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Pins Construction Ltd v Tkatchenko [2023] PGNC 362; N10504 (13 October 2023)

N10504


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS 376 OF 2017


BETWEEN:
PINS CONSTRUCTION LTD
Plaintiff


AND:
JUSTIN TKATCHENKO as MINISTER FOR PNG SPORTS FOUNDATION
First Defendant


AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant


Waigani: Bre, AJ
2023: 21st September, 13th October


PRACTICE & PROCUDURE – Application to set aside or vary Default
Judgement made inter-parties, NCR04r8(4).


PRACTICE & PROCUDURE - Liquidated Damages. s12(3) CBASA,
exception, variation, no substantive charge to order.


PRACTICE & PROCUDURE - NCRO4r49 substantive relief at
interlocutory proceedings an exception to other NCR granting substantive
relief such as O12r40NCR or O12r27 and not applicable.


Cases Cited
Andoi v Modilon Hospital Board [2018] PGNC 120; N7199
Balakau v Amet [2013] PGNC 107; N5313
Dempsey v Project Pacific Pty Ltd [1985] PGSC 3
Ekepe v Gaupe [2004] PGNC 82; N2694
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees [2006] PGSC 2; SC837
Siune v Rimua (2013) 95; N5281
Rei Logona v Messy Roaveneo (2016) SC1498


Reference


Claims By and Against the State Act 1996, s12(3)
National Court Rules O4r49(9), O12r8


Counsel:


Mr. J. Jabapro, for the Plaintiff
Mr. R. Kebaya, for the First and Second Defendants


RULING


13th October 2023


  1. BRE, AJ: INTRODUCTION: This is an application by the Defendants to set aside or vary a default judgement made against them on 14 October 2020. The substantive proceedings relate to liquidated damages for part payment of services rendered in 2016 by Pins Construction Ltd to the PNG Sports Foundation.

PRELIMINARY ISSUE


2. There was a preliminary issue concerning two Notices of Motions by the Defendants filed on the 08 of December 2020 and its current Notice of Motion filed on 17 July 2023.


3. Both Motions sought the same relief to vary the Court order of 14
October 2020, except for an additional order sought in the Notice of Motion of 17 July 2023 to dismiss the Plaintiff’s claim for failure to give Section 5 notice to the State pursuant to the Claims By and Against the State Act 1996 (hereinafter referred to as ‘CBASA’).


4. Mr. Jabapro objected to the additional summary dismissal relief. Mr. Kebaya clarified he would not be proceeding with that relief but only paragraph 3 of the motion of 17 July 2023 seeking to set aside or vary the default judgement of 14 October 2020.


5. Leave was granted to withdraw the Notice of Motion filed on 08 December 2020 with the Defendants motion to proceed only on Paragraph 3 of its motion of 17 July 2023.


6. Paragraph 3 seeks the following relief:

“Decision of the Court made on the 14th of October 2020 and entered on 19th October 2020 be set aside and or varied pursuant to the National Court Rules Order 12 rule 8.”


FACTS
7. Pins Construction Ltd is one of many contractors that was engaged by the Papua New Guinea Sports Foundation in 2016 for the construction of sports venues in preparation for PNG hosting the FIFA under 20 Women’s World Cup games in 2016. The Plaintiff was engaged to supply plant and equipment.


  1. Default Judgement was entered against the Defendants on 14 October 2020 for failing to file its Notice of Intention to Defend and Defence.
  2. The Plaintiff alleges it issued 22 invoices totaling K3,409,835.81 of which K1,462,996.01 was paid with a balance of K1,946,839.80 outstanding.
  3. The Defendants claim that the Plaintiff’s contract sum to date was K2,639,548.47 of which K2,019,623.01 was paid leaving a balance of K610,925.46 outstanding as at 05th October 2020.
  4. It is now more than two years and attempts to settle the amount ordered have been futile with parties now seeking the Court’s decision on quantum.

ISSUE


12. The following issues arise for determination: -


1) Whether the default judgement entered against the State containing the fixed liquidated amount of K1,946,836.80 should be set aside with an order for damages to be assessed as required by Section 12(3) CBASA.

