Motor Vehicles Insurance Limited v Rex Paki (2006) N3212

• Jurisdiction: Papua New Guinea
• Judge: Davani J
• Judgment Date: 25 May 2006
• Citation: (2006) N3212
• Docket Number: WS NO 658 OF 2002
• Court: National Court
• Year: 2006
• Judgement Number: N3212

Full Title: WS NO 658 OF 2002; Motor Vehicles Insurance Limited v Rex Paki (2006) N3212

National Court: Davani, J

Judgment Delivered: 25 May 2006

N3212

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 658 OF 2002

BETWEEN:

MOTOR VEHICLES INSURANCE LIMITED

Plaintiff

AND:

REX PAKI

Defendant

Waigani: Davani, .J

2006: 24 March

25 May

PRACTICE AND PROCEDURE – Notice of Discovery – consent order to produce certain documents –non-compliance with consent order – default in giving discovery – Defence struck out – O. 9 R. 1 – O. 9 R. 2 – O. 9 R. 9 – O. 9 R. 10 – O. 9 R. 15 (1) of National Court Rules

PRACTICE AND PROCEDURE – Notice of Discovery – Distinction between Notice of Discovery and Notice to produce – Notice of Discovery issued after pleadings have closed – Notice to Produce issued only in relation to documents referred to in pleadings and affidavit – O. 9 R. 9 (1) (2) (3) of the National Court Rules

LIQUIDATION – liquidator appointed – termination of liquidation – settlement of liquidators costs by Deed of Release – payment of liquidators costs – liquidator failed to keep accounts and records of liquidation – therefore invoices were not issued – s. 306 (1) (b) of Companies Act

Cases cited

Gibson v Sykes (1884) 28 Sol J. 533;

Treiguts v Tweedley [1959] VR 544;

Mosser v PGH Ceremics Pty Ltd (1964) 82 WN (Pt 1) (NSW) 147;

Donaldson v Harris (1973) 4 SASR 299;

John Cybula v Nings Agencies Pty Limited (1978) PNGLR 166;

Credit Corporation (PNG) Limited -v- Gerald Jee (1988 – 89) PNGLR 11;

Aisip L. Duwa v Ronald Moyo Senge [1995] PNGLR 140 (N 1360);

Public Officers Superannuation Fund Board v Sailas Imanakuan (2001) SC 677;

Ace Guard Dog Security Services Ltd v Lindsay Lailai (2003) N2459,

Ritchies Supreme Court Procedure NSW;

Counsel

J. Brooks, for the plaintiff/applicant

G. Epor, for the defendant/respondent

RULING

25 May, 2006

1. DAVANI .J: This is the plaintiff’s application moved by way of Notice of Motion filed on 16 February, 2006. The application is made pursuant to Order 9 Rule 15(1) of the National Court Rules (‘NCR’) where the defendant failed to comply with giving discovery, such notice issued pursuant to O. 9 r.1(1) of the NCR. These rules read;

“1. Notice for discovery

(1) Subject to this rule, where the pleadings between any parties are closed, any of those parties may, by notice for discovery in Form 30 filed and served on any other of those parties, require the party served to give discovery of documents, with or without verification.…

2. Discovery on notice

(1) A party required under Rule 1 of this Order to give discovery shall, subject to Rule 2 of this Order, give discovery within such time, not being less than 14 days after service on him of the notice for discovery, as may be specified in the notice for discovery.”

“15. Default

(1) Where a party makes default in filing or serving a List of Documents or Affidavit or other document, or in producing any document as required by or under this division, the Court may make such order as it thinks fit, including;…

(b) if the proceedings were commenced by Writ of Summons and the party in default is a defendant – an order that his defence be struck out and that judgment be entered accordingly.”

2. The default provision arises from O.9 r.2(1) of the NCR. It states that a party shall give discovery of documents relating to all matters in question between him and the party giving notice for discovery, and that this must be done not less than fourteen (14) days after service on him of the notice of discovery.

3. The plaintiff relies on the following affidavits in support of its application;

i. Jason Brooks sworn on 15 February, 2006 and filed on 16 February, 2006;

ii. Jason Brooks sworn on 21 February, 2006 and filed on 22 February, 2006;

iii. Affidavit of Service of Steven Ovia sworn and filed on 21 February, 2006;

iv. Affidavit of Service of Graeme Kunjil sworn and filed on 15 February, 2006;

v. Tiffany Gaye Nonggorr sworn on 12 August, 2006 and filed on 13 August, 2004;

vi. Tiffany Gaye Nonggorr sworn on 17 March, 2006 and filed on 21 March, 2006;

vii. Gavera Bitu sworn on 23 March, 2006 and filed on 24 March, 2006.

