Tovatnge v Tiensten [2013] PGNC 323; N5459 (5 December 2013)

N5459

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 761 OF 2012

BETWEEN:

BERNARD TOVATNGE
First Plaintiff

AND:

MESU INVESTMENT LTD
Second Plaintiff's

AND:

PAUL TIENSTEN LLM, MP
First Defendant

AND:

SECRETARY FOR FINANCE
Second Defendants

AND:

SECRETARY FOR NATIONAL PLANNING & MONITORING
Third Defendants

AND:

SECRETARY FOR TREASURY DEPARTMENT
Fourth Defendants

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendants

Kokopo: Oli AJ
2013: October 17th & 5th December.

CIVIL JURISDICTION - PRACTICE & PROCEDURE - Claims by and against the State - Notice of intention to make a claim - Notice out of time - Seek leave for extension of time - Applicant must show sufficient cause - Consideration of - Whether reasonable explanation for failure to give notice within prescribed time - Whether arguable case shown - Prejudice - Whether sufficient cause shown - Leave refused - Claims by and Against the State Act, 1996 - Section 5 (2)(c)(ii).

Cases Cited

Rawson Construction Ltd v Department of Works [2005] PGSC 39; SC 777
Viviso Seravo v Jack Bahafo (21/03/01) N2078
Vaihalla Ltd Construction and Civil Works v Independent State of Papua New Guinea [2011] PGNC 135, N4426

Counsel

Mr. Epita Paisat, for the Plaintiffs
Mr. Austin Edo, for the State

RULING

5th December, 2013

1. OLI, AJ. The Plaintiffs' Counsel filed an Originating Summons on 20th December 2012 against the defendants and claims:
   
   1. An Order that the Plaintiffs' be granted an extension of time within which to lodge an Notice of an Intention To Make A Claim against the State pursuant to Section 5 of the Claims By And Against the State Act 1996.
      
   2. An Order or further Orders the Court deems fit.
      
2. The Plaintiffs' Counsel moved the above Originating Summons (OS No: - 761 0f 2012) with the supporting affidavit by plaintiff sworn on 12th December 2012 and filed on 20th December 2012 annexed with other generic relevant documents in support of an application to seek an extension of time to allow plaintiffs to comply with compulsory section 5 Notice under Claims By and Against the State Act 1996. This is to give formal notice to the State that plaintiff's are desirous to sue the State before Writ of Summons to commence purported recovery action against the defendants, including the State as the 5th nominal Defendant.
   
3. The brief facts surrounding the Plaintiff's case that arose this claim is that the first Plaintiff submits on behalf of second Plaintiff in his capacity as the Managing Director around November or December 2008 a formal financial assistance Government Project Proposal through National Planning Office for a purpose of and to principally rehabilitate Kariai Plantation, in East Pomio – East New Britain Province. A formal submission entitled, "Cocoa Rehabilitation Proposal under the Kariai Nuclear Enterprise Concept" and funding sought was in the tune of K3.4mil and the said proposal was hand delivered to local Member of Parliament, the first defendant in his official capacity as the Minister responsible for National Planning & Monitoring and Rural Development Program.
   
4. The second Plaintiff Mesu Investment Limited Project Proposal submission was lodged through the first defendant and submission was approved after three months later and on 23rd March 2009 a Bank of Papua New Guinea cheque #38249 and Serial No. 237380 in the sum of K3.4mil was issued by Department of National Planning & Monitoring and Rural Development Program made payable to second Plaintiff Mesu Investment Ltd but never delivered to Mesu Investment Limited. However, some eight months later on 23rd November 2009 the said Bank cheque made payable to Mesu Investment Ltd in the sum of K3.4mil was cancelled and re-print cheque re-issued in the same amount made payable to Tol Port Services as the newly nominated Project Manager of the plantation rehabilitation program in place of Mesu Investment Ltd.
   
