N6708
                                         PAPUA NEW GUINEA		
[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1081 OF 2002

BETWEEN
ROGER MECKPI
Plaintiff

AND
LUKE FALLON
First Defendant

AND
DEKENAI CONSTRUCTIONS LIMITED
Second Defendant

   Mt. Hagen: Kandakasi, J
2016:	 22nd December  
2017:	 08th May   

MEDIATION – Bad faith at mediation – Repeated failures to attend  – Failure to comply with Court orders for mediation and after mediation - No explanation provided for – Conduct consistent with defendants’ overall failure to act in good faith resulting in delays – No issue warranting resolution by trial presented – No explanation for failures provided - No submissions against application for judgment against the defendants despite ample opportunity given – Appropriate remedy – Judgment for the Plaintiff together with costs on indemnity basis against Defendants for bad faith.

LAWYERS – Duties and responsibility of lawyers – Duty to resolve matters promptly and avoid unnecessary delays and increased costs – ADR Rules providing a process to assist lawyers to properly and meaningful discharge their duties and responsibilities – Lawyers role following orders for mediation, before during and after conduct of mediation – Breach of – Client to work determine if lawyer should reimburse fees and costs forced upon them by lawyers failures - Professional Conduct Rules- ADR Rules  

Papua New Guinea Cases cited:

Abel Constructions Ltd v. W.R. Carpenters (PNG) Ltd (2014) N5636
Alex Awesa & Anor v. PNG Power Limited (2014) N570
Hargy Oil Palm Ltd v. Ewase Landowners Association (2013) N5441
Koitaki Plantations Ltd v. Charlton Ltd trading as Kookabura Meats & Stuart Fancy (2014) N5656
Wantok Gaming Systems Ltd v. National Gaming Control Board (2014) N5809

Counsel:

O. Yallon, for the Plaintiffs
K. Peri, for the Defendants

8th May, 2017

1.     KANDAKASI J: This matter has returned to the Court on account of the defendants “bad faith” at mediation. Consistent with their prior conduct, especially that of their lawyers’, the defendants failed to turn up at the schedule venue and time for the mediation even after repeated adjournments and delaying the commencement times and attempts to getting the defendants to attend.  This failure has continued even after the return from mediation with the defendants failing to file affidavits and submissions explaining their failures. 

Relevant Issues

2.	The main issue for this Court to determine is what is an appropriate penalty for the defendants “bad faith” conduct?

The Relevant Facts 

3.	 The background and relevant facts are in a number of affidavits filed in these proceedings at various times. But the most relevant one is the affidavit of the Plaintiff Roger Meckpi (Roger) sworn and filed on 30th July 2015.   Roger issued this proceeding on 27th August 2002, claiming damages for breach of a tenancy agreement he had with the Defendants. He originally pleaded that he is the owner of a property described as Section 6, Allotments 1 & 2, Kagamuga Airport, Western Highlands Province (property) and runs a business out of the property. He also pleaded that he entered into a lease agreement with the defendants on terms he summarized as follows:

Premises	Rental Rates per month	
1. Office and carpark	K  1,000.00	
2. Lodging unit x 9 @ K45 per night payable monthly	
K25,650.00	
3. Double room x 1 @ K65 per night payable monthly	 
K   1,950.00	
4. Bond one off	K   1,500.00	
Total payable monthly	K27, 500.00	

4.	He went on to plead further that, the Defendants continued to occupy the property for a period of seven months from October 2001 to April 2002. Save only for a small payment, the Defendants fell into serious rental arears and subsequently terminated the agreement by a sudden vacation of the property.  This resulted in damages to Roger and he pleads his loss and damages as follows:

Premises	Rental Rates per month	
1. Rental areas for 7 full months 	K192, 500.00	
2. Less payment upon demand in February 2002	
K  24,000.00	
Total arears due and owing	K168, 500.00	

