Waghi Security Service Pty Ltd v Tembon and Western Highlands Provincial Government In Suspension [1994] PGNC 147; [1994] PNGLR 138 (22 December 1994)

PNG Law Reports 1994

[1994] PNGLR 138 - Waghi Security Service Pty Ltd v John Tembon and Western Highlands Provincial Government In Suspension 

[1994] PNGLR 138

N1287

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WAGHI SECURITY SERVICES PTY LTD

V

JOHN TEMBON AND

WESTERN HIGHLANDS PROVINCIAL GOVERNMENT (IN SUSPENSION)

Mount Hagen

Woods J

12 December 1994

22 December 1994

CONTRACT - Form of contract - Defects - Execution under seal by provincial government - Execution by company - Authorised signatories - Stamp Duties Act - Modern commercial agreements must comply with modern laws.

Facts

The plaintiff, a security service company sued for breach of contract to provide guard service, entered into by it and the provincial government. It was alleged that the contract was for three years, terminable by three months notice. No notice of termination was given, and damages were claimed for the three month period required for notice. The written agreement which the plaintiff purported to tender in court did not comply with the Stamp Duties Act, and the formal requirements for contracts between the provincial government and companies were not complied with.

Held

N1>1.       By s 19 of the Stamp Duties Act, the document tendered could not be admitted.

N1>2.       The defects in formalities, such as seals, signatures, and dates, invalidated the alleged contract.

Counsel

P Kunai, for the plaintiff.

No appearance for the defendants.

22 December 1994

WOODS J:  The plaintiff is suing for breach of a contract entered into with the Western Highlands Provincial Government in December 1991 to hire the plaintiff's services for security at Kapal House.

The contract is alleged to have been for three years. However, it is alleged that the officers of the government and, in particular, the first defendant terminated the contract without giving the formal notice, as required under the contract, and in breach of a clause of the contract which provides for termination.

The plaintiff is claiming for the period required for notice under the contract, namely for the three months of services which the plaintiff claims it is entitled to.

There is no claim for any work or services actually provided and not paid for. It is purely for the term of the defective notice and the loss suffered by the company for such premature notice.

The plaintiff is relying on the term of the contract and not for work done or services provided and not paid for.

The plaintiff has tendered an agreement upon which it relies for its claim. However, firstly there is no evidence of any compliance with the Stamp Duties Act Ch 117, it being a memorandum or agreement liable for duty. Therefore, under s 19 of the Act, the document tendered cannot be admitted as or available in law. One very simple rationale for this is that unless you pay stamp duties and company tax and income tax, how can a government get the funds it requires to provide the services of government institutions like courts to assist people with the resolution of disputes? If you want to enter into modern commercial agreements and have the protection and support of the modern institutions, you must comply with the modern laws.

However, that is only one problem. There are others. In so far as I have been able to view the document as embodying the terms of the agreement, there are a number of other defects. The document has not been executed properly. The seal of the provincial government has not been affixed properly, namely in the presence of two officers of the provincial government who are proper officers and who have signed accordingly. There appears to be one signature of a provincial government official, but that is all. It may have been necessary to have a copy of the resolution in the minutes of the Cabinet whereby the seal was authorised to be affixed. The same would go for the execution by the plaintiff company. There is no common seal affixed and properly certified by the signatures of two proper officers of the company.

Also the dates on the contract are too vague. There has been an alteration which has not been certified properly, and the date is not noted at the end near the purported signatures.

Even if the contract was admissible and good, there is no means of assessing the damages for any breach if such should be the case. The schedule merely refers to a figure per hour per man, as required from time to time. Whilst the plaintiff refers to a tender document for the means of calculating the actual quantum of the contract, that tender document is dated over two and a half years before the date of the alleged contract, so it cannot have any relevance.

The Court is unable to consider the written agreement tendered for the reasons stated above. I, therefore, find that there has not been a breach of an agreement such that the plaintiff can claim damages for breach of notice. I dismiss the claim and order judgment for the defendants.

Lawyer for the plaintiff: Kunai & Co.

No appearance for the defendants.