N10036

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 67 OF 2020

BETWEEN:
LYONS PUTUPEN trading as LYONS PUTUPEN & ASSOCIATE LAWYERS
- Plaintiff-

AND:
BENJAMIN MUL
-First Defendant-

AND:
WAIGANI CHRISTIAN SCHOOL
-Second Defendant-

Waigani: Tamade AJ
2022: 28th September; 14th October

ALTERNATIVE DISPUTE RESOLUTION – enforcement of mediated agreement – claim for outstanding legal bills – failure to comply with mediated agreement – Alternative Dispute Resolution Rules – Rule 12 (2) – Rule 10 (5) – mediated agreement entered into in good faith and can be enforced – excess amount creates new claim

CONTRACT – mediated agreement is a contract–specific performance – non -compliance on mediated agreement amounts to breach of contract

Cases Cited:

Taru v Pacific MMI Insurance Ltd [2021] PGSC 16; SC2098
Hargy Oil Palm Ltd v Ewasse Landowners Association Incorporated [2013] PGNC 188; N5441

Counsel:	

Mr Lyons Putupen, for the Plaintiff

14th October, 2022

1. 	TAMADE AJ: These are proceedings in which the Plaintiff is claiming to enforce a mediated agreement entered into on 1 August 2019 between the parties in proceedings WS 1116 of 2015. 

2. 	At the trial of the matter, Mr Putupen who is the Plaintiff submits that he had given notice of the hearing of the matter to the Defendants who had refused to accept service of the Notice of Trial and therefore he had pushed the envelope containing the Notice of Trial under the door of the Defendants and left. Mr Putupen had also submitted that service on the Defendants had been difficult since the proceedings were filed. I had accepted that the Defendants were served based on the Affidavit of Aiden Hevoho and allowed Mr Putupen to proceed with the matter.

3. 	The Plaintiff is essentially claiming that proceedings WS 1116 of 2015 concern a claim for unpaid Bill of Costs or legal fees issued to the Defendants over matters in which Mr Putupen had represented the Defendants for. Mr Putupen claims that Mr Benjamin Mul as his former client was unable to settle Mr Putupen’s legal bills and therefore gave to Mr Putupen a motor vehicle described as Registration Number. BDC 736, a Hyundai Tucson, Sedan, Green in colour. He claims that Mr Mul said the car was valued at K60 000 and offered that Mr Putupen accepts the car for its’ value of K50 000 and write off his outstanding legal bills. Mr Putupen however took the car in for a valuation and says that the car is only valued at K15 000.

4. 	The subject vehicle’s registration expired on 10 July 2015 however Mr Putupen claims that Mr Mul has not transferred the registration of the vehicle to him even though the vehicle is in Mr Putupen’s possession and custody. It appears that Mr Mul is reluctant to transfer the registration of the vehicle to Mr Putupen until Mr Putupen writes off or cancels his debt for his legal bills.

5. 	On 6 October 2019, proceedings WS 1116 of 2015 were mediated by His Honour the Chief Justice, Sir Gibbs Salika and an agreement was reached in mediation with Court Orders made to that effect for the discontinuance of those proceedings as a mediated agreement was reached.

6. 	As per the terms of the mediated agreement, Mr Mul was supposed to pay a sum of K50 000 as full and final settlement of his debt to Mr Putupen by instalments of K15 000 by 1 August 2019 and K35 000 by 28 February 2020. Mr Mul however only paid K15 000 on 1 August 2019 and failed to pay a sum of K35 000 by 28 February 2020. It is also a term of the mediated agreement that Mr Mul shall register the subject vehicle to Mr Putupen with any additional costs for the service at the Defendant’s expense by 1 August 2019 for pick up by Mr Putupen. This never eventuated. 

7. 	Mr Putupen has stated in his affidavit that he has brought the vehicle to the Defendants for registration and made attempts to attend at the Defendants premises and or communicate with the Defendants as to getting the Defendants to register the vehicle and pay him the balance of the funds agreed to, but all his efforts were futile as the Defendants have refused to even speak to him. 

8. 	Mr Putupen, therefore, claims a total sum of K129 600 as damages for loss of use of the motor vehicle from 1 August 2019 to 24 June 2020 and also claims for loss of use of the subject vehicle from 10 July 2015 to 1 August 2019 pursuant to the Fairness of Transactions Act 1993. 

Is Mr Putupen entitled to a claim for loss of use of the motor vehicle in the sum of K129 600 plus other general damages, interest and costs of the mediation?

9. 	The Supreme Court in Taru v Pacific MMI Insurance Ltd said this in regard to the enforcement of a mediated agreement:
“In the event of a breach, the procedure to enforce a mediated Agreement is set out in Rule 12(2)(a) and (b) of the ADR Rules. Rule 12(2)(a) and (b) allows a party to a mediated Agreement to apply to the Court to enforce it in two ways:
(a) In a case where the proceeding is still pending, by notice of motion (Rule 12(2)(a)): and
(b) In a case where the proceeding has been concluded, by fresh proceeding (Rule 12(2)(b)).
However, in each case Rule 12 does not prescribe the criteria or grounds for enforcement of a mediated Agreement. Neither has counsel referred to a case on point. We too have not been able to find one. However, it would appear that given that a mediated Agreement is reached in good faith, it is open to be enforced in the event of default by the aggrieved party on the ground of good faith.”
10. 	I am of the view that Mr Putupen has taken the right approach to file an Originating Summons to enforce the mediated agreement as per Rule 12 of the ADR Rules which is in this term:
12. Enforcement.

