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Yama Security Service Ltd v Warupi [1999] PGNC 67; N1919 (2 July 1999)

Unreported National Court Decisions

N1919

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 225 OF 1999
BETWEEN: YAMA SECURITY SERVICE LIMITED
PLAINTIFF
AND: ANDREW WARUPI
FIRST DEFENDANT
AND: MOTOR VEHICLES INSURANCE TRUST
SECOND DEFENDANT

Waigani

Sevua J
30 June 1999
2 July 1999

PRACTICE AND PROCEDURE – Stay of proceedings – Action on contract – Arbitration clause – Power of Courts – Discretionary Power – Arbitration Act Ch. 46 – Termination of contract not subject to arbitration clause – Application dismissed with costs.

Cases Cited

Mauga Logging Company Pty Ltd –v- Okura Trading Co. Ltd [1978] PNGLR 259.

Counsel

J. Kuimb, for Plaintiff/Respondent

D. Lightfoot, for 1^st Defendant/Applicant

J. Sirigoi, for 2^nd Defendant

2 July 1999

SEVUA J: The first defendant, by way of notice of motion, has applied for an order that the whole proceedings in this suit be stayed pursuant to s.4 of the Arbitration Act, Ch. 46.

The plaintiff ‘s claim against the defendants in this proceedings, is for damages for breach of contract. The evideefore me, from boom both the first defendant/applicant and the plaintiff, referred to a written contract dated 5^th November, 1998. A perusal of agre reveals eals that it is a security service contract bact between the plaintiff and the second defendant.

The first defenapplicant relies on clause 10(c) and (d) of the agreement which I set out fully here.

“(c) In thet of any misunderstaerstanding or disagreement arising between the company and the Hirer out of this Agreement, the parties shalempt duce isunderstanding or disagreement by mutual consent.

(d) <&#160 &#160 However, e event that the the parties are unable to resolve the matter, the Arbitration Act (Chapter 46) apply.”

At the hearing of this applon, Iired Lightfoot what the “misunderstanding”#8221; or ; or ̶“disagreement” was that necessitated arbitration and Mr Lightfoot said termination of the contract was the misunderstanding or disagreement which should be referred to arbitration. Witpect, I do not agree wiee with Mr Lightfoot.

Usually, a dispute as to the interpretation or application of a term of a cot is referred to arbitration pursuant to an arbitration clause. In my view, terminatiination of a contract is usually not a dispute requiring arbitration, unless the parties to the contract specifically agree to it in the contract. That is not the cere.

Ev

Even if I am wrong on that view, I find it diff difficult to follow the logic of the applicant’s argument. On3 of ffidavit in supportpport of this application, he denies the existence of the contract.ract. I noo that in his defence ence applicant denies par 4 of the plaintiff ‘s statement of claim which relates to allegallegations that he entered into a writtenract with the plaintiff.

If he denies entering into into a written agreement with the plaintiff, and denies the existence of such a contract, how does he reconcile his denial with his reliance on clause 10(c) & (d) of a contract?

In my view, the applicant either acknowledges the existence of the contract and that he executed it thus placing reliance on the arbitration clause, or if he denies executing the contract and denies its existence, he cannot rely on the arbitration clause. The plaf is simply saying,ying, no there is no contract, but I rely on the arbitration clause if there is a contract. In my view, is oeous and rand runs contrary to logic and common sense. Its akin rape trial rial wial where the defence counsel says his cldid not rape the prosecutrix, but if he did, it was by consent. Whatense!