Plumtrade Limited v The Papua New Guinea University of Technology (2011) N4798

• Jurisdiction: Papua New Guinea
• Judge: Sawong J
• Judgment Date: 19 April 2011
• Court: National Court
• Citation: (2011) N4798
• Docket Number: WS NO. 363 OF 2009
• Year: 2011
• Judgement Number: N4798

Full Title: WS NO. 363 OF 2009; Plumtrade Limited v The Papua New Guinea University of Technology (2011) N4798

National Court: Sawong J

Judgment Delivered: 19 April 2011

N4798

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 363 OF 2009

BETWEEN:

PLUMTRADE LIMITED

Plaintiff

AND:

THE PAPUA NEW GUINEA UNIVERSITY OF

TECHNOLOGY

Defendant

Lae: Sawong J.

2010: 8 December

2011: 19 April

PRACTICE & PROCEDURES – Application to strike out action – Claims by and Against the State Act s.5 – Statutory interpretation – meaning of the expression “the State” in Claims by and Against the State Act – Whether University of Technology included in the term “the State”.

Held:

1. The Supreme Court in SCR No. 1 of 1998; Reservation Pursuant to s.15 of the Supreme Court Act (2001) SC 672 applied six criteria to determine that a provincial government was included in the term “the State” as used in the Claims by and Against the State Act.

2. The Papua New Guinea University of Technology does not meet the criterias in 1, 2, 3 and 6 and therefore whilst it is a “government body” it is not included in the term “the State” as used in the Claims by and Against the State Act. Application refused.

Cases Cited:

Minato v Kumo & The State (1998) N 1768

Tohian & The State v Tau Liu (1998) SC 566

Tobbo Yakale v Allan Sako, Misty Baloiloi & the University of Technology, SCR 1 of 1998, Reservation Pursuant to. S.15, Supreme Court Act, (2001) SC 672

Hewali v Police Force & The State (2002) N2233

Naomi Vicky John v The National Housing Corporation (2005) N2770,

Albert Areng v The National Housing Corporation & Another (2005) N2895

Dastal Limited v Dr. Puka Temu, Minister for Lands & Physical Planning & Others (11th March 2011), Batari, Kariko and Sawong JJ, SCA No. 107 of 2008

Konze Kara v The Public Curator & The Stae (2009) N 4048

Anawe Megaraka Ona v The National Housing Corporation (2009) N3623.

William Trnka v The State (2000) N 1957

Chef Secret Limited v Nationa Capital District & Others (2011) N4217

Sengus Investment Limited v The National Broadcasting Corpioration, Unreported and unnumbered judgment), Sawong J.

Counsel:

A Manase, for the Application/Defendant

D. Poka, for the Plaintiff/Respondent

19 April, 2011

1. SAWONG J: By a Writ of Summons (WS 363 of 2009) the Plaintiff is suing the defendant for an alleged debt of K110, 763.89 being for goods supplied and delivered to the defendant at the request of the defendant over a period between October 2007 and October 2008.

2. The defendant has filed a defense denying the alleged debt. The defendant has now by a Notice moved the Court to dismiss the entire proceedings on the basis that the Plaintiff did not give notice under Section 5 of the Claims By and Against the State Act (the Act).

3. Both counsel have filed written submissions and also made oral submissions. I have read and considered carefully those submissions and the affidavit materials referred to.

4. There is no dispute between the parties that the Plaintiff did not give a notice pursuant to section 5 of the Act. The issue is whether the plaintiff is required to give notice to the defendant pursuant to section 5 of the Act in this case. The issue thus raised, raise a secondary issue as to whether the defendant falls within the expression “The State”.

5. In order to determine this issue, one needs to consider the relevant provisions of the Act, Section 5 of the Act reads:

“S. 5 – Notice of Claims Against the State.

(1) No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this section by the claimant to:

(a) The Departmental Head of the Department responsible for justice matters; or

(b) The Solicitor General.”

(2) A notice under this Section shall be given –

(a) Within a period of six months after the occurrence out of which the claim arose; or

(b) Where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or

(c) Within such further period as;

(i) The principle legal advisor; or

(ii) The Court, before whom the action is instituted, on sufficient cause being shown, allows.”

