Renton Pte Ltd v Pacific Helicopters Ltd [2024] PGNC 255; N10918 (22 July 2024)

N10918

PAPUA NEW GUINEA [IN THE NATIONAL COURT OF JUSTICE] WS NO. 100 OF 2023 BETWEEN: RENTON Pte Ltd Plaintiff/Firs Cross-Defendant V PACIFIC HELICOPTERS LIMITED Defendant/Firs Cross-Claimant/Second Cross-Defendant AND: JAVELIN AVIATION LIMITED Second Cross-Defendant/ Second Cross-Claimant

PAPUA NEW GUINEA [IN THE NATIONAL COURT OF JUSTICE] OS NO. 7 OF 2023 BETWEEN: PACIFIC HELICOPTERS LIMITED Plaintiff V RENTON PTE LTD Defendant

Waigani: Anis J
2023: 4^th December
2024: 22^nd July

WS 100 of 2023 - VARIOUS MOTIONS – Motion for Summary Judgment – Order 12 Rule 38(1) – National Court Rules – 2 motions seeking orders to compel parties to comply with notices to produce documents – Order 9 Rules 9 and 10 – National Court Rules – Consideration and ruling

OS 7 of 2023 – MOTION TO DISMISS AND ORDER FOR LIQUIDATION – s.339(1)(b), s.291(2)(c) and s.339(1)(a) – Companies Act 1997 – consideration and ruling

Cases Cited:
Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112
Smith v. Rumana Constructions Ltd (2000) N1982
Provincial Government of North Solomons v. Pacific Architecture Pty Ltd [1992] PNGLR 145
Rural Development Bank Ltd v. Kuri (2001) N2099
Nivani Limited v. The State (2020) N8562
John Momis and Ors v. Attorney General, NEC and The State [2000] PNGLR 109
Steven Bagari v. James Marape (2018) N7412
PAC–LNG International Ltd v. SPI (208) Ltd (2014) N5681
NCDC v. Yama Security Services Pty Ltd (2003) SC707
William Duma v. Eric Meier (2007) SC898
In the Matter of the Companies Act 1997; In the Matter of Platinum Limited (2019) N8114
In the Matter of the Companies Act 1997; In the Matter of Piunde Limited (2015) N5971

Counsel:
J R Renwick SC with G Geroro, for Renton Pte Ltd & Javelin Aviation Limited
M Goodwin, for the Pacific Helicopters Limited

DECISION

22^nd July, 2024

1. ANIS J: I heard various motions in relation to the 2 related proceedings herein on 4 December 2023. The proceedings are not consolidated; however, their various motions were heard together on the said date. I reserved my ruling thereafter to a date to be advised.

2. This is my ruling.

BACKGROUND

3. This dispute concerns an Aircraft Charter Agreement (the Charter) that was entered between Pacific Helicopters Limited (PHL) and Renton Pte Ltd (Renton) on 15 April 2021. Renton is incorporated in Singapore whilst PHL in Papua New Guinea. The dispute concerns ownership of 6 helicopters and how much money is owed to who, under the Charter.

4. Javelin Aviation Limited (Javelin) was later joined into the dispute by PHL in PHL’s defence and cross-claim. Javelin responded by filing a defence and cross-claim against PHL.

5. In proceeding OS 7 of 2023; Pacific Helicopters Limited v. Renton PTE LTD (OS 7 of 2023), PHL is seeking to set-aside a Creditor’s Statutory Demand for Payment of Debt (Creditor’s Statutory Demand) dated 19 January 2023. The Statutory Demand was issued by Renton under s.338 of the Companies Act 1997 (CA). The sum claimed in the Statutory Demand was K13,817,184.54. In response, Renton filed a notice of motion, which was subsequently amended (OS motion to Dismiss), to have OS 7 of 2023 dismissed. It also sought alternative orders which included liquidating PHL. This motion is before me for ruling.

6. In proceeding WS No. 100 of 2023; Renton Pte Ltd v. Pacific Helicopters Limited (WS 100 of 2023), Renton is suing PHL for breach of the terms of the Charter, that is, in terms of returning the chartered aircrafts as per the terms and conditions of the Charter. Renton also seeks damages that it claims to have suffered. So, 3 notices of motion were filed under this proceeding that sought various relief. The motions also returned before me for hearing on 4 December 2023. Renton and Javelin filed a notice of motion on 10 October 2023 (Motion for Summary Judgment) where they sought summary judgment as their main relief. The remaining 2 motions were filed by PHL and Renton & Javelin, where they sought orders from the Court to enforce their respective notices to produce documents for inspection. PHL’s motion was filed 2 October 2023 (PHL’s motion to order production of documents), and Renton’s & Javelin’s motion was filed 4 October 2023 (R & J’s motion to order production of documents).

