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Kondi v Provincial Administrator, Department of Western Highlands Province [2004] PGNC 49; N2755 (21 December 2004)

N2755

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 426 OF 2004

CASPAR KONDI
TRADING AS KONUM KALNE TRADING LTD
Plaintiff

V

PROVINCIAL ADMINISTRATOR,
DEPARTMENT OF WESTERN HIGHLANDS PROVINCE
First Defendant

ASSISTANT SECRETARY, POLICY, PLANNING & MONITORING DIVISION, DEPARTMENT OF WESTERN HIGHLANDS PROVINCE
Second Defendant

DIRECTOR, CORPORATE SERVICES,
DEPARTMENT OF WESTERN HIGHLANDS PROVINCE
Third Defendant

THE WESTERN HIGHLANDS PROVINCIAL ADMINISTRATION,
WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Fourth Defendant

MT HAGEN: CANNINGS J
5 NOVEMBER, 21 DECEMBER 2004

RULING ON MOTION

PRACTICE AND PROCEDURE – application to dismiss proceedings – Claims By and Against the State Act – Section 5, notice of claims against the State – Claims By and Against the Western Highlands Provincial Government Act – Section 5, notice of claims against the Western Highlands Provincial Government – whether notice of intention to make a claim was given within six months after the occurrence out of which the claim arose – whether the Court should allow a further period.

Cases cited:

Marinda v The State (1991) N1026
Minato v Kumo and The State (1998) N1768
Tohian and The State v Tau Liu (1998) SC566
William Trnka v The State (2000) N1957
Bokin v The Independent State of Papua New Guinea (2001) N2111
SCR No 1 of 1998; Reservation Pursuant to Section 15 of the Supreme Court Act (2001) SC672
Hewali v Police Force and The State (2002) N2233
Sarakuma Investment Limited Trading as Wabusa Mini Tavern v Peter Merkendi and Others (2004) N2629

Counsel:

Mr B Aipe for the plaintiff
Mr T Kuma for the defendants

CANNINGS J:

INTRODUCTION

This is a ruling on a motion by the defendants to dismiss the proceedings brought by the plaintiff. The plaintiff is claiming K21,990.70 as an outstanding debt. The defendants assert that the plaintiff failed to comply with the Claims By and Against the Western Highlands Provincial Government Act ("the Provincial Claims Act").

BACKGROUND

On 26 April 2004 the plaintiff, Caspar Kondi, trading as Konum Kalne Trading Ltd filed a writ of summons. The statement of claim attached to the writ states that in 2002 the plaintiff repaired, serviced and replaced parts for office equipment belonging to the Western Highlands Provincial Government. Monthly invoices were sent during 2002, totalling K21,990.70. The statement of claim asserts that despite numerous reminders and approaches the defendants showed no interest in paying the plaintiff. There is no claim for damages for loss of business or any other consequential relief. The claim is simply for the payment of K21,990.70 as a debt.

On 29 June 2004 the defendants’ lawyers, Mawa Lawyers, filed a notice of intention to defend.

No defence was filed.

On 2 July 2004 the plaintiff filed a notice of motion seeking judgment in his favour with damages to be assessed. This motion has not been pursued.

On 14 July 2004 the defendants filed a notice of the motion that is presently before the Court, ie that the proceedings be dismissed for failing to comply with the requirements of the Provincial Claims Act.

On 14 September 2004 the plaintiff filed another notice of motion, again seeking the entry of judgment with damages to be assessed. This motion has also not been pursued.

On 21 October 2004 the plaintiff swore an affidavit in which he set out the steps he had taken to secure payment of the alleged debt. On 21 October 2002 he wrote to the Western Highlands Provincial Administration bringing to their attention the outstanding invoices. On 1 November 2002 the plaintiff’s business associates put to the Provincial Administrator that they would be locked out of their premises as they could not pay the rent; and the reason they could not pay the rent was that the Provincial Government was not paying its invoices. On 13 November 2003 Mickay Consultancy Services wrote on behalf of the plaintiff to the Provincial Administrator giving notice of intention to take legal action for non-payment of K21,990.70.

On 5 November 2004 the defendant’s motion, filed on 14 July 2004, was argued before me at Mt Hagen. Mr Kuma, for the defendants, argued that this was a straightforward matter of non-compliance with a condition precedent to the filing of a writ of summons. Mr Aipe, for the plaintiff, asserted that the Court should be slow to dismiss such a proceeding on a technicality. He submitted that the plaintiff has acted in good faith and given notice of the claim before filing the writ of summons.

