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Gehlot v PNG Power Ltd [2020] PGNC 287; N8477 (26 June 2020)

N8477


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS NO. 603 OF 2015


BETWEEN:
NARAYAN GEHLOT
Plaintiff


AND:
PNG POWER LTD
Defendant


Lae: Dowa AJ
2020: 11th &26th June


PRACTICE AND PROCEDURE – both parties filed motions – plaintiffs motion seeks extension of time to comply to interlocutory orders – defendant seeks orders to dismiss plaintiffs proceedings for failing to comply with interlocutory orders and for being frivolous and vexatious - extension has caused and is likely to cause serious prejudice to the Defendant – but in the interest of justice and fairness plaintiffs proceedings cannot be dismissed – time is extended to plaintiff to pay into court security for costs -


Cases Cited:


Mt Hagen Urban Local Level Government v Sek No. 15 Limited SC1007
PNG Power Ltd v Narayan Gehlot (2017) SCA No. 103 of 2017
Kipane v Anton & another (2003) N2429
Pacific Energy Aviation (PNG) Ltd v PNG Air Ltd (2018) N8196
Coeco Ltd v Westpac Bank (2012) N4926


Counsel:


R Geoctau, for the Plaintiff
J Kais, for the Defendant

RULING


26th June, 2020


1. DOWA AJ: This is a ruling on two motions filed by the respective parties.


2. On 11th May 2020, Justice Murray delivered a decision on the Defendant’s application for Security for costs. Her Honour made the following orders:


  1. The Application by the Defendant in the Notice of Motion filed 09/04/2018 is granted.
  2. Narayan Gehlot is to pay into court Security for costs in the amount of K50,000.00 within 21 days from the date of this Order.
  3. Narayan Gehlot is to also pay costs of and incidental to this proceeding on the party/party basis to be taxed if not agreed.
  4. Time is abridged.

3. The Plaintiff did not comply with the Orders of 11th May 2020. He is now seeking variation and extension of time for compliance. By Notice of Motion filed 26/05/20 the Plaintiff seeks the following orders.


  1. That Pursuant to order 1 Rule 15(1) and (2) of the National Court rules, the Orders of this Honourable court entered 15/05/20 ordering the Plaintiff to pay Security for costs within 21 days be varied and extended to 12 months or such other period/time the court deems appropriate.
  2. Alternatively, pursuant to section.155(4) of the Constitution and Order 12 Rule 1 of the National Court rules, the Orders of this Honourable court entered 15/05/2020 ordering the Plaintiff to pay security for costs within 21 days be varied and or extended to 12 months or such other time the court deems appropriate.
  3. That consequent thereof (subject to the orders sought been granted) the matter be referred to mediation under the Alternative Dispute Resolution Rules process.

4. The Plaintiff relies on the following Affidavits in support.


  1. The Affidavit of Narayan Gehlot sworn 22/05/20 and filed 26/05/2020 (Doc#71);
  2. The Affidavit of Karo Gamoga sworn 29/05/20 and filed 02/06/20 (Doc#72)

Defendants Application


4. On the other hand, the defendant seeks to enforce the orders given 11th May 2020 by its own motion for dismissal of the proceedings. By Notice of Motion filed 3rd June 2020, the Defendant seeks the following orders:


“1) Pursuant to Order 14 Rule 27, Order 10 Rule 9A (15)(1)(a), (2)(c) and Order 12 Rule 1 of the National Court Rules, this court proceeding be dismissed for the plaintiff’s failure to comply with the National Court’s orders of 11 May 2020.


