Flaxen Engineering & Construction Ltd v Seaside Development Ltd (trading as PNG Concrete Aggregates) [2024] PGNC 45; N10703 (28 March 2024)

N10703

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 68 OF 2021

BETWEEN
FLAXEN ENGINEERING & CONSTRUCTION LIMITED
Plaintiff/First Cross Defendant

AND:
KOPS PORAKA
Second Cross Defendant

AND:
JASON TOKAPA
Third Cross Defendant

AND:
SEASIDE DEVELOPMENT LIMITED T/as PNG CONRETE AGGREGATES
Defendant/ Cross Claimant

Lae: Dowa J
2024: 13^th & 28^th March

PRACTICE AND PROCEDURE -application seeking to dismiss proceedings for non-compliance of court order by plaintiff- whether the proceedings can be summarily dismissed for failing to comply with directions of Court–failure to produce particular documents- failure in complying with directions of Court – delay in prosecuting matter has caused prejudice to defendants – proceedings dismissed for want of prosecution and non-compliance of court orders.

Cases Cited:
Kalang Advertising Ltd v Kappusamy (2008) SC924
John Aweto & other -v – Esther Tobias-(2020) N8480
Kave v Yakaso (2014) N5693
VNA Security Services limited v BUP Development Co. Ltd (2020) N8315

Counsel:
T Berem, for the Plaintiff/Cross Defendants
J Langah, for the Defendant/Cross claimant

DECISION

28^th March 2024

1. DOWA J: This is a ruling on the Defendant/Cross-claimant’s application to dismiss the Plaintiff’s statement of claim and for the entry of judgment on the Crossclaim.

FACTS

2. The Plaintiff/first Cross-Defendant is a company. The second and third cross-Defendants are the directors of the Plaintiff. The Plaintiff/first Cross-Defendant contracted with the Defendant/Cross-claimant for the supply of certain concrete products. The Plaintiff alleges that the Defendant/Cross-claimant supplied poor quality concrete material (below 40 Mpa) which resulted poor workmanship in a job the Plaintiff was contracted to do for a third party, Morobe Customs and Cartage Limited, (MCC). The Plaintiff alleges as a result its client, MCC, refused to settle its invoices. The Plaintiff/first Cross-Defendant therefore instituted the current recovery proceedings against the Defendant/Cross-Claimant

3. The Defendant/Cross-claimant denies the Plaintiff’s claim and filed a Crossclaim against the Cross-defendants for the unpaid invoices for the supply of concrete mixture totalling K 155, 274.25.

4. During discovery process, the Plaintiff/Cross-Defendants failed to respond to the Defendant/Cross-claimant’s Notice to Produce the unpaid invoices referred to in the statement of claim. The Defendant sought an order for production from the Court which was granted on 4^th December2023. Again, the Plaintiff /Cross-Defendants failed to comply with the directions of the Court which resulted in the current application.

The Defendant/Cross claimant’s Application

5. By Notice of Motion, the Defendant/Cross-claimant seeks the following orders:

1. Pursuant to order 10 Rule 9A 15(2)(b)(c) & (e) of the Listings Rules 2005, the:

1. Writ of Summons filed on 05th June 2021 (Doc.No. 1) be dismissed and
   
2. Defence to the cross-Claim filed on 04th June 2021 (Doc. No.10) be struck out and judgment be entered for the Defendant/Cross-Claimant on its Cross-Claim filed on 18th May 2021 (Doc. No.6) as pleaded at paragraph 9(a),(b),(c), (d) and (e).
   

2.Cost of the proceedings.

3.Any other order this Honorable Court may deem fit.”

6. In support of the application, the Defendant/Cross-claimant relies on the following Affidavits:

1. Affidavit of Jonah Langah, sworn 14^th and filed 15^th February 2024.
2. Affidavit In Support of Jonah Langah, sworn and filed 12^th March 2015.
   

7. The Defendant/Cross claimant applies for the dismissal of the Plaintiff’s claim, the striking out of the Cross Defence and entry of judgment on the Crossclaim for the following reasons:

a) The Plaintiff Flaxen Engineering & Construction Limited is removed from the Register of Companies and is no longer a legal entity to maintain the proceedings

b) For failure by the Plaintiff and the Cross claimants to comply with the orders of Court given on 4^th December 2023.

Issues

8. The issue for consideration is whether the Writ of Summons be dismissed, and the Defence to the Crossclaim be struck out and judgment be entered for the Cross claimant.

Law
9. The relevant law on the application for summary judgment is Order 10 Rule 9A 15 (2) of the NCR (Listing Rules 2005) which reads:

“(2) The Court may summarily dispose of a matter in the following situations:

a. for want of prosecution since filing the proceedings or since the last activity on the file; or

b. for a failure to appear at any of the listing or directions hearing by a party or his lawyer; or

c. for non - compliance of any order or directions previously made or issued by the Court at any of the listing processes.

d. under any of the grounds set out in Order 12 rule 40 and Order 8 Rule 27 of the National Court Rules.

e. on any competency ground relating to non-compliance with the National Court Rules or any other relevant rules of Court.”

