National Capital District Commission v Yama Security Services Pty Limited (2003) SC707

• Jurisdiction: Papua New Guinea
• Judge: Mogish J:
• Judgment Date: 06 June 2003
• Court: Supreme Court
• Citation: [2003] PNGLR 1
• Docket Number: SCA No 24 of 2002
• Year: 2003
• Judgement Number: SC707

Full Title: SCA No 24 of 2002; National Capital District Commission v Yama Security Services Pty Limited (2003) SC707

Supreme Court: Injia J, Davani J, Mogish J

Judgment Delivered: 6 June 2003

1 Practice and Procedure—National Court—Civil—Judgment on liability for damages to be assessed—Compromise reached by parties on damages pending trial on assessment of damages by court—Deed of Release—Application for summary judgment seeking enforcement of Deed of Release—Compromise disputed by one party on grounds of fraud, illegality and excess of authority—Inappropriateness of summary procedure under O12 r38—Necessity to institute fresh proceedings or amend pleadings to plead Deed of Release—Duty of the Court to facilitate process for pleadings and full trial to determine merits of issues—National Court Rules, O12 r38.

2 Contract—Contract involving public authority—Compromise of pending action—Deed of Release—Subsequently disputed by public authority on grounds of fraud, illegality and excess of authority by former officers of the public authority—Duty of Court to facilitate proper determination of issues—Inappropriateness of summary procedure to determine validity of Deed of Release—Public Finances (Management) Act 1995 s61—National Capital District Commission Act 1990—Claims By and Against the State Act; s5

3 Lindsay Lailai v Ace Guard Dog Security Services Ltd (2003) SC708, The Independent State of Papua New Guinea v Barclay Brothers (PNG) Ltd (1992) (Unreported and Unnumbered Supreme Court judgment delivered on 31 December 2002), Patterson v NCDC (2001) N2145, Yama Security Services Limited v Warupi and MVIT (2000) WS 225 of 1999 (Unreported and unnumbered National Court judgment of Sevua J dated 25 August 2000), John Momis, Michael Ogio, Sam Akoitai and Michael Laimo v Attorney–General, National Executive Council and The State (2000) N1951, Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112, Hornibrook NGI Pty Ltd v Lihir Management Company Pty Ltd and Wests Process Engineering Pty Ltd (Administrator Appointed) (1998) N1735, Kumul Builders Pty Ltd v PTC [1991] PNGLR 299, Ume More v The University of Papua New Guinea [1985] PNGLR 401, Caltex (Overseas) Ltd v Douglas Charles Dent [1978] PNGLR 411, Green v Rozen [1955] 2 All ER 797, Smythe v Smythe (1887) 18 QBD 544, Re Gardet Freres Steamships Co (1879) 12 Ch D 882, Eden v Nail (1878) 7 Ch D 781 and Pryer v Gribble (1875) LR 10 Ch App 534 referred to

___________________________

SC707

IN THE SUPREME COURT )

OF JUSTICE IN WAIGANI )

PAPUA NEW GUINEA )

SCA NO. 24 OF 2002

BETWEEN:

NATIONAL CAPITAL DISTRICT COMMISSION

Appellant

AND:

YAMA SECURITY SERVICES PTY LIMITED

Respondent

WAIGANI: Injia, Davani & Mogish .JJ

2003 : April 28

May 30

June 6

Practice and Procedure – National Court – Civil - Judgment on liability for damages to be assessed – Compromise reached by parties on damages pending trial on assessment of damages by court – Deed of Release – Application for summary judgment seeking enforcement of Deed of Release - Compromise disputed by one party on grounds of fraud, illegality and excess of authority – Inappropriateness of summary procedure under O. 12 R. 38 – Necessity to institute fresh proceedings or amend pleadings to plead Deed of Release – Duty of the Court to facilitate process for pleadings and full trial to determine merits of issues – National Court Rules, O. 12 R. 38.

