Nambawan Trophy Limited v Telikom (PNG) Limited (2017) N7683

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 17 January 2017
• Court: National Court
• Citation: (2017) N7683
• Docket Number: WS 1161 of 2011
• Year: 2017
• Judgement Number: N7683

Full Title: WS 1161 of 2011; Nambawan Trophy Limited v Telikom (PNG) Limited (2017) N7683

National Court: Hartshorn J

Judgment Delivered: 17 January 2017

N7683

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 1161 of 2011

BETWEEN:

NAMBAWAN TROPHY LIMITED

Plaintiff

AND:

TELIKOM (PNG) LIMITED

Defendant

Waigani: Hartshorn J

2016: 19th February

2017: 17th January

Trial

Cases Cited:

Papua New Guinea Cases

Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694

Jacob Simbuaken v. Neville Egari (2009) N3824

Sogeram Development Corporation Ltd v. Robin Som (2014) N5874

Overseas Cases

British Home Assurance Corporation Ltd v. Paterson [1902] 2 Ch. 404

Norman v. Federal Commissioner of Taxation (1963) 109 CLR 9

Scarf v. Jardine (1882) 7 AC 345

Tito v. Waddell [1977] Ch 106

Counsel:

Mr. M. Goodwin and Mr. B. Nutley, for the Plaintiff

Mr. N. Asimba, for the Defendant

17th January, 2017

1. HARTSHORN J: Nambawan Trophy Limited (NTL) sues Telikom (PNG) Limited (Telikom) for breach of contract and/or negligence and claims damages. This concerns a Distributorship Agreement that was entered into between the parties on 19th August 2008 (Distributorship Agreement).

2. NTL claims that Telikom breached the Distributorship Agreement and repudiated it, which NTL accepted, with NTL terminating the Distributorship Agreement effective from 10th October 2010. Telikom denies NTL’s allegations and says that following the execution of the Distributorship Agreement, it underwent a corporate restructure of its business. Telikom’s mobile business was sold and the Distributorship Agreement was transferred to Black Dolphin Ltd on 13th November 2008.

3. Telikom pleads that all of its contractual obligations and liabilities were assigned to Black Dolphin Ltd. This included Telikom’s mobile business licence which had authorised Telikom to carry on its mobile business.

4. Alternatively, Telikom pleads that the Distributorship Agreement is unenforceable as no statutory approvals and/or licences were given and/or obtained by NTL or Telikom as required by clauses 8(l) and 8(n) of the Distributorship Agreement.

5. Telikom also denies that there was any misrepresentation on its part.

6. In essence NTL claims that when Telikom purportedly assigned the Distributorship Agreement to Black Dolphin Ltd it failed to obtain NTL’s consent and failed to novate or assign the Distributorship Agreement correctly in any event.

Whether the Distributorship Agreement is enforceable

7. I consider the enforceability of the Distributorship Agreement first.

8. Telikom submits that it is not enforceable as various licences and approvals required by law and the Distributorship Agreement were not obtained.

9. NTL submits that this purported defence of Telikom cannot be relied upon by Telikom and the evidence presented in support of it, is inadmissible as Telikom has failed to plead this defence in its amended defence. Specifically NTL submits that Telikom should not be allowed to raise matters which are not pleaded. Therefore, paragraphs 10 to 15 of the affidavit of Mr. David Kulu are inadmissible. A notice of objection was filed by NTL to the use of Mr. Kulu’s affidavit and objection was taken to the admissibility of paragraphs 10 to 15, and 17 and 18 of his affidavit. This court reserved its decision on the question of the admissibility of these paragraphs.

10. Telikom submits as to the adequacy of its pleadings in its amended defence that by pleading lack of approvals and specifying clauses 8(l) and 8(n) of the Distributorship Agreement, that a sufficient foundation in its pleadings has been set for it to call evidence in regard to all approvals that it alleges should have been, but were not obtained.

11. In its amended defence at paragraph 11, Telikom pleads:

“Alternatively, the DA is unenforceable as no statutory approvals and/or licences were given and/or obtained by either parties as required by Clauses 8(l) and 8(n) of the DA.”

