State v Henshi Engineering Pty Ltd [1998] PGSC 51; SC594 (24 November 1998)

Unreported Supreme Court Decisions

SC594

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SCA 64 OF 1997
THE STATE
APPELLANT
AND: HENSHI ENGINEERING PTY LTD
RESPONDENT

Waigani

Hinchliffe Jalina Sawong JJ
3 June 1998
24 November 1998

PRACTICE AND PROCEDURE – Summary Judgement – Dispute on facts and law – triable issues raised – desirability of matter to proceed to trial – National Court Rules O12 r.38

Cases Cited

Chief Collector of Taxes v TA Field Pty Ltd [1975] PNGLR 144

United Timbers (PNG) Pty Ltd v Mussau Timber Development Pty Ltd, Unreported

National Court judgement N645 of 2 December 1987

Kumul Builders Pty Ltd v Post & Telecommunication Corporation [1991] PNGLR 299

Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112

Counsel

Mr J. Kawi with D. Rolpaigarea for Appellant

Mr M. Wilson with Ms Delgoda for Respondent.

24 November 1998

HINCHLIFFE JALINA SAWONG JJ: The respondent instituted proceedings in the National Court for damages against the Appellant as first defendant and One Daniel Mapira as second defendant. The Statement of Claim was as follows:

1. The Plaintiff is a company duly incorporated pursuant to the laws of Papua New Guinea and is capable of suing.

2. The Second Defendant is a statutory corporation capable of being sued in its own name.

3. On or about 15 May 1992 the Plaintiff entered a Lease Agreement with the Third Defendant to sub-lease Section 468 Allotments 1, 2, 3 and 4 Geauta Drive Gordons National Capital District.

4. On or about 3 July 1992 the Sub-Lease Agreement was approved by the First Defendant on 3 July 1992.

5. On or about 5 August 1992 the Second Defendant approved building plans on the said land submitted by the Plaintiff and the Second Defendant issued building approval permits.

6. Pursuant to the Lease Agreement the Plaintiff set up various buildings and conducted an Automative Engineering and Panel Beating business.

7. On or about 17 October 1996 the First Defendant without the consent of the Plaintiff entered up on the said property, demolished the Plaintiff’s building and took possession.

8. By reason of the premises the Plaintiff has suffered loss and damage.

Particulars of Special Damages

Particulars of Special/Damages will be supplied before the trial.

AND THE PLAINTIFF CLAIMS:

1. Damages.

2. Interest pursuant to Statute.

3. Costs.

The Appellant (then the first Defendant) filed the following defence:

“DEFENCE OF THE FIRST DEFENDANT”

1. The First Defendant admits paragraph 1 and 2 of the Plaintiff statement of claim.

2. The First Defendant does not know and cannot admit paragraph 3 of the Plaintiff’s statement of claim.

3. The First Defendant does not know and cannot admit paragraph 4 of the Plaintiff’s statement of claim but if any improvements are put up pursuant to the sub-lease agreement, the First Defendant says these have been valued and compensation for same has been paid.

4. The First Defendant does not know and cannot admit paragraph 5 of the Plaintiff’s statement of claim.

5. The First Defendant does not know and cannot admit paragraph 6 of the Plaintiff’s statement of claim and says that any improvements outside the lease area was and is deemed illegal and cannot be compensated for by the State.

6. The First Defendant admits paragraph 7 of the Plaintiff’s statement of claim but save as is admitted the First Defendant says notice was served on the registered lessee and that media coverage and continued presence of government agents and servants on site was such that everyone on site was aware of the need to move out. There was no obligation to serve notices on illegal squatters.

7. The First Defendant does not know and cannot admit paragraph 8 of the plaintiff’s statement of claim.”

The Respondent applied for summary judgement pursuant to O12 r.38 of the National Court Rules which provides:

“Summary judgement.

(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 entry of such judgement for the plaintiff on that claim or part as the nature requires of the case requires.”

