Hornibrook Ngi Limited v Marc Awai in his capacity as the Provincial Administrator for the Gulf Provincial Government and Others

• Jurisdiction: Papua New Guinea
• Court: National Court
• Judge: David, J
• Judgment Date: 22 November 2023
• Neutral Citation: N10809
• Citation: N10809, 2023-11-22
• Hearing Date: 08 November 2023,14 November 2023,15 November 2023,16 November 2023,22 November 2023
• Date: 22 November 2023
• Docket Number: WS NO. 202 OF 2023
• Counsel: Cathleen Sopa for the plaintiff,Salome Maliaki for the fourth defendant,Counsel:

N10809

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 202 OF 2023

Between:

Hornibrook Ngi Limited

Plaintiff

v.

Marc Awai in his capacity as the Provincial Administrator for the Gulf Provincial Government

First Defendant

and

Gulf Provincial Government

Second Defendant

and

Gulf Provincial Health Authority

Third Defendant

and

The Independent State of Papua New Guinea

Fourth Defendant

Lae: David, J

2023: 8, 14, 15, 16 & 22 November

CONTRACT — written contract for supply of works to public body — claim for breach of contract — Public Finances (Management) Act 1995 and National Procurement Act.

CONTRACT — written variation of contract for supply of works to public body — claim for breach — statutory procurement processes not followed — quantum meruit — Public Finances (Management) Act 1995 and National Procurement Act.

PNG cases cited:

Shaw v Commonwealth of Australia [1963] PNGLR 119

Supreme Court Reference No 4 of 1980 [1982] PNGLR 65

Parao Tunboro v Motor Vehicles Insurance (PNG) Trust [1984] PNGLR 272

Straits Contracting (PNG) Pty Ltd v Branfill Investments Limited [1988] PNGLR 239

Patterson v National Capital District Commission (2001) N2145

Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705

Island Helicopter Services Ltd trading as Islands Nationair v Wilson Sagati & Ors (2008) N3340

Rex Paki v Motor Vehicles Insurance Limited (2010) SC1015

Reference by the East Sepik Provincial Executive (2011) SC1154

Galem Falide v Registrar of Titles and The State (2012) N4775

Turik v Gubag (2013) N5132

Hargy Oil Palm Ltd v Ewasse Landowners Association Incorporated (2013) N5441

Board of Management, Holy Spirit Primary School v Moses Sariki (2013) N5446

National Broadcasting Corporation v Taison (2019) N8083

Travellers Rent A Car Ltd v Biko (2023) N10435

Arpa v Kerowagi District Development Authority (2023) N10438

Treatise cited:

JD Heydon, Cross on Evidence, Butterworths, Fifth Edition, 1996

Counsel:

Cathleen Sopa for the plaintiff

Salome Maliaki for the fourth defendant

Plaintiff's lawyer: In-house Lawyer

Fourth Defendant's lawyer: Solicitor-General

JUDGMENT

22 November 2023

INTRODUCTION

1. David, J: This is the decision of the Court after a trial was conducted on 8 November 2023 on both liability and quantum.

2. On 11 May 2023, the Plaintiff commenced these proceedings by writ of summons endorsed with a statement of claim claiming payment of the sum of K353,011.93 for outstanding invoices issued in relation to completed works carried out pursuant to a contract number PSTB/GULF/KMA?MOR/-005/2019 executed by the First Defendant on behalf of the defendants on 12 July 2019 for the sum of K280,000.00 (the contract) and approved variations to the contract for the sum of K225,739.20 and K5,372.26 as costs for service of a letter of demand, plus interest at 8% yearly under the Judicial Proceedings (Debts and Damages) Act from the date of filing of the writ to full settlement and costs on a full indemnity basis. The contract was for the refurbishment of the existing hospital morgue at Kerema in the Gulf Province and installation of a containerised morgue there.

3. The First, Second and Third Defendants are sued in their capacities as; Provincial Administrator in the case of the First Defendant, Provincial Government established under the Organic Law on Provincial Governments and Local-level Governments in the case of the Second Defendant and a provincial health authority established under the Provincial Health Authorities Act 2007 in the case of the Third Defendant.

4. The Plaintiff claims that the Fourth Defendant, The Independent State of Papua New Guinea vicariously liable for the actions or omissions of the First, Second and Third Defendants.

