Angelo Cresseri and Wiwa Korowi v Halla Resources Corporation [1985] PNGLR 294

• Jurisdiction: Papua New Guinea
• Judge: Los J:
• Judgment Date: 27 September 1985
• Citation: [1985] PNGLR 294
• Court: Supreme Court
• Year: 1985
• Judgement Number: SC303

Full Title: Angelo Cresseri and Wiwa Korowi v Halla Resources Corporation [1985] PNGLR 294

Supreme Court: Bredmeyer J, Amet J, Los J

Judgment Delivered: 27 September 1985

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

ANGELO CRESSERI AND WIWA KOROWI

V

HALLA RESOURCES CORPORATION

Waigani

Bredmeyer Amet Los JJ

29 April 1985

27 September 1985

PRACTICE — Pleading — Statute of Frauds — Not specifically pleaded — Raising at trial — Where defendant taken by surprise on pleadings — Particular circumstances — Statutes of Frauds and of Limitations (Ch No 330).

CONTRACT — Guarantee — Action on — Statute of Frauds — Statute not specifically pleaded — When may be raised at trial — Where defendant taken by surprise on pleadings — Particular circumstances — Statutes of Frauds and of Limitations (Ch No 330).

A statement of claim for moneys owing under a contract for the supply and delivery of cement contained a claim for goods sold and delivered and moneys had and received and a further claim:

"... for money due on account stated between them in a guarantee by the second and third named defendants of debts of the first named defendant and more particularly described above ...".

The defence contained the following paragraph:

"The second and third defendants deny the plaintiff's claim as endorsed on the statement of claim and say that there is no guarantee as alleged or at all by them in respect of the debts of the first defendant";

to which the plaintiff in reply alluded to particulars of an oral guarantee "with a document ... which is a note in writing of the said guarantee".

The trial judge rejected a request to raise at the trial the Statutes of Frauds and of Limitations (Ch No 330) as a defence it not having been specifically pleaded.

Held

(1) A defendant may be allowed to raise the Statutes of Frauds and of Limitations (Ch No 330) as a defence without first pleading it where the plaintiff's pleading is so bad that it has caught the defendant by surprise.

Brunning v Odhams Brothers Ltd (1896) 75 LT 602, adopted and followed.

(2) In the circumstances, although the reference in the statement of claim, to a claim for money due on an account stated was wrong and misleading, and although reference to a "claim ... in a guarantee ..." did not accord with proper pleading practices in respect of a claim on a guarantee, the paragraph together with the subsequent pleadings in reply fairly and adequately gave notice that at least part of the claim was on a guarantee and particulars thereof could have been sought:

Brunning v Odhams Brothers Ltd (1896) 75 LT 602, distinguished.

Cases Cited

Brunning v Odhams Brothers Ltd (1896) 75 LT 602.

Clarke v Callow (1876) 46 LJ QB 53.

Gonin decd, In Re [1979] 1 Ch 16.

Appeal

This was an appeal from a decision of Woods J in which he entered judgment for the plaintiffs against the defendant contractor on an original contract and against the defendants/guarantors on an oral guarantee.

Counsel

I Molloy and K Y Kara, for the appellants.

R F Mango and C J Coady, for the respondent.

Cur adv vult

27 September 1985

BREDMEYER J: This is an appeal from a decision of Woods J. The plaintiff, Halla Resources Corporation (hereinafter "Halla Resources"), is a Korean company and it agreed to supply cement to a Papua New Guinea company C & W Builders Suppliers Pty Ltd (hereinafter "Builders Suppliers") a company especially formed by Mr Cresseri and Mr Korowi for that purpose. The cement was delivered and sold but Halla Resources was not paid. Halla Resources sued Builders Suppliers and Mr Cresseri and Mr Korowi and obtained judgment against Builders Suppliers on the original contract, and against Mr Cresseri and Mr Korowi personally on an oral guarantee, for K106,196.46 plus certain amounts of interest. Mr Cresseri and Mr Korowi, who were the second and third defendants in the trial below, have appealed against that decision. The first defendant Builders Suppliers is insolvent and has not appealed.

The learned trial judge held that although the Statute of Frauds and of Limitations Act (Ch No 330) could apply to an oral guarantee to pay the debt of another, it is an enactment as to evidence, it has to be specifically pleaded as a defence and he cited the National Court Rules, O 8, r 14. He found that it was not so pleaded in this case so the second and third defendants could not get the benefit of it.

The relevant parts of s 5 of the Statute of Frauds and of Limitations Act read:

"No action shall be brought ... whereby to charge the defendant upon any special promise to answer for the debt default or miscarriages of another person ... unless the agreement upon which such action shall be brought or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorized."

The National Court Rules, O 8, r 14, provides:

"Matters for specific pleading

In a defence or subsequent pleading the party pleading shall plead specifically any matter, for example, performance, release, any statute of limitation, fraud, or any fact showing illegality:

(a) which he alleges makes any claim, defence or other case of the opposite party not maintainable;

(b) which, if not pleaded specifically, may take the opposite party by surprise; or

(c) which raises matters of fact not arising out of the preceding pleadings."

Our rule that specific defences, such as the Statute of Frauds, must be specifically pleaded is not unique to Papua New Guinea. It is copied from England where it had existed at least since the Judicature Acts, see Clarke v Callow (1876) 46 LJ QB 53. The current English rule is O 18, r 8. Mr Molloy, who argued the case capably for the appellant did not dispute this general rule but argued that in this case the plaintiff's statement of claim was so badly pleaded that it barely disclosed a cause of action and that the learned trial judge erred in allowing it to succeed in that form. Mr Molloy argued that the trial judge should have required the plaintiff to amend and should have given the plaintiff leave to do so; and consequently given the defendant leave to file a new defence and hence an opportunity to plead the Statute of Frauds. Mr Molloy cited Brunning v Odhams Brothers Ltd (1896) 75 LT 602 in support of the proposition that a defendant can be allowed to raise the Statute of Frauds as a defence without fist pleading it where the plaintiff's pleading is so bad that it has caught the defendant by surprise. The case does support that...