N11214

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 01 OF 2023 (COMM)

KOIA WAK TRUCKING & HIRE CARS LIMITED 
Plaintiff

V

SIMON LAKENG IN HIS CAPACITY AS THE ASSISSTANT COMMISSIONER, HIGHLANDS REGION, PAPUA NEW GUINEA CORRECTIONAL SERVICES
First Defendant

STEPHEN POKANIS IN HIS CAPACITY AS THE COMMISSIONER OF THE PAPUA NEW GUINEA CORRECTIONAL SERVICES
Second Defendant

THE PAPUA NEW GUINEA CORRECTIONAL SERVICES
Third Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

WAIGANI: ANIS J
4, 9 DECEMBER 2024; 31 MARCH 2025

BREACH OF CONTRACTS – Claim against the State for services rendered pursuant to purported oral and written agreements – claim denied premised on want of compliances with mandatory requirements stipulated under the Public Finance Management Act as amended – ss.44, 45, 47B, 47C and 47D – s.2A(2) – Claims By and Against the State Act 1996 - consideration and ruling

PLAINTIFF’S CONCESSION – plaintiff admits it did not follow or comply with the mandatory processes for procuring government contracts for goods and services, under various provisions of the Public Finance Management Act as amended and the Claims By and Against the State Act, in regard to the 2 purported contracts

PRACTICE AND PROCEDURES – plaintiff asserts it can seek damages premised on a quantum meruit basis – defence – no cause of action pleaded in that regard – departure rule - consideration and ruling

SETTLEMENT OFFER – defendants admit that some work were performed – concession made outside of the legal arguments and in good-faith - defendants happy to settle for a final sum of K278,114.50 – consideration and ruling

Cases cited

Covec PNG Ltd v. Peter Kama and Ors (2020) SC1912
Alfred v. Kaupa (2024) SC2569
Labian-Saiuwen v. Yerei Yautan [1965-66] PNGLR 152
Summit Development Ltd v. Chan (2016) N6390

Counsel

J Rotep for the plaintiff
Z H Waiin for the defendants

JUDGMENT

1.	ANIS J: This matter was trialed on liability on 4 and 9 December 2024.  I reserved my decision thereafter to a date to be advised.

2.	Parties have been notified so I will rule on the matter.

BACKGROUND

3.	The plaintiff claims that it entered into 2 contracts, one oral and the other written, in January 2019 and 4 September 2021 respectively, with members of the third defendant.  It claims that in January of 2019, Mendi Town and the whole of the highlands region was struck with a natural disaster, a 7.5 magnitude earth quake.  It claims that a correctional service officer (CSO/Inspector) for the Bui Iebi Correctional Service (BCS), one Bob Omba, approached and requested it to provide urgent assistance to BCS including fuel, food and other rations.

4.	Premised on the said purported understanding and request by Inspector Omba, the plaintiff claims that it began supplying diesel drums, firewood, food rations and hire car services to BCS.  The plaintiff claims that it issued invoices for the services rendered on a monthly basis to BCS.  In September of 2021, a new commander for BCS was appointed.  His name was Samson Kisa.  The plaintiff claims that Inspector Kisa organized and signed a formal agreement with it, for provision of hire car services to BCS.  The purported agreement is dated 3 September 2021 (Hire car agreement).

5.	The plaintiff claims BCS have made small amount of payments to its invoices but over time, the sums owed began to accrue.  These are pleaded at paras. 11 to 15 of the Writ of Summons and Statement of Claim filed 5 January 2023 (SoC).  The total sum the plaintiff claims was paid was K209,837.53, and the total sum that remains outstanding, according to the plaintiff, is K608,972.60.  These are also pleaded in the SoC.

6.	As for relief, the plaintiff seeks as follows:

1.	The plaintiff’s outstanding invoices totaling K608,972.60.
2.	Special Damages.
3.	Interest according to statute.
4.	Costs of the proceedings.
5.	Such other relief that the Court deems fit and just.

7.	The defendants deny the allegations.  In their defence, they assert that the 2 contracts did not comply with mandatory provisions stipulated under the Public Finance Management Act 1995 as amended (PFMA), namely, ss.44, 45, 47B, 47C and 47D.  They also allege breach of s.2A(2) of the Claims By and Against the State Act (CBASA).  As such, they submit that the claim is baseless and must be dismissed.

