Home | Databases | WorldLII | Search | Feedback National Court of Papua New Guinea

Tasman Building Company v Genia [2011] PGNC 174; N4412 (6 October 2011)

N4412

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS No. 613 of 2004

BETWEEN:

TASMAN BUILDING COMPANY
Plaintiff/Cross Defendant

AND:

KILROY GENIA
First Defendant/First Cross-Claimant

AND:

ELIZABETH GENIA
Second Defendant/Second Cross-Claimant

Waigani: Murray J
2011: 04 April &
06 October

RULING ON MOTION

PRACTICE AND PROCEDURE – Application by the Plaintiff for an Order to Strike out the Defendants' Defence and for Entry of Judgment as a result of the Defendant's non compliance with previous orders of the Court – Failure to pay Plaintiff's costs on indemnity basis thrown away in preparing for the vacated trial – Order 12, Rule 1 National Court Rules

Facts:

This is a ruling on an application by the plaintiff for an order to strike out the defendants' defence and for entry of judgments as a result of the defendants' non compliance with previous orders of the court made on 23 August 2010. According to those orders, the defendants were to pay on a full indemnity basis, the Plaintiff's costs thrown away in preparing for the trial that was vacated on the defendant's request and that, those costs be paid before the matter can be set down for trial again. At the hearing of the Plaintiffs application, the Defendants, without providing an explanation for their failure to comply with the Orders of 23 August 20109, argued that the issue of costs be best left to be determined at the end of the trial and in the mean time, the Court should make an order that costs be in the cause.

Held:

1. The Court is satisfied that Or.12 r 1 of the National Court Rules is sufficient source of authority enabling the Plaintiff to exercise its rights under the Court Order of 23 August 2010.

2. Until such time an order is set aside or successfully appealed to the Supreme Court, a party required to comply with an order must comply.

3. The Defendants have not complied with the orders of 23 August 2010, consequently, they are not entitle to ask this court for anything.

4. The orders sought in paragraphs 1, 3 & 4 of the Plaintiff's Notice of Motion are granted

5. The order sought in paragraph 2 of the Notuice of Motin was not properly addressed, hence that paragraph of the Plaintiff's Notice of Motion is adjourned to the Registry and the Plaintiff is at liberty to apply for the order it seeks on 3 clear days notice to the Defendants.

Cases cited:

Soso Tumu –v- State (2002) N2190
Andrew Davai & Ome Ome Forests Ltd-v-Lawrance Pukali & Anor (2002) N2289

Counsel:

Alexander MacDonald, for the Plaintiff
Luke Akop, for the Defendants

06 October, 2011

1. MURRAY J: By Notice of Motion dated 15 March 2011 and filed on 23 March 2011, the Plaintiff moved for orders that:

(1) Pursuant to Order 12 Rule 1 and the Orders granted on the 23 August 2010, the Defence be struck out and judgment entered jointly and severally against the Defendants in the sum of K85, 745.00. Further, the Defendants pay interest on the above judgment amount from the 31 December 2003 at 20% per annum. Alternatively interest at 8% per annum from the issue of proceedings on the 26 May 2004.

(2) Pursuant to Order 4, Rule (36)1 & (2) the Cross Claim be struck out for want of prosecution.

(3) Judgment be entered jointly and severally against the Defendants in the sum of K48, 414.79 being Plaintiffs' indemnified legal costs which remain outstanding.

(4) Defendants to pay the costs of these proceedings except for the costs of preparing for trial on 23 August 2010.

(5) Time for entry of the Orders be abridged to the date of granting the orders.

EVIDENCE

2. In support of its application, the Plaintiff relies on the following documents:

(1) Affidavit in support by Alexander MacDonald sworn on 15 March 2011 and filed 23 March 2011.

(2) Affidavit of Michael Reynolds, sworn 15 March, 2011 and filed 23 March 2011 and;

BACKGROUND

3. The affidavit of Alexander MacDonald sworn 15 March 2011 and filed 23 March 2011 sets out the background of the matter and the circumstances giving rise to the application the subject of my ruling.

4. In essence, the said affidavit deposes to the following which I consider relevant so as to appreciate the basis of the application:

(Nature of the Claim)

(1) In mid October 2003 the Plaintiff was engaged by the Defendants to renovate their home at a price of K136, 686.

(2) On 25th October 2003, the Defendants paid K10, 000.00.

(3) During November and December a number of meetings were held between the parties to discuss payment of the work performed and payment of future work. The parties disagree as to what was said or agreed at these meetings.

(4) On 31st December 2003, the Plaintiff downed tools and left the site. The parties disagreed at what stage of renovation was reached at this time.

(5) In mid February 2004, the Defendants sent two letters and paid K25, 000.00 and the parties had further meetings. The parties dispute the legal significance of the payment or what was said and agreed at the meetings.

(6) In March 2004, the Plaintiff alleging non payment for outstanding work or agreed funding to complete the project removed their material from site and issued this proceeding in May.

Chronology of events leading up to the Court Order of 23 August 2010.

(7) On 2 March 2010, by an order of the Court, matter was listed for trial on 21 and 22 April 2010.

