N2604

PAPUA NEW GUINEA

[In the National Court of Justice]

O.S. 63 OF 2004

RAWSON CONSTRUCTION LIMITED
on behalf of itself and 239 others
Plaintiff

AND

THE DEPARTMENT OF WORKS
First Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

WAIGANI: LAY J.
9th and 21st July 2004

DECISION

Claims by and Against the State Act s 5 – notice of claims against the State – application for further period to give notice – sufficient cause being shown – issues for consideration- civil works contracts – evidence to be given in the first person.

Cases Cited:
William Trnka v. State N1957
Paul and Mary Bal v Kenny Taiya, Francis Arumba, Philip Dege and The Independent State of Papua New Guinea (2003) N2481
Fraser v. MVIT (1992) N1089
 Kamapu Minato v. Philip Kumo & the State N1768
 Daniel Hewali v. Papua New Guinea Police Force N2233.
Rundle v. Motor Vehicles Insurance (PNG) Trust PNGLR 44 and [1998] 20 (SC).
In the Matter of the Motor Vehicles Insurance (Third Party) Insurance Act and in the Application of Sir Kapu Pupu N1077
Dick Nauka v Motor Vehicles Insurance (PNG) Trust N1680
Ovoa Rawa v. MVIT N1276
Michael Ivia v Motor Vehicles Insurance(PNG)Trust [1995] PNGLR 183
Korowa Pup -v- Motor Vehicle Insurance (PNG) Trust and Gabag John Walep Koglip -v-Motor Vehicle Insurance (PNG) Trust, N1415
In the Application of Miane Andakundi (1992) N1087
In the Matter of Section 54(6) of the Motor Vehicles (Third Party) Insurance Act, Application of Jack Lucas Kuri [1992] PNGLR 448;
BIP Akope v. Motor Vehicles Insurance (PNG) Trust N1603
Motor Vehicles Insurance (PNG) Trust v. Insurance Commissioner (1988) N1725
Joe Fuanka v. Motor Vehicles Insurance (PNG) Trust N1825
In The Independent State of Papua New Guinea v Barclay Brothers (PNG) Ltd (2001) N2090
Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705

The Facts:

The Plaintiffs did a considerable amount of drainage construction works at the behest of an officer of the First Defendant, some of the Plaintiffs did the work pursuant to what they alleged were written contracts with the Defendants. The First Defendant purported to cancel the contracts and sent machinery to cover up the works performed. The Plaintiffs engaged a lawyer within 6 months of their claim arising but did not give notice to the Second Defendant under Section 5 of the Clams by and Against the State Act. There were over 5 years of correspondence and negotiations with the First Defendant before the Plaintiffs brought this application.

Held:

The Plaintiffs had easy access to lawyers in Port Moresby and did not explain the failure to give notice within the 6 month period required by Section 5 of the Claims By and Against the State Act. Nor did the Plaintiffs adequately explain their subsequent 5 years delay in giving notice. The fact that the aggregate claim exceeded K18 million and the works were covered over and were deteriorating due to road traffic placed an onus on the Plaintiffs to give notice quickly. The legal foundation of the claims was unclear, the ‘written contracts’ produced in evidence were not signed for the Defendants, and there was no evidence that the Public Finances (Management) Act requirements had been met. There would be prejudice to the Defendants. Sufficient cause was not shown to grant a further period in which to give notice. To grant an extension just 8 months short of the Frauds & Limitations Act time limit would negate the purpose of Section 5 of the Claims by and Against the State Act.

Counsel:
Mr. F. Griffin for the Applicant Plaintiff
Mr. Kumura for the Respondent Defendants

This is the Plaintiffs application brought by Originating Summons filed 12th February 2004 and Notice of Motion filed 26th May 2004 for an order pursuant to the provisions of the Claims by and Against the State Act Section 5(2) (c) (ii), that the time for giving notice of the Plaintiffs intention to make a claim against the State be extended by three months from date of order. The Plaintiffs wish to pursue claims against the State for sums which in the aggregate they say total more than K18,000,000, for work done and materials supplied.