8.	Apart from the denials, the defendants also makes this further submission, which is premised on (i) good faith and (ii) outside their legal arguments in the matter.  They submit, without admission to any liability in the matter, that they are happy to make a one off payment of K278,114.50 to settle the matter.  The submission, I note, is more or less like a ‘without prejudice’ offer which they would like the Court to endorse.

9.	I will come to it in the latter part of my decision.

PLAINTIFF’S CONCESSION - CHANGE OF STATUS OF CLAIM AT TRIAL

10.	The plaintiff, in closing, decided against pursuing its claim for breach of the 2 contracts or its assertions that the 2 contracts were valid and enforceable against the defendants.  The plaintiff conceded that the 2 contracts did not comply with the relevant mandatory provisions of the PFMA as alleged by the defendants.

11.	However, the plaintiff then makes, what appears to be, a new assertion.  It claims that it is entitled to receive payment of all its outstanding invoices, premised on the principle of quantum meruit.  In other words, the plaintiff is asserting an action in quantum meruit.

12.	The defendants’ response to the purported claim is this; they submit the plaintiff did not plead the said cause of action in the SoC.  As such, they submit the plaintiff’s said claim should also be dismissed.

WAS QUANTUM MERUIT PLEADED? 

13.	So, at the hearing and on this issue, the immediate question I posed to the parties was whether the equitable claim of quantum meruit was pleaded in the SoC?

14.	The plaintiff, with respect, struggled to point out the paras. in the SoC where quantum meruit was pleaded as a cause of action.  In fact, there is no pleading at all in the SoC in that regard.  I find that to be the case.  I also note that no such relief was sought in the prayer for relief in the SoC.

15.	The plaintiff next referred this Court to its Reply filed 17 April 2023 (Reply).  It relied on para. 3.6, which states:

3.6	The plaintiff is a genuine service provider, is innocent and is therefore entitled to restitution for performance under the principle of quantum meruit. 

16.	1 note the submissions of the parties in this regard.

17.	In my view, the basic requirement of a reply in pleadings is to join issue and or respond directly to a defence.  A plaintiff when making a reply cannot raise new allegations of facts that are not raised or pleaded in the first place in a statement of claim.  

18.	There are many case authorities that address the rules, practice and procedures for pleadings.  The Supreme Court in Covec PNG Ltd v. Peter Kama and Ors (2020) SC1912 held in part the following:

2.	A plaintiff who desires to make a new or alternative claim must amend his statement of claim: Warnock v Victorian Railway Commissioner (1885) 7 ALT 54; Green v Horne [1888] VicLawRp 82; (1888) 14 VLR 220 and the rule does not prohibit a subsequent  pleading  explaining an earlier  pleading  (South Suburban Land Co v Hughes [1889] VicLawRp 108; (1889) 15 VLR 308), or changing the submission as to the legal effect of the pleaded facts (Re Vanderwells Trusts (No 2) [1974] Ch 269.

3.	A reply only answers the defence, it cannot raise a new cause of action or allege any matter inconsistent with the allegation in the statement of claim: see Australian Civil Procedure Tenth Edition by BC Cairns. [Underlining mine]

19.	With that, I make the following observations:

•	At para. 3.6 of the plaintiff’s Reply, it appears that the plaintiff, in responding to the defendants’ Defence, attempts to justify its actions by stating that it is entitled to restitution for performance under the principle of quantum meruit, however, it did not plead a cause of action for unjust enrichment or quantum meruit in the SoC;
•	There appears to be no basis for the pleading contained at para. 3.6 of the Reply; the said pleading appears to contradict the “departure rule”, which is that a party cannot, in a later pleading, raise a new ground of claim or contain an allegation of fact that is inconsistent with the party’s previous pleadings, unless the party seeks and obtains leave to amend the pleadings;
•	I note that counsel for the plaintiff submitted that it would be unjust for the plaintiff not to be compensated; that the Court should consider justice of the case in favour of the plaintiff;
•	Having noted the submission by the plaintiff, I acknowledge that the role of the Court is to deliver justice, but what that means is that it must be justice, equality or fairness, according to law; cases: Alfred v. Kaupa (2024) SC2569, Labian-Saiuwen v. Yerei Yautan [1965-66] PNGLR 152 and Summit Development Ltd v. Chan (2016) N6390; and justice, of course, must be applied to all the parties and not just one person or a specific group of persons;
•	When applying justice in this case for the plaintiff, I note that the plaintiff had had the opportunity to amend its pleadings had it wanted to; in fact, it had ample time to address that given that its Reply was filed on 17 April 2023; instead, it chose not to and has allowed the pleading to remain as it is;
•	When considering justice in this case for the defendants, I note that they have come to trial prepared premised on what has been pleaded, to argue their defence; if I am minded to accept the plaintiff’s new claim and to hear it, it would obviously be unjust or unfair on the defendants; 
•	And finally, when I apply the overall consideration of justice, namely, according to law, I note that it would be against the law not to allow an opportunity to the defendants to prepare themselves and respond to the new intended cause of action of quantum meruit (right to be heard); this would also be against the long established rules that govern pleadings, and I also make particular reference to the “departure rule”.