(8) Of no fault of either parties, the trial dates were vacated by the trial Judge for the month of April.

(9) By an order of the Court on 2 August 2010, the matter was directed to be relisted for a two day trial on either 17 and 18 August 2010 or 23 and 24 August 2010.

(10) Matter was then fixed for pre trial conference on 4 August, 2010, and by consent of both parties on that date, matter was set for trial on 23 and 24 August.

(11) On the first day of trial (23/08/10) Mr. Kentan of Counsel for the Defendants applied to the trial Judge to vacate the trial dates on the basis that his clients were not able to bring their witnesses.

(12) This was opposed by Mr. MacDonald of Counsel for the Plaintiff, and after hearing submissions from both Counsel, the Court made the following orders.

• (a) Adjournment sought by the Defendants is granted. Trial date is vacated and the matter to return to the Listings Court for another Trial Date and;
  
• (b) Defendants to pay Plaintiff's costs on indemnity basis thrown away in preparing for the vacated trial. Costs must be paid prior to the matter proceeding in Court. Where the Defendants fail to pay such costs, then the Plaintiff is at liberty to apply to dismiss or strike out the Defence.
  

Circumstances giving rise to the Plaintiff's application

(13) On 4 October 2010, Mr. MacDonald sent to Mr. Ketan, his Bill of Costs. The amount claimed being forty eight thousand, four hundred and fourteen kina, and seventy nine toea. (K48, 414.79).

(14) In the letter that enclosed the bill, Mr. MacDonald warned Mr. Ketan that if his client failed to settle the bill within a reasonable time, they will exercise their right under the Court orders of 23 August 2010.

(15) In the same letter, Mr. Ketan was reminded that the continuation of the proceeding depended on the payment and requested full payment within a month or a mutually agreed time.

(16) After receiving no favourable response from Mr. Ketan, Mr. MacDonald wrote another letter on 19 October, 2010. In this letter, the Defendants were asked if they would consider making payments by installment.

(17) On 2 November 2010, almost a month after Mr. MacDonald's letter of 19 October 2010, which was a second letter to follow up on the payment, Mr. Ketan, wrote to Mr. MacDonald, advising him, that he was still waiting for instructions from his client.

(18) Again after waiting for a while and receiving no favourable response from the Defendants' Lawyers, Mr. MacDonald wrote another reminder letter to Mr. Ketan. This was the last letter by Mr. MacDonald and is dated 28 February 2011.

(19) On 23 March 2011, about a month after the letter of 28 February 2011, the Plaintiff, through Mr. MacDonald filed the application which I heard on 4 April and reserved my ruling, which I now deliver.

Plaintiff's Submission

5. In essence Mr. MacDonald submitted, the Plaintiff is entitled to the orders it seeks pursuant to Order 12, Rule 1 National Court Rules and the court orders of 23 August 2010, which order are very clear in its meaning. Further the application should be granted because it was brought about as a result of the continuous failure by the Defendants' and their Lawyer to cooperate with the Plaintiff to settle the costs invoice issued by the Plaintiff on 4 October 2010. Furthermore, Mr. MacDonald submits that, despite the various correspondences he sent reminding the Defendants' of the orders of 23 August 2010 and the effect of non compliance, the Defendants and their Lawyer still failed to respond, even to a suggestion that payment be by installments. Consequently, Mr. MacDonald submits that this Court should grant the orders his client seeks.

Defendant's Submission

6. Mr. Akop, in his brief submission in reply, conceded that, there is an order for costs made against his clients, however, he went on and submitted that the amount claimed was excessive and so, this Court should not determine the issue of cost now but rather it should determine it at the end of the trial and for now, the Court should make an order that costs be in the cause.

7. In the course of hearing Mr. Akop, I enquired with him as to whether he had filed an affidavit in response to the matters raised by the Plaintiff as to his client's failure to comply with the Orders of the 23 August 2010, and the steps if any were taken in response to the constant reminders by the Plaintiff and or generally to offset the costs. In response, Mr. Akop, stated that he was not able to file one but relied on the Court Order of 23 August 2010.

8. I am not sure what he meant by that, because the Court Order of 23 August 2010 is very clear and is really in favour of the Plaintiff.

Application of Order 12 Rule 1 National Court Rule & Court Order 23 August 2010

9. The Plaintiff's application is made pursuant to Order 12 Rule 1 and the Court Order of 23 August 2010.

10. Order 12 Rule 1 National Court Rule is in the following terms:

The Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating process.

11. This provision in essence allows the Court at any stage of the proceedings, on the application of any party to make such orders as the nature of the case requires.

12. The Plaintiff's application is also made pursuant the Court Order of 23 August 2010. The actual terms of the said order are set out in paragraph 4(12) above.

13. Mr. Akop's submission, in my view, did not properly address the Plaintiff's application. Instead of responding to the application, Mr. Akop made submissions that, I refuse the Plaintiff's application and order that the costs of 23 August 2010 be costs in the cause.

14. In essence, Mr. Akop was asking me to vary the Court Orders of 23rd August 2010. I do not see how I could do that when there was no application to do that before me.