2) Whether the default judgement made inter-parties can be set aside under National Court Rules Order 4 rule 49(9) because it is a substantive relief and not an interlocutory relief; or alternatively,

3) Whether the fixed sum of K1,946,839.80 entered against the Defendants should be varied to K1,167,502.42 or K610,925.46.


LAW


12. The applicable laws are Order 12 Rule 8 National Court Rules, Section12(3) CBASA and related caselaw.


EVIDENCE


13. The Defendants rely on the Affidavit of Robbie Kebaya filed on 14 October 2020. Mr. Kebaya deposes to receiving instructions from the PNG Sports Foundation (hereinafter referred to as ‘PNGSF’) in its letter dated 8th October 2020 that the Plaintiff is owed K610,925.46. This letter is marked Annexure “A” to his Affidavit (herein after referred to as the ‘2020 letter’). He also deposes that he raised the issue of Section 12(3) CBASA earlier when the Orders of 14 October 2020 were made but was not heard.


14. The Plaintiff relied on the Affidavit of its former lawyer John Alman, filed on 30 September 2019, which contained a letter dated 20th June 2017 from PNGSF admitting to K1,167,502.42 as owing to Pins Construction Ltd. This letter contained the PNGSF’s instructions to the Solicitor General. The Letter is marked Annexure ‘M’ to John Alman’s Affidavit (hereinafter referred to as the ‘2017 letter’).


CONTEST


  1. Both Counsel provided written and oral submissions.

Defendant’s submissions


  1. The Defendants took issue with the Court Order of 14 October 2020 on the basis that it was not proper to awarding a fixed sum against the State instead of ordering default judgement with damages to be assessed.
  2. The Defendants rely on Section 12(3) CBASA to submit that this provision specifically precludes the Court from entering a fixed sum against the State and that this aspect, was not properly considered therefore it should be set aside pursuant to Order 12 Rule 8 of the National Court Rules (“NCR”).
  3. Further, the fixed sum ordered of K1,946,839.80 is the substantive relief sought by the Plaintiff as special damages in its Statement of Claim and was ordered contrary to Order 4 Rule 49(9) NCR which prohibits the granting of the substantive relief in interlocutory applications. On this point Counsel relied on Rei Logona v Messy Roaveneo (2016) SC1498.
  4. Alternatively, Mr. Kebaya submits that the current position of the PNGSF and the State is its position of 05th October 2020 which admits to a debt owing to the Plaintiff of K610,925.46. This position is contained in the PNGSF 2020 letter. The letter contains a spreadsheet which indicates that K2,630,548.47 is the contract sum to date of which K2,019,623.01 has been paid, with a balance of K610,925.46 outstanding.

Plaintiff’s submissions


  1. The Plaintiff relied on the PNGSF 2017 letter admitting to K1,167,502.42 as the outstanding owed to it with the total contract value at K3,409,835.81.
  2. Mr. Jabapro restated the differing positions of the PNGSF in its letters of 2017 and 2020 to emphasis alleged weakness in the Plaintiff’s admissions of two different outstanding balances as owed to the Plaintiff of K1,167,502.42 and K610,925.46. He therefore submitted that the original judgement amount of K1,946,839.80 should not be varied.
  3. The Plaintiff emphasized that there are three different amounts before the Court for consideration. These are:

(1) K1,946,839.80

(2)K1,167,502.42

(3)K610,925.46


  1. Alternatively, Counsel for the Plaintiff in his oral submissions, submitted that the amount of K1,167,502.42 is the correct amount to reflect if the Order of 14th October is to be varied, because PNGSF has admitted to the amount in its 2017 letter. Counsel indicated he had no issues with variation of the Court Order, just the amount submitted by the Defendants is queried.
  2. In reply Mr. Kebaya objected to the Plaintiff relying on the Affidavit of John Alman as he was the Plaintiff’s lawyer acting on instructions with no first-hand knowledge of the events. Alternatively, the 20 June 2017 PNGSF letter is dated and does not reflect the PNGSF current position of 05 October 2020 that the outstanding amount is K610,925.46.
  3. I will not refuse the Plaintiff’s Affidavit because the Defendants are also relying on Counsel’s affidavit and have not filed any Affidavit from the PNGSF. Both Affidavits contain useful information to guide this Court in its deliberations.

