Matrix Constructions (PNG) Ltd v Air Niugini Ltd [2020] PGNC 72; N8283 (24 April 2020)

N8283

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 89 of 2020 (COMM)

BETWEEN
MATRIX CONSTRUCTIONS (PNG) LIMITED
Plaintiff

AND:
AIR NIUGINI LIMITED
Defendant

Waigani: Anis J
2020: 20^th March & 24^th April

ORIGINATING SUMMONS – Application to set aside Creditor’s Statutory Demand For Payment of Debt – section 338(4)(b) and (c) – Companies Act 1997 – preliminary issue – whether originating summons was filed within 1 month – section 338(2) – Companies Act 1997 discussed – whether originating summons incompetent – whether proceeding should be dismissed

Cases Cited:

Pacific Assurance Group Ltd v. Pacific International Hospital Ltd (2017) N6992

Counsel:

Mr F Kuvi, for the Plaintiff
Mr T Griffiths, for the Defendant

RULING

24^th April, 2020

1. ANIS J: This was a hearing in relation to a preliminary matter that had been raised by the defendant. The originating summons seeks to set aside a statutory demand that was issued by the defendant under section 337 of the Companies Act 1997 (the Companies Act). Upon the return date of the originating summons on 19 March 2020, the defendant argued that the summons was filed and heard outside the mandatory 1 month period as required under section 338(2) of the Companies Act.

2. Parties were then given the opportunity to argue the competency issue first or ahead of the substantive matter. Submissions were made on 20 March 2020. I reserved my ruling to a date to be advised.

3. Parties have been notified so I will rule on it now.

BACKGROUND

4. On 29 January 2020, an arbitrator, who had been appointed under the provisions of the Arbitration Act 1951 (the Arbitration Act) as per an agreement that had been entered into between the parties, made an order for cost in favour of the defendant. The amount set was K70,000. The said sum constituted of the defendant’s fixed cost, that is, in successfully opposing an application that had been made by the plaintiff for security for cost.

5. On 11 February 2020, the defendant issued a Creditor’s Statutory Demand For Payment of Debt (Statutory Notice) under section 337 of the Companies Act, to the plaintiff to settled its cost award of K70,000. This led to the present originating summons. The plaintiff is seeking, in the originating summons, orders to set aside the Statutory Notice.

COMMON GROUND

6. The parties are at common ground on the following facts. First is the Statutory Notice. It was issued and served on the plaintiff on 11 February 2020. Second is the originating summons. It was filed on 12 March 2020. And the third common ground is service of the originating summons on the defendant. It was served on 13 March 2020.

ISSUE

7. The only issue before me is this, whether the originating summons is heard within a month of receipt of the Statutory Notice.

SECTION 338

8. The relevant provision under the Companies Act for this purpose is section 338(1)(2) and (3). It states, and I quote in part:

338. Court may set aside statutory demand.

(1) The Court may, on the application of the company, set aside a statutory demand.

(2) The application shall be made, and served on the creditor, within one month of the date of service of the demand.

(3) No extension of time may be given for making or serving an application to have a statutory demand set aside, but, at the hearing of the application, the Court may extend the time for compliance with the statutory demand.

9. The term “one month” is not defined in the Companies Act. The Interpretations Act Chapter No. 2 defines it under section 3 to mean a calendar month. The Collins Online English Dictionary defines a calendar month as follows, and I quote, A calendar month is the period from a particular date in one month to the same date in the next month, for example from April 4^th to May 4^th.

10. Justice Hartshorn, in the case Pacific Assurance Group Ltd v. Pacific International Hospital Ltd (2017) N6992, has adopted and applied the English case of Dodds v. Walker [1981] 2 All ER 609 at 610. His Honour quoted from Lord Diplock and Lord Russell at paragraphs 9 and 10 of his decision, and I quote:

9. In the House of Lord opinions in Dodds v. Walker [1981] 2 All ER 609 at 610 Lord Diplock said:

“My Lords, reference to a ‘month’ in a statute is to be understood as a calendar month. The Interpretation Act 1978 said so. It is also clear under a rule that has been consistently applied by the courts since Lester v Garland [1808] EngR 326; (1808) 15 Ves 248, [1803-13] All ER Rep 436 that, in calculating the period that has elapsed after the occurrence of the specified event such as the giving of a notice, the day on which the event occurs is excluded from the reckoning. It is equally well established, ....... that when the relevant period is a month or a specified number of months after the giving of a notice the general rule is that the period ends on the corresponding date in the appropriate subsequent month, ie the day of that month that bears the same number as the day of the earlier month on which the notice was given. ......

This simple general rule, which Cockburn CJ in Freeman v Read [1863] EngR 643; (1863) 4 B&S 174 at 184[1863] EngR 643; , 122 ER 425 at 429 described as being ‘in accordance with common usage..... and with the sense of mankind’, works perfectly well without need for any modification so long as there is in the month in which the notice expires a day which bears the same number as the day of the month on which the notice was given. Such was the instant case and such will be every other case except for notices given on the 31st of a 31-day month and expiring in a 30-day month or in February, and notices expiring in February and given on 30th or 29th (except leap years) of any other month of the year. In these exceptional cases, the modification of the corresponding date rule that is called for is also well established: the period given by the notice ends on the last day of the month in which the notice expires.”

10. Also in Dodds v. Walker (supra), Lord Russell of Killowen said at 611:

“....... ordinarily the calculation of a period of a calendar month or calendar months ends on what has been conveniently referred to as the corresponding date. ......... But the application of the corresponding date principle inevitably produces variation in the number of days involved, depending on the date on which a four-month notice is served and the irregular allotment of days to different months. Sometimes it is not possible to apply directly the principle, for instance if a four-month notice is served on 30th October (the time beginning to run at midnight 30th-31st October), there being in February but 28 (or 29) days it is not possible to find a corresponding date in February and plainly a corresponding date cannot be sought in March; the application of the corresponding date principle in such case can only lead to termination of the four-month period at midnight 28th February -1st March (or midnight 29th February – 1st March in a leap year). That is an inevitable outcome.”

11. I will adopt the above herein as my own. In my view, a month should be computed starting from a day in a particular calendar month and ending on its corresponding day on the following month.

FINDINGS

12. So as for the present case, the Statutory Notice was served on the plaintiff on 11 February 2020. The corresponding month would be 11 March 2020. In other words, 11 March 2020 was the final day of the month within which the plaintiff was required to file its originating summons. In this case, the originating summons was filed on 12 March 2020.

13. In my view, the originating summons is therefore filed outside the requirement of section 338(2) of the Companies Act.

SUMMARY

14. In summary, I find the originating summons incompetent. I will therefore dismiss it without proceeding further into its merit.

COST

15. An order for cost is discretionary. I will order cost to follow the event. I will order the plaintiff to pay the defendant’s cost of the proceeding on a party/party basis to be taxed if not agreed.

THE ORDERS OF THE COURT

16. I will make the following orders:

1. The proceeding is dismissed.
   
2. The plaintiff shall pay the defendant’s cost of the proceeding 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.
_______________________________________________________________
Elemi Lawyers: Lawyers Plaintiff
Ashurst PNG Lawyers: Lawyers for the Defendant