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Keu v Katilele [2024] PGNC 3; N10643 (16 January 2024)

N10643

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 351 OF 2020

BETWEEN
STEVEN KEU
Plaintiff

AND:
ALLY KATILELE
First Defendant

AND:
JAMES KUK
Second Defendant

AND:
THE REGISTRAR OF TITLES, DEPARTMENT OF LANDS & PHYSICAL PLANNING
Third Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Lae: Dowa J
2021: 23^rd September & 14^th October
2023: 21^st June 2023
2024: 16^th January

PRACTICE ND PROCEDURE- application for dismissal of proceedings for abuse of process - Order 12 Rule 40 of the National Court Rules-issues raised in the pleadings were determined in earlier proceedings-principles of res judicata applied - clear case for summary dismissal-application granted-proceedings dismissed.

Cases Cited:
Mt Hagen Urban LLG v Sek No.15 Ltd [2009] SC1007
Philip Takori v Simon Vagari (2008) SC905
Telikom PNG v ICCC & Digicel (PNG) Ltd (2008) SC906
Kerry Lerro v Philip Stagg (2006) N3050
PNG Forest Products vs. State [1992] PNGLR 85
Ronny Wabia vs. BP Exploration Co. Ltd [1998] PNGLR 8
Wabia vs. BP Petroleum (2019) N4337
National Provident Fund vs. Maladina & Others (2003) N2486
Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310
Titi Christian v Rabbie Namaliu (1995), Unreported, Un-numbered Supreme Court Judgment in OS No. 2 of 1995
National Airline Commission v Lysenko [1990] PNGLR 266
AGC (Pacific) Ltd v Sir Albert Kipalan (2000) N1944
Kundu Consultants Ltd v The State (2001) N2128

Counsel:
J. Alu, for the Plaintiff
L. Vava, for the second Defendant

DECISION

16th January 2024

1. DOWA J: This is a ruling on two motions. The first Notice of Motion was filed on 12^th August 2021 by the Second Defendant to dismiss the proceedings under Order 12 Rule 40(1) of the National Court Rules. The second motion is filed by the Plaintiff seeking leave to amend the statement of claim.

2. I heard arguments on 23^rd September 2021 and had the matter returned for decision on 14^th October 2021. When the matter returned for ruling, the Court noted that, an earlier decision in WS No 1210 of 2019 between the same parties which the second Defendant relied on in his application for dismissal was appealed to the Supreme Court and was pending hearing. The Court then adjourned the matter/ruling sine die pending the determination of the Supreme Court Appeal SC No. 13 of 2020.

3. On 19^th June 2023, the matter returned to Court for the first time since the last hearing in 2021. The lawyers for the Plaintiff did not turn up and the matter was adjourned to 21^st June 2023. When the matter was returned to Court on 21^st June 2023, again, counsel for the Plaintiff was not present. The Court was satisfied that the lawyers for the Plaintiff was notified, and he was aware of the return date and so the matter proceeded to the hearing.

4. Mr, Vava, counsel for the second Defendant, informed the Court that the proceedings in the Supreme Court in SCA No 20 of 2020 is resolved by discontinuance of the appeal by the appellant. The Court is urged to proceed with its ruling. The matter was mentioned twice but the lawyers for the Plaintiff made no appearance even though they were advised of the hearing. Since the parties have already made their submissions and filed their evidence in September 2021, the Court shall proceed with the ruling as it was adjourned sine die pending the determination of the Supreme Court Appeal.

Motion For Dismissal

5. I will deal with the Second Defendants Notice of Motion first. If I uphold the application, that will finally determine the proceedings. By Notice of Motion, the Second Defendant applies for the dismissal of the proceedings under Order 12 Rule 40 of the National Court Rules for disclosing no reasonable cause of action and for being an abuse of the process.

Brief Facts

6. On 12^th November 1999, the First Defendant, Alley Katilele agreed to sell his property, described as Allotment 8, Section 253, Lae, to the Plaintiff for the purchase price of K70,000.00. The first Defendant was a beneficiary of the NHC give-away scheme. It was agreed that the Plaintiff would deposit K35,000.00 and move into the property and take possession. The balance of K35,000.00 would be paid after the First Defendant has obtained a title from National Housing Corporation. The Plaintiff paid the K35,000 and moved into the property. It is alleged, the First Defendant obtained the title to the property in 2003 but did not disclose this fact to the Plaintiff and did not arrange for the conclusion of the transaction. Meanwhile and in breach of the agreement, the First Defendant sold the said property to the Second Defendant in March 2014 for K70,000.00. The transfer of title to the property was registered in the name of the Second Defendant in November 2016. The Plaintiff now institutes these proceedings seeking damages for breach of contract, and or in the alternative for specific performance.