5.	The Defendants filed and served a number of process against the Plaintiff include requests for further and better particulars, notice of discovery, notice of motion to file and serve their defence effectively out of time, four notices of motion each seeking dismissal of the Claim. Three of those were heard and dismissed by the Court.  One of them was based on a claim that Roger did not own the property.  On 11th June 2014, the Court decided to refer the matter to mediation. Before the mediation could take place, Roger tried to have this proceedings resolved by the parties negotiation pursuant orders or directions the Court gave.  For that purpose, Roger attended the offices of Warner Shand Lawyers and tried, on 8th, 10th, 12th, 15th, 18th, 20th, 22nd and 24th September 2014 to meet with Mr. Koeya Peri of counsel for Defendants.  Each time, Mr. Peri deferred the meetings without the courtesy of meeting with and talking to Roger.  Subsequently, Mr. Peri requested Roger to provide copies of his lease agreement with Defendant and documents disclosing Roger’s interest in the property, which Roger promptly obliged.

6.	On a number of occasions from 1st to 7th October 2014, Roger called Mr. Peri to try and speak to him but Mr. Peri refused to pick up his call and speak to him.   On the last occasion, Mr. Peri’s secretary told Roger to put in writing his attempts to meet with Mr. Peri.  This Roger did by letter dated 21st November 2014. In that letter he informed Mr. Peri that:

(a)	Mediation was fixed for 5th December 2014 and requested his presence at mediation;
(b)	He was deliberately or otherwise evading the Courts directions for the parties to talk and resolve this matter;
(c)	He failed to attend the various possible sessions at his offices;
(d)	He was making him (Roger) to suffer by his (Peri’s) conduct;
(e)	Despite having indicated that he (Peri) would assist him (Roger) he failed on that; and
(f)	Request his attendance at the mediation fixed for 5th December 2014.

7.	Before the above letter, Roger in person and Mr. Peri for the Defendants appeared before me in Court on 13th October 2014, when I fixed the court ordered mediation to take place on 14th October 2014 with their agreement.  The venue for the mediation was the Highlander Hotel, in Mt. Hagen.  The mediation did not proceed on the set date on account of Mr. Peri’s and his clients’ non-attendance.  The mediator fixed the mediation for 17th October at 8:30 am.  Roger and the mediators were ready to proceed with the mediation but for Mr. Peri and his clients who failed to turn up.  That forced an adjournment until 1:30 to enable Mr. Peri and his clients’ to turn up, which they failed to do.   That resulted in a rescheduling for 18th October 2014.  On that day, the mediators and Roger were all ready for mediation.   However, neither Mr. Peri nor any of his clients turned up for the mediation.  They even failed to inform the mediators or Roger of their inability to attend and the reason for that.   Again the mediators and Roger decided to wait until 3:30 pm when it was clear that Mr. Peri and his clients were not attending the mediation. Consequently, the mediators called off the mediation.  They then rescheduled the mediation for 08th December 2014.  Again come 08th December 2014, neither Mr. Peri nor any of his client’s turned up for the mediation.  Accordingly, the mediators decided to terminate the mediation and issued a “bad faith” certificate against the Defendants.

8.	The matter returned to Court on 17th December 2014, before me.  The Court issued a number of orders including orders for the parties to file affidavit evidence setting out the steps each of them took to comply with the order for mediation. The matter was then fixed for 6th February 2015 to receive submissions on what consequence should follow the Defendants’ bad faith.  The hearing did not proceed on the next return date.  Instead, a number of further orders and directions where issued for the parties to file and serve their affidavit evidence as well as their submissions.  Roger complied with the Court’s orders and directions but the Defendant continued to default.  Finally, on 27th July 2016, I received Roger’s submissions and adjourned for the Defendants to file and serve their submissions.  These they again failed to do.  At the same time, the Court warned that if the Defendants continue to default, the Court will proceed to consider the submissions and make a decision based on what was before the Court.  As at the date of this judgment, the Defendants have still not filed their affidavits or submissions against those of Roger’s. 