ANALYSIS


  1. It is unfortunate that both parties have not resolved the factual matter of quantum.
  2. The court order of 14th October 2020 is in the following terms: -

“1. The application is granted as per the terms of the Notice of Motion filed 30 September 2020.


2. Pursuant to Order 4, Rule 49 sub-rule 17 of the National Court Rules, the Notice of Motion dated 13 September 2018 and filed 19 September 2018 is dismissed for want of

prosecution.


3. Pursuant to Order 4 Rule 49 and Order 25 Rule 25(a), (b) and 9 (c) of the National Court Rules, default Judgement is entered against the defendants for failure to file their notice of intention to defend and Defence.


4. Pursuant to Order 12 Rule 27 of the National Court Rules, and Section 12(3) of the Claims By and Against the State Act 1996, the judgement is entered for the Plaintiff as per the outstanding owed by the Defendants is the sum of K1,946,839.80 plus interest on 8% per annum from the date when the cause of action arose to the time of settlement pursuant to Section 1(1) and (2) of the Judicial Proceedings ( Interest on debts and Damages) Act 1962.


5. Costs of this proceedings be paid by the Defendants.”

(emphasis mine)


  1. The first order grants the Plaintiff’s Motion filed on 30th September 2020 seeking to summarily dismiss the Defendants Notice of Motion filed 19 September 2018 for want of prosecution. That motion sought leave to file its Notice of Intention to Defend and Defence.
  2. The second order consequently dismisses the Defendants Notice of Motion of 19 September 2018.
  3. The third order found the Defendants in default for failure to file their Notice of Intention to Defend and Defence.
  4. The fourth order consequently relies on Section 12(3) CBASA and orders the fixed sum of K1,946,839.80 plus interest of 8% against the Defendants.
  5. The amount of K1,946,839.80 appears to have been taken from the Statement of Claim which pleads this amount as the debt alleged owing to the Plaintiff.

Whether the default judgement entered against the State containing the fixed liquidated amount of K1,946,836.80 should be set aside with an order for damages to be assessed as required by Section 12(3) CBASA.


Section 12(3) CBASA reads:

“12. JUDGEMENTS AGAINST THE STATE.

(3) Where in a claim against the State, the State is in default within the meaning of the National Court Rules, then notwithstanding that a plaintiff’s claim for relief is for a liquidated demand, judgement shall not be entered against the State for the sum claimed unless the claim relates to a debt only, and in all other cases judgement shall be entered for damages to be assessed and, where appropriate, for costs.”

(Emphasis mine)


  1. Section 12(3) CBASA provides a general rule that an order for default judgements entered against the State should be followed with an order for damages to be assessed. Section 12(3) CBASA provides an exception that where the claim against the State is for debt only, and the State is in default, a fixed amount can be ordered against the State.
  2. The exception in Section 12(3) authorises an order of a fixed amount for strictly debt cases where the State defaults in defending the proceedings.
  3. A critical starting point is to ascertain what constitutes a ‘debt’ within the terms of Section 12(3) CBASA.
  4. Section 12(3) CBASA was discussed by His Honour Kanadakasi J (as he then was) in Balakau v Amet [2013] PGNC 107; N5313 (7 August 2013) where he deferred from His Honour Justice Gavara-Nanu views in Stephen John Rose v. The State (2007) N3241 and held that Section 12(3) CBASA provided an exception to enter a fixed sum where the claim was for debt only and the State was in default. I concur with His Honour Kandakasi J (as he then was).
  5. What then is the definition of ‘debt’ under Section 12(3) CBASA? The term ‘debt’ in section 12(3) CBASA was clarified in Balakau v Amet (supra) that the debt must be “easily ascertainable without the need for any assessment.” See also Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees [ 2006] PGSC 2; SC837 (22 May 2006) and Dempsey v Project Pacific Pty Ltd [1985] PGSC 3; [1985] PNGLR 93 (15 May 1985). In Dempsy, the Court defined a liquidated demand to consist of a “clear debt or a demand for damages for a specific amount in Kina or dollars which can be easily ascertained by a mathematical calculation.”
  6. The Plaintiff’s substantive claim sought payment of an outstanding balance of a fixed amount of K1,946,839.80 plus interest of 8% and loss of business income of K200,000.00 per month for five months. The Plaintiff did not make submissions about its loss of business income claim and may have abandoned this. The Court Order of 14th October 2020 contained the fixed amount of K1,946,839.80 only.
  7. The exclusion in Section 12(3) CBASA applies to a ‘debt’ of an ascertainable amount that can be easily calculated. The amount ordered should be verified by evidence of a clear debt by the Plaintiff.

