Prosec Security v Amalgamated general Workers Union of Papua New Guinea [2003] PGSC 5; SC714 (3 April 2003)

SC714

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE AT WAIGANI]

SCA 99 of 1999

BETWEEN:

PROSEC SECURITY and
COMMUNICATIONS PTY LTD
and SECURITY HOLDINGS PTY
LTD trading as PROTECT SECURITY

Appellants

AND:

AMALGAMATED GENERAL
WORKERS UNION OF PAPUA NEW GUINEA

Respondent

Waigani: Amet CJ., Kapi DCJ., Los J.
3rd April 2003

APPEAL – Summary Judgement – Where there is dispute on facts, not appropriate for summary judgement – Claim for Union dues prescribed under s 63A of the Industrial Organisations Act – Application by employees not received.

Cases cited:
Tsang v Credit Corporation [1993] PNGLR 112
The State v Henshi Engineering Pty Ltd (Unreported Judgment of the Supreme Court dated 24th November 1998 SC594).
Pastor Geyamgoling Saki and Anor v Kadir Contractors Ltd (Unreported Judgment of the Supreme Court dated 25th February 1999 SC599)).

Legislation cited:

Industrial Organizations Act

National Court Rules

Counsel:
R. Bradshaw for the Appellant
K. Frank for the Respondent

15th August 2003

BY THE COURT: This appeal is against a decision of the National Court (Sevua J) in which the Court entered summary judgment for Amalgamated General Workers Union of Papua New Guinea (Respondent) against Protect Security & Communications Pty Ltd and Security Holdings Pty Ltd trading as Protect Security (Appellants).

The background to this appeal may be summarized as follows. Section 63A of Industrial Organizations Act (Cap 173) (Act) provides that where an employee becomes a member of a trade union, the employer must deduct union contributions duly authorized by the employee .and pay them to the union of which the employee is a member.

The Respondent is registered as a trade union under the Act. The Appellants are alleged to have employed 192 employees who allegedly joined the Respondent.

The Respondent alleges that the Appellants failed to pay the contributions in accordance with s 63A of the Act despite numerous requests. Consequently, a writ of summons was issued on 6th March 1998 to recover the outstanding amount.

The Appellants filed a defence on 23rd April 1998 and denied that the 192 employees were members of the Respondent and pleaded that they are not obliged to make any payments.

The Respondent in reply to the defence filed 29th April 1998 joins issue with the Appellants. The parties subsequently exchanged interrogatories and answers respectively in 1998.

The Respondent filed notice of motion on 25th February 1999 seeking orders to strike out the defence and for summary judgment. During the hearing, counsel for the Appellants admitted that they received 53 applications (Form 15) but continued to deny that they received the balance. The Court considered that the Appellants did not have a good defence and entered summary judgment for the Respondent.

The Appellants appealed against this decision. The notice of appeal sets out fourteen grounds of appeal:

"Grounds

(a) The Learned Judge erred in law in refusing to grant leave to the Defendants (Appellants) to file in Court the affidavit of Tony Carbry sworn 17 May 1999 which the Defendants sought to rely upon during the hearing of the Plaintiff’s (Respondent’s) application for entry of summary judgement.

(b) The Learned Judge erred in law in treating the application for entry of summary judgment as a "trial" and thereby erred in law in refusing to grant leave to the Appellants to file in Court the affidavit.

(c) The Learned Judge erred in law and fact inn finding that there were no serious questions of fact or law in dispute when the making of an application for leave to file an affidavit in Court should have put the Learned Judge on notice that matters of fact or law raised by the Plaintiff were being disputed.

(d) The Learned Judge erred in law and fact in entering summary judgment as there were serious disputes on questions of law and fact and this was not a clear case that the Defendants had no defence.

(e) The Learned Judge erred in law and fact in entering summary judgment as the Defendants set up a bona fide defence and raised issues against the Plaintiff’s claim which ought to have been tried.

(f) The Learned Judge erred in law and fact in failing to exercise care not to shut out the Defendants when considering that fact that the application for entry of summary of judgment was being made after close of pleadings, discovery and interrogatories.

