED
Defendant

Waigani: Hartshorn J.
2015: 24^th March,
2016: 8^th February

PRACTICE AND PROCEDURE - Application to dismiss proceeding – grounds of application – frivolous and vexatious and an abuse of process of the court – multiplicity of proceedings – plaintiffs file parallel proceedings - lack of good reasons why such parallel proceedings should continue and why two actions were brought – proceeding dismissed as an abuse of process of the court - Order 12 Rule 40 National Court Rules

Cases Cited:
Papua New Guinea Cases

State v. Peter Painke [1976] PNGLR 210
Kerry Lerro v. Stagg & Ors (2006) N3050
Takori v. Yagari & Ors (2008) SC905
Telikom PNG Ltd v. Independent Consumer and Competition Commission (2008) SC906
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 Patrick Pruaitch v. Chronox Manek (2010) SC1093
Siu v. Wasime Land Group Incorporated (2011) SC1107
Grand Chief Sir Michael Thomas Somare v. Chronox Manek (2011) SC1118 Talibe Hegele v. Tony Kila & Ors (2011) SC1124

Overseas Cases

Hudson Investment Group v. Australian Hardboards Ltd [2006] NSWSC 840
Hunter v. Chief Constable of the West Midlands Police and Others [1981] UKHL 13; [1982] AC 529
McHenry v. Lewis (1882) 22 Ch 397
Williams v. Hunt [1904] UKLawRpKQB 170; [1905] 1 KB 512

Counsel:

Mr. L. Tangua, for the Plaintiffs
Mr. N. Kopunye, for the Defendant

8^th February, 2016

1. HARTSHORN J: This is a decision on an application to dismiss this proceeding. The grounds for the application are that the proceeding is frivolous, vexatious and an abuse of process of the court. Reliance is placed upon Order 12 Rule 40 National Court Rules.

Background

2. It is pleaded that the plaintiffs’ are customary owners of land within blocks 3, 4 and 5 of the Vanimo Timber Project Area. The State entered into a Timber Rights Purchase Agreement (TRPA) with the customary owners. It expired on the 21^st March 2008. The State however, through the National Forest Authority, issued a Timber Permit to the defendant in respect of the land that continued until 31^st October 2011. The plaintiffs’ allege that the defendant conducted logging operations without authority between the above dates and therefore illegally. Further, the plaintiffs’ allege that some landowners were unduly influenced by the defendant into signing an agreement without authority that had the effect of extending the term of the TRPA. Declaratory relief is sought, together with damages, interest and costs.

This application

3. The defendant contends that the proceeding should be dismissed as:

a) the plaintiffs’ have commenced a multiplicity of proceedings including this proceeding concerning the same subject matter and this constitutes an abuse of the process of the court;

b) as the plaintiffs’ were equally at fault in the matter about which they make complaint and in essence are seeking to be unjustly enriched, they are barred from seeking restitution;

c) the delay in commencing this proceeding has caused prejudice to the defendant as it is no longer able to comply with s. 5 Claims By and Against the State Act to enable it to cross claim against the State.

4. The plaintiffs’ contend that the proceeding should not be dismissed as:

a) none of the circumstances required for a successful dismissal application pursuant to Order 12 Rule 40 National Court Rules exist in this proceeding;

b) whilst this proceeding and WS 176 of 2013 concern the same background and some similar issues, the defendants’ are not the same, and notice pursuant to s.5 Claims By and Against the State Act is not required as no claim is being made against the State in this proceeding;

c) they allege that the term of the Timber Permit was dependent upon the term of the TRPA, and not the Forestry Act, as contended by the defendant. This issue is the subject of a decision that is pending in WS 176 of 2013;

d) this application requires the determination of substantial issues that should be determined at trial;

e) alternatively, as this court is yet to determine fundamental issues in WS 176 of 2013 that will have a bearing on this proceeding, this proceeding should be stayed pending the court’s ruling in WS 176 of 2013.

Law

5. There are numerous authorities in respect of the principles which apply to applications under Order 12 Rule 40 National Court Rules and I refer to the following cases in this regard: Kerry Lerro v. Stagg & Ors (2006) N3050, Takori v.Yagari & Ors (2008) SC905, Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 and Siu v. Wasime Land Group Incorporated (2011) SC1107. The Court in Mount Hagen v. Sek (supra) in paragraphs 27 to 30 conveniently sets out the requirements of Order 12 Rule 40 (1) (a), (b) and (c) as follows:

“27. The terms “vexatious”, “frivolous”, “abuse of the process of the Court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori & The State (2006) N3050; Philip Takori & Others v. Simon Yagari & 2 Others (2008) SC 905. These cases say the same thing.

28. The law with regard to an application for dismissal of proceedings based on O.12 r.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori’s case (supra).

29. The phrase ‘disclosing a reasonable cause of action’ consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i) A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

(ii) The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii) The purpose of O.12 r.40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv) A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.

(v) A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

30. In an application under O.12 r.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded.”

6. Specifically as to an abuse of the process of the court, I refer to the following passage in State v. Peter Painke [1976] PNGLR 210 where the court stated that:

“Abuse of the process of the court is an expression used to describe any use of the process or procedures of the court for an improper purpose or in an improper way. It encompasses a wide range of situations.”

and the following classic statement of Lord Diplock in the House of Lord’s decision of Hunter v. Chief Constable of the West Midlands Police and Others [1981] UKHL 13; [1982] AC 529, as to the inherent jurisdiction of a court to deal with an abuse of its process is worthy of reproduction:

“This is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied;... It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power.

