PNG Electoral Commission v Kiandi Ltd (trading as Goroka Family Store) [2019] PGSC 39; SC1795 (25 February 2019)

SC1795

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 9 OF 2017

PNG ELECTORAL COMMISSION
Appellant

V

KIANDI LIMITED
Trading As GOROKA FAMILY STORE
Defendant

Waigani : Logan J, Liosi J, Miviri J
2019: 25 February

CONTRACTS – appeal from the National Court – where the respondent alleged a contract to provide food services to the appellant – where no written contract was entered into – whether the evidence supported the National Court’s finding that a sum was due and owing to the respondent – whether this contention was raised in the pleadings – where the respondent pleaded specific performance – where no specific performance was available – where National Court judge ordered payment as damages or quantum meruit – appeal dismissed

The respondent alleged that it had formed a contract with the appellant for it to provide food services in Goroka for the 2012 National General Election. While no written contract existed, the existence of a contract was supported by a letter from a provincial assistant election manager and some purchase authorities and related requisitions for expenditure. Despite providing the food services to the appellant, the respondent only received part-payment of approximately one sixth of the contract amount.

The respondent brought proceedings in the National Court, seeking for its contract with the appellant to be specifically performed. The learned National Court judge found that a contract existed and that, while specific performance was not available, judgment should be entered for the respondent in the sum alleged, less the part payment. The appellants appealed this judgment to the Supreme Court.

Held:

(1) The learned National Court judge was entitled to proceed to judgment on the basis of facts alleged in the pleadings, and proved, without putting any particular label on the cause of action. The judgment was therefore supported by the pleadings.

(2) It was open on the evidence before the learned National Court judge for his Honour to conclude that a contract existed between the appellant and the respondent, and that the appellant owed a sum of money under the contract to the respondent.

Cases Cited:
Papua New Guinea Cases

Embda Limited v Tropical Habitat Limited [2001] PGNC 145
Jeanette Minifie v The State [1994] PNGLR 78 at 89

Overseas Cases

Curran v William Neill & Son (St Helens) Ltd [1961] 1 WLR 1069
Shaw v Shaw [1954] 2 QB 429

Legislation

Constitution
Claims By And Against The State Act 1996 s 5
Judicial Proceedings (Interest on Debts and Damages) Act 2015

Application

This was an appeal against a judgment of the National Court, ordering judgment for the respondent for breach of contract or quantum meruit.

Counsel

Mr Simbala, for the Appellant
No appearance for the Respondents

25^th February, 2019

1. BY THE COURT: This case arises from the alleged supply by the respondent, Kiandi Limited trading as Goroka Family Store, to the Papua New Guinea Electoral Commission, the appellant, of catering services for officials, support staff and security officers at the central tally centre established at the National Sports Institution in Goroka for the purposes of the 2012 National Election. Kiandi Limited came to institute proceedings against, materially, the Electoral Commission by a writ of summons issued in March 2013. That writ was issued subsequent to the giving of prior notice pursuant to s 5 of the Claims By And Against The State Act 1996.
2. The relief claimed on the writ was as follows: Orders for specific performance against the defendants, judgment in the sum of K352,100, interest at 60 per cent per annum, costs and any other orders as the court deems fit.
3. The annexed statement of claim alleged an arrangement in respect of the provision of catering services as has been described. It further alleged the submission of invoices totalling K352,100 to the Electoral Commission in respect of catering services rendered. Also alleged was non-payment of the invoiced amounts.
4. Curiously, with all respect to the author of the statement of claim as per the allegation that was made at [14] under the heading “Performance of Contract”:

The plaintiff has faithfully delivered on its part of the contract in giving the catering services required by the defendants. The first and second defendants have defaulted on their part in paying for the goods and services already rendered and invoiced to them at K352,100.

It should be stated that as originally issued the writ named a Mr Alwyn Jimmy, Electoral Manager for the Eastern Highlands Province as the first defendant, the Electoral Commission as second defendant and the State as third defendant. The State was removed as defendant by an interlocutory order.

5. The proceedings for all practical purposes were constituted as between Kiandi Limited and the Electoral Commission in the National Court. They are the only parties to the appeal; the Electoral Commission as appellant and Kiandi Limited is the respondent.
6. In the result after a trial on affidavits, the order made by the National Court was as follows:

(1) The Second Defendant, Papua New Guinea Electoral Commission, to pay the Plaintiff K312,650.00.

(2) Interest on K312,650.00 at 2%yearly to accrue from 13th March 2013, to judgment and thereafter in accordance with the Judicial Proceedings (Interest on Debts and Damages) Act 2015.

(3) The Defendant is to pay the costs of the Plaintiff to be taxed if not agreed in accordance with the National Court Scale.