Is there proof of the amount of K1,946,839.80 ?


  1. The Plaintiff bears the onus of proving its loss in light of the Defendants providing evidence that questions the amount of K1,946,839.80 ordered as outstanding and due to the Defendants.
  2. Upon a perusal of the evidence, I note that the amounts of the total contract value alleged by either party of K3,409,835.81 or K2,630,548.47 are not captured in any contract produced in evidence by both parties.
  3. There is a three-page written agreement for the hire of plant and equipment between the Plaintiff and PNGSF executed on 03rd March 2016 marked as Annexure ‘D’ in John Alman’s Affidavit filed 30th September 2019. However, it does not indicate the contract value nor any amount that will be paid for the services to be rendered. Clause 1 of this Agreement requires the Plaintiff to provide the hourly or daily hire rate for the list of its plant or equipment hired for works required by PNGSF. There is no schedule in the agreement itemizing the plant and equipment with hourly or daily rates.
  4. The Plaintiff has not produced evidence of a hire charges schedule nor any document reflecting any specific information on agreed hire rates, times and conditions. The hire agreement is essentially a one page document.
  5. I turn to the PNGSF letters of 2017 and 2020 to ascertain what the fixed amount owing to the Plaintiff may be in the absence of direct proof about the contract value being K3,409,835.81.
  6. These letters are instructive letters to the State Solicitor relaying the

PNGSF instructions in these proceedings over two different time periods. The 2017 letter clearly indicates that of the total debt of K1,946,839.80 an amount of K779,338.00 is queried and subject to vetting with the balance of K1,167,501.80 outstanding.


  1. I place no weight to the amount of K3,409,835 as the total contract value because the PNGSF indicated another amount of K2,639,548.47 as the contract sum in its 2020 letter. The onus of proof lies with the Plaintiff not the Defendants. Further these letters should be subject to legal privilege by the Defendants, but I suppose it is too late now.
  2. As to the amount of K1,946,839.80, there is documentary evidence in the PNGSF 2017 letter that K1,946,839.80 was the outstanding balance of which K779,338.00 was queried and subject to vetting. PNGSF informed the Solicitor General that K1,167,501.80 is admitted as owing. The amount of K1,167,501.80 is not captured in the Court Order. The plaintiff did not produce any source document showing the invoices paid and the current year to date balance remaining outstanding.
  3. In the absence of direct evidence from the Plaintiff, I accept the position of the PNGSF in 2017 that of the K1,946,839.80 owing to the Plaintiff, K779,338.00 as queried and subjected to a verification process while K1,167,501.80 was admitted as outstanding. At the time when the Court Order was made, K1,946,839.80 was disputed.

Whether the default judgement made inter-parties can be set aside under National Court Rules Order 4 rule 49(9) because it is a substantive relief and not an interlocutory relief.


