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Glennel G Mari (trading as Wani Connection) v Numara [2019] PGNC 285; N8089 (6 November 2019)

N8089

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1387 of 2015

BETWEEN:
GLENNEL G MARI trading as WANI CONNECTION
Plaintiff

AND:
TIMOTHY NUMARA in His Former Capacity as the Corporate Service Manager to the Office of THE NATIONAL LIBRARIES, ARCHIVES & LITERACY
First Defendant

AND:
JACOB HAVELAWA, in His Former Capacity as the Director General to the OFFICE OF THE NATIONAL LIBRARIES ARCHIVES & LITERACY
Second Defendant

AND:
KASI KAKITO, Acting Director General, OFFICE OF NATIONAL LIBRARIES & ARCHIVES & LITERACY
Third Defendant

AND:
DR. UKE KOMBRA, the Acting Secretary, DEPARTMENT OF EDUCATION
Fourth Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

Waigani: Anis J
2019: 18 October and 6 November

NOTICE OF MOTION – dismissal of proceeding – Order 12 Rule 40(1)(a)(b) and (c) of the National Court Rules – want of compliances – section 2A of the Claims By and Against the State Act 1996 – issuance of Integrated Local Purchase Order (ILPOC) and Authority to Pre-commit Expenditure (ACP) - want of compliance – section 47B, 47C and 47D of the Public Finance Management Act 1995 –section 7 & 11 – Frauds and Limitations Act 1988

Cases Cited:

Terry Shelly v Yawe Riyong (2017) SC1567
Jhelson Rat t/a Bara Construction v. Timothy Numura and Ors (2018) N7380
PNG Water Board v Gabriel M Kama (2005) SC821
Island Helicopter Services Ltd v Wilson Sagati & Ors (2008) N3340

Counsel:

Mr. Tamarua, for the Plaintiff/Respondent
Ms. M Elisha, for the third, fourth and fifth Defendants

RULING

6^th November, 2019

1. ANIS J: This application was filed by the 3^rd, 4^th and 5^th defendants (defendants) on 28 March 2019. It was heard on 18 October 2019. I reserved my ruling thereafter.

2. This is my ruling.

MOTION

3. The main relief sought in the notice of motion states, and I quote in part:

That the proceedings be dismissed for being an abuse of the Court process pursuant to Order 12 Rule 40(1)(a), (b), and (c) of the National Court Rules for non-compliance of:

1. Section 5(2)(b) of the Claims By and Against the State Act 1996;
2. Section 2A of the Claims By and Against the State Act 1996;

100. Section 47B-D of the Public Finance Management Act 1995

SOURCE

4. The jurisdictional basis of the notice of motion was not contested. It is based on Order 12 Rule 40(1) of the National Court Rules. The defendants seek to dismiss the proceeding based on (a), want of reasonable cause of action, (b), frivolity and (c), abuse of the Court process.

BACKGROUND

5. The plaintiff’s claim is this. He said on 1 November 2011, he entered into a written contract with the first and second defendants. The contract had been for general building maintenance work at the premises of the defendants, in particular, the premises of the National Libraries, Archives and Literacy. The plaintiff said that the contract was worth K272, 250. He said he completed the contract and submitted his invoice of K272, 250 to the defendants. From the said invoice, he said he received two (2) cheque payments from the first and second defendants. He said the first cheque was for a sum of K43, 577.78 and it was received on 24 December 2012. And the second cheque, he said, was for a sum of K22, 867.30 and it was received on 22 December 2013. Thetotal payment received was K66, 445.08.

6. The plaintiff therefore claims that the defendants still owes him K205, 804.92 and so he files this proceeding to recover the debt. He also seeks other relief, namely, damages, special damages for a sum of K3, 775.00, interest and cost.

ISSUES

7. The main issues, in my view, are, (i) whether the plaintiff gave notice to sue the State within the required period under section 5 (section 5 notice) of the Claims By and Against the State Act 1996 (CBASA), and (ii), whether the plaintiff has provided sufficient or prima facie evidence in relation to the requirements of section 2A of the CBASA and section 47B-D of the Public Finance Management Act 1995 (PFMA).