Consideration

9.	There are number of judgments already on how to deal with the problem of “bad faith” at mediation. This includes my decisions in Koitaki Plantations v. Charton,Awesa v. PNG Power and Wantok Gaming Systems Ltd v. National Gaming Control Board. In these judgments, I went to some length in discussing the development, promotion and use of ADR and mediation for effective and efficient resolution of disputes.  Also, in these judgments, I highlighted the reasons why the formal courts and governments worldwide are promoting and encouraging the use of mediation.  Further, in these judgments, I discussed in some detail the duties and responsibilities of parties and their lawyers in mediation.  Thereafter, I proceeded to provide an answer to the important question of what amounts to “bad faith”.  I answered that question in all of these judgments in the same way.  For the purpose of my decision in the present case, unless otherwise indicated, I will quote relevantly from my decision in Wantok Gaming Systems Ltd v. National Gaming Control Board (supra) which quotes from my earlier decisions. At paragraph 24 in that judgement I said:

“…[A] proper understanding of these duties and responsibilities by the parties would enable them to “participate in good faith” at mediations.  That would in turn enable possible resolutions of the disputes.  But a failure in these duties and responsibilities and in particular an absence of any of the following list of behaviours would lead to a finding of a party acting in “bad faith” resulting in no final settlement:

‘(1)	Complying with the various legislative provisions and other rules, standing orders or practice directions’ or provisions that govern mediation;
(2)	Complying with orders referring a matter to mediation;
(3)	Personally attending (excluding attendance by telephone) at the mediation by all persons who are fully authorized to settle the dispute, 
(4)	Preparing for mediation by the parties and their representatives, which includes the exchange of any documents requested or as set forth in a rule, order or request of the mediator;
(5)	Participating in meaningful discussions with the mediator and all other participants during the mediation;
(6)	Acting in accordance with all contractual terms regarding mediation, the parties may have agreed to;
(7)	Following rules set out by the mediator during the introductory phase of the process;
(9)	Remaining in the mediation process until the mediator determines that the process is at an end or excuses the parties;
(10)	Engaging in direct communication and discussions between the parties to the dispute, as facilitated by the mediator;
(11)	Engaging in accurate and honest representations to the other parties or the mediator during and for the purpose of the mediation; and
(12)	Refraining from filing any new motions until the conclusion of the mediation, in pending lawsuits.”

11.	I went on to add in cases where corporations are involved, their servants and agents should:

“(1)	seek and secure the relevant governing bodies or authorities’ full and unrestricted authority or instructions to negotiate in good faith and find a solution;
(2)	seek and secure their legal advices and if need be secure appropriate legal services for and during the mediation process;
(3)	consult and get the inputs of other important and critical people where that is needed;
(4)	have readily available persons they will need to consult or seek their approval during the course of mediation to promptly provide the required inputs or instructions;
(5)	gather and put together all documentary and other evidence which they may require or wish to table at the mediation;
(6)	carry out investigations and researches as may be considered relevant and necessary with results ready for use during the mediation process if need be; 
(7)	allow for quality undivided time and attention to the mediation process; and
(8)	prepare and make full disclosure of information critical to arriving at a fair, just and a reasonable agreement.” 

12.	I then turned to a consideration of the main question of penalties or consequences for any breach of the requirement for “good faith” at mediation.  In that consideration, I had regard to the provisions of r.10 (7) of the ADR Rules and the kinds of penalties the Court could impose against a party that is guilty of “bad faith”.  I noted:  

“The Court has a wide discretion or power to make such orders as it may think appropriate in the proceedings once a case of “bad faith” is made out against a party.  I note this is not a vesting of a new power that the Court does not already have.  Instead, as it has been repeatedly and abundantly made clear by this and the Supreme Courts under the first and third factors outlined above, r.10 (7) merely restates and reinforces a power the Court already has. It would follow therefore that, a case of “bad faith” could be met by any one or more of the following orders depending on the seriousness of the conduct and whether the conduct is deliberate or inadvertent:

(a)	dismissal of the claim;
(b)	permanent stay of the claim; or
(c)	a stay of the claim pending a meeting of certain conditions; or
(d)	a strike out of a defence and entry of judgment; and or
(e)	order costs.