20.	Premised on these reasons, I dismiss the plaintiff’s claim that it has pleaded its cause of action for quantum meruit or restitution.  I find that no such claim has been pleaded, and I also find that the ‘interest of justice according to law’ dictates that I should reject this purported claim by the plaintiff.

21.	Consequently, what this means is that the plaintiff’s entire claim will fail.

AGREEMENT TO PAY OUTSIDE THE LEGAL ARGUMENTS

22.	I return back to the defendants’ other submission, which is made ‘outside the prism’ of their defence and legal arguments, which is their intention to make a one off payment of K278,114.50 to the plaintiff to settle the matter. 

23.	I also note that this submission is not made in the alternative to the defendants’ main arguments.  

24.	I am therefore minded to and will make an order for the defendants to pay K278,114.50, which is the prescribed sum requested by the defendants, to the plaintiff in relation to this matter.

PERSONAL LIABILITY AGAINST STATE EMPLOYEES INVOLVED

25.	The defendants also raised in their submissions that the Court should find and hold both Inspectors Omba and Kisa personally liable for their actions in the matter.  They submit that the State must not be held liable because both officers acted outside the scope of their duties when they purportedly entered into the 2 contracts with the plaintiff.  The defendants submit that the actions of the 2 officers breached s.1A of the Wrongs (Miscellaneous Provisions) (Amendment) Act 2022 (Wrongs Act).  They submit that any sum that is awarded by this Court that is over K278,114.50, should be ordered personally against each of the 2 officers to settle.

26.	Section 1A states:

"1A.    PERSONAL LIABILITY.

Subject to Section 5A of the Claims By and Against the State Act 1996, where the court establishes that the acts or omissions of an agent or servant of the State is -

(a)   outside of the agent or servant's scope of duties; or

(b)   outside of the agent or servant's course of duty; or

(c)   not in accordance with lawful instructions,

the agent or servant shall be held personally liable.".

27.	At the closing hearing, the defendants’ counsel later conceded that the proper basis for this claim would be to first of all join or make a crossclaim against the 2 persons to the proceeding, which they have not.  Therefore, and in summary, the defendants submit that it is up the plaintiff to bring separate lawsuits against the 2 CS inspectors personally.

28.	I note therefore that the defendants have essentially abandoned their said submission or claim.  As such, it is not necessary for me to make any finding or ruling in that regard.

SUMMARY

29.	In summary, I will dismiss the plaintiff’s claim.  However, premised on the defendants’ own volition to pay the K278,114.50, I will make an order to that effect.

COST

30.	An order for cost is discretionary.

31.	I think the best outcome on the issue of cost for this matter is to order each party to pay their own costs instead of the normal order which is for cost to follow the event.  A main consideration I take into account is the defendants’ concession to pay the plaintiff K278,114.50.

AND THE COURT ORDERS

32.	I make the following orders:

1.	The plaintiff’s claim is dismissed in its entirety.

2.	Premised upon the defendants’ own volition to pay the plaintiff a fixed sum in regard to the matter, I order the defendants to pay the plaintiff the sum of K278,114.50.

3.	Each party shall bear their own costs of the proceeding.

4.	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
________________________________________________________________
Lawyers for the plaintiff: Rotep & Co
Lawyer for the defendants: Solicitor General