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Pacific Assurance Group Ltd v Pacific International Hospital Ltd [2017] PGNC 292; N6992 (20 September 2017)

N6992

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 571 of 2017 (COMM)

BETWEEN:
PACIFIC ASSURANCE
GROUP LIMITED
Plaintiff

AND:
PACIFIC INTERNATIONAL
HOSPITAL LIMITED
Defendant

Waigani: Hartshorn J

2017: 13^th, 15^th, 19^th & 20^th September

APPLICATION TO SET ASIDE STATUTORY DEMAND – s.338(2) Companies Act, “calender month” and ‘corresponding date principle’ considered

Cases cited:
Papua New Guinea Cases

Moran Development Corporation Ltd v. Akida Investments Ltd (2003) N2458

Overseas case

Dodds v. Walker [1981] 2 All ER 609

Legislation:

Company’s Act 1997
Interpretation Act
Underlying Law Act 2000

Counsel:

Ms. E. Mel, for the Plaintiff
Mr. R. Puka, for the Defendant

20^th September, 2017

1. BY THE COURT: This is a decision on a contested substantive application to set aside a creditor’s statutory demand. The application is made pursuant to s. 338(1) Companies Act 1997 by way of originating summons.

Background

2. The plaintiff was served with the defendant’s statutory demand for payment of a debt in the sum of K 1,134,722.02 on 31^st May 2017.

This application

3. The defendant Pacific International Hospital Ltd (PIH) opposes the application to set aside the statutory demand only on the basis that the application was filed after one month after the statutory demand was served. Therefore pursuant to s. 338(2) Companies Act this court cannot set the statutory demand aside it is submitted.

4. If I find in favour of PIH on this issue, it will determine the application and so I consider this issue first.

5. As mentioned it is not in dispute that the subject statutory demand was served upon the plaintiff on 31^st May 2017

6. Section 338(1), (2) and (3) Companies Act is as follows:

“338. Court may set aside statutory demand.

(1) The Court may, on the application of the company, set aside a statutory demand.

(2) The application shall be made, and served on the creditor, within one month of the date of service of the demand.

(3) No extension of time may be given for making or serving an application to have a statutory demand set aside, but, at the hearing of the application, the Court may extend the time for compliance with the statutory demand.”

7. The plaintiff, Pacific Assurance Group Limited (PAC) submits that the originating summons being the application to set aside, was filed within one month of the date of service upon it of the statutory demand. This is so as:

a) the statutory demand was served on 31^st May 2017;

b) “month” pursuant to s. 3 Interpretation Act means a “calender month”;

c) s. 11(1) Interpretation Act provides that in computing time for the purposes of a statutory provision, a period of time from, amongst others, the happening of an event shall be deemed to be exclusive of the day on which the event happens;

d) a calendar month from 1^st June 2017 expires on 1^st July 2017;

e) 1^st July fell on a Saturday and so pursuant to s. 11(2) Interpretation Act, the application to set aside may be filed on the next day following that is not a Sunday or public holiday;

f) that next day was Monday 3^rd July and the application to set aside was filed on that day.

Consideration

8. I am satisfied that “month” in s. 338(2) Companies Act is to be interpreted as “calendar month” by virtue of s. 3 Interpretation Act, in the absence of a definition of “month” in the Companies Act. I was not referred to any decisions on how “calender month” should be interpreted. I note that in Moran Development Corporation Ltd v. Akida Investments Ltd (2003) N2458, Kandakasi J stated that:

“..... it means a calendar month, which can commence on a particular day in a month and end on the corresponding day of the following month.”

9. In the House of Lord opinions in Dodds v. Walker [1981] 2 All ER 609 at 610 Lord Diplock said:

“My Lords, reference to a ‘month’ in a statute is to be understood as a calendar month. The Interpretation Act 1978 said so. It is also clear under a rule that has been consistently applied by the courts since Lester v Garland [1808] EngR 326; (1808) 15 Ves 248, [1803-13] All ER Rep 436 that, in calculating the period that has elapsed after the occurrence of the specified event such as the giving of a notice, the day on which the event occurs is excluded from the reckoning. It is equally well established, ....... that when the relevant period is a month or a specified number of months after the giving of a notice the general rule is that the period ends on the corresponding date in the appropriate subsequent month, ie the day of that month that bears the same number as the day of the earlier month on which the notice was given. ......