The Plaintiff’s & Defendants Cases

The case for the Plaintiffs is that the affidavits filed on behalf of four of them show "sufficient cause" within the meaning of the Section in respect of the claims of all 239 of them. The case for the State is that there has been excessive delay in making the application, that the plaintiffs own evidence that they were forcibly removed from the job sites and that the claims were referred to the Fraud Squad raised a suspicion that ‘something was going on’, there were no written contracts produced for the majority of the claimants, most have not produced any evidence that they are contractors or that they had contracts. Counsel for the State also submitted that if the application is to be granted it should only be granted in respect of those contractors whose principals have given evidence.

Counsel for the Plaintiffs referred me to the decision of William Trnka v. State[1]. Neither Counsel suggested any principles arising out of case authority by which I might test whether sufficient cause had been shown.

The Facts:

The Plaintiffs rely upon evidence tendered in the following affidavits:

Rawson Rigolo Baro sworn 13th February 2004
Alex Sisio sworn 16th February 2004
Naua Poloni sworn 18th Febraury 2004
Cletus Gomiai sworn 20th February 2004
Waburi John Leva sworn 9th March 2004

The State led no evidence and accordingly the evidence filed for the plaintiffs is unchallenged.

I have taken into account all of the evidence, and I summarise the more pertinent facts as follows. Waburi John Leva’s company named Waleri Enterprises Limited entered into two written contracts with the Department of Works and Implementation for construction of rock walled drains, one dated 26th March 1999 for K60,000 and another dated 26th April 1999 for K90,000. The first contract was completed, a certificate of completion issued by Department of Works dated 23 March 2003 and an invoice to claim payment submitted on 28th March 2004. Mr. Leva says that "after being contracted by the Defendants" the company then commenced work on the second contract and" immediately before Easter weekend of 1999 the Company had dug up 300 metres" of earth works in preparation for construction of the second drain. I note here that, as Easter Day of 1999 fell on April 4th there is an inconsistency between the date of the contract and the days Mr Leva says his company worked on the job after being contracted and before Easter, because the contract is dated after Easter.

Cletus Gomiai traded under a registered business name of Gomiai Construction. He entered into a written contract dated 26th February 1999 with Department of Works to the value of K65, 000 for the construction of a rock walled drain. Immediately before the Easter weekend of 1999 he had completed the excavation for the drain and had expended K7, 100 on labour and materials for the work. He did not complete the work, for the reasons I mention below, but on 29th April 1999 he was issued a Certificate of Completion by the Roads and Bridges Section, Central Province, of the Department of Works.

Naua Poloni traded under a registered business name Magelo Magelo Constucter (sic) registered on 19 March 1998. He entered into two written contracts with the Department of Works for the construction of rock walled drains, the first was for the value of K48,000 dated 26th March 2004 to evidence work already carried out and completed in February 1999 and certified complete. The Certificate of Completion was lost when submitted to Department of Works in 2000. He was paid K30, 000 for this work but not the balance of K18, 000. The second contract also dated 26th March 1999 was to the value of K60, 000. Immediately before the Easter weekend 1999 he had dug up 200 metres of earth works in preparation for construction of the drain and had expended K2, 400 in labour and materials.

Alex Sisio traded under the business name Ipo Rori Dermies. On 2nd February 1999 he entered into a written contract with the Department of Works for the construction of 300 metres of rock walled drainage along the Magi Highway. Immediately before the Easter weekend of 1999 he had complete construction of 250 metres of the drain. He says he expended K75,000 in materials and labour.

Rawson Rigolo Baro owns a company named Rawson Construction Limited. On 26th March 1999 it entered into three contracts with the Department of Works for the construction of stone walled drainage, one for 300 metres on the Porebada Road valued at K144,000, one for 300 metres on the Motukea-Baruni Road valued at K120,000 and the last for 600 metres on the Motukea-Porebada Road valued at K180,000. The Company makes no claim under the last contract in respect of which it did no work. It was paid K56,000 in respect of the other two contracts. Mr Baru does not say what value or quantity of work his Company had completed immediately prior to the Easter weekend 1999. His evidence is that the Department of Works employed an independent consultant named Kibili Limited to advise it on the claims being made and there is annexed to his affidavit a letter from Mr Philip Ula, styled "Project Engineer" on Kibili Ltd letterhead paper. This letter records that a completion certificate issued on 16th April 1999 for a K120,000 contract in the sum of K84,000 for completion of 280 metres, another completion certificate was issued on 21st May 1999 in the sum of K90,000 also respect of a contract for K120,000. The letter records that "cheques of K90, 000 were released from HQ on 22/7/99. I have no idea whether the claimant received this or not." 

