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Papua New Guinea National Stevedores Pty Ltd v Baing; PNG Harbours Board v PNG National Stevedores Pty Ltd [1998] PGNC 21; N1705 (9 April 1998)

Unreported National Court Decisions

N1705

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS NO. 363 OF 1995
BETWEEN:
PNG NATIONAL STEVEDORES PTY LTD
FIRST PLAINTIFF
AND:
BANK OF SOUTH PACIFIC LTD
SECOND PLAINTIFF
AND:
THE HONOURABLE ANDREW BAING
FIRST DEFENDANT
AND:
PNG HARBOURS BOARD
SECOND DEFENDANT
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
THIRD DEFENDANT
AND
PNG HARBOURS BOARD
CROSS-CLAIMANT
AND
PNG NATIONAL STEVEDORES PTY LTD
CROSS-DEFENDANT

Waigani

Kapi DCJ
16 March 1998
9 April 1998

PRACTICE AND PROCEDURE – Application to set aside judgment – proper principles Considered - Application under O 12 r 8(2)(b) of the National Court Rules - Application under O 1 r 8 of the National Court rules – Application within a reasonable time O 1 r 9 of the National Court Rules.

Counsel

F. Frank for the First Plaintiff

W. Neill for the Second Plaintiff

R.S. O’Reagan QC with E. Kamburi for the Defendants

9 April 1998

KAPI DCJ: This is an application to set aside a judgement entered on the 19^th September 1996. It is necessary to set out the background to this application.

The first plaintiff commenced proceedings against the defendants for a mandatory injunction requiring the defendants to take necessary steps to repeal Statutory Instrument No. 2 of 1994 and in the alternative, for general damages.

The amended statement of claim pleads the following facts which are alleged to constitute the cause of action. In 1994 the second defendant amended s 192 of Harbours Board (General) (Amendment) By-Law (Cap 240) by Statutory Instrument No. 1 of 1994. The effect of this amendment was that a person may not carry on the business of stevedore within the boundaries of a declared port unless he is a holder of a licence. An application for such a licence:

“shall, subject to any agreement between the board and a person that applies, be made only by a person in the sense of a company that is 100% beneficially owned directly or indirectly by a citizen, but not by any such company in which the control exercisable in law or by any agreement between the company and a third part, or in practice, is maintained by a person other than a citizen.”

The effect of this law, it is alleged, was to enable citizen-owned stevedore companies to operate free from foreign-owned stevedore companies.

The first plaintiff was incorporated as a 100% citizen-owned company for purposes of carrying out stevedoring operations in the ports of Port Moresby and Lae. The first plaintiff applied and was granted a licence on or about 1^st July 1994.

It is alleged that upon the granting of the licence, the first plaintiff proceeded at substantial expense to make elaborate preparations for commencing stevedoring operations in Port Moresby and Lae. The first plaintiff alleges that these preparations were taken out in reliance of the By-Law which provide, in particular, that the operations would be free of foreign competition.

In January 1995 the first defendant announced his intention to change the policy set out in Statutory Instrument No. 1 of 1994. In accordance with the change in policy, the second defendant repealed s 192 of Harbours Board (General) By-Law (Cap 240) by Statutory Instrument No. 2 of 1994. The new amendment relevantly provides that:

“..With effect from 1^st January 1996 an application for a licence-

(a) &#16all be made only by a cy a company in which Papua New Guineans hold not less than 51% of the share capital. In order to ensure that there is a smooth transition period, application for licencebe ma comp which do nodo not fult fulfil tfil the immediately preceding [sic] requirement between the period 1/1/95 and 31/1/95 inclusive.”

The first plaintiff alleges that the effect of this amendment was to cancel the closing of stevedoring operations in Papua New Guinea ports to foreign-owned companies.

The first plaintiff further alleges that by reason of the Statutory Instrument No. 1 of 1994 and the granting of licence to the first plaintiff pursuant to the provisions of the said Statutory Instrument, the defendants are estopped from changing that policy and subsequent repeal of the said Statutory Instrument. This is the basis for the claim for mandatory injunction.

In the alternative, the first plaintiff alleges that the change in policy and the subsequent adoption of the policy in Statutory Instrument No. 2 of 1994 has prevented it from commencing stevedoring operations in Port Moresby and Lae. The first plaintiff alleges that this is unconscionable conduct and therefore it is entitled to damages.

The first and third defendants filed a defence. The second defendant was represented by different lawyers and it filed a defence as well. It is not necessary for the present purposes to set out the defence in detail.

In so far as it is relevant to the application before me, the lawyers for the first plaintiff served Notices of Discovery on the first and third defendants on the 5^th August 1996. When no list of documents were filed and served, lawyers for the first plaintiff filed a motion on the 22^nd August 1996 for orders for discovery of documents. An order was made on the 30^th August 1996 and entered on 11^th September 1996 requiring the first and third defendants to file and deliver documents within seven days of making the order.

