Western Highlands Provincial Government v Must Investment Ltd (trading as MS Rent A Car) [2021] PGSC 34; SC2110 (28 May 2021)

SC2110

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO.68 OF 2016

BETWEEN:
WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Appellant

AND:
MUST INVESTMENT LIMITED trading as MS RENT A CAR
Respondent

Waigani: David J, Makail J, Miviri J
2021: 25^th & 28^th May

CIVIL APPEAL – civil claim against a provincial government - notice requirements of provincial government legislation, Claims By and Against the Western Highlands Provincial and Local-level Government Act 1999 to be complied with – notice in writing of intention to make a claim against the provincial government must be given within a period of six months after the occurrence out of which the claim arose – notice to be given to Administrator of provincial government or Governor - no notice given – default judgment entered for damages to be assessed, but set aside as of right for irregularity on application for want of compliance with notice requirements and matter referred for mediation – further application filed and prosecuted for dismissal of entire proceedings refused – error committed - appeal upheld - Claims By and Against the Western Highlands Provincial and Local-level Government Act 1999, Section 5.

Cases Cited:
Shaw v Commonwealth of Australia [1963] PNGLR 119
Supreme Court Reference No 4 of 1980 [1982] PNGLR 65
Rundle v MVIT (1988) PNGLR 20
The State v Tau Liu (1998) SC566
Bokin v Independent State of Papua New Guinea (2001) N2111
Emmanuel Mai trading as Mai Lawyers v Southern Highlands Provincial Government (2004) N2558
Caspar Kondi v Provincial Administrator, Department of Western Highlands Province & Ors (2004) N2755
Wellcos Engineering Limited v Hami Yawari (2008) N3443
John Wasis v Brian Pebo (2008) N4515
Peter Wararu Waranaka v Gabriel Dusava (2009) SC980

Counsel:

Elizabeth Ngomba, for the Appellant
No appearance for the respondent

JUDGMENT

28^th May 2021

1. BY THE COURT: INTRODUCTION: This is the Court’s decision in relation to an appeal filed against the National Court’s decision made on 8 April 2016 at Mt. Hagen refusing the appellant’s application moved pursuant to a notice of motion filed on 26 November 2015 (Tab 13 AB) to dismiss the entire National Court proceedings commenced by the respondent then as plaintiff by WS No.909 of 2008, Must Investment Ltd trading as M.S. Rent A Car v Hon. Tom Olga, MP, Governor, Western Highlands Provincial Government and Western Highlands Provincial Government on 4 August 2008 (the National Court proceedings) for want of compliance with Section 5 of the Claims By and Against the Western Highlands Provincial and Local Level Government Act 1999 (Provincial Claims Act).

2. The appellant instituted the appeal by the filing of a Notice of Appeal on 11 June 2019 (Notice of Appeal) following the grant of leave to appeal on 28 May 2019: 143-144 AB.

3. The respondent has not shown any interest in contesting the appeal. The Court’s record shows that the respondent was served with the Notice of Appeal soon after its filing, but has not filed any notice of appearance. Nonetheless, the appellant has given the respondent notice of the hearing, but has not been represented at the hearing by counsel or otherwise.

BRIEF BACKGROUND

4. In the National Court proceedings, the respondent claimed against the appellant the sum of K482,448.00 for the use and hire of a number of its vehicles allegedly by the appellant between 7 April 2006 and 6 January 2009 at varying rates that it averred was outstanding: pp8-17AB.

5. The respondent applied for and obtained an order for default judgment with damages to be assessed on 7 May 2012 (the default judgment): pp 93-94-AB.

6. On 11 September 2015, the appellant applied for the default judgment to be set aside asserting that the default judgment was irregularly entered, inter alia, for failure to serve; the amended writ of service filed on 20 March 2009 on any of the designated officers of the appellant stipulated under Section 7 of the Provincial Claims Act; and a notice of intention to make a claim against the appellant contrary to Section 5 of the Provincial Claims Act. In addition, the appellant sought leave to file its defence out of time. The application was supported by the affidavits of; Joseph Neng sworn on 12 July 2013 and filed on 16 July 2013; Matthew P. Tamutai sworn and filed on 20 August 2014: pp98-131AB; and that of Elizabeth N. Suelip sworn on 29 July 2010 and filed on 4 August 2010: pp20-92AB. Even though there was delay in moving the application, the National Court was persuaded to accede to the appellant’s application and made orders setting aside the default judgment and for the parties’ dispute to be resolved by mediation: 132-133 and 146-157AB.

7. On 8 April 2016, the appellant applied for the dismissal of the National Court proceedings in their entirety for want of compliance with Section 5 of the Provincial Claims Act: pp134-136. The application was supported by the affidavit of Joseph Neng sworn on 11 November 2015 and filed on 26 November 2015 and also made reference to the affidavits of Joseph Neng sworn on 12 July 2013 and filed on 16 July 2013 and that of Elizabeth N. Suelip sworn on 29 July 2010 and filed on 4 August 2010: pp20-92AB and pp136-142AB. The National Court refused the application and directed that the matter proceed to mediation: pp158-165AB.