5. The first Plaintiff claims that the cheque cancellation from Mesu Investment Ltd to Tol Port Services was engineered and orchestrated by the first defendant in his capacity as Minister responsible for National Planning & Monitoring and Rural Development Program through the Secretary for Department of National Planning & Monitoring and Rural Development Program. The Plaintiff's since the occurrence of the diversion of cheque payment from Mesu Investment Ltd to Tol Port Services on 23rd November 2009 has six literal months to give s. 5 Notice under Claims By and Against the State Act 1996 to show their intention to sue the State. The requisite six month statutory notice period expires on and including 23rd May 2010.
   
6. The first Plaintiff explains that he was not aware of the statutory compulsory section 5 Notice to the State within six months from the date of the occurrence out of which the claim allegedly arose. The first plaintiff further stated that he was so busy with the Police Investigation Sweep Team that resulted in the first defendant being arrested and charged for his involvement in the alleged cancellation of the Mesu Investment Ltd cheque payment of K3.4mil, reprinted and re-issue to Tol Port Services in the same amount and was tried in Court during the month of October 2013 here at Kokopo and now awaiting the Courts decision on the verdict. The first plaintiff after receiving proper legal advice on section 5 Notice under Claims By and Against the State Act 1996 did cause a letter dated 30th August 2012 under his signature to Minister responsible for Justice & Attorney General Mr. Kerenga Kua, requesting for an extension of time to sue the State out of time.
   
7. There is neither no record of response from the office of the Minister for Justice & Attorney General nor any formal response from the office of the Solicitor General whether the request was granted or not. Hence, this application to seek leave through the Originating Summons process for leave for an extension of time wherein to file a notice under section 5 of the Claims By and Against the State Act 1996, some 3 years 11 months & 17 days later. The plaintiffs' counsel Mr. Epita Paisat informed the Court that since filing the Originating Summons on 20th December 2012, the plaintiffs have not served a formal Notice to the Departmental Head of Department of Justice and Attorney General; nor the Office of the Solicitor-General pursuant to s. 5 of Claims By and Against State Act 1996. I am at liberty to reproduce for purpose of completeness s. 5 of the Claim By and Against the State Act 1996 hereunder.
   
8. The s. 5 of the Claims By and Against State Act 1996 reads:
   

5. NOTICE OF CLAIM AGAINST THE STATE.

(1) No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this section by the claimant to–

(a) the Departmental Head of the Department responsible for justice matters; or

(b) the Solicitor-General.

(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. (underline emphasis is mine)

(3) A notice under Subsection (1) shall be given by–

(a) personal service on an officer referred to in Subsection (1); or

(b) leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 a.m. and 12 noon, or 1.00 p.m. and 4.06 p.m., or such other hours as may from time to time be declared by or under the Public Service (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act 1953.

9. The defendants' counsel Mr. Edo on behalf of the defendants object to further extension of time as the plaintiffs had sufficient time to file section 5 Notice to the State under Claims By and Against the Sate Act 1996 within six months from 23rd November 2009 when the plaintiffs became aware of the occurrence of which such claim arose. The defendants' counsel voice a very strong opposition to seek leave to file notice out of time on two fronts: - (1) Plaintiffs' have instituted the proceedings against the defendants of an event that happens some four years ago and they have more than sufficient time during which to comply with section 5. Notice under Claims By and Against the State Act. (2) The defendants' counsel referred to his own affidavit sworn and filed on 30th August 2013 in support of the Notice of Intention to Defend filed on 4th September 2013 to defend the civil suit and submit that the Plaintiff's claim has no legal cause of action at law and the claim is frivolous and vexatious and amount to abuse of process therefore should be dismissed with cost.
   
