N4275 

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS 531 OF 2009

BETWEEN:

GLOBAL CONSTRUCTIONS LIMITED
Plaintiff

AND:

NATIONAL CAPITAL DISTRICT COMMISSION
Defendant

Waigani: Hartshorn J.
2010: 10th December,
2011: 6th April

Section 5 Claims By and Against the State Act

Facts:
The plaintiff commenced this proceeding claiming that the defendant owes it about K2.8 million for road construction services rendered and interest, pursuant to a contract between the parties. The defendant now applies for this proceeding to be dismissed on the grounds that the application does not comply with s.5 Claims By and Against the State Act and is an abuse of process. 

Held:

The requisite notice pursuant to s.5 (2) Claims By and Against the State Act was not given. There is no evidence that any further period of time has been allowed for the giving of the requisite notice pursuant to s. 5 (2) (c) Claims By and Against the State Act. The proceeding is dismissed

Cases cited: 

Caspar Kondi v. Provincial Administrator, Department of Western Highlands Province (2004) N2755, 
Peter Komba v. National Capital District Commission (2007) Unreported, WS 451/07 Waigani, delivered 26/7/07

Counsel:

Ms. P. Mesa, for the Plaintiff
Mr. H. Leahy, for the Defendant

6th April, 2011

1. HARTSHORN J: The defendant, National Capital District Commission (NCDC) applies for this proceeding to be dismissed on the grounds that it is an abuse of process or that s. 5 Claims By and Against the State Act (Claims Act) has not been complied with.

2. The plaintiff, Global Constructions Ltd (Global), commenced this proceeding claiming that NCDC owes Global about K2.8 million for road construction services rendered and interest, pursuant to a contract between the parties.

3. As success on either of these grounds will result in the proceeding being dismissed they do not have to be considered in the order argued or as listed in the motion. I consider the s. 5 Claims Act ground first.

4. NCDC submits that it is part of the State, the notice requirements of the Claims Act must be complied with in respect of a claim in tort or contract against NCDC and the purported notice given by Global did not comply with s. 5 Claims Act as it was not given to an authorised person and it was not given in time.

5. Global submits that the requisite notice was given to someone who is authorised and was given in time. Global does not take issue with the argument that notice under the Claims Act must be given in respect of a claim in tort or contract against NCDC.

Whether notice given in time

6. Section 5 (2) Claims Act is:

"(2) 	A notice under this Section shall be given-

(a) within a period of six months after the occurrence out of which the claim arose; or

(b) where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or

(c) within such further period as-

(i) the Principal Legal Adviser; or

 (ii) the court before which the action is instituted,

 on sufficient cause being shown, allows."

7. Global submits that the requisite notice was given in time when it was given on 21st January 2009. This is on the basis, Global submits, that the time by which the notice had to be given started to run from the date when Global made a decision that its recovery efforts against NCDC, such as meetings and the issue of letters of demand, had failed and that it should pursue NCDC by issuing court proceedings. I am not satisfied that this submission is a proper interpretation of the requirements of s.5 (2) (a) and (b) Claims Act.

8. In its statement of claim, Global pleads at paragraph 11 that NCDC is indebted to Global for monies owed on account of services rendered, pursuant to the contract. It is not specifically pleaded that NCDC is being sued for breach of contract. In a letter to NCDC however, the lawyers for Global state that Global's cause of action is a breach of contract claim.

9. Pursuant to s. 5 (2) (a) Claims Act, the occurrence out of which the claim arose, to my mind, is the alleged non-payment by NCDC of the amounts in respect of which progress certificates had been issued when those amounts were due to be paid: Caspar Kondi v. Provincial Administrator, Department of Western Highlands Province (2004) N2755, Peter Komba v. National Capital District Commission (2007) Unreported, WS 451/07 Waigani, delivered 26/7/07, Hartshorn J. In the statement of claim the particulars are to the effect that the progress certificates were issued on 12th May 2008. Then in paragraph 8 of the statement of claim it is pleaded that it was a further term of the contract that payment of monies due under a progress certificate would be paid by NCDC to Global within 14 days after the issue of a progress certificate. This is admitted by NCDC in its defence.

10. Consequently, payment of the amounts in respect of which progress certificates had been issued, should have been made and expected by 26th May 2008. When payment was not made by that date pursuant to the contract as pleaded, the occurrence out of which the claim arose - the non-payment by the due date, had occurred.

11. If reliance is placed upon s. 5 (2) (b) Claims Act, Global would have become aware of the alleged breach of contract, as pleaded, when the subject payments were not made by 26th May 2008.

12. It is apparent that Global did become aware as it claims interest on the amounts alleged to be owing, and pleads that it was a term of the contract that interest is payable on amounts that are not paid by the expiration of the period by which payment should have been made. To claim interest as it has, would have resulted from an acknowledgement by Global that the sums due had not been paid as they should have been or that there had been a breach of contract.

13. Under s. 5 (2) (a) and (b) Claims Act, the time by which the notice was to be given would begin to run from 26th May 2008. The requisite notice should have been given by 26th November 2008. It was not. Further, there is no evidence that any further period of time has been allowed for the giving of the requisite notice pursuant to s. 5 (2) (c) Claims Act.

14. Consequently, as the time limits in s. 5 (2) Claims Act have not been complied with and as such compliance is mandatory, this proceeding should be dismissed. Given this, it is not necessary to consider the other submissions of counsel.

Orders

15. The orders of the Court are:

a)	this proceeding is dismissed,

b)	the defendant's costs of this proceeding shall be paid by the plaintiff,

_____________________________________________________ 
National Capital District Commission: Lawyer for the Plaintiff 
Pacific Legal Group: Lawyers for the Defendant