State v Downer Construction (PNG) Ltd [2009] PGSC 51; SC979 (2 July 2009)

SC979

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA No. 5 of 2008

BETWEEN

THE INDEPENDENT STATE OF PAPUA NEW GUINA
Appellant

AND

DOWNER CONSTRUCTION (PNG) LTD
Respondent

Waigani: Gavara-Nanu, Kandakasi and Lay JJ
2008: 25th August
2009: 02nd July

CIVIL LAW- Supreme Court Appeal – Whether notice under s. 5 of the Claims By and Against the State Act, required for claims made against the State in arbitration proceedings.

CIVIL LAW – Whether the word "claim" in s.5 of the Claims By and Against the State Act, includes a claim made in arbitration proceedings against the State.

CIVIL LAW- appeal - Claims by and Against the State Act s5 - whether the word "action" imports or includes "arbitration proceedings".

STATUTORY INTERPRETATION – Meaning of the words "claim", "action" and "suit" in ss.1, 2 (1) and 5 of the Claims By and Against the State Act.

Facts

The Respondent brought arbitration proceedings against the Appellant pursuant to the provisions of a written contract between them. The Appellant made application for a declaration that the arbitration proceedings were unlawful because no notice of intention to bring those proceedings was given to the State pursuant to the requirement of s.5 of the Claims by an Against the State Act.

Held (Kandakasi J dissenting)

The word "action" as used in s.5 of the Claims by and Against the State Act does not import or include the meaning of arbitration proceedings. A notice under that provision is not required prior to commencing arbitration proceedings.

Cases Cited:

Chief Collector of Taxes v.T.A Field Pty Ltd [1975] PNGLR 144
Commissioner General of Internal Revenue Commission v. Douglas Properties Ltd (2002) N2192
Mai Kuri v. The State (No. 2) [1991] PNGLR 311
Mark Opur v. Darbar Enterprises Ltd (2004) N2528
Mas International Ltd v. David Sode (2008) SC 944
Rundall v. Motor Vehicle Insurance Trust [1988] PNGLR 20
Ruth Kaurigova v. Dr. Russo Perone and Ors SC 964
Ted Abiari v. The State (No.1) [1990] PNGLR 250
Enforcement Pursuant to Constitution s57; Application by Gabriel Dusava (1998) SC581.
PLAR No. 1 of 1980 [1980] PNGLR 326.
Re Morobe Provincial Government for and on behalf of the Morobe Provincial Executive Council (2002) SC693.
Inakambi Singorom v. Klaut [1985] PNGLR 238.
Chief Collector of Taxes v Bougainville Copper Ltd; Bougainville Copper Ltd v Chief Collector of Taxes (2007) SC853.
Mairi v Tololo [1976] PNGLR 125.
Rundle v Motor Vehicle Insurance (PNG) Trust [1987] PNGLR 44
Paul Tohian, Minister for Police and The State v. Tau Liu (1998) SC566.
William Trnka v. The State [2000] PNGLR 294.
Daniel Hewali v. The State Ors (2002) N2233.
Patterson Lowa, & Ors. v. Wapula Akipe &Ors [1991] PNGLR 265; [1992] PNGLR 399. Kiee Toap v. The Independent State of Papua New Guinea and Department of Lands and Physical Planning (2004) N2766.
Kamopu Minatou v Phillip Kumo (1998) N1768
John Bokin v The State (2001) N2111
Rawson Construction Ltd v The State (2004) N2614
Reference by Western Highlands Provincial Government (1995) SC486

Overseas cases

Bank of England v. Vagliano Brothers [1891] UKLawRpAC 6; [1891] AC 107
Brennan v. R [1936] HCA 24; (1936) 55 CLR 253
R v. Hare [1910] NZGazLawRp 50; [1910] 29 NZLR 641
R v. Martyr [1962] Qd. R 398
Ward v. R [1972] WAR 36
Williamson Pty Ltd v. Barrowcliff [1915] VicLawRp 66; [1915] VLR 450
Clunies-Ross v. Commonwealth (1984) 55 ALR 609
Re Bolton: Ex parte Beane [1987] HCA 12; (1987) 70 ALR 225.
Amatek Ltd v. Googooreworn Pty Ltd [1993] HCA 16; (1993) 112 ALR 1
Wacando v. Commonwealth [1981] HCA 60; 1981) 37 ALR 317
Re The Commercial Bank of Australia Ltd [1893] VicLawRp 56; (1893) 19 VLR 333
Port of Melbourne Authority v. Anshun Pty Litd [1981] HCA 45; (1981) 147 CLR 589
Henderson v. Henderson [1843] EngR 917; (1843) 3 Hare 100; 67 ER 313
Madras Electric Supply Corporation Ltd v Boarland [1955] AC 667
Inland Revenue Commissioners v Hinchy [1960] AC 748 at 766 (H. L.)
Commissioner for Railways (NSW) v Wynyard Holdings Ltd [1971] 2 NSWLR 70
R v Dunn [1973] 2 NZLR 481

Legislation Cited

Architects (Registration) Act 1989
Apprenticeship and Trades Testing Act 1986
Banks and Financial Institutions Act
Claims by and Against the State Act
Civil Aviation Act 2000
Central Banking Act

Civil Aviation (Aircraft Operators Liability) Act

Explosives Act
Motor Vehicles (Third-Party Insurance) Act
Organic Law on Peace Building in Bougainville Autonomous Bougainville Government and Bougainville Referendum
Public Finance (Management) Act
Statutory Interpretation by Donald Gifford

Texts Cited

Statutory Interpretation in Australia (5th Ed) [4.39]
Stroud's Judicial Dictionary of Words and Phrases (7th Ed)
Osborn's Concise Law Dictionary (10th Ed)

Counsel:

G.M.Egan with J. Kumura, for the Appellant
J.H. Griffin QC, E. Anderson and N. Pitoi, for the Respondent

2 July, 2009

1. GAVARA-NANU J: On or about 4 December 1997, the appellant and the respondent ("the parties") entered into a written contract for the respondent to carry out road works to upgrade and seal certain parts of the Ramu Highway in Madang Province ("the Contract").

2. The project was funded jointly by the European Union through the European Development Fund under the Lome IV Convention and the appellant. The Contract price of the road works was agreed at K40m. The respondent completed the task in or around mid 2002, and was paid in excess of K71m thus the initial agreed Contract price was exceeded by K31m. This increase was as a result of a number of factors, including work variations, delayed payments, loss of productivity by the respondent, etc, etc.

3. Later, the respondent made an additional claim of K48m through the Department of Works through its appointed supervisor for additional works it claimed it did but were not paid for. Negotiations for the payment of the additional amount claimed by the respondent failed as the appellant refused to pay the amount, claiming that the claim was made contrary to the terms of the Contract and was time barred.

4. As a result, the respondent elected to initiate arbitration proceedings by giving notices of disputes under the Contract, alleging that there were disputes between the parties to the Contract, able to be resolved by arbitration under the terms of the Contract. On or about 19 December, 2002, the respondent commenced arbitration proceedings.

5. In December, 2007, the appellant made an application before the National Court seeking a declaration that the arbitration proceedings were unlawful, claiming that the Contract upon which the arbitration proceedings were based was illegal because it breached the Public Finances Management Act. The presiding judge Davani J ruled that the appellant was clutching at straws as the time to make the application had well passed and refused the application.

6. The appellant did not appeal the ruling.

7. In January, 2008, the appellant made another application, this time seeking a declaration that the arbitration proceedings were unlawful because the respondent had failed to give notice of its claim to the State, as required under s. 5 of the Claims By and Against the State Act, (CBASA). On 7 February, 2008, the presiding judge Hinchliffe J, refused the application ruling that the arbitration proceedings were not in breach of CBASA. His Honour also refused the injunctive orders sought against the continuation of the arbitration proceedings.

8. The election by the respondent to institute arbitration proceedings was made pursuant to the General and Special Conditions of Contract, and the Procedural Rules on Conciliation and Arbitration of Contracts Financed by the European Development Fund ("the Rules").

9. The relevant parts of the Rules are Articles 5.12, 18.1, 18.2 and 18.3.

10. Article 5 is headed – "Conciliation".

11. Article 5.12 is in these terms:

5.12. Should a settlement not result, the parties shall be at liberty to refer their dispute to arbitration under these Rules, in which case, nothing that has transpired in connection with the proceedings before the Conciliator or Conciliation Committee shall in any way affect the legal right of any of the parties at the tribunal. (my underlining).

12. Article 18 is headed - "Commencement of Arbitration Proceedings".

13. Article 18.1, inter alia, provides that the claimant in an arbitration, shall give to the respondent a notice of arbitration, Article 18.2 provides that arbitration proceedings shall be deemed to commence on the date on which the notice of arbitration is received by the respondent and Article 18.3 prescribes matters which the notice must include. Notably, these Articles are in mandatory terms.

14. The Rules provide a very detail and elaborate procedural requirements for the disputing parties to follow and comply with in conciliation and arbitration proceedings. The conduct of arbitration proceedings are governed by the Rules.

15. The respondent elected to commence arbitration proceedings for its additional claim pursuant to Articles 55 and 68 of the Contract.

16. The additional claim by the respondent for K48m was made pursuant to Article 55 of the Contract which allows for the contractor to make "claims for additional payment."

17. Article 68 of the Contract sets out General and Special Conditions for dealing with "settlement of disputes"; Articles 68.1, 68.2 and Article 68.5 are the pertinent parts.

18. Article 68.1 stipulates General Conditions of Contract and it is in these terms:

68.1 The contracting authority under contractor shall make every effort to amicably settle disputes relating to the contract which may arise between them, or between the supervisor and the contractor.

19. Article 68.5 also stipulates General Conditions of Contract and it is in these terms:

68.5 In the absence of an amicable settlement or settlement by conciliation within the maximum time limits specified, the dispute shall:

• (a) in the case of a national contract, be settled in accordance with the national legislation of the State of the contracting authority; and
  
• (b) in the case of the trans-national contract, be settled either:
  
  • (i) if the parties to the contract so agree, in accordance with the national legislation of the State of the contracting authority or its established international practices; or
    

(ii) by arbitration in accordance with the procedural rules adopted in accordance with the Convention. (my underlining).

20. Article 68.2 stipulates Special Conditions of Contract, the last paragraph of the Article is pertinent and it is in these terms:

68.2 Arbitration of disputes arising on the Contract shall be settled in accordance with the Procedural Rules on Conciliation and Arbitration of Contracts Financed by the European Development Fund (Document VIII/E 44/90-EN).(my underlining).

21. The issue before this Court is whether Hinchliffe J, erred in ruling that the notice under s. 5 of the CBASA relates only to actions taken in court proceedings and not to arbitration proceedings. This raises the question of whether the respondent was required to give notice of its additional claim to the State under s. 5. This leads me to a point of contention between the parties, namely, whether the word "claim" in s. 5 includes claims made in arbitration proceedings against the State. If answer to this question is in the affirmative, then the respondent was required to give notice of his claim against the State under s. 5. A related issue raised in the appeal is whether the word "suit" in s. 2 of the CBASA should be read and applied disjunctively to the word "action" in s. 5.

22. The appellant contends that the word "claim" in s. 5 is inclusive of all claims made against the State including claims made in arbitration proceedings. Thus, it is argued that the respondent was required to give notice under s. 5 of its additional claim of K48m to the State.

23. The respondent on the other hand contends that the word "claim" in s. 5 is restrictive in its meaning and it only relates to claims made in court proceedings against the State. The respondent also contends that the word "suit" in s. 2 relates to an action taken in court to enforce a claim made against the State as provided in s. 5 (1).

24. It is convenient that ss. 1, 2 (1) and 5 (1) and (2) be set out.

25. Section 1 is in these terms:-

1. Interpretation

In this Act, unless the contrary intention appears, "suit" includes any action or original proceeding between parties in any court of competent jurisdiction.

26. Section 2 (1) is in these terms:-

2. Suits against the State

(1) A person making a claim against the State in contract or in tort

may bring a suit against the State, in respect of the claim, in any court in which such suit may be brought as between other persons.

