PacLII Home | Databases | WorldLII | Search | Feedback

National Court of Papua New Guinea

You are here:  PacLII >> Databases >> National Court of Papua New Guinea >> 2013 >> [2013] PGNC 170

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Wartir v Semmy [2013] PGNC 170; N5410 (23 August 2013)

N5410


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS NO: 1120 of 2013


BETWEEN:


BERNADETTE WARTIR
Plaintiff


AND:


MATHIAS SEMMY as Assistant Manager of RABWELD LTD
First Defendant


ARNOLD PA'ASI as Manager for RABWELD LTD
Second Defendant


RABWELD LTD as Subsidiary Company to NGIP AGMARK LTD
Third Defendant


NGIP AGMARK LTD as Holding Company
Fourth Defendant


Kokopo: Oli, AJ
2013: 16th And 23rd August


CIVIL JURISDICTION - Practice & Procedure –Summary proceedings for recovery – Summary judgment sought – Breach of oral agreement


CIVIL JURISDICTION - Practice & Procedure –Summary judgment -Leave to enter final and summary judgment – To be invoked in clear case only – Order 12, Rule 38oOf the National Court Rules – Considered not a clear case - Leave sought refused – Matter set for trial.


Cases Cited:


Chief Collector of Taxes v T A Field Pty Ltd [1975] PNGLR 144
United Timbers PNG Pty Limited v Mussau Timber Development Pty Limited [1987] PGNC 16; N645 (2 December 1987)
United Timbers Kumul Builders Pty Limited v Post and Telecommunications Corporation [1991] PNGLR 299
Tsang v Credit Corporation PNG Limited [1993] PNGLR 112


Counsel:


Mr.Donald Wapu, for the Plaintiff
Mr. David Lidgett, for the Defendants


RULING


23rd August, 2013


  1. OLI, AJ: The plaintiff filed an action against the defendants each and severally on 24th October 2012 for breach of oral contract for hiring the plaintiff's truck. The Oral agreement was verbally entered into between the plaintiff and the first and second defendants. At the time of making the oral agreement the first and second defendants were the employee of third and fourth defendants. The plaintiff sued the defendants for breach of oral contract and claims judgment in the sum of K40, 207.40 for the outstanding payment of February and March 2009 including the K36, 000.00 purchase price of the truck against the third and fourth defendants. The Plaintiff also claims General damages for breach of Oral agreement plus interest and cost based on statute. The defendants denied the action and filed notice of intention to defend the civil suit by the plaintiff.

BACKGROUND


  1. The plaintiff pleads in her statement of claim that on or about October 2008, the first and second defendant's at the time were acting for the third defendant and entered into an oral agreement with the plaintiff to hire the plaintiff's truck for doing the third defendant's work.
  2. One of the terms of the oral agreement was that the third defendant pay K250.00 per day in which K7000.00 will be deposited into the plaintiff's Australia and New Zealand (ANZ) Bank account per month. The second term of the agreement was that all maintenance and repair responsibilities for the truck will be met by the third defendant. The third term of the agreement was for the defendants to inform the plaintiff if the truck faces mechanical problems immediately as soon as possible and that the defendants are working on the truck to rectify the mechanical fault.
  3. Despite the oral agreement, the plaintiff insisted that the agreement be in writing to safeguard her interest because the plaintiff has to constantly repay the loan generated from hiring the truck by the third defendant but the first and second defendants assured the plaintiff that a written agreement was not necessary as the third defendant had never signed any hiring of private vehicles for its use in the past.
  4. The first and second defendants further assured the plaintiff that the third defendant will still honour its obligations by entertaining invoices that would be presented to its office. Hence the defendants assured the plaintiff that she will still offset the loan from the hire of the truck by the third defendant.
  5. Based on that assurance, the plaintiff released the truck to the third defendant on the 1st January 2009 and the truck was driven to the third defendant's yard by the first defendant.
  6. Toward the end of April 2009, the truck had mechanical faults in the engine and was grounded at the third defendant's yard. This was never brought to the plaintiff's attention until the plaintiff found out that the truck was never on the road.
  7. The plaintiff having learnt that payments were not getting into her account made number of attempts to the first and second defendants why payments were not forth coming and why the vehicle was not on the road. The first and second defendants assured the plaintiff that the third defendant will fix the vehicle and make payments for the hire periods outstanding. However, there was no response forth coming from the third defendant and so the assurances made by the first and second defendants were to no avail. The plaintiff also engaged private consultant and incurred expenses and cost from private consultant to negotiate immediate payment of outstanding hire and to fix the truck fell on deaf ears also from the defendants.
  8. As a consequence of the defendants in not performing their part of the contractual obligations, the defendants were actually in breach of the oral agreement entered between the first and second defendants and the plaintiff.
  9. The particulars of the breach by the defendants as pleaded by the plaintiff are as follows:

The defendants:


(a) Failed to pay K4, 207.40 for the outstanding payment for the month of February and March 2009 respectively for the hire of the truck before the truck had mechanical faults in the engine and was grounded.

(b) Failed to inform the plaintiff about the mechanical fault in the engine to the truck immediately as soon as possible.

(c) Failed to maintain the condition of the truck by repairing faulty parts of the truck and keep it in good working condition at all material times.

(d) Failed to fix the truck for the truck to be on the road again.

(e) Refusing to pay attention to the plaintiff's plea for the defendant's to honour their commitment in performing their contractual obligations.

(f) Allowed the plaintiff to spend extra money to pay consultant fees for consultant to bring forward plaintiffs' grievances to the defendants' on behalf of the plaintiff.

(g) Refusing to pay attention to the plaintiff's consultant plea made for and on behalf of the plaintiff, and

(h) Failing to perform their part of the contractual obligation which placed the plaintiff in a very difficult financial position to the point of declaring bankrupt.

By reason of the breach cause by the defendants, the plaintiff suffered loss and damages.


  1. Particulars of loss and damages claimed by the plaintiff:

(ii) The plaintiff cannot afford to pay her six (6) children's school fees, clothes, books, biros, bus fare, and give lunch money for them because all her salaries are going towards repaying the loan arrears for the truck.


(iii) The plaintiff cannot buy food for the family and even pay for rent, electricity bills, water bills, and other necessities in the house and also cannot meet other social and family obligations because of the financial hardship faced by the plaintiff.


Consequently, the plaintiff suffered substantial anguish, emotional distress and inconveniences.


DEFENDANT'S FILE NOTICE OF INTENTION TO DEFEND.


  1. The defendants' Counsel filed notice of intention to defend the action on 31st October 2012. The defendants though admit the Oral Contract on vehicle hire was made between the plaintiff and the first and second defendants but denied the terms of the vehicle hire as pleaded in the statement of claim. The defendants argue that though the terms would have certainly include that the hire vehicle must always be in good road worthy and workable condition (the cost of and responsibility for which was always for the plaintiff to attend to) for the hire payments and hire agreement itself was to continue as a commercial arrangement.
  2. The defendants further argue that the terms of the so called Vehicle Hire agreement are uncertain, incomplete and vague to the extent that the agreement is not a binding contract and it is unenforceable in the manner pleaded by the Plaintiff.
  3. The defendants finally argue that the Plaintiff by her own pleadings has waited almost three years from the time she became aware that her vehicle was not being accepted for hire by the defendants, before issuing these proceedings. On these premises the defendants argue that the plaintiff is not entitled to the remedies sought in her Statement of claim.

PLAINTIFF FILE MOTION FOR SUMMARY JUDGMENT


  1. The Plaintiff's Counsel having received the defendants' 'Notice of Intention to Defend' filed on 31st October 2012, did cause to file on 9th August 2013 a Notice of Motion for Summary Judgment to be entered against the defendants pursuant to Order 12, Rule 38 of National Court Rules.

LEGAL ISSUE(S)


  1. There appears to one legal issue in this motion filed by the plaintiff and that is whether a Summary Judgment should be entered against the defendants?

THE LAW


  1. The law on Summary Judgment is well established in this jurisdiction. The National Court Rules set out the legal perimeters of its applicability and Supreme and National Court case authorities make it very clear where courts have applied these rules regarding the specific circumstances where relief sought as Summary Judgment has been granted. The Order 12, Rule 38 of the National Court Rules provides this relief and states:

Order 12 Rule 38 - National Court Rules


38. Summary Judgment.


(1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff-


(a) there is evidence of the facts on which the claim or part is based; and

(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed.


