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Finance Corporation Ltd v Tans Ganuka Ltd [2015] PGNC 36; N5978 (2 April 2015)

N5978

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 634 OF 2013

BETWEEN:

FINANCE CORPORATION LIMITED
Plaintiff

AND:

TRANS GANUKA LIMITED
First Defendant

AND:

SAM NILMO
Second Defendant

AND:

RACHEL NILMO
Third Defendant

Waigani: Hartshorn J.
2014: 25th July,
2015: 2nd April

Application for Summary Judgment

Cases cited:

Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112
Christopher Smith v. Ruma Construction Ltd (2000) N1982
William Duma v. Eric Meier (2007) SC898

Counsel:

Mr. D. Bidar, for the Plaintiff

2nd April, 2015

1. HARTSHORN J: The plaintiff advanced loan funds to the first defendant in May 2011. The plaintiff alleges that the first defendant has defaulted in making payments under the loan agreement that the plaintiff entered into with the first defendant.

2. The second defendant, a director of the first defendant, mortgaged land of which he is the registered State Lease proprietor, to the plaintiff to secure the funds advanced to the first defendant.

3. Further, the second defendant together with the third defendant who is a shareholder of the first defendant, guaranteed to the plaintiff, the payment of all funds advanced to the first defendant.

4. The plaintiff commenced this proceeding against the three defendants seeking amongst others judgment for damages and possession of the second defendant's land.

5. The plaintiff now applies for amongst others summary judgment to be entered against the defendants. I was satisfied that the notice of motion had been served on the defendants and that they had been notified of the hearing date of the motion. Consequently, I permitted the motion to be moved in the absence of representation of the defendants.

6. The plaintiff relies upon Order 12 Rule 38 National Court Rules. There are many decisions as to the requirements for summary judgment in this jurisdiction. A leading case is the Supreme Court decision of Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112.

7. Summary judgment is a discretionary power and may be granted if there is evidence of facts on which the claim is based and evidence given by an appropriate person that the defendants have no defence. The discretion of this court should be exercised in a clear case but with considerable care and should be granted where there is no serious triable issue of fact or law. In this regard I rely upon the recent Supreme Court decision of William Duma v. Eric Meier (2007) SC898 and the various authorities referred to in that decision.

8. For summary judgment to be entered pursuant to Order 12 Rule 38 (1):

a) the applicant must verify by affidavit evidence, the cause of action; and

b) must swear to a belief on his part that the defendant has no defence to the cause of action.

9. If the Court is satisfied in respect of these 2 factors, "...the onus is on the defendant to show an arguable defence or that there is a real question to be tried." This passage is taken from Christopher Smith v. Ruma Construction Ltd (2000) N1982, a decision of Sakora J., and in my respectful view, correctly records the test to be applied.

10. Here, Mr. Andrew Field, the plaintiff's Head of Credit, deposes as to what he believes is the plaintiff's claim against the defendants. Mr. Field deposes as to amongst others:

a) the loan agreement and its terms and the security given to the plaintiff by the defendants;

b) the default of the first defendant and the various notices given by the plaintiff;

c) repossession of vehicles by the plaintiff from the first defendant and their sale;

d) his belief that the defendants' do not have a valid defence to the claim of the plaintiff.

11. The plaintiff appears then to have satisfied the two factors previously mentioned. The cause of action of the plaintiff has been verified by affidavit evidence and an employee of the plaintiff with particular knowledge, has sworn a belief that the defendants' do not have a valid defence to the plaintiff's claim.

12. The onus is now upon the defendants to show an arguable defence or that there is a real question to be tried. As previously mentioned, there was no representation on behalf of the defendants. So there is no evidence of an arguable defence or that there is a real question to be tried, or any submissions in that regard.

13. Counsel for the plaintiff has referred to a defence that has been filed on behalf of the defendants. In their defence the defendants admit paragraphs 1 to 8 and deny paragraphs 9 of the statement of claim. Paragraph 9 of the statement of claim sets out certain actions that the plaintiff can undertake following an event of default under the mortgage between the first defendant and the plaintiff. The plaintiff submits that there is no factual or legal basis for the defendants to deny the allegations in paragraph 9 of the statement of claim as these clauses are terms of the mortgage that the parties entered into.

14. As to the remainder of the pleading in the defence the plaintiff submits that there are no specific denials of the facts contained in the statement of claim and the denials in the defence are general in nature, the plaintiff has the right to secure and sell the Toyota Land Cruiser which is covered by the fixed and floating charge granted by the first defendant, the claims concerning the Toyota Land Cruiser were found to be frivolous and vexatious and an abuse of process by three successive Magistrates of the District Court at Kimbe, the sum of K20,000 paid by the defendants in April 2012 was immediately applied in reduction of the first defendant's loans and the plaintiff sold all of the machines and vehicles that were repossessed at their fair market value after they were put out to tender with the highest bids received from the market being accepted.

15. From a perusal of the defence and taking into account the evidence given on behalf of the plaintiff, I am not satisfied that the defendants have raised an arguable defence or a real question to be tried. I am satisfied that the plaintiff is entitled to the summary judgment relief that it seeks against the three defendants. Given this it is not necessary for me to consider the other submissions of counsel. I will hear counsel as to the specific terms of the relief.
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O'Brien's Lawyers: Lawyers for the Plaintiff