12. Order 8 Rule 14 National Court Rules is as follows:

“14. Matters for specific pleading. (15/13)

In a defence or subsequent pleading the party pleading shall plead specifically any matter, for example, performance, release, any statute of limitation, fraud, or any fact showing illegality—

(a) which he alleges makes any claim, defence or other case of the opposite party not maintainable; or

(b) which, if not pleaded specifically, may take the opposite party by surprise; or

(c) which raises matters of fact not arising out of the preceding pleadings.”

13. In Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694 Kandakasi J stated:

“The law on pleadings in our jurisdiction is well settled….. unless there is foundation in the pleadings of a party, no evidence…. of matters not pleaded can be allowed.”

14. In Jacob Simbuaken v. Neville Egari (2009) N3824, Davani J, after setting out Order 8 Rule 14 National Court Rules, stated that the reason that certain matters should be pleaded is to avoid surprises and to ensure that all issues that need to be raised are raised long before the matter progresses to trial. Further, each party must plead all the material facts on which he means to rely at the trial otherwise he is not entitled to give any evidence of them at the trial. As I stated in Sogeram Development Corporation Ltd v. Robin Som (2014) N5874, I respectfully agree with the above statements.

15. Order 8 Rule 14 National Court Rules requires that in a defence the defendant shall plead any matter which he alleges makes any claim not maintainable, or if not pleaded would take the plaintiff by surprise. If he does not so plead all material facts on which he intends to rely at trial, a defendant is not entitled to give any evidence of those facts at the trial.

16. As to the submission that the pleading by Telikom of lack of approvals as required by Clauses 8(l) and 8(n) is a sufficient foundation in its pleading for it to call evidence in regard to all approvals that it alleges should have been but were not obtained, Clauses 8(l) and 8(n) of the Distributorship Agreement are as follows:

“The Distributor shall (apart from other obligations specified under this agreement):

…….

(l) Ensure that it obtains at its own expense the appropriate Radio Dealers License and any other registrations and approvals required by law in the Territory in order to sell the Products, under Papua New Guinea law.

……..

(n) Observe the provisions of the Independent Consumer and Competition Act 2000 and any other relevant legislation dealing with consumer protection and related subjects as they apply to the activities of the Distributor under this Agreement.”

17. From a plain reading of these clauses, I am satisfied that they are restricted to licences that are required to sell products in Papua New Guinea, and consumer protection obligations at law, and are not concerned with other statutory approvals such as under the Independent Public Business Corporation of Papua New Guinea Act (IPBC Act).

18. As Telikom has not pleaded in its amended defence any breach of the IPBC Act, it cannot rely on any breach of the IPBC Act as a defence to NTL’s claim and any evidence concerning alleged breaches of the IPBC Act is inadmissible. Consequently, the submission of Telikom that the Distributorship Agreement is unenforceable because of a failure to obtain approvals under the IPBC Act is rejected as there is not sufficient pleading and admissible evidence in that regard.

19. Telikom also submits that the Distributorship Agreement is unenforceable because of a failure to obtain approval under the Independent Consumer and Competition Act (ICCC Act). As referred to, Clause 8(l) makes reference to the ICCC Act. Specific reference is made in submissions by Telikom to s. 70 and s. 50 ICCC Act.

20. A perusal of s. 70 ICCC Act reveals that a person may apply for authorization. It is not a mandatory requirement. A perusal of s. 50 ICCC Act reveals that it is not a section under which an approval or licence can be given or obtained.

21. Consequently the submission of Telikom that the Distributorship Agreement is unenforceable as statutory approval and/or licences required by sections 70 and 50 ICCC Act were not obtained fails as s. 50 does not provide for an approval or licence to be given and s. 70 does not make it mandatory that an approval under that section is required.

Clause 17, Distributorship Agreement

22. Notwithstanding that it is pleaded in its amended defence, counsel for Telikom in oral submissions informed the court that Telikom was no longer relying upon or raising a defence based on clause 17 of the Distributorship Agreement and in written submissions Telikom submits that it does not take issue on the application and the effect of clause 17 of the Distributorship Agreement. Consequently I shall not consider this defence.

Effect of the transfer of the Distributorship Agreement by Telikom to Black Dolphin Ltd

23. Telikom pleads that as at November 2008, it has absolutely and unconditionally assigned all its benefits and obligations, including the Distributorship Agreement under its licence to Black Dolphin Ltd and “a notice pertaining to the same was given as well.”

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