The court may, by order, direct the entry of such judgment for the plaintiff on that claim or part, as the nature of the case requires.


(2) Without limiting Sub-rule (1) the court may under that Sub-rule direct the entry of judgment for the plaintiff for damages to be assessed.


(3) In this rule, "damages" includes the value of goods.


18. The purpose of these rules is to enable a plaintiff to obtain judgment without trial, if he can prove his claim clearly and if the defendant is unable to set up a bona fide defence, or raise an issue against the claim which ought to be tried. The ideal situation where the plaintiff seeks leave to enter final and Summary Judgment in an action under O 12, r 38 should only be invoked in a clear case. Great care should be taken not to shut out a defendant unless it is quite clear upon facts and/or the law that he has no defence. It is usually sought by the plaintiff to avoid extraneous court trials by parties in a clear case where there are no contested issues by defence and defence usually will agree by consent to Summary Judgment sought by plaintiff and parties will only focus argument on appropriate quantum of damages, if quantum of damages claim is in dispute by the defence.


  1. However, the plaintiff files an application by way of motion on the 9th August 2013 seeking the following orders that:

EVIDENCE


The Plaintiffs' Evidence


  1. The plaintiff relies on the following affidavits in support of her application for Summary Judgment:

The Defendants' Evidence


  1. The defendants rely on the following affidavits in defence in opposing the entry of the Summary Judgment against the defendants at this stage of the proceedings and sought to have a trial proper for court to examine the Oral Agreement in its entirety.

APPLICATION OF FACTS TO THE LAW


  1. The pertinent legal issue in this motion to be determined is whether relief sought by plaintiff which is the entry of Summary Judgment under Order 12, Rule 38 of the National Court Rules should be entered against the defendants'?
  2. The Plaintiff's counsel in support of his client's motion for summary judgment advance number of case authorities as relevant case precedents on the subject matter. In fact four case law authorities in reference to the summary judgment were advanced in support of the plaintiff's motion to secure Summary Judgment. The plaintiff's counsel submits and maintains that defendants have no credible legal defence in law/and or facts. The Counsel for defendants did admit that there was a oral agreement between plaintiff and the first and second defendants and further added that during the course of the initial stages of the agreement the third defendant did perform one of the main terms of the agreement by paying for the daily vehicle hire of the plaintiffs' truck hire to the plaintiff's ANZ bank account and also taking into its custody and control the plaintiff's vehicle under oral agreement for hire. However, the defendants' counsel is very adamant that the terms of the oral agreement were vague and incomplete and could not be enforceable. The counsel for the defendants went further to inform court that these terms of oral agreement can only be tested in court through plaintiff testifying in court during trial and court can have the opportunity to observe the witnesses demeanour to verify these terms of the said oral agreement made between the plaintiff and the first and second defendants.
  3. The counsel refers to the first case on summary judgment in favour of his client's case which is the case of Chief Collector of Taxes v T A Field Pty Ltd [1975] PNGLR 144. In this case the Chief Collector of Taxes sued the defendant for recovery of income tax assessment due and payable but outstanding by the defendant to the Tax office. His Honour Raine J, held that:

The defendant, a taxpayer file a notice to contest the validity of an assessment of income tax made under the Income Tax Act 1959, the Income Tax Act requires that the taxpayer must pay the assessment before appealing: it is not appropriate to raise the issue of the validity of the assessment in summary proceedings by the Chief Collector of Taxes, for recovery of income tax, in which proceedings, production of the notice of assessment pursuant to s. 239 of the Income Tax Act 1959 is conclusive and together with ss. 257 and 259 of that Act effectively precludes the taxpayer from going behind the notice of assessment for any purpose in those proceedings.


