Papua New Guinea University of Technology v Plumtrade Ltd (2012) SC1209

• Jurisdiction: Papua New Guinea
• Judge: Gavara-Nanu J; Kariko J; Collier J
• Judgment Date: 14 November 2012
• Citation: (2012) SC1209
• Docket Number: SCA 55 of 2011
• Court: Supreme Court
• Year: 2012
• Judgement Number: SC1209

Full Title: SCA 55 of 2011; Papua New Guinea University of Technology v Plumtrade Ltd (2012) SC1209

Supreme Court: Gavara-Nanu J; Kariko J; Collier J

Judgment Delivered: 14 November 2012

SC1209

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA 55 of 2011

BETWEEN

PAPUA NEW GUINEA UNIVERSITY OF TECHNOLOGY

Appellant

AND

PLUMTRADE LTD

Respondent

Waigani: Gavara-Nanu J; Kariko J; Collier J

2012: 30 October

2012: 14 November

STATUTORY AUTHORITY – Section 5 of Claims By and Against the State Act 1996 - whether Papua New Guinea University of Technology is part of “the State” – relevant principles in considering Section 5

PRACTICE AND PROCEDURE – failure of respondent to appear in appeal – approach of Court to hearing appellant’s submissions

Facts

A university appealed against the decision at first instance where the Court found that the university was not “the State” for the purposes of Section 5 of the Claims By and Against the State Act 1996.

Held:

1. The appellant was not “the State” for the purposes of Section 5 of the Claims By and Against the State Act 1996.

2. Being a governmental body within the meaning of Schedule 1.2.2(d) of the Constitution does not automatically mean that the entity is part of “the State”.

3. Whether a governmental body within the meaning of Schedule 1.2.2(d) of the Constitution is part of “the State” depends, in every case, on the construction of its governing legislation.

4. Remarks: as to the discretion of the Court to hear an appeal on its merits notwithstanding the absence of the respondent.

Cases cited:

Papua New Guinea Case

Kulunga v International Education Agency of Papua New Guinea (2011) SC1106

Maps Tuna Limited v Manus Provincial Government (2007) SC857

Mineral Resources Developments Company Limited v Mathew Sisimolu (2010) SC1090

Naomi Vicky John v National Housing Corporation (2005) N2770

National Capital District Commission v Jim Reima (2009) SC993

Paul Tohian v Tau Liu (1998) SC566

Plumtrade Limited v The Papua New Guinea University of Technology, (unreported, Sawong J, National Court of Justice, WS No. 363 of 2009, 19 April 2011)

SCR No. 1 of 1998, Reservation Pursuant to Section 15 of the Supreme Court Act (2001) SC672

Sengus Investment Limited v National Broadcasting Corporation (2010) N4129

Tobbo Yakale v Allan Sako as the Registrar of Papua New Guinea University of Technology (unreported, Yagi J, National Court of Justice, WS No. 1114 of 2008, 22 February 2010)

Wagambie and Kupo v Brigadier General Rockus Lockinap [1991] PNGLR 145

Overseas Cases

Riverpath Ltd v Brammall [2000] All ER (D) 99

Counsel:

Mr A Manase, for the Appellant

No appearance for the Respondent

Reasons for Judgment

1. BY THE COURT: This appeal raises an important question of law concerning the interpretation of Section 5 of the Claims By and Against the State Act 1996 (“Claims Act”). The appellant, Papua New Guinea University of Technology (“the University”), appeals against an interlocutory decision of Sawong J of 19 April 2011 in National Court proceeding WS No 363 of 2009. In that decision his Honour found that whilst the University was a “governmental body”, for the purposes of Section 5 of the Claims Act it was not included in the term “the State” as used in the Claims Act.

2. The Notice of Appeal filed by the University lists eleven grounds of appeal, however at the hearing before the Full Bench of the Supreme Court Mr Manase for the University conceded that there was, in effect, only one ground of appeal: namely that his Honour below erred in finding that the University was not protected by Section 5 of the Claims Act from an action to enforce a claim against it. It is appropriate to consider the appeal before the Court on this basis.