Mr. Baru also deposes that the balance of the 239 plaintiffs also contracted with the Department of Works between 1998 and 1999 and attaches a list to his affidavit of names said to be contractors and of amounts said to be due to them by Department of Works. No evidence is led of how Mr. Baru has come by this knowledge, no documents are produced in corroboration, no details of the contracts alleged to have been entered into or of the work alleged to have been done are produced in respect of these other claimants other than the names of the Plaintiffs, the general location at which the works are alleged to have been performed and the amount claimed.

On the morning of the Sunday of Easter weekend 1999 each of the deponents visited the sites at which their contract works for the First Defendant were in progress and found that back hoe machines were filling in the drains under construction and already completed, with earth, under the protection of armed Policemen. The deponents questioned the Department of Works representatives at their respective sites and were told to see Mr. Mark Tima, the Central Works Manager. Later in the week the deponents proceeded to the First Defendants office and saw Mr Tima. Mr. Tima advised them that work under each of the contracts had ceased that and that he would have to get reports from head office as to whether the contractors could continue to work or not and whether they would be paid.

The deponents then pursued their claims both collectively and individually. Mr. Rawson deposes that "the Plaintiff contractors have made numerous visits to the First Defendants offices and have written numerous letters to the different officers of the First and Second Defendant including its Minister, the Prime Minister of PNG and his Deputy, for the satisfaction of our claims to the total contract price." Internal correspondence of the First Defendant is produced which tends to confirm the allegation that the works were forcibly stopped and that some officers of the First Defendant were of the view that the Plaintiffs should be paid for the work done.

Some contractors including Rawson Construction Limited engaged a lawyer, who wrote a letter of demand to the First Defendant on 28th June 1999. Mr. Rawson says they "had to cease the engagement…because of rumours that the lawyers had led to the First Defendant ceasing to satisfy all the Plaintiffs claims" and because … "Mark Tima…had…begged us not to involve any lawyers. We were also led to believe that our claims would be satisfied immediately if the lawyers were not involved." This last sentence of the evidence, is not evidence of what was said to the witness, but evidence of the impression the words spoken gave to the witness: Evidence of important issues involving conversations should be given in the first person, the words actually spoke should be used: Fraser v. MVIT[2]., The evidence should not be given in the form of the witness’s summary of the inferences to be drawn. I cannot put any weight on the statement made because the manner in which the evidence has been given deprives the Court of the opportunity of assessing for itself whether the inference was a fair and reasonable one to be deduced from the words spoken. The statement is not admissible evidence as it is merely the witnesses’ opinion of the effect of statements made to him. 

In 2000 the Plaintiffs formed a committee to take their demands forward as a representative of all of them. Meetings were held with the First Defendant and the Minister. More correspondence was entered into. Various items of internal correspondence of the First Defendant are produced, some supporting the claims, others alleging that the contracts were entered into without authority, that there was no budget provision or that the contract documentation was "unconvincing". The First Defendants officers did make assurances that genuine claims would be paid, subject to the approval of the Secretary.

It does not appear from the evidence as to when the lawyers now acting were instructed, but on 20 September 2002 those lawyers wrote to the First Defendant inviting negotiations to settle the claims which they said at that time amounted to more than K13,000,000. 8 months later the lawyers wrote to "The Departmental Head, Department of Justice, Office of the Attorney General" purporting to give notice pursuant to the provisions of Section 5 of the Claims by and Against the State Act. On 21st July 2003 the Acting Solicitor General replied rejecting the letter as "…insufficient compliance with Section 5 of the Act…".

The Court is now invited to exercise its jurisdiction under Section 5(2)(c)(ii). It appears from the evidence that an application was not made to the Principal Legal Adviser under Section 5(2)(c)(i).

