National Information & Communications Technology Authority v Timil Tape and Others

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi DCJ
• Judgment Date: 14 January 2025
• Neutral Citation: N11129
• Date: 14 January 2025
• Counsel: Mr. T. Tape, first defendant, in person,Mr. J. Holingu for the plaintiff,Counsel:
• Citation: N11129, 2014-10-12
• Docket Number: WS (COMM) 28 OF 2020 (IECMS)
• Court: National Court

N11129

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS (COMM) 28 OF 2020 (IECMS)

National Information & Communications Technology Authority

Plaintiff

v.

Timil Tape

First Defendant

and

Stanis Japson

Second Defendant

WAIGANI: Kandakasi DCJ

18 May 2021; 14 January 2025

CONTRACT — Formal Contract of Sale and Purchase of land prepared by plaintiff — Aside from sale and purchase and payment of agreed consideration, no additional provision on requirements to be completed by each of the parties made — Vendor discharged all duties specified in the Contract — Application of “contra proferentem” rule — No extrinsic evidence can be supplied — No pending steps to be completed by vendor — All remaining steps to be completed by Purchaser — Land Act, s7, s10 and s11 — Claim against Vendor dismissed.

LAND LAW — Acquisition of customary land converted into a Special Agricultural and Business Development Lease (SABL) — Proper process — Land Act, s7, s10 and s11 — Department of Lands and Physical Planning (DLPP) administering the process — Process incomplete — Formal Contract of Sale and Purchase prepared by plaintiff — No provision on requirements to be completed by each of the parties — Vendor discharged duties specified in the Contract — Applicant on “contra proferentem rule — No extrinsic evidence can be supplied — No pending steps to be completed by vendor — All remaining steps to be completed by Purchaser — Land Act, s7, s10 and s11.

LAWYERS — Duty of lawyers — Lawyer client relationship — Extend of duty — Whether lawyers owe a duty to parties other than their own clients in a transaction — Application of general position at common law on negligent statement — Relevant principles already adopted and applied in the country — Need to consider common law principles together with the relevant provisions of the Professional Conduct Rules (PCR) for lawyers — Undivided fidelity to clients and prohibition against advising nonclients under r8 and r10 (1) and (6) of PCR — Meaning and effect of — No exceptions — Claim for development of underlying law to include exceptions — Claim not in accordance with the Underlying Law Act and no mention or foundation in the pleadings — No case made out neither against common law position on negligent statement or PCR for lawyers — Claim dismissed.

NEGLIGENCE — Negligent statement — Relevant test — Whether it was reasonable to foresee a representee of a statement relying upon the statement and for the representor to reasonably foresee that the representee would rely upon the statement and act on it to his or her detriment — Consideration of 3 categories in which a lawyer could make statements — Lawyer would be liable if the lawyer took responsibility for personally saying or doing something which only the lawyer is able to do and the representee was not able to know — Need to consider application of r8 and r10(1) and (6) of the PCR — Lawyer not liable as a lawyer to a third party.

PRACTICE & PROCEDURE — Pleadings — Importance and purpose of — Pleadings not laying the foundation for a claim based on the tort of negligent statement or a breach of a duty under the PCR pleaded and made out — Appropriate amendment not sought — Effect of — No disclosure of a reasonable cause of action disclosed.

PRACTICE & PROCEDURE — Application for summary judgment — relevant principles and considerations considered — Pleadings not laying the foundation for a claim based on the tort of negligent statement or a breach of a duty under the PCR pleaded and made out — Appropriate amendments not sought — If amendment were sought and granted it would still fail to disclose a reasonable cause of action to pursue — Effect of — No disclosure of a reasonable cause of action disclosed — Proceedings dismissed.

The Plaintiff (NICTA), which is a statutory corporation having a legal section headed by its manager, entered into a contract for Sale and Purchase of a customary land that was converted into a Special Agriculture and Business Development Lease (SABL) (Land). The Land was registered in the name of the original customary landowners duly incorporated as customary land group, under the name, Logaloto Incorporated Land Group (Logaloto ILG). In the transaction, the Purchaser was represented from start to finish by its manager, legal, an experienced lawyer, while the Vendors were initially not legally represented. Later the Vendor engaged the services of the Defendant lawyers. The Defendants sought advice from the Department of Lands & Physical Planning (DLPP) as to the process to employ for a complete and proper sale of the Land to the Purchaser. The Defendants passed on the information they obtained from the DLPP and requested a letter of guarantee from the Purchasers that it will pay the agreed purchase price once the process of acquiring a customary land by the State for the Purchaser was completed. The same information was sought by NICTA from the DLPP and essentially the same information was provided to them.