This case demonstrate a very unique procedural exception to the general rule in that the Chief Collector of Taxes is placed in a more privileged position than is the ordinary plaintiff in respect to application for summary judgment. This case in my view would have to be distinguished from the present case in that the defendant in the above case was precluded from contesting the validity of the tax assessment unless the defendant pay upfront the tax assessed first before challenging the validity of the tax assessed is indeed correct or not as determine by the court. This above case scenario is different from the current case on foot in that defendants as alleged by the plaintiffs' counsel that defendants may not have a credible legal defence, but the right to have a fair trial is not precluded by that fact alone. The defendants though admit that there was a oral agreement but raise a defence that the terms of the oral agreement were vague, uncertain and incomplete and to the extent that the agreement is not binding contract and is unenforceable in the manner it is pleaded in itself shift the onus and burden of proof to the plaintiff to prove the case on the balance of probabilities. And this can only be done through a proper hearing in a trial through the due process of the law before a court of competent jurisdiction. I distinguish this matter from the case on foot and reject this legal proposition by the plaintiff's counsel.


  1. The second case law advanced by the plaintiff's counsel is Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299, where his Honour Sheehan, J; held that; "an application for summary judgment is sought under O 12, r 38 of the National Court Rules, where the facts are not in dispute, the Court should determine any point of law which may settle matters between the parties." The court went on to enter summary judgement but parties were allowed to determine the niggling legal issues on point of law which may settle the matter between the parties. In this case the defendants have filed affidavits to establish a bona fide credible defence to challenge the terms of the oral agreement, in particular, to challenge the terms of the oral agreement were vague and incomplete and cannot be enforced in the manner it is pleaded by the plaintiff and therefore it is not a binding contract. These are contested issues and can only be properly determined through a proper trial before the court. The motion by plaintiff's counsel seeks to strike out the defendants' defence filed on the 11th December 2012 and supported by three affidavits of deponents Nicholas Jeremy Lyons, Ruth Kerina and Joshua Matiha were sworn and filed on 15th August 2013 goes to question the authencity of the oral agreement entered between the plaintiff and the first and second defendants.
  2. The third case authority advanced by the plaintiff's counsel is the case of United Timbers (PNG) Pty Ltd v Mussau Timber Development Pty Ltd [1987] PGNC 16; N645 (2 December 1987). King AJ in that case said that; "The power to enter summary judgment is one to be exercised sparingly with great care and only when it is clear that there is no triable issue between the parties". I find in this case that the defendants' have particularised and pleaded in their defence that there are indeed some credible legal issues that are needed to be tried before the court through a trial proper between the parties. I am satisfied in considering the motion that it is not a clear case that the entry of summary judgment at this stage of the proceeding is most inappropriate to do so. Hence, the case should proceed to trial to determine the legal defence filed and pleaded by the defendant through the trial proper. The fourth case authority advanced by the plaintiff's counsel is in the case of Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112. The Supreme Court at p. 117 – 118 set out two elements to this rules and state:

"There are two elements involved in this rule;


(a) Evidence of the facts proving the essential elements of the claim" and
(b) That the plaintiff or some responsible person gives evidence that in his belief there is no evidence.

In this case there is no issue in relation to the first element. However, as to the second element, the plaintiff must show in absence of any defence or evidence from the defendant that, in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that upon that facts and/or the law, the defendant has no defence.


The plaintiff will not be entitled to summary judgment if there is a serious conflict on question of fact or law. Whether a case should go on trial on these issues will be determined on the facts of each case. However, the authorities show that the summary jurisdiction should only be invoked in a clear case. See Chief Collector of Taxes v T A Field Pty Ltd [1975] PNGLR 144"


  1. The above case precedent confirms the legal proposition that unless the defendant does not have or raise any serious conflict on question of facts and law, the courts' use of discretionary power to enter summary judgment should only be invoked in a clear case. In this case I am convinced that the defendants' have raised serious conflicts on question of facts and law when parties enter into an Oral Agreement. These serious questions of facts and law as pleaded by defendants can only be properly addressed and dealt with through a proper interparty trial before the Court.

