United Timber (PNG) Pty Ltd v Mussau Timber Development Pty Ltd [1987] PGNC 16; N645 (2 December 1987)

Unreported National Court Decisions

N645

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

NO. WS 675 OF 1987
UNITED TIMBER (PNG) PTY LTD
V
MUSSAU TIMBER DEVELOPMENT PTY LTD

Waigani

King AJ
6 November 1987
2 December 1987

KING AJ: Several aspectshis matter tter came before me at an interlocutory stage on 6 November 1987. I was able to deal on that day with some of them, sntially by consent. Other I reserved my decision on following argument. Before dealing with with those outstanding aspects I shall set forth the orders I made on 6 November last:

(A) &##160; On the applicpplication t2 “freeze” funds in an already existing bank account, by consent I made an order that the existing injunction and order be continued until furtrder;

(B) &#160 &#On0; e so-called lled &#8d “preservation application”, by consent I made orders:

(i) &ـ t60; that that the defendant be at liberty to ship and marked approximately 6055 cubic metres of logs from Mussau d on ter 10 November 1981,

(ii) ҈ that that the proceedscee s of t of the logging, shipping and marketing of the said logs be paid as follows:

(a) & as to 3 to 35% of the total amount thereof; to the defendant;

<ـ as to thenbalance of 65% o65% of the total amount thereof; into an interest bearing trust account to be opened i joines anrated only under the joint signatures of the lawyers for the parties, with ANZ Bankingnking Grou Group (PNp (PNG) Ltd, Port Moresby Branch and to abide the further order of the court.

(c) ;&#16at both parh parties hies have liberty to apply on 3 day’s notice;

(d) ـ that tht costs of t of the application be costs in the cause No. WS675 of 1987

(60;&##160;< 160thOn the plaintiff̵’s application for orders against Mr. Coady and Messrs Elliot Stubbs and Bonutto, that the applicate dismissed.

I reserved my decision on the major matter of controversy, namely the pthe plaintiff’s application for summary judgment. As to (C) above, upon the dismissal of the application Mr. Coady sought costs which were opposed and I reserved my decision on that question also. I shall give my decision on each of these remaining aspects in turn.

It was not in dispute that the plaintiff and the defendant entered into a written contract known as a “logging and marketing agreement” on 14 December 1984. So far as presently relevant, the material part of the contract is clause 6 headed “Renumeration” which provides, inter alia:

“(The defendant) shall pay (the plaintiff) on the following basis:

(i) at a total rate of 70% of f.o.b. price (being 65% for logging responsibilities and 5% for marketing) of logs felled and loaded on board a carrying vessel by (the plaintiff) save that the logging componet shall not be less than K30.00 per cubic metre loaded on board as aforesaid.

(ii) &#16................................................

(iii) &#160ment of tht contractoractor’s (the plaintiff’s) renumeration other than upon sale into a domestimil sbe mathin seven days of a letter of credit for the particular shipment being negotiated.

>

(iv)&(iv) #160;ـ ...................................................

(v) ...............................................

Forme thties carried on business, each apparently believilieving the other to be abiding by the agre agreement. It now appears from the substl ples thae been exchanged nged betwebetween then them in relation to each party’s claim or claims against the other that the defendant alleges the plaintiff consistently breached the agreement and is liable in damages for those breaches; and that the plaintiff also makes allegations of breach of contract amounting to at least two distinct alleged causes of action against the defendant. It is in relation to one of the plaintiff’s claims only that it seeks summary judgment, and the basis of that claim is that whilst the agreement was still on foot in the sense that it had not been legally avoided or rescinded or otherwise terminated a parcel of logs was shipped and marketed to Sanyo Kokusaku Pulp Co. Ltd for $US 504,245.24 and that in respect of that shipment a letter of credit was “negotiated and opened” by the defendant in the defendant’s name on or about 7 or 8 September 1987 at the Rabaul branch of the ANZ Banking Group (PNG) Ltd. This was deposed to by Mr. Leslie Fung, the manager of the plaintiff, in his affidavit sworn on 6 October 1987. Mr. Fung was cross-examined but that evidence was not altered in any way. Indeed it was not challenged. It was conceded that the particular parcel of logs which was the subject of the plaintiff’s application for summary judgment had been shipped and marketed and that the shipping and marketing were other than into a domestic sawmill.

The defendant however contended that summary judgment should not be entered in accordance with clause 6 of the agreement because there were countervailing claims by the defendant against the plaintiff which were unquantified but were said to be likely to exceed the amount for which summary judgment might be entered. It was also said that the plaintiff had done no marketing of the relevant parcel of logs so that 5% of the proceeds should be deducted from the 70% figure, making only 65% payable in any event. As I understood the plaintiff, whilst clause 6 obviously makes it arguable that the whole 70% figure is payable even if no marketing is done by the plaintiff, the lower figure of 65% of the proceeds was acceptable by way of summary judgment. Finally it was said by the defendant that the preparation of the matter was at an early stage and that facts may emerge which would wholly or in part answer the claim. For those three basic reasons summary judgment was opposed.

