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Richardson v National Airport Corporation Ltd [2023] PGNC 366; N10533 (20 October 2023)

N10533

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 42 OF 2019

BETWEEN:
DAVID RICHARDSON
Plaintiff

AND:
NATIONAL AIRPORT CORPORATION LIMITED
Defendant

Waigani: Bre, AJ
2023: 20^th September, 20^th October

CIVIL PRACTICE AND PROCEDURE - Second application to amend Defence and Cross Claim - National Court Rules O8r50(1) and O12r1 - Principles of leave to amend considered.

Cases Cited
Dola v Alua (2023) N10456
Kerowa v Hargy Oil Palms Ltd [2012] PGSC 30; SC1194
Kewa v Kombo [2004] PGNC 83; N2688
Papua Club Inc v Nusaum Holdings Ltd [2002] PGNC 50; N2273
Papua New Guinea Banking Corporation Limited v Jeff Tole (2002) SC694

Reference
National Court Rules; O8r50(1) and O12r1

Counsel
Mr. M Alyata, for the Plaintiff
Mr. N Ako, for the Defendant

RULING

20^th October 2023

1. BRE, AJ: INTRODUCTION: National Airport Corporation seeks leave to amend its Amended Defence and Amended Cross-Claim following discovery of factual matters regarding the professional registration status of the Plaintiff as an Architect and his company as an architectural company.

BACKGROUND

2. David Richardson provided architectural services to the National Airports Corporation (NAC) between October 2010 and December 2013 for which he is seeking payment of outstanding fees.

3. The Defendant, disputes the authority of the former Managing Director to engage the Plaintiff or his company, David Richardson Architects Ltd and through this application, the professional standing of the Plaintiff which they allege was known, by the Plaintiff but not disclosed prior to his engagement.

5. This would be the second time the Defendant amends its Defence. The first time was on 06^th August 2021 where it also filed a Cross Claim seeking reimbursement of sums paid to the Plaintiff.

6. The Plaintiff filed his Reply to the Cross Claim on 02^nd September 2021 and its Defence to the Cross Claim on 01^st September 2023.

7. The proceedings are at an advanced stage, ready for trial on 16 May 2023 and placed on the Directions List.

8. The Defendant filed its Notice of Motion on 25^th July 2023 seeking the following orders:-
"

1. That Leave is granted to the Defendant to file and serve a Second Amended Defence and Cross Claim in the form of the draft document annexed to the Affidavit of Alu Konena sworn on the 21 day of July 2023 and filed herein.
   
2. The Defendant will file and serve the Second Amended Defence and Cross Claim before the expiration of seven days from the making of this Order.
   
3. That the costs of and incidental to this Motion are costs in the cause.
   
4. That time is abridged for the entry of these Orders to the of Settlement by the Registrar which will occur forthwith.
   
5. Such other Orders as this Honourable Court deems meet”.
   

EVIDENCE

9. The Defendant relies on the Affidavit of Alu Konena sworn on 21 July 2023 and filed on 25^th July 2023. Alu Konena deposes to obtaining information in August 2022 that David Richardson and his company David Richardson Architects Ltd were not registered with the Board of Architects for the years 2010, 2011 or 2013, the period the services were performed. The proposed second draft Defence and Cross Claim are annexed to Alu Konena's Affidavit.

10. The Plaintiff relies on his Affidavit sworn on 18^th March 2020 and filed on 20 March 2020 which deposes to his reasons for commencing the proceedings and the engagement of his services at the invitation of the former NAC Managing Director.

ISSUE

11. Whether the Defendant can amend its amended Defence and amended Cross Claim a second time when proceedings are at an advanced stage, nearing trial.

LAW

12. Order 8 Rule 50(1) of the National Court Rules and Caselaw. Order 8 Rule 50(1) and (2) NCR are in the following terms:-

(1) The Court may, at any stage of any proceedings, on application by any party or of its own motion, order, on terms that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such manner as the Court thinks fit.

(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings."

(emphasis mine)

Order 12 Rule 1 reads:-

"1. General relief

The Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating process."

(emphasis mine)

CONTEST

13. The Defendants application relies on Order 12 Rule 1, Order 8 Division 4 Rule 50(1) and Order 1 Rule 15(1) of the National Court Rules and Section 155(4) of the Constitution for the Court to exercise its discretion to grant leave to file its amended Defence.

14. Mr. Ako, Counsel for the Defendant, submits that the non-disclosure of the professional registration goes to the legal validity of any agreement between the parties. He submits the allegations were known a year after the earlier amended Defence was filed on 06^th of August 2021.

15. Mr Alyata Counsel for the Plaintiff, responded that the Plaintiff was properly engaged and relies on a statutory declaration dated 18 March 2019 signed by the former Managing Director of the Defendant, Mr. Joseph Kintau, attesting to the work performed. The statutory declaration is marked as Annexure 'BB' to the Plaintiff's Affidavit.

16. Mr Alyata submitted that the substantive proceedings are based on quantum meruit, and the issues are clear. He stresses that the matter is ready for trial and the Plaintiff will be prejudiced by further delays of the proceedings.

ANALYSIS

17. The Defendant is seeking the Court's discretion to grant leave. Both Order 8 Rule 50 and Order 12 Rule 1 NCR, grant a wide discretion to the Court to allow amendments at any stage of the proceedings. The exercise of discretion must be exercised on proper principles of law. See Kerowa v Hargy Oil Palms Ltd [2012] PGSC 30; SC1194 (3 September 2012).