Basis of the Second Defendant’s Application

7. The Second Defendant’s grounds for the application are twofold: Firstly, the current proceedings are an abuse of the process. The Plaintiff has previously filed a similar proceeding in WS No. 1210 of 2019 between the parties seeking the same reliefs. On 20^th March 2020 the National Court dismissed the proceedings WS 1210/2019 for disclosing no reasonable cause of action and for being statute barred. That decision was appealed to the Supreme Court in SCA No 13 of 2020 but was discontinued in March 2021 and endorsed by the Court in December 2022.

8. Secondly, the Second Defendant is now the registered owner to the property. He has indefeasible title to the property under section 33 of the Land Registration Act. The Plaintiff does not have a cause of action against him. The Second Defendant submits he is not a party to the agreement between the Plaintiff and the First Defendant. He says he is an innocent bona fide purchaser for value.

Issues

9. The issue for consideration is whether the proceedings be dismissed for being an abuse of the process.
   

The law under Order 12 Rule 40 of the NCR.

10. The application for dismissal is made under Order 12 Rule 40(1) of the National Court Rules. It reads:
    

” 40. 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.”

11. The law on applications under Order 12 Rule (40) of the National Court Rules is settled in this jurisdiction in cases such as Mt Hagen Urban LLG v Sek No.15, Philip Takori v Simon Vagari (2008) SC905, Telikom PNG v ICCC & Digicel (PNG) Ltd (2008) SC906 and Kerry Lerro v Philip Stagg (2006) N3050.
    

12. Order 12, Rule 40 of the NCRs is constructed and defined by the Supreme Court (per Takori v Yagari) in following terms:

1. A claim may be disclosing no reasonable cause of action if the facts pleaded does not clearly show all necessary facts and legal elements to establish a claim known to law.
   
2. A claim maybe frivolous if it can be shown that it is obviously untenable that it cannot possibly succeed or is bound to fail it if proceeds to trial.
   

100. Proceedings are vexatious where the case is a sham, amounting to harassment of the opposing party, or where the opposing party is put to unnecessary trouble and expense of defending the case.
     

13. The Court cannot readily dismiss a case on poor pleading or for lack of disclosing a reasonable cause of action or for abuse of process unless it is shown that the case is clearly frivolous or vexatious or an abuse of the process and that it is unlikely to succeed even it proceeds to trial. Refer: PNG Forest Products vs. State (1992) PNGLR 84–85, Ronny Wabia vs. BP Exploration Co. Ltd (1998) PNGLR 8, Wabia vs. BP Petroleum (2019)) N4337, Mt. Hagen Urban LLG vs. Sek No. 15 (2009) SC1007, National Provident Fund vs. Maladina & Others (2003) N2486; and Wambunawa Holdings Ltd. vs. ANZ Bank (2020) N8310.
    
14. I will now proceed to consider the grounds raised by the second Defendant.
    

Abuse of the process

15. The second Defendant, James Kuk, relies on his Affidavits sworn and filed 12^th August 2021 and 13^th June 2023 in support of the application.
    
16. This is the summary of Mr. Kuks’s evidence. He is the owner of the subject property, Allotment 8, Section 253, Lae, Morobe Province. He purchased the property from the previous owner Alley Katilele, first Defendant, for the purchase price of K 70,000.00. The transfer of title was registered in his name on 3^rd November 2016. After obtaining title to the property, he sought vacant possession from the Plaintiff but was refused. He instituted summary ejectment proceedings in the District Court in proceedings DCV No, 585 of 2019 – James Kuk v Steven Keu. Mr. Kuk deposes, the District Court dismissed the proceedings because by that time the Plaintiff had initiated proceedings in the National Court in proceedings -WS No, 1210 of 2019 – Steven Keu vs Ally Katilele (as first Defendant), James Kuk ( second Defendant) and Benjamin Samson, Registrar of Titles ( as third Defendant).
    
