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Infratech Management Consultants Ltd v Kimmins [2011] PGNC 47; N4276 (19 January 2011)

N4276

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS 115 OF 2009

BETWEEN:

INFRATECH MANAGEMENT CONSULTANTS LIMITED
Plaintiff

AND:

BRYAN KIMMINS as the CHAIRMAN OF THE CENTRAL SUPPLY AND TENDERS BOARD
First Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

Waigani: Hartshorn J.
2010: 2nd November,
2011: 19th January

Application to discharge and set aside orders

Facts:

The plaintiff, Infratech Management Consultants Ltd, commenced this proceeding seeking declaratory and injunctive relief. Infratech contends amongst others, that it has a contract with the second defendant in respect of the design and reconstruction of a building known as the Pineapple Building and that this was reaffirmed by a National Executive Council decision made in August 2008. Infratech further contends that the actions of the first defendant in advertising a public tender for the design and reconstruction of the Pineapple Building are contrary to the National Executive Council decision and in breach of Infratech's contract. The defendants now apply for amongst others, 2 orders already made, to be respectively discharged and set aside. This is the decision on that application.

Held:

1. The defendants have not made their case for the Consent Order to be set aside and the application to do so is refused.
   
2. Mediation is ordered for and in respect of this proceeding pursuant to s. 5 (2) ADR Rules and this proceeding is adjourned to the ADR Track before Justice Kandakasi for this purpose.
   

Cases cited:

Simon Mali v The State (2002) SC690
Pius Nui v. Senior Sergeant Mas Tanda (2004) N2765
PNG International Hotels Pty Ltd v. Registrar of Land Titles (2007) N3207
Simon Mali v The State (2008) N3442
Network Construction Ltd v The State (2010) N4045

Counsel:

Mr. S. Koim, for the defendants

19th January, 2011

1. HARTSHORN J: The plaintiff, Infratech Management Consultants Ltd (Infratech), commenced this proceeding seeking declaratory and injunctive relief. Infratech contends amongst others, that it has a contract with the second defendant (State) in respect of the design and reconstruction of a building known as the Pineapple Building and that this was reaffirmed by a National Executive Council decision made in August 2008. Infratech further contends that the actions of the first defendant in advertising a public tender for the design and reconstruction of the Pineapple Building are contrary to the National Executive Council decision and in breach of Infratech's contract.

2. The defendants now apply for amongst others, 2 orders already made, to be respectively discharged and set aside.

3. The hearing of the defendants' amended notice of motion proceeded in the absence of representation on behalf of Infratech as I was satisfied that the lawyers for Infratech were aware of the time and date of the hearing by virtue of them filing the order of this court that appointed the time and date. There was also an appearance by counsel for Infratech when this court made the order by consent appointing the time and date of a special fixture to hear the defendants' and Infratech's respective amended notices of motion.

Restraining order

4. The relief sought in paragraph 1 of the defendants' amended notice of motion is for the order made on 25th March 2009 and extended on 15th April 2009 to be discharged pursuant to Order 12 Rule 8(3) National Court Rules. The order restrained the defendants from dealing with the tender that was published in the media concerning the design and reconstruction of the Pineapple Building.

5. From a perusal of the court file, on 10th July 2009 this court ordered amongst others, that the interim injunctive orders of 25th March 2009 were extended until the close of business on 24th July 2009. On 24th July 2009, no order was made extending the orders of 25th March 2009 even though other orders were made when the matter was called. Only Counsel for Infratech appeared on the matter at that time.

6. As the orders of 25th March 2009 were not extended, they expired at the close of business on 24th July 2009 and so there is nothing to discharge. The relief sought in paragraph 1 of the defendants' amended notice of motion is not necessary and is refused.

Consent order

7. The order sought in paragraph 2 of the defendants' amended notice of motion is for the consent orders of 23rd October 2009 made by me (Consent Order), to be set aside pursuant to s.155(4) Constitution essentially on the grounds that:

a) the settlement negotiations that led to the Consent Order were not frank and truthful and misrepresentations were made,

b) there were material non disclosures to the court when the Consent Order was sought,

c) it is in the public interest and the interests of Papua New Guinea that the Consent Order be set aside.

8. The Consent Order provides amongst others, for an independent audit to establish the extent of damages payable by Infratech, the terms of reference of the auditor, that the audit will be paid for by the State, and that Infratech shall be paid by the State K4 million in regard to Infratech's claim in proceeding WS 1467 of 2007 for damages, legal costs and on account of certain invoices. There is also a further order in regard to work on the Waigani office development project. I note from the evidence that the sum of K 4 million was paid to Infratech but that the other requirements of the Consent Order appear not to have been complied with.

