N2251

PAPUA NEW GUINEA

[In the National Court of Justice]

WS No. 1421 of 2000

BETWEEN:

TAU GUMU
Plaintiff -

AND:

PAPUA NEW GUINEA BANKING CORPORATION LIMITED
Defendant -

WAIGANI: GAVARA – NANU, J
2002: 19th & 26th April

PRACTICE & PROCEDURE – Application by way of notice of motion to strike out defence -Material evidence in an affidavit sworn by a defence witness effectively rendering the defence frivolous and vexatious – To allow such defence to proceed to trial would amount to abuse of process by the defendant.

PRACTICE & PROCEDURE – The Court has inherent power to strike out a defence which is frivolous and vexatious.

PRACTICE & PROCEDURE – Requirements under Order 12 r 37(1)(c) of the National Court Rules – Employee claiming damages against the employer for the employer’s failure to notify the Registrar of the Workers’ Compensation Tribunal of the plaintiff’s injury as required by s.42(1) of the Workers’ Compensation Act,1978 - Such claim being based on the employer’s failure to comply with a statutory duty is not prohibited by Order 12 r 37(1)(c).

PRACTICE & PROCEDURE – Criteria under Order 12 r 38(1) of the National Court Rules - Plaintiff deposing in his affidavit that in his belief, the defendant has ‘no valid defence’ - Second criteria in Order 12 r 38(1)(b), satisfied.

WORKER’S COMPENSATION ACT, 1978 – Duty of the employer to give notice of the employee’s injury under s. 42 (1) of the Act – Employee is deemed to have given notice to his employer of his injury as required under s. 41 (1) and (5) of the Act, where the employer is fully made aware of such injury by the employee and where the employer already has records of the personal particulars of the employee.

Cases cited:
PNG Forest Products –v- The State [1992] PNGLR 85
Tsang -v- Credit Corporation (PNG) Ltd [1993] PNGLR 112
Hornibrook Constructions Pty Ltd -v- Kawas Express Corporation Pty Ltd [1986] PNGLR 310
Akipa & Others –v- Lows & Others [1990] PNGLR 502
Eton Pakui –v- The State [1995] PNGLR 321

Other cases cited:
Waters -v- Sunday Pictorial Newspaper Ltd [1961] 1 WLR 967
Davey -v- Bentinck [1893] 1 QB
Wenlock -v- Moloney [1965] 1 WLR 1238

Counsel:
Baniyamai for the plaintiff
Solomon for the defendant

DECISION

GAVARA-NANU J : The plaintiff by notice of motion applies for the defendant’s defence to be struck out and summary judgement be entered for him for assessment of damages.

The plaintiff’s ground for the application is that, the defendant’s main defence which was based on time bar, was dismissed by Kandakasi J. on 7th December, 2001; and the remaining part of the defence is a general denial which is prohibited by Order 8 r 28 of the National Court Rules, therefore it should also be struck out.

The plaintiff issued these proceedings on 23rd October, 2000. The claim for damages arose out of the defendant’s failure to comply with its statutory duty under s. 42 (1) of the Workers’ Compensation Act, 1978, to notify the Registrar of the Workers’ Compensation Tribunal of the plaintiff’s injury in time so that the plaintiff could claim compensation for the injury, which he allegedly suffered while working for the defendant in 1979.

Factual Background

The brief factual background to the plaintiff’s claim is this - The plaintiff started working with the defendant in 1975. In 1978, he started experiencing pains in his right knee. He was getting medical treatments for the pain. In 1979, while trying to remove coin boxes from one section of the bank to the vault, during work, the plaintiff fell and landed on the right knee. The fall was witnessed by other staff. The fall aggravated the condition in his knee and on the next day, he told his superiors and took time off from work to seek medical treatment. 