GROUNDS OF APPEAL

8. The appellant relies on four grounds in this appeal and these are contained at paragraph 3 of the notice of appeal which we reproduce below.

“1. The learned trial judge erred in law and in fact in not considering that the respondent had failed to tender evidence of service of Section 5 Notice to the Western Highlands Provincial Government at the time for application for default judgment; and when the appellant raised the issue again in 2016; that it had not complied with giving Section 5 Notice to the Western Highlands Provincial Government.

2. The learned trial judge erred in law and in fact and acted ultra vires his jurisdiction when he refused the application to dismiss which contradicted his earlier ruling on 11 September 2015 when he set aside default judgment on the basis that the default judgment was entered irregularly as the respondent failed to comply with the requirements to give notice to the Western Highlands Provincial Government as required under Section 5 of the Claims By and Against the Western Highlands Provincial and Local Level Government Act.
3. The learned trial judge erred in law and in fact in ordering mediation under Rule 5 of the Mediation Rules on a claim which is void ab initio when the respondent had not discharged the onus of proof as to the validity of the proceedings.
4. The learned trial judge erred in law and in fact in holding that the proceedings should not be dismissed; because the pleadings and affidavits raised factual or legal grounds for dismissal on the basis that:

(i) The respondent’s lawyer confirmed giving Section 5 notice to the State only, but it did not produce evidence that it also gave Section 5 notice to the Western Highlands Provincial Government.

(ii) The respondent failed to demonstrate in the pleadings and the affidavits that it had complied with Section 5 of the Claims By and Against the Western Highlands Provincial and Local Level Government Act to give notice to the Western Highlands Provincial Government prior to instituting the proceedings against the Western Highlands Provincial Government.”

RELIEF SOUGHT

9. The principal relief that is sought in the Notice of Appeal is that the orders made on 8 April 2016 in the National Court proceedings be quashed.

ISSUES

10. The major issues that stem from the grounds of appeal are:

1. Whether the learned trial judge erred in refusing to dismiss the entire proceedings when there was no evidence to demonstrate that the respondent gave notice to the appellant pursuant to section 5 of the Provincial Claims Act?
2. Whether the learned trial judge erred in law and in fact and acted ultra vires his jurisdiction when he refused the application to dismiss the proceedings which contradicted his earlier ruling on 11 September 2015 when he set aside the default judgment?
3. Whether the learned trial judge erred in law and in fact in ordering mediation under Rule 5 of the Mediation Rules on a claim which was void ab initio?
4. Whether the learned trial judge erred in law and in fact in holding that the proceedings should not be dismissed because the pleadings and affidavits raised factual or legal grounds for dismissal for want of compliance with Section 5 of the Provincial Claims Act?

NOTICE OF CLAIM UNDER SECTION 5, CLAIMS BY AND AGAINST THE WESTERN HIGHLANDS PROVINCIAL AND LOCAL-LEVEL GOVERNMENT ACT

11. All the major issues will be addressed together.

12. Ms Ngomba of counsel for the appellant contends that the appeal should be upheld as the trial judge erred in not dismissing the National Court proceedings when there was no evidence produced by the respondent, the onus of proof being on it, to demonstrate that notice of its claim was given to the appellant in accordance with Section 5 of the Provincial Claims Act. The appellant argued that notice required to be given was a condition precedent to the issuing of a writ of summons against it.

13. Ms Ggomba handed up copies of the Provincial Claims Act at the hearing. Section 5 of the Provincial Claims Act relevantly states:

NOTICE OF CLAIMS AGAINST THE WESTERN HIGHLANDS PROVINCIAL AND LOCAL LEVEL GOVERNMENT

(1) No action to enforce any claim against the Western Highlands Provincial and Local Level Government lies against the Western Highlands Provincial and Local Level Government unless notice in writing of intention to make a claim is given in accordance with this section by the claimant to –

(a) the Administrator of Western Highlands Provincial Government; or

(b) the Governor.

(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 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 Provincial Administrator; or

(ii) the court before which the action is instituted, on sufficient cause being shown, allows.

(3) A notice under Subsection (1) shall be given by—

(a) personal service on an officer referred to in Subsection (1); or

(b) leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 am and 12 noon, or 1.00 pm and 4.06 pm, or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act (Chapter 321).

14. No issue was taken of the existence of the Provincial Claims Act before the learned trial judge.

15. The notice requirements under Section 5 of the Provincial Claims Act are in addition to those stipulated under Section 5 of the Claims By and Against the State Act 1996 (National Claims Act): Emmanuel Mai trading as Mai Lawyers v Southern Highlands Provincial Government (2004) N2558, Caspar Kondi v Provincial Administrator, Department of Western Highlands Province & Ors (2004) N2755, Wellcos Engineering Limited v Hami Yawari (2008) N3443 and John Wasis v Brian Pebo (2008) N4515.