Law

9. This court has the inherent power under s. 155 (4) Constitution to set aside a consent order even when it is a final order and determines the relief sought: Simon Mali v. The State (2002) SC690. This power can be exercised in at least 2 situations; where there are errors on the face of the court's record and where there are procedural irregularities associated with the consent order being obtained. I exercised this power to set aside a consent order in Simon Mali v. The State (2008) N3442 and Network Construction Ltd v. The State (2010) N4045. I also refer to the decisions of Cannings J in Pius Nui v. Senior Sergeant Mas Tanda (2004) N2765 and Davani J in PNG International Hotels Pty Ltd v. Registrar of Land Titles (2007) N3207.

10. The defendants have not submitted that there are any procedural irregularities associated with the Consent Order. As to any error on the face of the court's record, the defendant submits that there is error patent on the record. If I understand correctly, this error is submitted to be a rewriting of the terms of the subject agreement. I am unable to see how this is so from a perusal of the Consent Order.

11. A further argument concerning error on the face of the record may be that an order for the payment of money was made in respect of damages, but that damages are not claimed in the Originating Summons that commenced this proceeding. It is clear however, that the damages component in the Consent Order is for proceeding WS1467/07 and not this proceeding. I am not satisfied that the defendants have properly shown an error on the face of the court's record.

12. As mentioned, the defendants also rely on other grounds. The first of these is that the defendants were not made aware of the existence of proceeding WS 1467/07. That proceeding is between the same parties, apart from the first defendant in this proceeding and concerns the same contract between Infratech and the State. Infratech has default judgment entered in its favour with damages to be assessed in proceeding WS 1467/07. In essence the defendants submit that they were misled. Counsel for the defendants submits that if they had been aware of proceeding WS 1467/07 and that default judgment had been entered, they would not have consented to the Consent Order as by so doing, they consented to paying an amount of damages that was awaiting assessment in proceeding WS 1467/07.

13. It is plainly not correct that the defendants were not aware of proceeding WS 1467/07. The Consent Order specifically makes reference to it. Further, for default judgment to be entered, the presiding judge would have been satisfied that proper service of the proceeding had been effected on the defaulting party. There is also evidence that because of proceeding WS 1467/07 and negotiations between the parties in WS 1467/07, the National Executive Council in its special meeting no. 25 of 2008 further considered the matter, resulting in its decision 164 of 2008. I find no merit in this ground.

14. The second further ground is that there was a material non disclosure to this court of the existence of WS 1467/07 and that damages were still to be to be assessed in WS 1467/07. This, it is submitted, led to this court being misled into accepting an amount for damages when the amount of damages should have been proved, and to a rewriting of the terms of the contract.

15. This submission, with respect, ignores the fact that the draft Consent Order specifically refers to proceeding WS 1467/07 and was signed by the Solicitor General on behalf of the defendants. Parties by their lawyers are permitted to agree and settle on a specific amount for damages and to otherwise settle their claims. I note in this regard that there is no submission from the defendants to the effect that the Solicitor General in some way exceeded his authority or acted as he did without the consent of the Attorney General. I am not satisfied that there is any merit in this ground.

16. As to the submission that it is in the public interest and the interest of Papua New Guinea that the Consent Order be revisited, this submission is merely that, without any worthy argument in support. If there were any merit to the previous submissions of counsel for the defendants, then perhaps an argument that it was in the interests of the public and Papua New Guinea for the Consent Order to be set aside may have been advanced with a modicum of success.

17. In the circumstances, I am not satisfied that the defendants have properly made their case for the Consent Order to be set aside and the application to do so is refused.

18. As to the alternate orders that are sought in paragraph 4 of the defendants' amended notice of motion, they seek extension and variation of the Consent Order. I am not minded to amend a consent order without the consent of all of the parties affected. I also take into account that most of the Consent Order appears not to have been complied with by the parties. This raises the question of whether any amendment would be.

19. I note that there have been attempts at settling this proceeding and the Consent Order is indicative of this. In the circumstances therefore, I am of the view that this proceeding would benefit from mediation.

Orders

20.

a) the relief sought in paragraphs 1, 2, 3 and 4 of the defendants' amended notice of motion filed 10th September 2010 is refused.

b) mediation is ordered for and in respect of this proceeding pursuant to s. 5 (2) ADR Rules and this proceeding is adjourned to the ADR Track before Justice Kandakasi for this purpose.

c) no order is made as to costs.

___________________________________________________

Steeles Lawyers: Lawyers for the Plaintiff
Office of the Solicitor-General: Lawyers for the Defendants