From 1979 to 1992, the plaintiff regularly sought medical attention . He also took time off from work on regular basis with the approval of the defendant due to the worsening condition in his right knee. The condition in the knee got worse in the 90’s and on 12th October, 1993, his right leg was amputated from above the knee. In 1994, he was sent to Brisbane by the defendant for an artificial leg to be fitted on his right leg. The defendant met the expenses for the trip including accommodation in Brisbane and the cost of the artificial limb.

The plaintiff, thinking that the defendant having known all about his illness and the amputation of his leg, had notified the Registrar of the Workers’ Compensation Tribunal as required by s. 42(1) of the Workers’ Compensation Act, 1978, did not lodge his claim for compensation. He only became aware of the defendant’s failure to notify the Registrar of the Workers’ Compensation Tribunal of his injury in 1998.

The law

Section 42 (1) of the Workers’ Compensation Act, 1978, is in these terms:-

42.	Employer to give notice of injury, etc., to Registrar.

(1)	Where an injury to a worker results:-

(a)	in the death of the worker within one day after the occurrence of  the injury; or
(b)	in the total or partial incapacity of the worker for a period exceeding one day, whether or not the injury gives rise to any claim for compensation, the employer must— 

(c)	not later than seven days after the occurrence of the injury; or

(d)	where the employer had no immediate knowledge of the injury, not later than seven days after the occurrence of the injury first came to his notice, forward to the Registrar a notice in the prescribed form. (my underlining).

The material aspects of the circumstances giving rise to the plaintiff’s claim have been pleaded in the Statement of Claim.

Paragraph 2 of the defendant’s defence denies paragraphs 4 to 17 of the Statement of Claim. The plaintiff says this is a general denial which is prohibited by Order 8 r 28 of the National Court Rules, thus should be struck out.

The defendant admits paragraphs 1 to 3 of the Statement of Claim. These paragraphs relate to the capacities of the plaintiff and the defendant to sue and be sued and that the plaintiff was an employee of the defendant at all material times.

The plaintiff’s Statement of Claim is in 17 paragraphs.

Paragraphs 4 to 17 of the Statement of Claim give account of how the plaintiff sustained his injury, how the defendant was made aware of the injury and how the defendant assisted the plaintiff to seek medical assistance, the failure by the defendant to inform the Workers’ Compensation Tribunal Registrar about the plaintiff’s injury and how the Workers’ Compensation Tribunal Registrar rejected the plaintiff’s claim for compensation due to the late lodgment of his claim and the damages the plaintiff suffered as the consequence. These claims were denied by the defendant in paragraph 2 of its defence.

Paragraph 2 of the defence is in these terms:-

"2. The Defendant does not know and cannot admit to the allegations contained in paragraphs 4 to 17 of the Statement of Claim." (my underlining).

Paragraphs 3 to 7 of the defence raised time bars under s. 41 (2) and (5) of the Workers Compensation Act, 1978, and s. 16 of Frauds and Limitations Act, 1988.

Section 41 of the Workers’ Compensation Act, 1978, is in Division 4, under the heading – ‘Notice of Injuries and Claims’.

Section 41 (2) and (5) are in these terms:-

41.	Time for taking proceedings.

(1)

(2)	Subject to Section 68, proceedings for the recovery under this Act of compensation are not maintainable unless:-

(a)	notice of the injury has been given as soon as practicable after the injury occurs and before the worker has voluntarily left the employment in which he was injured; and

(b)	the claim for compensation with respect to the injury has been made within 12 months after the occurrence of the injury, or in the case of death within 12 months after the date of death.

(3)	
(4)	

(5)	The notice referred to in Subsection (2):-

(a)	may be given in writing or orally to the employer or any one of the employers or to any foreman or other official under whose supervision the worker is employed or to any person designated by the employer for the purpose; and

(b)	shall specify the name and address of the person injured; and

(c)	shall state in ordinary language the cause of the injury and the date  on which the injury occurred.

