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TNA Ltd v Kua [2011] PGNC 23; N4225 (21 March 2011)

N4225

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS No.1195 OF 2008

BETWEEN:

TNA LIMITED
Plaintiff

AND:

PAUL KUA
First Defendant

AND:

KONGO COFFEE LIMITED
Second Defendant

Mt. Hagen: David, J
2011: 18 & 21 March

PRACTICE & PROCEDURE - Application for judgment on admissions – defence filed denying liability - admissions in letter from Second Defendant to the Plaintiff after defence filed - power to enter judgment discretionary – entry of judgement only where applicant shows a clear and unanswerable case – application refused - National Court Rules – O.9 r.30 & O.12 r.1

Cases cited:
Papua New Guinea Cases
Samson Kai v The State (1992) N1079
Rural Development Bank Ltd v Kuri (2001) N2099
Alfred Alan Daniel v Pak Domoi Ltd (2009) SC970
John Kul v The State (2010) N3898

Overseas cases cited:
Ellis v Allen [1913] UKLawRpCh 144; [1914] 1 Ch 904
In the Matter of the Trade Marks Act 1955-1958 and In the Matter of Registered Trade Marks "Certina" and "Certina DS" (1970) 44 ALJR 191

Counsel:
K.J. Peri, for the Plaintiff

RULING ON MOTION

21 March, 2011

1. DAVID, J: INTRODUCTION: This is an application by the Plaintiff seeking orders to strike out of the Second Defendant's defence filed on 18 November 2008 and the entry of judgment in favour of the plaintiff pursuant to O.9 r.30 and O.12 r.1 of the National Court Rules. The application is brought by a notice of motion filed on 9 July 2010.

2. The Plaintiff relies on the following affidavits:

1. Affidavit in Support of Notice of Motion of Koeya J. Peri sworn on 6 July 2010 and filed on 9 July 2010;
   
2. Affidavit of Gerard Philip sworn on 23 November 2010 and filed on 25 November 2010;
   
3. Affidavit of Service of Moses J. Paiya sworn and filed on 23 February 2011;
   
4. Affidavit of Service of Koeya J. Peri sworn on 16 March 2011 and handed up to the Court with leave at the hearing.
   

3. The Second Defendant did not appear to oppose the application. Having been satisfied that the Second Defendant was served with the notice of motion and notice of the hearing of the motion fixed for 18 March 2011 was given to the Second Defendant's lawyers both by the Plaintiff's lawyers and the Registry of this Court, I proceeded to hear the application ex parte.

BRIEF BACKGROUND

4. On 15 October 2008, the Plaintiff commenced these proceedings by way of a writ of summons endorsed with a statement of claim.

5. Briefly, the Plaintiff claims as follows. On or about 28 June 2008, it engaged the services of the Second Defendant to transport 18 tonnes of trukai rice worth K61,672.60 (the goods) it had purchased from Lae to Kundiawa. The goods were being transported to Kundiawa on a Hino truck owned by the Second Defendant bearing registration number EAF 095 (the truck) driven by the First Defendant, an employee of the Second Defendant when it was involved in an accident in the vicinity of Dirty Wara between Henganofi and Bena in the Eastern Highlands Province (the accident) as a result of the negligent driving of the First Defendant. The container containing the goods was opened by looters and the goods stolen. The Plaintiff suffered loss as a result.

6. On 18 November 2008, the Second Defendant filed its defence basically denying liability.

7. During the process of discovery, a letter from the Second Defendant to the Plaintiff dated 30 June 2008 concerning the accident and the looting of the goods (the Second Defendant's letter) purportedly containing admissions was discovered.

8. On 19 February 2010, default judgment was entered against the First Defendant for damages to be assessed.

ISSUE

9. The primary issue for my consideration and determination is whether the Second Defendant's letter contains admissions to justify the setting aside of the Second Defendant's defence and the entry of judgment.

