Pacific Energy Aviation (PNG) Ltd v PNG Air Ltd [2020] PGNC 28; N8196 (19 February 2020)

N8196

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 1574 of 2018 (COMM)

BETWEEN:
PACIFIC ENERGY AVIATION (PNG) LIMITED
Plaintiff

AND:
PNG AIR LIMITED
Defendant

Waigani: Anis J
2020: 14^th & 19^th February

NOTICE OF MOTION – Order 1 Rule 15 – National Court Rules – seeking extension of time to file affidavits outside the period as ordered by the Court – Court’s power – discretionary – exercise of discretion – whether reasons provided reasonable or valid – other requirements discussed

Cases Cited:

Arman Larmer Surveys v. Chan Consolidated Ltd (2013) SC1253
Coecon Ltd v. Westpac Bank Ltd (2012) N4926

Counsel:

Mr E Asigau, for the Plaintiff/Respondent
Mr B Sinen, for the Defendant/Applicant

RULING

19^th February, 2020

1. ANIS J: On 14 February 2020, the defendant applied to this Court for orders that it be granted permission to file an affidavit outside of the time that had been ordered by the Court on 18 November 2019. The application was contested. I reserved my ruling to today at 1:30pm.

2. This is my ruling.

BACKGROUND

3. The plaintiff is suing the defendant for the return of its money. It claims a liquidated sum of K750,000 (money) plus interest and cost. This is how the dispute arose. On 19 January 2018, the plaintiff deposited the money with the defendant. This was after the parties had entered into a Share Purchase Agreement (SPA) on 9 January 2018. The deposit was made as per a term of the SPA. Under the SPA, the plaintiff agreed to purchase all the shares in a company which is owned by the defendant. That company is called PNG Ground Services Limited. The parties also agreed in the SPA that before completion of the sale and purchase of the shares as per the SPA, that the parties would execute a Fuel Supply Agreement (FSA). The parties agreed that they would execute the FSA on a mutual date to be set after 150 days from the date of execution of the SPA. The 150 days lapsed and the FSA was not signed. On 20 June 2018, the plaintiff wrote to the defendant and terminated the agreement. The plaintiff also requested payment of the money. The defendant refused to pay the money, so the plaintiff files this proceeding.

4. The defendant denies the claim in its defence. It says, amongst other things, that by the plaintiff’s letter of 20 June 2018, the plaintiff has forfeited the money.

MOTION

5. As stated, the defendant is seeking extension of time to file one of its affidavit. The main relief in its notice of motion (motion) reads:

1. Pursuant to Order 1 Rule 15(1),(2) and Order 12 Rule 1 of the National Court Rules 1983 (as amended), leave be granted to the Defendant for an extension of time to file its affidavits within 14 days.

6. The parties do not contest the source of the motion.

ISSUES

7. The issues are as follows, (i), whether the ‘defect’ shown at relief 1 is fatal and whether it makes the relief sought void, (ii), whether the defendant applied promptly without delay, (iii), whether the defendant has provided a reasonable explanation as to why it had not complied with the Court direction, and (iv), whether the plaintiff is prejudiced by the delay.

COURT DIRECTION

8. Consent directions were made by this Court on 18 November 2019. Of concern is term 2, which reads and I quote, The defendant to file and serve the affidavit materials it wishes to rely on at trial by or before 24 January 2020.

COMMON GROUND

9. These facts are not disputed. The defendant did not file and serve its affidavit on the plaintiff on 24 January 2020. On 23 January 2020, the defendant requested the plaintiff to agree for an extension of time to file its affidavit out of time. The plaintiff declined the request. On 4 February 2020, the defendant filed this motion.

LAW

10. The Court’s power to grant or refuse the motion is discretionary. But of course or as always, exercise of this discretion must be applied following the law or that it must be based upon sound reasoning or the requirements that have been established by the case law.

11. Let me begin by considering Order 1 Rule 15(1) and (2) of the National Court Rules. It reads, and I quote:

15. Extension and abridgment. (2/3)

(1) The Court may, on terms, by order extend or abridge any time fixed by the Rules or by any judgment or order.

(2) The Court may extend time under Sub-rule (1) as well after as before the time expires or by any judgment or order.

12. Justice Sawong in the case Coecon Ltd v. Westpac Bank Ltd (2012) N4926, stated his view in regard to Order 1 Rule 15. Paragraph 15 of his judgment reads, and I quote:

15. Without having to discuss these provisions in any great detail, it is clear that these are general discretionary powers given to the court to help deal with matters before it. These rules are general in that they do not relate directly to applications for cross claims. Sub Rule (1) and (2) give the Court general power to extend the time either before or after the time stipulated expires or before it expires. Such an application for extension of time must be by way of Notice of Motion and supported by an affidavit.

13. I would adopt these as my own herein. I will add these. There are various considerations the Court may take into account, and I note that some have been covered in the written submissions of the parties. The considerations may, for example, be similar to an applicant who is applying to set aside a judgment that is regularly entered. See case: Arman Larmer Surveys v. Chan Consolidated Ltd (2013) SC1253. In my view, the relevant considerations for this type of application would be as follows, (i), whether the applicant has applied promptly, (ii), whether the applicant had sought an extension by consent, (iii), whether the applicant has provided a good explanation for not complying with the directional order, and (iv), whether there was any serious prejudice caused to such an extent that any further filing of affidavits should be refused.