REQUIREMENTS OF THE PROVINCIAL CLAIMS ACT

This Act is in almost identical terms to the equivalent national legislation, the Claims By and Against the State Act 1996 ("the National Claims Act").
Section 5 of the Provincial Claims Act states:

(1) No action to enforce any claim against the Western Highlands Provincial Government lies against the Western Highlands Provincial Government unless notice in writing of intention to make a claim is given in accordance with this Section by the claimant to —

(a) the Administrator of Western Highlands Provincial Government; or

(b) the Governor.

(2) A notice under this Section shall be given —

(a) within a period of six months after the occurrence out of which the claim arose; or

(b) where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or

(c) within such further period as —

(i) the Provincial Administrator; or

(ii) the court before which the action is instituted,

on sufficient cause being shown, allows.

(3) A notice under Subsection (1) shall be given by —

(a) personal service on an officer referred to in Subsection (1); or

(b) leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 a.m. and 12 noon, or 1.00 p.m. and 4.06 p.m., or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act (Chapter 321).

KEY PRINCIPLES

As I recently pointed out in Sarakuma Investment Limited Trading as Wabusa Mini Tavern v Peter Merkendi and Others (2004) N2629, a case involving an unsuccessful claim against an agency of the East Sepik Provincial Government, there is a long line of cases demonstrating the importance of Section 5 of the National Claims Act. Key principles to emerge from the cases include the following:

• Notice of an intention to make a claim is a condition precedent to issuing a writ of summons. Notice under Section 5 must be given first – before the writ is issued – even if the writ is issued within 6 months after the date of the occurrence out of which the claim arises. (Tohian and The State v Tau Liu (1998) SC566, Supreme Court, Kapi DCJ, Sheehan J, Jalina J.)
  
• Failure to comply with the mandatory requirements of the National Claims Act is a ground on which a default judgment can be set aside. (Marinda v The State (1991) N1026, Woods J.)
  
• The purpose of requiring notice to be given is to give the State early notification, so that it can make enquiries as to the occurrence. It can carry out its own investigations while the trail of evidence is still fresh. It can meaningfully decide whether to settle an intended claim. (Minato v Kumo and The State (1998) N1768, National Court, Akuram J.)
  
• The requirement to give notice to the appropriate person and the method of serving the notice are mandatory. (Bokin v The Independent State of Papua New Guinea (2001) N2111, Davani J.)
  
• The notice under Section 5 must be in writing. It must give sufficient details of the intended claim, eg date, time and place of occurrence. If insufficient details are given, even a notice in writing will not comply with Section 5. (Hewali v Police Force and The State (2002) N2233, National Court, Kandakasi J.)
  
• Under the National Claims Act both the Attorney-General or the Court before which an action is instituted, have a discretion to extend the time for giving notice of a claim. "Sufficient cause" must be shown. There are no hard and fast rules. Good and acceptable reasons for delay must exist, eg inaccessibility to legal advice. (William Trnka v The State (2000) N1957, National Court, Sevua J.)
  

RELATIONSHIP BETWEEN THE PROVINCIAL CLAIMS ACT AND THE NATIONAL CLAIMS ACT

The National Claims Act commenced operation in 1996. For a number of years it was not clear whether it applied to claims against provincial governments. The uncertainty was resolved by the decision of the Supreme Court in SCR No 1 of 1998; Reservation Pursuant to Section 15 of the Supreme Court Act (2001) SC672, (Amet CJ, Los J, Sheehan J, Salika J and Sakora J). The Court decided that the term "the State" includes provincial governments.

In the meantime it appears that all the provincial governments had enacted their own legislation to deal with claims against them. The provincial legislation has apparently not been repealed. At least, it has not been repealed in the case of Western Highlands Province. That means that whenever a person is intending to make a claim against the Western Highlands Provincial Government or any of its officers or agencies, two laws have to be considered.

• the National Claims Act; and
  
• the Provincial Claims Act.
  

An interesting question to ponder is whether the Provincial Claims Act is constitutional. Was it made by the provincial legislature in accordance with a head of power conferred by Division III.3 (Powers and Functions of Provincial Legislatures) of the Organic Law on Provincial Governments and Local-level Governments?

If the answer to that question is ‘No’, perhaps the Provincial Claims Act has not been validly made.