PLAINTIFF'S SUBMISSIONS

10. Mr. Peri for the plaintiff submits that the Second Defendant's letter contains admissions by the Second Defendant that their truck was involved in the accident whilst transporting the goods and the container containing the goods was opened and looted by bystanders. The admissions therefore justify the striking out of the Second Defendant's defence and the entry of judgment in favour of the plaintiff counsel said.

REASONS FOR RULING

11. The Court's power to enter judgment based on admissions is found in O. 9 r.30 (1) of the National Court Rules. It states:

"Judgement on Admission

(1) Where admissions are made by a party, whether by his pleading or otherwise, the Court may, on the application of any other party, direct the entry of any judgement or make any order to which the applicant is entitled on the admissions."

12. According to the above rule, admissions may be made either in pleadings or in a number of other ways as the words "or otherwise" connote, for example, in answers to interrogatories, affidavits or letters: see Samson Kai v The State (1992) N1079; Rural Development Bank Ltd v Kuri (2001) N2099; Alfred Alan Daniel v Pak Domoi Ltd (2009) SC970; John Kul v The State (2010) N3898. In Ellis v Allen [1913] UKLawRpCh 144; [1914] 1 Ch 904, the Court took into account an admission as to the conduct of the defendant contained in a letter written by the defendant's solicitor to the plaintiff's solicitor after the institution of the proceedings that destroyed the defence.

13. It is clear that a grant of the remedy sought by the plaintiff is at the discretion of the Court. This means that where there are admissions, it does not necessarily follow that the Court should direct the entry of judgment. The discretion however must be exercised on proper grounds. The applicant must show a clear and unanswerable case: In the Matter of the Trade Marks Act 1955-1958 and In the Matter of Registered Trade Marks "Certina" and "Certina DS" (1970) 44 ALJR 191. In that case, during the course of a trade mark dispute, the respondent admitted in correspondence that he could not maintain the registration of certain trademarks. In the light of that admission, the appellant applied to the High Court for judgment. It was held that judgment on an admission can only be given where an applicant makes out a clear and unanswerable case. There, the respondent's unequivocal admission was sufficient to support the entry of judgment. Moreover, the Court must look at all the circumstances surrounding a particular application in deciding whether or not to grant the remedy sought as the objective of the exercise is that any remedy the Court grants must serve a useful purpose and justice is dispensed.

14. Order 12 r.1 of the National Court Rules is a general relief provision. It reads:

"1. General relief. (40/1)

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."

15. Has the plaintiff made out a clear and unanswerable case? To answer that question, it requires an examination of the pertinent parts of the Plaintiff's statement of claim and the Second Defendant's defence together with the Second Defendant's letter.

16. From paragraphs 1 (c) to 6 of the Plaintiff's statement of claim, it was pleaded as follows:

"1. At all material times,

(c) On 28th of June 2008, the Second Defendant was the registered proprietor of a Hino Truck bearing registration number EAF 095 ("the truck").

(d) On 28th June 2008, the Plaintiff was the owner of 18 tones of trukai rice referred to ("the goods").

(e) On 28th of June 2008, the Second Defendant employed the First Defendant as a driver to drive its heavy trucks in furtherance of its business.

(f) On 28th of June 2008 or thereabout, the Second Defendant agreed to the Plaintiff's request to transport the goods on the truck from Lae to Kundiawa for a reward.

2. On the 28th of June 2008, the First Defendant whilst driving the truck upon the Highlands Highway in the vicinity of Dirty Wara between Henganofi and Bena in the Eastern Highlands Province, in the course of his employment, the truck was involved in a single motor vehicle accident ("the accident").

3. As a result of the accident, the goods were stolen.

4. The accident was caused by the negligence of the First Defendant in the course of his employment as an employee of the Second Defendant.

PARTICULARS OF NEGLIGENCE

(a) Failing to keep any or any proper lookout;

(b) Failing to steer or manage the truck in such a manner to prevent the occurrence of the accident;

(c) Failing to apply brakes to prevent the accident;

(d) Failing to shift to low gear in time to prevent the truck reversing backwards;

(e) Driving without due care and attention.