The Law:

Section 5 of the Claims by and Against the State Act is in the following terms:

5.	Notice of claims against the State.

(1)	No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this Section by the claimant to—
(a)	the Departmental Head of the Department responsible for justice matters; or
(b)	the Solicitor-General.
(2)		A notice under this Section shall be given—
(a)	within a period of six months after the occurrence out of which the claim arose; or
(b)	where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or
(c)	within such further period as—
(i)	the Principal Legal Adviser; or
(ii)	the court before which the action is instituted,
on sufficient cause being shown, allows.
(3)	A notice under Subsection (1) shall be given by—
(a)	personal service on an officer referred to in Subsection (1); or
(b)	leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 a.m. and 12 noon, or 1.00 p.m. and 4.06 p.m., or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act (Chapter 321).

The purpose of this type of provision is to enable the beneficiary, in Section 5 the State, to gather evidence to inform itself about the claim: Kamapu Minato v. Philip Kumo & the State[3]. A small number of recent judgments of the Court consider Section 5 and note its similarity to Section 54(6) of the Motor Vehicles Insurance (PNG) Trust Act, and consequently the usefulness of considering how the Court has applied Section 54(6) of that Act when considering the application of the provisions of Section 5 of the Claims by and Against the State Act. See for example William Trnka v The Independent State of Papua New Guinea[4]. applied in Paul and Mary Bal v Kenny Taiya, Francis Arumba, Philip Dege and The Independent State of Papua New Guinea [5]and in Daniel Hewali v. Papua New Guinea Police Force[6].

A short and not comprehensive survey of Section 54(6) cases shows that:

a)	Extensions have been allowed where:
i.	There was a delay of over 3 years where Plaintiff was hospitalized for a month then had medical treatment out of the jurisdiction, resided out of the jurisdiction, was advised his condition would not stabilize for a year, his Australian lawyers were ignorant of the need for notice and thus did not advise him: Rundle v. Motor Vehicles Insurance (PNG) Trust[7].
ii.	There was a delay of 1 year, where there may have been some doubt in the unusual circumstances as to whether a claim could be brought and against whom; In the Matter of the Motor Vehicles Insurance (Third Party) Insurance Act and in the Application of Sir Kapu Pupu [8]
iii.	There was a delay of 3 ½ years where there was lack of sophistication, ignorance of proper procedure, restricted mobility and non lawyer relatives involved in pursuing the claim: Ovoa Rawa v. MVIT[9]
iv.	There was a delay of 2 years, where the plaintiff gave instructions to a lawyer promptly and the lawyer promptly gave notice, but to the wrong party: Michael Ivia v Motor Vehicles Insurance(PNG)Trust [10]
v.	There was a delay of three years, where after 2 years the Insurance Commissioner had given an extension but the letter went astray in the post and a further year was lost sorting out the position: Korowa Pup -v- Motor Vehicle Insurance (PNG) Trust and Gabag John Walep Koglip -v-Motor Vehicle Insurance (PNG) Trust[11]

b)	An extension was refused where:

i.	There was a delay of 2 years, other claimants in the same accident had lodged there claims earlier, the claimant was a driver who had failed to comply with his statutory duty to report the accident.: In the Application of Miane Andakundi[12];
ii.	The material before the court did not show a prima facie case: In the Matter of Section 54(6) of the Motor Vehicles (Third Party) Insurance Act, Application of Jack Lucas Kuri[13];
iii.	There was a delay of 5 years, where the plaintiff had attempted to make his claim on two occasions but had not followed up and the Defendant was prejudiced by the delay in investigating the claim: BIP Akope v. Motor Vehicles Insurance (PNG) Trust)[14];
iv.	There was a delay of two years, where there was a one year delay in instructing lawyers after being informed of the right to make a claim, and a further 4 months delay by lawyers before writing to Insurance Commissioner: Dick Nauka v Motor Vehicles Insurance (PNG) Trust[15];
v.	The Plaintiff was resident in Port Moresby with good access to lawyers: Motor Vehicles Insurance (PNG) Trust v. Insurance Commissioner[16];
vi.	There were internal discrepancies in the documents giving rise to doubts about the genuiness of the claim: Joe Fuanka v. Motor Vehicles Insurance (PNG) Trust[17] .