7. I will deal first with the Motion for Summary Judgment.

SHOULD SUMMARY JUDGMENT BE ENTERED?

8. The Motion for Summary Judgment seeks the following relief:

1. Pursuant to Order 12 rule 1 and/or Order 12 rule 38(1) and (2) of the National Court Rules judgement be entered in relation to the whole of Renton’s Amended Writ of Summons filed herein on 22 March 2023 with damages to be assessed.
   
2. Pursuant to Order 12 rule 1 and/or Order 12 rule 38(1) and (2) of the National Court Rules judgement be entered in relation to the whole of Javelin’s Second Cross-Claim filed herein on 24 August 2023 with damages to be assessed.
   
3. Pursuant to Order 8 rule 41(2)(e) and/or Order 12 rule 1 and/or Order 12 rule 40(1)(a), (b) and (c) of the National Court Rules the whole of the Cross-Claim filed herein on 3 May 2023 by the Defendant/Cross-Claimant/Second Cross-Claim Defendant (Pacific Helicopters) be dismissed in that the Cross-Claim:
   

(a) discloses no reasonable cause of action.

(b) is frivolous or vexatious.

(c) is an abuse of the process of the Court; and/or

(d) is time-barred pursuant to section 16(1) of the Frauds and Limitations Act 1988 insofar as relates to Aircraft H145 20074 and Aircraft H145 20074.

4. Any further orders or directions that the Court deems fit.
   
5. Pacific Helicopters to pay Renton’s and Javelin’s cost of and incidental to these entire proceedings on a full indemnity basis.
   
6. The time for entry of these orders be abridged to the date of settlement by the Registrar, which shall take place forthwith.
   

9. Order 12 Rule 38(1) is the applicable source in the National Court Rules (NCR) for summary judgment applications. Order 12 Rule 1, on the contrary, is not and so I dismiss it as a relevant source. Rule 38(1) reads:

"(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 judgment for the plaintiff on that claim or part, as the nature of the case requires."

10. The elements for granting summary judgment are derived from Order 12 Rule 38(1). In Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112, the Supreme Court confirmed the 2 main elements as follows:

“There are two elements involved in this rule:

N2>(a) evidence of the facts proving the essential elements of the claim; and

N2>(b) that the plaintiff or some responsible person gives evidence that in his belief there is no defence.

In this case, there is no issue in relation to the first element.

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 judgment if there is a serious conflict on questions of fact or law. Whether a case should go to trial on these issues will be determined on the facts of each case. However, the authorities show that the summary jurisdiction should only be invoked in a clear case; see Chief Collector of Taxes v T A Field Pty Ltd [1975] PNGLR 144.”

11. In Smith v. Ruma Constructions Ltd (2000) N1982, Sakora J stated, which I also adopt herein, as follows:

“All other cases, described in the various terms and phrases used in the foregoing case law, envisage the following steps to be taken:

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.
   

However, this is not a heavy onus, as Dixon J made clear in Dey v. Victorian Railways Commissioners (supra). Indeed, it is clear that a "question to be tried" may be established or demonstrated even though a defendant has "not succeeded in positively establishing a defence": Fancourt v. Merchantile Credits Ltd (1983) HCA 25; (1983-84) 154 CLR 87. But the defendant must produce some evidence of a defence.”

12. But before considering the 2 elements, let me conduct a cursory inquiry on the adduced evidence to see whether the plaintiff’s main supporting evidence is deposed to by a responsible person, and secondly, whether the deponent has expressly stated therein that in his or her belief, there is no defence to the claim (the 2 prerequisites): Provincial Government of North Solomons v. Pacific Architecture Pty Ltd [1992] PNGLR 145, Rural Development Bank Ltd v. Kuri (2001) N2099 and Nivani Limited v. The State (2020) N8562. Only after I am satisfied that Renton & Javelin have met these 2 preliminary matters will I then proceed to consider the full arguments.