(g) The Learned Judge erred in law in failing to find that an industrial organization can sue an employer pursuant to section 63A(3) of the Industrial Organizations Act, Chapter No. 173 ("the Act") for deductions made under section 63A(1) if that employer after making the deductions from any moneys from time to time payable to the employees contributions payable by the employees to that industrial organization does not pay the moneys deducted (contributions) to the industrial organization.

(h) The Learned Judge erred in law and fact in entering summary judgment for the Plaintiff when there was no evidence before the Court that the Defendants had in fact deducted from moneys from time to time payable to the 192 employees contributions payable by the 192 employees to the Plaintiff.

(i) The Learned Judge erred in law and fact in entering summary judgment for the Plaintiff when there was no evidence before the Court that the Defendants were withholding contributions from the 192 employees payable to the Plaintiff.

(j) The Learned Judge erred in law and fact in failing to find that because there was no evidence before the Court that deductions were in fact made by the Defendants from moneys payable from time to time to the 192 employees, the Plaintiff could not rely upon section 63A(3) of the Act as the Defendants did not hold any moneys which the Plaintiff could sue as Debt due to it.

(k) The Learned Judge erred and fact in granting an "order in terms of paragraph 3 of the plaintiff’s notice of motion ("the injunction") when there was no evidence before the Court to necessitate 6the granting of the injunction.

(l) The Learned Judge erred in law in granting the injunction as the terms of the injunction are too general and do not show clearly what acts or inactions are prohibited.

(m) The Learned Judge erred in law and fact in granting the injunction when the Plaintiff failed to establish that it had a right which had been infringed and that further infringement had been threatened.

(n) The Learned Judge erred in law in entering summary judgment "with further damages to be assessed" without clarification whether the penalties under section 63A(1) of the Act claimed in the Statement of Claim were included in the order that further damages to assessed."

Counsel for the Appellants has conveniently summarized these grounds as follows: (1) Grounds (a) – (f) deal with the issue whether this case is an appropriate case for summary judgment (2) Grounds (g) – (k) deal with the issue whether the Appellants were withholding membership contributions for members of the Respondent under the Act (3) Grounds (l) and (m) deal with the issue whether the trial judge erred in granting the injunction by the Respondent and (4) Ground (n) deals with the issue whether the trial judge erred in entering summary judgment with further damages to be assessed without clarifying whether this included penalties sought under s 63A of the Act.

The law is settled on when summary judgment may be entered. Simply stated, summary judgment may only be entered where it is clear that there is no defence on the facts and the law (see Tsang v Credit Corporation [1993] PNGLR 112; The State v Henshi Engineering Pty Ltd (Unreported Judgment of the Supreme Court dated 24th November 1998 SC594); Pastor Geyamgoling Saki and Anor v Kadir Contractors Ltd (Unreported Judgment of the Supreme Court dated 25th February 1999 SC599)). Section 63A of the Act provides

"(1) An employer must, as from the date of receipt of a notice in the prescribed form sighed by an employee, deduct from any moneys from time to time payable by the employer to that employer contributions payable by that employee to the industrial organization named in the notice.

Penalty: A fine not exceeding K200.00.

Default Penalty: a fine not exceeding K50.00.

(2) An employer making a deduction in accordance with Subsection (1) shall, subject to Subsection (3), pay the amount deducted to the industrial organization named in the notice within 35 days of making the deduction.

(3) An amount not paid by an employer to an industrial organization in accordance with Subjection (2) may be sued for by the industrial organization as a debt due to that industrial organization.

(4) Nothing in this section authorizes –

• (a) an industrial organization or its agents or its members to coerce or otherwise require any person who is not a member of an industrial organization to sign a notice for the purposes of Subsection (1); or
  
• (b) an employee to sign a notice permitting deductions for payment to any industrial organization of which he is not a member.
  

(5) This section does not apply to an employer employing nine or less persons."