  1. I turn now to the Defendants additional submission that Order 4 of the Court Order of 14 October 2020 grants substantive relief and finally determines the matter and as such is contrary to Order 4 Rule 49(9) NCR, Order 4 Rule 49(9) is in the following terms:

“Except as otherwise expressly provided in the National Court
Rules, Motions shall be for relief on interlocutory matters only and
not for the substantive relief claimed in the originating process.”
(emphasis mine)


  1. Defence Counsel relied on Rei Logona v Meissy Roaveneo (supra). In Rei Logona the Supreme Court considered 04r49(9) NCR and cited the cases of Gabriel Yer v. Peter Yama (2009) SC990, PAC –LNG International Ltd v. SPI (208) Ltd (2014) and others, to confirm that seeking interlocutory orders identical to the substantive relief claimed was contrary to Order 4 Rule 49(9) NCR. Rei Logono and the cases cited thereat concerned proceedings commenced by Originating Summons and the interlocutory orders sought were identical in terms to the substantive relief in the Originating Summons. Those case laws are distinguished from this case as default judgement has been ordered against a liquidated amount. Order 4 rule 49(9) NCR applies where there is no provision elsewhere in the rules allowing substantive relief.
  2. To my mind, summary judgement for frivolity under O12 r40 NCR and default judgement for liquidated demand under O12 r27 NCR to name a few, would come within the exclusion in O4r49(9) NCR. Default Judgement and Summary Judgement orders are obtained during interlocutory proceedings which affect the finality of the entire proceedings but do not contravene O4 r49(9) NCR as they are excluded by O4 r49(9) itself. The Court Order of 14 October 2020 is clearly based on the Court's authority to award fixed amounts for liquidated demands under Order 12 Rule 27 NCR and complements the exception in Section 12(3) CBASA.
  3. Balakau v Amet (supra) concerned a liquidated amount commenced by writ of summons in which default judgement was granted for a specific sum fixed in a deed. Section 12(3) CBASA was considered and held not to preclude the default judgement as it related to a clearly ascertainable amount agreed to by the parties.
  4. The PNGSF letters of 2017 and 2020 show there is no issue with liability. Both Counsels are not taking issue with liability. It is too late now for the Defence to raise arguments about setting aside the fixed amount order for an order for damages to be assessed and especially so when the Order of 14 October 2020 was made when both parties were present at the hearing and making submissions.
  5. I find that the Orders of 14 October 2020 are excluded from the application of Order 4 Rule 49(9) NCR. I turn now to variation of the order given the dispute about the correct amount outstanding and owed to the Plaintiff.

Whether the fixed sum of K1,946,839.80 entered against the Defendants
should be varied to K1,167,502.42 or K610,925.46


  1. It is trite law that the Court can vary its orders. However most caselaw relate to ex parte interlocutory orders. Order 12 Rule 8 (4) NCR and the Court’s inherent jurisdiction under Section 155 4 (4) of the Constitution provide sufficient authority to vary an earlier Order of the Court.

56. In the recent five-member Supreme Court case of Lady Ni Cragnolini v Teddy Tasion SC2464 28 September 2023, the Court in finally determining conflicting views about whether the National Court can set aside its own orders under Order 12 Rule 8, held the National Court can set aside an ex parte order under Order 12 Rule 8(1), (2) and (3). In terms of Order 12 Rule 8(4) NCR, it remarked at [17] that Order 12 Rule 8(4) NCR is more specific to its nature and is an additional power to the National Court which stands apart from Order 12 Rule 8(1), (2) and (3) NCR. The Court also relied on Inugu v Maru (2019) SC1873 at [71]. Order 12 Rule 8(4) NCR is an additional power to be exercised on terms as set out thereat. I am satisfied that I have the authority under Order 12 Rule8(4) NCR, to vary the default judgement order made inter-party.


57. Accordingly, in deciding the considerations to exercise my discretion to vary the Court Order, I take note of the following cases to consider when I can exercise tis discretion. In Mainland Holdings Ltd v Stobbs [2003] N2522, that Court held that the exercise of discretion to vary an earlier order is due to a change in circumstances and not to review the earlier Court’s decision but to “... determine the continuance of the order in the light of all relevant circumstances and principles.”