(4) Time abridged to the date of settlement which shall be forthwith.

The present appeal is brought against those orders.

7. The notice of appeal is somewhat prolix. However, with commendable forensic discernment, Mr Simbala, counsel for the appellant identified the essence of the appellant’s grievance as being found in ground 4(a) which states:

His Honour erred in law and in fact when he entered judgment against the Appellant in the sum of K312,650.00 when -

(i) there was no foundation in the pleadings of the amount of K312,650.00 as being due and owing to the Respondent; and
(ii) there was no evidence before the court of the sum of K312,650.00 as being due and owing by the Appellant to the Respondent.

8. Having perused the other grounds pleaded in the notice of appeal, we regard the identification by Mr Simbala of the essence of the appeal being found in this ground as accurate. The other grounds in essence contain arguments as to why the particular grievance named in ground 4(a), should be upheld.
9. Before turning to the merits of that ground and the reasons for judgment of the primary judge, we should record the following in relation to Kiandi Limited. When the appeal was called on for hearing this afternoon, there was no appearance by or on behalf of that company. An explanation for that was found in an affidavit made by Mr Simbala on 22 February 2019 and filed in court earlier today. In that, he deposes - and we have no reason to doubt accurately - to an exchange between him and Mr Tenige, the lawyer in the firm acting on behalf of Kiandi Limited. Suffice it to say Mr Tenige disclosed to Mr Simbala some embarrassment in relation to his obtaining of a current practising certificate and canvassed as a result of that an adjournment of the hearing of the appeal. Not unreasonably, the stance taken on behalf of the appellant was that the appeal had been set down for some time, notice duly given of the hearing date and that the appellant was entitled to, and proposing to, proceed with the hearing of the appeal.
10. Insofar as the Constitution requires that natural justice be observed in the exercise of judicial power, the giving of notice to the respondent of the hearing today of the appeal complied with that requirement. Embarrassment on the part of a lawyer arising from not keeping current a practising certificate is no reason at all to adjourn the hearing of the appeal. It was quite proper for Mr Simbala on behalf of the appellant to take the stance which was taken so as to allow the appeal to proceed on its appointed hearing date.
11. That, of course, does not mean that the appeal must succeed. It is necessary for us to determine the appeal on its merits. In that regard, we have had the advantage of Mr Simbala’s oral submissions this afternoon as well as the earlier prepared and filed written submissions made on behalf of both the appellant, Electoral Commission, and on behalf of Kiandi Limited as respondent.
12. The reasons for judgment of the learned primary judge are abbreviated but with respect none the worse for that. His Honour was faced with a case where particular material facts in relation to the supply of catering services by Kiandi Limited to the Electoral Commission were alleged. The claim made for specific performance was always misconceived. There was nothing specifically to perform. The contract had been performed according to particular facts alleged in the statement of claim. What was truly at issue was whether the Electoral Commission was liable to make any payment to Kiandi Limited in respect of the allegedly supplied catering services.
13. The defence filed on behalf of the Electoral Commission was not particularly helpful. By that, we mean it consisted of nothing more than denials and non-admissions. In particular, there was no allegation made of any illegality in relation to the contract alleged.
14. As to the evidence, there was no cross-examination by or on behalf of either party in respect of their respective affidavit evidence. For the appellant Electoral Commission, its evidence consisted of an affidavit made by Mr Francis Dakeni, its Manager Logistics. Mr Dakeni deposed to the tendering process, which one might infer was an ordinary part of Electoral Commission’s conduct of its business and to an absence of that process in respect of this particular claimed supply of services. He deposed that the only advertisements that the Electoral Commission had placed were, materially, advertisements calling for expressions of interest from service providers or vendors expressing their desire to provide goods and services to the Electoral Commission in the conduct of the 2012 National Election.
15. He further deposed that he believed that the claim may have emanated from a local arrangement between the Election Manager of Eastern Highlands Province, Mr Alwyn Jimmy, and the plaintiff company. However that may be, the evidence at trial also included a letter dated 6 August 2012 sent by the provincial assistant election manager to Kiandi Limited in which the following was stated:

We acknowledge your catering services during the 2012 National Election and due to funds yet to be released from the PNG Electoral Commission, HQ, we are unable to pay your invoices.

We will pay your company for the services rendered as soon as the funds have been released.

We apologize for the delay.

16. That letter aligned with an account given on behalf of Kiandi Limited by its managing director, Ms Keryn Hargreaves, by an affidavit in which she stated at [6] that:

Janet Reuben, Assistant manager to Alwyn Jimmy sent their officers to Existing businesses within Goroka town to engage us in various services.