13. I note the evidence that have been adduced by the parties. The Motion for Summary Judgment was filed under WS 100 of 2023. The material affidavit filed in support in the said proceeding is the affidavit of Jackson Liskia filed 4 October 2023. I observe that Mr Liskia is a lawyer employed by firm Geroro Lawyers that acts for Renton & Javelin in WS 100 of 2023. Mr Liskia as counsel, in my view, cannot be a responsible person who is capable of giving any evidence on behalf of his clients on substantive matters, like in an application for summary judgment. The responsible person should have been a senior person or representative of Renton or Javelin who has detailed knowledge of the matter, based on his or her employment and responsibilities. In Rural Development Bank Ltd v. Kuri (supra), Kandakasi J, now the Deputy Chief Justice, stated, which I adopt herein, as follows:

Nevertheless, I am not satisfied that the requirements under Order 12 Rule 38 has been met. This is simply because, there is no affidavit from a responsible officer of the Plaintiff company setting out the relevant facts and confirming a belief that the defence filed and served on behalf of the Defendant, can not be sustained. All I have is an affidavit from the Plaintiff’s lawyers. That affidavit does not depose to any facts but makes submissions based on the Defendant’s admission. It is settled law that, affidavits by lawyers based on instructions of their clients are nothing more than evidence of instructions and not facts: see the Supreme Court decision in Provincial Government of North Solomons v. Pacific Architecture Pty Ltd [1992] PNGLR 145 at pages 148-149. It was thus improper for the Plaintiff to apply for summary judgement without first meeting the requirements of the relevant rules. I am therefore, not prepared to order judgement under Order 12 Rule 38 of the NCRs.

14. I also adopt AJ Suelip’s decision in Nivani Limited v. The State (supra) where Her Honour stated at para. 12 and I quote:

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.

15. I find that Renton & Javelin have failed to establish or meet the 2 pre-requisites. They have not adduced evidence from a responsible person that could support the Motion for Summary Judgment. Mr Liskia did not depose that he is a responsible person, and I note that he could not have been a responsible person. Mr Liskia also did not depose that in his belief that there is no defence to the claim. But again, Mr Liskia could not have expressed such a belief on behalf of his clients.

16. Without a proper or valid supporting affidavit, the Motion for Summary Judgment will be dismissed in its entirety. This will also apply to relief 3. I decline to dismiss PHL’s cross-claim at this juncture. I also find insufficient materials and evidence that are adduced in Mr Liskia’s affidavit to assist me follow the submissions of Renton & Javelin.

REQUESTS TO ORDER PRODUCTION OF DOCUMENTS

17. I now tun to the PHL’s and R&J’s motions to order production of documents.

18. In regard to R&J’s motion to order production of documents, they seek this main relief:

“1. Pursuant to Order 9 Rule 10(1)(b) and/or (c) of the National Court Rules and/or Order 9 Rule 12 of the National Court Rules, an order that the Defendant/ Cross-Claimant/ Second Cross-Clain Defendant (Pacific Helicopters) produce for inspection by Renton and Javelin:

(a) all documents, records and reports evidencing the “forensic assessment” referred to at paragraph 7 of the Cross-Claim by Pacific Helicopters filed herein on 3 May 2023; and

(b) all documents, records and reports evidencing the “forensic investigation by Delotte” referred to at paragraph 6 of the affidavit of Mr Edward Matane filed on 28 July 2023 in National Court proceeding OS 200 of 2023,

within 3 days of such order.”

19. Their motion is supported by Mr Liskia’ affidavit of 4 October 2023, that is, the same affidavit that was relied on in the Motion for Summary Judgement. I find Mr Liskia’s deposition of facts therein relevant for this purpose, and as such, I consider and give due regard to it. Mr Liskia is not deposing to any substantive facts, but rather, facts that were within his knowledge concerning discovery of documents.

20. In regard to PHL’s motion to order production of documents, the main relief sought is as follows:

“1. Pursuant to Order 9 and 10 of the National Court Rules, the Second Cross-Defendant, Javelin Aviation Limited, is ordered to comply with the Notice to Second Cross-Defendant to Produce Documents filed 28 August 2023 and served on 30 August 2023, within 7 days of the date of this order.”

21. PHL relies on the affidavit of Daniel Bidar filed 2 October 2023 in support of its motion.

22. I note the submissions of the parties.

23. I make these observations. Both parties gave evidence that they had issued their respective Notice to Produce Documents for inspection on each other. Both parties also gave evidence that their notices had been ignored or not complied with. PHL, through the affidavit of Mr Bidar, states that the documents that PHL had requested Javelin to produce for inspection are directly relevant premised on the filed pleadings of Javelin. In regard to R&J’s motion to order production of documents, Mr Liskia simply states that they had served their clients’ Notice to Produce Documents for inspection, however, to date of swearing his affidavit, PHL has failed to comply.

