Rumbam Engineers Ltd v Hiri 152 Developments Ltd [2020] PGNC 208; N8447 (11 August 2020)

N8447

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (COMM) NO. 392 OF 2018 (2)

BETWEEN
RUMBAM ENGINEERS LIMITED
First Plaintiff

AND
PERELO & ASSOCIATES CONTRACTORS
Second Plaintiff

AND
HIRI 152 DEVELOPMENTS LTD
First Defendant

AND
PAPA RESOURCE DEVELOPMENTS LTD
Second Defendant

AND
BURIA REAREA CAUTION BAY LTD
Third Defendant

AND
BOERA ENTERPRISES LTD
Fourth Defendant

AND
POREBADA INVESTMENTS LTD
Fifth Defendant

Waigani: Anis J
2020: 15^th June & 11^th August

NOTICE OF MOTION – application for summary judgment – Order 12 Rule 38(1) – National Court Rules – leave granted, and application heard ex-parte – requirements for grant of summary judgment discussed – judgment based on admission - Order 9 Rule 30(1) – National Court Rules – whether there was evidence of admission – considerations – whether valid cause of action disclosed – whether pleadings support valid cause of action – exercise of discretion

Cases Cited:

Davidwestern Advertising Group Ltd v. Hiri 152 Developments Ltd and Ors (2019) N7952
Christopher Smith v. Ruma Construction Ltd (2000) N1982
Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stag, The State & Ors (2006) N3050
Dobiam Kope v. Tourism PNG Limited (2006) N3175
Imawe Bogasi Land Group Inc -v- Bank South Pacific Limited and Toale Hongiri ILG & Ors (2011) SC1102
Chief Collector of Taxes -v- TA Field Pty Limited [1975] PNGLR 144
Severinus Ampaoi v. Bougainville Copper Ltd (2012) SC1166

Counsel:

Mr S Kil, for the Plaintiffs
Nil appearances by the defendants

RULING

11^th August 2020

1. ANIS J: The plaintiffs applied for summary judgment by their notice of motion filed on 3 October 2019 (NoM). I reserved my ruling to a date to be advised.

2. I rule on it now.

BACKGROUND

3. These are claims that are based on invoices for services alleged to have been rendered under various contracts in 2012. This proceeding is related to proceedings WS 1075 of 2018 Davidwestern Advertising Group Ltd v. Hiri 152 Developments Ltd and Ors (proceeding WS 1075 of 2018). Proceeding WS 1075 is also pending before the National Court. The company Davidwestern Advertising Group Ltd (principal contractor) was the principal contractor. Various developments had been undertaken at various Hiri villages or areas in the Central Province. The principal contractor and others had been engaged by the defendants to carry out various civil works including engineering, construction, road grading and sealing to and from the various Hiri villages within the Liquefied Natural Gas (LNG) impact areas in the Central Province. In turn, the principal contractor had engaged sub-contractors which included the plaintiffs in this proceeding, to carry out work.

4. In this proceeding, the 1^st plaintiff claims that in 2012, the defendants had directly engaged it and the principal contractor, to perform the works as described above. The 2^nd plaintiff on the other hand claims that he had been engaged by the principal contractor and the defendants to carry out similar works.

5. Work appeared to have been performed by the principal contractor and the sub-contractors including the plaintiffs. Monies appeared to have been owed by the defendants to the principal contractor and the plaintiffs. So in 2014, the principal contractor and the plaintiffs commenced proceeding described as WS 654 of 2014 Davidwestern Advertising Group Ltd, Rumbam Engineers Ltd and Ors v. Hiri 152 Developments Ltd and Ors (WS 654 of 2014) against the defendants herein and the Central Provincial Government. They had alleged that despite the work that they had undertaken as agreed to under the various pleaded contracts in their pleadings, the defendants and the Central Provincial Government, had failed to settle their claims or invoices that had been submitted. They claimed a total sum of K9, 122,101.40 against the defendants in the said proceeding. Later and after some negotiations, proceeding WS 654 of 2014 was discontinued. A consent order and a deed of settlement and release were signed between the parties. And from these, a sum of K4,500,000 was agreed to by the parties and was paid out by the Central Provincial Government, to the principal contractor to be distributed to the sub-contractors which included the plaintiffs herein.

6. The plaintiffs herein commenced this new proceeding. They allege that despite the deed of settlement and release, the consent orders that had been entered, and the payment of K4.5 million in proceeding WS 654 of 2014, the defendants still owe them monies.

