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Chris v Kaeo [2019] PGNC 436; N8163 (20 December 2019)


N8163


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS (HR) No. 1205 of 2019 (CC2)


BETWEEN:
RHONDA CHRIS
Plaintiff


AND:
DIM WIN KAEO
First Defendant


AND:
NATIONAL HOUSING CORPORATION
Second Defendant


Waigani: Shepherd J
2019: 25th October & 20th December


PRACTICE AND PROCEDURE – whether proceedings should be dismissed – National Court Rules, Order 12 Rule 40 – principles applicable – summary disposal of a proceeding cannot be obtained in an action where fraud has been pleaded – Order 12 Rule 37 of National Court Rules – notice of motion seeking orders under Order 12 Rule 40(1) of National Court Rules for stay or summary dismissal of proceeding must expressly plead which of the grounds set out in Order 12 Rule 40(1)(a) or (b) or (c) or combination of those grounds are relied on by the applicant – order pursuant to Order 12 Rule 1 of National Court Rules for production by National Housing Corporation of all documents relevant to matters in issue - motion for dismissal refused and proceeding adjourned for further directions.


Cases Cited:


Kappo No. 5 Pty Ltd v James Chi Kong Wong (1997) SC520
Yaluma v State (2010) N 4088
ANZ Bank (PNG) Ltd v Maita Yawi (2014) N5663
Paul Pilimbo Pora v Dean Hull (2012) N4936
Kerry Lerro v Philip Stagg (2006) N3050
Augerea v Bank of South Pacific Ltd (2007) SC 869
Takori v Yagari (2008) SC 905


Counsel:


Mr Gibson Bon, for Applicant/First Defendant
Ms Adjit Joanne Taio, for Respondent/Plaintiff
Mr Abel Tol, for Second Defendant

DECISION


20th December, 2019


  1. SHEPHERD J: The first defendant has applied to the Court by motion filed on 15 October 2015 seeking orders for the dismissal of this proceeding and for immediate possession of a block of residential land at Nine Mile, National Capital District, which land is the subject of a current dispute involving the plaintiff, the first defendant and the National Housing Corporation as second defendant (NHC). The first defendant’s motion is supported by the NHC.
  2. The primary relief which the plaintiff is seeking in this proceeding are orders that a purported tenancy agreement between the NHC and the first defendant relating to the disputed property be annulled and that the NHC enter into a tenancy agreement in respect of that property with the plaintiff. The plaintiff is also seeking orders that both the first defendant and the NHC be restrained from evicting the plaintiff from the property

ISSUE


  1. The issue which is squarely before the Court is whether the first defendant has sufficiently made out its case for the Court to dismiss the plaintiff’s causes of action in this proceeding.

EVIDENCE

  1. The first defendant, in support of her motion for the dismissal of this proceeding, relies on her affidavit sworn on 14 October 2019 filed on 15 October 2019. The plaintiff in answer relies on her affidavit sworn and filed on 4 October 2019.
  2. The evidence shows that the NHC has title to the subject property, which is described as Section 3 Allotment 36, 9-Mile Settlement, National Capital District (the property). The property forms part of the NHC’s Self Help Housing Scheme for urban settlers at 9-Mile Settlement near Bomana.
  3. The plaintiff is a widow. She asserts that her deceased husband, the late Chris Kaeo was allocated the property by the NHC under its Self Help Housing Scheme back in 2003, at which time the property was vacant land at 9-Mile Settlement. The plaintiff contends that her late husband signed a tenancy agreement with the NHC in respect of the property in 2003 which entitled her late husband and herself to move onto the property, which they did. The plaintiff says that upon taking possession of the property in 2003, she and her late husband constructed a house made from permanent materials. The plaintiff states in her affidavit that she and her late husband fenced the property and arranged for electricity and water connections to the house, which became their family home. They also built a small shop on the property.
  4. The plaintiff says that after her husband died in 2017 (actual date of death not given by the plaintiff), she has continued to occupy the home and the property down to the present time.
  5. The first defendant in this matter is the sister of the plaintiff’s late husband.
  6. Following the death of the plaintiff’s husband, which the first defendant says occurred in April or May 2018 (not in 2017, as stated by the plaintiff), the first defendant claimed, apparently for the first time according to the plaintiff’s evidence, that the NHC had never allocated the property to the plaintiff’s late husband in 2003 and that she, the first defendant, had acquired the property from a previous tenant of the NHC in 2002, following which she had allowed the plaintiff’s late husband (and presumably the plaintiff and their family) to occupy the property as caretaker for her. The plaintiff has strenuously denied the first defendant’s claims in this regard.
  7. The dispute between the plaintiff and the first defendant regarding their respective claims to entitlement to occupation or ownership of the property came to the attention of the NHC during the latter half of 2018.
  8. On a date in February 2019 the NHC’s then a/Manager-NCD/Central, Mr John Emena, had a meeting with NHC’s senior legal officer Mr Nigel Pilamp and various other senior executives of NHC to discuss the dispute which had arisen between the plaintiff and the first defendant regarding the property. It was resolved at that meeting that the NHC would transfer “ownership” of the property to the plaintiff, not to the first defendant.
  9. A copy of an NHC internal memorandum dated 10 March 2019 from Mr Emena to Mr Pilamp is annexed to the plaintiff’s affidavit. The memo, which is on NHC letterhead,stated as follows:

“Date: 10th March 2019
To: Senior Legal Officer – Nigel Pilamp

SUB: ADVISE ON DISPUTE PROPERTY SECTION 03 LOT 36 9mile


With reference to your memo as above dated 15 January 2019, pertaining the subject property – refer attached.


Please with due respect, I wish to advise that this matter has already being addressed in our meeting some weeks ago – yourself, a/GMP, a/RMS, Settlement Officer and myself with passing resolution to legalize or transfer the ownership to the current tenant – widow.


Thus, you have been assigned or given the task to advise the parties of our meeting decision accordingly hence by this time parties should have known their positions.

However, your memo doesn’t reflect to our meeting resolution thus causing confusion, which subsequent both parties are frequently following upon the case causing inconveniences.


Hence, would you please advise the parties of our meeting resolution accordingly and respectively as per our meeting resolution rather than submitting your recommendation.


For your information and perusal.


Thank you.

[signature]

John Emena

Manager NCD/Central ”


  1. Prior to the decision of senior NHC officials in February 2019 to transfer “ownership” of the property to the plaintiff (by which I surmise those NHC officials may probably have intended a long term tenancy arrangement with the plaintiff), proceeding DC No. 859 of 2018 in the District Court at Port Moresby was instituted by the plaintiff in November 2018 seeking orders to restrain the first defendant from evicting her from the property. An order by consent was made by the District Court on 25 March 2019 whereby the first defendant agreed that she would be restrained from entering the property “pending awarding of the new Tenancy Agreement by National Housing Corporation”. The plaintiff similarly agreed that she would be restrained by that consent order from constructing any further improvements on the property until the tenancy situation was sorted out by the NHC.
  2. I am satisfied on the evidence that after the District Court at Port Moresby made its order by consent on 25 March 2018, the NHC then resiled on its decision to transfer “ownership” of the property to the plaintiff. For reasons which have not yet been explained to this Court, the NHCthen did a backflip on its decision in February 2019 to “transfer the ownership to the current tenant -widow”. The NHC instead leased the property to the first defendant by entering into a purported tenancy agreement with the first defendant on 14th May 2019. The tenancy agreementprovides that the NHC has granted the first defendant a lease of the property for a term of 2 years from 14th May 2019 subject to certain conditions, which if those conditions are met, will entitle the first defendant to be granted another lease of the property, this time for a full term of 50 years. A copy of the tenancy agreement is annexed to the plaintiff’s affidavit, and an extract of that document is similarly annexed to the first defendant’s affidavit.
  3. The District Court proceedings at Port Moresby were dismissed on application by the first defendant’s lawyer, Gibson Bon, on 26 September 2019. The next day, by letter dated 27 September 2019, Mr Bon wrote to the managing director of the NHC requesting the NHC’s assistance to evict the plaintiff from the property. A copy of Mr Bon’s letter is annexed to the first defendant’s affidavit.
  4. On 2 October 2019 NHC’s a/managing director Elizabeth Bowada wrote a letter addressed to the plaintiff which gave notice that the plaintiff was to vacate the property within 14 working days from the date of receipt of that letter, in default of compliance with which notice the NHC would evict the plaintiff from the property with the assistance of the NHC’s law enforcement unit. Ms Bowada’s reason given in her letter for the threatened eviction of the plaintiff was because the NHC’s Dispute Resolution Committee had “unanimously concluded that Diim Kaeo Win is the legal tenant/purchaser of the subject property”. No date for when that Committee of the NHC had arrived at that “unanimous” decision was stated in Ms Bowada’s letter.
  5. This National Court proceeding was then commenced by the plaintiff on 2 October 2019 in response to the steps being taken by the first defendant to obtain the assistance of the NHC to have the plaintiff and her family evicted from the property.