The obligation on the part of an employer to deduct contributions arises "as from the date of receipt a notice in the prescribed form signed by an employee" (s 63A (1)). The affidavit in support of the motion for summary judgment deposes to the relevant facts. In particular, the deponent Mr Kandakasi makes reference to forwarding signed prescribed forms by the 192 employees enclosed in several letters dated 1st November 1996, 27th December 1996, 8th January 1997, 17th January 1997 and 19th February 1997.

In absence of any dispute as to these facts and a statement of belief by some responsible person that there is no defence to this claim in accordance with O 12 r 38 of the National Court Rules, that would satisfy the requirements to enter summary judgment.

In the present case, the Appellants filed defence and denied that they received any of the prescribed forms signed by the 192 employees. As we have pointed out earlier, counsel for the Appellants admitted that they received 53 applications only. This would appear to be the forms enclosed in the Respondent’s letter dated 19th February 1997. In respect of these employees, there can be no dispute. This is a matter for which the parties may and should settle without having to go to trial.

Counsel for the Appellants submits that the Appellants have filed defence disputing that they received the prescribed forms. We would have thought that this was a simple matter to resolve. Either the Appellants received the forms or they did not.

We appreciate that the Appellants have admitted receiving 53 applications enclosed in the Respondent’s letter dated 19th February 1997. The question is whether the Appellants received the balance of the outstanding forms. Again we consider that this is a simple matter capable of resolution. If the Appellants did not receive these forms, it is a simple matter of the Respondent making copies of the signed forms and making them available to the Appellants and the matter would be resolved. However, we suspect that the Respondent is unable to do this as Mr Kandakasi deposed in his affidavit that they did not keep copies of the signed forms (see paragraph 7 of Affidavit). These are issues capable of resolution by the parties.

In the circumstances, a Court is entitled to encourage parties to settle the outstanding issues of fact in the interest of all parties. If the parties are not able to resolve this, a Court should try the issues of fact.

It is apparent from the record that the parties were unable to resolve the receipt of the outstanding 139 forms. In our opinion, the only way to resolve this issue is to go to trial. The trial judge did not do this but resolved the issue in the following manner:

"The defendants submitted that they received only 53 applications or Form 15 from the plaintiff on 19th February 1997. They denied receiving the balance of the applications from plaintiff relating to the rest of the 192 employees. The plaintiff’s evidence is that it forwarded these applications by post to the defendants and the Court noted from annexures "C", "D", "E", "F" and "G" of Kandakasi’s affidavit that all their correspondence relating to the 192 applications for the 192 employees were directed to the same postal address, P.O. Box 5392, Boroko.

If the defendants were able to receive the letter accompanying the 53 applications sent by the plaintiff on 19th February, 1997, what happened to the other four letters sent on 1/1196, 27/12/96, 8/1/97 and 17/197 and the applications of the remaining 139 employees? They were sent to the same address.

I accept the plaintiff’s evidence that in respect of its 192 members who were employed by the defendants, it had lodged 192 applications to the defendants and the defendants had refused to comply with s 63A of the Act."

The trial judge further concluded:

"I consider that the defendants have no defence at all. As the plaintiff said, and I accept its evidence and submissions, the defendants’ defence is that they did not receive authority for deduction from the 192 employees who are members of the plaintiff. In my view, there is no defence on the merits. That is not a valid defence."

In our view, the trial judge determined the disputed facts raised by the Appellants on the merits and entered summary judgment. In so doing, the trial judge fell into error. The defence filed by the Appellants clearly disputed the receipt of the prescribed forms and while they admitted to receiving 53 forms, they continued to deny receiving the balance of the forms. In the circumstances, the trial judge ought to have tried the matter to determine the facts raised by the defence. We conclude that this was not an appropriate case for summary judgment.

We consider that this ground of appeal determines the outcome of the appeal, it is not necessary to consider other grounds of appeal.

In the result we would allow the appeal, quash the decision of the National Court and set aside the orders made by the trial judge on 15th October 1999 with costs to the Appellants. We further order that the defence is restored and the parties take steps to progress the matter to trial.
_____________________________________________________________
Lawyers for the Appellants : BLAKE DAWSON WALDRON
Lawyers for the Respondent : MALADINAS