58. In Pagi v Mindili [2009] PGNC 135; N3753 (25 September 2009), His Honour Makail J at [14] and [22] relied on equity to decide on an application to set aside an interim order that was made inter-parties by limiting the changes in circumstances to exercise the discretion to vary an interlocutory order “to the change in relevant circumstances, which render the continuation of the interlocutory order, unnecessary or inappropriate in the circumstances.”


59. In Siune v Rimua (2013) 95; N5281 (31 July 2013) the Court held that a Court Order can be varied if it will not alter it in a substantive way, but the variation will give “effect to, complement or enforce the original order”. See also Golobadana No 35 Ltd v Bank of South Pacific (2002) N2309.


60. These cases explain that the Court order can be varied where there is a change in circumstance that renders the Order inappropriate or unnecessary and will not substantially alter the Order but complement or enforce the original order.


61. I find that there has been a change of circumstances in the fixed amount
ordered. The amount of K1,946,839.80 is an outstanding amount alleged to be owed to the Plaintiff in 2017. This did not factor the amount of K779,338.00 queried by PNGSF in 2017 nor the K1,167,502.46 admitted then as owing. PNGSF’s position had changed from its admission of K1,167,502.46 to K610,925.46 on 05th October 2020, at the time the default judgement order of 14 October 2020 was made. Both counsels would have known this fact.


62. This change renders the Court Order I appropriate or unnecessary. The variation will not substantially alter the original order but enable its compliance. The intent of the original Court Order is to order a fixed liquidated amount to the Plaintiff. These circumstances require the order of 14 October 2020 be varied in the amount of K1,946,839.80.


Analyzing the Evidence


63. I turn now to the evidence to determine the factual issue of the correct amount. I remind myself that this is not an assessment of damages hearing so I will tread carefully in considering the evidence as presented in the parties' Affidavits in this motion.


64. As I mentioned earlier, there is no source document produced in evidence showing the total cost of the plant and equipment hire nor the total contract value. The only evidence are the 2017 and 2018 PNGSF letters admitting to owing Plaintiff K1,167,502.46 in 2017 and K610,925.46 in 2020.


65. Pins Construction Ltd’s principle or company officials have not filed any Affidavit nor produced any bank statements, company accounts nor tax returns to verify the transaction details such as particulars of the hire, invoices issued, and payments received or not received to date. The Plaintiff relies heavily on the PNGSF letter of 2017 and provided no direct evidence to confirm their current position.


66. The 2020 PNGSF letter dated 05th October 2020 contains a spreadsheet which shows K2,019,623.01. This shows an increase K556,627.00 from the K1,167,502.46 originally admitted as in 2017. Does K556,627.00 reflect cleared verified payments from the K779,338.00 of the K1,946,839.80 queried in 2017? Or does it reflect the paid balance of the K1,167,502.46 admitted in 2017? Has the Plaintiff received payments totaling K556,627.00 between 20 June 2017 and 05 October 2020?


67. A simple calculation of K556,627.00 subtracted from K1,167,502.46 leaves a balance of K610,875.46 just K50.00 short of what the Defendants say they owe the Plaintiff. Alternatively, K55,627.00 added to K1,462,996.01 admitted in 2017 as paid to the Plaintiff confirms the Defendants payments as of 05 October 2020 at K2,019.623.01


68. Both counsels did not address the Court on this issue. The Plaintiff did not provide any current evidence to substantiate its multimillion Kina claim. It has been lax in providing its claim by continuing to rely on a 2017 PNGSF instruction letter admitting liability to its lawyers, the Solicitor General. This letter, which could have been subjected to legal privilege by the Defendants had the proceedings being defended, had the proceedings been defendant.


69. The hire agreement executed between PNGSF and the Plaintiff is essentially a one page flimsy agreement with no certainty to the essential financial terms. Contracts with the State worth millions of kina are subjected to the public tender process with a State sanctioned agreement capturing all essential terms of a contract. PNGSF is irresponsible in executing a generic agreement with a runaway financial clause that is borne by the taxpayer and a cost to the State. As a prudent business, the Plaintiff should have safeguarded its financial position by insisting on certainty in payment terms. It is not surprising, after the fact, for both parties to dispute the Contract value.