27. Section 5 (1) and (2) is in these terms:-

5. Notice of claims against the State

(1) No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this Section by the claimant to –

(a) the Departmental Head of the Department responsible for justice matters; or

(b) The Solicitor General.

(2) A notice under this Section shall be given –

(a) within a period of six months after the occurrence out of which the claim arose; or

(b) where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or

(c) within such period as -

(i) the Principal Legal Adviser; or

(ii) the court before which the action is instituted,

on sufficient cause being shown, allows.

28. It is clear from the plain reading of s. 1, that the word "suit" in s. 2 imports same meaning as the word "action" viz, action taken in court.

29. In this regard I adopt what was said by Hodges J in Craig, Williamson Pty Ltd v. Barrowcliff [1915] VicLawRp 66; [1915] VLR 450 at 452:

"I think it is a fundamental rule of construction that any document should be construed as far as possible so as to give same meaning to the same words wherever those words occur in that document, and that that applies especially to an Act of Parliament, and with especial force to words contained in the same section of an Act. There ought to be very strong reasons present before the Court holds that words in one part of a section have a different meaning from the same words appearing in another part of the same section".

30. The word "court" is not defined anywhere in the Act, thus to give it a proper and sensible construction, it should be read in the context of the Act, including ss. 1 and 2 (1), which in my view give efficacy to its meaning, namely a court of law in which a claim made by a claimant against the State is or may be enforced.

31. The respondent has also raised two other issues. Firstly, that there is issue estoppel against the appellant from raising the issue of s.5 because it is an issue which should have been raised in the proceedings before Davani J. Thus, it is argued that the broader principle of the doctrine of res judicata and public policy requirement that there be finality in litigation operate as estoppel against the State from raising s. 5 at this stage. Secondly, the respondent claims that in any case, it had given notice of its additional claim to the State under s. 5, when it wrote to the Department of Works regarding its additional claim, as some of those correspondences were passed onto the Solicitor General. Thus, it is submitted that the Solicitor General had due notice of its additional claim.

32. These issues are raised as alternatives to the main issue.

33. Turning now to the main issue of whether the respondent was required to give notice of its additional claim to the State under s. 5 and whether the word "claim" in s. 5, includes a claim made in arbitration proceedings against the State, I am of the respectful opinion that the answer to the issue lies in the legislative intent or purpose behind "notice" under s. 5.

34. In Ruth Kaurigova v. Dr. Russo Perone and Ors SC964, the Supreme Court considered this issue and said:

" With respect to the question of whether Ms. Ephraim was a proper person to receive the notice by the appellant under s. 5 (3), we consider that the question needs to be determined in the context of the legislative intent behind s.5 by taking a purposive approach to the Section. The scheme and purpose of s. 5 in our view is akin to that of s. 54 (6) of the MVIT Act, thus the purpose of a s. 5 notice is to ensure that the notice of intention to make a claim by a claimant against the State gets to the notice of the State through the officers mentioned in Subsection (1) viz. Attorney General the (Secretary for Justice) or the Solicitor General as the case may be within the time stipulated under Subsection (2) so that, the State is put on early notice and is made aware of an impending claim against it. The purpose of a notice under s. 54 (6) of the MVIT Act, was first discussed in in (sic.) Graham Rundall v. Motor Vehicles Insurance (PNG) Trust (No.1) [1988] PNGLR 20 at 23 where Bremeyer J, said:

"The purpose of s.54 (6) is to give the Trust early notice of the claim so that it can make its inquiries. Obviously inquiries as to the driver, the owner and the insurance details of the vehicle become more difficult as time passes. Drivers change addresses and sometimes in Papua New Guinea their names, witnesses disappear, expatriates leave Papua New Guinea and police accident reports and insurance certificates get lost."

In Stanley Tendi v. Motor Vehicles Insurance (PNG) Trust [1996] PNGLR 379, at 383, Injia J (as he then was) in stating the same principle said:

"In my view, a notice under s. 54(6) should be awarded its ordinary meaning. It means to inform or to make the Trust aware of the claimant's intention to make a claim against it...Whatever form the notice takes, should sufficiently set out the relevant particulars of the vehicle, accident, the nature of the injuries received and medical treatment received, if any, and the claimant's desire or intention to make a claim..."

Then in Daniel Hewali v. Papua New Guinea Police Force and The Independent State of Papua New Guinea N2233, Kandakasi J, considered the issue of sufficiency of a notice of intention to make a claim against the State by a claimant under s. 5 of the CBAS Act. This his Honour did by reference to s. 54 (6) of the Motor Vehicle Insurance (PNG) Trust Act, and said:

"The wording in this section (s.5 of CBAS Act) is identical to section 54(6) of the MVIT Act. There are two differences between the two sections. First, there is no guidance has (sic.) to what form a notice under section 54 (6) of the MVIT Act, should take, whereas under the CBASA (CBAS Act), it provides that the notice must be in writing. Akuram J (as he then was) spoke of this difference in Kamapu Minato & Anor v. The State (unreported judgement) N1768. Secondly, it prescribes the manner in which the notice must be served.

All the cases on point, such as Kamapu Minato & Anor v. The State (supra), agree that, the purpose or intend (sic.) of Parliament behind s. 5 of the CBASA, is the same as that under the MVIT Act, as held by the Supreme Court in the Rundle case (supra).

...It is to give the MVIT early notice of an impending claim against it so that, it can carry out its own investigations while the trail of evidence is still fresh to enable it to meaningfully decide whether or not to settle the intended claim. No such investigations could be carried out if no details of the kind spoken of by the other judgements are disclosed or given.

...Such notice must give sufficient details about the impending claim so that the State can carry out its investigations and gather its evidence to properly address the claim once lodged against it. Such details should include dates, time, names of people and places, copies of any correspondence or such other information that could enable the State to carry out its own investigations..."

In Kamapu Minato & Anor v. The Independent State of Papua New Guinea N1768, Akuram J, compared s. 5 of the CBAS Act, to s. 45 (6) of the MVIT Act, and said:

"..The purpose of Section 54(6) was explained in Rundle's case by Bredmeyer J at p. 23 is to give the Trust early notification of the claim so that it can make its own enquiries as to the driver, owner, witnesses, police accident reports and insurance certificates. Section 54 (6) is designed to give the Trust prior notice of the claim within six months.

I would apply the same reasoning here and say that the purpose of Section 5(1) & (2) of the Claim By and Against the State Act, 1996, is to give the State early notification of the claim so that it can make enquiries. Obviously enquiries as to, as in this case, the raid itself, the policemen involved, the properties damaged or destroyed, their value, the witnesses and whether the action is time barred. Section 5 (1) & (2) is therefore designed to give the State and its agents or servants sufficient prior notice of the claim within six months..."

All these cases affirm that the purpose of a notice of an intention to make a claim under s. 5 of the CBAS Act, is the same as a notice of an intention to make a claim under s. 54(6) of the MVIT Act."

35. The decision in Ruth Kaurigova and the line of authorities collated in that case further affirm the legislative intent or purpose behind s. 5; which is to give early warning to the State about an impeding claim against it by a claimant so that it can make its own investigations regarding the claim. This is now a settled principle.

36. The common purpose given to s. 54(6) of the Motor Vehicles Insurance (PNG) Trust Act and s. 5 of the CBASA) by Ruth Kaurigova and the line of authorities cited in that case is rooted in the common phrase - "no action to enforce any claim...", which is found in the two sections .

37. This phrase in my respectful opinion also affirms the view that the word "claim" in s. 5 relates to a claim made in court proceedings.

38. This view is supported by the view expressed in Rundall v. Motor Vehicle Insurance Trust [1988] PNGLR 20, where Amet J (as he then was) with whom Kidu CJ agreed, in construing the phrase in the context of s. 54 (6) of the Motor Vehicles Insurance (PNG) Trust Act, said:

"The point to be made in my view, is this, consistently with similar expressions used in other subsections, the words "action to enforce any claim" used in subsection (6) refer to and means "proceedings" to enforce any claim" in court. This might seem trite, but it is important, I believe to establish it sufficiently. If we interpose this expression in the place of "action to enforce any claim" in subsection (6) then it would read like this:

"No proceedings to enforce any claim under this section in a court lies against the Trust unless notice of intention to make a claim is given etc".

39. Applying this principle, the intention of the legislature appears plain, that is, the word "claim" in the context of the Act, should be given a restrictive meaning, although it is a word of wide connotation. The word must find its colour and meaning from the context of the whole of the Act. Ordinarily, the word would have wide connotation but it is in my view intended by the legislature to be given a restrictive meaning to be in harmony with the scheme of the Act. Given the scope in which the words "suit", "action" and "court" are used in the Act, this would be a reasonable and proper construction of the word "claim". As I alluded to earlier, these words cannot be considered piece meal or apart from the rest. They have to be given their cognate sense as they take their colour and meaning from each other. If these words are construed on their own or in isolation from each other, such an approach will present a real danger of the words being read out of their proper context.

40. The intention of the legislature appears equally clear that the word "claim" should not be construed broadly to mean any and every claim made against the State, including claims made against the State in arbitration proceedings.

41. The words needing construction, including the word "claim" should be construed in the context of the scheme of the Act. There is abundant authority in support of this view, in a case where the intention of the legislature for a particular legislation under construction is quite plain from its wordings or language, as is the case here. See, Ted Abiari v. The State (No.1) [1990] PNGLR 250; Mai Kuri v. The State (No. 2) [1991] PNGLR 311; Bank of England v. Vagliano Brothers [1891] UKLawRpAC 6; [1891] AC 107; Brennan v. R [1936] HCA 24; (1936) 55 CLR 253; R v. Hare [1910] NZGazLawRp 50; [1910] 29 NZLR 641; R v. Martyr [1962] QD R 398 and Ward v. R [1972] WAR 36.

42. I perceive that the reason why the word "claim" should be given restrictive meaning is because CBASA is a special legislation enacted specifically to protect and favour the interests of the State in regard to claims made against it by claimants and s. 5 is intended to filter and screen all such claims. When one looks closely at the rest of the Act, this becomes plain. In this regard, the Act is like tax legislations which are designed specifically to protect and favour the interests of the tax collector or the Internal Revenue Commission, See, Commissioner General of Internal Revenue Commission v. Douglas Properties Ltd (2002) N 2192; Mark Opur v. Darbar Enterprises Ltd (2004) N2528; Chief Collector of Taxes v. T.A Field Pty Ltd [1975] PNGLR 144 and Mas International Ltd v. David Sode (2008) SC 944.

43. Thus, the claim made by the respondent against the State in the arbitration proceedings, and any claims made against the State in arbitration proceedings generally, fall outside of the ambit of s. 5.

44. I am therefore of the respectful view that s. 5 has no application and relevance to the arbitration proceedings commenced by the respondent to enforce its additional claim.

45. There are two other fundamental reasons why I come to the view that the respondent was not required to give notice under s. 5.

46. First, in electing to institute arbitrations proceedings against the State for its additional claim, the respondent did so in the exercise of its right pursuant to the terms of the Contract and the processes provided under the Rules to which I have adverted earlier. This right became available to the respondent once the appellant refused to pay the respondent's additional claim.

47. By discussing the respondent's claim with the respondent during their negotiations for possible settlement of the claim as required under the Rules and by considering the claim before refusing to pay the claim; the appellant had in the process became fully apprised of the facts and circumstances which gave rise to the claim. Besides, notices of disputes as to the claim were given by the respondent to the State and its agents. Thus, the appellant had due notice of the respondent's claim, hence there was no need for the respondent to give notice of its claim under s. 5. The processes provided under the Rules achieved the purpose of a notice under s. 5. The Rules have their own elaborate processes for dealing with settling the respondent's claim. This further affirms the view that the respondent's claim having been made in arbitration proceedings, the respondent was not required to give notice under s. 5, because the Rules have their own processes which also required the respondent to notify the appellant of its claim. The respondent complied with these requirements and gave due notice of its additional claim.