CONSIDERATION

14. The first issue is preliminary in nature. The plaintiff contends that because the defendant did not add the word “serve” but rather only included the word “file” in the first relief of the motion, it means that the motion is defective and cannot be cured. In other words, the plaintiff is saying that even if the Court were to grant term 1 of the relief, the extension order would not reflect fully on what had been originally ordered under term 2 of the Directional Orders of 18 November 2019. The defendant submits, amongst others, that the relief was sufficiently pleaded.

15. To me, I find the plaintiff’s argument, with respect, as being ‘too technical’. This Court has powers which can cure such minor omissions. And if I may add, that the main relief sought by the motion is to seek extension of time. If the Court is minded to grant the extension, then editions or additional orders that may follow would be regarded as consequential. The other party or the parties generally may also ask for other orders to adjust to or to give full effect to the previous orders that have been made. I therefore reject the plaintiff’s preliminary argument.

16. The next issue is promptness of the application. So the due date for compliance was on 24 January 2020. The defendant did not file its affidavit on that day. The motion was filed on 4 February 2020. If I compute time from the due date, there would be a delay period of 11 days. If I compute time starting from when the Court officially opened this year, which was on 3 February 2020, the delay period would be 1 day. Either way, in my view, I do not find that there has been undue delay in applying to the Court.

17. The next issue or question is this. Did the defendant attempt to seek an extension of time with the plaintiff? I would not regard this as a mandatory consideration but rather optional, and perhaps as evidence, if established, of genuineness on the part of the defendant or an applicant for that matter. In the present case, the fact that the defendant did try to seek an extension of time from the plaintiff is not disputed. It is also deposed at paragraphs 13 and 14 to the affidavit of Paul Abbot, that is, the one filed on 4 February 2020. Such a requirement, though not mandatory as stated above, is good practice and should be exhausted, in my view, before coming to the Court to seek an extension of time. It is of course provided under Order 1 Rule 15 (3) of the National Court Rules. It states and I quote, The period within which a person is required by these Rules or by any order to serve, file or amend any pleading may be extended by consent without an order for extension.

18. Let me now deal with the next issue. Did the defendant provide a good explanation for not filing its affidavit by 24 January 2020? I have considered the submissions made by the parties on this matter. Let me refer to the reasons. They are contained in the affidavit of Mr Abbot. In summary, this was his explanation for the delay. He said that after he had received the plaintiff’s affidavit, he forwarded it to a third person because the intended witness Jaydip Sangupta was not available at that time. He said Mr Sangupta had taken his recreational leave. On 23 January 2020, that is, a day before the deadline, a draft was forwarded to Mr Sangupta. It was not stated in the affidavit when Mr Sangupta had returned from his recreational leave. Mr Sangupta said that he needed time to verify the facts that have been drafted in his draft affidavit. It then became clear to the defendant that more time would be required. Request was then made to the plaintiff on 23 January 2020 which, as stated above, was denied. The defendant then applied to this Court.

19. I have considered the reasons. In my view, I do not find the reasons totally convincing. Firstly, I acknowledge the part where it is stated that Mr Sangupta was not available because he was away on leave. But Mr Abbot did not state the date when Mr Sangupta had resumed work. And I also note the fact that the final draft of the affidavit was forwarded by the defendant’s lawyers on 21 January 2020, that is, 3 days before the due date for its filing and service. The second reason why I find the explanation not very convincing is this. I agree with the plaintiff’s submission that the directional orders had been consented to. As such, the defendants should have or ought to have contemplated the timing beforehand, that is, before agreeing to the timing which was then endorsed by the Court on 18 November 2019.

20. The final issue is this, whether the plaintiff was or is prejudiced by the delay. I find some form of prejudice caused to the plaintiff by the inaction of the defendant in complying with the Court Directions of 18 November 2019.

21. However, I am of the view that the prejudice caused are not serious given what I would term as reasonable actions that had been taken by the defendant to try to minimize such risk. I make particular mention of the fact that the defendant had tried to obtain the plaintiff’s consent to file its affidavit outside the required time as ordered by the Court. Such an option is available under Order 1 Rule 15(3) of the National Court Rules. The defendant in this case had exhausted that option before it filed this motion. I also note that the Court may consider an award of cost as a measure to relieve the plaintiff of any inconveniences that may have been caused.

SUMMARY

22. Based on my findings on the 4 issues, I must say that I am satisfied that the defendant has slightly passed the requirements on the balance of probabilities, and I also find that this is a case where I should exercise my discretion and grant the application.

COST

23. Awarding cost in this matter is discretionary. I will award cost of the motion in favour of the plaintiff. I find that the plaintiff is being forced to protest against the defendant’s motion because of the defendant’s own conduct.

24. Cost will be awarded on a party/party basis which may be taxed if not agreed.

REMARK

25. Let me make this remark. I would not have exercised my discretion and allowed the defendant to file its affidavit had the orders concerned also included a trial date. I would have found that to have serious consequences against the defendant. In my view, if a matter has been set down for trial then the Court should protect its process and ensure that the trial is not hindered. However, that is not the case here. I note that no trial date has been set; the matter had been set down and had returned for directions on 10 February 2020.

ORDERS OF THE COURT

26. I make the following orders

1. Leave is granted to the defendant and time is extended for it to file and serve its affidavit within 14 days from the date of this order.
   
2. The defendant shall pay the plaintiff’s cost of this application on a party/party basis which may be taxed if not agreed.
   
3. Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly
________________________________________________________________

Pacific Legal Group: Lawyers for the Plaintiff
Leahy Lewin Lowing Sullivan Lawyers: Lawyers for the Defendant