10. It is settled law that Rule 15 of the Listing Rules 2005, gives power to the National Court to summary determine or dispose of a matter on application by a party or on its own initiative. Refer: Kalang Advertising Ltd v Kappusamy (2008) SC924.

Consideration

11. Mr. Langah, counsel for the Defendant/Cross-claimant, presents two reasons why the Plaintiff’s proceedings be dismissed, and judgment be entered on the Crossclaim.

No legal entity

12. The first reason is this. Recent online searches on the Investment Promotion Authority website show that the Plaintiff, Flaxen Engineering & Construction Limited, was removed from the Register of Companies. Counsel submits this renders the proceedings futile as the Plaintiff is no longer in existence as a legal entity to maintain the continuity of the proceedings.

13. Mr. Berem, counsel for the Plaintiff, says he has no instructions from his clients but submits that the proceedings should not be dismissed as the claims are substantial.

14. The information presented by counsel for the Defendant/ross-claimant is very brief. The search results attached to the Affidavit of Mr Langah shows the company was removed on or about 5^th December 2023 for failure to re-register. In my view the information presented is not sufficient to make a big decision. What if the Plaintiff applies for re-registration and gets registered again soon after a decision is made for dismissal. What becomes of the proceedings. Will they be reinstated as well. To avoid a possible chaotic situation, I will be hesitant to grant the orders sought for this reason alone.

Non-compliance of Court Orders.

15. The second reason for dismissal is for noncompliance of Court orders issued on 4^th December 2023. On 4^th December 2023 the Court made the following orders:

i. The Plaintiff shall file an Affidavit including all unpaid invoices within 14 days.

ii. The matter is adjourned to 2^nd February 2024 for listing. within 14 days.

16. In defiance, the Plaintiff/Cross-Defendants failed to file an Affidavit attaching the invoices as ordered. Counsel for the Defendant/Cross-claimant submits that the proceedings be dismissed for noncompliance of the orders.

17. Counsel for the Plaintiff/Cross-Defendants again says he has not heard from his clients and could not comply with the directions of the Court. Nevertheless, he opposes the application, submitting that the claim is substantial, and the Court exercise its discretion in their favour by refusing the application.

18. There is no dispute that the Plaintiff/Cross Defendants failed to comply with the orders of 4^th December 2023. Should the Court then dismiss the proceedings for noncompliance and for the entry of judgment on the Crossclaim.

19. It is important to consider the pleadings and the conduct of the parties to arrive at a just conclusion. The Plaintiff/first Cross-defendant is a contractor in a triparted contractual relation. The Defendant is the subcontractor or supplier. The Plaintiffs client or principal is Morobe Customs and Cartage Limited (MCC), a third party.

20. The Plaintiff pleads in his statement of claim that the Defendant, as Supplier, failed to supply good quality concrete products as specified in the contract. As a result, the Plaintiff/Cross defendants were not able to produce the quality of work required by their client/principal. The Plaintiff/Cross-defendants pleads their client, MCC, complaining of poor workmanship, refused to settle their invoices. As a result, they suffered loss of income and damage to their business reputation.

21. I have perused the Plaintiff’s statement of claim and note that the Plaintiff did not plead the details of the loss especially the outstanding unpaid amount and the details of invoices sent to its client, MCC. It is just a general allegation. It is also interesting to note that the Plaintiff and the Cross-defendants who filed various Affidavits in the proceedings did not expressly state the outstanding amount nor attaching the relevant unpaid invoices with their client, MCC. This prompted, it appears, the Defendant/Cross Claimant to file and serve a Notice to Produce Documents, particularly the invoices sent to Morobe Customs & Cartage Limited by the Plaintiff /Cross Defendant.

22. Although the notice for the particular or specific production of documents was filed and served on the Plaintiff/Cross defendants on or around 20^th October 2023, they failed to comply within the time frame required by the National Court Rules. On 06^th November 2023, the Defendant/Cross-claimant filed a Notice of Motion seeking orders from the Court to compel the Plaintiff/ Cross-defendants to comply with the Notice to Produce Documents. On 4^th December 2023, Orders were granted by the Court directing the Plaintiff /Cross-Defendants to file an affidavit attaching all the unpaid invoices sent to MCC within 14-days. The Plaintiff/Cross-defendant’s lawyer was in attendance when the orders were made. Again, the Plaintiff /Cross Defendants failed to comply with the orders of the Court which resulted in the current application.

