Fulleborne Extension Business Group (Inc) v Papua New Guinea Forest Authority [2021] PGNC 439; N9212 (13 October 2021)

N9212

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 4 OF 2020

BETWEEN

FULLEBORNE EXTENSION BUSINESS GROUP (INC)

Plaintiff

AND

WS NO.14 OF 2020

ANIA SAWMILL BUSINESS GROUP INC

Plaintiff

AND

WS NO. 20 of 2020

EXTENDEN MENGEN BUSINESS GROUP INC

Plaintiff

AND

PAPUA NEW GUINEA FOREST AUTHORITY

First Defendant

AND

DAIRI VELE as the SECRETARY FOR DEPARTMENT OF TREASURY

Second Defendant

AND

Dr. KEN MENGEN as the SECRETARY FOR THE DEPARTMENT FOR FINANCE

Third Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fourth Defendant

Waigani: Tamade AJ

2021: 23^rd September

PRACTICE AND PROCEDURE – directions hearing - Plaintiff’s made submissions that the Court should act upon the self-executing directional orders of the Court – whether previous directions of the court are self-executing orders - directions of the Court not self-executing neither were they conditional to happen on a future act - Defendants have some explanation of the non-compliance and common sense demands that I look at the merits of the case and the difficulty of the Defendant’s – plaintiffs’ submission to summarily enter judgement for the Plaintiffs in all three matters is refused -State’s application for extension of time to file their Defence be allocated a hearing date and the matter be progressed accordingly.

Cases Cited:

Kalang Advertising Limited v Kuppusamy [2008] PGSC 15; SC924

Baing and The State v PNG Stevedores Pty Ltd and BSP Ltd (2000) SC627)

Lord & Company v Inapero (2014) SC 1624

Counsel:

Mr. Jeffery Abone, for the Plaintiffs

Mr. Kevin Kipongi, for the Defendants

13^th October, 2021

1. TAMADE AJ: This matter came before me for Directions Hearing on 22^nd September 2021 in which Mr Abone of the Plaintiffs in the three related proceedings WS 4 of 2020, WS 14 of 2020, and WS 20 of 2020 made submissions that regarding certain previous directions of the Court in the nature of self-executing orders that because of the non-compliance of the Defendants, Mr. Abone of counsel for the Plaintiff’s made submissions that the Court should act upon the self-executing directional orders of the Court.

2. Mr. Kipongi from the Solicitor General’s Office representing the Defendants however objected to the Plaintiff’s submissions for the Court to act upon the self-executing orders and responded that the State did attempt to comply with the directions of the Court however as the claims are alleging contracts entered into with the State so many years ago, the State was prejudiced to locate copies of these agreements however there were attempts to meet with the Plaintiffs.

3. I enquired into the matter and noted that the Plaintiff’s claims were premised upon a Timber Rights Purchase Agreement which was dated back in 1967 for extraction of logs from the Plaintiff’s land. The Plaintiff alleges that the Defendant’s owed them amounts in excess of K32 million in WS 20 of 2021, an amount in excess of K21 million in WS 4 of 2020 and an amount in excess of K23 million in WS 14 of 2020.

4. As the amounts sought in these three proceedings were in the millions, I directed that parties’ file written submissions in this matter so I can carefully consider the previous orders of the Court, any compliance issues on the part of the Defendants and whether this is a case that warrants the exercise of discretion to act upon any self-executing orders. Parties have filed written submissions, and this is my ruling in relation to previous directions of the Court in the nature of self-executing orders as submitted.

5. It is important therefore to set out the dates of previous directions of the Court when His Honour, The Deputy Chief Justice, Justice Ambeng Kandakasi presided on these matters and made directions on these matters.

