THE Department of Works and Highways (DoWH) for a record has again saved another K105 million claim through court victory.
Works and Highways Minister Solan Mirisim announced this in a statement last Friday while welcoming the National Court decision to dismiss a case between the Roadstabilizer PNG Limited (RPNGL) and the DoWH.
“As the Minister for Works and Highways, I am pleased to tell the nation that the DoWH has yet again won another court battle on Monday 27 February, 2023.
Following a contested hearing, the Waigani National Court had dismissed the claim by RPNGL against the DoWH and the State for breach of contract,” Mirisim said.
He said the claim by RPNGL against the DoWH and the State was for damages for breach of contract.
By way of giving the background of the court battle, Minister Mirisim said that on the 7th of June 2012, the RPNGL and the State through the former Secretary of the DoWH, Mr. Joel Luma, executed a total of seventy-nine (79) Minor Maintenance Works Pro-Forma Contracts.
He said the contracts relate to 19 arterial roads in the National Capital District at a cost of K17,686,101.89 with the contracts containing standard terms and conditions except the contract sum.
The Minister further explained that the contracts required RPNGL to undertake earthworks, pavements and bitumen surfacing in various roads in the National Capital District.
He said on the date of execution of the contracts, the company demanded the DoWH for an advance payment of KIO, 890,000.00 which sum amounted to about 64% of the total value of the 79 Contracts so it could order the pothole patching products from a supplier in Australia and commence the works.
“However, DoWH refused to pay the contracts in advance. After numerous unsuccessful attempts, the RPNGL sued Mr. David Wereh, the Secretary for Works and Highways, the Minister for Works and Highways and the State for breach of the 79 Contracts.
On the 11th of February 2014, Mirisim said Elemi Lawyers filed a writ of summons on behalf of the company which saw the State being the primary defendant.
RPNGL in its summons statement alleged that it undertook the respective works required under each of the 79 contracts and demanded payment pursuant to the contracts, however, the State failed to effect payment as per the terms of the contract.
By reason of the failure to effect payments pursuant to the contracts, it (RPNGL) suffered the loss of the value of contracts in the sum of K17, 686,101.89, loss of business in the sum of K38, 021,000.00, special damages in the sum of K2,189,000.00, general damages plus interest pursuant to statute plus costs of the proceedings.
The total amount pleaded in the statement of claim was K57, 296, 101.89. However, taking into account other claims including general damages, interest on judgment debt and costs of the proceedings, the total State liability in this claim was estimated at K105 million.
Mirisim said the DoWH through the Attorney-General engaged the services of the private law firm, Guardian Legal Services to defend the department and the State.
He said Guardian Legal Services vigorously defended this claim in Court and eventually assisted the Court to dismiss the claim in its entirety with costs thus saving the State K105 million that otherwise could have been wasted if the claim was not defended properly in Court.
Mirisim said since 2013, the DoWH with the cooperation of Attorney-General has singled-handedly successfully defended similar false claims worth over K700 million.
“No doubt those savings ultimately save public monies for public use and on behalf of the government and the people, I commend the Secretary Wereh and his legal team for maintaining the winning track since 2013,” Minister Mirisim said.
In the light of the court victory, Minister Mirisim announced that “the times of collusion and conspiracy between claimants and unscrupulous public servants to facilitate false and bogus claims against the Department of Works and Highways are a thing of the past”.
“Since 2013, the DoWH with the support of the Attorney-General, has been testing the validity and the merits of every claim against the department in the Courts of PNG and we have succeeded in getting rid of all false claims against the Department.
We will continue to defend any false claims and there will be no room for negotiation for out of court settlement of all unmeritorious claims involving the DoWH.”
