Rex Paki v Motor Vehicle Insurance Limited (2010) SC1015

• Jurisdiction: Papua New Guinea
• Judge: Salika DCJ, Gabi J, Hartshorn J
• Judgment Date: 09 February 2010
• Court: Supreme Court
• Citation: (2010) SC1015
• Docket Number: SCA NO. 68 OF 2006
• Year: 2010
• Judgement Number: SC1015

Full Title: SCA NO. 68 OF 2006; Rex Paki v Motor Vehicle Insurance Limited (2010) SC1015

Supreme Court: Salika DCJ, Gabi J, Hartshorn J

Judgment Delivered: 9 February 2010

SC1015

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 68 OF 2006

BETWEEN:

REX PAKI

Appellant

AND:

MOTOR VEHICLE INSURANCE LIMITED

Respondent

Waigani: Salika DCJ, Gabi J, Hartshorn J

2009: 31st August

2010: 9th February

APPEAL – Appeal against defence being struck out for failure to give discovery of documents – consideration of an award of costs on an indemnity basis

Facts:

The Appellant appealed the decision of the National Court that ordered that his defence be struck out and that damages be assessed as he had failed to give discovery of certain invoices. The appellant argues that once the Court had made a finding that the invoices did not exist it erred by then ordering that the defence be struck out for failure to give discovery of the same (non-existent) invoices.

Held:

1. The finding of Davani J. concerning the appellant’s conduct as to the discovery of the invoices, and Her ruling to strike out the defence was in the circumstances proper and appropriate and in the exercise of discretion under O 9 r 15 of the National Court Rules.

2. With respect to the Deed of Release, it has no relevance to the question of discovery. It is agreed that the appellant was required by law to maintain the invoices as part of the records of the liquidation for seven (7) years.

3. The actions of the appellant have caused the respondent an enormous amount of wasted time, effort and money. The conduct of the appellant was improper, unreasonable and blameworthy.

4. This appeal is dismissed

5. The decision of Davani J. to strike out Mr. Paki’s defence in proceedings WS No. 658 of 2002 is upheld

6. Pursuant to Order 9 Rule 15 of the National Court Rules judgment is entered for MVIL for damages to be assessed, plus interest and costs

7. Mr. Paki shall pay the costs of MVIL in respect of the National Court proceedings; and

8. Mr. Paki shall pay the costs of MVIL of these appeal proceedings on an indemnity basis, including any hearing as to quantum.

Cases cited:

PNG Cases

Aisip L Duwa v Ronald Moyo Senge [1995] PNGLR 140

Alex Latham and Kathleen Marie Latham v Henry Peni [1997] PNGLR 435

Bean v Bean [1980] PNGLR 307

Benny Balepa v Commissioner of Police (1994) N1374

Bishop Brothers Engineering Pty Ltd v Ross Bishop (1989) N705

Don Polye v Jimson Sauk Papaki & Electoral Commission [2000] PNGLR 166

Gulf Provincial Government v Baimuru Trading Ltd [1998] PNGLR 311

Island Helicopter Services Ltd v Wilson Sagati (2008) N3340

Jacob Sarapel v Fred Kulumbu (2003) N2405

Mision Asiki v Manasupe Zurenuoc (2005) SC 797

Peter Aigilo v Morauta (2001) N2102

PNG Waterboard v Gabriel M Kama (2005) SC 821

POSF Board v Sailas Imanakuan (2001) SC 677

Public Curator v Bank of South Pacific Ltd (2006) SC 832

Salvation Army (PNG) Property Trust v Ivar Jorgenson and Rex Vagi (1997) N1644

Thiess Bross (Pacific) Pty Ltd v Chief Collector of Taxes [1982] PNGLR 385

William Moses v Otto Benal Magiten (2006) SC 875

Willie Mel v Coleman Pakalia (2005) SC 790

Overseas Cases

Austrim Nylex Ltd v Knoll and Ors (No. 3) (2002) VSC 290

Holden & Co v Crown Prosecution Service [1990] 2 QB 262

Myers v Elman [1940] AC 282

Orchard v Southern electricity Board [1987] QB 565

P.C.R.Z. Investments Pty Ltd v National Golf Holdings Ltd & Anor (2002) VSCA 24

Ridehalgh v Horsefield [1994] 3 All ER 848

Sirois v Centennial Pontiac Buick GMC Ltd and General Motors of Canada Ltd (1988, 89) N.B.R. (2d) 244

Counsel

J. Brookes, for the appellant

G. Epor, for the respondent

9th February, 2010

1. BY THE COURT: This is an appeal from the decision of Davani J. delivered on 25th May 2006 whereby Her Honour ordered that the appellant’s defence be struck out and that damages be assessed.