If the answer is ‘Yes’, how are the two Acts to be applied? In practical terms, if a person intends to make a claim against the Western Highlands Provincial Government, who do they have to give notice to?

(a) To the Provincial Administrator or the Provincial Governor?

(b) To the Secretary for Justice or the Solicitor-General?

(c) To any one of the above?

(d) To one of (a) plus one of (b)?

These questions have not been authoritatively dealt with by the National Court or the Supreme Court. They are important and need to be addressed in appropriate court proceedings or by legislative amendments. However, it is not necessary to address them in the present case, as the issues are confined to whether the requirements of the Provincial Claims Act were breached and nobody (other than me) has suggested that that legislation might be unconstitutional or that the plaintiff has not complied with the National Claims Act.

I therefore presume that the Provincial Claims Act is constitutional and that it was necessary for the plaintiff to comply with it.

DID THE PLAINTIFF COMPLY WITH THE PROVINCIAL CLAIMS ACT?

I am satisfied that the plaintiff gave notice in writing of his intention to make a claim against the Provincial Government. The requirements of Section 5(1) and 5(3) are satisfied. What about Section 5(2)? One of Section 5(2)(a), 5(2)(b) or 5(2)(c) has to be complied with.

The claim is not for breach of contract, as such. So Section 5(2)(b) is not applicable. Rather, it is for enforcement of a debt. So Section 5(2)(a) is the relevant provision. Notice had to be given within 6 months after "the occurrence" out of which the claim arose.

What was "the occurrence"? It was an unpaid debt, so it is necessary to refer to the last invoice. It has not been exhibited in Court, but it is apparently dated 20 December 2002. I presume that in the ordinary course of business this invoice would have allowed 30 days for payment. This means that the occurrence, for the purposes of Section 5(2)(a), was 19 January 2003. To comply with Section 5(2), notice of the claim should have been given by 19 July 2003. However it was not given until 13 November 2003. That means it was almost four months late. So Section 5(2)(b) was not complied with.

I now consider Section 5(2)(c). The Provincial Administrator has not given a further period for giving notice. So Section 5(2)(c)(i) does not apply. But has sufficient cause been shown for the Court to allow a further period under Section 5(2)(c)(ii)?

There are a number of factors to take into account in deciding how the Court should exercise the discretion under that provision. These are:

• the reasons for failure to comply with the six months requirement;
  
• whether the claimant has acted bona fides;
  
• the length of the delay;
  
• whether the Provincial Government would be prejudiced by the Court allowing further time; and
  
• where the interest of justice lie.
  

I now apply those considerations. It appears that the plaintiff is a small businessman. The reason for his failure to comply with the six months requirement was that he was taking his own measures to try and get the Provincial Government to pay his invoices. He did not have the benefit of legal advice in the early stages after the occurrence of which the claim arose. I consider that the plaintiff has acted in good faith. There is no evidence that he has done anything underhand or untoward or that there was any impropriety in his dealings with the Provincial Government. The delay of four months is, in the circumstances, not a lengthy one. I do not consider that the Provincial Government would be prejudiced if the Court were to allow a further period for the giving of notice. As to the interests of justice, I take into account that the plaintiff appears to have taken reasonable steps to enforce a debt, the existence of which has not been denied by the Provincial Government. The plaintiff asserts that his company has gone out of business as a result of the Provincial Government’s failure to pay its dues.

All these factors support the exercise of the Court’s discretion to allow further time for the giving of notice. I am satisfied that sufficient cause has been shown under Section 5(2)(c)(ii).

The requirements of Section 5(2) have therefore been complied with.

REMARKS

This is a case that has not been handled well by the Western Highlands Provincial Government. The plaintiff took reasonable steps to recover a debt. It is incumbent on a provincial government or any governmental body in a similar position to either correspond meaningfully with a person in the position of the plaintiff and negotiate the matter or to file a defence to any Court proceedings that are commenced. The Western Highlands Provincial Government has done neither. Instead it has chosen to attempt to have the proceedings dismissed on a technicality. It has not acted reasonably, in my view.

CONCLUSION

The requirements of the Provincial Claims Act have been met by the plaintiff. The order of the Court will be that the defendants’ motion to dismiss the proceedings, is dismissed. Costs will follow the event ie the defendants shall pay the plaintiff’s costs of these proceedings, to be taxed if not agreed.
_____________________________

Lawyers for the plaintiff : Public Solicitor
Lawyers for the defendants : Mawa Lawyers