10. The Counsel Edo finally submit that this action is ill conceived and suggest that the proper avenue available to the Plaintiff is to file Judicial Review application where they will have no need to file section 5 Notice to the State under Claims By and Against the State Act 1996. If, however, the Plaintiffs pursue Judicial Review option they would have the right to challenge the decision by the first defendant for his intervention as the minister responsible for National Planning & Monitoring and Rural Development Program to direct the Secretary for National Planning & Monitoring and Rural Development Program to cancel the cheque in the sum of K3.4mil made out to Mesu Investments Limited; re-print and re-issue to Tol Port Services as the new Project Manager and not Mesu Investment Limited. This is not the case in this application before the Court.
    

ISSUE:

11. The pertinent question is whether the Plaintiffs have shown sufficient cause for not meeting the requirement under the Claims By and Against the State Act 1996.
    
12. The real issue is not why the Plaintiff's have not complied with the compulsory requirement under section 5 Notice to the State under Claims By and Against the State Act 1996 within six months from the date the alleged claim arose, but whether the Plaintiff's have shown sufficient cause for not meeting the requirements under the Claims By and Against the State Act 1996.
    
13. I ask this simple but very important question because the Counsel when first receives instructions from the plaintiff to assist with his legal claim would have put his judicial antennas on alert that there was a great potentiality to sue the State Agencies and its Employees as the financial assistance sought was through the Department of National Planning & Monitoring and Rural Development Program, hence the State is likely to be a nominal defendant in this matter. But what is more serious in this matter is the fact that action against the State cannot commence without notice in writing to the State of the parties' intention to make a claim against the State is given in accordance with this section by the applicant/claimant according to the established legal protocol under s. 5 of the Claims By and Against the State Act 1996. The service of section 5 notice must be serve on:
    
    • (a) The Departmental Head of the Department responsible for justice matters; or
      

(b) The Solicitor-General, a notice under this section shall be given within a period of six months after the occurrence out of which the claim arose.

14. The case law in this area of seeking leave to file notice against the State out of time has been developed to entail and include as part of the legal requisite requirement of section 5 compulsory notice to the State is the substantive component and ingredient of s. 5 notice under Claims By and Against the State Act 1996. That is the claimant/applicant must disclose four additional legal requisite requirements, however, I find the first and second limb of considerations relevant and applicable in this case when the application to seek leave to file notice out of time is sought under Originating Summons process. I am indebted to the two relevant principle considerations enunciated in the matter between: Rawson Construction Ltd v Department of Works [2005] PGSC 39; SC 777 (4th March 2005) and adopt them as set out below where:
    

"The Appellant in this case claim that the State contracted them to carry out certain public works, which they part performed but terminated forcefully by the state during Easter weekend of 1999. Since then they claimed and negotiated with the State for damages to them of part performance and breach of contract. The State did not show any immediate interest in prompt settlement but the appellants continued to negotiate and or wait upon the State. On 20th September 2002, the Appellants wrote and asked for a conference with State to discuss the claims and possible settlement and purported to give notice under s. 5 of the Claims By and Against the State Act 1996.

Following no response, the Appellant demanded on 29th May 2013 a payment of their claims then put at K18, 379, 200.00. They also, give notice of their intention to issue proceedings to recover those amounts if not settled and also purported to again give notice of their intention to make a claim against the State under s. 5 of the Claims By and Against the State Act 1996. On 21st July 2003, the Solicitor General refuses to entertain the claim, saying the claims were out of time and they did not properly and sufficiently particularized their claims.

The Appellants did nothing until they file an Originating Summons for an extension of time for them to give notice of their intention to make their claims against the state on 12th February 2004. The National Court heard the application and dismissed it on 20th July 2004, because of the substantial delay which was not explained and that they not demonstrate that the State would not be prejudiced.

The Appellants appealed against that decision and applied for leave to adduce "fresh evidence" of successful claims by other people coming from the same group or community as the appellants for the same kind of work and outside the s. 5 notice requirements. The intent was to demonstrate a discriminate application of the law by the Solicitor General and that the evidence would diminish the prejudice the learned trial judge found against them. The Appellant otherwise did not seriously challenge the trial judge's decision and reasons for decision. It was held that:-

1. An application for an extension of time to give notice of his intention to make a claim against the State under s. 5 of the Claim By and Against the State Act 1996 must show "sufficient cause" for not meeting the requirements under the Act.
   