70. The onus is on the Plaintiff to prove his loss and it has not discharged effectively its evidentiary burden of proof. The Court put it apathy in Lagan v The State [1995] PGNC 32; N1369 (15 September 1995). The Court said:


“"... the minimum requirement in any action is for the plaintiff himself to give admissible evidence in support of his claim. He is not exonerated from this duty in any way by the fact that default judgment has been entered and that the trial on assessment of damage is preceding exparte or that he has authorised another person to give evidence on his behalf. When the primary evidence of the plaintiff is lacking, there is a serious gap in the plaintiff’s case, all other evidence being inadmissible as being hearsay or hearsay upon hearsay."


71. I find the PNGSF has been consistent in its admissions, and I accept the position of PNGSF as to the debt outstanding of 20th June 2017 of K1,167,502.42 and its revised position of 05th October 2020 of K610,925.46 which support their position in 2017 about subjective K779,338.00 to verification. I infer that the debt of K1,167,502.42 has been reduced by K556,627.00. I accept the 05th October 2020 balance of K610,925.46, as the current position.


72. I make a general remark that business income payments are taxable income under the Income Tax Act 1959 (as amended) and the appropriate company tax must be paid after reasonable business expenses are factored. The State will be within its rights to demand that the Plaintiff undertake to file Income Tax Returns, as a condition of the payment.


73. I make a final note about the interest of justice requiring finality of proceedings and encourage the Defendants to take all the necessary steps to settle the amount due, now that the debt is confirmed.


Conclusion


74. In conclusion, the Court Order of 14th October 2020 is not precluded by Section 12 (3) CBASA. The Order concerns a pleaded ascertainable debt and comes within the exception provided in Section 12(3) CBASA.


75. The interlocutory proceedings giving rise to the default judgment Order of 14 October 2020 is not contrary to Order 4 Rule 49 (9) NCR. The order is a fixed liquidated amount under Order 12 Rule27 NCR granting substantive relief and is excluded from the application of Order 4 Rule 49(9) NCR.


76. The default judgement Order which arose in an inter-party hearing can be varied under Order 12 rule 8(4) NCR to reflect the change in circumstance to the outstanding amounts and enable its compliance.


77. The Plaintiff did not discharge its evidentiary burden of proof to prove its actual debt. There is no direct evidence from its principle nor company officials confirming particulars of the business transaction with PNGSF nor of payments received or not received to date. I find this conduct wanting, especially in a multi-million Kina action.


78. I am satisfied that the sum of K610,925.46 reflects the principle outstanding balance owed to the Plaintiff.


Costs.
79. Costs are discretionary. I make no order as to costs. This is a factual dispute which both parties could have easily settled out of court.


Orders


80. The formal orders of the Court are: -


  1. By virtue of Order 12 Rule8(4) Order 12 Rule (5), Order 12 Rule 1 NCR and Section 1554(4) of the Constitution, only the fixed amount of K1,946,839.80 contained in Order 4 of the Court Order made on 14th October 2020 and entered on 19th October 2020 is varied in full to the extent of that amount and nothing else.
  2. The fixed amount of K1,946,839.80 is varied by removing it and replacing it with the amount of K610,925.46
  3. The Court Order made on 14th October 2020 and entered on 19th October 2020 concerning interest to be charged at 8% per annum from the date when the cause of action arose to the time of settlement pursuant to Section 1(1) and (2) of the Judicial Proceedings (Interest on debts and Damages) Act 1962, remains and continue as they were so ordered.
  4. All other Orders contained in the Court Order made on 14th October 2020 and entered on 19th October 2020 in Order 1, 2, 3 and 5 remain and continue as they were so ordered.
  5. No order for Costs. Each party bears its own costs.
  6. Time for entry of these orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith.

The Court orders accordingly.
_______________________________________________________________
JPJ Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyers for the Defendants


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