SECTION 5 NOTICE

8. Section 5(1) of the CBASA states, and I quote in part:

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

(a) the Departmental Head of the Department responsible for justice matters; or

(b) the Solicitor-General.

(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 Principal Legal Adviser; or

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

on sufficient cause being shown, allows.

(Underlining is mine)

9. In this instance, the plaintiff pleads that he gave section 5 notice to the State as required by the CBASA on 28 July 2015. The defendants acknowledge receipt of the said notice. However, they submit that the notice was received well after the 6 months period as required under section 5(2)(b) of the CBASA which was why it was rejected. The issue for me to decide is this. When did the plaintiff become aware of the alleged breach? I firstly turn to the undisputed facts, which are as follows. The plaintiff served its notice of intention to sue the State by letter on 28 July 2015. Based on the pleading (i.e., the statement of claim), the defendants contracted the plaintiff to commence work on 2 November 2011. The plaintiff quoted its scope of work at a total cost of K272, 250. The plaintiff commenced and completed the work 15 days later on 17 November 2011. The pleading states that payment was not done immediately because it was required under the contract that a certificate of completion had to be issued first by the defendants upon completion of work. On 27 February 2012, the defendants issued a certificate of completion. On 24 December 2012, the defendants paid their first cheque of K43, 577.78 to the plaintiff. On 22 December 2013, the defendants paid their second cheque of K22, 867.30 to the plaintiff, which was the last payment. The plaintiff gave notice of his intention to sue the State on 28 July 2015. On 30 September 2015, he filed this proceeding.

10. Section 5(2)(b) of the CBASA requires a plaintiff to give notice after he or she becomes aware of the allege breach of contract. After the certificate of completion was issued on 27 February 2012, the payment of K272, 250 would have been due. Payments, if validly owed, would have been due as of 27 November 2012 because work had been completed, according to the pleading, on 17 November 2011. Now, 27 February 2012 may be the original date where the plaintiff’s right of action may have arisen, but is that the correct date to compute time based on the pleading and the evidence that has been filed? I note that counsel for the defendants has computed time based on date ofthe last payment, that is, on 22 December 2013. I note that counsel did not explain further on that. For clarity and in my view, the said computation by counsel is consistent with section 7(1) of the Frauds and Limitations Act 1988 (F&LA). See case: Terry Shelly v Yawe Riyong (2017) SC1567. Section 7 states, and I quote in part:

7. Fresh accrual of action on acknowledgement or part-payment.

(1) Subject to Subsection (2) and Sections 8, 9 and 10—

(a) where—

(i) a right of action has accrued to recover a debt or other liquidated pecuniary claim; or

(ii) a claim is made to, or to any share or part in, the personal estate of a deceased person; and

(b) the person—

(i) liable in respect of that debt or other liquidated pecuniary claim; or

(ii) accountable in respect of that personal estate,

acknowledges or makes a part payment in respect thereof,

the right to the debt or other liquidated pecuniary claim, or the claim to, or to a share or part in, the personal estate of the deceased person, is deemed to have accrued on, and not before, the date of theacknowledgement or the date of the last payment, as the case may be.

......

(Underlining mine)

11. So, the plaintiff herein is deemed to be aware of the breach on or about 22 December 2013. Six months after that would be June of 2014. The plaintiff, however, did not give his section 5 notice within the said 6 months period. Instead, he gave his notice outside the 6 months period on 28 July 2015 before he filed the proceeding on 30 September 2015.

12. I therefore find that the plaintiff did not give his section 5 notice within 6 months as required by section 5 the CBASA. I will dismiss the claim on that basis, but before I do so, let me also address the next issue.

SECTION 2A & SECTION 47B-D

13. The defendants also allege non-compliance with section 2A of the CBASA. Section 2A reads, and I quote:

2A. Claim against the State not enforceable in certain circumstances.