17. The author of the letter of 6 August 2012 was Janet Reuben as assistant elections manager for the province. Ms Hargreaves then related her attendance at a meeting at the National Sports Institute convened by the Electoral Commission for all service providers. She also related having received a vehicle pass allowing her vehicle to enter the Electoral post established at the National Sports Institute and to this at [17]:

The work I was given by Electoral Commission comprise two parts. The first part was to cater for the construction workers during the construction phase. This comprised of feeding 147 construction workers 3 meals per day for the construction of the counting houses at the National Sports Institute. This construction phase took 2 weeks. [sic]

18. She then deposed at [18]:

The second part comprised of feeding counting officials, security personals and related administrative staffs at the central tally room at the National Sports Institute. This totalled to more than 150 people. We served till about 2.00 am in the morning. The catering was provide since July to mid August 2012. [sic]

19. Ms Hargreaves further deposed at [19]:

Invoices were issued in relation to services provided. The first invoice was invoice number 001 for the sum of PGK50,050.00 and invoice 002 for the sum of PGK50,050.00 and invoice number 003 for the sum of PGK252,000.00, all for the value of goods and serviced rendered at their request.

[sic]

20. By a letter dated 12 December 2013, the Electoral Commission sent the following to the manager ANZ Bank Boroko in the National Capital District. In respect of:

Cheque Confirmation, Kiandi Limited – 100 458

This letter serves as a confirmation to the payment raised under Kiandi Limited for the amount of K55,450, cheque number 100458 dated 12th December 2013.

The payment is for catering services provided during the 2012 Elections.

21. Also in evidence before the learned primary judge was a series of business records of the Electoral Commission. This comprised three separate purchase authorities and related requisitions for expenditure. The purchase authorities were these:
    • (1) purchase authority number 0001-05-407-020-118 in the amount of K50,050;
    • (2) purchase authority 0001-05-407-020-119 in the amount of K50,050; and
    • (3) purchase authority number 0001-05-407-020-120 in the amount of K268,800.

Each of these purchase authorities was apparently authorised by a Mr Alwyn Jimmy; inferentially, the same gentleman referred to by Ms Hargreaves in her affidavit and the manager of the particular electoral office.

22. There was no evidence before the learned primary judge by or on behalf of the Electoral Commission which sought in some way to explain how the cheque was calculated and how and why that differed from the amount specified in the Electoral Commission’s own purchase orders.
23. Against this evidentiary background, the learned primary judge observed that:

The writ is poorly drafted. For example the claim is for specific performance, namely for the Plaintiff to be paid. One would have thought this to be better pleaded as a simple claim for money due for goods and services provided alternatively for quantum meruit. As to the pleading of vicarious liability, it is plain from Mr Dakeni’s affidavit that the agent had authority. There is no doubt about the claim as pleaded namely:

The Plaintiff wants payment of a stated amount for catering services provided for the 2012 Elections. There is no surprise or confusion with the pleadings.

His Honour found that the catering services were provided. On the evidence, that was a finding which was open.

24. Having done that, his Honour then addressed the amount that should be allowed, if anything, to Kiandi Limited in respect of the payment for catering services. His Honour observed and the case on the evidence was that:

The matter has been bedevilled by lack of itemised invoices. Though the deponent [Ms Hargreaves] refers to “invoice number 001”, “002”, “003”, as detailing the amounts claimed, no invoices are annexed. It seems that also lost the original invoices as the agent sent off 3 substituted requests for payment forms (Purchase Orders) for those respective three amounts (i.e. K50,050, K50,050, and K268,000).

25. His Honour then analysed the purchase orders observing that they expressed the amounts claimed in a curious way and that expressing the costs in this way was not helpful. His Honour also observed that there was no elaboration in Ms Hargreaves’ affidavit as to the number of meals, the kinds of meals provided three times daily and the dates when the catering was provided were imprecise.
26. What his Honour did was the best that he could on the evidence to hand. His Honour stated:

Because of these unknown variables, the Court cannot speculate on the amount claimed and has to take into account that the PNGEC agent confirmed the 3 amounts (K50,050, K50,050 and K268,000), in total K368,100.

27. His Honour then stated:

In this case that is the one clear piece of evidence. The payment of K55,450 is ambiguous as to whether it was full payment or [part] payment. Suffice to say the Court finds on balance of probabilities that the sum of K312,650 is due and owing by the Second Defendant to the Plaintiff.

Orders in the terms already recited were then made.

