Nasa v Post (PNG) Ltd [2006] PGDC 6; DC496 (9 February 2006)

DC496

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

DCCi 5092 OF 2004

BETWEEN

RAYMOND NASA
Complainant

AND

POST (PNG) LTD
Defendant

PORT MORESBY: C BIDAR, PM
2005: 29 November
2006: 26 January & 09 February

District Court – Practice and Procedure -
Claim against Post (PNG) Ltd for damages for wrongful or unlawful termination of employment -
Notice of intention to make a claim against the State-
Claims by and against the State Act -
S 5 Notice -
Whether applicable to Statutory Corporations.

Practice and Procedure - Proceedings against Statutory corporations -
Claim against Post (PNG) Ltd -
Proceedings against Post (PNG) Ltd -
Postal Services Act 1996 –
Claims By And Against the State Act- Both Acts of Parliament.

Cases Cited
Albert Areng –V- Gregory Babia and NHC - N2895
Dan Kakaraya –V- The Ombudsman Commission [2003] N2478
Curtain Brothers –V- The State [1993] PNGLR 285

Counsel
I. Mugugia for Complainant
K. Pato for Defendant

DECISION

9 February 2006

BIDAR C PM: By Notice of Motion filed on the 30 October 2005, the defendant seeks the following orders:

"1. The Complaint be dismissed for being statute barred pursuant to s 23 (1) and (2) of the Postal Services Act 1996 (as amended) and or pursuant to s 5 of the Claims By and Against the State Act 1996.

2. In the alternative, the defendant/applicant be granted leave to amend its initial defense pursuant to s 138 of the District Court Act.

3. The amended version be filed and served on the complainant/respondent within fourteen (14) days

4. Costs be in the cause

5. Such further or other orders this court sees fit."

2. In support of the application, counsel for the applicant/defendant relies of his own affidavit sworn on the 25 October 2005 and filed on 28 October 2005.

3. At the outset counsel for the applicant/defendant, Mr. Pato abandoned the argument under s 23 (1) and (2) of the Postal Services Act (as amended,) and sought dismissal of complainant’s claim against the defendant on the basis of complainant’s failure to give notice of intention to make a claim against the State, under s 5 of the Claims By and Against the State Act (CB and ASA). Section 5 notice is a mandatory requirement prior to filing of proceedings against the State.

4. The Complainant opposes the application. As the issue to be decided is the application of Section 5 notice, the court directed both counsel Mr. Pato and Miss Mugugia for complainant to file written submissions, which they did. I am much indebted to both counsel in their respective submissions, which no doubt would assist this court decide the issue.

5. The background to these proceedings is that, the complainant was employed by the defendant at its Salim Moni Kwik Section as a teller for a number of years. As a result of defendant’s internal investigations, complainant was suspended from active duty, eventually terminated his employment on the 30 April 2002. Complainant appealed his termination to the Board, which refused his appeal and confirmed the Management decision.

6. Reverting to the application, as I alluded to, the issue to be resolved is whether or not s 5 of the Claims By and Against the State Act, apply to Post (PNG) Ltd. And if the answer is in the affirmative, does the failure by complainant to give notice of intention to make a claim render the proceedings filed against the defendant nugatory.

7. I have had the benefit of reading the submissions by counsel thoroughly and the cases they referred to. It was submitted for the applicant/defendant that, s 5 of the Claims By and Against the State Act applied to Post (PNG) Ltd which is an instrumentality of the State. Claims By and Against the State Act applies to governmental bodies defined by sch 1.2 of the Constitution, which are in these terms:-

Governmental body means-

a) National Government

b) A Provincial Government body or

c) An arm, department, agency or

d) Instrumentality of National or Provincial government body, or

e) A body set up by Statute or Administrative Act for Governmental purposes

8. Despite the defendant having attributes of a company, it is no ordinary one. It was set up by the State through an Act of Parliament to realize public policy and that is to provide Postal Services to the people nationwide.

With respect to the case of Albert Areng –V- Grerory Babia and NHC N2895 it was submitted that, the decision should be rejected as it failed to take into account several important considerations. Such as the decision in Dan Kakarya –v- The OMBUDSMAN COMMISSION (2003) N2478 and Curtain Brothers –v- The State [1993] PNGLR 285, which considered various aspects including Public Finance (Management) Act and Leadership Code.

9. In Dan Kakarya & OMBUDSMAN COMMISSION (Supra) the court ruled that for a corporate body to quality as a Government body.

(a) it must be wholly owned by the State

(b) Managing Director and Board of Directors appointed by the State.

(c) Incorporated under the Companies Act or other legislation for executing Governmental or public purposes.

(d) Government or State must be the sole beneficiary of its profits

10. It was submitted finally that, complainant has failed to give the required s 5 notice thus rendering the proceedings nugatory.

11. For Complainant/respondent, Miss Mugugia submitted that the decision in Albert Areng –V- Gregory Babia and National Housing Corporation, N 2895 states clearly the application of s 5 in relation to Statutory Corporations. In other words, failure to give notice to the State does not render proceedings against a statutory corporation nugatory.

12. Miss Mugugia finally submitted that the Claims By and Against the State Act 1996, is an Act to provide for situations, which the State may sue or be sued. The term State for purposes of Claims By and Against the State Act means National Government, or an Arm, department, agency or instrumentality of National Government.

13. In relation to whether or not s 5 applies to the defendant, Post (PNG) Ltd. The defendant is just like National Housing Corporation, set up by an Act of Parliament. It has attributes of a company and has separate legal entity, which can sue and be sued in its corporate name and style. The defendant came into existence by enactment of Postal Services Act, just like National Housing Corporation Act. It is a company Limited by shares and the sole beneficiary of its profits may be the State. Despite that it is a corporate entity, which can sue and be sued in its corporate name. I am inclined to accept the submissions by Miss Mugugia, that Post (PNG) Ltd is a profit making entity on a commercial basis and in my view, failure to give s 5 Notice under the Claims By and Against the State Act, does not render proceedings nugatory.

14. Postal Services Act and Claims By and Against the State Act are both Acts of the Parliament. None is superior to the other in the hierarchy of laws under s 9 of the Constitution. In my view, the only protection under Claims By and Against the State Act is under s 13. The profits derived by defendant cannot be executed, attached or garnished.

15. One of the fundamental reasons the Claims By and Against the State Act was enacted, was that, the State was faced with so many judgments against it both from the higher and lower courts. This Act was passed to provide safeguards to the State.

16. In the circumstance as I alluded to, I am inclined to accept the submissions by Miss Mugugia, that defendant is a corporate entity which operates commercially and although it has received government support, when it faced financial problems, in my view s 5 of the Claims By and Against the State Act does not apply to it and the complainant need not serve notice on the State.

17. If I am wrong in my view, that indeed, s 5 Notice is required to be served on the State, would the lawyers from Solicitor Generals Offence act for the defendant or with Solicitor General give a brief-out? What about the lawyers from legal division of the defendants?

18. I make the following orders:

(1) Court refuses to dismiss the complaint on the basis that s 5 of the Claims By and Against the State Act does not apply to the defendant.

(2) Defendant is granted leave to amend its initial defence.

(3) That, the amended defence be filed and served within fourteen (14) days from today.

(4) Costs to be in the cause.

(5) This matter returns to court on 2 March 2006 at nine thirty in the morning (9:30 am).

M. S. & Wagambie Lawyers Lawyer, for Complainant
Legal Branch Post (PNG) Ltd Lawyers, for Defendant