24. I am minded to grant orders for Production of Documents for inspection. The applications are standard in nature, and parties seeking discovery are entitled under the NCR to seek such orders from the Court if, for example, their notices are not complied with after they have been served and the time for compliance have expired. The only variations I intend to make will be on timing. I will allow 21 days each for the parties to comply. If there are valid reasons for non-compliance, a party should be at liberty to apply separately to the Court whereby the Court will consider the application on its merit and make a separate ruling.

OS 27 of 2023 – MOTION TO DISMISS

25. I now address the OS Motion to Dismiss filed by Renton. It seeks the following main relief:

2. Pursuant to section 339(1)(b) of the Companies Act 1997 and the inherent jurisdiction of the Court under section 155(4) of the Constitution of PNG, an order that the whole of the proceedings herein be dismissed and the Plaintiff be put into liquidation forthwith.
   
3. Pursuant to section 291(2)(c) of the Companies Act 1997 and the inherent jurisdiction of the court under section 155(4) of the Constitution of PNG, an order that Mr Darius Kombe be appointed liquidator of the Plaintiff company forthwith.
   
4. In the alternative to the relief sought in paragraphs (2) and (3) above, pursuant to section 339(1)(a) of the Companies Act 1997, and order that the Plaintiff pay the debt the subject of the Statutory Demand (Form 42) herein within 10 (ten) days of the date of such order, failing which the Defendant shall be at liberty to apply to put the Plaintiff into liquidation.
   

26. The parties rely on various affidavits which were read into the Court’s record.

SECTIONS 338, 339(b)

27. Relevant for this purpose are ss.338 and 339 of the CA. They read:

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.

(4) The Court may grant an application to set aside a statutory demand where it is satisfied that–

(a) there is a substantial dispute whether or not the debt is owing or is due; or

(b) the company appears to have a counterclaim, set-off, or cross-demand and the amount specified in the demand less the amount of the counterclaim, set-off, or cross-demand is less than the prescribed amount; or

(c) the demand ought to be set aside on other grounds.

(5) A demand shall not be set aside by reason only of a defect or irregularity unless the Court considers that substantial injustice would be caused if it were not set aside.

(6) In Subsection (5), “defect” includes an immaterial misstatement of the amount due to the creditor and an immaterial misdescription of the debt referred to in the demand.

(7) An order under this section may be made subject to conditions.

339. ADDITIONAL POWERS OF COURT ON APPLICATION TO SET ASIDE STATUTORY DEMAND.

(1) Where, on the hearing of an application under Section 338, the Court is satisfied that there is a debt due by the company to the creditor that is not the subject of a substantial dispute, or is not subject to a counterclaim, set-off, or cross-demand, the Court may–

(a) order the company to pay the debt within a specified period and that, in default of payment, the creditor may make an application to put the company into liquidation; or

(b) dismiss the application and forthwith make an order under Section 291(3) putting the company into liquidation,

on the grounds that the company is unable to pay its debts as they become due in the ordinary course of business.

(2) For the purposes of the hearing of an application to put the company into liquidation pursuant to an order made under Subsection (1)(a), the company is presumed to be unable to pay its debts as they become due in the ordinary course of business where it failed to pay the debt within the specified period.

GROUNDS RAISED SEEKING DISMISSAL

28. I refer to the submissions of the parties, and in particular, the grounds relied on by Renton. The main grounds may be summarized as follows:

• Renton argues, referring to the clauses in the 4 repayment agreements, that PHL has admitted the debts the subject of this proceeding;
• Renton refers to s.10 of the Frauds and Limitations Act 1988 and states that acknowledgment of a debt binds the person making the acknowledgment, and as such and in this case, PHL, Renton submits, had acknowledged the Debt that is claimed for in the Creditor’s Statutory Demand thus is bound by it;
• Renton refers to clause 2.2 in all the 4 repayment agreements and makes a legal argument that PHL had, by these clauses, waived or abandoned its right to dispute the Creditor’s Statutory Demand.
  