  1. Alternatively, that pursuant to Order 12 Rule 40(1)(a)(b)(c) of the national Court Rules, this court proceeding be dismissed for being frivolous and vexatious.
  2. Judgement be entered for the Defendant in the sum of K51,371.65 pursuant to the Certificate of Taxation filed 7 June 2019 in the Supreme Court Appeal SCA No.103 of 2017; PNG Power Limited v Narayan Gehlot.
  3. The defendant’s costs of and incidental to this application and the costs of the court proceeding be borne by the plaintiff to be taxed if not agree

....”
No Reasonable Cause of Action


5. I intend to deal with paragraph 2 of the Defendant’s Notice of Motion first. If the application succeeds, then that will be the end of the proceedings, and I do not have to deal with the Plaintiff’s Notice of Motion, and the balance of the Defendants Motion.


6. The relevant Rule under Order 12 Rule 40 (1) of the National Court Rules, is set out below:


Frivolity, etc. (13/5)


“(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,

The Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.


(2) The Court may receive evidence on the hearing of an application for an order under Sub-rule (1).

7. The law on Order 12 Rule 40 of the National Court Rules is well settled in the Supreme Court in Mt Hagen Urban Local level Government v Sek No.15 SC 1007 in paragraphs 27-30.


“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 ApioIrafawe v. YauweRiyong (1996) N1915; Eliakim Laki and 167 Otheres v. Maurice Alulaku and Others (2002) N2001; KieeToap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Phillip Stagg, Valentine Kambori& The State (2006) N3050; Phillip Takori& Others v. Simon Yagari& 2 Others (2008) SC 905. These cases say the same thing.


  1. 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 Phillip Takori’s case (supra).
  2. 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:
  3. 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.”

8.The Plaintiff claims in his statement of claim damages for wages and fees for consultancy services allegedly rendered to the Defendant for the period commencing 1st December 2013 to 31st July 2014. The Plaintiff was not a foreign contracted employee of the Defendant. He had no work permit with the Defendant. Neither did he have a written contract for consultancy services with the Defendant. The Plaintiff bases his claim for oral engagements and some email exchanges. I note the aggregate sum of the claim is substantial, exceeding K 2.5million.


9. The Defendant argues the statement of claim does not disclose a reasonable cause of action, is frivolous and untenable. The Defendant submits there are glaring inconsistencies and irregularities contained in the Plaintiff’s evidence that clearly render the claim unsustainable even if allowed to proceed to trial. The Defendant refers to the views recently expressed by the Supreme Court in SCA No103 of 2017 PNGPower Ltd v Narayan Gehlot (2017) and Justice Murray in her decision of 11th May 2020.


10. I have studied the statement of claim and the primary Affidavit of the Plaintiff filed 14th March 2016. I do agree there are discrepancies in the claim. For example, why should the Plaintiff make a claim for wages when he is already paid for the consultancy services rendered. He does not even have a work permit as a foreigner to be employed in the first place. However, whilst there are contradictions and inconsistencies in the evidence this is not the time to critically analyse the evidence.


The matter should be allowed to proceed to trial and evidence be properly assessed. For these reasons, the application is refused.


Application for Extension of time.


11. I now turn to the Plaintiffs application for extension of time to comply with the orders of 11th May 2020. If the application fails, the court will grant orders for dismissal of proceedings as sought by the Defendant. The Plaintiff seeks variation and extension of time to comply with the orders given 11th May 2020. The Plaintiff relies on his Affidavit filed 25th May 2020.


12. The relevant rule for an application for extension of time is Order 1 Rule 15 of the NationalCourt Rules, as set below:


“15 Extension and abridgment(2/3)


(1) The Court may, on terms,by order extend or abridge any time fixed by the Rules or by any judgement or order.
(2) The Court may extend time under Sub-rule (1) aswell after as before the time expires whether or not an application for the extension is made before the time expires.”

13. Order 1 Rule 15 gives a general discretion to the Court to extend or abridge the time for doing any act required under the rules or an order of Court. Refer: Kipane v Anton & another (2003) N2429, Coecon Ltd v Westpac Bank (2012) N4926 and Pacific Energy Aviation (PNG) Limited v PNG Air Limited (2018) N8196. In Pacific Energy, Anis J outlined following considerations when dealing with applications for extension of time:


  1. whether the applicant has applied promptly
  2. whether the applicant had sought an extension by consent
  1. whether the applicant has provided a good explanation for not complying with the order
  1. whether there was any serious prejudice caused

Promptness of the Application


14. The order for payment of security for Cost was made on 11th May 2020. The application for extension of time was filed on 26th May 2020. In my view the application was filed promptly.


