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Radio Taxis Ltd v Wano [2018] PGSC 98; SC1768 (28 September 2018)

SC1768

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCAPP NO. 53 OF 2018

BETWEEN:
RADIO TAXIS LIMITED
Appellant

AND:
JOHN WANO & SIWI KUNI CO. LTD
First Respondent

AND:
MOKONDA REINA REMA
Second Respondent

Waigani: Dingake J
2018: 16 May, 26 June, 31 July & 15 August

SUPREME COURT – Application for leave to appeal – Applicant demonstrated that it has an arguable case – Leave granted

Counsel:

Mr. Sanol Malaga, for the Appellant
Ms. Gethrude Kubak, for the Respondents

Cases Cited:

Matiabe Oberia v Chief Inspector Michael Charlie (2005) SC801

28 September, 2018

1. DINGAKE J: This is an application for leave to appeal against the decision of the National Court (per David J) given on the 20^th of March, 2018, in National Court, Court Proceedings OS No. 561 of 2016.
2. There is no doubt in my mind that the ruling is interlocutory in nature and leave to appeal is required under Section 14(3)(b) of the Supreme Court Act.
3. On the 20^th of March, 2017, the National Court, refused the applicant’s application to dismiss National Court Proceedings OS No. 561 of 2016 for irregularity and non compliance with Section 138, Schedule 4 of the Companies Act, in that the first respondent company had not passed appropriate company resolution before instituting the proceeding and that no reasonable cause of action was disclosed in the pleadings as the applicant had title to the land portions 441 and 442 Granville Fourmil Moresby.
4. The principles on the grant of leave are succinctly set out in the leading case of Matiabe Oberia v Chief Inspector Michael Charlie (2005) SC801.
5. The main consideration for granting leave are that the application should not be without merit; there must be an arguable or prima facie case that the decision was wrong and that substantial injustice will be done by leaving the erroneous decision uncorrected.
6. The onus is upon the applicant to establish the above requirements.
7. Upon considering the affidavit material placed before me and upon listening to the submissions of respective counsels of the parties with great care, I am persuaded that the application is merited.
8. A company is in law a separate legal person capable of suing or being sued in its own name. Unless the law provides otherwise, the company cannot initiate legal proceedings without a duly passed resolution authorizing the company to litigate. A company that purports to litigate without a duly passed resolution to that effect lacks locus standi and such proceedings amount to an abuse of Court process.
9. In this case, the applicant strongly raised the issue of absence of a company resolution to initiate the proceedings.
10. The reasoning of the lower Court in dismissing the applicant’s application was that there is no evidence before the Court that John Wano Pepena has not given his consent to the first plaintiff, John Wano & Siwi Kuni Co Ltd to institute proceedings.
11. The Court held that in the absence of any evidence to the contrary from John Wano Pepena, it is reasonable to assume that the proceedings were filed with the authority of the Directors in compliance with Section 138 and Schedule 4 of the Companies Act.
12. In this matter there is no evidence of any resolution passed by the Company. This cannot be assumed.
13. In the result, it seems to me that the applicant has established that it has an arguable or prima facie case.
14. The issuance of a proper, duly executed Company resolution to initiate litigation is a condition precedent to commencing any action or litigation in the name of the company. It is possible that the Supreme Court when considering this matter may well conclude that there was no such resolution and that the applicant’s application in the lower Court ought to have succeeded.
15. For these reasons, I grant leave to appeal. Cost of the application shall be in the cause of appeal.

___________________________________________________________
Sanol Malaga Lawyers: Lawyers for the Applicant
Kubak & Kubak Solicitors & Barristers: Lawyers for the Respondents