48. Secondly, the respondent having chosen to exercise its rights under the Contract to initiate arbitration proceedings for its claim, the proceedings are governed by the Rules. For that reason, and by their very nature, the arbitration proceedings are not legal proceedings, thus the respondent was not required to give notice under s. 5. This difference is also inherently plain in the Arbitration Act, Chapter No. 46, which differentiates between arbitration proceedings and legal proceedings or proceedings in a court of law. Section 4 of the Act, makes this difference particularly plain by spelling out the difference between the two proceedings.

49. Moreover, a claim for which a notice is given under s. 5 contemplates legal proceedings that may be commenced or have been commenced by the claimant in a "suit" or an "action" within the meaning of ss. 1, 2(1) and 5 (1) and (2). The word "suit" in s. 2 is defined by s. 1 as including "any action or original proceeding between parties in any court of competent jurisdiction". It follows that the word claim" in ss. 2 (1) and 5 (1) when given reasonable construction can only relate to a "suit" or an "action" taken in a court or legal proceedings, bearing in mind that a "suit" means an action taken in a court of law or a lawsuit. In this connection, a "suit" also means "action" taken in court proceedings.

50. The actions or steps taken in arbitration proceedings on the other hand do not contemplate legal proceedings thus they are different to a "suit" or an "action" commenced pursuant to a notice given by a claimant under s. 5 (1). Arbitration proceedings as I alluded to earlier are also not court or legal proceedings for the simple reason that they are not proceedings before a court. A "suit" or an "action" on the other hand has to be brought in a court to commence legal or court proceedings. This is clear from the plain reading of s. 2 (1). Moreover, the arbitration proceedings are brought before an arbitrator which is not a court.

51. The Arbitration Act also differentiates between an arbitrator or an umpire and a court in terms of their respective powers and functions; an arbitrator or an umpire is appointed to conduct arbitration proceedings and the powers given to the arbitrator or umpire are made subject to the powers of the court by the Act.

52. These differences in my respectful opinion affirm the view that s. 5 of CBASA has no application and relevance to the arbitration proceedings commenced by the respondent.

53. For the foregoing reasons I would dismiss the appeal.

54. Given the conclusion I have reached in respect of the main issue, I do not consider it necessary to consider the other two issues raised by the respondent.

55. I make following Orders:-

(1) The appeal is dismissed;

(2) The orders of the trial judge are confirmed;

(3) The interim injunctive orders in the appeal are dissolved;
(4) The appellant to pay the costs of and incidentals to the appeal

with certified costs for an overseas counsel.

56. KANDAKASI J: I have had the benefit of reading the draft judgments of my learned brothers, Justice Gavara-Nanu and Justice Lay and am with the greatest respect not able to agree with their views for the reasons, I will shortly give.

57. The relevant facts and background leading to this appeal are adequately stated in my two brothers' reasons for their respective decisions and I need not repeat them save only in so far as is relevant to give context to my decision.

Background
58. The Independent State of Papua New Guinea is appealing against a decision of the National Court, per the late Hinchliffe J., dated 07th February 2008. That decision declined an application by the State seeking to prevent an arbitration panel in Brisbane Australia from delivering its decision after hearing had concluded. Downer Constructions (PNG) Ltd commenced the arbitration proceedings to enforce a multimillion Kina road construction contract against the State. In its substantive National Court proceedings, the State seeks two main declaratory orders, namely (1) a declaration that the contract on which Downer went for arbitration is invalid and (2) that the arbitration proceedings are null and void. Those orders are sought on the basis of alleged breaches of the Public Finances (Management) Act 1995 (PFMA) and for lack of notice under s. 5 of the Claims By and Against the State Act 1996 (CBASA).

59. Pending determination of its substantive proceedings and any appeals there from, the State filed two separate notices of motion, respectively based on the State's allegation of breaches of the PFMA and lack of s.5 notice, the later being filed after failing the first. The State appealed only against the decision dismissing the second application, which appeal is before us now.

Arguments and Trial Judges Decision

60. The trial judge accepted arguments for Downer that, the requirements for notice under s. 5 of the CBASA does not apply to arbitration proceedings because they are not a "suit" within the meaning of s.2 (1) and not a "court action" within the meaning of s.5(1) and (2) of the CBASA. It was argued for Downer that, the word "suit" in s. 2(1) and the words "action" and "court" in s.5 (1) and (2), excludes arbitration. The argument was arbitrations can thus proceed without meeting the notice requirements. Downer's lawyer argues, this is the case because, by specific agreement the State agreed to arbitration with its own notice requirements which is sufficient. Further, learned counsel for Downer argues that, the State is precluded from raising the notice issue for two reasons. Firstly, the State is raising the issue belatedly after the arbitration proceedings having practically concluded but only for the decision. Secondly, the State should have raised the issue of s. 5 notice in its earlier application but it did not, by reason of which, it is estopped by its own conduct.

61. The State's response places emphasis on the word "claim" as used in ss. 2(1) and 5 as distinct from the word "suit" as well as the purpose of the notice requirement. It is submitted for the State that, the purpose of s. 5 is to give the State notice of all impending claims which is an important public administrative and budgetary requirement so that the State can make appropriate appropriations of funds and resources to meet an impending claim. Given that purpose, the intention was to cover all claims and all actions against the State, be it any court action, arbitration or any other action taken to enforce a claim against the State. As for the timing of the issue taken, the State's response is that, the requirement for notice is an important requirement which goes into claims that can be legally pursued against the State. Hence, any action without meeting the notice requirement is illegal, null and void and unenforceable. Such an issue can be raised at any time and as such, the State is entitled to raise the issue in the way it has.

Relevant Issues

62. From the arguments of the parties, it is clear that the relevant issues for our consideration and determination are these:

(1) Does a proper construction of the terms "suit", "action", "the court" and "claim" as used in ss.2 (1) and 5 (1) and (2) of the CBASA suggest that the requirements for notice under s.5 applies only to "court actions"?

(2) Depending on the construction of ss.2(1) and 5(1) and (2) of the CBASA, was Downer required to give notice of its intention to make a claim against the State?

(3) Subject to a determination of the above questions, is the State at any liberty to belatedly raise the issue of notice under s.5 of the CBASA and succeed?

63. The answer to the first question will help answer the second and third questions. I will therefore deal with that question first. Thereafter I will deal with the second and third questions. Before dealing with these questions, may I first thank all learned counsel for ably assisting the Court with their respective submissions.

Proper construction of the terms "suit", "action", "the court" and "claim" as used in ss.2 (1) and 5 (1) and (2) of the CBASA

64. This first question concerns the proper construction and meaning to be given to the word "suit" as used in s.2(1) and the words "action", "the court" and "claim" as used in both ss. 2(1) and 5(1) and (2) of the CBASA. Before undertaking a construction of these provisions, I first remind myself of the principles governing statutory interpretation for better guidance.

65. Sakora J in his leading judgment in the case of Enforcement Pursuant to Constitution s57; Application by Gabriel Dusava[1] summarized the different approaches to statutory interpretation, which need not be quoted since they are well know and recognized in our jurisdiction.

66. Bearing in mind these different approaches to statutory interpretation, Wilson J, in PLAR No. 1 of 1980[2] said:

"... there is no place in a developing country where the courts, as well as the Law Reform Commission, are given special responsibilities in the process of development, for the narrow interpretation of statutes without adequate regard to the social purpose of particular legislation. Development is difficult to achieve if courts adopt too conservative an approach to the interpretation of statutes. There has been a tendency in our National Judicial System, less evident in some recent decisions of the courts but still perceptible, to over-emphasize the literal meaning of a provision at the expense of the meaning to be derived from other possible contexts; the latter including the application of the "mischief" rule, the recognition of the general legislative purpose, as well as the obligations laid down under the Constitution such as, for example, the obligation upon the courts in interpreting the law to give 'paramount consideration to the dispensation of justice'..."

67. Being guided by these principles, both the Supreme and National Courts have since been interpreting the provisions of the Constitution and other statutory provisions giving their fair, large and liberal meanings to give effect to Parliament's intention. A recent example of such a decision is the Supreme Court decision in SCR No. 1 of 2000; Re Morobe Provincial Government for and on behalf of the Morobe Provincial Executive Council.[3] In that cases, the Court said in the context of the Value Added Tax legislation:

"Going by this expressed dictation in the Constitution ..., it is now an accepted principle of both constitutional and other statutory interpretation, that provisions of the Constitution and all Acts of Parliament must be given their fair and liberal meaning. This is so as to give effect to the intent of Parliament behind the provisions in question. There is a long line of case authority on that."

68. There are however, two known exceptions to this approach. The first is in cases where the words used in the legislation under consideration are so plain and clear that no art of interpretation is required.[4] The second is in tax legislation cases, where the strict interpretation rule applies.[5] In such cases, the law is that, for the imposition of a tax or charge against a subject, clear and unambiguous intention must be shown in the statute.[6] Otherwise, an interpretation favourable to taxpayers would be preferred.

69. There is a further well accepted principle of statutory interpretation. That is in the area of, what is included and excluded in any legislation. It is a well accepted principle that, where the legislature provides for inclusions or exclusions, the opposite is intended for the matters not included or excluded, as the case might be. The Supreme Court in SCR No. 1 of 2000; Re Morobe Provincial Government for and on behalf of the Morobe Provincial Executive Council[7] made reference to that in these terms:

"The State goes on to argue that, by listing in s.86 (1) of the OLPLLG the areas in which Provincial Governments can legislate, it in fact limits these governments legislative powers. It adopts one of the well-known principles of statutory interpretation "the express inclusion of one omits the other."[8]

70. Further, there is much authority for the proposition that, the courts must exercise care to ensure that, they do not usurp the powers of Parliament in the guise of interpreting and applying any statutory law. This principle was ably expressed by Kidu CJ., in Inakambi Singorom v. Klaut[9] this way:

"Whatever the rules or maxims of statutory interpretation say, one thing must not be lost sight of and that is that a clear parliamentary intention in legislation cannot be ignored or overruled by the courts. The courts cannot and must not frustrate clear parliamentary intention in any legislation so long as such legislation is constitutionally valid. For Parliament is empowered by the Constitution, s 100, to exercise the legislative power of the people and not the courts. In fact Parliament's legislative power, subject to the Constitution, is unfettered (the Constitution, s 109 (1) ), and laws made by Parliament 'shall receive such fair, large and liberal construction and interpretation as will best ensure that attainment of the object of the law according to its true intent, meaning and spirit' (s 109 (4) ). I have said the above to emphasise that a court cannot go beyond its powers by using maxims of interpretation or rules of interpretation to over-ride clear and explicit parliamentary intent in legislation. This is not saying that I support 'the strict literal and grammatical construction of the words, heedless of the consequences' approach to statutory interpretation: see PLAR No 1 of 1980 [1980] PNGLR 326."

71. Allowing myself to be guided by these principles, I now turn to a consideration of the issue before us. The words for consideration once again are "suit" as used in s. 2(1), "action", "court" and "claim" as used in both s. 2(1) and s. 5(1) and (2) of the CBASA. The provisions in question read:

"2. Suits against the State.

(1) A person making a claim against the State in contract or in tort may bring a suit against the State, in respect of the claim, in any court in which such a suit may be brought as between other persons."

...

"5. Notice of claims against the State.

(1) No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this Section by the claimant to—

(a) the Departmental Head of the Department responsible for justice matters; or

(b) the Solicitor-General.

(2) A notice under this Section shall be given—

(a) within a period of six months after the occurrence out of which the claim arose; or

(b) where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or

(c) within such further period as—

(i) the Principal Legal Adviser; or

(ii) the court before which the action is instituted,

on sufficient cause being shown, allows."

(Underlining mine)

72. I accept learned counsel for Downer's submission that, the words in dispute must be construed within their proper context because this is the only way to make proper sense out of words the legislature has employed to convey its intention and thus the purpose behind the provisions in question. The question then is, how do we ascertain Parliament's intention and purpose? We are not left without any guidance.

