Suing a company is not difficult, but three things are commonly got wrong: the name, the method of service, and who may appear.
Get the name exactly right
A company incorporated under the Companies Act 1997 is a separate legal person. It must be sued by the name on the register, including Limited or Ltd.
Do not sue the trading name, the shopfront sign, or the directors. Search the register maintained by the Registrar of Companies at the Investment Promotion Authority and take the name from there.
Suing the trading name. If the company trades under a business name, that is not the defendant. See suing a business name — and note that Order 5 Division 3 applies only where the business name is unregistered.
Suing the directors. Directors are not liable for the company’s debts merely because they are directors. Joining a director requires a cause of action against that person.
Suing the wrong company in a group. Common where several companies share a similar name. Check who actually contracted.
A mistake is not fatal — Order 5 Rule 7 provides that proceedings shall not be defeated by reason of the misjoinder of a party, and Rule 8 allows the right defendant to be added. But under Rule 11(3) the added party’s commencement date is the date of the amendment, which matters for the limitation period.
Companies Act section 431
Notwithstanding any other Act, a document — including a writ, summons, notice or order — in any legal proceedings may be served on a company —
(a) by delivery to a person named as a director or the secretary of the company on the register;
(b) by delivery to an employee of the company at the company’s head office or principal place of business;
(c) by leaving it at the company’s registered office or address for service;
(d) by posting it to the company’s registered office, address for service, or postal address;
(e) by serving it in accordance with any directions as to service given by the court;
(f) in accordance with an agreement made with the company; or
(g) by serving it at an address for service given in accordance with the rules of Court, or by such means as a solicitor has stated that the solicitor will accept service.
The methods specified in subsection (1) are the only methods by which a document in legal proceedings may be served on a company in the country.
That is an exhaustive provision, and it governs. Leaving a writ with a shop assistant who is not an employee at the head office or principal place of business, or handing it to a shareholder, is not service.
Note how this interacts with the Rules. Order 6 Rule 2(1) requires originating process to be served personally on each defendant — but expressly “subject to any Act”. Order 6 Rule 3(2) allows personal service on a corporation by serving the mayor, chairman or president, or the town clerk, clerk, secretary, treasurer or other similar officer, and Rule 3(3) says that sub-rule applies in addition to any provision for service on a corporation made by or under any Act. For a company under the 1997 Act, section 431(2) is the controlling provision.
| Method | Comment |
|---|---|
| Leave at the registered office — s 431(1)(c) | The most reliable. The register discloses the address |
| Post to the registered office — s 431(1)(d) | Cheap; keep proof of posting |
| Deliver to a director or the secretary — s 431(1)(a) | Must be a person named on the register — check first |
| Deliver to an employee at the head office — s 431(1)(b) | Head office or principal place of business only |
| Court-directed service — s 431(1)(e) | Where the ordinary methods fail — see substituted service |
| Solicitor accepts — s 431(1)(g) | Matches Order 6 Rule 8 — acceptance by solicitor |
Section 161(1) — a company shall always have a registered office in the country, and it shall be identifiable and easily accessible. Section 162 allows the company to change it; the change takes effect on a date stated in the notice. So check the register at the time you serve, not at the time you took instructions.
Section 433
An overseas company may be served in Papua New Guinea by delivery to a director named in the register who is resident in the country; to a person named in the register as authorised to accept service; to an employee at its place of business (or principal place of business) in the country; by posting to its principal place of business or postal address; by court-directed service; or in accordance with an agreement made with the company.
Section 433(2) — again, these are the only methods.
Where the company has no place of business and no authorised person in the country, section 433 has nothing to bite on. You are then in the territory of service outside Papua New Guinea under Order 6 Division 2, which requires the proceeding to fall within one of the specified categories.
A company must have a lawyer
Except as provided by or under any Act, a corporation may not commence or carry on any proceedings otherwise than by a solicitor.
A director who files a notice of intention to defend for the company, or appears to argue its case, has no standing to do so. The consequence can be that the company is effectively undefended and default judgment follows.
If a company is served and cannot afford a lawyer, the answer is not to send a director to court. It is to instruct someone, or to consider whether the company should be dealt with under the Insolvency Act or the winding-up provisions of the Companies Act.
Contrast a sole trader or partnership, who may appear in person.
Sources
- Companies Act 1997 — ss 161–163, 431–434
- National Court Rules 1983 — O 4 r 5; O 5 rr 7, 8, 11, Div 3; O 6 rr 2, 3, 8, Div 2
- Insolvency Act (Chapter 253)
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.