Consideration


  1. The plaintiff has by her statement of claim alleged constructive fraud against the NHC. Particulars of that fraud are pleaded in paragraph 14 of the statement of claim. Those particulars contend to the effect that the NHC,through the actions of certain of its officials and by reason of the tenancy agreement which the NHC entered into with the first defendant on 14 May 2019, collaborated with the first defendant to deny the plaintiff any right to acquire an interest in the property,which actions were contrary to the prior decision of the NHC in February 2019 to transfer ownership of the property to the plaintiff.
  2. The first defendant’s motion is seeking a dismissal of this proceeding pursuant to O.12 r.40(1) of the National Court Rules(NCR), which states:

40(1) 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 –

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court,

(d) the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.
  1. However O.12 r.40(1) falls within Division 4 of Order 12 NCR which comprises rules 37 to 43 within that Division. Those rules all deal with applications for the summary disposal of proceedings, whether by way of summary judgment or summary dismissal. Order 12 r. 40(1) is subject to O.12 r.37 which relevantly provides:

Division 4 – Summary Disposal


  1. Application of Division 4


This Division applies to all proceedings except proceedings which include:

(a) a claim by the plaintiff for libel, slander, malicious prosecution, false imprisonment, seduction or breach of promise of marriage; or

(b) a claim by the plaintiff based on an allegation of fraud;

(c) a claim for damages arising in respect of the death of any person or in respect of personal injuries to any person.”

[underlining supplied]

  1. Summary disposal of a proceeding cannot be obtained in a case which includes allegations of fraud: Kappo No. 5 Pty Ltd v James Chi Kong Wong (1997) SC520, Kapi DCJ, Los J, Salika J. That case was an appeal in the Supreme Court against summary judgment entered in the National Court in an action where fraud had been pleaded by the plaintiff. In the course of the Supreme Court judgment, their Honours said, with reference to O.12 r.37:

This rule clearly states that where there is a claim based on fraud, summary procedure is not available. It is clearly intended that such allegations must be dealt with at the substantive trial. We find that the trial judge made no reference to this rule in his judgment. If his attention was drawn to the rule he may not have entered judgment against the second appellants. We find that the trial judge erred in this regard.


  1. The plaintiff’s statement of claim filed in this proceeding pleads to the effect that the NHC’s actions in entering into a tenancy agreement with the first defendant on 14 May 2019 in respect of the property were, in the circumstances of this case, tantamount to constructive fraud and were an abuse of the NHC’s own statutory procedures. While I observe that the plaintiff’s statement of claim is to a certain extent poorly pleaded, this does not render it defective. The plaintiff’s statement of claim is capable of rectification through amendment or provision of further and better particulars.
  2. As the plaintiff’s claim includes a claim against both defendants which is based on fraud, no matter how loosely pleaded it may be, it is obvious that the first defendant is precluded by operation of O.12 r. 37(b) from bringing any application for summary disposal of this proceeding on any of the grounds set out in O.12 r.40. The defendant’s application for dismissal is misconceived and it can and should be dismissed as being an abuse of the process of the Court for this reason alone.
  3. There is a further reason why the first defendant’s application for dismissal of this proceeding is flawed and should not be allowed to succeed. The defendant’s notice of motion is defective because term 1 simply seeks an order that the entire proceeding be dismissed pursuant to O.12 r.40(1) NCR. The notice of motion does not specify which of the alternative grounds set out in O.12 r.40(1) could be said to apply to this proceeding.
  4. This failure by the first defendant to identify in her notice of motion whether she seeks dismissal of this proceeding on the ground that no reasonable cause of action is disclosed [O.12 r.40(1)(a)], or that the proceeding is frivolous or vexatious [O.12 r.40(1)(b)], or that the proceeding is an abuse of Court process [O.12 r.40(1)(c)], or that dismissal is sought on each of these alternative grounds, offends against the overriding rule of pleading for motions, namely O.4 r.49(8) NCR which provides:

49(8) Form of Motions


All Motions must contain a concise reference to the Court’s jurisdiction to grant the orders being sought. Motions not containing such reference will not be accepted for filing. If accepted by the Registry staff without such reference, and it goes before the Motions judge, the Court may strike out the motion for being incompetent and for lack of form.


The motion must state the following:

”... move the Court for Order pursuant to (eg.section 5 of the Claims by and Against the State Act...)...”.

  1. A motion that does not state the jurisdictional basis for the relief sought is in breach of O.4 r.49(8). It is incompetent and should be dismissed, especially where substantive relief such as summary disposal is sought in the motion: Yaluma v State (2010) N 4088, Sawong. J.
  2. In ANZ Bank (PNG) Ltd v Maita Yawi (2014) N5663 the defendant sought orders for dismissal of the proceeding, relying generally on O.12 r.40(1) without specifying the basis on which he relied. Sawong J said:

The defendant has sought to dismiss the proceedings either as an abuse of Court process, [as] vexatious and frivolous or as showing no reasonable cause of action. It is not clear to me exactly what basis the defendant relies on. In my view, the way the principal relief is formulated creates confusion and ambiguity. The reliefs in Order 12 Rule 40 are set out in alternatives, that is a party must choose which of the grounds in that particular rule it wishes to rely on. To invoke or attempt to rely on all the grounds as is pleaded in this case in my view creates confusion and lacks clarity. It does not plead precisely the relief it seeks to rely on.