... Sanctions under (a) - (c) could be imposed in appropriate cases, if the defaulting party is the plaintiff or a cross claimant. Obviously, the sanction under (d) could be imposed against a defendant or a cross-defendant.  Sanctions under (a) and (d) could be considered drastic. However, if the circumstances leading to a finding of “bad faith” is serious, such sanctions might very well be called for and warranted, when considered in the light of the kind of sanctions that could be and are being imposed for contempt of court or for breach of court orders.  The final possible sanction of costs could be either on a solicitor/client or party/party basis. Such a sanction could be in addition to any of the sanctions under (a) - (d).  If possible, the court could at the time of the order, fix the actual amount of costs payable or allow for taxation.”

13.	Applying the principles outlined above, I found in both the Koitaki Plantations v. Charlton (supra) and Awesa v. PNG Power (supra) cases, the respective Plaintiffs failed to:
 
(1)	comply with the call and encouragement for the use of mediation by legislation,… including the ADR Rules, the various Supreme and National Court decisions and many learned and authoritative publications;
(2)	comply with the orders of the Court that referred the matter to mediation with their consent;
(3)	personally attend through a duly authorized person having the necessary power and authority to bind them at the appointed time, date and venue for mediation as did the other parties and the mediators; 
(4)	prepare for mediation, which included:
(a)	seeking and securing their board’s full and unrestricted authority or instructions to negotiate in good faith and find a solution;
(b)	the exchange of any documents requested or as set forth in a rule, order or request of the mediator;
(c)	seeking and securing their legal advice and if need be, secure appropriate legal services for and during the mediation process;
(d)	consulting and getting the inputs of other important and critical people where that was needed;
(e)	ensuring the ready availability of persons who needed to consulted or seek their approval during the course of mediation to promptly provide the required inputs or instructions;
(f)	gathering and putting together all documentary and other evidence which they may require or wish to table at the mediation;
(g)	carrying out investigations and researches as may be considered relevant and necessary with results ready for use during the mediation process if need be;  and
(h)	allowing for quality undivided time and attention to the mediation process; and
(i)	preparing to make full disclosure of information critical to arriving at a fair, just and a reasonable agreement.
(5)	participate in meaningful discussions with the mediator and all other participants during the mediation;
(6)	act in accordance with all contractual terms regarding mediation that the parties may have agreed to, given that the mediation orders were with the consent of the parties;
(7)	follow rules that may have been set by the mediator during the introductory phase of the process or in his earlier communication with the parties;
(9)	remain in the mediation process until the mediator determined that the process was at an end or excused the parties;
(10)	engage in direct communication and discussions with the other parties with the mediator’s facilitation;
(11)	engage in accurate and honest representations to the other parties or the mediator during and for the purpose of the mediation. 

14.	In both cases, I found these failures seriously impeded the Court ordered mediations from proceeding.  That denied the parties an opportunity to resolve the matter and failing that, enable the parties with the assistance of the mediator to identify the existence, if any, of a serious and meritorious issue that is inappropriate for resolution by mediation and warrant a judicial consideration and determination as specified in my decision in Abel Constructions Ltd v. W.R. Carpenter (PNG) Ltd.  I commented that, if indeed the cases presented the kind of issues in question, the parties acting in bad faith should have made that known to the Court prior to the referral to mediation. If that was done, it could have prevented a referral to mediation. But the parties acting in bad faith who had the burden to so disclose or make out a case failed. I added that, where the parties failed to discharge that duty and the Court refers a matter to mediation, it in effect means there is no serious and meritorious issue that is inappropriate for mediation and resolution only by judicial determination. Consequently, this obligates the parties to use their best efforts and endeavours to resolve their dispute through the mediation process. If they faithfully discharged their respective duties and responsibilities in the way discussed, settlement would be inevitable.  I added that, the only exception to that, would be cases in which the parties are able to agree that there is a serious impediment to settlement which was not clear as at the time of the order for mediation.   

15.	In respect of the matters just discussed, I found in both cases a number of failures on Koitaki Plantations’ and PNG Powers’ parts.  These were that:

(a)	they failed to demonstrate to the Court's satisfaction that there existed in their respective cases, the kind of impediment and or type of issue discussed above;
(b)	they conducted in a way that was contemptuous of the orders for mediation;
(c)	their conducts ran against the grain of the various legislative, judicial and learned publications, encouraging and supporting the use of mediation to resolve human conflicts;
(d)	their respective conducts forced the other parties, the Court and the mediator to waste their time, energy and effort in arriving at the decision to have the matter referred to mediation and setting aside time and generally preparing for it; and
(e)	save only to point out that their decisions were not to settle the matter and hence not to give mediation a fair chance, they both failed to provide any good reason for taking that position.

