N6080

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 16 of 2014

BETWEEN:

FINANCE CORPORATION LIMITED
Plaintiff

AND:

DALMINE ENTERPRISES LIMITED
First Defendant

AND:

HERMAN TOISIAT
Second Defendant

AND:

JOSEPH BARAS
Third Defendant

Waigani: Hartshorn J
2014: 13th August
2015: 14th June

Application for Summary Judgment

Cases Cited: 
Papua New Guinea Cases

Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112
Curtain Bros (Qld) Pty Ltd v. The State [1993] PNGLR 285
Christopher Smith v. Ruma Construction Ltd (2000) N1982
Provincial Government of North Solomons v. Pacific Architecture Pty Ltd [1992] PNGLR 145
Rage Augerea v. The Bank South Pacific Ltd (2007) SC869 
William Duma v. Eric Meier (2007) SC898

Overseas Cases

K/S A/S Oil Transport v. Saudi Research and Development Corporation Ltd (The "Gudermes") [1984] Lloyd's Reports 5 
Wallingford v. Directors of the Mutual Society (1880) 5 AC 685 

Counsel:
Mr. D. Bidar, for the Plaintiff
Mr. R. Inua, for the Defendants

4th June, 2015

1. HARTSHORN J: This is a decision on an application for summary judgment.

Background

2. Dalmine Enterprises Ltd (Dalmine) entered into financial arrangements with Finance Corporation Ltd (Fincorp) for the lease and purchase of certain vehicles and machines. Pursuant to the arrangements Dalmine was advanced loan funds in the sum of over K 3,370,000 and has given security to Fincorp over the vehicles and machines and also Dalmine's assets and undertaking.

3. Dalmine is alleged to have defaulted in making repayments of the loans.

4. Fincorp commenced this proceeding in January 2014 against Dalmine and Dalmine commenced proceedings against Fincorp in Kokopo in February 2014 by originating summons. The parties have consented to the Kokopo proceeding being consolidated with the Waigani proceeding.

Summary judgment application

5. Fincorp applies for amongst others summary judgement to be entered in the proceedings against the defendants pursuant to Order 12 Rule 38 National Court Rules for a liquidated sum of K 3,798,171.28. 

6. There are many decisions as to the requirements for a successful summary judgment application in this jurisdiction. Counsel for Dalmine cited the Supreme Court case of Rage Augerea v. The Bank South Pacific Ltd (2007) SC869. In that case the Supreme Court stated that the law on summary judgment is well settled in this jurisdiction. The Court then referred to the case of Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112 as enunciating and settling the relevant principles, which the decision of Curtain Bros (Qld) Pty Ltd v. The State [1993] PNGLR 285, followed.

7. The Court than reproduced the following passage that had been stated in the previous two decisions as to Order 12 Rule 38 National Court Rules:

"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.

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 judgement 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."

8. Another Supreme Court also in 2007, in William Duma v. Eric Meier (2007) SC898, as to an application for summary judgment said:

"Summary judgment is a discretionary power and may be granted if there is evidence of facts on which the claim is based and evidence is given by some responsible person that in his belief the defendant has no defence to the claim or part of the claim………

The discretion conferred on the Court should be exercised in a clear case and with considerable care. Summary judgment should be granted only where there is no serious triable issue of fact or law. If there is no dispute as to fact and there are clear admissions of the claim or part of the claim then judgment must be entered for the plaintiff."

9. I also make reference to a passage in Christopher Smith v. Ruma Construction Ltd (2000) N1982, a decision of Sakora J in which his Honour, in my respectful view, correctly records the test to be applied when regard is had to the wording of Order 12 Rule 38 (1) National Court Rules. For summary judgement to be entered:

"1. The applicant must verify by affidavit evidence the cause of action.

2. The applicant must swear to a belief on his part that the respondent (defendant) has no defence to the cause of action (or the pleadings). 

If the Court has been satisfied in respect of (1) and (2), then the onus is on the respondent to:

3. show an arguable defence or that there is a real question to be tried."

10. Note should also be taken of what Ackner LJ in K/S A/S Oil Transport v. Saudi Research and Development Corporation Ltd (The "Gudermes") [1984] Lloyd's Reports 5 at p7 said:

"It is well settled that a defendant, seeking to resist summary judgment, should state clearly and concisely what his defence is and what facts are relied upon as supporting it."

11. This passage was referred to favourably in Curtain Bros (Qld) Pty Ltd (supra). Further, in Wallingford v. Directors of the Mutual Society (1880) 5 AC 685 at 704, in a passage referred to in Provincial Government of North Solomons v. Pacific Architecture Pty Ltd [1992] PNGLR 145, Lord Blackburn said, that the defendant must, "condescend upon particulars". It is not enough to swear, "I say I owe the man nothing."

12. In this instance, Mr. Andrew Field, Fincorp's Head of Credit deposes in his evidence as to Fincorp's claim against Dalmine and the other defendants. Mr. Field also deposes that he verily believes that the defendants do not have a valid defence and their cross-claim has no basis.

13. I am satisfied that Fincorp has met the two factors mentioned in Christopher Smith v. Ruma Construction (supra) being:

a) the cause of action of the plaintiff has been verified by affidavit evidence; and

b) an employee of the plaintiff with particular knowledge, has sworn a belief that Dalmine and the other defendants have no defence to Fincorp's claim.

14. The onus is now upon Dalmine and the other defendants to show an arguable defence or that there is a real question to be tried. In so doing they should state clearly and concisely what their defence is by condescending upon particulars, and what facts are relied upon as supporting their defence.

15. The defendants in their defence in essence plead that:

a) certain documents were signed, but the defendants do not know the terms and effect of the documents as they were not explained to them;

b) they deny that they received demand notices;

c) repayments have been made and Dalmine is not in default;

d) they did not understand the documents and were not given independent legal advice.

16. The second defendant deposes that amongst others, K1, 498,322.28 has been paid to Fincorp up to 20th December 2013, he does not know how Fincorp has apportioned these payments between the nine accounts, if there are arrears which is denied, it is because Fincorp has not constantly kept the defendants informed.

17. As to the defence of the defendants, Mr. Field deposes amongst others that:

a) pursuant to the Master Lease Agreement, which is in evidence, Fincorp retains title to all of the vehicles and machinery until the leases are fully repaid;

b) Dalmine's loan accounts have been in default for between 201 and 322 days as at 11th July 2014 and that no repayments have been made since December 2013, (which accords with the second defendant's evidence), so that the arrears have continued to accrue;

c) Dalmine's accountant Mr. Allan Arua has conceded in a letter dated 21st October 2013 that Dalmine is in arrears;

d) the second defendant in a letter dated 30th May 2013 to the Department of Works - New Ireland Provincial Authority, has stated that Dalmine's finances are overstretched;

e) whatever payments have allegedly been made by Dalmine, are grossly insufficient to clear the arrears on the nine loan accounts.

18. In considering the pleadings of the defendants and the evidence filed on their behalf, I am not satisfied that they have stated clearly and concisely their defence and what facts they rely upon to support their defence, particularly as to Dalmine not being in default and in arrears in making the necessary payments to Fincorp. 

19. Further, the pleadings of Fincorp including its reply and the evidence of Mr. Field, to my mind show that the defendants do not have a reasonable defence and that there are no serious triable issues of fact or law.

20. I am satisfied that Fincorp is entitled to the summary judgment relief that it seeks against the defendants. I will hear counsel as to the specific terms of the relief.

_____________________________________________________________
O'Briens Lawyers: Lawyers for the Plaintiff 
Lawama Lawyers: Lawyers for the Defendants