29. I make the following observations on these grounds. First, I note that they are all substantive in nature, and I wonder whether this is the appropriate time for this Court to consider and make a ruling on them, or whether the Court should refrain and address them later at the substantive hearing. I will answer in favour of the latter. In my view, such defence or arguments should be reserved for a hearing proper and not at this preliminary stage. John Momis and Ors v. Attorney General, NEC and The State [2000] PNGLR 109, Steven Bagari v. James Marape (2018) N7412, PAC–LNG International Ltd v. SPI (208) Ltd (2014) N5681, NCDC v. Yama Security Services Pty Ltd (2003) SC707 and William Duma v. Eric Meier (2007) SC898.

30. These case authorities address situations where Courts have, amongst others, ruled that it would be an abuse of court process for parties to seek substantive relief or raise substantive arguments at an interlocutory stage or hearing. Likewise, or in the present case, Renton, in its bid to dismiss the proceeding, is in fact raising matters or issues that are substantive in nature and where it is asking the Court to consider and make determinations on them now rather than at trial. I remind myself that it is PHL who has summoned Renton in OS 7 of 2023 to Court, to hear its reasons why it says the Creditor’s Statutory Demand should be set aside. It should be given that opportunity to raise them at the trial, and Renton should also be given the same opportunity to respond.

31. I am therefore minded to and will dismiss the OS Motion to Dismiss. I find it to be an abuse of the court process for the stated reasons.

OTHER CONSIDERATION

32. The other factor I had considered to dismiss the OS Motion to Dismiss, is this. I do not find that s.339(1)(a) is an appropriate source or jurisdiction where one may invoke to dismiss an application or originating summons that is filed under s.338 of the CA.

33. Section 339 begins in part, and I quote, Where, on the hearing of an application under Section 338, which, to me, means or refers to the substantive hearing of this proceeding, which is the application to set-aside the Creditor’s Statutory Demand. See case: In the Matter of the Companies Act 1997; In the Matter of Platinum Limited (2019) N8114. Renton could have used provisions of the National Court Rules to make such an application: See case: In the Matter of the Companies Act 1997; In the Matter of Piunde Limited (2015) N5971.

34. Section 339 confers additional powers to the National Court in relation to an application that is filed and moved under s.338. In so doing, it also stipulates what additional types of relief the National Court may grant. However, the said power is exercisable only at or after the hearing of an application to set-set-aside a Creditor’s Statutory Demand that is filed under s.338 of the CA. Thus, it is misconceived, in my view, for Renton to invoke s.339 as the source for filing its notice of motion to dismiss PHL’s application that is filed under s.338, and to seek the prescribed additional relief under s.339.

SUMMARY

35. In summary, I dismiss Renton and Javelin’s Motion for Summary Judgment filed in WS 100 of 2023. I also dismiss Renton’s OS Motion to Dismiss filed in OS 7 of 2023. I will order cost to follow the event on both motions.

36. In regard to matters concerning discovery, I grant both PHL’s and R&J’s motions to order production of documents. I will allow each party 21 days to attend to the respective issued notices. I will order costs to follow the event on both motions.

ORDERS OF THE COURT

37. I make the following orders:

WS 100 of 2023

1. Renton Pte Ltd’s and Javelin Aviation Limited’s notice of motion filed 10 October 2023 in WS 100 of 2023 is dismissed.
   
2. Renton Pte Ltd and Javelin Aviation Limited shall pay Pacific Helicopters Limited’s cost for the said motion on a party/party basis to be taxed if not agreed.
   
3. Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.
   

OS 7 of 2023

4. Pacific Helicopters Limited’s notice of motion filed 2 October 2023 is granted in the following terms:
   

(i) Javelin Aviation Limited is ordered to comply with Pacific Helicopters’ Notice to Produce Documents filed 28 August 2023 and served on 30 August 2023, within 21 days from the date of this order.

(ii) Javelin Aviation Limited shall pay Pacific Helicopters Limited’s cost for the said motion on a party/party basis to be taxed if not agreed.

(iii) Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.

5. Renton Pte Ltd’s and Javelin Aviation Limited’s notice of motion filed 4 October 2023 is granted in the following terms:
   

(i) Pacific Helicopters Limited is ordered to comply with Javelin Aviation Limited’s Notice to Produce Documents filed and served 1 September 2023, within 21 days from the date of this order.

(ii) Pacific Helicopters Limited shall pay Renton Pte Ltd’s and Javelin Aviation Ltd’s costs for the said motion on a party/party basis to be taxed if not agreed.

(iii) Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.

The Court orders accordingly.

_______________________________________________________________
Geroro Lawyers: Lawyers for Renton Pte Ltd and Javelin Aviation Limited
Goodwin Bidar Nutley: Lawyers for Pacific Helicopters Limited