Kui Valley Business Group Inc v Hugh Mosley

• Jurisdiction: Papua New Guinea
• Judge: Yagi J
• Judgment Date: 18 August 2011
• Citation: (2011) N4548
• Court: National Court
• Year: 2011
• Judgement Number: N4548

Full : WS. NO. 959 OF 2009; Kui Valley Business Group Incorporated v Hugh Mosley and Deloitte Touche Tohmatsu (2011) N4548

National Court: Yagi J

Judgment Delivered: 18 August 2011

N4548

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 959 OF 2009

BETWEEN:

KUI VALLEY BUSINESS GROUP INCORPORATED

Plaintiff

AND:

HUGH MOSLEY

First Defendant

AND:

DELOITTE TOUCHE TOHMATSU

Second Defendant

Kainantu/Goroka: Yagi J

2011: 17th & 18th August

EVIDENCE – Affidavit evidence – Evidence Act, s. 34 - use of affidavit in an interlocutory application - objections - National Court Rules, Order 11 Rules 23(1)(b) and 28(b) – affidavit containing matters which are hearsay, opinion, scandalous and oppressive - affidavit struck out and removed from the file.

Cases Cited:

Mathias Karani v Yawa Silupa & Electoral Commission of PNG (2004) N2517

Counsel:

D. Umba, for the Plaintiff

M. Henao, for the Defendants

RULING

18th August, 2011

1. YAGI J: There are two interlocutory applications before the Court for hearing. The first application is by the plaintiff in which the plaintiff seeks to have the defendants’ defence struck out and have summary judgment entered in its favour under Order 12 Rule 38(1)(b) of the National Court Rules (NCR). The second application by way of a cross motion is by the defendants to strike out or dismiss the plaintiff’s notice of motion for being incompetent under Order 8 of the Motions Amendment Rules 2005 and for abuse of process under Order 12 Rule 1 of the NCR.

2. The defendants have also raised two grounds of objection in their cross motion. These objections relate to the admissibility of the affidavit or parts thereof which is being relied upon by the plaintiff in support of its application. These objections are set out in paragraphs 3 and 4 of their cross motion and are as follows:

“3. The affidavit of George Kuno purportedly sworn on 4 April 2011 and filed 5 April 2011 be taken off the file, pursuant to Order 11 Rule 28(b) and/or Order 12 Rule 1 of the National Court Rules.

4. Further or in the alternative, paragraphs 15, 16, 17, 17(a), 17(b), 17(c), 17(d), 17(e), 17(f), 17(g), 17(g)(ii), 17(g)(iv), 17(g)(v), 17(g)(vi), 17(g)(vii), 17(g)(viii), 17(g)(ix), 17(g)(x), 17(g)(xii), 17(i), 17(k), 17(l), 18 contained in the Affidavit of George Kuno purportedly sworn 4 April 2011 and filed 5 April 2011 be struck out, pursuant to Order 11 Rule 28(a) of the National Court Rules.”

3. At the hearing both counsel agreed that the defendants’ objections be dealt with first as a determination in favour of the objections may render the plaintiff’s application incompetent. I accepted the approach agreed to by counsel in view of the evidentiary requirement under Order 12 Rule 38(1)(b) of the NCR which the plaintiff’s application is based.

4. A brief background of the case is this. The plaintiff is a local incorporated business group from the Simbu Province. In 2003 it was placed under liquidation pursuant to a National Court order. The first defendant is a qualified accountant and at all material times a partner in the accounting firm Deloitte Touche Tohmatsu, the second defendant. At the time of liquidation, the Court appointed the first defendant as the liquidator of the plaintiff. The appointment was made under the provisions of the Companies Act. The first defendant carried out his duties and responsibilities as the liquidator of the plaintiff’s affairs and business until 2008 when the Court terminated the liquidation. He therefore relinquished the control of the affairs and business of the plaintiff to its executive committee and shareholders.

5. On taking over from the first defendant, the plaintiff took strong views about the manner in which the second defendant conducted the liquidation on its behalf. It therefore filed this action against the defendants.

6. The claim by the plaintiff against the defendants in the proceedings is essentially for damages for alleged breaches of statutory duties under the Companies Act. It claims that the first defendant was negligent in the discharge of his duties and responsibilities by failing to properly conduct the liquidation on its behalf. The defendants have denied the allegations and filed a defence to that effect.

