National Capital District Commission v Yama Security Services Limited (2005) SC835

• Jurisdiction: Papua New Guinea
• Court: National Court
• Date: 09 December 2005
• Citation: (2005) SC835
• Docket Number: SCA No. 46 of 2004
• Year: 2005

Full Title: SCA No. 46 of 2004; National Capital District Commission v Yama Security Services Limited (2005) SC835

National Court: Jalina, Sawong and Lay JJ

Judgment Delivered: 9th December 2005

1 Contracts—Deed of Release—Entered into after judgment for damages to be assessed—Whether Deed of Release a “Contract” for purposes of the Public Finance (Management) Act s. 61 requiring Ministerial approval.

2 Contracts—Deed of Release—Entered into after judgment for damages to be assessed—Whether Deed of Release invalid for failure to obtain Ministerial approval under s.61 of Public Finance (Management) Act.

Cases cited:

Fly River Provincial Government—v- Pioneer Health Services Ltd , SC705; NCDC v Yama Security Services Pty Ltd [2003] PNGLR 1

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BY THE COURT: This is an appeal against a decision of the National Court dated 30th April 2004 (Sevua J) which found that a Deed of Release entered into between the Appellant and the Respondent under which the Appellant was to pay K8.5 million was valid and binding on the Appellant with a further order for the Appellant to pay to the Respondent that sum of money.

A brief history of these proceedings is that on or about 5th February 1998 and 27th March 1998, the Respondent and the Appellant entered into two Security Contracts, one being the principal and other supplementary, whereby the Respondent was to provide security services to the Appellant for a period of 48 months and 39 months respectively.

The Appellant terminated the two Security contracts on the 9th February 1999.

Upon termination of the Security Contracts by the Appellant, the Respondent sued the Appellant for breach of contract in proceedings WS No. 1221 of 1999 on 29th October 1999 claiming the sum of K7, 513, 835.84 being the amount the Respondent was to have been paid during the full term of the Security Contracts with interests and costs. The then City Administrator, Jamie Maxton Graham and the present Appellant (then in suspension) were made the first and second defendants while the National Executive Council and the State were made the third and fourth defendants respectively.

The third and fourth defendant’s Notice of Intention to Defend was filed by the Solicitor General on 10th November 1999 whilst that of the

first and second defendants were filed by A.G. Corren & Co on 12th November 1999.

On 7th December 1999 the first and second defendants filed a motion seeking leave to file their Defence out of time and on 9th December 1999 the Court granted an extension of time of 30 days from the original date of expiry of the time required for filing of the Defence.

On 7th January 2000 the Solicitor General filed the third and fourth defendant’s Defence denying that it entered into any contracts with the plaintiff (now the Respondent) and further stating that the second defendant was capable of being sued and suing in its own name and style under s.3 of the NCDC Act 1990. It also relied on the failure by the plaintiff to give notice under s. 5 of the Claims By and Against the State Act in addition to saying that the second defendant was soley liable for any damages suffered by the plaintiff, and that the proceedings did not disclose any reasonable cause of action against them.

On 12th January 2000 the plaintiff, after conducting a search at the National Court Registry and discovering that the first and second defendants had not filed their Defence within the extended time referred to above, filed a Notice of Motion seeking default judgment against the first and second defendants for K7,513,735.84 for failure to file their Defence and costs.

On the same day, 12th January 2000, the first and second defendants filed their Defence. In their Defence, apart from denying the claim and denying any breach of contract and further stating that the claim did not disclose any reasonable cause of action, the first and second defendants pleaded in the alternative the provisions of the Public Finance (Management) Act 1995 including the failure to obtain ministerial approval under s. 61of the Act.

On 19th January 2000 the plaintiff filed an amended Notice of Motion seeking default judgment for the above sum or alternatively default judgment for damages to be assessed and costs against the first and second defendants.

On 31st January 2000 the first and second defendants filed a Notice of Motion seeking a further extension of time to file their Defence out of time in the event that the Court found the Defence they had filed on 12th January 2000 which we have referred to above, to have been filed out of time.

Both the plaintiff’s motion for default judgment and the first and second defendants’ motion for further extension of time to file their Defence were heard by Los J on 10th March 2000. On 17th March 2000, His Honour rejected the defendants’ application and entered default...