16.	In those circumstances, I decided in Koitaki Plantations v. Charlton (supra) that the most appropriate sanction would be an order for a dismissal of the case.  Accordingly, I ordered a dismissal of Koitaki Plantations’ claim and ordered a strike out of its defence with judgment entered against it on a cross claim by the defendants.  In making the second part of the order, I noted that, the case concerned a simple supply of goods contract, namely live animals, a claim of none payment for them in the plaintiff’s claims and in the defence and cross-claim a claim of a failure to supply the animals and or an over payment for them.  I was of the view that, this presented no meritorious issue that was beyond the reach of mediation and resolution by the parties.  All that the parties had to do was to sit down with the facilitation of a mediator at mediation and settle that claim.  At mediation they would have gone through the various and relevant purchase orders, delivery dockets, invoices, payment slips and evidence of payments and settle the claim after establishing the correct records of what happened in the various transactions. 

17.	In the Alex Awesa case, I arrived at a similar decision for the same reasons but with damages to be assessed as they were not liquidated. I then ordered the damages to be settled through mediation.  Costs were ordered against the party acting in bad faith, PNG Power Ltd.  

18.	In Wantok Gaming Systems Ltd v. National Gaming Control Board (supra), after considering all the arguments and evidence put before me as well as my earlier decisions, I concluded unlike the defendant in the Alex Awesa case, which was able to point out at least an issue about interpreting a particular statute, there was no mention of any issue that warranted trial being pointed out or identified by the Gaming Board.  If parties attended mediation in good faith and were not able to resolve their dispute despite their best efforts, they have the duty under Rule 5(2) of the ADR Rules to “identify and limit the real and meritorious issues in the proceedings that warrant judicial consideration and determination” and reach agreement on how to conduct the litigation over those issues. By choosing not to go to mediation at the instigation of the Gaming Board, the parties failed to discharge that duty.  This, I found was serious because, when the Court decided to have the matter referred to mediation, it was of the view that, there was no issue warranting a court hearing and determination.  A review of that position could only come after the parties tried their very best to find a solution to their dispute and in the process discover an issue of the kind that is inappropriate for mediation as per the list provided in the Able Construction Ltd case. In these circumstances, I considered ordering the parties to return to mediation and have the matter resolved was appropriate. Accordingly, I referred the matter to mediation for the second time by a different mediator at the National Gaming Board’s costs on account of its bad faith conduct.

19.	More recently, in Wantok Gaming Systems Ltd v. National Gaming Control Board (No.2) (2017) N6685, I declined to find bad faith against the Defendant this time on the application of the Plaintiffs. There, following the second order for mediation, the parties did participate in mediation.  The process took seven hours during which the Chairman of the Defendant made the defendants last offer of K5 million and announced that was his maximum limit.  Later, the Defendant increased the offer to K6.5 million which was rejected.  The mediator filed a certificate that confirmed that the parties participated in good faith. Additionally and importantly, I found that the Plaintiffs failed to establish the full extent of their damages going past the amounts offered and there was a strongly likelihood of judgement being entered for them in such amounts.  

Present Case

20.	In the present case, there is no dispute that the Court ordered mediation did not take place on any of days fixed by the Court or the mediators in consultation with the parties.  The uncontested evidence from Roger and the lack of any evidence filed for or by the Defendants clearly establishes the following conducts of the Defendants and in particular that of their lawyers:

(a)	failed to engage in meaningful out of court settlement discussions;

(b)	failed to comply with Court orders and directions for direct settlement discussions;

(c)	being discourteous to Roger and not honouring counsel’s indication of wanting to have this matter discussed and resolved;

(d)	despite repeated adjournments and opportunities given to the Defendants both by the Court, the mediators and Roger for them to attend and participate meaningfully in the Court ordered mediation they failed to turn up on each of the appointed dates; and

(e)	failed to give any explanation at all for their failure to engage in settlement discussions, failure to turn up for mediation on the various appointed dates and their failure to participate at mediation in good faith.