6. It is clear that these two (2) subsections provide that:

· It is necessary to give notice to the State of the intention to make a claim against it. (Section 5 (1)).

· And the claim must be made within six months after the claims arose and in a claim for a breach of contract, within six months of becoming aware of the breach. (Section 5 (2)).

7. There is growing volume of case law that highlights the importance of compliance with section 5 of the Act. Principles emerging from these cases include:

· Notice of an intention to lay a claim against the State is a condition precedent to the issuing of a Writ of Summons; Tohian & The State v Tau Liu (1998) SC 566.

· The rational behind the provision is to notify the State early of an intending claim against it so that it can carry out its own investigations while evidence is still fresh and then probably consider whether or not to settle the claim; Minato v Kumo & The State (1998) N 1768.

· The Notice must be in writing and contains sufficient details of the intended claim, including date, time and place of occurrence. If insufficient details are given it may amount to non compliance with Section 5; Hewali v Police Force & The State (2002) N 2233. Badastal Limited v Dr. Puka Temu, Minister for Lands & Physical Planning & Others (11th March 2011), Batari, Kariko and Sawong JJ, SCA No. 107 of 2008.

· The Notice must be given within the prescribed time frames or within such extended time frame under Section 5 (2) of the Act. See Paul Tohian v The State & Tau Liu, (supra) William Trnka v The State (2000) N 1957 and Chef Secret Limited v National Capital District & Others (2011) N4217, Sawong J.

8. The term State is not defined in the Act. The Interpretation Act defines the expression “The State” to mean “The Independent State of Papua New Guinea”.

9. In SCR 1 of 1998, Reservation Pursuant to Section 15 of the Supreme Court Act (2001), SC 672, the Supreme Court unanimously held that the term “State” includes a Provincial Government. The Supreme Court said:

“The Constitution, does not define “The State” but it defines the name “Papua New Guinea” to mean “The Independent State of Papua New Guinea”. The Constitution also defines “governmental body” to mean:

(a) a National Government; or

(b) a Provincial Government; or

(c) an arm; department, agency or instrumentality of the National Government or a provincial body;

(d) a body set up by statute or administrative act for government or official purposes”.

The Claims By and Against the State Act (1996) does not define “the State”. The Interpretation Act defines “the State” as “The Independent State of Papua New Guinea”.

A provincial government is thus at least a “governmental body”. It is a part of “”State’’’? Is it a part of the Governmental body making up “The Independent State of Papua New Guinea”? We believe it is and therefore its assets and finances must be protected from execution in the same way as the assets and finances of the National Government. The State therefore must also include a “provincial government”…”

10. The Court concluded and said:

“We are of the opinion that a provincial government is “governmental body” making up the Independent State of Papua New Guinea for the purposes of the Claims By and Against the State Act. The power of the people is vested in “all governmental bodies” which administers and exercises them on behalf of the people. These governmental bodies includes “The National Government”, “a Provincial Government”, or arm, department, agency or instrumentality of the National Government or a Provincial Government or “a body set up by statute or administrative act for government or official purposes”. This power is exercised by these “governmental bodies” on behalf of the same people. The finances administered by a Provincial Government, is for and on behalf of the same people. The National Government administers “the National Government funds and assets”.

11. The Supreme Court also stated that this general protection did not apply to assets and finances of developmental enterprises of a provincial government that have independent corporate status and operate commercially. They are subject to the ordinary laws as corporate citizens. However, any profits this developmental enterprise contributes to the Provincial budgets become the assets belonging to the people and they are also protected from execution processes. In like manner, tax revenue generated under delegated legislative authority becomes State finances and is protected.

12. In SCR 1 of 1998 (supra), the Supreme Court sets out six (6) criterias as to whether a provincial government is included in “the State”. These criterias are whether:

1. The subject entity is established by the Constitution

2. The subject entity is part of the three tier structure of government enshrined in the Constitution.

3. like the other tiers of government, the subject...