Malai v Kandemari [2013] PGNC 5; N4954 (30 January 2013)

N4954

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA NOS 6-11 0F 2011

HON BUKA GOLI MALAI
Appellant

V

CHARLIE KANDEMARI, DANIEL KATNAWAN,
CASPER KANDEMARI, FRANCIS FULIVA,
CHARLIE MUNDUL & GIM WINDI
Respondents

Madang: Cannings J
2012: 9 November
2013: 30 January

COURTS – District Court – duty to observe natural justice – whether defendant served with notice of proceedings, District Courts Act, Section 47

CONTRACTS – oral agreements – need to plead elements of cause of action – proof of elements of breach of contract

The respondents obtained from the District Court orders for payment of K10,000.00 by the appellant to each of them pursuant to oral agreements with the appellant that he would pay them for assisting him in a political campaign, which resulted in his election to Parliament. The appellant appealed on three grounds: (1) that he was not properly served with the complaints by which the District Court proceedings were instituted; (2) the complaints did not disclose a reasonable cause of action; and (3) the respondents failed to prove the existence of a contractual relationship.

Held:

(1) There was sufficient proof of service of the summonses under Section 47(1)(a) of the District Courts Act. The first ground of appeal was dismissed.

(2) The complainants failed to disclose a reasonable cause of action. However, this was a procedural defect that should have been raised as a preliminary point in the District Court and the appellant was not permitted to raise it on appeal. The second ground of appeal was dismissed.

(3) The respondents gave insufficient evidence in the District Court of the existence of a contractual relationship so it was not reasonably open to the District Court to be satisfied that liability had been established. The third ground of appeal was upheld.

(4) Only one ground of appeal was upheld but it was sufficient to sustain the appeals as there was a substantial miscarriage of justice. The orders of the District Court were quashed and the matters remitted for retrial.

Cases cited

The following cases are cited in the judgment:

Bernard Steven Philipae v Atio Igaso (2011) N4366
Boi Kawage v MVIL (2008) N3354
Danny Yai v Joseph Pindu (2009) N3630
John Vulupindi v John Gideon (2006) N3925
Papua Club Inc v Nusaum Holdings Ltd (2005) SC812
SCR No 3 of 1984; Kevin Masive v Iambakey Okuk [1984] PNGLR 390
Steven Naki v AGC (Pacific) Ltd (2005) N2782
Veltro Ltd v Steven Liu Huang OS No 478 of 2006, 12.09.06

APPEALS

These are appeals against orders of the District Court requiring the appellant to pay K10,000.00 to each respondent.

Counsel

B W Meten, for the appellant
W Akuani, for the respondents

30 January, 2013

1. CANNINGS J: The former member for Madang Open, Buka Goli Malai, is appealing against orders of the Madang District Court made on 30 September and 6 October 2010 in proceedings brought against him by the respondents, Charlie Kandemari, Daniel Katnawan, Casper Kandemari, Francis Fuliva, Charlie Mundul & Gim Windi. They claimed that Mr Malai owed them money for assistance they provided to him in his campaign for the 2007 general election which resulted in his election to the National Parliament. Mr Malai failed to attend the hearing of the matters in the District Court. The presiding Magistrate Mr S W Seneka SPM heard evidence from the respondents and decided the cases in their favour, ordering Mr Malai to pay each of them K10,000.00 plus K100.00 costs. Mr Malai raises three grounds of appeal:

(1) he was not properly served with the complaints by which the District Court proceedings were instituted;

(2) the complaints did not disclose a reasonable cause of action; and

(3) the respondents failed to prove the existence of a contractual relationship.

1 APPELLANT NOT PROPERLY SERVED

2. Mr Meten for Mr Malai submitted that the document by which the defendant in District Court proceedings is given notice of the complaint laid against him – the 'summons upon complaint' – was not personally served on Mr Malai. Mr Meten relies on my decision in Bernard Steven Philipae v Atio Igaso (2011) N4366 to argue that absence of proof of service means that Mr Malai was not given an opportunity to be heard. There was a denial of natural justice.

3. I reject that argument and distinguish the facts of this case from those in Philipae as there is proof that each of the summonses upon complaint was served on Mr Malai's protocol officer, Bruno John, at Madang District Office by Snr Const Steven Etna of Madang Police Station on 19 August 2010. I am satisfied that this complies with the requirements of Section 47(1)(a) of the District Courts Act, which states:

A summons shall be served at least 72 hours before the time appointed in the summons for the hearing – in the case of a natural person – on the person to whom it is directed by delivering a copy of the summons to him personally or, if he cannot be found, by leaving it at his last known place of abode with some other person apparently an inmate and apparently not less than 16 years of age.

4. The summons does not have to be delivered personally. If the defendant cannot be found it can be left "at his last known place of abode with some other person apparently an inmate and apparently not less than 16 years of age". The term "place of abode" usually refers to a person's residence or domicile": the place where they live (SCR No 3 of 1984; Kevin Masive v Iambakey Okuk [1984] PNGLR 390). However given the context in which the term appears its meaning can properly be extended to include a person's place of work, especially in the case of a member of Parliament. Mr Malai's protocol officer was apparently an "inmate" of that place of abode and was apparently not less than 16 years of age. The first ground of appeal is dismissed.