This simple general rule, which Cockburn CJ in Freeman v Read [1863] EngR 643; (1863) 4 B&S 174 at 184[1863] EngR 643; , 122 ER 425 at 429 described as being ‘in accordance with common usage..... and with the sense of mankind’, works perfectly well without need for any modification so long as there is in the month in which the notice expires a day which bears the same number as the day of the month on which the notice was given. Such was the instant case and such will be every other case except for notices given on the 31^st of a 31-day month and expiring in a 30-day month or in February, and notices expiring in February and given on 30^th or 29^th (except leap years) of any other month of the year. In these exceptional cases, the modification of the corresponding date rule that is called for is also well established: the period given by the notice ends on the last day of the month in which the notice expires.”

10. Also in Dodds v. Walker (supra), Lord Russell of Killowen said at 611:

“....... ordinarily the calculation of a period of a calendar month or calendar months ends on what has been conveniently referred to as the corresponding date. ......... But the application of the corresponding date principle inevitably produces variation in the number of days involved, depending on the date on which a four-month notice is served and the irregular allotment of days to different months. Sometimes it is not possible to apply directly the principle, for instance if a four-month notice is served on 30^th October (the time beginning to run at midnight 30^th-31^st October), there being in February but 28 (or 29) days it is not possible to find a corresponding date in February and plainly a corresponding date cannot be sought in March; the application of the corresponding date principle in such case can only lead to termination of the four-month period at midnight 28^th February -1^st March (or midnight 29^th February – 1^st March in a leap year). That is an inevitable outcome.”

11. I referred counsel to Dodds v. Walker (supra) and heard their further submissions. Apart from counsel for the plaintiff submitting that the definition of “calender month” in Dodds v. Walker (supra) should apply in this jurisdiction but in conjunction with s. 11(1) Interpretation Act, the parties maintained their original positions.

12. Decisions from the Courts of England and Wales are persuasive in this jurisdiction. The expression, “calender month” no doubt originated from England and so a decision from its highest court specifically on the meaning and calculation of a “calender month” when referred to in a statute and in the absence of a statutory definition, is particularly relevant in this instance.

13. The considerations of their Lordships in Dodds v. Walker (supra) proceed on the basis that the day upon which the event occurred is not counted in the calculation and the calculation commences on the next day. That is similar to s. 11(1) Interpretation Act. Further, the exception to the corresponding date principle, that when an event occurs on any 31^st of a month, a calendar month from then ends at midnight on the last day of the next month, to my mind is with respect, correct, as by commencing on the first day of the next month and ending at midnight on the last day of that next month, provides for a month of the calendar in each case - a calendar month.

14. I am not aware of any reason why the corresponding date principle and its exception should not apply in this jurisdiction as it was part of the common law of England before this country’s independence. The English common law is a source of the underlying law pursuant to The Underlying Law Act 2000. I am satisfied that its application and enforcement would not be contrary to the National Goals, Directive Principles and Basic Social Obligations established by the Constitution and would not be contrary to the basic rights guaranteed by Division III.3 of the Constitution.

15. In this instance, when the exception to the corresponding date principle is applied, as the statutory demand was served on 31^st May, the last day of the calendar month within which an application to set aside the statutory demand shall be made was 30^th June and not 1^st July 2017. The 30^th June 2017 fell on a Friday and not a Sunday or public holiday.

16. Consequently, as the application to set aside the statutory demand was filed on 3^rd July 2017, it was not made in accordance with s. 338(2) Companies Act and was not made in time for this court to be able to consider it. Notwithstanding that there is no application for an extension of time in which the application to set aside may be filed, I note that s. 338(3) Companies Act does not permit this court to grant any such extension. In such circumstances the originating summons should be dismissed.

Orders

17. The orders of the Court are.

a) The originating summons filed 3^rd July 2017 is dismissed;

b) The plaintiff shall pay the defendant’s costs of and incidental to this proceeding;

c) Time is abridged.
_____________________________________________________________
Bradshaw Lawyers: Lawyers for the Plaintiff
Henaos Lawyers: Lawyers for the Defendant