On 26 September 1997 the National Court entered summary judgement for the Respondent for damages to be assessed on the basis that:

(a) The defence filed by the appellant was unsatisfactory,

(b) The compensation paid by the appellant was not adequate to pay the respondent and that the respondent was not advised of the compensation payment.

(c) For equity reasons the respondent be granted summary Judgement.

The Appellant seeks, inter alia, orders that the orders granted to the Respondent be quashed and that the matter be remitted to the National Court for trial proper.

The principles which guide the court when dealing with applications under O12 r.38 are well settled in this jurisdiction and these principles have been consistently applied in a number of cases.

In Chief Collector of Taxes v TA Field Pty Ltd [1975] PNGLR 144 Raine, J said at p.146:

“The plaintiff has applied by way of notice of motion for an order under OXVIII r.1, namely, that he should be given leave to enter final and summary judgement in the action. In my opinion the summary jurisdiction conferred by the rule should only be invoked in a clear case. Great care should be taken not to shut out a defendant unless it is quite clear upon the facts and/or the law that he has no defence. Summary proceedings in ejectment in New South Wales under the old Rules in that State were only made use of by the Judges of the Court in very clear cases. See Bumstein v Lynn (1955) 73 WN (NSW) 111 and Pearrch v Gyucha (1953) 73 WN (NSW) 122 at 124 where Street CJ said:-

“Jurisdiction under this Order does not entitle the court to deprive the parties of their right to proceed to a hearing before that, of course, involves not only the surrounding facts themselves, but inferences of fact to be drawn from the evidence. If there is not such serious question between the parties, then I think that this Court should exercise the power which it has to determine the matter summarily and prevent continuous litigation over a claim which has little or no substance.”

In United Timbers (PNG) Pty Ltd v Mussau Timber Development Pty Ltd, Unreported National Court judgement N645 of 2 December 1987, where King AJ said:

“The power to enter summary judgements one to be exercised sparingly and with great care and only when it is clear that there is no triable issue between the parties.”

In Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299 Sheehan, J. said in relation to O12 r.38 at p.300:

“The purpose of these rules is (to) enable a plaintiff to obtain judgement without trial, if he can prove his claim clearly and if the defendant is unable to set up a bona fide defence, or raise an issue against the claim which ought to be tried ...

Essentially, the court will direct an entry of judgement, summarily, where there is sufficient, clear evidence before the court of the facts on which the claim is made to enable it to conclude that there is no triable issue of fact, and no arguable defence in law.”

In Tsang v Credit Corporation (PNG) Ltd [1993] 112, the Supreme Court said at p.117 – 118:

“There are two elements involved in this rule;

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

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

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 the defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that upon the facts and/or law, the defendant has no defence. The plaintiff will not be entitled to summary judgement 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 TA Field Pty Ltd [1975] PNGLR 144.”

In the present case we find that the defence filed by the Appellant clearly raises triable issues of fact and law.

For instance in paragraph 3 of the defence, the Appellant says that compensation has been paid for improvements made pursuant to the sub-lease agreement. This raises issues as to whether the Appellant is liable for further payment which can only be determined at trail.

Paragraph 5 of the defence raises the defence of illegality which can only be determined at trial.

Paragraph 6 of the defence raises questions as to whether sufficient notice was given which can appropriately be determined at trial.

In fact the learned trial judge did acknowledge that there was a triable issue yet His Honour proceeded to enter summary judgement. In His judgement (see p.29 of the Transcript of Proceedings) he said:

“I consider therefore that the single remaining defence which might possibly be arguable, being the defence, paragraph 6 to the statement of claim 7”.

For the foregoing reasons we find that the learned trial judge erred in entering summary judgement for the Respondent.

We accordingly quash the order of the trial judge and refer the matter to the National Court for further conduct of the proceedings. The Appellant’s costs are to be paid for by the Respondent to be taxed if not agreed.

Lawyer for the Appellant: Solicitor General

Lawyer for the Respondent: Warner Shand Lawyers