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Kana Construction Ltd v Were [2018] PGNC 262; N7350 (9 July 2018)

N7350

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 227 OF 2016

BETWEEN:
KANA CONSTRUCTION LIMITED
Plaintiff

AND:
DAVID WERE as the Secretary,
Department of Works & Implementation
First Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GINEA
Second Defendant

WAIGANI: Dingake J
2018: 4 June

PRACTICE AND PROCEDURE – application to strike out defendants defence – applicant argues defence doesn’t disclose a reasonable defence and has a tendency to cause prejudice and delay proceedings – reasons to refuse application discussed – application refused

Counsel:

Mr. Lubia Evore, for the Plaintiff
Ms. Alice Nasu, for the Defendants

9^th July, 2018

1. DINGAKE J: This is an application to strike out the First and Second Defendants’ Defence filed on the 20^th of June, 2016 and for entry of default judgment for a liquidated sum of K3,996,257.28 on the basis that the Defence does not disclose a reasonable defence and has a tendency to cause prejudice and delay the proceedings.
2. The application is brought in terms of Order 8, Rule 27(1) (a) (b) and Order 12 Rules 25(b), 27, 28, 31 and 32 of the National Court Rules.
3. Essentially the crux of the Applicant’s case is that the Defendants’ Defence (which was filed in time) is bad in law because it doesn’t disclose a reasonable defence and has a tendency to cause prejudice and delay proceedings. The Applicant argues that if the Defence is struck out, the implications would be that there would be no defence on record, opening the way for a default judgement to be entered.
4. The Respondents on the other hand argue that their Defence is not incurably bad, and that they have a meritorious defence.
5. The substantive claim herein relates to alleged breach of contract entered into on or about the 6^th of July, 2016, by the parties hereto.
6. It is common cause that the Applicant never had the opportunity to perform the contract and the substantive claim relates to the value of the contract.
7. The crux of the Respondents defence is that, although the signed contract provided that the Second Defendant shall be represented by Secretary for the Department of Works, that was not done as the Secretary was not involved at all in the contract referred to as CSTB Contract No. 2189.
8. The Applicant’s response to the argument on the non involvement of the Secretary for the Department of Works is that his involvement is without consequence because the contract was signed by the Chairman of CSTB who is legally authorized to bind the Second Defendant.
9. I have perused Contract No. 2189, the Contract in issue in this matter. The contract provides that the Second Defendant shall be represented by the Secretary, Department of Works, which did not happen.
10. It may well be that, at the end of the day, once the matter is fully ventilated, the argument that the Contract was signed by a person with authority, being the Chairperson of CSTB, would triumph, but I would be cautious, at this stage, to dispose of this matter on this ground.
11. It is not clear to me, at this stage, why the contract would provide for a particular representative of the State, and that is not done.
12. The above is but one reason why I would be reluctant to strike the Defence as incurably bad in law at this stage.
13. There are two other reasons that militate against the granting of this order.
14. Firstly, the Applicant, in part, seeks a liquidated claim against the State which is not competent in terms of Section 12 (3) of the Claims By and Against the State Act.
15. Secondly, it seems to me that granting the relief sought, for a contract that has not been performed at the substantial amount of money sought, at this stage, without a full ventilation of all the issues implicated may be unjust. I am also mindful that this matter involves public funds.
16. Consequently, for one or all of the reasons aforesaid, I will decline to exercise my discretion to grant the relief sought.
17. In the premises:
    • (a) The Application is refused.
    • (b) There is no order as to costs.

___________________________________________________________
Jema Lawyers: Lawyers for the Plaintiff
Office of the Solicitor General: Lawyers for the Defendants