5. The Court's records show that on 27 June 2023, the Fourth Defendant filed its notice of intention to defend. On 17 August 2023, the Fourth Defendant filed its defence. The Fourth Defendant denies liability. It avers that the Second and Third Defendants are separate legal entities established under their respective enabling legislations and are directly responsible for the actions and or omissions of their employees and have their own budget and processes to meet any of their expenditures. It therefore averred that it was vicariously liable only for wrongs committed by its servants and agents within the course of their employment and no other including the First, Second and Third Defendants in the present case. The Fourth Defendant also averred that:

1. The Plaintiff did not meet the requirements of a valid contract or to enforce the contract against The State under ss.47C (Certain contracts null and void) and 47D (Claim against State not enforceable in certain circumstances) of the Public Finances (Management) Act 1995 and s.2A (Claim against the State not enforceable in certain circumstances) of the Claims By and Against the State Act; and

2. The Plaintiff failed to plead that it was properly issued with an authority to Pre-commit Expenditure by the Department responsible for financial management pursuant to s.47B (Authority to Pre-commit Expenditure) of the Public Finances (Management) Act 1995 before the execution of the contract.

6. The First, Second and Third Defendants have shown no interest in defending the Plaintiff's claim after service of the writ of summons on each of them and they have not filed any notice of intention to defend. This resulted in the Plaintiff making an application for default judgment. On 7 September 2023, the Court refused the application and said that the issue of liability and quantum should be determined at trial. The Court opined that while the First, Second and Third Defendant had clearly defaulted in filing their notices of intention to defend and defence within the prescribed statutory period after service on each of them of the writ of summons, the entry of default judgment against each of them would prejudice the rights of the Fourth Defendant who had filed a defence and the terms of the variation to the principal contract were not clearly set out in the pleadings and the evidence before the Court.

7. Following the completion of the evidentiary part of the trial, the matter was adjourned for the hearing of submissions on 14 November 2023. When the matter returned for submissions on 14 November 2023, Ms. Sopa for the Plaintiff sought an adjournment to 15 November 2023 which was granted as she had instructions to apply for the reopening of the Plaintiff's case so as to call evidence on whether or not the requirements under the Public Finances (Management) Act 1995 for the entry of a valid contract and to enforce the contract had been met. On 15 November 2023, the Plaintiff moved its formal application for leave supported by affidavit evidence to re-open its case and call further evidence which it said was vital to its case relying on principles enunciated in the National Court decision of Parao Tunboro v Motor Vehicles Insurance (PNG) Trust [1984] PNGLR 272 and approved and followed by the Supreme Court in Straits Contracting (PNG) Pty Ltd v Branfill Investments Limited [1988] PNGLR 239.

8. In Parao Tunboro v Motor Vehicles Insurance (PNG) Trust [1984] PNGLR 272 McDermott J said an application by a plaintiff to re-open his case to admit “fresh evidence” is a matter within the Court's discretion and His Honour suggested a number of factors that could be taken into consideration in exercising the discretion and these are:

1. The effect of the fresh evidence on the state of the case when made;

2. the fresh evidence would, if believed, probably affect the result;

3. the fresh evidence could not with reasonable diligence have been adduced before;

4. the fresh evidence is not merely confirmation of the plaintiff's case;

5. the fresh evidence was not omitted by inadvertence;

6. the fresh evidence was not omitted by deliberate election; and

7. it is in the interests of justice that the fresh evidence be admitted.

9. Ms. Sopa submitted that the evidence sought to be adduced, ie, that relating to certain requirements to meet in State contracts was not omitted by deliberate election otherwise it was in the interests of justice that such evidence be adduced.

10. The Plaintiff's application was not seriously opposed by Ms. Maliaki for the Fourth Defendant.

11. I granted the application because I was of the view that the evidence sought to be adduced was vital to the plaintiff's case, it was not omitted from the trial by deliberate election, the interests of justice warranted the fresh evidence to be adduced and also noting that the Fourth Defendant would not be seriously prejudiced as it had elected not to offer evidence.

12. At the hearing of submissions, the Plaintiff through Ms. Sopa informed the Court that it was abandoning its claim against the Fourth Defendant. The claim against the Fourth Defendant is therefore dismissed.

EVIDENCE

13. The Plaintiff relies on and reads the following affidavits:

1. Affidavit of Ethel Jerry sworn on 27 July 2023 and filed on 1 August 2023 (Exhibit “A”);

2. Affidavit of Malcolm Lewis sworn on 3 October 2023 and filed on 6 November 2023 (Exhibit “B”);

3. Affidavit of Matthew Lewis sworn on 14 November 2023 and filed on 15 November 2023 (Exhibit “C”); and

4. Affidavit of Matthew Lewis sworn on 15 November 2023 and filed on 16 November 2023 (Exhibit “D”).

14. As I have alluded to earlier, the Fourth Defendant did not offer any evidence.

SUMMARY OF PLAINTIFF'S EVIDENCE

ETHEL JERRY

15. The witness is employed by the Plaintiff as Accounts Receivable Supervisor. She has personal knowledge of this matter.

16. One of her duties is to issue invoices for jobs/contracts done by the Plaintiff's respective divisions upon instructions received from the managers.

17. For this job, the Building Division Manager instructed her to issue the relevant invoices for the refurbishment of the Third Defendant's hospital morgue.

18. The first invoice she issued to...