MOTION

7. The main relief sought in the NoM reads:

Pursuant to Order 12 Rule 38(1) and Order 9 Rule 30(1) of the National Court Rules, Summary Judgment be entered against the first, second, third, fourth and fifth defendants, for damages to be assessed.

ISSUES

8. The main issues are, (i), whether summary judgment should be entered in favour of the plaintiffs, and (ii), whether judgment should be entered based on admissions.

SOURCES

9. Order 12 Rule 38(1) & (2) and Order 9 Rule 30(1), of the National Court Rules (NCR) read:

38. Summary judgement. (13/2)

(1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff-

(a) there is evidence of the facts on which the claim or part is based; and

(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,

the Court may, by order, direct the entry of such judgement for the plaintiff on that claim or part, as the nature of the case requires.

(2) Without limiting Sub-rule (1), the Court may under that Sub-rule direct the entry of judgement for the plaintiff for damages to be assessed.

......

30. Judgement on admissions. (18/3)

(1) Where admissions are made by a party, whether by his pleading or otherwise, the Court may, on the application of any other party, direct the entry of any judgement or make any order to which the applicant is entitled on the admissions.

10. The requirements before National Court may grant summary judgment in a matter is settled in the case law. I need not refer to them all here. In Christopher Smith v. Ruma Construction Ltd (2000) N1982 for example, the Court states the requirements as follows:

1. The applicant must verify by affidavit evidence the cause of action.

2. The applicant must swear to a belief on his part that the respondent (defendant) has no defence to the cause of action (or the pleadings).

11. What this means is that there must be no serious issues of law and fact raised either in the pleadings or evidence. Summary judgment must only be granted in the clearest of cases. See cases: Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stag, The State & Ors (2006) N3050; Dobiam Kope v. Tourism PNG Limited (2006) N3175; Imawe Bogasi Land Group Inc -v- Bank South Pacific Limited and Toale Hongiri ILG & Ors (2011) SC1102 and Chief Collector of Taxes -v- TA Field Pty Limited [1975] PNGLR 144.

12. As for judgment based on admissions, the Supreme Court in Severinus Ampaoi v. Bougainville Copper Ltd (2012) SC1166, held amongst others, the following:

2. According to O 9, r 30(1) of the National Court Rules, judgment may be entered against a party where admissions are made by the party in his pleadings or otherwise. The phrase “otherwise” covers other circumstances where admissions are made by the party such as affidavits, letters or answers to interrogatories. Alfred Alan Daniel -v- Pak Domoi Ltd (2009) SC970, John Kul -v- The State (2010) N3898 and TNA Limited -v- Paul Kua & Kongo Coffee Limited (2011) N4225 referred to. (per Makail, J).

3. For judgment by admissions to be granted, an applicant must show a clear and unanswerable case or the admissions must be strong and unambiguous. Alfred Alan Daniel -v- Pak Domoi Ltd (2009) SC970, Imawe Bogasi Land Group Inc -v- Bank South Pacific Limited and Toale Hongiri ILG & Ors (2011) SC1102, TNA Limited -v- Paul Kua & Kongo Coffee Limited (2011) N4225 and Dep International Private Limited -v- Ambogo Sawmill Pty Limited [1987] PNGLR 117 referred to. (per Makail, J).

CONSIDERATION

13. The best place to begin would be to consider the pleadings, namely, the Amended Statement of Claim filed on 26 July 2019 (ASoC). I have considered the pleadings in the ASoC. The ASoC appears to plead the background of how the various contracts had been entered into in 2012 or earlier. It also pleads facts relating to proceeding WS 654 of 2014, the consent orders and the deed that was signed between the parties in 2015, and for the release and payment of the K4.5 million by the Central Provincial Government to the parties including the plaintiffs here.

14. Of crucial importance for this purpose, in my view, are paragraphs 25 and 26 of the ASoC. They read:

25. Consequently, the Central Provincial Government (Sixth Defendant herein) paid K4.5 million to Kubak Lawyers trust account as part settlement of the Plaintiffs’ claim. Davidwestern Advertising Group Limited kept all the money for itself and distributed the funds, without giving any share to the Plaintiff herein.

26. Hence, the Plaintiffs’ initial invoices of K1,998,592.00 and K1,760,000.00, respectively, remains unsettled to date by the Defendants.