2. The proceedings before Her Honour concerned an application by Motor Vehicle Insurance Limited, the respondent, to have the defence of

Rex Paki, the appellant, struck out pursuant to Order 9 Rule 15(1) of the National Court Rules. In dealing with the question of the appellant’s failure to give discovery of certain invoices, Her Honour said:

“No doubt, the defendant’s inability to produce invoices is because he did not issue them. He was under an obligation to have kept invoices as records of the liquidation. He has not. Which (sic) means he did not issue any.” (Appeal Book (AB), page 274, line 10).

3. The appellant argues that once the Court made a finding that the invoices did not exist it was a mistake to order the defence be struck out for failure to give discovery of the same (non-existent) invoices.

4. The respondent concedes that Her Honour erroneously decided a matter of fact. As a result, it served on the appellant, a notice pursuant to Order 7 Rule 28 of the Supreme Court Rules that it does not seek to discharge or vary any part of Her Honour’s judgment. The respondent submits that the appellant maintained that he had the invoices and consented to the Court orders of 7th December 2004 requiring him to produce the invoices.

5. The issues are: (i) whether on the evidence this Court can come to the same conclusion as Her Honour but for different reasons; and (ii) if so, whether this Court should award costs of the appeal on an indemnity basis.

6. This appeal was heard on 27th June 2007 by Hinchliffe J, Salika J (as he then was) and Gabi J and the decision was reserved. Following the death of Hinchliffe J. before a decision had been given, the parties exercised their entitlement under section 3 of the Supreme Court Act to have the appeal re-heard. This is a re-hearing of the appeal.

Background

7. In order to appreciate the basis of the respondent’s application under Order 9 Rule 15 of the National Court Rules, it is necessary to set out the relevant factual matters in chronological order. The relevant background factual matters are not in dispute.

8. On 29th September 2000, the respondent was placed into liquidation and the appellant was appointed the liquidator of the respondent. On 9th April 2001, a Deed of Settlement and Indemnity (“the Deed”) was entered into between the parties. Clause 10 of the Deed provides that the appellant’s fees for the liquidation “will not exceed K690, 000” (subject to an entitlement to further payments in certain circumstances). On 17th May 2001, the liquidation was terminated and the appellant was discharged as liquidator of the respondent. The liquidation period lasted from 29th September 2000 to 17th May 2001, a period of thirty three weeks, and in that time the appellant paid himself K990, 512 as liquidator.

9. On 25th May 2002, the respondent commenced proceedings WS No. 685 of 2002 whereby it claimed repayment from the appellant of monies he allegedly overpaid himself during the liquidation. The respondent alleged there was overpayment of between K265, 712 and K792, 512. On 2nd August 2002, the appellant’s lawyers, Namaliu & David Lawyers, filed the appellant’s defence. On 17th December 2003, a notice for discovery was served on the appellant. On 8th March 2004, the appellant served a copy of his verified list of documents. Schedule 1, Part 1, paragraph 3 of his list of documents reads:

“Bundle of invoices raised by the Defendant from the date of appointment as liquidator to the date of termination.” (AB, tab 9 page 25).

10. Gadens Lawyers, acting for the respondent, made repeated calls to Namaliu & David Lawyers requesting copies of the documents. On 16th March 2004, Gadens Lawyers wrote to Namaliu & David Lawyers requesting copies of the documents. In that letter a notice to set down for

trial was enclosed for execution by the appellant’s lawyers and to be returned with copies of the documents. The documents, particularly the invoices, were not provided so on 13th August 2004 the respondent filed a notice of motion seeking production of documents. On 21st October 2004, Namaliu & Company Lawyers wrote to Gadens Lawyers advising that:

“…our client is prepared to provide to you the original documents commencing from the date of appointment – to the date of termination. However, the documents are stored away in the archives and therefore would require some good amount of time to locate the relevant documents. We therefore request that you give our client up till the end of next week to locate the documents which are stored in his archives at Korobosea.”

(AB, tab 17 page 155).

11. Neither the appellant nor his lawyers provided the documents as suggested.

12. On 7th December 2004, the National Court, by consent, ordered Mr. Rex Paki to:

“produce copies of the documents listed as item 3 in Schedule 1 Part 1 of [his] List of Documents to the Plaintiffs Lawyers within 14 days….” (AB, tab 15 page 102).

13. On 20th December 2004, Namaliu & Company Lawyers sent a facsimile to Gadens Lawyers, enclosing two tax invoices from RAM Business Consultants dated 10th November 2000 and 17th November 2000 (AB, tab 15 pages 104 to 106). Following telephone enquiries, Namaliu & Company Lawyers advised Gadens Lawyers that they did not have any more

invoices from their clients (AB, tab 15 pages 87 & 88). On 19th October 2005, Gadens Lawyers wrote to Namaliu Lawyers requesting copies of the documents in compliance with the Orders of 7t...