(1) Where in the course of a mediation, the parties agree on a resolution of all or part of the proceedings, the agreement shall be written down and signed by or for each party.

(2) Any party to a mediation conducted by a mediator may apply to the Court for an order giving effect to an agreement reached during the mediation by:
(a) notice of motion if the proceedings are current; or

(b) Originating Summons if the proceedings have been concluded.
(3) Subject to sub-rule (2) an agreement reached during the mediation shall have the same force and effect, and may be enforced in the same manner, as if it were an agreement reached otherwise than during a mediation.

11. 	In the case of Hargy Oil Palm Ltd v Ewasse Landowners Association Incorporated, His Honour the Deputy Chief Justice has said this in terms of a mediated agreement where parties have reduced their intentions into writing:
“In cases where parties have reached an agreement and the terms of their agreement is reduced into some form of a written record, no extrinsic evidence can be called or allowed. Instead, the document is usually allowed to speak for itself. However, this rule is general. Extrinsic evidence can be admitted to help resolve any ambiguity in a written document or record. The decision of the Supreme Court in Shell Papua New Guinea Ltd v. Speko Investment Limited and Peandui Koyati[1] restates this position in these terms:

"... if parties have wholly reduced their agreement into a written contract, extrinsic evidence should not be permitted to be admitted into evidence to elicit the intention of the parties evinced by the terms of the contract. The key word here is "if". If the parties have wholly reduced their agreement into the written contract, extrinsic evidence is not permissible. However, if they have not wholly reduced their agreement into the written contract, extrinsic materials are admissible. The Supreme Court (Amet CJ, Sheehan J, Kandakasi J) explained this in PNGBC v Jeff Tole (2002) SC694[2]:

'Under contract law, where parties have set down the whole of their agreement in writing, evidence seeking to add or subtract from or vary or qualify the written contract cannot be given and or accepted. This is what is called the parol evidence rule. For authorities on this, see Curtain Bros (Qld) Pty Ltd v The State [1993] PNGLR 285[3] ... It is a rule that does have exceptions to it. It is open to parties to assert that a written contract or document does ... not contain the whole of an agreement and at trial adduce evidence to support the contention. But that will require appropriate pleadings ..

12. 	I am of the view that the claim for loss of use of the said vehicle by Mr Putupen in the sum of an amount exceeding K129 600 as pleaded in the Originating Summons is misconceived as the mediated agreement was entered into in good faith of all parties. Rule 10(5) of the Rules Relating to the Accreditation, Regulation and Conduct of Mediators (ADR Rules) imposes on parties an obligation to enter into the mediation in good faith. To award loss of use of the vehicle in the sum in excess of K129 600 is contrary to the intention of the parties in the mediated agreement and does not enforce or give effect to the agreement. What it does is that it creates a new claim. Enforcement of the mediated agreement should be seeking to convert the breach of the agreement into a judgement if Court Orders by consent were not made, asking for specific performance, and enforcement through garnishee proceedings etc, or through the enforcement of judgment proceedings as available under the National Court Rules.

13.	Mr Putupen could have asked to enforce the mediated agreement by way of specific performance for the Defendants to specifically perform the agreement as the mediated agreement is a contract as between the parties. Specific performance will compel the Defendants to register the vehicle and pay him the balance of the funds due as agreed in the sum of K35 000 and or seek judgement in the sum of K35 000 as what is owing to him under the said mediated agreement. His claim would therefore be as a breach of a contract on the mediated agreement. 

14. 	The claim for loss of use of the vehicle is misconceived as there is also some ambiguity in the mediated agreement whether Mr Putupen was to do a formal letter to write off the debt owed by the Defendants prior to the registration of the vehicle to Mr Putupen. In paragraph 8 of Mr Putupen’s Affidavit filed on 13 July 2020, Mr Putupen states that the Defendants refused to register and transfer the motor vehicle ownership to Mr Putupen and insisted that the balance of the bill owed to Mr Putupen should be written off before a transfer of the vehicle can happen. I find that the mediated agreement between the parties makes no mention of such an arrangement for Mr Putupan to do a letter or a document to say the defendant’s debt is written off. This is a fact accepted in the mediated agreement.

15. 	The claim for loss of use of the vehicle is therefore denied.

16. 	The Court will therefore only grant a sum of K35 000 as the amount owing to Mr Putupen from the Defendants that has not been paid for under the said mediated agreement and for specific performance of the said mediated orders.

17. 	The Court, therefore, makes the following orders:

i)	Judgment is entered for the Plaintiff in the sum of K35 000 as amount owing to the Plaintiff pursuant to a mediated agreement entered into by parties in WS 1116 of 2015 and entered into on 26 July 2019. The Defendants shall pay this sum within 21 days from the date of this Order.
ii)	The Defendants shall register the subject vehicle described as Registration Number BDC 736, a Hyundai Tucson, Sedan, Green in colour at MVIL to Mr Lyons Putupen within 21 days from the date of this Order.
iii)	Failing compliance of terms (i) and (ii) of these orders by the Defendants, the Plaintiff shall apply to Court for contempt of Court against the Defendants forthwith.
iv)	The Defendants shall meet the Plaintiff’s costs of these proceedings to be taxed if not agreed.
v)	Costs for the mediation conducted in WS 1116 of 2015 is denied as those proceedings were amicably resolved in the mediation.
vi)	 Time is abridged to the date of these orders to take effect forthwith.

Orders accordingly.
_____________________________________________________________
Putupen & Associates: Lawyers for the Plaintiff