(1) In this section—

"Authority to Pre-commit Expenditure" an Authority to Pre-commit Expenditure issued under Section 47B of the Public Finances (Management) Act 1995;

"Integrated Local Purchase Order and Claim (ILPOC)" means Finance Form 4A—Integrated Local Purchase Order and Claim issued in accordance with the Finance Instructions under the Public Finances (Management) Act 1995.

(2) A claim for the price arising from the sale of property or stores or for the supply of goods or services to the State shall not be enforceable, through the courts or otherwise, unless the seller of the property or stores or the supplier of the goods or services produces—

(a) a properly authorized Integrated Local Purchase Order and Claim (ILPOC); or

(b) an Authority to Pre-commit Expenditure,

relating to the property or stores or goods or services, the subject of the claim, to the full amount of the claim.

(3) The provisions of this section apply to an alleged sale of property or stores or to an alleged supply of goods or services after 1 March 2003.

14. Section 47B-D of the PFMA states, and I quote in part:

47B. Authority to pre-commit expenditure.

(1) The Finance Departmental Head may issue to a Departmental Head an Authority to Pre-commit Expenditure in relation to the purchase of real or personal property or for the supply of goods or services where the Finance Departmental Head is satisfied that —

(a) in the case of proposed expenditure exceeding K100,000.00 —

(i) the provisions of this Part have been complied with in relation to the purchase or supply; and

(ii) funds will be available to meet the proposed schedule of payments for the purchase or supply; and

(b) in the case of proposed expenditure not exceeding K100,000.00, the circumstances of the proposed expenditure are such that it is appropriate to authorise the Departmental Head to enter into a contract for the purchase of real or personal property or stores or for the supply of goods or services notwithstanding that the full amount of funds to meet the payment required under the contract is not immediately available.

(2) An Authority to Pre-Commit Expenditure under Subsection (1) shall specify —

(a) the purchase of real or personal property or stores or the supply of goods or services to which it relates; and

(b) the maximum amount to which the Authority extends.

(3) An Authority to Pre-Commit Expenditure under Subsection (1) authorises the Departmental Head to enter into a contract for the purchase of public property or for the supply of goods and services specified in the Authority to the extent of an amount not exceeding the maximum amount specified in the Authority.

47C. Certain contracts null and void.

(1) In this section—

"Authority to Pre-commit Expenditure" means an Authority to Pre-commit Expenditure issued under Section 47B;

"Integrated Local Purchase Order and Claim (ILPOC)" means Finance Form 4A—Integrated Local Purchase Order and Claim issued in accordance with the Financial Instructions.

(2) A contract for the purchase of property or stores or for the supply of goods or services entered into, or purported to have been entered into, by or on behalf of the State, in respect of which purchase or supply no Authority to Pre-commit Expenditure has been issued or no Integrated Local Purchase Order and Claim has been issued, is null and void.

(3) The provisions of this section apply in respect of contracts entered into, or purported to have been entered into, by or on behalf of the State, on or after 1 March 2003.

47D. Claim against State not enforceable in certain circumstances.

(1) A contract purportedly entered into for and on behalf of the State without full compliance of this Act is null and void and shall not be enforced in any court.

(2) Any property, goods or services supplied under a contract referred to in Subsection (1), may not be sued upon and no claim is enforceable in respect of them, in any court.

15. Justice Hartshorn in Jhelson Rat t/a Bara Construction v. Timothy Numura and Ors (2018) N7380, stated, and I quote in part:

In regard to the submission by Jhelson that a General Expenses Form and a Requisition for Goods and Services were endorsed in support of the contract, that a Certificate of Completion was issued and therefore the contract is valid and enforceable, s. 47D PFMA and 2A Claims Act are quite clear. A contract purportedly entered into for and on behalf of the State without full compliance of the PFMA is null and void and shall not be enforced in any court and any property, goods or services supplied under such a contract may not be sued upon and no claim is enforceable in respect of them, in any court. Further, such a claim shall not be enforceable through the court unless the supplier of the services produces the requisite Integrated Local Purchase Order and Claim (ILPOC) or Authority to Pre-commit Expenditure (APC).