73. Courts in the common law world, which we are part of have developed a number of approaches to assist in ascertaining the intention and purpose behind Acts of Parliament. The most important one is to look at the words employed by Parliament and give them their proper meaning and effect. There are however, other factors the courts occasionally take into account, though not decisive on their own to assist the courts in their search for the intention of Parliament and the purpose of the legislative provision that might be under consideration. In so far as is possible, this includes taking into account and a consideration of the following aspects:

(a) the background or circumstances leading to the enactment of the legislation which would identify a mischief the legislation was intended to protect against;[10]

(b) the title to the legislation;[11]

(c) the preamble to the legislation;[12] and

(d) headings to parts of the legislation.

74. I am of the view that, all of these aspects are factors that can contribute to an ascertainment of the intention and purpose behind the CBASA and the particular provisions in question in the overall scheme of the Act. This will be in addition to or subject to giving close attention to the words actually employed by Parliament in expressing its intention and purpose. The words employed by Parliament in the general context of the Act and more specifically the context of the particular provisions under consideration should be allowed to speak without unnecessary restriction unless any restriction is clear and or there is a serious ambiguity.

75. Turning firstly to a consideration of the background to the Act, I note that, Parliament passed the present CBASA in 1996, at a time when there were large number of claims against the State, some of which were fraudulent and a large number of default judgments where being entered against the State without the State knowing or having any idea about them, costing the State millions of Kina. That was the mischief Parliament wanted to prevent. Having seen and learned from claims against the Motor Vehicles Insurance Trust and the case law that had built around s. 54 (6) of the Motor Vehicles (Third Insurance) Act, (MVIT Act) Parliament decided to have the same apply to claims against the State. That is how s. 5 got introduced into the CBASA. The earlier version of the Act did not have such a provision. This is why, as will be shown in detail a little later, many decisions of the Supreme and National Courts acknowledge that s.5 of the CBASA has its origin in s. 54(6) of the MVIT Act and they have a similar purpose of giving early notice so the MVIT and the State can carry out their respective investigations into an impending claim against them and be prepared to settle or oppose it.

76. Secondly, whilst it is not conclusive and might be misleading, the title to the Act is "Claims By and Against the State Act". Subject to a consideration of the particular provisions in issue before us and the Act in its entirety, the title seems to fit in well with the background leading to the enactment of the Act. It gives the clear impression that the Act is the legislation that governs all claims against the State and is not restricted to a particular class or type of claims but rather a catch all, legislation.

77. Thirdly, turning to the preamble to the Act, I note it is in the same language as the title to the Act. They seem to compliment each other. This is apparent from the following words employed in the preamble:

"Being an Act to provide for claims by and against the State, and to repeal the Claims By and Against the State (Chapter 30), and for related purposes..."
(Underlining mine)

78. Finally, I note that, the Act is not organised in parts. However, the individual sections are clearly marked with their respective headings. As Holroyd J said in Re The Commercial Bank of Australia Ltd,[13] such headings have the purpose of indicating:

"... certain groups of clauses as relating to a particular object .... The object is to prima facie to enable everybody who reads to discriminate as to what clauses relate to such and such a particular subject matter. It must be perfectly clear that a clause introduced into a part of an Act relating to one object matter is meant to relate to other subject matters in another part of the Act before we can hold that it does so."

79. In the case before us, each of the sections heading clearly in my view indicates what each of them is providing for. A quick look at the first few sections reveals this as can be seen from the following:

• Section 1 – Interpretation;
• Section 2 – Suits Against the State;
• Section 2A – Claim Against the State Not Enforceable in Certain Circumstances;
• Section 3 – Suit Against the Head of State;
• Section 4 – Suits by the State;
• Section 5 – Notice of Claims Against the State;
  

80. A reading of what is provided for in each of the sections clearly shows that, their headings signal what is in the provisions themselves. A careful consideration of each of the provisions made in the legislation under their respective headings makes one thing very clear. The provisions speak about two main things; (1) "claims" generally without any limit and (2), suits both by and against the State. Sections 1 to 4, 7, 10, 11, 13 and 15 talk about suits involving the State, whilst ss. 5, 9, 12 and 21 talk about "claims" against the State. The remaining provisions, namely, ss. 6, 8, 14, 16, 17, 18, 19 and 20, although they do not use the word "suit" it is clear that, they speak about matters relating to court proceedings or suits.

81. Section 1, in an attempt to define the term "suit" says, "suit includes any action or original proceeding between parties in any court of competent jurisdiction." Most law dictionaries define the term in similar language. Within the context of the provisions in question, there is rightly no issue between the parties that, the word "suit" means in simple terms a court action or proceedings issued out of a court.

82. The Act does not however, provide any definition for the term "claim". Learned counsel for the State Mr. Egan argues that, there is a distinction between the word "claim" and "suit". He goes on to point out that, the word "claim" as a broader meaning and application and covers all claims against the State, whether or not, suits have been issued or are to be issued to enforced a claim. This, he argues should be distinguished from the word "suit" which is restricted to court action or proceedings in court.

83. In response, learned counsel for Downer Mr. Griffin argues that, the focus should be on the word "action" and have that word tied in with the word "court" as used in the definition of the term "suit", s. 2(1) and s. 5(1) and (2). His argument then goes into submissions as to the meaning and effect of the use of the words "action" and "court". In my view, this argument does not with respect address the argument that, there is a distinction between the words "suit" and "claim".

84. I have searched a number of legal and ordinary English language dictionaries for the meaning of the word "claim". Leaving the everyday English language usage aside, the use of the word in the legal sense leads to this definition. A claim is an assertion, statement, allegation or averment which may be coupled with a demand or request or a call for a remedy or redress of a breach or damage done to one's person or property right or interest recognised, granted or protected by law. Bringing a suit or taking court action is not an essential element in the definition of a claim. Hence, a claim may be made without necessarily having issued a "suit" or a "court action". Clearly, therefore, there is a distinction between, the word "suit" and "claim" with the later forming the foundation for a "suit" since a "suit" is usually an action taken by a party seeking to enforce his or her claim. In other words, a "claim" becomes the basis for a "suit". The whole scheme of the Act under consideration as we noted in the foregoing, appear in my view to go along with this distinction. For these reasons, I accept the submissions by Mr. Egan that, there is a distinction between "suit" and "claim".

85. This now leaves us to deal with the meaning and effect of the words "action" as used in s.5 and the term "court" as used in both ss.2 and 5 of the CBASA. Learned counsel for Downer Mr. Griffin, correctly points out that the term "action" has both an ordinary English Language and a legal meaning. Mr. Griffin further argues that, Parliament intended the legal meaning to apply to the exclusion of the ordinary English Language. In support of that argument reference is made to a number of legal dictionaries such as Stroud's Judicial Dictionary of Words and Phrases (7th Ed) and Osborn's Concise Law Dictionary (10th Ed).

86. In further support of its argument, Mr. Griffin relies on the decision of the Supreme Court in the Rundle case.[14] There, Amet J., (as he then was) with whom, Kidu CJ., agreed, opined that, the phrase "action to enforce any claim" as used in s. 54(6) of the MVIT Act means "'proceedings to enforce any claim' in court". Mr. Griffin cites the decision of the Supreme Court in Paul Tohian, Minister for Police and The State v. Tau Liu[15] and a number of National Court decision[16] which have consistently held that s.5 of the CBASA was based on s. 54(6) of the MVIT Act, by reason of which, the cases that have built around the MVIT Act are good guide and indeed apply to the provisions of the CBASA.

87. Based on the authorities Mr. Griffin refers to, the submission is ultimately made that, the requirements for notice under s.5 of the CBASA apply only to claims resulting in court actions. Therefore, arbitration proceedings which are not strictly speaking court actions are not covered by the notice requirements under s.5 of the CBASA.

88. On the other hand, the State through Mr. Egan, argues for the broader ordinary English Language meaning to apply. His submission is that, the term should be given its usual meaning of "denoting something done or some exertion of energy productive of something". Proceeding on that basis and having regard to the general scheme of the legislation as we have outlined above, Mr. Egan argues that the term "action" should be construed to include all claims and actions against the State.

89. Further, Mr. Egan submits that, the Court must also look at the Parliament's intention or purpose for enacting s.5 of the CBASA, and in particular the mischief Parliament intended to avoid. He goes on to suggest that Parliament intended to require all claims to be proceeded with by notice amongst others for public administration and budgeting purposes, irrespective of the types of claims intended against the State. This was to ensure that, a claim involving millions of Kina progressed through arbitration or such other dispute settlement processes, not involving court action, are subjected to the same notice requirements for the same intended public purpose, in much the same way claims for much lesser amounts involving court action are subjected to. Hence, Mr. Egan argues that, the Rundle case is unhelpful. This is so because, that case was in an entirely different non contractual setting involving a different subject matter.

90. Having consulted a number of dictionaries, I note that the term "action" has a wider meaning in the way the State argues for; from an act or deed that is peaceful to more violent ones such as fights and war fares. Included in that wider definition is, court actions or suits. Taking the word in isolation of the context of the relevant legislative provision comes with the risks of not upholding the legislative intention behind the provisions in question and cause mischief. Hence, we must aim to properly ascertain the proper context of ss. 2(1) and 5(1) and (2) by reference to the background to the legislation, the words used in these provisions, the whole of the Act and its general scheme. This will lead us to their proper construction, meaning and application. That will in turn enable an upholding of the intention of Parliament. Reference to other legislation having similar provisions whilst they may be useful, could easily lead us astray, unless we are careful as to the context, intention and purposes of all legislation. This is necessary because each legislation's objective or purpose is usually different from each other.

91. Thus, the most relevant question for us in the present case is, what does the context of the provisions of s.2 (1) and s.5 of the CBASA suggest as to the meaning to be given to the words "action" and "court"? At paragraph 20 above, we covered the background leading to the enactment of the s. 5 of the CBASA. To this I accept and add the administrative and budgetary purposes highlighted by Mr. Egan for the State, since they fit in well with what we have already discussed. What is left to be considered are the proper context, meaning, effect and application of ss.2 (1) and 5. This requires a close examination and consideration of what these provisions provide for.

92. Turning firstly to s.2 (1), I am of the view that, this provision does no more than simply provide a road map as to where a person having any "claim" (as we have defined) against the State that is founded in contract or in tort could go to enforce his or her claim if need be. Such a person could go to a court in much the same way any person having a claim in contract or tort as against any other person could. One could only go to a court if the State does not accept responsibility and is contesting the claim. This is why, in my view, Parliament did not make it mandatory for every person having a claim against the State based in contract or in tort to issue proceedings against the State. For the same reason, I am of the view that, Parliament did not see it necessary and did not provide for any demarcation between, cases in which court proceedings are or likely to be issued and those in which there are and will be no court action. All that Parliament did is, provided an avenue for a person having a claim against the State in contract or in tort to take his or her claim to court, if need be, as any other person could do for his or her claim against any other person failing any out of court resolution.

93. This is apparent from what the provision does actually provide for. I am of the view that, there are three distinct parts in s.2 (1) which are spelt out in a sensible and logical flow through way. These are as follows:

(1) "A person making a claim against the State";
(2) based "in contract or in tort";
(3) "may bring a suit in any court in which such a suit may be brought as between other persons".

94. This is not surprising at all because, one must first have a claim that is founded in law such as the law of contract or, the law of torts, which, the law recognises and can enforce. Thus, it is not necessary for a person to "bring a suit" to a court in order to make a claim against the State. A person can still have and make a claim against the State or any other person without necessarily having brought a suit in a court first. Indeed, a number of matters get settled out of court and even so, without the issuance of any proceedings. Nearly all courts in the world today are recognising this and are encouraging litigants or people having a cause of action to have their causes or disputes resolved out of court. The Courts in PNG have accepted the fact that, that is the way to go with the recent amendments to the National Court Act and other legislations such as ss.333 – 337 of the Constitution at the highest, calling for resolution of disputes through mediation or other forms of alternative dispute resolution (ADR).

