Mining World Group Pty Ltd v PNG Drillers Pty Ltd [1998] PGNC 122; N1795 (10 December 1998)

Unreported National Court Decisions

N1795

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 305 OF 1998
BETWEEN: MINING WORLD GROUP PTY LTD
PLAINTIFF
AND: PNG DRILLERS PTY LTD
FIRST DEFENDANT
AND: JOHN DANIELS
SECOND DEFENDANT

Waigani

Sevua J
23 September 1998
10 December 1998

Counsel

W. Neil for Plaintiff

D. Igolena for 2nd Defendant

10 December 1998

SEVUA J: The plaintiff applied for summary judgment pursuant to Order 12 Rule 38, National Court Rules, against both defendants. The first defendant did not oppose the plaintiff’s application, but the second defendant did.

In respect of the first defendant, I accept the evidence that it has no defence and accordingly, I find the first defendant liable. Summary judgment is therefore entered against the first defendant pursuant to Order 12 Rule 38 (1), in the sum of AUD 105,241.60.

The second defendant has defended this application and the substantive claim as well. The facts are not in dispute and I accept the evidence of both parties. However, the difficulty here is whether the second defendant should be held liable for the debt claimed by the plaintiff. There is no dispute that the second defendant signed the commercial credit application. In the absence of any evidence from Mr Paul Reed, I would accept the evidence of the second defendant.

It is evident from the commercial credit application, annexure “B” of Kae McDonnell’s affidavit, sworn on 14^th July, 1998; that the first defendant is the applicant for the credit facility offered by the plaintiff. That fact is not in dispute, and I so find. In view of that finding, why wasn’t the application signed by all the directors of the first defendant ? Why was the application signed only by the second defendant, who was only an alternate director of the first defendant ? And why didn’t the plaintiff, through Paul Reed, request the second defendant to have the application sign by all the directors ? As I alluded to earlier, the plaintiff has not filed any affidavit sworn by Paul Reed, and under such circumstances, I accept the evidence of the second defendant.

I consider it quite unfair and unreasonable that the plaintiff should expect the second defendant to be held liable for the debt he did not personally incur. I accept that the second defendant signed the application on behalf of the first defendant, although I think it was quite foolish of him not to have read the contents of the application. However, given the fact that I have accepted his evidence, he assumed that his signature was only a matter of formality.

Having carefully perused the application itself, it becomes undoubtedly clear that the application was required to be signed by all the directors of the applicant, ie, the first defendant. I deduce this from Clauses 1 – 4 inclusive. These clauses refer to phrases like, “the undersigned being all the directors”, “jointly and severally”, “the directors”, etc. To my mind, these phrases clearly imply that the application was required to be executed by all the directors of the first defendant. However, since that has not been done, it could not be enforced against the second defendant as it appears that the application is incomplete.

In any event, I accept the second defendant’s evidence, in particular, paragraph 3 of his affidavit, sworn on 11^th August, 1998; that as an alternate director of the first defendant, he had limited powers and in exercising such limited power, he was granted indemnity from any liability incurred in that capacity. Accordingly, he cannot be liable for the debt owed by the first defendant.

For these reasons, I would refuse the plaintiff’s application in so far as it relates to the second defendant.

In respect of the first defendant, it did not object to the plaintiff’s application. It has failed to file a notice of intention to defend and a defence. It has not denied the debt owing and I am satisfied that the first defendant has no defence. The plaintiff is therefore entitled to summary judgment against the first defendant, and I will grant the plaintiff’s application against the first defendant.

Finally, in respect of the plaintiff’s application to change it’s name to UDR Consumables Pty Ltd, no objection has been raised by the defendants. In any case, I am satisfied by the evidence of Kae McDonald in respect of the change of name, so it is in order for me to grant that order for the change of name.

I make the following orders:

1. &ـ T6e plae plaintiffntiff’s name is changed to UDR Consumables Pty Ltd.

2. ;&#1660mary ent ent iered ered for the plaintiff against the first defendant in the sum of AUD 10UD 105,2415,241.60.<.60.

3. ـ ټ Ist atst atfrom the date of filing of writ to date date of j of judgmeudgment, and thereafter at 4 % until final settlement.

4. ټ&##160;; The first drst defendant is to pay the plae plaintiff’s costs of these proceedoceedings.

5. ټ&#The plaintiff is t is to pay the costs of the second defendant in this application.

6. &ـ; Thend hend dent &ent ‘s cross claim is to proceed to trial.

Lawyer for PlainPlaintiff:tiff: Blak Blake Dawson Waldron

Lawyer for SeDefendant: Milner & Associates

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