Facts

4. On 29 September, 2000, the plaintiff (‘MVIL’) was placed into liquidation by Finance Pacific Limited (‘FPL”) and the defendant (“Mr Paki”) was appointed as liquidator.

5. On 9 January, 2001, the Privatization Commission commenced proceedings in the National Court to terminate the liquidation. This was because the Privatization Commission had taken over the FPL’s functions.

6. On 9 April, 2001, a Deed of Settlement and Indemnity (“the Deed”) was entered into between the parties. Clause 10 of the Deed states that Mr Paki’s fees for the liquidation “will not exceed K690,000”, unless certain events did not take place as contemplated by the Deed, in which case the liquidators approved rates would apply. The liquidators approved rate was K150.00 per hour.

7. On 9 April, 2001, all conditions in the Deed were satisfied and the liquidation was terminated. Mr Paki was discharged as MVIL’s liquidator. This occurred thirty-nine (39) days after the execution of the Deed. Mr. Paki took or was paid K990,512.00 (from MVIL) during the period he was liquidator.

8. Because the MVIL could not substantiate the payments Mr Paki made to himself whilst he was liquidator, it commenced proceedings by way of Writ of Summons No. 658 of 2002.

9. The claim by MVIL is alternatively for either:

(a) overpayment of K792,512. The MVIL alleges that Mr Paki was only due K198,000 based on 33 weeks (29/9/00 to 17/5/01) at 40 hours per week being 1,320 hours at K150/hour = K198,000.00; or

(b) that, if (which the plaintiff denies) the Court finds that Mr Paki is entitled to the maximum amount of K690,000.00 (as per the Deed) and a further payment of 39 days at the agreed rate, the total payment to Mr Paki would be K724,800.00 which would result in an overpayment to Mr Paki of K265,712.00

History of proceedings

10. The plaintiff filed the Writ of Summons and Statement of Claim on 25 May, 2002 (the ‘Writ’). The Writ was served on the defendant and on 22 August, 2002, Mr. Paki’s then Lawyers, Namaliu & David, filed his Defence.

11. On 17 December, 2003, the plaintiff served a Notice for Discovery upon the defendant. This is attached as annexure “JMB 1” to the affidavit of Jason Brooks sworn on 16 February, 2006.

12. On 8 March, 2004, the defendant served a copy of his Verified List of Documents. This is attached as annexure “JMB 2” to the affidavit of Jason Brooks sworn on 16 February, 2006.

13. Thereafter, Gadens Lawyers made repeated telephone requests to the defendant’s lawyers for copies of the documents described as items 1, 2 and 3 in Part 1 of Schedule 1 of the List of Documents filed by the defendant.

14. Tiffanny Gaye Nonggorr deposes to this in par (6) to (8) of her affidavit sworn on 12 August, 2004. Ms Nonggorr deposes that on 9 and 10 March, 2004, several telephone calls were made from Gadens Lawyers to the defendant’s Lawyers requesting documents numbered 1, 2 and 3 in the defendant’s verified list of documents. These are described in the said list at part 1 of Schedule 1 as;

“ Document: Date:

1. Deed of Settlement and Indemnity

between the defendant, Motor Vehicles

Insurance Limited (in Liquidation),

PNGBC Limited and the Privatization

Commission. 9th April, 2001

2. Consent order in resort of National Court

proceedings OS No. 13 of 2001 in the matter of Motor

Vehicles Insurance Limited (in Liquidation) 17th May, 2001

3. Bundle of invoice raised by the Defendant

from the date of appointment as liquidator

to the date of his termination.”

4. Copies of Court Documents filed in these proceedings.

5. Correspondence between lawyers for the parties

15. Gadens Lawyers also sent letters dated 16 March, 2004 and 21 April, 2004 requesting copies of these documents and also for the defendants lawyers to endorse the “Notice to Set Down for Trial” and return to Gadens Lawyers. These letters are attached as annexures ‘TGN6’ and ‘TGN8’ to Tiffany Gaye Nonggorr’s affidavit sworn on 12 August, 2004. But the defendant’s lawyers did not respond to these letters.

16. Because the defendant did not send the plaintiffs lawyers the documents it requested, on 13 August, 2004, Gadens Lawyers then filed a Notice of Motion seeking production by the defendant of the documents it had listed in its List of Documents, particularly documents listed as items 1, 2 and 3 in Schedule 1, Part 1 and that the documents be produced within 7 days from the date of the Courts orders.

17. By letter of 21 October, 2004, to Gadens Lawyers, Mr Paki’s lawyers advised that;

“…We advise 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.…”

18. This letter is annexed as annexure ‘TGN1’ to Tiffany Gaye Nonggorr’s affidavit sworn on 17 March, 2006.

19. As...