Where the respondent does not enter an appearance

3. At the hearing of the appeal in this case there was no appearance on behalf of the respondent Plumtrade Ltd, and no explanation for that lack of appearance. The Court granted leave to Mr Manase for the University to tender copies of letters of service of the notice of hearing upon the lawyers for the respondents. The Court then permitted Mr Manase to make submissions in support of the appeal.

4. The absence of the respondent at the hearing of an appeal deprives the appellate Court of the benefit of the submissions of a contradictor in circumstances where the question to be determined by the Court is whether a standing judgment of the Court below should be overturned. There is no provision in either the Supreme Court Act 1975 or the Supreme Court Rules 1984 dealing with this situation. However in a case where the respondent neither appears nor makes submissions to oppose the appeal, information is before the Court that the respondent is (or should be) fully aware of the hearing date, and the Court is unaware of the reasons for the apparent lack of interest of the respondent, the Court has a discretion to either hear submissions of the appellant in support of the appeal, or to adjourn the matter. Clearly, the appellant needs to substantiate its case – the absence of the respondent from the hearing of the appeal does not entitle the appellant to automatic default judgment. The appellant is required to demonstrate that the primary Judge made errors of law or fact warranting the judgment below being set aside (see, for example, Kulunga v International Education Agency of Papua New Guinea (2011) SC1106). In deciding to hear submissions from the appellant, the appellate Court is required to carefully consider the merits of the appeal before reaching a decision. A respondent against whom judgment is entered in these circumstances may be at liberty to apply for the decision to be set aside, however it would be a rare case where the Court exercised jurisdiction to set aside an order that it had made, if it was satisfied that there was no real prospect of any new order being different from that which it originally made: Neuberger J in Riverpath Ltd v Brammall [2000] All ER (D) 99.

Background

5. The background facts to this appeal are as follows.

6. The University is a State-owned university, established under the Papua New Guinea University of Technology Act 1986 (“Unitech Act”). The respondent is a supplier of building materials.

7. Between October 2007 and 2008 the respondent supplied materials to the University for general repair and maintenance work on student accommodation units. The respondent claimed that the cost of materials sold and delivered by it on credit to the University at the University’s request was in the sum of K110,763.89.

8. A dispute arose between the parties. The University claimed that, in fact, the respondent supplied some materials which were not included in the Official University Purchase Order, and further that not all materials allegedly supplied by the respondent were in fact delivered. The University claimed that it was only liable to the respondent in the sum of K11,145.75.

9. On 17 July 2009, the respondent obtained judgment by default in the sum of K110,763.89 plus interest at 12.5% per annum and costs of K263 for the failure of the University to file a defence within time.

10. On 21 April 2009, the National Court set aside the default judgment and allowed the University 14 days to file a defence. In its defence, the University generally denied the claim, but also asserted that because it was an institution of the Government a notice of the respondent’s claim should have been given to the State under Section 5 of the Claims Act (“Section 5 notice”).

11. It is not in dispute that the respondent had not given the University, or anyone else, a Section 5 notice. Subsequently, the University by Notice of Motion moved the Court to dismiss the entire proceedings on that basis.

Decision of the primary judge

12. In considering the Motion before the Court, his Honour considered principles emerging from recent cases in which Section 5 had been considered, and discussed in some detail the decisions including SCR No. 1 of 1998, Reservation Pursuant to Section 15 of the Supreme Court Act (2001) SC672; Naomi Vicky John v National Housing Corporation (2005) N2770; Sengus Investment Limited v National Broadcasting Corporation (2010) N4129 and Tobbo Yakale v Allan Sako as the Registrar of Papua New Guinea University of Technology (unreported, Yagi J, National Court of Justice, WS No. 1114 of 2008, 22 February 2010) as well as the submissions of the parties. The primary Judge noted that in Tobbo Yakale, Yagi J had found that the University was part of the “State” for the purposes of Section 5 of the Claims Act however his Honour respectfully disagreed with that conclusion and dismissed the appellant’s motion (Plumtrade Limited v The Papua New Guinea University of Technology, unreported, Sawong J, National Court of Justice, WS No. 363 of 2009, 19 April 2011). Further, his Honour distinguished his earlier decision in Sengus Investment Limited on the basis that that decision involved the application of Section 13 of the Claims Act, whereas these proceedings concerned Section 5.

13. His Honour reached his conclusions for two reasons, in summary as follows:

(1) While his Honour...