6. On 1^st December 2020, the Court made the following orders:

1. This matter is adjourned to return on Thursday 4^th February 2021 at 9:30am or soon thereafter.
2. The parties shall enter into settlement negotiations and have this matter resolved, for which purpose, the Plaintiff shall forward a formal settlement proposal to the Defendants by Wednesday 9^th December 2020, to which the Defendants shall respond by Thursday 17^th December 2020.
3. The parties shall meet in settlement conference by Monday 21^st December 2020 discuss the matters in dispute between them, have those resolved and incorporate the terms if of the settlement into a draft consent order for the Court’s consideration and endorsement, if all is in order.
4. Failing settlement, the parties shall settle upon a Statement of the relevant Facts and Issues for resolution and come ready to address the Court on matters in dispute between them for the Court to consider and issue a binding opinion or refer the matter for resolution by mediation.
5. For the purpose of the Statement referred to in term 4 of these orders, the Plaintiff shall draft and forward the same to the Defendants by Friday 8^th January 2021, to which, the Defendants shall respond by Friday 22^nd January 2021.
6. The Statement referred to in Terms 4 and 5 of these orders shall be in the form of a table having three columns, with the first one containing paragraph numbers, the second stating only the relevant facts chronologically guided by the questions of who said or did what to whom and in what manner and form, when, where, how and the consequences that followed but without stating any arguments, submissions, conclusions, opinions or any law with the final column indicating where appropriate, any disputed fact with a statement of the alternative narrative and concluded immediately below the table with a statement of the issues presented for resolution.
7. For the purpose of any mediation order referred to in term 4 of these orders, the parties shall forward to Kandakasi DCJ’s Associate by Tuesday 22^nd December 2020, a draft consent order with agreements on the mediator to be appointed, all fees payable and the dates for the various steps to be taken including the actual mediation conference dates and for the mediation to commence and conclude during the balance of the month of January 2021.
8. Upon receiving the draft consent orders for mediation under term 7 of these orders, the Court shall consider and issue appropriate Chamber Orders for mediation by Wednesday 23^rd December 2020.
9. The time for entry of these orders is abridged to take place forthwith upon the Court signing these orders.
   

7. On 4^th February 2021, the following directional orders of the Court were made:

1. The matter is adjourned to return on 4^th March 2021 at 9:30am or soon thereafter.
2. The Order of 1^st December 2020 are extended for full compliance well before the return date.
3. For the purpose of settlement negotiation and parties arriving at possible settlement, the Second and Third Defendants together with counsel representing the First and the Fourth Defendants shall personally see to the relevant orders being complied with and in particular shall participate in the settlement discussion and or conferences.
4. The Defendants shall be at liberty to file and serve their Defence by Friday 19^th February 2021.
5. The time for entry of these orders is abridged to take place forthwith upon the Court signing these orders.
   

8. On 4^th August 2021, the Court made the following directions:

1. This matter is adjourned to return on Wednesday 22^nd September 2021 at 9:30am or soon thereafter.
2. All previous orders in so far as they remain outstanding are extended for the party’s full compliance by no later than 30^th August 2021.
3. The Defendants shall take extra and urgent steps to check the records within themselves or the Central Reserve Bank of Australia and communicate their final position on settlement also by 30^th August 2021.
4. For clarity, the provisions of Order 10 Rule 9A (Listing Rules) (15)(2) of the National Court Rules and all previous self-executing orders shall apply should the Defendants continue to fail to comply with the previous orders as extended today and these orders.
5. The time for entry of these orders is abridged to take place forthwith upon the Court signing the Orders.
   

9. I make an observation that the Court Orders of 1^st December 2020 and that of 4^th August 2021 are not self-executing in nature. They only gave directions for certain steps to be taken however they did not expressly and or in any way say that non-compliance by the Defendants would render that judgement be entered for the Plaintiff and or words to that effect. The directions of the Court were not self-executing neither were they conditional to happen on a future act.

10. The case of Kalang Advertising Limited v Kuppusamy [2008] PGSC 15; SC924 (31 July 2008) can be differentiated from this matter. In that case, the National Court made conditional orders and the Defendants were given an opportunity to explain non-compliance, their reasons were non satisfactory to the Court and the Court struck out their Defence entering judgement for the Plaintiff in a summary manner. The Supreme Court held that acting on the conditional orders was a proper exercise of judicial discretion. The Court therefore stated in the Kalang case that:

This means that the Listings Judge could have, on the day of the directions hearing, 11^th May, made the orders that he actually made on 23^rd May. However, his Honour did not summarily determine the matter on 11^th May. He gave the party that failed to appear, Kalang, a right to be heard, by making a conditional order, i.e. an order the terms of which were conditional upon the happening of some event in the future; the event being their failure to provide the explanation required by the court. The order of 11^th May was not a self-executing order, as it made provision for the exercise of a further judicial function at a later time; the function being the determination of whether Kalang gave a satisfactory explanation. Conditional orders of this nature are a proper exercise of judicial power (Baing and The State v PNG National Stevedores Pty Ltd and BSP Ltd (2000) SC627).

11. In regard to conditional orders of the Court, the Supreme Court said in Baing and The State v PNG Stevedores Pty Ltd and BSP Ltd (2000) SC627) that:

A conditional order, by its very nature, necessitates the exercise of further judicial function of determining whether the condition had been satisfied or not at the specified time.

12. The case of Lord & Company v Inapero (2014) SC 1624, differentiates between the Kalang case where in there was an Affidavit explaining non-compliance in the Lord & Company case.

