Robmos Ltd v Fredrick M Punangi

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, J
• Judgment Date: 12 January 2017
• Citation: (2017) N6585
• Court: National Court
• Year: 2017
• Judgement Number: N6585

Full : WS No 396 of 2009; Robmos Limited v Fredrick M Punangi and Michael Thomas Somare and the persons named in Schedule 1 and Philip Stagg and the persons named in Schedule 2 and the Independent State of Papua New Guinea (2017) N6585

National Court: Kandakasi, J

Judgment Delivered: 12 January 2017

N6585

PAPUA NEW GUINEA

IN THE NATIONAL COURT OF JUSTICE

WS NO. 396 OF 2009

BETWEEN

ROBMOS LIMITED

Plaintiff

AND

FREDRICK M PUNANGI

First Defendant

AND

MICHAEL THOMAS SOMARE AND THE PERSONS NAMED IN SCHEDULE 1

Second Defendant

AND

PHILIP STAGG AND THE PERSONS NAMED IN SCHEDULE 2

Third Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fourth Respondent

Waigani: Kandakasi, J.

2014: 03rd December

2017: 12th January

CONTRACT LAW - Public tender process – Purpose of - To seek and secure the best supply of goods and services for the best possible price from suitably qualified, experience and competent bidders – Order of consideration for Central Supply and Tenders Board and other decision makers - Appropriately qualified, experienced and competent nationals first and where there is one lacking consider foreign bidders - Tender process breached - Tender awarded to foreign bidder for higher price over only one qualified, capable and competent national company – Judicial review proceedings takeout successfully resulting in set aside of tender award – No appeal or review against – Effect of – Prima facie case of liability against defendants – Plaintiff produced evidence – Defendants failed rebut case against them – Liability established against Defendants – Public Finance (Management) Act 1995

DAMAGES FOR TENDER BREACHES – Assessment of – Basis for assessment of damages – Contractual more than on the basis of tort - Expectation net income loss from tender price – Actual evidence and oral evidence adduced – No rebuttal of – Expectation net income loss from tender price awarded.

JUDGMENT & ORDERS – Facts and basis for Plaintiff’s claim already tested judicially and determined against the Defendants in a judicial review proceeding – No appeal or reviews – Effect of – Res judicata and or issue estoppel does not arise given different nature of proceedings – But a rebuttable prima facie case is presented – Failure to rebut prima facie case – Judgment for the Plaintiff – Sections 45 and 47 of the Evidence Act (Chp. 48).

VACARIOUS LIABILITY – State servants and agents breaching statutory process and procedure – Failure to cooperate with State, turn up in Court and offer evidence in defence of the State – Consequence of – State servants and agents responsible for the tort or breach of statutory and other duties resulting in the damages and judgment against the State are primarily liable – State liable to satisfy judgment and is entitled to seek contribution and or recovery from the responsible servants or agents.

LAWYERS DUTY – Lawyers have a duty to act promptly on clients instructions and take all steps necessary to resolve the client’s case within a reasonable time - Costs and interests can be minimized by earlier resolution of court proceedings – Where there is already a judgment counsel is duty bound to seek and secure clients instructions to actively pursue and resolve a matter by direct negotiations or by ADR and mediation – Where there is good reason to litigate, lawyer to appear in court and ably represent his or her client - Failure by lawyer to discharge his or her duty – Effect of – Costs and interest unnecessarily incurred – Lawyer responsible for – Client can seek recovery from lawyer – Rule 8 (4) – (7) Professional Conduct Rules 1989 – ADR Rules 2010.

Papua New Guinea Cases cited:

Able Construction Ltd v. W.R. Carpenter (PNG) Ltd (2014) N5636

AGC (Pacific) Ltd v. Sir Albert Kipalan (2000) N1944

Alex Awesa v. PNG Power Limited (2014) N5708

Andrew Moka v. Motor Vehicles Insurance (PNG) Limited (2001) N2098

Aundik Kupil v. The State [1983] PNGLR 350

Edward Etepa v. Gari Baki (2015) SC1502

Eremas Wartoto v. The State (2015) SC1411

Fly River Provincial Government v. Pioneer Health Services Ltd (2003) SC705

For example in Wantok Gaming Systems Ltd v. National Gaming Control Board (2014) N5809