CONCLUSION


  1. In conclusion, there is no doubt that the case law, based on the National and Supreme Court judgments considered so far is very clear, that the Courts power to award summary judgment should be exercised with great care and should only be invoked in a clear case. The law on summary judgment is very clear in this jurisdiction and I confirm the following conclusion in this case hereunder:

(i). That the Courts summary jurisdiction conferred by Order 12, Rule 38 of the National Court Rules should only be invoked in a clear case and above all great care and caution should be taken not to shut out a defendant unless it is clear upon facts and /or the law that he has no defence, (per Raine, J, Chief Collector of Taxes v T A Field Pty Ltd [1975] PNGLR 144.


(ii). That the power to enter summary judgment is one to be exercised sparingly and with great care and only when it is clear that there is no triable issue between the parties. (United Timbers (PNG) Pty Ltd v Mussau Timber Development Pty Ltd, (Unreported National Court Judgment N645, per King, AJ.)


(iii). That the purpose of this rule is to enable a plaintiff to obtain judgment without trial, if he can prove his claim clearly and if the defendant is unable to set up a bona fide defence, or raise an issue against the claim which ought to be tried........the court should exercise its discretion with considerable care. A defendant should not be prevented from making his case in defence unless it is clear that he does not have one. Summary Judgment must therefore not be granted when there is any serious issue of fact or law arising. (Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299, Sheehan J).


(iv). That the plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of fact or law. Whether a case should go to trial on these issues will be determined on the facts of each case. (Tsang v Credit Corporation (PNG) [1993] PNGLR 112, Kapi DCJ, Sheehan Brown JJ).


  1. Finally, by relating the above case authorities to the present case on foot, the court made the following observations to the history of the case to date. The plaintiff filed for recovery action against the defendants through the issuance of the Writ of Summons filed on 24th October 2012 and served on the defendants thereafter. The defence counsel filed appearance and notice of intention to defend the action on 31st October 2012. The defence counsel then filed particularised particulars of defence on the 11th December 2012 with no supporting affidavits in defence. The plaintiff's counsel then filed a motion for summary judgment on 9th August 2013 with supporting affidavit by the plaintiff and a witness Mr. Don Wapu, a lawyer by profession who had carriage of the matter in the past who deposed an affidavit in support of the motion. The defendant by this time had not filed any affidavit in defence to support their particularised defence filed on 11th December 2012. This indeed is a clear case that the defendant had not filed any affidavit in defence and the plaintiff seeking courts discretion under Order 12, Rule 38 of the National Court Rules for court to exercise its discretional power where there is no defence filed and there is no serious conflict of facts or law to be determined by the court. It is therefore proper for the plaintiff to seek relief under O12, r 38 of the National Court Rules for the court to enter summary judgment. However, the factual and legal position in this case has changed since 15th August 2013 when the defendants filed three separate witness affidavits in defence by deponents Nicholas Jeremy Lyons, Joshua Matiha and Ruth Kerina. These witnesses are currently the employees of the third and fourth defendants, whose affidavits goes to support the particularised defence filed on 11th December 2011, and do raise serious questions of facts and law on the Oral Agreement entered into between the plaintiff and first and second defendants on or about October 2008. It is to be noted with great interest that since the inception of this matter by the plaintiff on 24th October 2012 the first and second defendants have not filed any affidavits in defence or in support of the Oral Agreement on file to date. These three defence witnesses' affidavit goes to question the authority of the first and second defendants to enter into oral agreement with the plaintiff on behalf of the third and fourth defendants then. The defence counsel though admitted the existence of the oral agreement, submit that the defendants will take issue with the terms of the agreement in that the terms were vague, uncertain, incomplete and to the extent that the agreement is not a binding contract and it is not enforceable in the manner the plaintiff has pleaded in her statement of claim in the Writ of Summons. These latter statements alone shift the onus and burden of proof to the plaintiff to prove her case on the balance of probabilities; the standard of proof required in civil proceedings. I am satisfied that the defendants have raised some credible and arguable defence in law and fact and the justice of the case so requires that these legal issues of law and facts ought to be tried or can only be tested through the due trial process before the court. The plaintiff's motion to seek leave for summary judgment against the defendants is refused and I order that the matter proceed to trial. The costs be in the cause.

_________________________________________________________________
Paraka Lawyers: Lawyer for the Plaintiff
Warner Shand Lawyers: Lawyer for the Defendants


PacLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2013/170.html