21.	The conducts listed above was consistent with the Defendants and their lawyers attitude from earlier on in the proceedings, which saw repeated failed applications for dismissal, and various other interlocutory and interrogatory processes, some of which were without good reason and unnecessary.  This caused more than a decade in delays in having this proceeding disposed off promptly after its filing in 2002.  The end result of the Defendants conduct and as clearly revealed by the evidence or lack thereof, means the Defendants and their lawyer’s breached a number of their respective duties.  For the Defendants they breach their duties to:

(1)	comply with the call and encouragement for the use of mediation by legislation, including the ADR Rules, the various Supreme and National Court decisions and many learned and authoritative publications;

(2)	comply with the orders of the Court that referred the matter to mediation;

(3)	personally attend by the First Defendant and the Second Defendant through a duly authorized person having the necessary power and authority to bind it on the appointed time, date and venue for mediation as did Roger and the mediators; 

(4)	prepare for mediation in terms of:
(a)	seeking and securing the Second Defendant’s board’s full and unrestricted authority or instructions to negotiate in good faith and find a solution;
(b)	the exchange of any documents requested or as set forth in a rule, order or request of the mediator;
(c)	seeking and securing their legal advice and if need be, secure appropriate legal services for and during the mediation process;
(d)	consulting and getting the inputs of other important and critical people where that was needed;
(e)	ensuring the ready availability of persons who needed to be consulted or seek their approval during the course of mediation to promptly provide the required inputs or instructions;
(f)	gathering and putting together all documentary and other evidence which they may require or wish to table at the mediation;
(g)	carrying out investigations and researches as may be considered relevant and necessary with results ready for use during the mediation process if need be;  and
(h)	allowing for quality undivided time and attention to the mediation process; and
(i)	preparing to make full disclosure of information critical to arriving at a fair, just and a reasonable agreement.
(5)	participating in meaningful discussions with the mediator and all other participants during the mediation;
(6)		following rules that may have been set by the mediator during the introductory phase of the process or in his earlier communication with the parties;
(9)	remaining in the mediation process until the mediator determined that the process was at an end or excused the parties;
(10)	engaging in direct communication and discussions with the other parties with the mediator’s facilitation;
(11)	engaging in accurate and honest representations to the other parties or the mediator during and for the purpose of the mediation. 

22.	Again on the basis of the evidence before me and lack thereof from or for the Defendants and their lawyers, I also find Mr. Peri of counsel for the Defendant failed in his professional duties.  In Alex Awesa v. PNG Power Limited (supra) I outlined the kinds of duties and responsibilities a lawyer has in view of the law and the Courts requiring the use of mediation in all case with the exception of a few cases to find a prompt and lasting resolution of all disputes.  I pointed out in the context of mediation that proper advice of the lawyers to their clients are called for at three stages.  These stages are:

(1)	prior to a case being referred to mediation;

(2)	immediately post an order for mediation; and

(3)	immediately post a failed mediation or lack thereof resulting in an issuance of a “bad faith” certificate. 

23.	I then pointed out that, at the first stage, the follow kinds of advice should be given to clients by their lawyers:

“(1)	a statement on the nature of the case outlining the kinds of issues presented, and an outline of the correct, relevant and applicable legal principles; 

(2)	then of the issues presented, whether any or all of them presented any question that was inappropriate for mediation;

(3)	that should be followed by an outline of the kind of processes available namely, direct negotiations and failing any resolution, mediation and failing any resolution through that, the formal court process with advice on the advantages and disadvantages of employing any of those processes;

(4)	in the context of item (3) there should be an outline of the party’s worse alternative to a negotiated outcome (WATNO) or agreement (WATNA) and the party’s best alternative to a negotiated outcome (BATNO) or agreement (WATNA).