(6)	 
(7)	 

Section 16 (1) of the Frauds and Limitations Act,1988, is relevant and is in these terms:-

16.	Limitation of actions in contract, tort, etc.

(1)	Subject to Sections 17 and 18, an action—

(a)	that is founded on simple contract or on tort; or

(b)	to enforce a recognizance; or

(c)	to enforce an award, where the submission is not by an  instrument under seal; or

(d)	to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture, shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

Paragraph 8 of the defendant’s defence is the final paragraph and it makes final denial of all the claims in the Statement of Claim.

On 10th August, 2001, the defendant applied for these proceedings to be dismissed for abuse of process under Order 8 r 27 (1) (c) of the National Court Rules or in the alternative that the defence (as discussed above) be amended.

The defendant’s application to dismiss the proceedings was made pursuant to paragraphs 3 to 7 of its defence, contending that, the plaintiff’s claims were time barred, under s. 41 (2) and (5) of the Workers’ Compensation Act and s.16 of the Frauds and Limitations Act. That application was dismissed on 7th December, 2001, by Kandakasi J, when his Honour held that the plaintiff’s cause of action arose in 1998, when he became aware of the defendant’s failure to notify the Registrar of the Workers’ Compensation Tribunal of his injury. The second and the alternative leg of the defendant’s application was also dismissed. So the only ground of defence remaining is paragraph 2.

Counsel for the plaintiff, submitted that paragraphs 3 to 7 of the defendant’s defence which raised time bar, having been dismissed by Kandakasi J. on 7th December, 2001, the remaining paragraph, which is paragraph 2, should also be struck out under Order 8 r. 28 of the National Court Rules, because it raises general denial.

The counsel for the defendant argued that, paragraph 2 of the defence is permitted by Order 8 r. 21 (2) of the National Court Rules, therefore, the plaintiff cannot invoke Order 8 r. 28, further more, the plaintiff’s claim is prohibited by Order 12 r 37 (c), as it is based on personal injury.

Alternatively, the counsel for the defendant argued that, the plaintiff has not met the criteria set out in Order 12 r 38(1) of the National Court Rules, because he has not established any factual evidence in his affidavit upon which his claim can be based and secondly, the plaintiff should have deposed in his affidavit that, in his belief, the defendant has no defence. It was submitted for the defendant that, the plaintiff only deposed that, in his belief, the defendant had ‘no valid defence’ which the defendant says does not meet the second criteria in Order 12 r 38(1)(b). The defendant submitted that the plaintiff only made a conclusion by saying that the defendant had ‘no valid defence’ and there is no evidence to support such conclusion.

Reasons for decision.

It is established from the material evidence before me that the issue of time bar raised by the defendant’s defence in paragraphs 3 to 7 was dismissed by Kandakasi J. in the judgement he delivered in favour of the plaintiff on 7th December, 2001, therefore the only issue I have to decide now is whether paragraph 2 of the defence raises general denial and as such is prohibited by Order 8 r. 28, and should therefore be struck out.

Order 8 r 28 of the National Court Rules is in these terms:-

28.	General issue abolished. (15/27)
A party shall not plead the general issue.

The defendant has argued that paragraph 2 of its defence is permitted by Order 8 r 21 (2) and therefore it is not a general denial.

Order 8 r 21 is in these terms: -

21.	Admission and traverse. (15/20)

(1)	Subject to Sub-rule (3), an allegation of fact made by a party in his pleading shall admitted by any apposite party required to plead to that pleading unless it is traversed by that opposite part y in his pleadings or a joinder of issue under Rule 22 operates as a denial of it.

(2)	A traverse may be either by a denial or by a statement of non-admission, and either expressly or by necessary implication, and either generally or as to any particular allegation.

(3)	Where a pleading makes an allegation of the suffering of damage, or an allegation of an amount of damages, a pleading to that pleading by an opposite party shall be taken to traverse the allegations, unless the allegation is specifically admitted. (my underlining).