2. NO REASONABLE CAUSE OF ACTION
   

5. Mr Meten submitted that the complaints filed in the District Court did not disclose any cause of action. Each complaint stated:

On the 30th of July 2007, owed to Complainant K10,000.00 being his respective allowance promised to him by the Defendant when he engaged the Complainant's service as Committee in his 2007 National Election conducted for the Madang Open electorate.

The Defendant did not pay the Complainant after the return of the writ on 30th July 2007 as promised and has since failed after numerous demands.

Complainant therefore seeks orders for payment of the respective amount plus interests according to law and costs of this proceeding. [sic]

6. Mr Akuani for the respondents submitted that the argument underlying this ground of appeal should have been raised as a preliminary point in the District Court proceedings, but it was not as Mr Malai failed to attend the hearing so he should not be allowed to rely on it.

7. I accept the arguments of both counsel. Mr Meten is correct. There is no cause of action disclosed by the complaints, which simply refer loosely to an "allowance" of K10,000.00 promised by Mr Malai. I know this was the District Court and the rules of pleadings do not apply as strictly as they do in the National Court but a complaint must still disclose a cause of action (Danny Yai v Joseph Pindu (2009) N3630). Was it breach of contract? If so it should have been pleaded that there was a contract and that it was performed by the complainant and that the defendant failed to honour it (Steven Naki v AGC (Pacific) Ltd (2005) N2782, Boi Kawage v MVIL (2008) N3354). Those elements were not pleaded and there is no other identifiable cause of action so the complaints were defective.

8. Mr Akuani is also correct. This should have been raised as a preliminary point. It was a valid argument but Mr Malai denied himself the opportunity to raise it by not attending the hearing. The general rule that an appellant ought not be permitted to raise on an appeal a point of law that he had the opportunity to argue at the trial applies here (Papua Club Inc v Nusaum Holdings Ltd (2005) SC812). Ground 2 of the appeal is dismissed.

3. FAILURE TO PROVE CONTRACTUAL RELATIONSHIP
   

9. Mr Meten submitted that even though Mr Malai did not attend the hearing before the District Court the respondents still had to prove their case. They had to provide evidence capable of satisfying the Court of the existence of a cause of action. Mr Akuani countered by pointing to the fact that the trial Magistrate had before him two bodies of evidence. The respondents each filed an affidavit deposing that Mr Malai appointed them to his campaign committee and promised to pay them K10,000.00 each and they campaigned for him, and this resulted in him being elected to Parliament and he refused to pay them despite numerous demands. The respondents also gave oral testimony.

10. I have considered the affidavit evidence that was before the District Court but it is very vague. As to the oral testimony it is not clearly recorded in the depositions and his Worship refers to it in general terms only in his written judgments. There are general references only to Mr Malai appointing the respondents to his committee and to him promising to pay them for their assistance and to the respondents campaigning hard for him. I respectfully find that his Worship glossed over the requirement for the respondents to present evidence of the elements of a cause of action. As I suggested when determining ground 2 of the appeal the cause of action that should have been pleaded was breach of contract. Though it was not pleaded its elements could and should still have been proven. The fact that the alleged agreements between Mr Malai and the respondents were made orally in the course of an election campaign does not mean that the agreements were not capable of being enforced (John Vulupindi v John Gideon (2006) N3925). But nor does it mean that there was no requirement to prove the elements of the cause of action.

11. As I pointed out in Veltro Ltd v Steven Liu Huang OS No 478 of 2006, 12.09.06, a contract (a legally enforceable agreement) can be entered into orally or in writing or by a combination of those forms of agreement. Whatever form it takes it must be clearly identifiable. The party seeking to prove its existence must present evidence that resolves issues such as: Who are the parties to the contract? When did it come into existence? What words were used to bring it into existence? Where was it entered into? What are its terms?

12. I find that there was insufficient evidence before the District Court for the learned trial Magistrate to be satisfied on the balance of probabilities of the existence of any of the contracts, let alone what their terms were or how they were breached. The third ground of appeal is upheld.

CONCLUSION

13. Two grounds of appeal have been dismissed. Only one has been upheld but it is sufficient to sustain the appeals. I am satisfied that his Worship erred in law by not ensuring that the respondents proved the elements of a cause of action in breach of contract. This gave rise to a substantial miscarriage of justice and warrants all orders of the District Court being quashed and the cases being remitted to the District Court for rehearing under Sections 230(1)(c) and (d) of the District Courts Act. I will order that the parties bear their own costs as Mr Malai, though winning the appeals, was the author of his own misfortune by not taking the District Court proceedings seriously.

ORDER

(1) The appeals are allowed.

(2) The orders of the Madang District Court of 30 September and 6 October 2010, the subject of these appeals, are quashed.

(3) The cases are remitted to the Madang District Court for rehearing.

(4) The parties shall bear their own costs of the appeals.

______________________________________________

Meten Lawyers: Lawyers for the Appellant
William Akuani Lawyers: Lawyers for the Respondents