(5)	if the advice identifies the case as presenting issues inappropriate for mediation, it should also identify the issues, how such issues are presented, seek specific instructions to apply under r. 4 of the ADR Rules to proceed to litigation and thereby take the matter out of the pre-supposed requirement for mediation and outline the kinds of evidence required and who is to depose to them in support of any such application; and

(6)	if the opposite of item (5) was the case, advice should have been provided to that effect and seek appropriate instructions to apply for appropriate orders, prepare for and proceed with mediation once ordered without delay.”

24.	At the second stage, I pointed out that the lawyers’ advice should cover the following:

(1)	the fact that the Court has made an order for mediation with an emphasis on the need to comply with the order and why, including an avoidance of any possible contempt of court charges;

(2)	an outline of the parties duties under r.10 (1) – (6) of the ADR Rules as elaborated and detailed in the case of Hargy Oil Palm and how those duties could be or should be discharged;

(3)	following on from item (1) and (2) above, an outline of the possible consequences that would follow for any noncompliance of the orders and the requirements of the ADR Rules as elaborated and set out in the Koitaki case.
(4)	seeking specific instructions for an unrestricted authority to negotiate and settle on behalf of the company17 but between its WATNO and BATNO, the board or the person with the power to bind the company to be on standby for any further or additional or alternative instructions that might be needed and provide any endorsement or approval that might be required.”

25.	Finally, at the third stage, I pointed out that the lawyers’ advice should cover the following:

“(1)	an outline of what could amount to a reasonable explanation for the conduct leading to the failure of mediation and the issuance of the certificate of “bad faith”;

(2)	highlight a need for instructions going into a provision of evidence disclosing a reasonable explanation for the conduct leading to the mediation failing and the eventual issuance of the “bad faith” certificate; and

(3)	where the failure of mediation is due to  an identification of an issue that is inappropriate for mediation to resolve, highlight; (1) the need to demonstrate how that issue could not be identified prior to the order for mediation despite an exercise of due care and attention to do so; (2) how it was revealed after the order for and or during mediation; (3) the need to get the other party and the mediators agreement on such an issue surfacing during mediation; and (4) how it is an issue that is beyond the parties ability to resolve with the mediators help.

(4)	an outline of what steps the party against whom a “bad faith” certificate was issued took at the mediation to have any factual issue arising in the case resolved, which would clearly be an aspect the parties would be able to achieve, unless there were serious technical facts in issue which are incapable of resolution through any joint appropriate testing, inquiry and or assessment.”

26.	Also, I pointed out that, when a case goes back to the Court on a bad faith certificate, lawyers for the parties acting in bad faith must provide evidence of having provided the kind of advice required.  In the case then before me I found PNG Power’s lawyer failed in his duty to appropriately advice at each of the stages his client.   Evidence adduced by or for PNG Power disclosed that certain of its officers took the view that the “matter was inappropriate for mediation.”  In support of that view, the officers merely pointed to “a possible application of the Fairness of Transactions Act” and the “need for an interpretation of provisions of a lease agreement between” the parties.  They did not however, specify the issues presented and failed to demonstrate how such issues arise and how they warranted only a judicial consideration and determination.    In this regard, I pointed out further that, when the Court decided to refer the matter to mediation, it was effectively of the view that the “case did not present any issue that warranted only a judicial consideration and determination and therefore present an inappropriate case for mediation.” That effectively, obligated the parties to:

“fairly and openly discuss the matters of importance and concern to them, then jointly identify their issues, concerns or interests, consider all possible options for a resolution of each of the issues presented and arrive at an outcome that would finally resolve all issues between them.”

27.	On the evidence then before me or lack therefore I found that, instead of taking such steps, “PNG Power took a position unilaterally and failed to take any real and meaningful step to give the Court ordered mediation a real go in good faith.”  In those circumstances, I considered it appropriate that the matter should be referred back to mediation at PNG Powers costs. 