95. It should follow therefore that, the issuance of any court proceeding does not grant any person with a cause of action. Instead, a cause of action forms the foundation for a claim and or a suit or court proceedings. Hence, no person can issue and successfully purse any suit or proceeding in court unless he has a "claim" that is well founded in law and the law can have it enforced. Technically this is called having a "cause of action" which must be disclosed in all proceedings filed in court.[17] Our law reports and numerous decisions of the National and Supreme Courts are loaded with cases that speak about "cause of action" and dismissal of cases for failure to disclose a "reasonable cause of action."[18] If Parliament intended to prevent a person from having a cause of action or Parliament was desirous of a person having a cause of action conditional on bringing a "suit" it could have had s. 2(1) in these terms:

"No person can make a claim against the State in contract or in tort without bringing a suit against the State, in respect of the claim, in any court in which such a suit may be brought as between other persons."

96. Alternatively, Parliament could have drafted s.2(1) in the following terms to make that intention clear:

"A person making a claim against the State in contract or in tort shall bring a suit against the State, in respect of the claim, in any court in which such a suit may be brought as between other persons."

97. Having such provisions would have meant that, there could be no claims against the State without first bringing a "suit" against the State. That would have meant that there would be no cause of action unless court proceedings have been issued, which would have been additional to having a cause of action founded in contract or tort. This would have done a lot of mischief because there would be more litigation, higher costs and prevention of persons from having a valid cause of action against the State from resolving their disputes through their own negotiations or a form of ADR. Also, this would run contrary to all the legislative provisions that have been made to enable and encourage peaceful, prompt and economical settlement of disputes through mediation and other forms of ADR. In my view, Parliament could not have allowed for such a mischief to be provided for.

98. Learned counsel for Downer, Mr. Griffin did not address this point, choosing instead, to concentrate only on the definition of the term "suit" and connect it with the words "claim and "action". In my view, these words have been taken out of their context and have been connected in the way suggested without any such connection being evident in the Act. With respect, counsel paid little attention to the particular wording in s.2 (1). If due regard was had to the words in the provision, it could be found that, the provision talks about someone having a claim based in tort or in contract. Downer's claim is based in contract. So if what is not provided for was the case, Downer would not even be entitled to proceed with its claim through arbitration unless it has first issued court proceedings. In the circumstances, I do not accept the arguments for Downer.

99. This leads us to consider the provisions of s.5 (1) and (2). In respect of this, Downer's argument through Mr. Griffin once again is this. The combined effect of the use of the words "suit" in s.2 (1), and "action" in s.5 and the phrase "court before which the action is instituted" as used in s. 5(2) (c) (ii) and the use of the term "court" in both provisions is that, the notice requirements applies to a matter in which court actions or proceedings are issued to enforce ones claim against the State. Proceeding on that basis, Mr. Griffin argues that, the requirements for notice under s. 5 do not apply to claims pursued through arbitration. Hence, Mr. Griffin is arguing for a more restricted and limited meaning to be given to the term "action" to only mean "court action". In support of this argument, Mr. Griffin relies on the following passage from Amet J.,[19] with whom Kidu CJ., agreed in the Rundle case:

"... the words "action to enforce any claim" used in subs (6) refer to and mean "proceedings to enforce any claim" in a court. This might seem trite, but it is important, I believe, to establish it sufficiently."

100. I have difficulty accepting the arguments for Downer for a number of reasons. First, I note that, in the Rundle case, one of the main issues was whether, fling and serving a writ of summons constituted notice under s. 54 (6) of the MVIT Act. That issue gave the context and set the agenda for the arguments and the decision of the Court. The Court did not have before it and did not determine the issue before us in these proceedings.

101. All the cases from Rundle to the latest of Ruth Kaurigova v. Dr Russo Perone & Ors[20] have clearly established that the requirement for notice under s. 5 of the CBASA is a condition precedent. Given that, the authorities clearly say, no one can make any claim or have a cause of action against the State without first meeting the notice requirements. Hence, where a claimant fails to meet the notice requirements, he has no cause of action to pursue against the State, by reason of which, many cases have been dismissed.[21]

102. On the basis of the same authorities, I accept as correct, the arguments for Downer that, the origin of s. 5 is s.54 (6) of the MVIT Act, which is in similar language as s.5 (1) and (2) of the CBASA. Consequently, contrary to the State's learned counsel's argument, I also accept the submission for Downer that, the decision in the Rundle case, and the others that have followed it with approval, applies here.[22] That is however, with one very important qualification. As Mr. Egan, learned counsel for the State submits, the particular circumstances and the issues leading to the decision in the Rundle case and if I may add, the subsequent cases approving and following it, are different to the case before us. Given that, the decision in Rundle case does not automatically apply save with the appropriate modifications to reflect the particular intention and purpose of s.5 of the CBASA.

103. As noted, the issue in the Rundle case and its followers was, whether the requirements for notice were met? The issue before us is, whether the requirement for notice under s. 5 on the CBASA is restricted in its application to "court actions" or does it cover all claims against the State, including claims pursued through arbitration or other forms of ADR? As the trial judge noted, this issue is being raised for the first time in this case. The issue before us has and does in fact, gives its own context and considerations which, the Court must have regard to, which are different from those arising in the Rundle's case and the various other Supreme Court decisions that have approved and followed it. This is why I hold the view that, what was said in Rundle case does not automatically apply here unless properly modified and contextualized to make it more relevant and appropriate for the case before us. The onus was on Downer to do that, but it failed to do so. In any case, given the difference in the issue before us and what was in the Rundle case and those approving and following it, I cannot see how Downer could have discharged that onus. Thus, the arguments for Downer must fail.

104. Secondly, Downer's argument fails to have any regard to the other words or phrases used in s. 5 which are also very important within the context of the whole Act, its scheme and more specifically, within the context of the issues before us. A close examination of the wording in s.5 (1) and (2) reveals a structure similar to the one found in s.2 (1), also with three parts. These are as follows:

1. "No action to enforce any claim against the State lies against the State";
2. "unless notice in writing of intention to make a claim is given" to -
   

"(a) the Departmental Head of the Department responsible for justice matters; or

(b) the Solicitor-General"; and

(3) such a notice must be given "within a period of six months after the occurrence out of which the claim arose; or where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or ... within such further period as—

(i) the Principal Legal Adviser; or

(ii) the court before which the action is instituted,

on sufficient cause being shown, allows."

105. This provision generally talks in an all inclusive way about enforcing a claim against the State. We have already noted at paragraph 35 that, the meaning of the word "action" is broad. Similarly, I note that term "enforce" has a broader meaning too. The term as various meanings in terms of "put into effect", "implement", "put in force", "impose", "insist on", "make obligatory", "make compulsory" or "inflict". The meaning that emerges from this various definitions is not exclusive to court action. Indeed, I note that, arbitration proceedings involve one or more of these features and are substantially not different from court proceedings. The only major difference is in the area of the parties' choosing and funding their arbitrators whilst parties have no choice as to their judge and both the judge and the court a judge sits in are funded and provided for by the State.

106. Having now established the possible meaning of the words "action", "enforce" and "claim" the question is, what in particular did Parliament intend when it enacted the provisions in question? Before getting deep into an answer to that question, I am sure over one aspect all of us can agree. Parliament could not have intended the most violent and such other illegal and destructive acts or ways for the enforcement of a claim against the State. So the question gets narrowed down to, did Parliament intend to provide for the broader, large and liberal meaning of the words in question in the context of the provision where they are found or did Parliament intend to restrict the definitions of the terms in question to court actions?

107. Let us examine what the provision says. I am of the view that, the first part of s.5 (1) is preventing a person from taking any "action" to enforce any claim against the State. The second part of the same provision then makes it very clear that, the prohibition in the first part applies "unless notice in writing of intention to make a claim is given". In my view, this is the single most important part of s.5. It is plain and clear that, it leaves no room for argument. The requirement simply is for notices to precede any claims and actions to enforce any claims against the State. It is clear to me as was held in the Rundle line of authorities, giving notice is the first requirement a person intending to make a claim against the State must meet. After having met that requirement, a person may be at liberty to make his or claim. If the State accepts the claim and meets whatever is claimed against it and does so, that would be the end of the matter. If however, the State takes issue with the whole or parts of the claim, or simply says nothing or does nothing about a claim lodged against it, the claimant would take steps to enforce his claim. Unless, say by specific agreement with the State in the case of a claim base in contract, the claimant has agreed to take his dispute to mediation or arbitration or such other means of dispute resolution, the claimant will resort to taking court proceedings to enforce his claim.

108. I am sure that the draftsman and Parliament were well aware of this reality. If they wanted to restrict the notice requirements to apply only to matters requiring court action, the word "suit" or "court action" would have been employed in place of the word "claim" in the second part of s. 5(1). Thus s.5(1) in relevant parts would have read:

(1) No action to enforce any claim against the State lies against the State unless notice in writing of intention to bring a suit or court action is given in accordance with this Section by the claimant..."

109. I accept Mr. Egan, counsel for the State's suggestion that, if that is what Parliament intended, the Act itself could have had the heading "Suits By and Against the State Act" and more specifically, the heading to s.5 would read "Notice of Suit Against the State". I am also of the view that, if it was Parliament's intention to provide only for "suits" or "court actions", the Act would not have talk about "claims" and "suits" at the same time and would have enacted another legislation to govern all other claims against the State. The fact however is that, Parliament did not do that. The only Act that governs claims by and against the State is the very Act under consideration.

110. Ultimately, I am of the view that, Parliament intended the CBASA to govern all claims, including court actions by and against the State and not have it restricted to "court actions". Accordingly, there is no limit as to the application of s.5 of the CBASA. It applies to all intended claims against the State, some of which might, require the issuance of court proceedings to enforce them while others, may resolve without the need for any court action. This is understandable if we clearly understand and appreciate the background leading to the enactment of this provisions as we noted earlier and the fact that not all claims require court action.

111. Again as has been clarified by a number of Supreme Court decisions, the condition precedent is for a good reason. As we have already noted, the requirement for notice is to give the State, just like the MVIT, which is usually not personally involved and or aware of the facts giving rise to claims against it, early notice of all impending claims against it so that, the State can carry out its own investigations when the trail of evidence and facts as it were, are still fresh and available. Then based on its investigations, it can decide to either settle an impending claim or defend it. The decisions of the Supreme Court in the Rundle case and those following it with approval have clearly and authoritatively identified and settled this point. In the context of s.5 of the CBASA, the Supreme Court decisions in the Paul Tohian & Tau Liu case with recent followings in Rawson Construction Limited & Ors v. The State[23] and Ruth Kaurigova v. Dr Russo Perone & Ors[24] adopted and applied this point.

112. To this, I have already added the points made by Mr. Egan for the State and say there is an additional purpose for requiring notice of all impending claims against the State. That purpose and hence another mischief Parliament intended to avoid is from a proper public administration and budgetary stand point. Notice of any impending claim is to enable the State to be informed of the possible, budgetary and relevant administrative implications a claim would bring against the State's limited resources by any and all claims against the State so that, the State can consider, prepare and respond appropriately in good time, rather than being caught unawares. I accept the arguments for the State that, this was to ensure that, a claim involving millions of Kina progressed through arbitration or such other processes, not involving court action, are subjected to the same notice requirements as a relatively smaller claim involving much less financial consideration, for the same purposes for requiring notice. If that were not the case, claims involving substantial amounts of money could escape the notice requirements and defeat the intention or purpose behind that requirement. It would also be unfairly discriminating against claims pursued against the State between cases where court proceedings are issued and those being pursued without court proceedings. In this regard it would appear that, the notice requirement is a penalty for a claimant taking his matter to court. That would certainly be mischievous and go against the right of a person to go to the courts for redress as provided for in the Constitution.

113. Further, for the reasons stated above, Parliament deliberately did not provide for any exception to the requirements for notice, That is the case even in cases where a person has a contract with the State which expressly provides for the resolution of any conflict or dispute through arbitration or mediation or any other form of ADR, which might have their own provisions for notice. If Parliament intended to exempt these kinds of cases, it would have made provision for it but it did not. In my view, this was not an oversight. Instead it was a deliberate decision by Parliament to ensure and avoid parties contracting with the State undermining the requirements for notice by contract. This could happen for instances by a party having a claim under a contract, not doing anything about it until say a substantial period of time has lapsed and much change has occurred with the loss of memories and witnesses, placing the State in a prejudiced position. Accordingly, I am of the view that, there is no authority in the State or a party contracting with a party to contract out of the requirements of s.5 of the CBASA.