18. Those principles are aptly set out in in Papua Club Inc v Nusaum Holdings Ltd [2002] PGNC 50 and by Cannings J in Kewa v Kombo [2004] PGNC 83. These were summarised recently by Anis J in Dola v Alua (2023) N10456 at [23] and are as follows:-

1. "Will the amendment enable the Court to determine the real issues in
2. controversy between the parties?
3. Will the amendment correct any defect or error in the proceedings?
4. Will the amendment cause real prejudice or injustice to the other party?
5. Is the application for such amendment made in good faith or in bad faith?
6. Can the other party be fairly compensated with costs for the amendment?
7. Is the party prevented by its conduct or the manner in which the proceedings have progressed from being permitted to amend its pleadings?
8. Where do the interests of justice lie?
9. Will the amendment allow effective and efficient determination of the issues between the parties.”
   

19. I apply these principles to consider the application.

1. Will the amendment enable the Court to determine the real issues in controversy between the parties?

The amendment will allow evidence to be led on formation of contract which goes to determining liability.
The consideration in Papua New Guinea Banking Corporation Limited v Jeff Tole (2002) SC694 is noteworthy:-

"The Rules cannot for instance change the laws of contract ... the Rules are there to assist parties to resolve their disputes fairly and expeditiously according to the substantive law that governs the dispute and relief can only be permitted only to the extent the substantive law can permit."

2). Will the amendment correct any defect or error in the proceedings?

Yes. The amended defence raises additional issues on misrepresentation in contract which has not been pleaded in the Defendants Amended Defence nor Cross Claim. The additional amendment will enable correction of the pleadings to reflect the new allegations on professional registration.

3. Will the amendment cause real prejudice or injustice to the other party?

The dispute is one of quantum meruit and concerns services rendered by the Plaintiff between 2010 and 2013, some 10 years ago for which the Plaintiff is claiming payment of alleged outstanding unpaid invoices covering the period from November 2012 to December 2013 of an amount of K577,133.40. Unfortunately, the dispute could not be resolved amicably. The Plaintiff was 76 years old and a non-citizen at the time of filing this claim on 28 January 2019.

The Defendant is a public corporation with resources at its disposal if it was diligent, it would have picked up on the irregularities it is alleging now much earlier during its procurement vetting process. Further the Defendants lawyers obtained information about the Plaintiff's professional registration information by August 2022 but filed this application about a year later on 25^th July 2023.

The Plaintiff will be prejudiced by further delay and in incurring additional cost to further respond to the second amended pleadings. Nevertheless, it is important to clarify the issues for trial and allow both parties to properly plead and adduce evidence at trial, the prejudice to the Plaintiff can be mitigated by a costs order.

4). Is the application for such amendment made in good faith or in bad faith?

Parties did not address this.

5). Can the other party be fairly compensated with costs for the amendment?

Yes, for the reasons set out in (3) above, costs are an appropriate remedy to the Plaintiff.

6). Is the party prevented by its conduct or the way the proceedings have progressed from being permitted to amend its pleadings?

This issue was not addressed by both parties. However, the history of the case shows both parties progressing the litigation.

7. Where do the interests of justice lie?

The interest of justice requires issues in dispute to be properly clarified for final deliberation during trial. It also demands finality of proceedings. The option to settle out of Court is available to the Parties at any stage of the proceedings. Considering it is more than 10 years since the cause of action arose, the Court is encouraging both parties to consider negotiating with a view to settlement or proceeding via the Alternate Dispute Resolution process as an alternate option to litigating to trial. The Court expects Lawyers to actively assist in this process.

8. Will the amendment allow effective and efficient determination of the issues between the parties? Yes. The amendment should crystalise issues for trial and enable parties to proceed to trial.
   

CONCLUSION

20. The Court has wide discretion to grant leave to a party to amend its pleadings at any stage of the proceedings. However, that discretion must be exercised in accordance with guiding principles.

21. The draft amended Defence and Cross-Claim contained in the Affidavit of Alu Konena demonstrate the need for the Defendant to plead allegations on formation of contract and effect of representations. This will clarify for both parties the extent of the Defendant’s liability and assessment of damages (if any). It will also enable the Plaintiff to appropriately respond to the new allegations.

22. The Defendant could have raised the new allegations earlier. The Plaintiff will be prejudiced by further delay and in incurring additional costs associated with responding to the Defendant's amended pleadings. Costs are an appropriate remedy for the Plaintiff.

COST

23. Costs are discretionary. For the reasons indicated above, I exercise discretion in favour of the Plaintiff to award reasonable Costs in defending this application and in preparing and filing appropriate amended pleadings in response. The Costs are to be taxed, if not agreed.

ORDER

24. The formal Orders of the Court are:-

1. Leave is granted to the Defendant to file and serve a Second amended Defence and amended Cross Claim in the form of the draft document annexed to the Affidavit of Alu Konena sworn on the 21 of July 2023 and filed on 25 July 2023.
   
2. The Defendant will file and serve its Second amended Defence and Cross Claim by or before the expiration of seven (7) days from the making of this Order.
   
3. The Plaintiff shall respond appropriately to the Second amended Defence and Cross Claim within the time allowed by the National Court Rules.
   
4. The Defendant shall pay the Plaintiff's reasonable Costs in defending this application and in attending to preparing and filing his responses to the Defendant's Second amended Defence and amended Cross Claim. The costs are to be taxed, if not agreed.
   
5. Time is abridged for the entry of these Orders to the time of Settlement by the Registrar which shall take place, forthwith.
   

Orders Accordingly.
________________________________________________________________
Greg Manda Lawyers: Lawyers for the Plaintiff
O'Briens Lawyers: Lawyers for the Defendant