The circumstances in which Order 8 r 28 may or may not be invoked were discussed by Kapi DCJ in the case of Hornibrook Constructions Pty Ltd -v- Kawas Express Corporation Pty Ltd [1986] PNGLR 301. In that case, his Honour held that, the denial by the defendant in its defence – "That the defendant does not admit the allegations contained in paragraphs 3 to 20 of the Statement of Claim" – was a general denial prohibited by Order 8 r 28. But in the subsequent case of Akipa & Others -v- Lowa & Others [1990] PNGLR 502, Kapi DCJ. did not follow his ruling in Hornibrook Constructions Pty Ltd -v- Kawas express Corporation Pty Ltd (supra). In the latter case, his Honour held that Order 8 r 28 does not prohibit a mere denial of facts alleged in a Statement of claim either generally or specifically because such a defence is permitted by Order 8 r 21 (2). This accords with the submission made by the counsel for the defendant.

Applying the reasoning in Akipa & Others -v- Lowa & Others (supra), it is clear that, paragraph 2 of the defendant’s defence in this case, does not offend against Order 8 r 28 as it is permitted by Order 8 r 21 (2). The ratio in Akipa & Others –v- Lowa & Others (supra), was adopted by Woods J. in Eton Pakui –v- The State [1994] PNGLR 321.

So, if Order 8 r 28, is the only consideration in respect of paragraph 2 of the defendant’s defence, I would uphold the defendant’s submission, but, there in one other aspect of this defence which I must consider. That is, the way the defendant has pleaded paragraph 2 of its defence. It states that, the defendant did not know the matters pleaded in paragraphs 4 to 17 in the Statement of Claim.

But, the allegations in paragraphs 4 to 17 of the Statement of Claim are matters which have all been deposed in the affidavit sworn by Aleen Bird on 10th August, 2001, on behalf of the defendant. This affidavit confirms the material facts deposed by the affidavit sworn by the plaintiff on 7th September, 2002. So the defendant has conceded paragraphs 4 to 17 of the Statement of Claim through Aleen Bird’s affidavit.

The two affidavits, especially that by Aleen Bird, clearly show that the defendant was fully cognizant of the plaintiff’s injury, including where and how the injury occurred up to the time his right leg was amputated. This is evident from Aleen Bird’s affidavit which acknowledges the hospital visits by the plaintiff, the medical treatments he received, the amputation of his right leg and his subsequent trip to Brisbane for further medical treatment including the fitting of an artificial leg at the expense of the defendant. The affidavit further acknowledges that the plaintiff was given time off form work but was also allowed back to work during the periods of his illness. Aleen Bird’s affidavit also shows that progressive reports were made on the plaintiff’s condition by a number of the defendant’s staff who visited the plaintiff at the Port Moresby General Hospital where he was hospitalised. Those reports were submitted to the defendant’s senior managers. The defendant also had the plaintiff’s personal particulars as required by s. 41 (5) of the Workers Compensation Act. These are matters pleaded by the plaintiff in paragraphs 4 to 17 of his Statement of Claim. Paragraph 2 of the defendant’s defence is therefore clearly contradicted by Aleen’s affidavit. It is clear from this that, the defendant has no defence to the allegations in paragraphs 4 to 17 of the Statement of Claim.

The material evidence deposed, especially in Aleen Bird’s affidavit effectively negate the denials made by the defendant in paragraph 2 of its defence. The effect of this is that, if paragraph 2 of the defendant’s defence is allowed to proceed to trial, it cannot possibly succeed. See Waters -v- Sunday Pictorial Newspapers Ltd [1961] 1 WLR 967 at p. 974. In other words, the defence raised in paragraph 2 of the defence has been clearly rendered frivolous and vexatious by the affidavits sworn by Aleen Bird and the plaintiff and it cannot be sustained. It is a sham, and it cannot to be allowed by the Court to go to trial. See Davey -v- Bentinck [1893] 1 QB 185 at pp. 188 – 189. It would also be an abuse of process and waste of time by the defendant if such unsustainable defence or pleading is allowed to proceed to trial. The Court has the inherent power and duty to protect its processes from such abuse. See PNG Forest Products Pty Ltd & Inchcope Berhad -v- The Independent State of Papua New Guinea & Jack Genia, Minister for Forests [1992] PNGLR 8. See also Wenlock -v- Moloney & Ors [1965] 1 WLR 1238.