114. Given this legislative position, I am of the view that, the Supreme Court starting with the Rundle case, and the cases that have subsequently approved and followed it, have consistently held that, filing and serving court proceedings or otherwise proceeding with a claim without first meeting the notice requirements are invalid and have had them all dismissed. The Courts have gone a step further to point out particularly in the context of s. 54(6) of the MVIT Act that, it would be illegal to entertain any claim, not necessarily a court action that has not met the notice requirements because, to do so would be allowing an illegal and an unauthorised action. A clear expression of that point is in the decision of Injia J., (as he then was) in Stanley Tendi v. Motor Vehicles Insurance Trust[25] in these terms:

"In relation to the second requirement that notice of the claim must be given within the six months or within such extended period, I do not think there is room to engage in any judicial construction exercise. Within six months or such extended period speaks for itself. If a claimant or his lawyer or agent is out of time in giving notice within the 6 months or the extended period, he cannot purport to give notice to the Trust outside of those time limits. If such notice is given, then the trust is under no legal obligation to act on those letters. I would agree with Woods J., in the three cases cited by Counsel for the Trust. That which is against clear legal statutory requirement cannot be validated by a Court under the guise of statutory construction."

115. Thirdly, having ignored the import of the phrase "notice ...of intention to make a claim" Downer's argument introduces in my view an exception to the requirements for notice without Parliament providing for it. The argument effectively is that, the requirement for notice and hence the condition precedent applies only to cases in which court action is to be instituted. Accepting this argument as the effect of the Court introducing an amendment to the Act to exclude the application of the provisions of s. 5 to cases in which claims are to be resolve without any court action. This runs contrary to the well established principles of law, as we earlier noted that, the courts can only interpret and apply what Parliament has provided for in legislation. They cannot in the guise of statutory construction, add to or remove any provision made by Parliament. Great care must thus be exercised to ensure that the Courts do not usurp the powers of Parliament in the guise of statutory interpretation.

116. In the instant case, it was within Parliament's competence and not that of the Courts to clearly state its intention if it was its intention that the condition precedent should apply only to cases in which there is to be a court action against the state. In any case, I am of the view that, this does not sit well with the background and purpose behind the enactment of s.5 of the CBASA. Given the purpose and hence the intention behind the provision in question, I am of the view that, Parliament deliberately decided against providing for any exception to the requirements for notice. Accordingly, the Courts ought to exercise care not to create any or a list of exceptions to the requirement. The Courts should be guided by the unrestricted meaning and effect of the word "claim" as used in s.5 CBASA and all the other words used in that provision should be given their fair, large and liberal meaning within the context of the provision and the Act as we have noted in the foregoing.

117. Fourthly, I cannot with respect, see any sense in Downer's counsel's argument because, claimants seek to minimize their costs and delay in a resolution of their claims by trying to resolve their conflicts through direct negotiations with the other side as quickly as possible. Presently, as already noted, the recent amendments to the National Court Act and other legislation are supporting this kind of approach to dispute resolution and our Courts are encouraging parties to resolve their disputes through negotiations or a form of ADR. Only failing any satisfactory settlement or outcome, the parties could resolve to court proceedings or actions to enforce their claims. In some cases, inevitably, negotiations could go beyond the initial 6 months from the date of the cause of action accruing and fail to reach settlement, which may cause a claimant to go to court. If the argument for Downer is correct, did Parliament intend to shut out these categories of claimants from taking out any Court proceedings? Are they exempt from the notice requirements? If not what is or are their remedy or remedies? Could they be required to apply for extension of time to give notice of their intention to make a claim? If so why should that be the case, when the claimant had already made his or her claim and the State is aware of the claim? If required, why that extra expense and for what purpose? Downer neither raised nor provided any answer to any or all of these questions. That in my view provides a reason to reject the arguments for Downer.

118. Finally, I am of the view that, Downer's argument fails to note the fact that the phrase "the court before which the action is instituted" as used in s. 5 (2) (c) (ii) concerns, applications for extensions of time. Until the decision in the Rundle case, there was an ambiguity in this provision. After the clarification in the Rundle case, it is now accepted that the time limit of 6 months for the giving of notice as imposed by s 5 (2) (a) and (b) can be extended on appropriate and successful application to the Principle Legal Adviser who is the Attorney General or "the court before which the action is to be instituted". Clearly, the phrase in question does not say that the requirements for notice applies only to cases in which there is to be a court action so as to exclude cases in which there is to be no court action. Instead, it is clear that a person, who is caught out by the 6 months time limit to give notice of one's intention to make a claim, can apply to the Attorney General or the Court before which he or she will issue proceedings for extension of time to give notice of his or her notice of intention to make a claim.

119. In my view the words used in s.5 (2) (c) (ii) to describe the court is merely to identify the Court or the forum to which a party may go to with his application for extension of time and nothing more. Consequently, as Amet J, again said in the Rundle case, the interpretation given to the phrase in question renders consistency with the main scheme of the whole of the provision dealing with notice. That is why, in my view, the Courts have not required parties applying for extensions of time to demonstrate amongst others that, their proposed cause of action is something that can only be resolved by court action. That would have been absurd and would clearly go against the intention and scheme of s.5 of the CBASA. The Courts have therefore, sensibly required persons applying for extension of time to meet only three requirements, namely: (1) reasonable explanation for not coming within the 6 months period and any delays thereafter in making an application for extension of time; (2) disclose a reasonable cause of action to pursue against the State; and (3) demonstrate no prejudice likely to occur to the State by any late notice.[26]

120. Ultimately, I am of the view that, the requirement for notice under s. 5 of the CBASA applies to all claims, whether any court action is contemplated or not. This is a stand alone requirement and is not subject to any other provision in the Act, or else where and no art of statutory interpretation beyond what has already be said is required to give effect to Parliament's intention and purpose behind the provision. It applies to all claims against the State and is an important condition precedent to all claims against the State, so that the State can have early notification of an impending claim which may or may not result in any court action, appropriately prepare, make provisions both administratively and financially to meet the claim and respond to claims against it, once made. A failure to meet this requirement renders any claim against the State illegal and invalid.

Was Downer required to give notice of its intention to make a claim against the State?

121. This leaves us to turn to a consideration of the next issue of, was Downer required to give notice of its intention to make its claim against the State? In the light of the foregoing discussions, I have no hesitation in answering that question in the affirmative.

122. In alternative arguments for Downer, it is claimed that, Downer gave notice of its intention to make its claim against the State. Reference is made to a number of its correspondences to a number of State servants, agents and or authorities. The first lot of correspondence were address to the Secretary of the Department of Works and the Secretary of the Department of National Planning. Section 5 (2) of the CBASA is very clear that, such notices must be addressed and given to the Attorney General or the Solicitor General.[27] Clearly therefore, the correspondence addressed to the respective Secretaries of the Departments of Works and National Planning could not be valid because they were neither of the designated authorities under s. 5 (2) nor could the purported notices be said to have been given in accordance with that provision.

123. The second lot of Downer's correspondences were addressed to the Attorney General. However, they were dated well outside the six months limitation stipulated by s. 5 (2) (a) and (b). There is no evidence of that time limit being extended and the purported notices being served within any such extended period. Proceeding on the strength of relevant cases on point, most of which we already referred to above, I am of the view that, those purported notices were not proper and valid notices because they were outside the required time limits. Further, I note that, the contents of the letters do not seem to address the issue of notice. The decision of the Supreme Court in the Rawson Construction case remains instructive and not heeded. Accordingly, this provides an additional reason to hold these purported letters of notices defective and invalid, which I hereby do.

124. The question then is, should the State be granted the relief it is seeking, which is a declaration of nullity of the arbitration proceedings which have been concluded with a partial award now delivered. This is the subject of the only remaining issue, to which, I now turn my attention.

Is the State at any liberty to belatedly raise the issue of notice under s.5 of the CBASA and succeed?

125. Learned counsel for the State, Mr. Egan argues that, it is trite law that, the provisions of s.5 of the CBASA are mandatory condition precedent to the enforcement of any claim against the State. Therefore, any non-compliance renders any attempted enforcement action null and void and of no effect. Reliance is placed on Paul Tohian & The State v. Tau Liu,[28] case.

126. In response, learned counsel of Downer, Mr. Griffin, says, the State had opportunity much earlier to raise this issue before the arbitration progressed in the way it has to the point where the arbitration is now concluded save only for its final decision. Additionally Mr. Griffin points to earlier interlocutory proceedings before Davani J, in the context of which the State could have raised the issue of notice but did not. Consequently, Mr. Griffin argues that, in failing to raise the issue earlier, the State allowed the earlier proceedings to be fought and determined only on the issue of whether or not the requirements of the PFMA have been breached. The Court determined that issue in Downer's favour.

127. Downer is hence, raising the defence of res judicata or issue estoppel or estoppel by conduct. In Australia this defence has become known as the Anshun estoppel after the decision of the High Court in Port of Melbourne Authority v. Anshun Pty Ltd.[29] This defence has common law origin. A statement of the relevant principles is in the words of Sir James Wigram VC in Henderson v. Henderson[30] in these terms:

"Where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."

(Underlining mine)

128. In the Anshun case, the High Court of Australia per Gibbs CJ, Mason and Aickin JJ at p. 602 in due recognizance and acceptance of these principles said:

"...there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding."

129. In our jurisdiction, we have accepted these principles. Sakora J.'s decision in AGC (Pacific) Ltd v. Sir Albert Kipalan[31] confirms this. There, his Honour said:

"In this respect, it is useful to note for our present purposes (and assistance) the impact of the Australia High Court decision in Port of Melbourne Authority –v- Anshun Pty Ltd (1981) HCA, which is that a party will be estopped from bringing any further action that arises out of the same subject matter as a earlier action. This decision emphasizes the importance of the doctrine of res judicata, as operating to prevent prejudice and unfairness to a party, more particularly a defendant, being burdened and saddled with multiplicity of allegations and claims to answer. The doctrine also operates to confirm the twin doctrines of finality and certainty in judicial-making process."

130. I repeatedly adopted and applied these principles in a number of my decisions in the National Court.[32] One of the most recent ones is my decision in the matter of Telikom PNG Limited v. ICC & Digicel (PNG) Limited,[33] which went to the Supreme Court and the Supreme Court effectively endorsed them in its decision in Telikom PNG Limited v. ICCC & Digicel (PNG) Limited.[34]

131. A local case that might be more directly on point is my decision in the matter of Manorburn Earthmoving Limited v. The State.[35] In that case, Manorburn sued the State for breach of a construction contract. Through out of court settlement negotiations, parties executed a deed of release. On the basis of the deed, the State agreed to pay Manorburn certain sums of money in consideration of Manorburn agreeing to discontinue its proceedings. Proceeding on the basis of the deed, the State made part payment of what it agreed to pay. On its part, Manorburn filed a discontinuance of its proceedings.

132. Later, the State took issue with the deed and filed court proceedings seeking to have the deed declared null and void. Its main basis was its claims of lack of notice under s.5 of the CBASA and non compliance of the requirements of ss.59 and 61 of the PFMA. These defences were open and available for the State to take in defence of Manorburn's original proceedings but the State did not do that and instead, entered into the deed of release. Then after having issued its proceedings, the State did not prosecute its proceedings resulting in its dismissal. The State appealed against that decision but did not prosecute it resulting in its dismissal for want of prosecution. Thereafter, Manorburn issued proceedings seeking to enforce the deed of release.

