Nivani Ltd v Independent State of Papua New Guinea [2020] PGNC 438; N8562 (7 October 2020)

N8562

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 76 OF 2018

BETWEEN:
NIVANI LIMITED
Plaintiff

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Defendant

Kokopo: Suelip AJ
2020: 21^st August & 7^th October

CIVIL - Practice and procedure - plaintiff's application for summary judgment- Order 12 Rule 38(1)(a)(b) of the National Court Rules is express and unambiguous - applicant required to prove two elements - applicant must show there is evidence of the facts proving the essential elements of the claim; and the plaintiff or some responsible person gives evidence that in his belief there is no defence - plaintiff proved first element only - application for summary judgment refused - parties pay own costs

Papua New Guinea Cases

Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112
Curtain Bros (Qld) Ltd & Anor v. The State [1993] PNGLR 285
Christopher Smith v. Ruma Construction Ltd (2000) N1982
Jacob Simbuken v. Neville Egari & The State (2009) N3824

References

Wrongs (Miscellaneous) Provisions Act National Court Rules Ch No. 38

Counsel

Grace Kerue Norum, for the Plaintiff Elsie Takoboy, for the Defendant

RULING
7^th October, 2020
1. SUELIP AJ: I have a notice of motion filed on 17 July 2020 by the

plaintiff seeking 2 orders:

(i) Pursuant to order 12 Rule 38(J)(a) & (b) of the National Court Rules that summary judgment be entered against the defendant in favor of the plaintiff.

(ii) That the defendant pays the plaintiff's cost of and incidental to

these proceedings on an indemnity basis to be taxed if not agreed.

2. Both parties filed submissions and I heard arguments on 21 August 2020. I then reserved my ruling. This is now my ruling.

Facts
3. The plaintiff is a civil engineering construction company based in

Kokopo, East New Britain Province and has its branch in Kimbe. It engages in road and building construction and other related works. The plaintiff's claim is for outstanding payment for goods and services supplied on credit by the plaintiff to the Department of Works, Kimbe, an implementing agency of the defendant.

4. On 20 February 2018, the plaintiff served the Writ of Summons filed 15 February 2018. On 6 July 2018, the Court granted leave to the defendant to file its Defence out of time. Unhappy with this ruling, the plaintiff filed an application for Leave to Appeal in SCA 12 7 of 2018 to appeal the interlocutory decision.

5. Leave to appeal was granted on 20 June 2019 by the Supreme Court and
the substantive matter was heard on 25 May 2020.
6. On 28 May 2020, the Supreme Court handed down its decision and
upheld the appeal. It quashed the trial judge's decision in granting of leave to the defendants to file a Defence out of time and struck out the defendant's Defence. It then ordered the matter to be revived in the National Court in Kokopo and progressed to trial.
7. The plaintiff is now seeking summary judgement.

Issue

8. Whether summary judgment should be granted to the defendant?
The law
9. Order 12 Rule 38(1)(a)(b) of the National Court Rules is set out in the
following terms:
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.

10. The principles of summary judgment is well settled in this jurisdiction by the Supreme Court cases in Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112 and followed in Curtain Bros (Qld) Ltd & Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285.

11. In these two cases at pages 7 and 8 respectively, the Supreme Court, said:

"There are two elements involved in this rule:

(a) Evidence of the facts proving the essential elements of the claim; and
(b) That the plaintiff or some responsible person gives evidence that in his belief there is no defence.

As to the second element, the plaintiff must show in absence of any defence or evidence from the defendant that in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that, upon the facts and/or the law, the defendant has no defence. The plaintiff will not be entitled to summary judgement if there is a serious conflict on questions of fact or law."

12. These elements (my underline) are express and unambiguous.
13. In Christopher Smith v. Ruma Construction Ltd (2000) N1982, His Honor, Justice Sakora records the test to be applied in summary judgment applications pursuant to Order 12 Rule 38 (1) National Court Rules 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).

If the Court has been satisfied in respect of (1) and (2), then the onus is on the respondent to:

3. show an arguable defence or that there is a real question to be tried."

14. These elements must be proven for the Court to exercise its discretion to grant the applicant's application for summary judgment.

Plaintiff's arguments

15. As regards the first element of the rule, the plaintiff says that the evidence of the facts proving the essential elements of the claim are pleaded in the Writ

of Summons.

16. As regards the second element, the plaintiff relies on the affidavits of:-

(i) Christopher Edward Stein sworn on 2 July 2018 and filed 3 July 2018.

(ii) David John Stein sworn 9 July 2020 and filed 10 July 2020.