In the case of William Trnka v The Independent State of Papua New Guinea[18] Sevua J had this to say about ease of access to legal advice:

"In Motor Vehicles Insurance Trust -v- Insurance Commissioner, N.1725, which is one of my own decisions referred to by the plaintiff’s counsel, I said then that there should not be any hard and fast rule in determining what amounts to or does not amount to the phrase, "sufficient cause". I still maintain that principle here. In at least two of my own numbered decisions, I have said that "access to legal services" is a factor in determining the exercise of discretion in a Section 54 (6) application. Again, I maintain that principle here in respect of a s.5 notice under the Claims By and Against the State Act."

I respectfully agree with His Honour’s view. Of course this will not be the only factor, but when there are no strong factors in favour of finding "sufficient cause", the fact that a Plaintiff lives in a place with ease of access to lawyers both private, and the Public Solicitor, may be a determinative factor.

I remind myself that the circumstances in which the jurisdiction may be exercised are not limited and that whole of the facts of the case must be considered in applying Section 5(2) (c) (ii) and before exercising the Courts discretion for or against an applicant. The notice must be given to the persons specified in the Act; notice to some other Government agency will not suffice: Trnka v The Independent State of Papua New Guinea (supra). That the claim is for a large amount will undoubtedly be a factor in the Solicitor General’s allocation of time and resources, as will any circumstances in which the physical evidence has been altered or is likely to be altered so that the elapse of time will make it more difficult to ascertain the true facts from an examination of that physical evidence. Those circumstances to my mind would place an onus on a Plaintiff to give notice earlier rather than later.

The "sufficient cause" to be shown must, I think, include evidence of why notice was not given under Section 5 within the 6 months period.

The Solicitor General’s Refusal of an Extension.

It is clear that the Plaintiffs regarded the Defendants as being in breach of the contracts at some time in 1999. The precise date is irrelevant to establish that a letter written in 2003 did not comply with the requirements of Section 5(2)(b). However, that information was not available to the Solicitor General because the relevant dates were not provided to him in the lawyers’ letter and attached schedules. The Solicitor General correctly rejected the letter as not being notice under Section 5, although his reasons for doing so did not refer to the date issue. It is not necessary for the purpose of determining that the lawyers’ letter was not notice, to examine whether the reasons given by the Solicitor General were correct.

Issues

The issues for my determination are:

1.	Has there been an adequate explanation of the failure to give notice within the 6 month period?
2.	Has there been an adequate explanation of the delay subsequent to the 6 month period?
3.	Have the Plaintiffs produced sufficient particulars of their case to enable the Departmental Head or Solicitor General to properly investigate it?
4.	Would the Defendants be prejudiced by granting an extension of time now?
5.	Considering 1- 4 above and all the evidence, has sufficient cause been shown.

1. Has there been an adequate explanation of the failure to Give Notice in the 6 Month Period

In my opinion the proper course of action would have been to give notice under Section 5 of the Claims by and Against the State Act when the first lawyer was engaged in 1999, and the Plaintiffs could then have negotiated at their leisure for the 5 years that have now elapsed. They did not do that.
 
The Plaintiffs have proceeded in the same way as any claimant might where there was a time limitation of 6 years in bringing a claim rather than a matter where they had 6 months to establish their cause of action. They have had meetings and written letters for 5 years and now decide that they should seek the assistance of the Court.

The issue of the failure of the Plaintiffs to give notice in the initial 6 months period is not addressed directly in the evidence, nor was it addressed by Counsel. Counsel for the Plaintiffs advanced the argument that his clients are not litigious and preferred negotiation as the principal explanation for failing to give notice of the Plaintiffs claim against the State.

2. Has there been an adequate explanation of the delay Subsequent to the 6 Month Period

The evidence in the affidavits explains in detail how the Plaintiffs have spent their time pursuing the claim in the past 5 years, but it does not directly address the issue of why notice was not given, other than to say that the parties tried to negotiate a settlement without redress to the Courts. I do not regard that statement on its own as "sufficient cause". By itself that assertion tends equally to support the inference that the Plaintiffs made a deliberate election not to pursue litigation and the conditions precedent to founding a cause of action against the State. Mr. Sisio says also that he is not a fluent speaker of the English language but he does not claim any connection between that fact and the failure to give the Section 5 notice. 