16. Except for reference to appropriate officers specified to be given notice, Section 5 of the Provincial Claims Act is substantially in identical terms with Section 5 of the National Claims Act. Hence, the approach taken in dealing with the issue of want of compliance with Section 5 of the National Claims Act should be adopted as was done in Caspar Kondi v Provincial Administrator, Department of Western Highlands Province (2004) N2755, Wellcos Engineering Limited v Hami Yawari (2008) N3443 and John Wasis v Brian Pebo (2008) N4515.

17. In The State v Tau Liu (1998) SC566, this Court held that the giving of a notice of an intention to make a claim against the State under Section 5 of the National Claims Act is a condition precedent to the issuing of a writ of summons in all circumstances. The Court adopted the approach taken in Rundle v MVIT (1988) PNGLR 20 where it was held that service of a notice of intention to make a claim against the Motor Vehicle Insurance (PNG) Trust was a mandatory condition precedent to the validity of any writ of summons filed against the Motor Vehicle Insurance (PNG) Trust as it considered that Section 5 of the National Claims Act was similar to Section 54 of the Motor Vehicles (Third Party Insurance) Act.

18. Consequently, the giving of a notice of intention to make a claim against the appellant, Western Highlands Provincial Government as required under Section 5 of the Provincial Claims Act is a condition precedent to the issuing of a writ of summons against the Western Highlands Provincial Government (Emphasis added).

19. The requirements for giving notice of an intention to make a claim to the appropriate officer, in this case, the Administrator of Western Highlands Provincial Government or the Governor of Western Highlands Province under Section 5 of the Provincial Claims Act are mandatory: Bokin v Independent State of Papua New Guinea (2001) N2111. This includes the method of serving the notice: Bokin v Independent State of Papua New Guinea (2001) N2111. In addition, the 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 a breach of contract, within a period of six months after the claimant became aware of the alleged breach.”
20. It is a fundamental principle of litigation that he who asserts must prove: Shaw v Commonwealth of Australia [1963] PNGLR 119, Supreme Court Reference No 4 of 1980 [1982] PNGLR 65, Peter Wararu Waranaka v Gabriel Dusava (2009) SC980. We reject the appellant’s submission that the onus of proof was on the respondent. On the contrary, in the present case, it was the appellant, then as the defendant and applicant who asserted that the respondent did not give any notice of intention to make a claim against it pursuant to Section 5 of the Provincial Claims Act so it bore the onus of proving that assertion according to the civil standard of proof on the balance of probabilities.

21. The affidavit of Elizabeth N.Suelip showed that only a notice of intention to make a claim against the State under Section 5 of the National Claims Act was served on the Acting Attorney-General by letter from Mirupasi Lawyers dated 5 March 2008. A copy of that letter is annexed as annexure B to Ms Suelip’s affidavit. Ms Suelip did not state that a notice under Section 5 of the Provincial Claims Act was also served on the appellant. Mr. Neng’s affidavit evidence particularly paragraph 47 of his affidavit sworn on 12 July 2013 and filed on 16 July 2013 and paragraph 7 of his affidavit sworn on 11 November 2015 and filed on 26 November 2015 also demonstrate and confirm that the respondent did not give any notice of intention to make a claim against the appellant under Section 5 of the Provincial Claims Act.

22. The service of a notice of intention to make a claim against the State by the respondent under Section 5 of the National Claims Act was not enough. The State was not a party to the National Court proceedings. Only the respondent was. The appellant has its own legislation regulating claims against it so it should be complied with in addition to the notice requirements under the National Claims Act. Clearly the National Court proceedings were void ab initio for the respondent’s failure to give notice of an intention to make a claim under Section 5 of the Provincial Claims Act. There was sufficient evidence before the National Court especially that contained in the affidavit of Ms. Suelip that only a notice of intention to make a claim was given to the State under Section 5 of the National Claims Act. This state of affairs was acknowledged and accepted by the National Court on 11 September 2015 when it set aside the default judgment. There was no evidence to show that the respondent gave any notice of intention to make a claim against the appellant under Section 5 of the Provincial Claims Act to warrant an enquiry by the National Court as to whether or not it had been received by the appellant and confirmed by evidence of a search of the appellant’s records. Clearly, the National Court erred. Since a notice under Section 5 of the Provincial Claims was not served on the appellant, the National Court proceedings were void ab initio and ought to have been dismissed.

23. In addition, as the National Court proceedings were void ab initio, there was no dispute properly before the National Court that required a referral for mediation.

ORDERS

24. In the circumstances, judgment is entered in favour of the appellant and the orders of the Court are:

1. The appeal is upheld.

2. The order of 8 April 2016 made in National Court proceedings WS No.909 of 2008, Must Investment Ltd v Western Highlands Provincial Government is quashed.

3. The National Court proceedings WS No.909 of 2008, Must Investment Ltd v Western Highlands Provincial Government are dismissed in their entirety.

4. The respondent shall bear the appellant’s costs of and incidental to the appeal and the National Court proceedings WS No.909 of 2008, Must Investment Ltd v Western Highlands Provincial Government which, if not agreed, shall be taxed.
____________________________________________________________
Tamutai Lawyers: Lawyers for the Appellant