The power to enter summary judgment is one to be exercised sparingly and with great care and only when it is clear that there is no triable issue between the parties. Having reminded myself of those well-known principles, nonetheless in this case it seems to me to be abundantly clear that on the undisputed evidence of Mr. Fung the plaintiff became entitled seven days after on or about 7 or 8 September this year to at least the figure of 65% of the proceeds of the shipment that it is prepared to accept. That result follows from the clear wording of the agreement in the face of Mr. Fung’s affidavit (which also complies with the technical requirement of the Rules by saying it is believed the defendant has no defence to this part of the plaintiff’s claim) and the concession made that the Sale was not “into a domestic sawmil”. It is true that if it seems that further evidence may come to light to challenge the claim, then summary judgment may be refused. But this approach has its origins basically in the decision of the High Court of Australia in Brisbane City Council -v- Southern Electricity Authority (1968) 42 A.L.J.R 78. In that case there was a strong indication that such evidence might emerge from proceedings pending in another tribunal. Here there is nothing but an assertion from the Bar table by Counsel, unsupported by evidence tending to suggest the possibility of further matterial evidence, and of course the defendant was in a position to challenge the relevant part of Mr. Fung’s affidavit but did not do so. I would not refuse summary judgment on this ground, and as to the argument that there exists a countervailing claim for damages, I think the position is clear that in such circumstances the plaintiff should not be deprived of the real advantage, at least in a saving of costs, of getting summary judgment: the position of the defendant may be protected by an order that execution of the summary judgement be stayed: Sheppards & Co -v- Wilkinson and Jarvis (1889) 6 L.T.R. 18.

The fact that the plaintiff will accept the figure of 65% of the proceeds of the log shipment disposes of the defendant’s other complaint and accordingly I shall direct the entry of summary judgment for the plaintiff against the defendant on that part of the plaintiff’s claim as is found in paragraphs 15 to 21 inclusive of the plaintiff’s statement of claim for 65% of the value in kina of the log shipment after deduction of bank charges. I calculate that figure as K289,459.18 and I direct summary judgment for the plaintiff as to part of its claim in that sum. In case my arithmetic is wrong I give liberty to apply to both parties in respect of the calculation. Interest will of course run on the amount of the judgment from the date of its entry: however I direct that execution of the judgment (including accrued interest thereon) be stayed until further order of the court.

The remaining matter strictly does not concern the defendant but I shall include my determination of it in these reasons because of the composite nature of the proceedings that were before me on 6 November last. It is the question of costs in the plaintiff’s application, which was dismissed, against Mr. Coady and Messrs Elliott Stubbs ang Bonutto.

The application was dismissed chiefly because events had overtaken it, although it was to a degree misconceived. Mr. Coady had ceased to be a lawyer on the record in the proceedings and thus, since there is no property in witnesses and he could not be compelled to co-operate with either party beyond answering a subpoena, there was no point in any order. As to Messrs Elliott Stubbs and Bonutto, it was asserted by Mr. Coady that clearly that firm could not hold any relevant papers from when he acted for both the plaintiff and the defendant because he was then with another firm, an that seems to be so: hence my comment that the plaintiff’s application was to a degree misconceived.

Orders for costs are always discretionary, but event at an interlocutory stage a successful party should only be deprived of costs for good reason. Here the plaintiff failed in its application and in my view could only avoid an order for costs if it appeared that the application was well justified and failed for reasons not relating to some lack of merit in the application when originally brought.

As against Mr. Coady it seems to me that the application was well founded. He had acted for both parties at an earlier stage in relation to their contractual dealings inter se and with the greatest of respect to him he should never have gone on the record as the defendant’s lawyer once the dispute developed. Added to that, when in Japan he clearly acted in what was apparently a professional capacity by despatching a telegram which was referred to in the affidavit evidence. Finally, no one watching or involved in the proceedings of 6 November 1987 could have any doubt where his allegiance lay: he consulted regularly with Mr. Hirst, who appeared for the defendant, throughout. In fact it was his suggestion which led to my order (referred to herein as order (B) (ii) (b) that an interest bearing trust account be opened and that suggestion was put from the Bar table on the basis that the defendant wished to ensure that the money earned interest pending any order of the court in relation to its final destination.

Hence I think the application against Mr. Coady, which failed because of the turn of events, should not result in an order for costs against the plaintiff. However the concurrent application against Messrs Elliot Stubbs and Bonutto, at least to the extent that it sought production of documents, seems to me probably never to have had any prospects of success. Accordingly it seems to me that I would, in the exercise of my discretion, be doing justice between the plaintiff and Mr. Coady and Merrs Elliot Stubbs and Bonutto in respect of the costs of this application by ordering the plaintiff to pay one third of costs of the application (including Mr. Coady’s expenses of travelling from Rabaul to Waigani) on the basis that the application against Messrs Elliott Stubbs and Bonutto was not the major part of the application. I have looked at the authorities Mr. Coady referred me to and I shall not discuss them here as none of them seems to me to prohibit the order I just indicated which I now formally make.

Lawyers for the Plaintiff: Mr. Fiocco; and Mr. Roberts.

Lawyer for the Defendant: Mr. Hirst.

Mr. Coady in person and as lawyer for Messrs Elliott Stubbs and Bonutto.