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National Court of Papua New Guinea |
PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE
WS 1652 of 2018
BETWEEN:
NIUGINI EXPRESS DEVELOPMENT CONSULTANT LIMITED
Plaintiff
AND:
UNITECH DEVELOPMENT CONSULTANCY LIMITED
Defendant
Waigani: Anis J
2019: 9 & 14 October
NOTICE OF MOTION – Summary judgment – Order 12 Rules 38 and 39 – defence be struck out – Order 8 Rule 27(1)(a) – cross-claim be dismissed – whether evidence support the material facts – whether there was admission to the claim – whether the pleadings do not disclose a valid defence and cross-claim
Cases Cited:
William Duma v. Eric Meier (2007) SC 898
Finance Corporation Ltd v. Trans Ganuka Ltd (2015) N5978
Counsel:
Ms M Worinu, for the Plaintiff
Ms R Siaguru, for the Defendant
RULING
14th October, 2019
1. ANIS J: This is an application by the plaintiff seeking various summary relief. It was heard on 9 October 2019. I reserved my ruling to today at 9:30am.
2. This is my ruling.
BACKGROUND
3. The plaintiff filed its claim on 18 December 2018. It is suing the defendant for breach of contract. It claims that it entered into 2 agreements with the defendant, the first on 7 May 2014 (first agreement) and the second in 2015 (second agreement), to construct 2 duplex houses.
4. Based on the 2 agreements, the plaintiff pleads their material terms in its statement of claim. I will summarise them as follows. The defendant would provide land and the plaintiff would construct 2 duplex houses. At the start of the construction, the plaintiff would advance the defendant a sum of K75,966 for mobilization costs. The defendant shall, after the completion of the 2 duplex houses, sell them within 3 months. And the defendant shall, following that, pay the plaintiff a total sum of K1, 000, 000 based on the formula, that is, K250,000 per unit for the 4 units. The defendant shall, after the completion of the 2 duplex houses, reimburse the plaintiff its K75, 966 advances.
5. The plaintiff claims that it completed the 2 duplexes in April of 2015. It claims that despite that, the defendant has not paid it monies as agreed to under the 2 agreements hence filed this proceeding. It seeks in total K1, 075, 966, plus interest and costs.
MOTION
6. The plaintiff’s notice of motion was filed on 26 June 2019. It seeks primarily summary judgment against the defendant. Other relief sought include orders for the defendant’s defence and cross-claim to be struck out.
7. The sources that have been relied upon in the notice of motion, are Order 8 Rule 27(1) (a), Order 12 Rule 38 and 39 and Order 12 Rule 40, of the National Court Rules. The sources are not contested. I also find them to be in order. I may address one or two in the latter part of my decision.
8. The notice of motion is contested.
EVIDENCE
9. The plaintiff relies on these evidences, namely, (i), affidavit of Dr Helen Emang filed on 28 June 2019 and (ii), affidavit of Melisa Worinu filed on 26 June 2019.The defendant on the other hand relies on the affidavit of Sam Koim filed on 2 May 2019.
ISSUES
10. The main issues are as follows, (i), whether there is evidence of admission by the defendant, (ii), if so, whether that therefore means that there are no serious issues to be trialed or that there are clear evidence disclosed that support the material facts as pleaded in the statement of claim, (iii), whether the defence and cross-claim are frivolous or vexatious.
ADMISSION
11. The highlight of the plaintiff’s submission is this. It says that there is evidence of admission by the defendant in relation to the main claim. Counsel referred this Court to an email contained at annexure D to the affidavit of Dr Helen Emang. The email is attached at the second page of the annexure. It was sent by one Jeffery Juju for the defendant to Dr Emang for the plaintiff, on 28 November 2015. It reads in part, and I quote:
I refer to the agreement between UDC and NEDC for financial consideration. Based on this agreement, please invoice UDC Ltd to be forwarded to the Board Chairman.
Invoice for a K1.0m at K250, 000 each.
12. At the hearing, I raised various points with counsel concerning the said requirement to pay based on the terms of the 2 agreements. Counsel maintained that based on the agreements, and in particular, clause 5 of the second agreement, the defendant was required to pay K250, 000 for each of the 4 units of the 2 duplex houses. The defendant submits differently. Counsel submits that the K250, 000, according to the agreements, was to be paid as full and final payment for the construction of the 2 duplex houses.
13. I refer to clause 5 of the second agreement. It states and I quote in part, The payment will be made to NEDCL for materials of the house and labor and operation cost of total Two hundred Fifty Thousand Kina (K250, 000.00) upon the houses completed and issue of invoice from NEDCL.
14. Let me begin with the defendant’s pleadings. The defendant filed a defence and cross-claim on 22 May 2019. Its response to the subject matter is pleaded at paragraph 4(iii). It states, and I quote in part, the Defendant.....Denies subparagraph (iv) and says that the 2nd Agreement states that the Defendant was to pay the Plaintiff a total cost of K250, 000 for all four residential units and not K250, 000 for each unit.