15. Consequently, I am left with no option but to accept the submission by Mr. MacDonald, for the following reasons:

(1) I consider that Order 12 Rule 1 National Court Rules is sufficient source of authority which empowers this Court to apply in circumstances as faced by the Plaintiff.

(2) Not only does Order 12 Rule 1 provide the basis of the application but that the application is also supported by the Court Orders of 23 August 2010, which is in no uncertain terms, that, if the Defendant fails to pay the Plaintiff's costs then the Plaintiff is at liberty to apply to dismiss or Strike out the Defendant's defence, and in my view, Order 12 Rule 1 National Court Rule is the source of authority to enable the Plaintiff to exercise its right pursuant to the Court order of 23 August 2010. There is ample authority in this jurisdiction that until such time an order is set aside or successfully appealed to the Supreme Court, a party required to comply must do so. (see Soso Tumu- v-State (2002) N1290) and Andrew Davai & Ome Ome Forests Ltd-v-Lawrance Pukali & Anor (2002) N2289

In the case of Andrew Daiva, Kandakasi J said at pages 15 & 16,

"Where a person is directed, ordered or adjudged by a Court to do something or abstain from doing something, he or she is obliged to comply. The need to do so arises from the moment he or she is served or is made aware of the existence of the Court's direction, order or judgment. He or she is required to comply unless there is setting aside or variation of it rendering compliance unnecessary. After all the law is that, unless a direction, or order or a judgment of a Court is set aside, it is valid and must be honoured."

(3) The Defendants were given ample opportunity to discuss the Bill of Cost that was sent by the Plaintiff if they took issue with the amount, but for a period of about 6 months from the date of issue of the Bill to the date of application, they sat back and did nothing, leaving the Plaintiff in the dark as to when they will pay, so that the matter can progress to trial.

(4) Then on the day of hearing of the application by the Plaintiff, the Defendant raises the issue of excessiveness of the costs, something they could have raised with the Plaintiff before the day of hearing and perhaps reached some agreement, which could easily resolve the Plaintiff's application and more importantly progress the matter to trial, especially when I note the Plaintiff's willingness to discuss payment of its Bill of Cost.

That to me is unacceptable, when the Court order is very clear that, the matter will proceed only after payment of the Plaintiff's Costs thrown away as a result of the trial fixed for 23 and 24 August being vacated on an application by the Defendants. If the Plaintiff does nothing about this, no progress will be made given the Defendants' attitude.

(5) Further, by their conduct, I do not think the Defendants are entitled to ask for an order that costs be in the cause, when they have done nothing to comply with the Court orders of 23 August 2010, thereby prompting the Plaintiff's application.

In other words, they have not come to Court with clean hands, as submitted by Mr. MacDonald of Counsel for the Plaintiff.

(6) Finally, it is my view that, there is no basis for this Court to make such an order as sought by the Defendants because, as far as this Court is concerned, an order as to the issue of costs arising from the trial dates being vacated has been made and until that order is varied or set aside, I do not think such an application by Mr. Akop is appropriate.

16. I am therefore of the view that the circumstances as set out above warrant the grant of the orders sought pursuant to Order 12 Rule 1 National Court Rules and the cases cited herein. I am satisfied there is sufficient authority for the Plaintiff's application in so far as paragraph 1, 3 and 4 of the Notice of Motion are concerned.

17. Paragraph two (2) of the Plaintiff's Notice of Motion seeks to dismiss the Defendants' Cross Claim. In the course of Mr. MacDonald's submission regarding the application for orders which I have just ruled on, Mr. MacDonald briefly mentioned that, his client was also seeking an order pursuant to Order 4 Rule 36(1) & (2) National Court Rules, but did not make any submissions that would properly address the requirements that his client need to satisfy this Court before an order can be granted. For this reason, I have not considered this application and leave that to the Plaintiff to prosecute at a later date if it so desires.

Order

18. The order of the Court is as follows:

(1) The Defendants' Amended Defence filed 1 June 2006 is dismissed.

(2) Judgment is entered jointly and severally against the Defendants in the sum of Eighty five thousand, Seven hundred forty five kina (K85, 745.00, with interest at eight per cent (8%) from the date of filing of the writ to the date of this order.

(3) Judgment is entered jointly against the Defendants in the sum of Forty eight thousand, four hundred and fourteen kina seventy nine toea (K48, 414.79) being Plaintiffs indemnified legal costs which remain outstanding since the issue of the Bill of Costs on 4 October 2010 in accordance with the Court Orders of 23 August 2010.

(4) Paragraph 2 of the Plaintiff's Notice of Motion is adjourned to the Registry and the Plaintiff is at liberty to apply for the order it seeks on 3 clear days notice to the Defendants.

(5) Costs of the proceedings to the Plaintiff less the costs already awarded up to the 23 of August 2010.

(6) Time of entry of the Orders is abridged to the date of settlement of the granting of the orders.

______________________________________
Young & Williams Lawyers: Lawyers for the Plaintiff
Ketan Lawyers: Lawyers for the Defendants