133. The State turned up at the hearing of Manorburn's proceedings and raised the same issues it failed to raise in the first of Manorburn's proceedings and later it raised in its own proceedings which were dismissed for want of prosecution and its defence to the second lot of Manoburn proceedings. In dismissing the State's arguments, I reasoned that:

"44 The State had the opportunity in its defence ... to raise the lack of compliance of the requirements for notice under s. 5 of the Claims By and Against the State Act and the requirements for public tender and Minister for Finances' approval under s.59 and s. 61 respectively. It chose not to do that. Instead, the State decided to have the matter settled out of Court and executed the Deed. Then on the basis of the Deed, the parties took various steps including a discontinuance of the Company's then proceedings and the State making part payment of the agreed damages. Later however, the State changed its position and issued proceeds questioning the validity of the Deed, based on some of the very grounds that were available to it at the time of negotiation and conclusion of the Deed. The failure to raise those grounds and instead enter into the agreement to settle the claim by way of the Deed clearly demonstrated in my view, the fact that the State was not taking those points up and instead it was happy to enter into settlement negotiations and have the matter settled through the Deed.

45. The only new issue it could raise and did raise was the lack of signature or approval of the Deed by the Attorney General and its claim of fraud leading to the Deed. The State did not pursue its proceedings and instead allowed them to be dismissed for want of prosecution, an outcome it did not challenge in any manner or form. Then only when the Company sought to enforce the Deed, the State belatedly and at the trial raised the same issues it failed to raise at the time of entering into settlement negotiations and later in the proceedings it issued but which were dismissed on account of its own failure to pursue them. I have already expressed the view that, by its own conduct the State shut itself out from further litigating on the very issues that were put to an end with the entering into of the Deed and the dismissal of its proceedings under WS No. 1343 of 2002, by reason of which, the State is at no liberty to re-agitate the same issues."

134. On its part, I note the Supreme Court has already spoken in relation to the State belatedly raising the issue of lack of s.5 notice. The Supreme Court's decision on point is its decision in The State v. Brian Josiah & Ors.[36] The following passage from that decision is pertinent:

"Whilst we accept the requirement to give notice of intention to make a claim against the State to be mandatory, we do not consider that the learned trial judge made any error in that regard for the simple reason that it was for the appellant to have raised the issue through the pleadings. The Appellant failed to do so even though it had had more than ample opportunity to have done so. The first opportunity was during the ordinary course of pleadings after the writ was served on it through the office of the Solicitor General and secondly, after an extension of time of 7 days was granted to it by Kandakasi J. It cannot now complain that the learned trial judge failed to properly consider the provisions of that Act."

135. That was in the context of the State not raising the issue of s. 5 notice in proceedings before the National Court well before that Court concluded the proceedings. The State sought to raise the notice issue on appeal against a decision to enter summary judgment against it. Prior to the entry of the summary judgment the State had opportunity within the time period allowed under the CBASA and the National Court Rules as well as further time extended by the Court to raise the issue but the State did not. Only on appeal, the State raised the issue without first meeting the requirements of O.8 r.14. This rule requires specific pleading of a matter that "makes any claim, defence or other case of the opposite party not maintainable" or that which might "take the opposite party by surprise".
136. What all these means in my view is this. The law requires a party responding to a claim, to raise all of the issues or matters necessarily connected and arising out of what is before the Court or tribunal that forms the foundation for either a grant or denial of the relief sought at the earliest possible opportunity. This the parties must do before there is a decision on the matter before the court and further steps are taken. This requirement is important both from a legal and public policy consideration, which require certainty and finality in litigation. Enshrined in these broad principles amongst others, are the need to avoid unnecessary litigation, frustration, delay and costs. Where a party fails to observe these requirements and allows judgment to go on what is before the court or the tribunal, the issues that have been raised and those not raised but should have been raised are said to have reached res judicata and or issue estoppel. This effectively precludes a party from re-agitating issues that have already been determined or should have been raised and determined in the earlier proceedings or determination, subject only to ones right of appeal. But even in appeal cases, a party is not at liberty to raise issues it should have raise in the Court or tribunal of first instances.[37]

137. Applying these principles to the present case, I note that, the issue of notice under s.5 of the CBASA was always there for the State to raise the moment Downer made its claim and initiated the steps to have its claim arbitrated. Failing that, the State had further opportunity to raise the issue before the arbitration panel has a preliminary point but it did not, safe only for a last minute or after-thought attempt. That resulted in the arbitration panel proceeding to hear the matter with witnesses called and submissions made at substantial costs to both parties. Only the final decision of the arbitrators is pending. The State had further opportunity when its earlier application before Davani J was argued. The State chose only to argue its claims based on its claim of the requirements under the PFMA not being met. Only after losing on that claim, it brought another application this time on claims of the requirements for notice under s.5 of the CBASA not being met. In the circumstances, I am of the view that, the State is precluded from raising this issue now and succeed by its own conduct, as I am of the view that the issue has reached res judicata, or if not, issue esstoppel as arisen.

138. In the end, I find that, Downer was obliged to give notice of its intention to make its claim against the State, which it failed to do. When it proceeded to make its claim against the State and eventually proceeded with the arbitration proceedings, it was incumbent on the State to raise the issue of notice as the first and most important point as soon as possible before any further step or decision was made but the State did not to do that. This was despite having had the services of lawyers from the Solicitor Generals office, and at various stages, the well established law firms of Blake Dawson and Possman Kua and Aisi Lawyers. Those failures allowed the arbitration proceedings to progress to a hearing and conclude save only for the arbitration panel's final decision. In the circumstances, I have no difficulty in finding that the State is precluded from raising the issue by its own lawyers' conduct.

139. In the State's Notice of Appeal, it seeks a grant of the orders it seeks in its notices of motion filed respectively on 13th December 2007 and 21st December 2007. Davani J., heard and dismissed the first motion. The State accepted that decision as it did not appeal against the decision so that decision remains intact. The second motion is the subject of this appeal, which I find must fail for the reasons I have given in the foregoing and not for the reasons the learned trial judge dismissed the State's application. There was and is no reason to give consideration to the other aspects or principles governing the grant of interim injunctions, having determined the key and determinate point against the State.

140. Interestingly, I note that, the State's two notices of motion essentially sought the substantive orders sought in the substantive proceedings. Consequently, I am of the view that, the basis for seeking those orders now being determined against the State, it should serious consider discontinuing the substantive proceedings.

141. Before turning to a consideration and determination of the orders that must be made, I turn to the final issue of costs. If anything is clear from the facts giving rise to the arbitration proceedings and the proceedings in the National Court and finally this appeal, it is the State's failure to promptly respond and defend Downer's claim against it. In a belated attempt to avoid the claim against it, the State raised the issues of non compliance of the PFMA requirements and the requirements of s.5 of the CBASA. The State took the belated steps without first taking the steps it should have taken at the appropriate time and not having the proper foundation to raise them. I am therefore of the view that, the State should be fully responsible for the costs of this appeal and costs in the National Court. I would therefore order costs against the State with certification for one overseas counsel.

142. Based on the foregoing, I would make the following orders:

(1) The Appeal be upheld.

(2) The decision of Hinchliffe J., delivered on 7th February 2008 be quashed in its entirety.

(3) The orders sought in the Appellant's Notice of Motion filed on 21st December 2007 be declined and the motion be dismissed.

(4) The interim order issued by the single man Supreme Court on 14th February 2008 be lifted,

(5) The Appellant seriously consider discontinuing its proceedings under OS 783 of 2007 in view of this decision.

(6) The Appellant pay the Respondent's costs with certification for one overseas counsel costs.

143. LAY J: In 1997 Downer and the State entered into a contract for road building works valued at K40 million. During the construction of the works various claims were made by Downer for additional works and at the practical completion of the work a further K30 million had been certified, making the total contract value K70 million. Practical completion was about May 2002. About May 2003 Downer gave notice to the State through the Department of Works that it considered there were additional works not paid for and it eventually made a claim against the State for a further K48 million.

144. After some discussion and an exchange of correspondence, the Supervising Engineer refused to certify the additional claims and the State refused to pay.

Downer took steps to have arbitrators appointed under the contract terms. The arbitration did eventually proceed in Brisbane in December 2007.

145. Also in December 2007 the State made application before Davani J. for a declaration that the arbitration proceedings were unlawful because the original contract under which the arbitration was proceeding was in breach of the Public Finance (Management) Act. Davani J. ruled that the State was clutching at straws and the appropriate time to raise compliance with the Public Finance (Management) Act had passed. The State concedes that the judgment of Davani J. was right and no appeal was brought from the judgment.

146. Next in January 2008 the State sought the same relief before Hinchcliffe J. on the basis that no Section 5 Notice under the Claims by and Against the State Act (CBASA) had been given to the State before the arbitration proceedings commenced or within six months of the occurrence of the events out of which the claim in arbitration arose. Hinchcliffe J. decided against the State's contention that the claim was in breach of the CBASA, and at the same time dismissed the State's claims for injunctive relief with respect to continuation of the arbitration. It is essentially from this ruling that the State appeals.

147. In this appeal there are interim injunctive orders preventing the parties from taking any further steps in the arbitration, including each party requesting the Tribunal to take no further steps including joining in handing down of an award.

148. The State argues that in Section 5(1) of the CBASA the words "no action to enforce a claim" include in the term "action" arbitration proceedings. It is argued that one cannot simply pick a definition or meaning from the way the word was used in other Acts or any dictionary and apply it, it must be given a contextual meaning within its own Act.

149. Downer argues that there can be only two meanings to the word " action " either it means its common meaning of any step, which leads to ridiculous results such as a party could not even write a letter of demand, or, which Downer contends, it has the common legal meaning of an action brought at law in court. It is argued the draughtsman did not intend to include arbitration proceedings because those are done by agreement and nearly always have their own timetables for notice etc.

150. Further Downer argues that there is an estoppel, there has to be finality in litigation. At the very latest, if the State wanted to assert that a section 5 notice was not given and that it was necessary, it should have made that application at the same time as its other application before Davani J.

151. The State's reply to the last point is that the Court must always enforce the legislation and the fact that there had been delay does not change the fact that the proceedings were illegally commenced.

152. Finally Downer argued that in any event notice had been given by the many letters which it had sent to Department of Works some of which were passed on by Department of Works to the Solicitor General.

153. The State submits in reply that Section 5 (1) of the CBASA requires personal service by the party making the claim, the requirements of the Act are not fulfilled by notice to the Department of Works being passed on to the Solicitor General.

The first issue then for determination is what is meant by the term "no action" in s5 of the CBASA?

154. I approach this question by looking at:

1. the purpose of the Act;
2. other internal references in the Act to "action";

100. judicial comment in respect of provisions with which Section 5 has been compared;

4. other legislation using the term "no action".
   

The Purpose of the Act

155. It has been said that the purpose of the Act:

"... is to give the State early notification of the claim so that it can make inquiries as to ( the circumstances of the claim)...": Kamopu Minatou v Phillip Kumo (1998) N1768;

156. This statement was adopted and applied by Davani J. in John Bokin v The State (2001) N2111 and by Lay J. in Rawson Construction Ltd v The State (2004) N2614.

157. In David Hewali v Papua New Guinea Police Force (2002) N2233 Kandakasi J. said:

"The purpose or intent of Parliament behind s5 of the CBASA is the same as that under the Motor Vehicles (Third-Party Insurance) Act as held by the Supreme Court in Rundle v MVIT [1988] PNGLR 20. The relevant part of the judgment in that case is in these terms by Bredmeyer J.:

' the purpose of s54(6) of the Motor Vehicles (Third-Party Insurance) Act Chapter 295 is to give the Trust early notification of the claim so that it can make inquiries. Obviously inquiries as to the driver, the owner and the insurance details of the vehicle, become more difficult as time passes. Drivers change addresses and sometimes in Papua New Guinea their names, witnesses disappear, expatriates leave Papua New Guinea, and the police accident report and insurance certificates get lost'.

158. This purpose I consider militates against a meaning for "action" which includes "arbitration" because:

a) Where there is arbitration the parties are already in a formal written contractual relationship;

2. Where arbitration is commenced the parties have been in communication over an issue and have reached a position which cannot be resolved by agreement;

100. Most if not all arbitration provisions contain their own procedural framework which includes requirements for notice.
     