17. Mr. Kuk deposes that the proceedings in WS No 1210 of 2019 was dismissed by the National Court on 20^th March 2020 for disclosing no reasonable cause of action and for being statutory time barred. The Plaintiff appealed the decision to the Supreme Court in proceedings-SCA No 13 of 2020-Peter Keu v Ally Katilele, James Kuk and Benjamin Samson, the Registrar of Titles. The Plaintiff (Appellant) filed Notice of Discontinuance of the Appeal proceedings on 21^st March 2021 which was endorsed by the Supreme Court on 7^th December 2022.
    
18. The second Defendant urges the Court to dismiss the proceedings in the light of the existing decision of the National Court in WS No 1210 of 2019 which has effectively determined all issues raised in the current proceedings.
    

The Plaintiff’s Response

19. The Plaintiff’s claim is set out in the statement of claim. He entered an agreement with the first defendant on 12^th November 1999 to buy this property Allotment 8 Section 253 Lae which was then owned and managed by the National Housing Commission. The Plaintiff agreed with the first Defendant to buy the property for K 70, 000.00. The parties agreed that the Plaintiff pay a deposit of K 35, 000,00 and pay the balance on delivery of the Title after receiving same from National Housing Corporation, The Plaintiff paid a deposit of K 35,000.00 on 12^th November 1999. Upon payment of the deposit the Plaintiff moved into the property and has been occupying the property up to now.
    
20. The Plaintiff pleads that unknown to him the first Defendant after receiving the title to the property from National Housing Corporation sold the property to the second defendant for K 70, 000.00. The Plaintiff alleges that the first Defendant breached the terms of his contract with him when he sold the second defendant. The Plaintiff also pleads that the first and second defendants conspired and agreed to defraud him as they were both aware of the existing contract for the sale of the property to him. The first and second Defendants knew that he was already occupying the property but chose to enter the second transaction in a secret and fraudulent manner depriving him from his rights under the first agreement.
    

Consideration of the Issues

21. It is clear from the facts pleaded and evidence provided that the parties to the proceedings have some interest of some sort in the property, allotment 8 section 253, Lae.
    
22. The second defendant is the current registered owner and thus is recognized as owner for the purposes of sections 32 and 33 of the Lands Registration Act until such time when his interest is set aside for fraud and other reasons set out in section 33(1) of the Act.
    
23. The Plaintiffs interest in the property is equitable only at this stage until it is promoted by an order of Court by the grant of reliefs sought in these proceedings.
    
24. The Plaintiffs claim in the proceedings is now challenged by the second Defendant. The second defendant submits that this Court does not have power to hear and determine the matter because the issues raised in the proceedings were already determined by a Court of competent jurisdiction in WS No 1210 of 2019, where the Court has dismissed the proceedings.
    
25. The defence raised by the second Defendant is commonly known as res judicata. It means a matter that has been adjudicated by a competent court and therefore may not be pursued further by the same parties.
    
26. The law and principles on the doctrine of res judicata are set out by the common law. They are adopted and applied in the cases; Titi Christian v Rabbie Namaliu (1995), Unreported, Un-numbered Supreme Court Judgment in OS No. 2 of 1995. National Airline Commission v Lysenko [1990] PNGLR 266; AGC (Pacific) Ltd v Sir Albert Kipalan (2000) N1944, Kundu Consultants Ltd v The State (2001) N2128 and Telikom PNG Ltd v ICCC (2008) SC906.
    
27. The basic principles emerge from these cases are that, for the defence of res judicata to succeed, a party relying on the doctrine must show:
    
    1. The parties in both cases are the same.
    2. The issues(s) in both cases are the same.
    3. The previous judgment extinguished the foundation of the claim or the right to set up the action. The result is final and conclusive, and it binds every other Court.

4. A Court of Competent jurisdiction made the first decision.

28. I will apply the above considerations to determine the plight of the current application.
    

Are the Parties in both cases the same?

29. The parties in WS 1210/2019 are: Peter Keu (Plaintiff) v Ally Katilele (first Defendant), James Kuk (second Defendant) and Benjamin Samson, Registrar of Titles, (third Defendant). The parties named in the current proceedings-WS 351of 2020 are one and the same.
    

Are the cause of action and issues the same.