23. The issue before the Court is whether the Plaintiffs/Cross Defendant’s Writ of Summons be dismissed, their Defence to the Crossclaim be struck out and judgment be entered on the Crossclaim for non-compliance. It is now a matter of discretion of the Court. In VNA Security Services limited v BUP Development Co. Ltd, (2020) N8315, I said this at paragraph 10 of my judgment:

“10. The Court has the discretion to grant the orders sought or refuse same and make such other orders to do justice in the circumstances. Under Order 1 Rule 7, of the National Court Rules the Court has a discretion to dispense with the requirements of the rules of court. The Court can also give extension of time to comply with the rules under order 1, Rule 15 of the National Court Rules. However, the exercise of the discretion has to be a judicial exercise taking into account the conduct of parties, the interest of justice, the smooth flow of justice administration by the Court, and the impact it would have on the parties. The rules of the National Court are not an end to themselves, but a means to achieving a just resolution of the dispute between parties. Refer; Niugini Mining v Bumbandy (2005) SC 804.”

24. In my view, the conduct of the Plaintiff/Cross Defendants are found wanting. The Plaintiff/first Cross-defendant failed to specifically plead particulars of the claim in the statement of claim. The second and third Cross-defendants who are directors of the Plaintiff/first Cross-defendant failed to attach all relevant unpaid invoices sent to MCC, let alone even the amount/figure of the outstanding invoices in their respective affidavits. They failed to produce the invoices in response to the Notice to Produce Documents as required by Order 9 Rule 9 of the National Court Rules. Furthermore, they failed to comply with the orders of 4^th December 2023 which directed them to file all unpaid invoices sent to MCC. And finally, they offered no explanation at the time of hearing this motion why this Court should not dismiss the proceedings for noncompliance of the orders of 4^th December 2023.

25. Non-compliance of the National Court Rules and the Court directions is a serious matter. This is what I said in a similar ruling in the case John Aweto & other -v – Esther Tobias (2020) N8480 at paragraph 18 of my judgement:

“18. As discussed earlier, one of the reasons for the application for dismissal is for non-compliance of the orders of Court. It is clear to me the conduct of the Plaintiff and their lawyers show little respect for directions of Court. A non-compliance of directions of Court, often delays due dispensation of justice by the Courts, and is a serious matter. See Kave v Yakaso (2014) N5693. At paragraph 46 of the Judgment, Murray J said this:

“This consideration involves the issue of "where the interest of justice lie". It is not disputed that the Plaintiffs may have a claim (underline mine) against the Defendants. What is being challenged is that this claim is yet to materialise. The alleged cause of action arose in 2008. The proceeding filed in February of 2009. By the time, the application by the defendants was made; the claim had not yet materialized. In my view, ample opportunities were given to the plaintiffs to do that through the orders of the Court, but they let that slip, by their lack of action, resulting in noncompliance of Court orders. Non-Compliance of an order, in my view is a very serious matter and if there is no good explanation for the failure to comply, then, in my view, the interest of justice cannot favour the party who has not complied.”

26. In my view, the interest of justice does not favour the Plaintiff/Cross-defendants who have continuously defied the Rules and directions of the Court. The failure has prejudiced the Defendant in having to do its own investigations at great expense as well as causing delays in the hearing of the matter. The result is, this matter can be dismissed under Order 10, Rule 9A (15) of the National Court Rules for non-compliance of directions of Court. In the exercise of my discretion, I dismiss the Plaintiff’s entire proceedings.

Cross Claim
27 The Defendant/Cross-claimant’s Crossclaim is a liquidated amount of K 155,274.25. The Cross-Defendants filed a general Defence to the Crossclaim. Because of the noncompliance, the Defence to the Crossclaim is struck out and judgment is entered for the Defendant/Cross-Claimant.

28. It is observed, in passing, that unlike the Plaintiffs statement of claim, the Crossclaim pleaded a liquidated sum fully particularised. The Cross- claimant filed an Affidavit annexing all the relevant invoices. Although the Cross-Defendants filed a Defence to the Crossclaim, there is no serious dispute on the outstanding invoices, except that the payment for the invoices were withheld because of the supply of the poor-quality concrete material. It must be stressed that pleading a cause of action in clear terms is important as it notifies the opposing party the nature of the allegations, he is called upon to respond. This is not the determining factor in this case but only to highlight how the parties in these proceedings have conducted themselves.

29. That said, it is my view that judgment for the Defendant/Cross-claimant is just and reasonable. The Court, accordingly, grants all the reliefs sought in the Notice of Motion in its entirety.

Costs
30. In respect of cost, the Defendant/Cross claimant succeeded in its claim and is therefore entitled to the costs, to be taxed if not agreed.

Orders

31. The Court orders pursuant to Order 10 Rule 9A (15) (2) of the NCR that:

1. The Plaintiff’s proceeding is summarily dismissed for noncompliance of Court Orders.
2. The Defence to the Crossclaim by the Cross-Defendants is struck out.
3. Judgment is entered for the Defendant/Cross-claimant on its Crossclaim filed on 18^th May 2021 as pleaded in paragraph 9 (a), (b). (c) and (d).
4. The Plaintiff/cross Defendants shall pay the cost of the proceedings.
5. Time be abridged.

________________________________________________________________
Berem Lawyers : Lawyers for the Plaintiff/Cross Defendants
Albright Lawyers : Lawyers for the Defendant/Cross Claimant