Consideration
Multiplicity of proceedings

7. That a multiplicity of proceedings may be considered an abuse of process is well recognised: Grand Chief Sir Michael Thomas Somare v. Chronox Manek (2011) SC1118, Telikom PNG Ltd v. Independent Consumer and Competition Commission (2008) SC906, Talibe Hegele v. Tony Kila & Ors (2011) SC1124, McHenry v. Lewis (1882) 22 Ch 397, Williams v. Hunt [1904] UKLawRpKQB 170; [1905] 1 KB 512 and Hudson Investment Group v. Australian Hardboards Ltd [2006] NSWSC 840. See also Patrick Pruaitch v. Chronox Manek (2010) SC1093.

8. In Telikom v. ICC (supra), the majority said the following concerning why a multiplicity of proceedings is considered an abuse of process:

“We do not consider that it is for a defendant to be harassed or for one of a number of proceedings to reach finality for a multiplicity of proceedings to give rise to an abuse. It is the very existence of two or more proceedings involving the same subject matter that is noxious and gives rise to the presumption, rebuttable, of abuse of process.

Once the jurisdiction of the National Court is invoked by filing a proceeding, it is incumbent on a plaintiff to prosecute it with all due dispatch; and not to commence parallel proceedings over the same subject matter. Parallel proceedings give rise to confusion and inconvenience for the defendants and the court, even where, as in the present case, one of the originating processes is not served on the defendant. Very good reasons for commencement of parallel proceedings must be given.”

9. The comments of the majority in Telikom (supra) reflect the position taken in England and Australia as indicated by the following passage reproduced from the decision of Gzell J. in Australian Hardboards (supra):

“6 In McHenry v Lewis (1882) 22 Ch 397 at 400, Jessel MR said that where two actions by the same man were brought in courts governed by the same procedure, and where judgments are followed by the same remedies, it was prime facie vexatious to bring two actions where one would do. In Williams v Hunt [1904] UKLawRpKQB 170; [1905] 1 KB 512 at 514, Collins MR said that where two separate remedies were possible and a start was made to put in force one of the remedies, it was an abuse of process of the Court to divide the remedy where there was a complete remedy in the Court in which the suit was first started.

7 In Reynolds v Reynolds [1977] 2 NSWLR 295 at 306, Waddell J cited both decisions and concluded that the existence of two proceedings was considered prime facie vexatious and one would, generally as of course, be stayed. His Honour said:

“The general principle in relation to proceedings in two courts in one country is stated by the Court of Appeal in McHenry v Lewis and in relation to proceedings in each of two divisions of the one court in Williams v Hunt again the decision of the Court of Appeal. In such cases the existence of two proceedings is considered prime facie vexatious, and the court will generally, as of course, put the plaintiff to his election, and stay one of the proceedings; or it may, as in the latter case, stay the proceedings which it considers to be inappropriate.” ”

10. In this instance the plaintiffs’ concede that this proceeding and WS 176 of 2013 are, “.... two related proceedings raising similar issues pertaining to the legality of a logging operation conducted on the plaintiffs’ customary land after the expiration of a Timber Rights Purchase Agreement on 21 March, 2008, but both proceedings are against different defendants.”

11. Further, the plaintiffs’ in essence concede that the proceedings are similar by submitting that they are attempting the consolidation of both proceedings.

12. That the two proceedings are similar is reflected in the fact that they concern the same logging operation, the same land, the same issue concerning the TRPA and Timber Permit and the same plaintiffs’. Further, in the statement of claim in WS 176 of 2013 there are numerous references to the defendant in this proceeding. The similarity in the proceedings is also reflected in the relief sought. In this proceeding amongst others, damages are sought against the defendant for the loss of trees and round logs as a consequence of illegal logging by the defendant on blocks 3, 4 and 5 Vanimo Timber Project Area, and for trespass and economic loss. In WS 176 of 2013 damages are sought against the defendants’ in that proceeding for specific damages for the amount earned from the export of harvested logs from blocks 3, 4 and 5, and also in respect of logs that remain; trespass, economic loss and environmental damage.

13. Further, the declaratory relief sought in both proceedings is similar.

14. In the submissions made on behalf of, and in the evidence relied upon by the plaintiffs’, there is not in my view a sufficient reason and certainly not a very good reason, as required in Telikom (supra), for the commencement of parallel proceedings and why the claims of the plaintiffs’ against the defendant in this proceeding could not have been made in WS 176 of 2013.

15. After considering the evidence and submissions relied upon and made on behalf of the plaintiffs’, the lack of good reasons why such parallel proceedings should continue and why two actions were brought where one would do, the similarity of both proceedings and the case law, I am satisfied that this proceeding should be dismissed as an abuse of process of the court. Given this it is not necessary to consider the other submissions of counsel apart from as to costs.

16. As to costs I am not satisfied that the defendant has properly made out its case for solicitor/client costs to be awarded and so they will be awarded to the defendant on a party to party basis.

Orders

17. It is ordered that:

a) This proceeding is dismissed;

b) The plaintiffs’ shall pay the costs of the defendant of and incidental to this proceeding on a party to party basis to be taxed if not agreed;

c) Time is abridged.

_____________________________________________________________
Baniyamai Lawyers: Lawyers for the Plaintiffs
Bradshaw Lawyers: Lawyers for the Defendant