I accept as fact that the First Defendant specifically asked the Plaintiffs in 1999 not to engage lawyers and there was assurance in some meetings by officers of the First Defendant, that payment for genuine claims would be made, subject to approval of the Secretary, and in later meetings, payment was discussed at a greatly reduced rate of remuneration from the amounts shown in the "contracts". Until late 2001 the Plaintiffs might have felt they were making headway with their claims. By the end of 2001 it was quite clear on the evidence that the Plaintiffs were getting no closer to being paid than they were in 1999. Delay until the end of 2001 might have been partly excused on the basis that progress appeared to be being made in the negotiation. From late 2001 on there was really nothing occurring in the negotiation with the Defendants which might encourage the Plaintiffs to believe that their claims could be successfully settled by negotiation. There has been a lengthy delay in giving notice, some 4 years and 9 months after the expiry of the 6 months period, at the present time. There has been no attempt to explain why notice was not given in the 6 month period. The subsequent delay is not adequately explained. 

The Plaintiffs have been engaged in "contracts" for work in the environs of Port Moresby. The two firms of lawyers which the Plaintiffs have engaged have been Port Moresby firms and the deponents give their addresses in their affidavits as Port Moresby. I infer from those facts that the Plaintiffs or in the case of companies, their officers, are resident in Port Moresby and have ready access to lawyers and legal advice.

3. Have the Plaintiffs produced sufficient particulars of their case to enable the Departmental Head or Solicitor General to properly investigate it?

Apart from the description of the work to be performed and the name of the contractor, all of the contracts produced in evidence were in identical form. The contract is a printed form with spaces to fill in the blanks. The form consists of only 2 pages. On the second page there is a provision for signature by the "Purchaser" and a provision for signature by the "Supplier". On the first page the Papua New Guinea Department of Works and Implementation is defined as "the Purchaser". None of the contracts annexed to the affidavit evidence have been signed for or by the Purchaser in the place provided. The only place in which a signature appears of someone who may be an employee of the First Defendant, is as witness to the signature of the contractor described as "the Supplier". If the claims were tried on all available causes of action, lack of signature of the contracts may not be fatal, perhaps a claim could succeeded on a quantum meruit. But for the purposes of this application the Plaintiffs have put their case on having written contracts. That assertion is wrong in respect of the four Plaintiffs on whose behalf affidavits were filed. There is no evidence to explain how or why the Plaintiffs proceeded to undertake work on the basis of contract forms unsigned by the First or Second Defendant, apart from the evidence of Waburi John Leva that he on behalf of his company Waleri Enterprises Limited "had been directed by the First Defendants engineer, one Arau Gegelai to construct…" drainage works before a contract was signed in respect of one of his two claims. As I noted in reciting the facts, the other contract form under which this company claims is also dated after the works were said to be completed.

There is no evidence that the requirements of Section 40 of the Public Finances (Management) Act have been complied with. This is an important consideration for the Defendants in determining whether the Plaintiffs have a claim. In The Independent State of Papua New Guinea v Barclay Brothers (PNG) Ltd[19] Kapi DCJ found:

There is nothing in the PFM Act which indicates the consequences of breach of the tender process under the Act. In considering this issue, I bear in mind the purpose and policy behind such legislative provisions. It is not difficult to determine this in Papua New Guinea. The problem of corruption and misuse of public funds have become notorious and widespread. To quote the words of Connolly J in Hunter Bros v Brisbane City Council (supra) at page 339 these provisions are "designed to ensure regularity and openness in the purchase of goods and services. Its provisions are a matter of public law and there can be no injustice in holding not only the Council but prospective vendors to a strict observance of its requirements." As a matter of construction I conclude that s 40 (1) prohibits the class of contract which do not go through the tender process.

