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Nauwin Wee Ltd v Maru [2012] PGNC 183; N4874 (7 September 2012)

N4874

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1107 OF 2010

BETWEEN:

NAUWIN WEE LIMITED
First Plaintiff

AND:

MT KURUP LIMITED
Second Plaintiff

AND:

ANDREW MALD
Third Plaintiff

AND:

RICHARD MARU –
Managing Director of the NATIONAL DEVELOPMENT BANK
First Defendant

AND:

NATIONAL DEVELOPMENT BANK
Second Defendant

Waigani: Kariko, J
2012: 3rd & 7th September

PRACTICE & PROCEDURE – CIVIL JURISDICTION – Application for summary judgement under O12 r38, National Court Rules – Principles – Application for summary judgement based on admission of facts pursuant to O9 r30(1), National Court Rules – Principles

PRACTICE & PROCEDURE – CIVIL JURISDICTION – Notice to Admit Facts - Irregularity

PRACTICE & PROCEDURE – CIVIL JURISDICTION – Application to dismiss proceeding – Exercise of discretion

Facts:

In the course of pleadings the defendants were required to respond to a Notice to Admit Facts but failed to do so. Based on the deemed admissions by virtue of the default in replying to the Notice, the plaintiffs applied for summary judgment. They also applied for summary judgment arguing the defendants had no defence. In response, the defendants applied to withdraw the deemed admissions and have the proceeding dismissed.

Held:

(1) An application for summary judgment under O12 r38, National Court Rules is different to an application for entry of judgment summarily based on admission of facts pursuant to O9 r30(1), National Court Rules.

(2) Deemed admissions pursuant to O9 r29(2), National Court Rules are not sufficient to obtain summary judgement as of right.

(3) A party is not obliged to respond to a pleading that is irregular.

(4) The discretion to dismiss a proceeding under O12 r40, National Court Rules should be exercised sparingly and in the clearest of cases,

Cases cited:

Samson Kai v The State (1992) N1049
Alfred Alan Daniel v Pak Domoi Ltd (2009) SC970
Curtain Bros (PNG) Ltd v UPNG (2005) SC788
Philip Takori v Simon Yagari (2008) SC905

Counsel:

Mr J Kolo, for the plaintiffs
Mr A Waffi, for the defendants

7th September, 2012

1. KARIKO, J: Mr Andrew Mald as sole shareholder and director owns the two companies named as co-plaintiffs. Nauween Wee Limited obtained a financial loan from the Rural Development Bank (the Bank) whereby a number of properties including some owned by Mt Kurup Limited were mortgaged to the Bank as security. Following default in repayment of the loan, the Bank exercised its rights as mortgagee pursuant to the relevant loan agreement including giving due notice and advertising the secured properties for sale. However the plaintiffs were then able to arrange settlement of the loan arrears.
   
2. The plaintiffs filed this proceeding claiming damages caused by the negligence of the Bank and Mr Richard Maru (collectively, the defendants) in dealing with the loan and in the Bank's actions as mortgagee following the default.
   
3. The defendants filed a Defence categorically denying the alleged negligence.
   
4. I now rule on two notices of motion argued before me:
   
   • (1) The first by the plaintiffs seeking summary judgment pursuant to O9 rr29(2)& 30(1) and O12 r38 of the National Court Rules (NCR); and
     
   • (2) The other by the second defendant seeking leave to withdraw the admissions pursuant to O9 r29(3) NCR and a dismissal of the proceedings under O12 r40(1) NCR.
     

Summary judgement

5. An application for summary judgment under O12 r38 is different to an application for entry of judgment summarily based on admission of facts pursuant to O9 r30(1); Alfred Alan Daniel v Pak Domoi Ltd (2009) SC970.
   
6. For summary judgment a plaintiff must show that:
   
   • (1) there is evidence of the facts proving the essential elements of the claim; and
     
   • (2) there is evidence from him or some responsible person that in his belief there is no defence.
     
7. I am not satisfied that the applicant has properly shown the existence of these matters particularly in relation to the defence and I refuse to order summary judgment.
   
8. For entry of judgment under O9 r30(1), a plaintiff needs to show that:
   
   • (1) the defendant has made admissions; and
     
   • (2) he (the plaintiff) is entitled to judgment based on the admissions.
     
9. The plaintiffs rely on the deemed admissions of the defendants pursuant to O9 r29(2). I decline judgment under 09 r 30(1) for two reasons. Firstly, deemed admissions under this provision has been considered not sufficient to obtain summary judgment as of right; Samson Kai v The State (1992) N1049. Secondly, as the name suggests the Notice to Admit Facts concerns one party requesting another to admit to facts. This procedure allows parties to isolate and agree to relevant facts thereby saving the parties and the court the time and expenses of proving these facts. In the present matter, the Notice to Admit Facts essentially repeats the claims of negligence pleaded by the plaintiffs and asks the defendants to agree to these allegations. In my view this is irregular and the Notice is therefore defective. A party is not obliged to respond to a defective pleading; Curtain Bros (PNG) Ltd v UPNG (2005) SC788. The defendants therefore did not have to respond to the Notice to Admit Facts, and so there cannot be any deemed admissions.
   

Application for leave to withdraw admissions

10. Having refused the applications by the plaintiffs, it is not necessary for me to consider the first application by the defendants for leave to withdraw admissions.
    

Application to dismiss proceeding

11. I now turn to the application to dismiss the proceeding. As the Supreme Court stressed in Philip Takori v Simon Yagari (2008) SC905, the powers under O12 r40 is discretionary and is to be exercised sparingly and in the clearest of cases where the statement of claim is incontestably bad. I am not persuaded that this is such a case and I accordingly refuse the application.
    

Orders

12. The orders of the court are:
    
    • (1) The plaintiffs' notice of motion filed 9th November 2011 is refused.
      
    • (2) The second defendant's notice of motion filed 2nd June 2012 is refused.
      
    • (3) The parties shall bear their own costs of and in relation to these notices of motion.
      

_________________________________________________

Kolo & Associates: Lawyer for the plaintiffs
Namani & Associates: Lawyer for the defendants