The Purchaser and its lawyer drew up the relevant Contract for the Sale and Purchase of the Land. Aside from including the agreement for the Sale and Purchase, the agreed purchase price to be paid over to the Vendor by the Purchaser, no other provision was made to provide for each of the parties' duties and responsibilities for full and complete sale and transfer of the Land from the Vendor to the Purchaser. The parties executed the Contract for the Sale and Purchase of the Land. Thereafter, the Vendors surrendered to the DLPP their SABL title for cancellation together with their consent for the cancellation of the title and for the State to compulsory acquire the Land for the Purchaser. In return, they received the full agreed purchase price of K10 Million.

There was much delay in the processing of the cancellation and acquisition of the Land. The Purchaser wrote to the DLPP more than once following up on the due completion of the acquisition process. Eventually by letter dated 04 April 2019 the DLPP apologized for the long delay and outlined the steps that must be taken to complete the process which was essentially no different to the one the Defendants stated in their letter of 14 April 2014. At the same time, it added a few additional requirements that must be met for the complete acquisition of the Land by NICTA.

Through a new law firm instructed by NICTA, this proceeding was commenced and pursued against the Defendants' claiming NICTA was owed a duty of care by the Defendants which was breached. That was despite having no lawyer client relationship but based on the common law tort of negligent statement, in terms of the information the Defendants communicated to NICTA in their letter of 13 October 2014. The Defendants denied having such a duty of care and its breach, the information they passed on was true and correct and is information NICTA in any case had or could have received from the DLPP. Proceeding on that basis, the Defendants requested a withdrawal of the proceedings and failing that they would file their defence and apply for a dismissal of the proceeding. At the same time, they warned against costs on an indemnity basis. On NICTA deciding not to withdraw the proceeding, the Defendants applied for a dismissal of the proceedings pursuant to O.12, r40 the National Court Rules for a failure to disclose a reasonable cause of action against them.

Held:

1. Lawyers owe a duty of care to their clients in a lawyer and client relationship which duty is codified and strengthened by the lawyers Professional Conduct Rules 1989 (PCR) especially by r8 and r10(1) and (6) which provides for lawyers to be faithful to their clients, render undivided fidelity to their clients and are prohibited from advising third parties who are not their clients.

2. The common law principles governing negligent statements in terms of a representor of a statement's need to foresee the representee to reasonably rely on the representation and for the representor to reasonably foresee that he would do so as elaborated and enunciated by the decision in Hedley Byrne & Company Limited v. Heller & Partners Limited [1964] AC 465 is part of the underlying law in Papua New Guinea, per the decision in Wahgi Savings & Loan Society Ltd v. Bank of South Pacific Ltd [1980] SC185 and others.

3. The correct English case precedents involving statements or representations made by lawyers are the decisions represented by the decisions in Dean v Allin and Watts [2001] EWCA Civ 758; [2001] 2 Lloyd's Rep 249 and Steel & Anor v. NRAM Limited [2018] 1 WLR 1190 and the line of authorities they represent.

4. The general common law principle as represented by the decision in Hedley Byrne and adopted into Papua New Guinea per the decision in the Wahgi Savings case, does not automatically apply to lawyers making a statement to the other party in a transaction who is represented by that party's own briefed or in-house lawyer.

5. Also, unlike the lawyers' position in England as represented by the decision in Dean v. Allin & Watts and Steel & Anor v. NRAM Ltd, lawyers in PNG have the provisions of r8 and r10 (1) and (6) of the PCR, which obligates lawyers to be faithful to their clients, have unbroken fidelity to their clients and not to advise third parties who are not their clients. Consequently, claims such as the one by NICTA in this case, would be effectively asking a lawyer to breach the provisions of r8 and r10 (1) and (6) of the PCR.

6. If there is an exception to the provisions of r8 and r10(1) and (6) of the PCR and that needs to be adopted into PNG as part of the underlying law, that exception with its justifications needs to be properly pleaded with particulars in accordance with the s6 and s7 of the Underlying Law Act 2000.

7. In the present case, NICTA has not properly pleaded with particulars how the Defendants owed it a duty of care when it had its own lawyers, how the information provided by the Defendants letter of 13...