2. "Sufficient Cause" would be shown if the applicant is able to:-
   

Provide by appropriate evidence a reasonable explanation for not giving notice within the period stipulated under s. 5 of the Claims By and Against the State Act 1996 and where there is a delay in applying for an extension of time, provided a reasonable explanation for that delay;

(a) Demonstrate a reasonable cause of action to be pursued on the merits; and

(b) Show by appropriate evidence that the delay in giving notice has not and or would not result in any prejudice to the State. (underline in mine) The case of Viviso Seravo – v – Jack Bahafo (21/03/01) N2078: Cited with approval.

(a) The learned trial judge did not err in his finding that the Appellants failed to show "sufficient cause" in that, they failed to give notice and or provide a reasonable and or satisfactory explanation for their failure to give notice and or to promptly, apply for an extension of time to comply with the notice requirements and that the delay has not and or will not result in prejudice to the State.

3. ....................
   
4. ....................."
   
15. In this case on foot, I respectfully adopt and apply the first and second limb considerations enunciated in the above case of Rawson Construction Ltd v Department of Works [2005] PGSC 39; SC 777 (4th March 2005):
    

However, in another case of Vaihalla Ltd Construction and Civil Works - v - Independent State of Papua New Guinea [2011] PGNC 135, N4426 (21st October 2011) where his Honour Makail J, echoed the same principles as major considerations for a application seeking leave for an extension of time to file notice out of time against the State. It is incumbent on the Plaintiff to show sufficient cause when seeking leave for an extension of time to file notice out of time.

The plaintiff in this case is required under the first limb to show "sufficient cause" that comprises of the following requisite legal requirements that Plaintiff is expected and must:

(a) Provide by appropriate evidence a reasonable explanation for not giving notice within the period stipulated under s. 5 of the Claims By and Against the State Act 1996 and where there is a delay in applying for an extension of time, provided a reasonable explanation for that delay;

(b) Demonstrate a reasonable cause of action to be pursued on the merits; and

(c) Show by appropriate evidence that the delay in giving notice has not and or would not result in any prejudice to the State. (underline emphasis is mine)

16. The onus is on the plaintiff in this case to provide appropriate evidence and reasonable explanation for not giving notice within six months when the claim allegedly arose as required under s. 5 of the Claims By and Against the State Act 1996. However, where there is a delay and when applying for an extension of time in order to file notice out of time, the plaintiff has a legal duty to provide a reasonable explanation for the delay. The learned Counsel for plaintiff in his submission failed to advance any reasonable explanation showing exceptional circumstances that may have formed the basis for reasonable explanation and justification that may have contributed to the prolonged delay in filing due notice out of time to sue the State as the 5th Nominal Defendant.
    
17. The plaintiff's have not offered any reasonable explanation why they have not filed notice since 23rd November 2009 to and including filing Originating Summons on 20th December 2012 to seek leave for extension of time to file a formal section 5. Notice to sue the State. The first plaintiff did offer some explanation when he stated in his affidavit that he was so caught up with Police Investigation Sweep Team in investigating the first defendant's involvement in diverting the Bank of PNG cheque No. 38249 in the sum of K3.4mil dated 22nd March 2009 made payable to Mesu Investment Ltd, which was cancelled and reprint and re-issue new Bank of PNG cheque No. 40572 in the same sum of K3.4mil dated 1st December 2009 to Tol Port Services, as the newly nominated Project Manager of the Rehabilitation Program in place of Mesu Investment Ltd. The eleventh hour turn around event came about at the direction and intervention of the first defendant in his capacity as the Minister responsible for National Planning & Monitoring and District Development Program.
    