  1. In Paul Pilimbo Pora v Dean Hull (2012) N4936 Cannings J, when considering the issue of costs in that case, observed that

... all of the defendants who sought dismissal of the proceedings filed notices of motion that suffered from imprecision: none of them identified precisely which paragraph of Order 12 Rule 40(1) was being relied on ...

  1. I accordingly find in the present instance that as the first defendant’s notice of motion failed to specifically plead which of the alternative grounds under O. 12 r. 40(1) NCR are relied on by her for the application for dismissal, this is an additional reason why the motion should itself be dismissed.
  2. Moreover I find the following observations made by Kandakasi J (as he then was) in a similar application for dismissal which was before the Court in the leading case of Kerry Lerro v Philip Stagg (2006) N3050,when dealing with the issue of whether the plaintiff had a reasonable cause of action and with questions of evidence, to be equally applicable here:

In my view, these are matters that go beyond a simple examination of the pleadings of the plaintiff to determine whether a cause of action is disclosed or not. They instead require a consideration of the relevant evidence and facts emerging from the evidence. No findings of fact on a contested matter can be made summarily and without a proper trial in the normal way. Here the plaintiff’s evidence appears to support his claim, while the defendants have filed affidavit evidence seeking to rebut the plaintiff’s claim. Clearly this is a matter for trial rather than summary determination.


  1. Lerro v Philip Stagg is also authority for the twin propositions that the Court’s power to dismiss a proceeding or strike out a pleading should be sparingly used and only in cases which are plain and obvious, such as where a proceeding is incontestably bad and cannot succeed, and that where a deficiency in pleadings can be cured by an order for particulars, that does not entitle a party to ask for dismissal; approved in Augerea v Bank of South Pacific Ltd (2007) SC 869, Salika J, Jalina J, Kandakasi J and Takori v Yagari (2008) SC 905, Kirriwom J, Gavara-Nanu J, Kandakasi J.
  2. Having regard to all of the above, it cannot conceivably be submitted that the plaintiff has no reasonable cause or causes of action and that the plaintiff’s proceedings against the first defendant and the second defendant are futile and destined to fail if the case proceeds to trial. The first defendant’s application for dismissal is refused.
  3. It therefore follows that the first defendant’s second relief which she seeks in her motion, namely an order that she be allowed to take immediate possession of the property and requiring the plaintiff to forthwith vacate the property, is similarly refused. Subject to any future procedural steps and interim orders which may be made in this proceeding, this case should be permitted to progress to trial.
  4. However there is an evidentiary matter of present concern to the Court which needs to be addressed. The plaintiff has asserted that her late husband had a tenancy agreement in respect of the property which she says her late husband entered into with the NHC in 2003. The first defendant denies this and argues that she purchased the property from a prior occupier of the property in 2002. No documentary evidence is before the Court of either the 2003 tenancy agreement between NHC and the plaintiff’s late husband or the contract for purchase (or assignment of an NHC lease) which the first defendant says she entered intowith a vendor or transferor a year before in 2002. Nor has any cogent evidence been led at this stage which establishes to the Court’s satisfaction on the civil standard of proof what actually took place at meetings held by senior officials of NHC during the latter half of 2018, in February 2019, May 2019 and on other occasions this year as regards the initial decision taken those officials in February 2019 to transfer “ownership” of the property to the plaintiff, which decision was subsequently reversed as evidenced by the NHC entering into its purported tenancy agreement with the first defendant on 14 May 2019.
  5. In my view, based on my experience with similar cases involving the NHC, this case requires a careful examination of all material records held by the NHC in connection with the property, with reference to the NHC’s dealings not only with the plaintiff’s late husband and the plaintiff but also with the first defendant, as from about year 2000 down to the present time. To expedite matters and to avoid the delays which would inevitably result from discovery procedures under O.9 Division 1 NCR, I will therefore exercise the Court’s discretionary power under O.12 r.1 NCR to issue orders to the NHC’s acting managing director to produce to the Court for inspection by the plaintiff, the first defendant and their respective counsel all relevant records held by the NHC relating to the property for the years 2000 to 2019 on the next return date for this proceeding.

ORDER


  1. The terms of the formal Order of the Court are as follows:


______________________________________________________________
Leslie B. Mamu, Public Solicitor: Lawyer for the Plaintiff
Gibson Bon Lawyers: Lawyers for the First Defendant
Abel Tol: In-house lawyer for the Second Defendant

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