1. As a result of the accident, looters cut opened the container and emptied the goods.
   
2. As a result of the accident pleaded in paragraph 8, the Plaintiff has suffered loss.
   

PARTICULARS OF LOSS

(a) 18 tones of trukai rice K61,672.60..." (sic)

17. It is not disputed that the Second Defendant is the registered owner of the truck.

18. From paragraphs 2 to 10 of the Second Defendant's defence, it was pleaded as follows:

"2. The Second Defendant does not know and can not admit the facts alleged in paragraph 1 (d) of the Statement of Claim.

3. The Second Defendant denies the fact set out in paragraph 1 (e) of the Statement of Claim.

4. In answer to the facts set out paragraph 1 (f) of the Statement of Claim, the Second Defendant says it agreed to transport the goods for a price on the condition that the goods were transported at the owner's risk.

5. The Second Defendant does not know and can not admit the facts set out in paragraph 2 of the Statement of Claim. The Second Defendant says further that there was no accident involving any of its vehicles driven by the First Defendant on the date and place pleaded.
   
6. The Second Defendant does not know and can not admit the facts alleged in paragraph 3 of the Statement of Claim. The Second Defendant says if there were goods stolen it was done by persons without any encouragement or assistance from either the Second Defendant or any of its agents.
   
7. The Second Defendant does not know and can not admit each and every fact and particular of negligence set out in paragraph 4 and 4 (a) to (e) of the Statement of Claim.
   
8. The Second Defendant does not know and can not admit the facts alleged in paragraph 5 of the Statement of Claim.
   
9. The Second Defendant does not know and can not admit the facts and particulars of loss set out in paragraph 7 of the Statement of Claim.
   
10. The Second Defendant say further any loss to the Plaintiff was done by looters and Second Defendant did not have any responsibility over the actions of the said looters...." (sic)
    

19. The formal parts of the Second Defendant's letter read:

"Subject: Loss of cargo

We wish to inform you officially that, our truck Reg # EAF 095, had an accident at Dirty Wara between Henganofi and Bena in Eastern Highlands Province in the early hours of Saturday, 28th June 2008.

We sadly advise that, your container of rice was lost due to the accident, when the truck capsized. The local villagers in the surrounding villagers, smashed the container door and looted the rice. Our truck was seriously damaged and completely vandalised and stripped off all parts.

We have yet to ascertain the cause of the accident, as the driver fled and we believe he is in Lae. We are working with the Henganofi Police, who are attending to this matter and will bring the driver in for questioning and get his statement. They are also doing both the accident and crime reports for us.

We will furnish you copy of both reports from the police as soon as we get them. If you wish to discuss this further or get more information, please call us or come to our office and discuss with our company accountant, Mr Francis Kuman.

Finally, on behalf of Kongo Coffee, we sincerely apologise and ask for your understanding in this matter.

We hope that this incident does not impact on our business and remain at your service.

Thank you."

20. It is abundantly clear from the Second Defendant's letter that it, inter alia, contains admissions that:

1. during the early hours of the morning on 28 June 2008, the truck was involved in the accident at Dirty Wara between Henganofi and Bena in the Eastern Highlands Province.
   
2. the accident occurred whilst the truck was transporting a container containing the goods belonging to the Plaintiff.
   
3. the container was forcefully opened and looted by local villagers.
   

21. The admissions in my respectful view do not however resolve the question of liability raised by the Second Defendant in paragraphs 4, 6 and 10 of its defence. The Second Defendant's letter contains no admission to justify the setting aside of the Second Defendant's defence and the entry of judgment, ie, the plaintiff has not made out a clear and unanswerable case.

22. For the above reasons and in the exercise of my discretion, the orders sought in the Plaintiff's notice of motion are refused with costs to be in the cause.

___________________________________________
Warner Shand: Lawyers for the Plaintiff
Stevens Lawyers: Lawyers for the Defendant