15. Term 4 of the Consent Order of 12 June 2015 is pleaded at paragraph 24 of the ASoC. It reads:

4. The Plaintiffs are at liberty, either jointly or severally, to pursue any outstanding part of their respective claims that they may have against the First, Second, Third, Fourth and Fifth Defendants as arising from a contractual arrangement entered directly between the Plaintiffs and the Defendants.
   

16. Based on these pleadings, namely, the ASoC, I make the following observations. Firstly, the ASoC indicates that the plaintiffs’ invoices were meant to be covered by the K4.5 million payment. The plaintiffs also plead that the principal contractor did not pay them out of the K4.5 million that was paid by the Central Provincial Government. To me, this suggests that moneys for work incurred by the plaintiffs may have been fully settled by the payment of the K4.5 million and pursuant to the deed that was executed between the parties for the said payment, in 2015. It also suggests that perhaps the plaintiffs may have a cause of action against the principal contractor and not the defendants; that to seek payment again from the defendants may be regarded as trying to receive double payment. My second observation is this. If the plaintiffs are to argue that these payments were based on contracts that were separate or outside those where based upon which the K4.5 million had been paid, then I observe that they are not clearly pleaded in the ASoC. The ASoC, as it is, appears broad and vague in the sense that no distinction is made for work and invoices issued that may be regarded as different to those work and invoices that had been pleaded in proceeding WS 654 of 2014 where payment has been received. My third observation is this. It appears that this Court may have to properly observe the terms of the consent order and interpret the terms of the deed of settlement. All these may be appropriately dealt with at the trial proper, most likely together with proceeding WS 1075 of 2018. With that, I am of the view and I will make consequential orders, or orders for the administration of these matters. Hearing them apart and on a piece meal basis should, in my view, be avoided. They must also progress to trial without further delay.

17. In my view, the reasons I give above are sufficient to decline the relief, particularly on the basis that (i), the cause of action may not be valid, and (ii), the pleading or the ASoC appears ambiguous. Therefore, it would by unjust and wrong in law if I am to simply ignore these considerations and sign summary judgment.

18 I therefore decline summary judgment that is sought under Order 12 Rule 38(1) & (2) of the NCR. Let me proceed to address the second issue.

19. Regarding the plaintiffs’ claim concerning admission, I have considered the evidence and submissions by counsel. I will say this. There is no clear evidence of admissions by the defendants. Again, if the pleading appears to be in disarray or is ambiguous, then how can one know for sure what someone may be admitting to? I also note that I have already found above that the ASoC does not appear to constitute a valid cause of action. The argument therefore shall fail for these reasons.

20. But assuming that I may be wrong, let me consider the evidence. The plaintiffs rely on a petition dated 1 August 2016 and a letter by T M Rei Lawyers dated 7 November 2016, to argue that consents have been given by the defendants to settle the outstanding invoices after 2015 and after the payment of the K4.5 million. The evidence is contained at annexures C and D to the affidavit of Bamake Rumbam filed on 1 October 2019. I have considered them, and I will say this. The 2 documents do not constitute express admissions by the defendants. One thing in common from the 2 documents is this. They tend to say that the plaintiffs were not paid out from the K4.5 million that had been paid by the Central Provincial Government in proceedings WS 654 of 2014. If that were the case, then like I have stated above in my decision, it is arguable whether the plaintiffs are attempting to receive double payment with this proceeding or whether the 2 invoices pleaded in the present proceedings relate to separate work based on contracts not covered in proceedings WS 654 of 2014. The terms of the consent orders may need to be considered as well as terms of the deed of settlement. Again, it goes on to say that the matter should be properly trialed.

SUMMARY

21. In summary, I will dismiss the plaintiffs’ notice of motion for summary judgment. I will also make orders for this proceeding to be consolidated with proceedings WS 1075 of 2018 Davidwestern Advertising Group Ltd v. Hiri 152 Developments Ltd and Ors.

COST

22. Cost award is discretionary. The motion is not contested so I will not make any order on cost.

THE ORDERS OF THE COURT

23. I will make the following orders:

1. The plaintiffs’ notice of motion for summary judgment is dismissed.
2. This proceeding shall now be consolidated with (i.e., to be dealt jointly with) proceeding WS 1075 of 2018 Davidwestern Advertising Group Ltd v. Hiri 152 Developments Ltd and Ors.
3. Time for entry of these orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith.
   

The Court orders accordingly.
_______________________________________________________________
Yansion Lawyers: Lawyers for the Plaintiffs