15. My consideration is as follows. Firstly, it is arguable whether the content of the email by Mr Juju would constitute an admission. The email indicates that the invoice of K1 million may be subject to the defendant’s board’s approval. Secondly, I note that clause 5 of the second agreement may require further scrutiny. It is arguable whether, the clause requires that the defendant shall pay K250,000 as a one-off payment for the 2 duplex houses upon completion, or whether it requires that the defendant shall pay K250, 000 for each of the 4 units upon completion. It is also arguable whether the defendant may be required to pay K250, 000 for each of the houses totaling K500, 000.
16. I find that that is something that should be properly trialed in Court; that it is not something that I should decide summarily here without the benefit of receiving all the evidence or considering evidence which have not been fully tested in Court; that the Court should also receive proper submissions on the appropriate law from the parties before making a final decision. My conclusion, in my view, is consistent with Order 12 Rule 38 of the National Court Rules. The rule requires an applicant to (i), disclose evidence of the facts on which the claim is based, and (ii), evidence from a responsible person who must depose into an affidavit to say that in his or her belief, the defendant has no valid defence. The Supreme Court in William Duma v. Eric Meier (2007) SC 898 stated, and I quote in part:
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 is clear admissions of the claim or part of the claim then judgment must be entered for the plaintiff (see Chief Collector of Taxes v T.A. Field Pty Ltd [1975] PNGLR 144; Dep International Private Ltd v Ambogo Sawmill Pty Ltd [1987] PNGLR 117; Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299; and Curtain Brothers (Qld) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 295).
17. I would adopt these as my own herein.
MOBILISATION COST AND CROSS-CLAIM
18. The plaintiff also claims that summary judgment be entered in the sum of K75,966. It claims that pursuant to the 2 agreements, that it had advanced the money to the defendant for mobilization costs. It submits that the sum was to have been repaid, pursuant to the 2 agreements, after the completion and sale of the 2 duplex houses.
19. The defendant admits, in its defence, receipt of the money but says that the money had been used to pay for labour and operational costs.
20. The relevant clause is clause 3 of the second agreement. It states, and I quote in part:
The NEDCL agrees to advance Unitech Development & Consultancy Ltd the sum of Seventy Five Thousand, Nine Hundred and Sixty Six Kina [K75, 966], for the purpose of labour and operational cost associated with assembling four (4) units at the designated site and in consideration for this advance, UDC Ltd agree to reimburse the full amount advanced upon sale of each units within 3 months of execution date.
21. Clause 3, in my view, appears to confirm the obligation of the plaintiff to advance the money to the defendant. And I note that money had been paid by the plaintiff to the defendant. The clause also appears to confirm the defendant’s obligation to repay the money. But I note that as to when the defendant is to pay back the money appears confusing under the said clause. Was the defendant supposed to pay within 3 months of signing of the 2 agreements? Or was it supposed to pay within 3 months after the completion of the project? I also note that the end result may be irrelevant in so far as the defendant’s obligation to pay is concerned. But then I also further note that that is not the only argument advanced by the defendant.
22. In the defendant’s cross-claim, it claims that the 2 duplex houses had not been fully or 100% completed within the time frame as agreed in the 2 agreements. It claims that as a result, it had to incur additional cost. It claims a sum of K287, 925 plus other relief.
23. The plaintiff, when asked by the Court whether there had been any certificate of completion issued for the 2 duplex houses, submitted that the admission in the email and the invoice that it had issued, both of which were in evidence, were sufficient evidence to prove that the houses had been fully completed. The plaintiff also submitted that if the defendant was unhappy or had issues with the 2 duplex houses, that it should have engaged its own experts to conduct its independent report, and filed evidence of that. It submitted that the defendant had not filed any such evidence.
24. In my view, I do not find the evidence relied upon by the plaintiff on the subject matter as complete proof of full completion of the 2 duplex houses. To issue an invoice to someone cannot in itself constitute proof that work had been performed. It would, in this case and in my view, require more than the evidence which the plaintiff is presently relying on. Also, it is not the task of the defendant, in a summary judgment application, to provide proof of the material facts. The burden shall be on the plaintiff. It is the plaintiff that wants early judgment without a full trial. Therefore, the plaintiff has the burden to furnish its evidence to the satisfaction of the Court. If the plaintiff falls short of that, the Court need not hear from the defendant and it must refuse to grant summary judgment. See also the case: Finance Corporation Ltd v. Trans Ganuka Ltd (2015) N5978.
CONSIDERATION
25. In my view, I find that there is insufficient evidence provided by the plaintiff to my satisfaction. That is, I am not satisfied that the plaintiff has provided evidence to establish the material facts as pleaded. I find that there are serious issues of facts and law which, in my view, requires that the matter should, if not settled, be set down for trial; that I should not exercise my discretionary power and enter summary judgment.
26. In regard to the defendant’s defence and cross-claim, I will say this. From the evidence that is filed and in particular based on the 2 agreements, I do not find the defence and cross-claim baseless or frivolous. Rather, and as stated above, I find the material facts and law contested, that is, as expressly evident in the pleadings.
SUMMARY
27. I will refuse to exercise my discretionary power. I will not grant summary judgment in favor of the plaintiff.
COST
28. Cost award is discretionary.
29. I will award cost to follow the event based on the normal cost scale, that is, on a party/party basis which may be taxed if not agreed.
ORDERS OF THE COURT
30. I make the following orders
________________________________________________________________
Kopunye Lawyers: Lawyers for the Plaintiff
Spot Check Legal Service: Lawyers for the Defendant
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