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Parakua v Pundi [2024] PGNC 396; N11069 (14 February 2024)

N11069

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

W.S. NO. 174 OF 2023

ERICK PARAKUA
Plaintiff

-V-

DICK PUNDI
First Defendant

NIXON MANGAPE & other Directors of Kupiane Investment Limited
Second Defendant

KUPIANE INVESTMENT LIMITED
Third Defendant

JOLSON KUTATO as Managing Director of IPI Group of Companies
Fourth Defendant

IPI GROUP OF COMPANIES
Fifth Defendant

Waigani: Kariko, J
2024: 12^th & 14^th February

PRACRTICE & PROCEDURE – application for summary dismissal – oral agreement – pleadings - details of the agreement – elements of contract

The plaintiff claimed damages for breach of an oral agreement alleging the directors of two companies promised him compensation after he was assaulted in a riot at a funeral gathering that concerned the defendant companies.

Held:

1. Because the action is based on an alleged oral agreement, the plaintiff must plead and prove the agreement, and precisely plead the details of the contract:

• the parties to the agreement,
• date it was made,
• the form of the agreement,
• where it was made,
• why was it entered into.
  

2. The plaintiff’s pleadings do not fully meet the required details.
3. The plaintiff’s pleadings are vague, and do not properly set out the elements of an enforceable contract, which are:

• an agreement (offer and acceptance);
• an intention to create legal relations; and
• support of the agreement with consideration.
  

4. No reasonable cause of action is disclosed, and the claim is trivial and untenable
   

Cases Cited
Gambu v Kurame (2017) N6868
Kerry Lero trading as Hulu Hara Investments Ltd v Philip Stagg (2006) N3850
Philip Takori v Simon Yagari (2008) SC905
Shell PNG Ltd v Speko Investment Ltd (2004) SC767
The State v Keboki Business Group Incorporated and Morobe Provinsel Gavman [1985] PNGLR 369

Legislation
Frauds & Limitations Act
National Court Rules

Counsel
Mr J Kep, for the Plaintiff
Mr T Injia, for the Fourth Defendant

14^th February 2024

1. KARIKO J: The plaintiff claims in these proceedings that directors and management of Kupiane Investment Limited and IPI Group of Companies have failed to honour an oral agreement to pay him K1 million as compensation for injuries he suffered at a funeral event that concerned the companies.
   
2. This is my ruling on the fourth defendant’s motion primarily seeking to have the proceedings summarily dismissed:
   
   • pursuant to O12 r40(1) of the National Court Rules for not disclosing a reasonable cause of action, for being frivolous and vexatious and for being an abuse of process; and
   • pursuant to s 16(1)(a) of the Frauds & Limitations Act (the Frauds Act) for being statute-barred.
     

SUBMISSIONS

3. The defendant argued that the pleadings in the statement of claim suggest the cause of action to be breach of contract, but the essential elements of the contract (offer, acceptance and consideration) are not pleaded and in any case the action is statute-barred because the alleged agreements is said to have been entered into in 2012 – some 11 years before these proceedings were filed. An action in breach of contract must be brought within 6 years from when the alleged breach accrues; s 16(1) (a) of the Frauds Act.
   
4. The plaintiff confirmed that an oral agreement was entered into in 2012 but submitted the breach has been continuous since then, confirmed by the fact that he has been continuously chasing up for the compensation over the years. He argued there was a proper contract; that he suffered injuries from being assaulted in a riot related to the death of a landowner leader (Pakiru Pundi) who had interest in the defendant companies; and the directors of the companies promised to pay him compensation of K1 million.
   

CONSIDERATION

5. Counsel properly referred me to some of the case authorities on the interpretation and application of O12 r40, including Kerry Lero trading as Hulu Hara Investments Ltd v Philip Stagg (2006) N3850 and Philip Takori v Simon Yagari (2008) SC905..
   
6. The relevant principles in relation to applications under this Rule are well settled and include:
   
   • A plaintiff or claimant should not be driven from the judgment seat in a summary manner unless in a clear case and that the Court should be cautious and slow in exercising its discretionary power.
   • In the originating document, a plaintiff must demonstrate it has a cause of action. The document must clearly set out the legal elements of the claim and the facts that support each element. Only if the plaintiff does that, is there a reasonable cause of action
   • The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.
   • The Court is granted power to terminate actions or claims which are plainly frivolous or vexatious or untenable.
     
7. The alleged contract (the oral agreement) is referred to in the Statement of claim at [19] which reads:
   

19. First Defendant, Directors and Managers of both Defendants’ Companies on their own initiative mutually agreed to pay compensation to the Plaintiff and verbally promised K1 Million to the Plaintiff. The terms of the Verbal Agreement are as follows:-

VERBAL AGREEMENT

“That the Directors and Management of Kupiane Investment Limited and Ipili Pogera Group of Companies mutually agree in principal that;

(a) the Plaintiff be paid K1 Million by the Defendants’ Companies as form of compensation for injury he suffered;
(b) the 50% of the K1 Million be paid by First, Second and Third Defendants Company to the Plaintiff;
(c) the other 50% of K1 Million be paid by Fourth and Fifth Defendants Company as compensation to the Plaintiff.” (sic)

8. Because this court action is based on an alleged oral agreement, the plaintiff must plead and prove the agreement, and precisely plead the details of the contract:
   • the parties to the agreement,
   • date it was made,
   • the form of the agreement,
   • where it was made,
   • why was it entered into.
     

(The State v Keboki Business Group Incorporated and Morobe Provinsel Gavman [1985] PNGLR 369, Gambu v Kurame (2017) N6868)

9. The plaintiff’s pleadings do not meet any of the required details, except arguably for the last detail. In my view, there is uncertainty in the essential terms.
   
10. The pleadings are vague, and I find that they do not properly set out the elements of the contract, being:
    
    • an agreement (offer and acceptance);
    • an intention to create legal relations; and
    • support of the agreement with consideration.

(Shell PNG Ltd v Speko Investment Ltd (2004) SC767).

11. I have perused the affidavit of the plaintiff which he filed with his writ of summons. The contents do not add to the facts pleaded in the writ which to my mind are plainly lacking and cannot be properly amended. I note also that the affidavit contains a letter of demand for compensation but no reference to an agreement between the parties, let alone a promise or undertaking to pay compensation which I believe is a more accurate description of the plaintiff’s claim.
    

CONCLUSION

12. In the circumstances, I find that no reasonable cause of action is disclosed, and the claim to be trivial as I consider it untenable. I therefore uphold the application for summary dismissal.
    
13. I do not consider it necessary to address the parties’ other submissions.
    
14. As to costs, I am not inclined to order it on an indemnity basis.
    

ORDERS

(1) These proceedings are summarily dismissed.
(2) The plaintiff shall pay the fourth defendant’s costs of and incidental to the proceedings, to be taxed if not agreed.
(3) Time for entry of these Orders is abridged to the date of settlement by the Registrar, which shall take place forthwith.

________________________________________________________________
Font & Bleau Lawyers: Lawyers for the Plaintiff
Ashurst Lawyers: Lawyers for the Fourth Defendant