159. These are not circumstances which take the State by surprise when steps are taken to commence arbitration. None or very little purpose would be served by a s5 notice. I also accept Downer's contention that there are only two meanings which could be intended, "court action" or "any action" and the latter leads to the ridiculous position that not even a letter of demand could be sent.

Assistance of internal references in the CBASA

160. In Section 9 of the CBASA, which gives the State 60 days to file its defence, the opening sentence refers to "... in any proceedings for a claim". Then in the last line provides "... or such further time as the court, before which the action is instituted, upon sufficient cause being shown, allows". In the context it appears that the words "proceeding" and "action" have been treated as having the same meaning. And in the context of s9 "action" inescapably means "court action".

161. Subsection 14(5) provides:

"No action-

1. for or in the nature of mandamus;
2. for contempt of court

or otherwise lies, against the Solicitor General..."

162. As a remedy in mandamus or for contempt of court can only be taken in a court of unlimited jurisdiction "no action" in the context of Section 14 (5) must mean "court action".

163. It is a presumption of general statutory construction that where the Parliament has used a word in different sections of a statute it intends to convey the same meaning with that word; unless the context requires a different interpretation. This method of interpretation has been applied to the Constitution: Reference by Western Highlands Provincial Government (1995) SC486. It is not a rule which compels the same meaning to be adopted in respect of every instance of the use of a word. Lord McDermott in the House of Lords in Madras Electric Supply Corporation Ltd v Boarland [1955] AC 667 at 685 made the following comments:

"The presumption that the same word is used in the same sense throughout the same enactment acknowledges the virtues of an orderly and consistent use of language, but it must yield to the requirements of the context, and it is perhaps at its weakest when the word in question is of the kind that readily draws its precise import, its range of meaning from its immediate setting or the nature of the subject with regard to which it is employed".

164. It may be an inappropriate presumption to apply to a very long statute employing dozens or even hundreds of instances of a common word, or where the statute deals with quite diverse and incongruous provisions: Inland Revenue Commissioners v Hinchy [1960] AC 748 at 766 per Lord Reid (H. L.). Nevertheless "... the primary rule, and one that should not be readily displaced, is that the same meaning should be given to the same word where ever it appears in an Act of Parliament": Commissioner for Railways (NSW) v Wynyard Holdings Ltd [1971] 2 NSWLR 70 at 82-83.

165. The CBASA is a very short Act and it would be surprising indeed if in such a short enactment Parliament intended to employ the same word with different meanings in different sections. I am of the view that nothing in Section 5 requires the word "action" to be interpreted differently to the meaning attributed to it as used in Sections 9 and 14(5). Hence the meaning of "action" in Section 5 is "court action".

Judicial Comment in Respect of Provisions with Which Section 5 of the CBASA Has Been Compared

166. I have already referred to the comparison, similarity, and findings of common purpose between Section 5 of the CBASA and Section 54 (6) of the Motor Vehicles (Third-Party Insurance) Act at [16]. The similarity between the two subsections was also referred to and relied upon for the purposes of interpretation of the CBASA in Paul Tohian v Tau Liu (1998) SC566.

167. Section 54 (6) of the Motor Vehicles (Third-Party Insurance) Act provides:

"No action to enforce any claim under this section..."

168. In Rundle v Motor Vehicle Insurance Trust [1988] PNGLR 20 Amet J., with whom Sir Buri Kidu CJ agreed, was in no doubt that the reference to "no action" should be properly interpreted as "no proceedings to enforce any claim in a court". He said:

"The point to be made in my view, is this, consistently with similar expressions used in other subsections, the words "action to enforce any claim" used in subsection (6) refer to and means "proceedings" "to enforce any claim" in a court. This might seem trite, but it is important, I believe to establish it sufficiently. If we interpose this expression in the place of "action to enforce any claim" in subsection (6) then it would read like this:

"No proceedings to enforce any claim under this section in a court lies against the Trust unless notice of intention to make a claim is given etc".

169. It was said by the New Zealand Court of Appeal in R v Dunn [1973] 2 NZLR 481 at 483 that:

"The primary rule of construction of words in a statute is that when the words are familiar and are in common or general use, they should be given their ordinary and popular meaning. While it is true that judicial decisions may result in particular meanings being attached to particular words in a section, the Courts will not readily apply to one statutory provision a gloss on the ordinary meaning of common words which a judicial decision has given to another section, a fortiori one in another statute".

170. I acknowledge that the foregoing general statement is hedged around by many cases which warn against adopting the definition of a word in one statute for use in another statute, without first making a careful examination of the intention of Parliament in the statute for which a definition of a word is being sought.
171. Nevertheless, given the similarity of purpose and intent of Section 54 (6) of the Motor Vehicles (Third-Party Insurance) Act and Section 5 of the CBASA, and of the Supreme Court's approval of the use of the similarities as an aide in interpretation, I find no good grounds to depart from the meaning given to "action to enforce any claim" in the former Act when interpreting that same phrase in the latter Act, the CBASA. I am fortified in this view by the fact that Rundle's Case was decided in 1988 and the CBASA was not introduced until 1996, so that Parliament and the Legislative Draughtsman would have been well aware of the meaning attributed to "action" in the almost identically worded provision in the Motor Vehicles (Third-Party Insurance) Act. Parliament could have been expected to employ a different word, insert the word "arbitration" as it has done in other legislation, which I discuss below, or introduce a definition if a different meaning was intended in the CBASA to the judicial interpretation applied in the earlier Act.

Assistance gained from other legislation using the term "no action"

172. There are in fact a very large number of Acts of the Parliament in our body of legislation which use the term "no action". It is quite common. Some examples are as follows:

Architects (registration) Act 1989

s.13 no action, suit, prosecution or other proceeding..." and then at s41 "... action in court..."

Civil Aviation (Aircraft Operators Liability" Act

s26(2) "... no action lies against a carrier..."

Banks and Financial Institutions Act

s68(2) "No action lies against..."

Civil Aviation Act 2000

s320(1) "no action for nuisance..."

Explosives Act

s.22 "no action lies against..."

173. However, it is instructive and interesting to note that the Parliament does, when it considers it necessary to do so, make specific reference to particular types of actions or proceedings or other matters, examples of which are as follows:

Organic Law on Peace Building in Bougainville Autonomous Bougainville Government and Bougainville Referendum

s71 "any arbitration, action or proceeding".

Apprenticeship and Trades Testing Act 1986

s59 "... any arbitration, action or proceeding..."

Central Banking Act

s107 "... any action, arbitration or proceeding was pending..."

174. The following statement is found in Statutory Interpretation by Donald Gifford at page 82:

"It may also be useful to contrast the definition of a word in one Act with the definition of the same word in another Act, if the two definitions used different words it is reasonable to suppose that the meaning of the two definitions are intended to be different. For example, where one Act specifically excluded bodies corporate from the definition of "consumer" but the definition of the same word in another Act contained no such exclusion, the court held that had Parliament wished to exclude bodies corporate from the provisions of the second Act it would have done so specifically".

175. Although I am here not considering a definition but the use or failure to use a word, I find it confirmative of my view that "action" does not include "arbitration", that where the Parliament wishes to include arbitration, it has done so by specific reference to arbitration, as the examples at [173] show.

176. Therefore, for all the reasons I have advanced, I conclude that in the CBASA Section 5 the words "no action" mean no court action and the words do not import "arbitration".

177. It is not necessary to address the parties other submissions as this finding disposes of the appeal because it is clear s.5 of the CBASA does not apply to arbitration proceedings and a notice under s.5 was not required to commence the arbitration.

ORDERS:
a) the appeal is refused;
b) the orders of the trial judge are confirmed;
c) the interim injunctive orders in the appeal are dissolved;

d) the Appellant shall pay the Respondent's costs of and incidental to the appeal.
e) Certification for one overseas counsel.
_______________________________
Posman Kua Aisi: Lawyers for the Appellant
Gadens Lawyers: Lawyers for the Respondent

---

^[1] (1998) SC581.
^[2] [1980] PNGLR 326.
^[3] (2002) SC693 (per Kandakasi J with whom Salika J (as he then was agreed)..
^[4]Inakambi Singorom v. Klaut [1985] PNGLR 238, per Kidu CJ at 241.
^[5] Chief Collector of Taxes v. Bougainville Copper Ltd; Bougainville Copper Ltd v. Chief Collector of Taxes (2007) SC853; Followed in MAS International Ltd v. David Sode (2008) SC944.
^[6] Mairi v. Tololo [1976] PNGLR 125.
^[7] Supra note 3.
^[8] Ibid.
^[9] Supra note 4, per Kidu CJ at 241.
^[10] For authorities on point see Rundle v Motor Vehicle Insurance (PNG) Trust [1988] PNGLR 20; PLAR No. 1 of 1980 (supra note 2).
^[11] For examples of cases in which this was done at least by the High Court of Australia, see Clunies-Ross v. Commonwealth (1984) 55 ALR 609 at 610; Re Bolton: Ex parte Beane (1987) 70 ALR 255 at 237; Amatek Ltd v. Googooreworn Pty Ltd [1993] HCA 16; (1993) 112 ALR 1 at 5.
^[12] See Wacando v. Commonwealth [1981] HCA 60; 1981) 37 ALR 317 at 327, per Mason J and Statutory Interpretation in Australia (5^th Ed) [4.39] at p.121.
^[13] [1893] VicLawRp 56; (1893) 19 VLR 333 at 375.
^[14] Supra note 10.
^[15] (1998) SC566 (Kapi DCJ, Sheehan J, Jalina J).
^[16] Namely William Trnka v. The State [2000] PNGLR 294 (Sevua J.) and Daniel Hewali v. The State Ors (2002) N2233 (Kandakasi J).
^[17] See Patterson Lowa, & Ors. V. Wapula Akipe &Ors [1991] PNGLR 265; [1992] PNGLR 399 for what amounts to a cause of action.
^[18] Ibid (note 17); Kiee Toap v. The Independent State of Papua New Guinea and Department of Lands and Physical Planning (2004) N2766 (Cannings J.) and Jack Livinai Patterson v. National Capital District Commission (2001) N2145 (Kandakasi J.).
^[19] At p.29 of the Rundle decision.
^[20] (2009) SC 964 (per Gavara-Nanu and Kandakasi JJ.)
^[21] See for example Daniel Hewali v. The State Ors (2002) N2233 (per Kandakasi J.); Peter Saun v. Joseph Homiwafe, & Ors (2004) N2742 (per Sawong J.); Sarakuma Investment Limited Trading as Wabusa Mini Tavern v. Peter Merkendi, & Ors (2004) N2629 (per Cannings J.).
^[22]See Rawson Construction Limited & Ors v. The State (2005) SC777 and Ruth Kaurigova v. Dr Russo Perone & Ors (2009) SC 964 (supra note 22) for more recent authorities on point.
^[23] Ibid, first case.
^[24] Ibid, second case.
^[25] [1996] PNGLR 379 at 383.
^[26] Rawson Construction Limited & Ors v. The State (2005) SC777.
^[27] See Ruth Kaurigova v. Dr Russo Perone & Ors (2009) SC 964 for a detail discussion on what is meant by the word “given” as used in s. 5 of the CBASA.
^[28] Supra note 15.
^[29] (1981) 147 CLR 589.
^[30] [1843] EngR 917; (1843) 3 Hare 100; 67 ER 313 at 67 ER 319.
^[31] (2000) N1944.
^[32] Some of these cases are Koitaki Farms Ltd v. Kemoko Kenge (2001) N2143; Umapi Luna Pakomeyu v. James Siai Wamo (2004) N2718 and Eki Investments Ltd v. Era Dorina Ltd (2006) N3176.
^[33] (2007) N3144.
^[34] (2008) SC906 (Injia DCJ (as he then was) Kirriwom and Cannigs JJ.)
^[35] (2008) N3287.
^[36] (2005) SC792.
^[37] See for examples of authorities on point PNGBC v. Jeff Tole (27/09/02) SC694 and Jimmy Ono v. The State (04/10/02) SC698,