7. The plaintiff seeks to rely on two affidavits sworn by Mr. George Kuno. The first affidavit was filed on 5th April 2011 and a further or supplementary affidavit filed on 1st July 2011. The objection by the defendants is directed at the earlier affidavit.

8. The defendants contend that the earlier affidavit should not be admitted into evidence and be relied upon by the plaintiff in these proceedings in particular for the purpose of its application on the basis that it contains hearsay materials and does not constitute facts in breach of s. 34 of the Evidence Act and Order 11 Rule 23(1)(b) of the NCR. Mr. Henao for the defendants points to Annexure “E” of the first affidavit as a classical example of the breach and submits that such a breach is serious enough that warrants sanction particularly in the context of the kind of relief being sought by the plaintiff. The defendants further argue that the relevant parts of the affidavit referred to in paragraph 4 of its cross motion contains allegations which are scandalous, irrelevant and oppressive as to the reputation and standing of the first defendant and Mr. James Kruse and hence offends Order 11 Rule 28(b) of the NCR.

9. Mr. Umba for the plaintiff concedes to the discrepancies in respect to the amendments regarding the dates on which the affidavit was attested, however, argues that these discrepancies are relatively minor in nature and do not affect the substance of the matters deposed to in the affidavit and the court should therefore exercise its discretion and allow the affidavit. Counsel further referred to various paragraphs in the affidavits of Mr. George Kuno and sought to explain the basis of the averments or statements and submits that the parts of the affidavits complained of are not scandalous, irrelevant or oppressive and therefore the objections should be dismissed.

10. I have considered the arguments by the parties and also perused the affidavit of Mr. George Kuno and particularly the objectionable parts.

11. I start by considering the grounds of the objection. Reliance is placed on s. 34 of the Evidence Act and Order 11 Rules 23(1)(b) and 28(b) of NCR.

12. Section 34 of the Evidence Act states:

“34. Evidence by affidavit

(1) Subject to this section, in any legal proceedings before a tribunal to which this Division applies the tribunal may at any time order that -

(a) a particular fact or facts may be proved by affidavit; or

(b) the affidavit of a witness may be read in the proceedings on such conditions as the tribunal thinks reasonable; or

(c) a witness whose attendance ought to be dispensed with be examined by interrogatories or before an examiner named by the tribunal.

(2) Where it appears to the tribunal that a party to, or a person interested in, the proceedings bona fide and reasonably requires the production of a witness for cross-examination and that the witness can be produced, an order shall not be made under Subsection (1) authorizing his evidence to be given by affidavit.

(3) Nothing in an order under Subsection (1) affects the power of the tribunal to refuse to admit evidence tendered in accordance with any such order if, in the interests of justice, the tribunal thinks it proper to do so.”

12. Rule 23 of Order 11 states:

“(1) Where there is any interlineations, erasure or other alteration in the jurat or body of an affidavit –

(a) the affidavit may nevertheless be filed, unless the Court otherwise orders; but

(b) the affidavit may not be used without the leave of the Court unless the person before whom the affidavit is sworn initials the alteration and, in the case of an erasure, re-writes in the margin of the affidavit any words or figures written on the erasure and signs or initials them.

(2) Sub-rule (1) applies to an account verified by affidavit as if the account were part of the affidavit.”

14. Order 11 Rule 28(b) provides:

“Where there is scandalous, irrelevant or otherwise oppressive matter in an affidavit, the Court may order that –

(a) ………………………..

(b) the affidavit be taken off the file.”

15. The basic function of a court of law is to receive evidence, make a finding of fact based on the evidence and apply the law to the facts in order to decide an issue in a just, fair and impartial manner. Subject to law, a decision, judgment or order of the court must be respected and enforced without question by everyone in society. For the decision to be accepted and respected, the Court must act on evidence that is strong, convincing, coherent and credible. The court should not act on evidence that is questionable. Therefore the rules of evidence have developed to ensure that there is cogency and credibility in the evidence that is to be acted upon by a court of law. This brings integrity into the legal and judicial process. The rules therefore provide the necessary safe guards to prevent the...