His Honour’s views were endorsed by the Supreme Court in Fly River Provincial Government v Pioneer Health Services Ltd[20]. Tenders must be called for expenditure of amounts over K100, 000: Financial Instructions made under Section 117 of the Public Finances (Management) Act. 

A Memorandum from the Secretary of the First Defendant to subordinate officers dated 21st May 1999 and being annexure "E" to the affidavit of Mr Baro notes to his offices in relation to the "Lined Drain Contracts" that "…under the Public Finances (Management) Act you have no authority to award such contracts."

The foundation of the contractual basis for the claims is questionable, both because of lack of signed contracts and the absence of evidence that Section 40 of the Public Finances (Management) Act 1995 was complied with for the contracts exceeding K100, 000. However I cannot draw the inference I was invited to draw by counsel for the State, from the evidence that the claims were referred to the Fraud Squad, that "something was going on". It is only evidence that someone thought the circumstances worthy of 
investigation. Only the results of the investigations would be material.

4. Would the Defendants be prejudiced by granting an extension of time now?

The total of the claims is a large amount deserving of proper investigation. It was known to the Plaintiffs from Easter 1999 that the physical evidence was covered by earth which obviously would accelerate the obliteration of the physical evidence of work done. These factors in my view put an onus on the Plaintiffs to give early notice of their intention to make a claim. The lengthy delay in giving notice will make it nigh impossible to physically re-confirm claims of work done and materials provided. Photographs annexed to the affidavit of Mr. Rawson Baro show the substantial damage and obliteration done to some of the works by filling and road traffic. Those photos are attached to a report dated in the year 2000. It is reasonable to infer the position would now be worse.

Rawson Constructions Limited claims it is entitled under contracts in the amount of K120, 000 & K144,000. A letter dated 1 September to the First Defendant from its consultant Kibili Limited refers to Rawson having two contracts each of K120, 000. An annexure to the letter headed "Appendix G" refers to a contract amount being K81, 900. It is impossible to reconcile these figures. It is indicative that the document records now available are confusing and conflicting as to the quantum and value of the works. It is very likely those issues will not be able to be resolved by reference to the physical works.

Annexures to the affidavits indicate there is a body of documentation in the offices of the First Defendant which relate to the claims. I do not know whether witnesses are still available as neither party called evidence on that issue.

I conclude that the delay will cause some prejudice to the Defendants, particularly in establishing who, if anyone, authorized the work and what was actually done, but that this is not a case where the trail is completely cold and no information at all can be obtained.

Considering 1- 4 above and all the evidence, has sufficient cause been shown?

I find the facts are that the Plaintiffs engaged lawyers within the 6 months period following the Plaintiffs becoming aware of the alleged breaches of contract but for their own reasons chose to discharge those lawyers. By error inadvertence or deliberate choice they did not give notice pursuant to Section 5(2)(b) of the Claims by and Against the State Act within the prescribed time. The failure has not been explained. The ensuing delay of almost 5 years has not been satisfactorily explained. The Plaintiffs assert that the claims are based on written contracts but that is wrong in relation to the documents produced. The Defendants will suffer some prejudice if an extension of time is now granted. The Plaintiffs are resident in Port Moresby and had and have relatively easy access to legal advice. Opposed to those factors, which I find are against exercising the Courts discretion in favour of the Plaintiffs, is the fact that there was a specific request in 1999 by an officer of the First Plaintiff not to engage lawyers. There was also qualified assurance that genuine claims would be paid. There should be a body of documents with the First Defendant which would throw light on the claims. However I do not think those factors outweigh the factors against the Plaintiffs 

I am sensitive to the fact that there has been work done by the Plaintiffs, money spent on labour and materials and plant hire, which may never be recoverable if an extension of time is not granted. But the law must be given proper effect. To grant an extension now, just 8 months short of the 6 year time limit imposed by the Frauds and Limitations Act, would completely negate the purpose of the Section 5 provision.

I find that sufficient cause has not been shown for the Court to exercise its powers to grant an extension of time to give notice to the State of the Plaintiffs intention to make a claim against it. The Plaintiffs application is refused.

Costs follow the event.

Lawyers:
For the Applicant Plaintiff		:	Maladina’s
For the Respondent Defendant	:	Solicitor-General