17. Briefly, the first affidavit deposes of the history of the claim from the time the Department of Works in Kokopo had requested the plaintiff to perform emergency road works at Ivule and Buluma in the West New Britain Province during the rainy seasons between March 2014 and 15 October 2015. Mr Edward Stein says some payments were made however, the plaintiffs claim of K815,836.62 remains outstanding.

18. The second affidavit gives an account of what happened after leave was granted to the State to file their Defence out of time and the appeal lodged thereafter by the plaintiff, which appeal was successful. The plaintiff contends that in light of the above evidentiary facts produced in the affidavit material, it is a fact that the defendant's defence was struck out and there has been a valid agreement between both parties of which part payments have been made. The plaintiff is only asking for the outstanding payments which the defendant has promised to pay but has failed to pay, to this day.

Defendant's arguments

19. In regards to the first element of the rule, the State says that the plaintiffs Statement of Claim filed on the 15 February 2018 at paragraphs 4 and 5 stipulates that there was a credit agreement between the plaintiff and the defendant for the emergency road works to be carried out by the plaintiff to perform for the defendant on a credit basis. The State says that this alleged credit agreement referred to in the Statement of Claim as "payable by the defendant to the plaintiff for goods and services supplied on credit ... " has terms that have not been specifically pleaded in the Statement of Claim. It is argued by the State that the affidavit evidence produced by the plaintiff in support of this application does not show any evidence of the purported agreement nor terms of that agreement.

20. The State contends that the plaintiff has in fact failed to plead its cause of action against the defendant including the specific and essential elements of its cause of action or claim. The State relied on Jacob Simbuken v. Neville Egari & The State (2009) N3824.

21. As regards the second element of the rule, the State submits that the plaintiff’s affidavit does not demonstrate any real evidence that the defendant does not have a defence. The State says at paragraphs 2 to 7 of Mr Stein's affidavit, it only referred to Supreme Court's decision however, the defendant has filed a cross claim, which has not been struck out by the Supreme Court, which cross claim demonstrates that there are real issues of contention between the parties to be tried.

22. Essentially, the State argues that the application filed by the plaintiff is premature and there is a serious conflict between the facts and law, as the plaintiff has not pleaded its action in law and the elements of its action. The State submits that the plaintiff's claim should be heard along with the cross claim and consequently the plaintiff’s application should not be granted but rather allow the defendant the opportunity to file an appropriate application to have its defence filed.

Consideration

23. For this Court to exercise its discretion to grant the applicant's application for summary judgment, the two elements in Order 12 Rule 38(l)(a)(b) must be proven.

24. In proving these elements in its application for summary judgment, the plaintiff submits that firstly, there is evidence of the facts proving the essential elements of the claim in its Statement of Claim, and secondly, Mr David Stein, a director of the plaintiff gave evidence in his affidavit that the State's defence has been struck out.

25. The plaintiff did not clearly spell out the particulars of its claim during oral submissions, despite my enquiry as what is its claim. Counsel merely stated that her client's claim in its Statement of Claim are "well captured" therein.

26. Hence, I had to carefully peruse through the Statement of Claim to determine whether the particulars of the claim are pleaded as well as the plaintiff claimed. As it is, there are particulars of the claim sufficiently pleaded.

27. As to proving the second element, I also had to carefully peruse both affidavits relied on by the plaintiff to find a statement by either one of the directors saying that in his belief, there is no defence. In the first affidavit by Mr Edward Stein, I find no such statement. In the second affidavit by Mr David Stein, the statements made are in paragraphs 8 and 9 where he says "defendant's defence was struck out" and "State defence has been struck out". There is no statement that says that in his belief, there is no defence. Such statement is vital in this application. Order 12 rule 38(1) is express and unambiguous.

28. As I am not satisfied that the plaintiff has proven the second element of the application, there is no requirement for the State to show an arguable defence or that there is a real question to be tried.

Conclusion

29. In the end, the law on summary judgment is well settled in this jurisdiction. The onus is on the applicant to prove the 2 elements in an application for summary judgment for the Court to exercise its discretion to grant the application. If the Court is satisfied, then the onus shifts to the defendant to show an arguable defence or that there is a real question to be tried.

30. In this matter, the plaintiff proved there are facts and evidence of the claim pleaded in the Statement of Claim. The second element, however, was not proven as neither director stated in his affidavit that it is his belief that there is no defence.

31. I therefore make the following orders:

(i) Summary judgment pursuant to Order 12 Rule 38(1)(a) & (b) of the National Court Rules is refused.

(ii) Parties pay for their own costs of and incidental to this application.
_____________________________________________________________________
Nivani In-house Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyers for the Defendant

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