Extension by Consent


15. I note consent for extension was sought but apparently not given and now even opposed.


Explanation for failing to Comply with the Court Order


16. The main reasons for the extension of time are set out in paragraph 5 of the Plaintiff’s Affidavit which I quote:


“a) I need to apply for a loan with my bank for the Security deposit.


  1. All financial institution (lending) are placed on hold to the due to the USA economy shut down owing to covid-19 pandemic.
  1. I have been laid off work as my services are non-esential. (I am a part time scientist electrical & electronics technology).
  2. The little savings I have, is to help keep me to survive during the shutdown period.
  3. The USA economy and the covid-19 pandemic are unpredictable and nearly all non-essential services/universities, colleges have been shut down.”

17. The defendant submits that the reasons given by the Plaintiff for non-compliance are not genuine. Looking at the history of the case I am inclined to agree with counsel for the Defendant. The lockdown of the USA economy due to Covid-19 took place only recently. The Plaintiff knew or ought to have known the order for security for costs was coming. The Plaintiff being domiciled outside of Papua New Guinea was requested and required to pay for the Security for cost. Discussions were held between the parties as early as 2018. The Plaintiff made no attempts to set aside funds for the costs.


The Plaintiff has not shown the steps he has taken to raise the funds. The Plaintiff has instead applied for an extension of 12 months which almost defeats the purpose and the spirit of the orders. The Plaintiff has not demonstrated good faith towards the litigation process. For instance, the Plaintiff was served with taxed costs for the Supreme Court proceedings in SCA NO103 of 2017 for the sum of K51,371.65. This taxed cost is yet to be settled. Nothing has stopped the Plaintiff from paying the taxed costs. For these reasons I find the Plaintiff does not have good and genuine reasons for noncompliance of the orders of 11th May 2020.


Whether Serious Prejudice is Caused


18. The extension has caused and is likely to cause serious prejudice to the Defendant. Firstly, the Defendant has to wait for the Plaintiff to raise the money and no one knows how long that is going to take. Secondly it is clear the Defendants taxed cost for the Supreme Court has not been paid and is unlikely to be settled any time soon. Thirdly, the proceedings are going to be delayed further and is unlikely to be prosecuted in the near future. Finally, the Plaintiff is domiciled outside of the country and there is no evidence that he has any assets in the country or elsewhere. In the event of the matter being successfully defended given that the Plaintiff’s case appears to be weak in the face of the pleadings and evidence filed so far, there is doubt whether the Defendant will successfully recover its cost.


Conclusion


19. For the reasons given above, I am not prepared to grant an extension of 12 months. Should I then grant the second leg of the Defendants Notice of Motion by dismissing the proceedings. In my view that will be a summary determination which I am not inclined to grant now. In fairness to both parties and in the interest of justice I propose to make conditional orders. The Plaintiff shall be given some time to pay the security deposit for the Cost. If the Plaintiff fails to comply with the orders within such extended time the proceedings shall stand dismissed.


  1. The formal orders of the Court are:
    1. The Defendants Notice of Motion filed 3rd June 2020 is refused.
    2. The Orders of Court given on 11th May 2020 are varied and extended in the following terms:
      1. The Plaintiff shall pay the security for cost in the sum as ordered on 11th May 2020 by 26th August 2020.
      2. Unless payment for the security deposit is paid within the said period, the Plaintiffs entire proceedings shall stand dismissed for non - compliance.
    3. The Plaintiff shall pay the cost of the applications.
    4. Time be abridged

Gamoga & Co Lawyers: Lawyers for the Plaintiff
Dentons PNG: Lawyers for the Defendant

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