This order was served on first and third defendants on the 12^th September 1996.

When no documents were filed and served by the seventh day from the making of the order, first plaintiff obtained the following order on the 13^th September 1996:

”IT IS THIS DAY ODERED BY CONSENT

1. &ـ T60; That that the first and third defendants make file and deliver a list of documents verified by affidavit withrty-ehours (48) of the making of this order.

2. &< 160; Thad in default of coof compliance with this order and on the filing of an affidavit of non-compliance the defence be struck out and interlocutory judgement be entered for thentiffnst trst and third defd defendanendants.

3. ـ T6at the first and and third defendants pay the plaintiff’s cost incidental to this application in any event.”

The order was entered on 19^th September 1996.The ion obility in rein respectspect of t of the action between the first plaintiff and the second defendant was set down for hearing on the 10^th February 1998.

The application to set judgement against the first and third defendants was filed on 10^th February 1998 and set down for hearing on the same date. The parties agreed to hear both matters together. Both matters were adjourned on 10^th February and set down for hearing before me on the 16^th March 1998.

At the hearing, by consent, judgement was entered for the second defendant with costs in respect of the action against the second defendant.

I heard the application to set aside judgement against the first and third defendants.

The general rule is that a perfected judgement cannot be recalled or varied, for the public interest requires that the judgement when it is entered should conclude the litigation.

There are some exceptions to this general rule. Brennan J. conveniently sets out these exceptions in Permanent Trustee Co. (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd 1976 28 FLR 195 at 198:

“The exceptions fall into three categories: those which are founded upon the inherent jurisdiction of the court to ensure that its procedures do not effect injustice; those which are authorised by statute, and those which override the general rule in order to give relief where the judgement is obtained by fraud or by an agreement which is void or voidable.

When the inherent jurisdiction of the court is invoked, the court will inquire whether the entered judgement correctly expresses the court’s decision (Re Swire (5)) or perhaps whether it requires amendment to keep its records in conformity with the real position (Mercer Alloys Corporation v Rolls Royce Ltd. (6)) or whether the judgement proceeded from a hearing which was so irregular as to be treated as a nullity (Craig v Kanssen (7); Cameron v The Cole (8). The jurisdiction may be invoked by application in the proceedings in which judgement was entered.

The cases which are authorised by statute are various, and the procedure for invoking the statutory jurisdiction depends upon the statute. Thus, an appellate court which is given the jurisdiction to hear an appeal from a judgement will be vested with a power to set the judgement aside, but the power cannot be exercised by the court from which the appeal may be brought (Re St. Nazaire Co. (9); The Liverpool [Steamship Enterprise of Panama Inc., Liverpool (Owners) v Ousel (Owners), The Liverpool] (10)). On the other hand, the slip rule (O. 31, r. 11) or the rules relating to the setting aside of judgements obtained by default (O. 14, r. 10; O. r. 14) vest the jurisdiction under those rules in the court which entered the judgement.

When the litigant has a right to set aside the judgement on the ground of fraud, however, the fraud must be alleged in a fresh action brought to try the issue (Flower v Lloyd (11); Jonesco v Beard (12)). Similarly, where the judgement is entered by consent, and a party alleges that the agreement pursuant to which the judgement was entered is void or voidable (Harvey v Phillips (13), Huddersfield Banking Co. Ltd. V Henry Lister & Sons Ltd. (14) the issue must ordinarily be litigated in a fresh action (Wilding v Sanderson (15); Rayner v Rayner (16).”

In the present case, counsel for the first and third defendants primarily rely on O 12 r 8 of the National Court Rules to set aside the judgement. During the course of submissions, an issue arose as to whether these rules are applicable to the circumstances of the present case. Mr Neill, counsel for the second plaintiff argued that the first and third defendants were represented at the hearing of the motion on 13^th September 1996 and consented to the order and therefore O 12 r 8 is not applicable. Mr. Frank for the first plaintiff simply adopted the submissions made by Mr Neill. Counsel for the first and third defendants on the other hand argued that the defendants were not represented and that there was no consent order and therefore the order was made in absence (O 12 r 8 (2) (b)). He also relied on O 12 r 8 (4).

On this issue, I heard oral evidence from Mr Komang from the State Solicitor’s Office and Mr Sullivan, a director of the first plaintiff. In essence Mr Sullivan said that he was in attendance in court on 13^th September 1996 and that the first plaintiff was represented by Mr Smith and the first and third defendants were represented by Mr Komang and that he consented to the orders proposed by Mr Smith.

Mr Komang on the other hand said that he was in the court room but he did not consent to the orders. He simply spoke to Mr Smith and asked that the matter be adjourned because he was not personally handling the case. He said that he did not announce his appearance or addressed the Court. Both witnesses were cross-examined.