18. It was shown and confirmed in the file that the first defendant did cause a letter under his signature dated 23rd November 2009 to Secretary - National Planning & Monitoring and Rural Development Program directed the cancellation and re-print and re-issue by Department of National Planning & Monitoring and Rural Development Program, a Bank of PNG Cheque # 38249 dated 22nd November 2009 for K3.4 million be re-issued to Tol Port Services as the new Project Manager of the Plantation Rehabilitation program in place of Mesu Investment Ltd.
    
19. The first plaintiff when he became aware of requisite legal requirement to give formal notice to the State of their intention to sue the State, took steps to cause a letter under his signature to Attorney General to seek leave for an extension of time to file notice out of time under s.5 of the Claims By and Against the State Act 1996. Whilst there is some momentum by first plaintiff to seek extension of time to file out of time, there is no evidence to show that there is a cause of action at law to be pursued on the merits of the case. What is on file is the voluminous copy of the Project Proposal documents by second plaintiffs for financial assistance sought through the National Planning & Monitoring and Rural Development Program office.
    
20. The Project Proposal for Mesu Investment Ltd was approved and a copy of the Bank of PNG cheque No. 38249 in the sum of K3.4mil was issued by National Planning & Monitoring and Rural Development Program is attached in the file. However, this cheque payment was directed to be cancelled, re-printed and re-issued to Tol Port Services with a new cheque No. 40572 in the same amount of K3.4million. The Secretary for National Planning & Monitoring and Rural Development Program acted upon a letter by first defendant dated 23rd November 2009 to re-issue the same cheque amount of K3.4mil from Mesu Investment Ltd to Tol Port Services as the new nominated Project Manager of the Plantation Rehabilitation program in Pomio District in place of Mesu Investment Ltd. As a matter of fact the purported cheque issued and made payable to Mesu Investment Ltd was cancelled and re-issued to Tol Port Services. The plaintiff being aggrieved by the action of the first and the third defendant claims that they are entitled to sue the defendant's but, of course, within the perimeter and the scope of the current enabling legislation(s) according to the rule of law.
    
21. The plaintiff is tasked with the challenge to show sufficient cause under the circumstance of this case and according to the case precedent in this jurisdiction to provide by appropriate evidence a reasonable explanation for not giving notice within the period stipulated under s. 5 of the Claims By and Against the State Act 1996 and where there is a delay in applying for an extension of time, the claimant/applicant must provide a reasonable explanation for that prolonged delay. The case laws under the first limb is the case of Rawson and Vaihalla require the claimant/applicant to show sufficient cause that constitute reasonable explanation for not giving notice within the prescribed period of six months under s. 5 of the Claims By and Against the State Act 1996, hence seeking leave to file notice out of time is justified with reasons.
    
22. The second part of the first limb is for the claimant/applicant to establish as to wherein lies the second plaintiff's legal rights that constitute an arguable legal cause of action on the merits to claim the total return of the K3.4mil principally awarded through the due process by Department of National Planning & Monitoring and Rural Development Program to Mesu Investment Ltd to rehabilitate Kariai Plantation, in East Pomio – East New Britain Province. However, if, in the event that the application for leave is granted the claimant/applicant must not only show that there is an arguable case on the merits but such delay should not have foreseeable and conceivable prejudicial effect on the defendants.
    
23. The second Plaintiff's formal submission entitled, "Cocoa Rehabilitation Proposal under the Kariai Nuclear Enterprise Concept" sought funding assistance in the sum of K3.4mil from the Government through National Planning & Monitoring and Rural Development Program; and the said project proposal was hand delivered to local Member of Parliament, the first defendant in his official capacity as the Minister responsible for National Planning & Monitoring and Rural Development Program. The Project Proposal was approved and cheque issued under its corporate entity as Mesu Investment Ltd on the strength of its Project Proposal to rehabilitate its Kariai Plantation in Pomio District. The Project Proposal funding approval and Bank of PNG cheque of K3.4mil made in favour of Mesu Investment Limited did not reach the well intended implementation phase to rehabilitate Kariai Plantation in East Pomio District – East New Britain Province.
    