30. I have compared the statement of claims and the reliefs sought in WS 1210 of 2019 and WS 351 of 2020 thoroughly. They are in identical terms and the same. The proceedings in WS 351of 2020 is a repeat of WS 1210 0f 2019. The facts and legal issues raised in WS 1210 of 2019 are the same as those raised in WS 351 0f 2020.
    

Did the earlier Court effectively deal with the issues raised in the current proceedings.

31. The proceedings in WS 1210 of 2019 was dismissed by the National Court (per Murray J) on 20^th March 2020 in a written judgment. The decision was arrived at on an application filed by James Kuk, the second Defendant, on the grounds that there was no reasonable cause of action and that the claim was statue barred pursuant to sections 16 of the Frauds and Limitation Act. The relevant orders of the Court read:
    

“i. That these proceedings are dismissed in its entirety for failing to disclose a reasonable cause of action and for being time barred.

....”

32. The decision was made in an interlocutory application. The matter was not tried. However, Order 12 Rule 40 of the National Court Rules allow for summary dismissal of proceedings in clear cases on application by a party to the proceedings. There is no doubt that the decision of 20^th March 2020 is final. It put to rest the matters of controversy between the parties. The decision is conclusive and binding on this Court.
    
33. The decision is made by a Court of competent jurisdiction, This Court has no power or jurisdiction to deal with the matter again on the same issues that were effectively dealt with and concluded by the Court in its decision of 20^th March 2020 in WS 1210 of 2019. Only the Supreme Court has power to review the decision of the first Court that dismissed the proceedings.
    
34. There is evidence that the Plaintiff appealed the decision of 20^th March 2020 in WS 1210 of 2019 to the Supreme Court in proceedings SCA No 13 of 2020. The appeal, SCA No 13 of 2020 was discontinued on 21 March 2021 and endorsed by the Supreme Court on 7^th December 2022. The result is the National Court decision of 20^th March 2020 in WS1210 of 2019, dismissing the proceedings, is valid and binding. This Court does not have any superior power over the first Court to hear the matter again. This Court does not have the power to review the decision of the earlier Court. This Court cannot ignore the decision of the earlier Court as if it is of no significance. Rather, this Court is duty bound and has judicial comity to respect and take notice of the decision, and where necessary, give effect to it.
    
35. I conclude based on the reasons and matters discussed above that the current proceedings are an abuse of the process. The second Defendant has raised a meritorious argument in law which the Court cannot ignore and shall grant the orders sought in the interest of justice. While it is not desirable to terminate the Plaintiff’s proceedings early, the Court has a duty to protect its process.
    
36. In arriving at this conclusion, the Court is mindful of the Plaintiffs claim. The Plaintiff entered into an agreement for the purchase of the subject property in November 1999. There is no clear explanation why the first Defendant failed to complete the transaction and decided to sell the property to the second Defendant. On the Plaintiffs part, it seems he left it far too late in taking any action to protect his interest. Be that as it may, it is nevertheless unfair for the first Defendant to walk away with the Plaintiff’s money paid for the property. It is recommended that the first Defendant return the Plaintiff’s money deposited for the property.
    
37. That said and, in the end, I am inclined to grant the second Defendant’s application and thus, the proceedings filed by the Plaintiff shall be dismissed for abuse of the process pursuant to Order 12 Rule 40 (1) (c) of the National Court Rules.
    

Plaintiff’s Application for amendment.

38. As the Court reached a decision to uphold the second Defendant’s application, in dismissing the proceedings, it is not necessary to deal with the Plaintiff’s application for amendment. It is clear the proposed amendment is unlikely to improve or prevent the matter from being dismissed for the reasons given in this judgment.
    

Costs

39. The second Defendant seeks cost of the application. It is a discretionary matter. The first Defendant who initiated the two transactions appear to have acted mischievously. There is allegation that the second Defendant played a part in the way the property was transacted to the detriment of the Plaintiff. The complaint is not too remote as there is evidence that the Plaintiff and the second Defendant are neighbors. To award cost against the Plaintiff would be burdensome. In my view the parties bear their own cost.
    

Orders

40. The Court orders that:
    
    1. The second Defendant’s application is granted.
    2. The Plaintiff’s proceeding is dismissed.
    3. The parties bear their own costs of the proceedings.
    4. Time be abridged.

_______________________________________________________________
Supasonix & Alu Lawyers: Lawyers for the Plaintiff
Luke Vava Lawyers: Lawyers for the Second Defendant