The Court also has the inherent power to strike out the defence in such circumstances, See Wenlock -v- Moloney (supra).

 I will make one other remark about the denial by the defendant in paragraph 2 of its defence. When the denial is viewed against the material evidence deposed in Aleen Bird’s affidavit, it is not difficult to perceive that the denial is not honest, and has not been made in good faith. In my opinion, that ground alone is sufficient for the Court to strike out this defence, so that the plaintiff is not caused unnecessary anxiety, trouble and expense by allowing it to proceed to trial.

I am also of the opinion that, the plaintiff’s application is not prohibited by Order 12 r 37(c), because the actual basis of the plaintiff’s claim is the failure by the defendant to comply within its statutory duty by not notifying the Workers’ Compensation Tribunal Registrar of the plaintiff’s injury as required by s. 42 (1) of the Workers’ Compensation Act. 

As to the defendant’s contention that, the plaintiff has not satisfied the second criteria in Order 12 r 38(1)(b), I am of the opinion that, the plaintiff has satisfied that requirement, because he has provided affidavit evidence of the facts upon which he has based his claims and has deposed in his affidavit that in his belief, the defendant has no defence or no valid defence to his claims. 

Order 12 r 38 of the National Court Rules is in these terms:-

38. 	Summary judgement. (13/2)

(1)	Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff—

(a)	there is evidence of the facts on which the claim or part is based; and

(b)	there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,

the Court may, by order, direct the entry of such judgement for the plaintiff on that claim or part, as the nature of the case requires.

(2)	Without limiting Sub-rule (1), the Court may under that Sub-rule direct the entry of judgement for the plaintiff for damages to be assessed.

(3)	In this rule, "damages" includes the value of goods.

The defendant took issue under Sub-rule (1)(b), because it contended that the plaintiff only deposed in his affidavit that, in his belief, the defendant had ‘no valid defence’. I see no difference between the meaning of the phrases ‘no defence’ as in the Rule and ‘no valid defence’ as deposed by the plaintiff in his affidavit. They both mean, there is no defence. 

In the case of Tsang -v- Credit Corporation (PNG) Ltd [1993] PNGLR 112, the Supreme Court in discussing Order 12 r38(1) at pp.117-118 said:

"There are two elements involved in this rule:

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

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

In this case, there is no issue in relation to the first element.

As to the second element, the plaintiff must show in absence of any defence or evidence from the defendant that, in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that, upon the facts and/or the law, the defendant has no defence. The plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of fact or law. Whether a case should go to trial on these issues will be determined on the facts of each case. However, the authorities show that the summary jurisdiction should only be invoked in a clear case; see Chief Collector of Taxes v T A Field Pty Ltd [1975] PNGLR 144."

In my opinion, the plaintiff has satisfied the second criteria under Order 12 r 38(1)(b), as discussed in Tsang –v- Credit Corporation (supra).

Consequently, having found that the defendant’s defence of time bar had been dismissed by Kandakasi J. on 7th December, 2001, I now for the foregoing reasons strike out the remaining defence in paragraph 2.

The effect of this is that, the defendant has no defence. I therefore enter summary judgement for the plaintiff for damages to be assessed.

Costs of this application to the plaintiff.
_____________________________________________________________________________
Lawyer for the plaintiff		:	Stevens Lawyers
Lawyer for the defendant		:	Posman Kua Aisi Lawyers