24. The Plaintiff, however, in the alternative, may be entitled to sue for damages incurred due to the eleventh hour unintended intervening event in question that result in the diversion of project funding assistance approval and PNG Bank cheque raised for project proposal by Mesu Investment Ltd as Project Manager was changed to Tol Port Services as new Project Manager. It is indeed an undisputed fact that Tol Port Services did not nor submit any Plantation Rehabilitation Project Proposal for financial assistance from Government through the National Planning & Monitoring and Rural Development Program. This being the case, the Plaintiff, in my view, is entitled to review the PNG Bank cheque cancellation of K3.4mil to Mesu Investment Limited and re-issued to Tol Port Services initiated by first defendant.
    
25. What the Plaintiff has done in this action is file Originating Summons to seek leave for extension of time to file out of time and once leave is granted will file for the substantive recovery action thereafter. However, the latest trend on case law on the application to seek leave sought to file out of time under s. 5 Notice of the Claims By and Against the State Act 1996 is not a standalone application. It must be accompanied by the following legal requisite requirements as shown in the case of Rawson Construction Ltd v Department of Works [2005] PGSC 39; SC 777 (4th March 2005). This case law has extended the process to have an effect of one stop shop approach from the time of filing the Originating Summons to seek leave to file notice out of time. The process now effectively requires the Plaintiff to include and show the substantive cause of action on the merits of the case and show appropriate and reasonable explanation and evidence to justify why seeking leave to file notice out of time after six months under s. 5 of the Claims By and Against the State Act 1996. And it will have no prejudicial effect on the defendants if leave is granted. The Plaintiff in this case has failed to meet this test in this application with the standard required ingredients set as a guide in the above case of Rawson Construction Ltd v Department of Works, as current relevant case authority in this jurisdiction.
    
26. The plaintiffs have failed to demonstrate a reasonable cause of action at law to be pursued on the merits of the case, if in the event that the leave is granted in this application. It is of paramount importance, in my view, that in the interest of justice and the justice of the case so requires that the plaintiffs demonstrate and must show that a reasonable cause of action at law to be pursued on the merits of the case in the substantive hearing in this proceeding. The plaintiff, in my view, has failed to discharge its' legal obligation to establish on the merits of the case, a prima facie case on the balance of probabilities against the defendants at the leave application stage as clearly demonstrated in both matters of Rawson and Vaihalla's cases referred to above.
    
27. Having considered all the evidence before me, I am not satisfied that on the evidence as it stands that the plaintiffs have satisfactorily advanced any credible evidence nor provided very persuasive reasons for the prolonged delay surrounding the circumstances of their inability to file section 5 Notice; nor have they also shown sufficient cause to sue the defendants including the State as the 5th nominal Defendants and that there is an arguable case on the merits, and the defendants will not be prejudiced if leave is granted in favour of the Plaintiff under s. 5 of the Claims By and Against the State Act 1996. In view of the foregoing considerations alluded to above, I am satisfied to make the following conclusive findings in this application as hereunder.
    

CONCLUSION

28. I hereby make the following findings that:
    
    1. In an application for leave to make a claim against the State out of time under section 5 (2)(C)(i) of the Claims by and Against the State Act 1996, an applicant must establish that there is a reasonable explanation for the failure to give a notice within a prescribed time.
       
    2. On the evidence as it stands before the court, the applicant has failed to establish a reasonable explanation for its failure to give notice within the prescribed time, that there is a cause of action to be pursued on the merits, and that there is an arguable case and that the defendants will not be prejudiced if leave is granted.
       
    3. The application is accordingly refused and proceeding dismissed with cost, if not agreed be taxed.
       

__________________________________________________
Jackson Gah & Associates Lawyers: Lawyer for the Plaintiffs
State Solicitor: Lawyer for the Defendants