Contract – Contract involving public authority – Compromise of pending action – Deed of Release - Subsequently disputed by public authority on grounds of fraud, illegality and excess of authority by former officers of the public authority – Duty of Court to facilitate proper determination of issues –Inappropriateness of summary procedure to determine validity of Deed of Release – Public Finance (Management) Act 1995 ss. 61 – National Capital District Commission Act 1990 – Claims By and Against the State Act; s. 5

PNG Cases cited:

·Lindsay Lailai, Acting Managing Director & Anor v Yama Security Services Limited SCA No. 87 of 2001 Unnumbered judgment of Injia, Davani and Mogish .JJ, dated 6.5.03;

·Barclay Brothers (PNG) Ltd v The State, Unpublished and Unnumbered Supreme Court Judgment dated 31.12.02;

·Patterson v National Capital District Commission N2145 dated 5.10.01;

·Lindsay Lailai, Acting Managing Director and Anor v Ace Guard Dog Security Services Limited SCA No. 85 of 2001;

·Yama Security Services Ltd -v- Motor Vehicles Insurance (PNG) Trust Unreported and Unnumbered National Court judgment of Sevua .J dated 25/8/00;

·John Momis, Michael Ogio, Sam Akoitai and Michael Laimo v the Attorney General, National Executive Council and the State N1951 dated 10.3.00;

·Hornibrook NGI Pty Ltd v Lihir Management Company Pty Ltd

·Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299;

·Uma More and Others v University of Papua New Guinea [1985] PNGLR 401;

·Caltex (Overseas) Limited -v- Dent [1978] PNGLR 411;

Overseas cases cited:

·Green v Rozen [1955] 2 All ER. 797;

·Smythe v Smythe (1887) 18 QBD 544;

·Re Gardet Freres Steamships Co. (1879) 12 Ch D 882;

·Eden v Nail (1878) 7 Ch D 781;

·Pryer v Gribble (1875) LR 10 Ch. App 534;

Other texts cited:

·Halsburys Laws of England, volume 9, 4th edition, para no. 201; Volume 2, 4th edition, para 1353.

I. Molloy & P. Kuman for the Appellant

J. Poro and A. Amet (Jnr) for the Respondent

6 June 2003

INJIA ,J: The Appellant challenges the decision of the National Court at Waigani made on 27th March 2002, in which the learned judge entered judgment in favour of the Respondent in the sum of K8.5 million. The grounds of appeal are set out in the judgment of Justice Davani, which I adopt.

The background circumstances of the Respondent/Plaintiff’s claim and the procedure employed by the Respondent in seeking and obtaining this judgment in brief are these. The Appellant is a statutory body established under the National Capital District Commission Act 1990 and is charged with the duty to manage the affairs of the National Capital District. On 5 February 1998, the Respondent entered into a contract with the Appellant to provide security services. The contract was to run for a period of four years, and was to expire on 5 February 2002. On 27 March 1998, the parties entered into a “Supplementary” contract for additional security services in the same period. On 9 February 1999, some 13 months into the performance of the contract, the Appellant “suspended” the contract. On 29 October 1999, the Respondent commenced proceedings in the National Court in WS No. 1221 of 1999, seeking damages for the unperformed period of the contract. The Respondent claimed total damages of K7,513,835.84, particulars of which were endorsed on the Writ. In these proceedings, the respondent also joined the National Executive Council and the State as nominal defendants, under provision of s.2 of the Claims By and Against the State Act 1997 and s. 68(3) of the Organic Law on Provincial and Local Level Governments. This is because the respondent was under suspension at the time the proceedings were instituted and the management of the affairs of the Commission was vested in the National Government. On 1 December 2000 the Respondent obtained judgment on liability, for damages to be assessed later. This judgment on liability was not in issue in the National Court and also not in issue in this appeal.

Pending assessment of damages by the court, the parties entered into negotiations on quantum of damages. The Respondent claims that these negotiations resulted in a resolution passed by the Respondent’s board on 25 November 2001, which authorized its Chairman and Governor of the National Capital District, one Philip Taku (who was the elected member for Moresby North East in the National Parliament) and...