Grand Chief Sir Michael Thomas Somare v. Chronox Manek & Ors (2011) SC1118

Helen Jimmy v. Paul Rookes (2012) N4705

Henry Torobert v. Mary Torobert (2012) SC1198

Jackson Mari v. Dr Sano Tahong & Ors (2015) N6241

James Liwa v Markis Vanimo (2008) N3486

John Kaina v. The State [1990] PNGLR 292

John Kul v. The Independent State of Papua New Guinea (2010) N3898

Koitachi Farms Ltd v. Kemoko Kenge (2001) N2143

Koitaki Plantations Ltd v. Charlton Ltd (2014) N5656

Limited v. ICC & Digicel (PNG) Limited (2007) N3144

Manorburn Earthmoving Limited v. The State (2008) N3287

MVIL v. Kauna Kiangua (2015) SC1476

NCDC v. Yama Security Services Pty Ltd (2003) SC707

Rabaul Shipping Limited v Peter Aisi (2006) N3173

Reference by DR Allan Marat, In the matter of Prime Minister and NEC Act 2002 Amendments (2012) SC1187

Telikom PNG Limited v. ICCC & Digicel (PNG) Limited (2008) SC906

The State v. Brian Josiah (2005) SC792

The State v. Downer Construction (PNG) Ltd (2009) SC979 Telikom PNG

Tin Siew Tan v. Thomas John Pelis [1999] PNGLR 31

Wamena Trading Limited v. Civil Aviation Authority (2006) N3058.

Work Cover Authority of NSW v. Placer (PNG) Exploration Limited (2006) N3003

Overseas Cases cited:

Allied Maples v. Simmons & Simmons [1995] WLR 1602; BAILII [1995] EWCA Civ 17

Biggin & Co Ltd v. Permanite Ltd [1951] 1 KB 422

Chaplin v. Hicks [1911] 2 KB 786

Commons [2000] 67 Con LR 1; BAILII [2000]

Commons [1999] EWHC TCC 195; BAILII [1999] EWHC Technology 199

Construction Ltd v St. John Roman Catholic School Board [1996] 28 CLR (2d) 1

Harmon CFEM Facades UK Ltd v The Corporate Office of the House of Harmon CFEM Facades UK Ltd v The Corporate Office of the House of Emery

Henderson v. Henderson (1843) 3 Hare 100; 67 ER 313

Hollington v. Hewthorn [1943] 1 KB 587

Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 589

Counsel:

M. Goodwin, for the Plaintiff

R. Gelu, for the Defendants

12th January, 2017

1. KANDAKASI J: Robmos Limited is a Papua New Guinean company (Robmos) suing for damages for the expectation net income loss for a tender it should have won but for the negligence or deliberate illegal and or improper actions of certain servants of the State. Through a judicial review proceeding, Robmos was able to secure a decision nullifying an award of the tender to an Australia company which bided at a higher price than Robmos. Given that decision, Robmos argues that, liability has been established against the State. Consequently, it argues for an award of the damages it is claiming. Despite, Mrs. R. Gelu of counsel appearing for them, the Defendants have not been actively defending this proceeding.

Issues for determination

2. The issues this Court must determine are as follows:

(1) Whether the decision in the judicial review proceeding quashing the award of the tender to the Australian company has the effect of resolving the issue of liability against the Defendants in this case?

(2) If the answer to the first question is “yes”, is Robmos entitled to recover the expected tender value of K1, 766, 250.00?

Background facts

3. The relevant background facts are straight forward. They are contained in the following affidavits by Tim Ward sworn on:

(a) 1st February 2011and filed on 7th February 2011;

(b) 22nd June 2014 and filed the same day; and

(c) 31st January 2014 and filed on same day.

4. No affidavit has been filed by or for and on behalf of any of the Defendants. Hence, Robmos’ evidence stands uncontested in any manner or form.

5. From the evidence before the Court, it is clear a call for tender was placed by the State to which Robmos responded with a formal tender. It submitted its tender on or about 21st April 2005, through the Director of Supply of the Papua New Guinea Defence Force (PNGDF). The tender was to:

(1) supply clothing apparel, ceremonial uniforms, commemorative and related items;

(2) deliver the goods for which the tender was invited within 8 to 12 weeks to the order of Murray Barracks Stores; and

(3) supply the items for a price of K1,766,250 inclusive of all charges for freight and all government taxes and duties.

6. On a date between 22nd July 2005 and 1st September 2005, the Fourth Defendant formally awarded the tender to a company called Australian Defence Apparels Limited. Australian Defence Apparels Limited (the foreign company) was a foreign company and was a company not resident in Papua New Guinea. Robmos was the only national tenderer whose tender was before the Second Defendant on 22nd July 2005 and at a cheaper price within the parameters of the tender.

7. Being aggrieved by the decision to award the tender to the foreign company, Robmos sought judicial review of the decision. The National Court after hearing its application granted Robmos’s...