28. Turning then to the ground for appeal. The first proposition is one of an alleged absence of foundation in the pleadings for the amount of K312,650 as being due and owing to Kiandi Limited. What is clear though as it was to the learned primary judge is that there was an arrangement for the provision of catering services. So much is evidenced by the letter of 6 August 2012. Further, it was open to the learned primary judge to find that those services had been provided. Ms Hargreaves’ evidence, which was not challenged by cross-examination, established that. Material facts supporting a claim for provision of services by agreement and non-payment in respect of those services were pleaded in the statement of claim. The criticism made by his Honour was well made.
29. Nonetheless, it was no answer in the face of evidence supporting material facts to allege just a discrepancy in the pleaded cause of action and the relief which ultimately claimed to be granted. In Embda Limited v Tropical Habitat Limited [2001] PGNC 145 (Embda Limited v Tropical Habitat Limited), Justice Gavara-Nanu upheld a claim for damages arising from a breach of implied warranty. In so doing, his Honour considered the pleading requirement set out in the National Court Rules. Quoting Richard Dennis Wallbank and Jeanette Minifie v The State [1994] PNGLR 78 at 89, his Honour stated:

The National Court Rules O 8 r 7 merely ask that the plaintiff plead the facts on which he seeks to rely. If established on the evidence at the hearing, the Court may find an award for damages according to any principles of law which have developed, whether by common law, statutory effect or development in Papua New Guinea on a case-by-case basis. There is no need “to put a label on the cause of action.”

30. His Honour then in Embda v Tropical Habitat Limited made what was with respect, an apt reference to an observation made by Lord Justice Denning as his Lordship then was in Shaw v Shaw [1954] 2 QB 429 at 441 in which his Lordship stated:

It is said that an implied warranty is not alleged in the pleadings, but all the material facts are alleged, and in these days, so long as those facts are alleged, that is sufficient for the court to proceed to judgment without putting any particular legal label upon the cause of action.

31. The present case is an example of the learned primary judge proceeding to judgment on the basis of facts alleged and proved without putting any particular legal label upon the cause of action. If one were disposed to put a label “on the cause of action” one might describe it as a claim for damages or alternatively a quantum meruit.
32. Of course, it would have been possible for the claim to have been amended at trial so as to raise these causes of action. As to that in Curran v William Neill & Son (St Helens) Ltd [1961] 1 WLR 1069 at 1078, Lord Justice Holroyd Pearce stated:

An amendment would have a very strong claim on our discretion, even at this late stage, if it could be shown that on the evidence the plaintiff was clearly entitled to succeed under a regulation on which he had omitted to rely.

The other judges in that case were of a like-mind.

33. What follows both from this local authorities as well as the English authorities referred to, was that it was open in law for the learned primary judge, material facts having been pleaded, to give such judgment on the evidence as established a cause of action known to law. That is all that the learned primary judge did.
34. As to ground 4(a)(ii), it is not the case there was no evidence before the court of the sum of K312,650 as being due and owing to Kiandi Limited by the Electoral Commission. The Electoral Commission’s own business records in the form of the purchase orders referred to by the learned primary judge established that such an amount was owing. None of this is to say that it is not possible to see how a concern may have arisen in the headquarters of the Electoral Commission in relation to the claimed payment of catering services in respect of this particular electoral post. However, it was for the Electoral Commission to explain in evidence in a way that discharged proof on the balance of probabilities that the sum as specified in its own purchase orders was in some way irregular and that the amount and only amount lawfully owing to Kiandi Limited was that which was paid by cheque.
35. Further, his Honour’s observation that it was ambiguous as to the basis upon which that cheque was tendered was a conclusion open on the evidence. There was no covering letter which stated that the cheque was tendered in full and final satisfaction. That, of course, would still have left it open to the plaintiff company, Kiandi Limited, to have disputed the amount, refused to accept the cheque or stated that it would only accept that as part payment. As it happened, there was no need to do that because the covering letter that did not cry out for that type of reaction.
36. It only comes to this. In this case, material facts sufficient to show that catering services were provided to the Electoral Commission were pleaded in the statement of claim. The evidence was not all that one might have expected in terms of a well-run business preserving copies of invoices. For all that, there was sufficient evidence to which we have referred which admitted of the conclusions reached and orders made by the learned primary judge. Mr Simbala has put everything which may fairly be put on behalf of the appellant, Electoral Commission. Nonetheless, for the reasons which we have given, there is no merit in either limb of ground 4(a). It necessarily follows that the appeal must be dismissed.

ORDER

For these reasons, we order as follows:

1. The appeal be dismissed.
   
2. The appellant to pay the respondent’s costs of and incidental to the appeal, to be taxed if not agreed. On any taxation, no allowance is to be made in respect of an appearance on the hearing of the appeal by the respondent.
   

Judgment accordingly.
_________________________________________________________________
Harvey Nii Lawyers: Lawyers for the Appellant
No appearance for the Respondents