16. I find His Honour’s view relevant and adopt them as my own herein.

17. Let me firstly refer to the affidavit in support of Julius Bakaman filed on 28 March 2018. Mr. Bakaman deposes at paragraph 7 that the General Expenses form which is attached to the plaintiff’s affidavit of 28 October 2015, is different to an Integrated Local Purchase Order (ILPOC) or an Authority to Pre-commit (APC). I have had the benefit of considering the forms. I note that the plaintiff has not produced any other documents except those provided under annexures FI and F2 of his affidavit. In my view, these forms are not consistent with the designated forms, in particular, an ILPOC or an APC. The plaintiff, if I am to seriously consider his claim, is obliged under section 2A(2) of the CBASA to produce the issued ILPOC or the APC. In this case, he has not produced evidence to that effect. This is also not reflected in his pleading. And the defendants have provided evidence to say that no such ILPOC or APC were ever issued in relation to the contract or the claim by the plaintiff.

18. In my view, I would also dismiss the claim based on want of reasonable cause of action.

SUMMARY

19. I will grant the defendants’ notice of motion. I find that the plaintiff’s section 5 notice of 28 July 2015 was given outside the 6 months period as required under the CBASA. I also find that the plaintiff does not have a valid or a reasonable cause of action against the defendants.

COST

20. Cost is discretionary. I will award cost to follow the event. In this case, the defendants have asked that costs should be awarded on an indemnity basis.

21. Has the plaintiff been forewarned of the defendants’ intention to seek cost on an indemnity basis? See cases: PNG Water Board v Gabriel M Kama (2005) SC821 and Island Helicopter Services Ltd v Wilson Sagati & Ors (2008) N3340. These cases, to name a few, state that before a party may seek cost on solicitor/client or on an indemnity basis, that it must give notice of its intention to seek cost on such a cost scale. In this case, I note that there is evidence of forewarning, and I refer to annexure E1 to the affidavit of Mr. Bakaman. At the second last paragraph at page 3 of the letter by the defendants which is dated 28 February 2018, the defendants state and I quote, We will rely on this letter to seek costs on indemnity basis should our application succeeds.

22. I am satisfied that the plaintiff has been forewarned. I will therefore order the plaintiff to pay the defendants’ cost of the proceeding on an indemnity basis which may be taxed if not agreed.

REMARK

23. I note that the plaintiff has also pleaded section 11 of the F& LA at paragraph 29 of his statement of claim. The plaintiff, in essence, pleads that because the defendants have made two part-payments in regard to his claim, they are therefore liable pursuant to section 11 of the F& LA.

24. Section 11(1) states, and I quote:

11. Effect of part-payment.
    

(1) Subject to Subsection (2), a part-payment made in respect of a debt or other liquidated pecuniary claim binds all persons liable in respect of that debt or liquidated pecuniary claim.

(Underlining mine)

25. I note that the key words there is all persons liable.

26. In the present case, despite the two cheque payments the defendants made to the plaintiff, they cannot, in my view, be regarded as persons liable within the meaning of section 11, and I say this in light of the Court’s findings, namely, want of section 5 notice and also want of a reasonable cause of action. These reasons in my view make the defendants qualify as persons who are not liable and therefore section 11 of the F&LA shall or does not apply in this instance.

ORDERS OF THE COURT

27. I make the following orders:

(i) The proceeding is dismissed for failure by the plaintiff to give his section 5 notice within the 6 months limitation period, pursuant to the Claims By and Against the State Act 1996 and for want of reasonable cause of action.

(ii)The plaintiff shall pay the third, fourth, and fifth defendants’ costs of the proceedings on an indemnity basis which may be taxed if not agreed upon.

(iii)Time for entry of these orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith.
________________________________________________________________
Lomai &Lomai Attorneys: Lawyers for the Plaintiff

Solicitor General: Lawyers for the Third, Fourth and Fifth Defendants