Pakrah Trading Ltd v Papua New Guinea Electoral Commission [2018] PGNC 314; N7425 (17 July 2018)

N7425

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 357 of 2017

BETWEEN
PAKRAH TRADING LIMITED
Plaintiff

AND
PAPUA NEW GUINEA ELECTORAL COMMISSION
Defendant

Waigani: Dingake J
2018: 17^th May, 21^st June, 17^th July

PRACTICE AND PROCEDURE – Default Judgment – Liquidated demand against the State – held liquidated demand against the State not permissible in terms of Section 12(3) of the Claims By and Against the State Act.

Cases Cited:

Jeffery Balakau v Sir Arnold Amet as the Attorney General and Principal Legal Adviser & Another (2013) N5313;

Counsel:

Mr.Nelson Kopunye, for the Plaintiff.
Mr. John Ole, for the Defendants.

17^th July,2018

1. DINGAKE J: This is an application for default judgment. The plaintiff seeks, inter alia, an order that the defendant pay the plaintiff the sum of K71,995.00 plus compound interest at the rate of 8% per annum from 28^th June, 2012, to the date of full settlement of the sum of K71,995.00.
2. The Plaintiff also prays that the defendant pay to the plaintiff the sum of K10,000.00 for out of pocket expenses and compound interest at 8% per annum from the date of commencement of the proceedings to the date of full settlement.
3. The plaintiff’s substantive claim relates to the alleged provision of meals for the counting officials and security personnel of the Papua New Guinea Electoral Commission during the counting of the Jiwaka Provincial Seat in the National Elections of 2012, at the request of the Commission.
4. The plaintiff alleges that the defendant has failed or neglected to pay the invoices submitted to it, amounting to K71,995.00.
5. The plaintiff avers that the defendant attempted to pay the out of pocket expenses in the amount of K10,000.00, but the cheque that the defendant issued in the sum of K10,000.00 was dishonoured.
6. It is now trite learning that in determining whether default judgment should be entered, there are at least six (6) factors/conditions the Court should consider.
7. The six factors that the Court should consider are:
   • (i) Whether the Notice of Motion for Default Judgment is in proper form and supported by Affidavit?
   • (ii) Whether the Notice of Motion and Affidavit have been served pursuant to the National Court Rules?
   • (iii) Is the Defendant in default?
   • (iv) Has the Plaintiff given notice/warning of its intention to apply for default judgment?
   • (v) Has the Plaintiff filed an Affidavit confirming the service of the Writ of Summons?
   • (vi) Has the Plaintiff filed an Affidavit proving the default upon which it relies on? eg Affidavit of Search.
8. It is trite learning that even where the above conditions have been met the Court may still refuse to grant default judgment, where it considers it appropriate to do so.
9. The plaintiff’s claim is for a liquidated amount – meaning an ascertainable amount of money (a fixed sum), as per the invoices, save of course for the out of pocket expenses, of which there are no invoices or supporting documentation.
10. In terms of the provisions of Section 12 (3) of the Claims By and Against the State Act, where in a claim against the State, the State is in default, then notwithstanding that the plaintiff’s claim is for a liquidated demand, judgment shall not be entered against it, for the sum claimed, unless the claim relates to a debt only. (Jefferey Balakau v Sir Arnold Amet as the Attorney General and Principal Legal Adviser & Another N5313).
11. The next question that logically follows in this matter is whether the claim relates to a debt only.
12. In my mind, what would transform the amounts in the invoices into a debt is an unequivocal undertaking to pay by the defendants. In this case, there is no such unequivocal undertaking to pay. Consequently, judgment against the state with respect to the liquidated demand is not permissible. In the absence of an unequivocal undertaking to pay the liquidated demand there is no debt owing to the plaintiff. In other words, once the parties agree on the amount due and owing to the plaintiff a debt comes into being.
13. In the circumstances, this Court cannot enter a default judgment with respect to the liquidated amount of K71,995.00 and the accompanying interest. Instead, the Court would enter Judgment in favour of the plaintiff, the damages whereof to be assessed.
14. This leaves this Court to consider the claim of K10,000.00 for out of pocket expenses. There is evidence that the defendant issued a cheque in favour of the plaintiff which was dishonoured. The issuance of a cheque that was dishonoured transformed the liquidated amount of K10,000.00 into a debt. Implicit in the issuance of a cheque is an admission of liability of the out of pocket expenses. However since these are out of pocket expenses, the plaintiff must establish by evidence the precise amount of out of pocket expenses it is entitled to.
15. In the premises, judgment is entered against defendant with respect to liability to pay out of pocket expenses, and the precise damages incurred to be assessed.
16. In all the circumstances of this case, it is ordered that:
    • (i) Entry of default judgment against the defendant with respect to liability is entered against the defendant, damages thereof to be assessed.
    • (ii) Default judgment for out of pocket expenses is entered against the defendant, damages thereof to be assessed.
    • (iii) There is no order as to costs.

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Kopunye Lawyers : Lawyers for the Plaintiff
Kimbu & Associates Lawyers : Lawyers for the Defendants