13. In the Lord & Company Case, the appellants raised the issue that as there were serious allegations of fraud raised in the matter, the National Court ought to have considered this in its’ exercise of its discretion in summarily dealing with the matter. This discussion in the Lord Case by the Supreme Court is set out below:

However, as we have already observed, in this case the claims of the plaintiff/respondent involved serious allegations of fraud. While Order 12 rule 37(b) is not applicable in this case, in our view in considering whether to exercise his discretion to summarily determine the matters before him, a relevant consideration for his Honour to have taken into account was the fact that the statements of claim raised serious allegations of fraud or deceit. We note that this was the view taken by Kariko J in National Fisheries Authority v Tipi [2012] N4836 where his Honour was invited to make a summary determination pursuant to O9 r15(1)(b) National Court Rules in respect of a failure to comply with discovery orders. In that case his Honour said that he ought not summarily determine the matter in circumstances where the claim was based on allegations of fraud, unless the failure has been intentional. As his Honour observed at [11] :

The rationale why a claim should not be summarily determined where it is founded on allegations of fraud is that fraud is a serious allegation and may amount to a criminal offence, so in the interest of justice the claim should be properly tried. For the same reasons, this court has held that default judgement should not be granted where the statement of claim raises serious allegations of fraud and deceit, as the interests of justice require those allegations to be proved by evidence in a trial before judgment is given on the merits; Bala Kitipa v Vincent Auali, Supply and Tenders Board of Western Highlands Provincial Government and Others (1998) N1773.

59. In our view the cautious approach adopted by Kariko J in National Fisheries Authority v Tipi had merit. Certainly this Court has previously cautioned that care needs to be taken in giving default judgment where fraud or deceit are alleged: Lambu v Torato [2008] SC953 at [119], Kunton v Junias and the Independent State of Papua New Guinea (2006) SC929 at [21] and Kewakali v Independent State of Papua New Guinea [2011] SC1091 at [23]. In our view similar principles are applicable in cases involving summary disposal, even those outside the scope of Order 12 Division 4 of the National Court Rules.

14. I am minded to take the approach as in the Lord & Company case and not particularly to matters of fraud looking at the pleadings in the Statement of Claims, the Plaintiff’s claims are in the millions over agreements entered into in 1960’s and claims essentially against the State. The Court must be slow in coming to judgement in the interest of justice in this case where the pleadings raise issues of time limitations and where the sum sought is exorbitant.

15. The orders of the Court made on 4^th August 2021 refer to Order 10, Rule 9(A) (15)(2) of the Listing Rules should there be non-compliance of the previous orders. This gives the Court a discretion to either summarily determine the matter due to non-compliance and or otherwise but to my mind, the orders are not ‘self-executing’ so as to be an automatic coming into place of a strike out of a defence and summary judgement where the Court’s hands a bound by the automatic entry of judgement or dismissal. The Orders of the Court are therefore not self-executing to warrant automatic dismissal. To my mind, the previous directions of the Court only point me to the discretion to be exercised in the Listing Rules, a further time for judicial consideration in the rules to consider whether to exercise that discretion or not.

16. I therefore remind myself that my hands are not tied or bound to confirm any self-executing orders as there were none, I am only directed to consider Order 10, Rule 9(A) (15)(2) of the Listing Rules as to whether to summarily determine the matter as to non-compliance.

17. I now turn to the State’s reasons for not adhering to previous directions of the Court.

18. Mr. Kipongi of the Solicitor General’s Office states that the State has been having difficulty verifying its records regarding the Plaintiff’s claim. Mr Kipongi states in his Affidavit sworn on 27 September 2021 and filed on 27 September 2021 that the State on 18^th August 2021 wrote to the Plaintiff’s advising of the position of the Department of Treasury and agreeing to meet with the Plaintiffs on 30^th August 2021 in which the Plaintiffs refused in their letter dated 27 August 2021.

19. The Plaintiff’s claim is on an agreement that was entered into in 1967 and claim for investment of funds by the Defendants on behalf of the Plaintiffs span from 1967. These are matters that clearly put the Defendant’s in a dilemma as to retrieving records and or prove the existence of such records. The directional orders of the Court compel the Defendants to discuss out of court settlement however a party can only come to the negotiating table confidently if they have records to verify the claim.

20. The Defendants have some explanation of the non-compliance and common sense demands that I look at the merits of the case and the difficulty the Defendant’s will have in discussing settlement out of Court. Settlement discussions do not happen in vacuums, they should happen with facts and figures, reliable documentation etc.

21. I therefore refuse to summarily enter judgement for the Plaintiffs in all three matters. I will direct that the State’s application for extension of time to file their Defence be allocated a hearing date and the matter be progressed accordingly.

Orders accordingly.
_____________________________________________________________
Parkil Lawyers: Lawyers for the Plaintiffs
Solicitor General’s Office: Lawyers for the Defendants