28.	In the present case, there is a complete lack of evidence of what steps if any learned counsel for the Defendants took to appropriately inform, advice and prepare his clients for the Court ordered mediation to take place on any of the set dates.  Despite the changes to the dates for mediation to enable the Defendants to attend mediation and participate in good faith they did not make any attempt at all.  This deprived the parties of resolving the matter and or failing that, enable them to clearly identify the issues which warranted resolution only by the judicial consideration and determination.  It is clear, learned and experienced counsel for the Defendants, Mr. Peri, failed in respect of all of his duties at all stages that call for a considered discharge of his duties and responsibilities.  This directly resulted in the Court ordered mediation not taking place on the dates fixed by the Court or the mediator in consultation with the parties.  That led to the issuance of the “bad faith” certificate against the Defendants.  This conduct and behaviour was consistent with Mr. Peri and his client’s conduct through him in bringing repeated failed applications and the various interlocutory proceedings which only increased costs and delay unnecessarily.  I consider the Defendants’ and their lawyers conduct constitutes repeated acts of contempt of court without good reason or excuse at the highest. 
 
29	I find that the kinds of conduct the Defendants and their lawyers engaged in this case is far worse than those displayed in the previous cases mentioned and discussed earlier in this judgment.  This case presents no issue of the kinds listed in Abel Constructions Ltd v. W.R. Carpenter (PNG) Ltd or at all that warrants a judicial consideration and determination.  Instead, this is a simple claim for liquidated damages out of a tenancy agreement.   The Defendants paid K24, 000.00 out of a total of K192, 500.00 that was due and payable according to Roger’s claim.  In their defence, the Defendants amongst others, took issue with Roger owning the property and the lack of a written agreement between the parties.   Based on their claim of Roger not being the owner of the property, the Defendants, made repeated applications for a dismissal of the proceedings.   Roger adduced evidence of the Defendants occupation of the property and their failure to pay the rents.  The Defendants adduced no evidence rebutting Roger’s claim as supported by his evidence.  In the end all of the Defendants’ repeated applications failed. At the end of those repeated failed applications of the Defendants and the resultant delays, the Court finally ordered the parties to have the proceedings resolved by mediation.  

30.	Without any serious commitment on the part of the Defendants and in particular their lawyer, they made several repeated representations to Roger and the mediators that they would enter into settlement discussions and have this matter settled.  Despite that, the Defendants took no real and meaningful steps to engage in settlement discussions both prior to and at the Court ordered mediations even though a number of opportunities were given to them.  The also failed to respond to both written and personal attendances on the Defendants lawyers by Roger and the Court appointed mediators.  They extended no courtesy of meeting with Roger when he turned up at the offices of their lawyer on the lawyer’s indication that he would meet with him.  Further, they failed to provide any explanation at all for both failing to meet with Roger on the various attendances he made at their lawyers offices and for their failure to turn up at mediation on the number of occasions the matter was set for the mediations to take place.   Consistent with that attitude, the Defendants and their lawyers failed to meaningfully participate in Court on the return of this matter from mediation.  They have not filed any affidavit evidence, explaining their various failures and how they might have a meritorious defence that is likely to succeed.  There is not a single argument or submission for or by the Defendants as to the kind of consequence that should follow their serious “bad faith” and unexplained conducts.

31.	In these circumstances, I consider an appropriate response and penalty is to enter judgment and make orders which I hereby do in terms of the following:

1.	The Defendants defence filed on the 31st December 2002 be dismissed.

2.	Judgment be entered for the Plaintiff in the sum of K168,500.00.

3.	Interest at 8% on the judgment sum be calculated and added onto the judgment sum to run from the date of the issue of the writ to date of final settlement.

4.	Costs on full indemnity basis be ordered against the Defendants, to be taxed if not agreed.

32.	In the light of the apparent failures of the Defendants’ lawyer Mr. Koeya Peri, I did give some serious thought to making orders against him personally.  However in the light of no evidence from the Defendants and their earlier sustained but unsuccessful applications against Roger’s claim I decided against making such an order and leave the issue to the Defendants and their lawyer to sort out.  If the lawyer acted on the Defendants instructions, they would be responsible. If however, the lawyer failed to keep them informed of all developments and obligations as they befall on the Defendants and failed in his duties to appropriately advice, prepare and take them to the Court ordered mediation appointments, they are of course at liberty to seek recovery from the lawyer both the damages and the costs as ordered against them. 

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Yallon & Associates Lawyers:	 Lawyers for the Plaintiff
Warner Shand Lawyers:		Lawyers for the Defendant