Counsel referred to the endorsement by the judge’s associate on the court file which simply shows that Mr. Smith appeared for the plaintiff and orders made in terms of the notice of motion. There was no endorsement to show that Mr. Komang appeared for the defendants. It is not uncommon to find that sometimes files are not accurately endorsed. With permission of Salika J., I had the liberty of examining the judge’s notes of hearing of the motion. The record shows that Mr. Smith appeared for the plaintiff and Mr. Komang appeared for the defendants and orders were made by consent. I have drawn the attention of lawyers for all the parties to this evidence and they have had an opportunity to consider and make appropriate submissions. This is an independent piece of evidence and in my view accurately records the facts of what happened. Having regard to all the relevant materials, I have reached the conclusion that the first and third defendants were represented by Mr Komang and that he consented to the orders.

It follows from this finding that the order made on the 13^th September was not made in absence of the defendants and therefore O 12 r 8 (2) (b) is not applicable.

I am also of the opinion that O 12 r (8) sub-rule (4) is not applicable. This sub-rule is limited by the words “except so far as the order determines any claim for relief and..”. In the present case the order in question determines the relief against the defendants.

O 12 r 8 does not affect any other power of the Court to set aside a judgement (O 12 r 8 sub-rule (5)). There is power given to set aside judgement under O 1 r 8. It is in the following terms:

“8. ټ Nmn-concliance with with Rules not to render proceedings void.

Non-compliance with any of these Rules, or with any ru pracfor tme being in force, shall not render any proceedings void, unless the Cohe Court ourt otherwtherwise so directs, but the proceedings may be set aside, either wholly or in part, as irregular, or may be amended or otherwise dealt with, in such a manner, and on such terms, as the Court thinks fit.

9. ҈& A60;icaplication tion to set aside for irregularity.

An application to set aside any proceeding for irregularity shall not be allowed unless it is made within a reasonable time, omade the applyipplying hang has taks taken any fresh step with knowledge of the irregularity.”

In so far as breach of the rules are concerned, the defendants rely on non-compliance in respect of O 12 r 4. This rule deals with doing of an act within a specified time. Counsel for the defendants submitted that delivery of documents which were directed to be filed and served pursuant to the order dated 30^th August 1996 was required to be done 14 days after the service of the order under O 12 r 4 (2). He submitted that the order was served on the 12^th September 1996 and therefore the period of 7 days ran from this date which would take the period to 19^th September 1996. Therefore, he submitted that the order of the 13^th September 1996 was made prematurely in non-compliance with O 12 r 4 (2).

Two things may be said of this submission. The first is that if the submission is correct, the proper date for doing of the act should be 14 days from the date of service. That would put the date at 26^th September 1996. Secondly, the period of 14 days referred to in this provision is subject to the words “..unless the Court otherwise orders..”. In the present case the Court ordered that documents be made filed and served within 7 days of the order. That is the 13^th September 1996 when the order was made. The requirement of 14 days referred to in O 12 r 4 (2) is therefore not applicable.

The order became effective on the 11^th September 1996 when it was entered. The entry of this order is not a point of dispute.

The position in the present case is this. The order of 30^th August 1996 became effective on 11^th September 1996. The 7 days within which documents had to be made served and filed ran from the making of the order. That period ran out on Friday, 6^th September 1996. Lawyers for the first plaintiff filed motion to further deal with discovery of documents on the following Monday, 9^th September 1996. On the same date the first plaintiff filed affidavit of Mr. Smith deposing that as of that date no documents had been served or filed. The motion was heard on 13^th September 1996 and up to that point in time no documents had been served or filed. As I have found, consent orders were made. I find that the first plaintiff did not breach the terms of O 12 r 4 (2).

I realise that the defendants were served with the order only on 12^th September 1996. That of course gave only one day for the first and third defendants to comply before the hearing of the motion on 13^th September 1996. O 12 r 4 (5) envisages a situation where a party who is required to do an act is unable to perform the act within the specified time, may apply to the Court to seek another specified time under O 12 r 4 (5). The defendants had an opportunity to seek such an extension on the 13^th September 1996 when Mr Komang appeared at the hearing. However, as I have found counsel who appeared for the defendants consented to the order instead.

In the event that I am wrong in respect of whether or not there was breach of O 12 r 4 (2), then I find that the application to set aside was not made within a reasonable time in accordance with O 1 r 9 of the National Court Rules. The order was made on the 13^th September 1996. The application to set aside the order was filed on 10^th February 1998. This is a period of about seventeen months. The first and third defendants gave no explanation whatsoever for the delay in filing the application. The application was made in the last minute on the morning of 10^th February 1998 to be heard the same day.

Since the order was made, the second plaintiff has been joined as a party and interim orders have been made from which it stands to gain if the judgement stands and amount of damages is settled or assessed by the Court.

In the exercise of my discretion I would not grant the relief sought in all the circumstances.

The next class of exceptions I need to consider is whether there are any circumstances which might invoke the inherent jurisdiction of the Court in common law to set aside the judgement. Brennan J. in Permanent Trustee Co. (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd. (supra) referred to three examples where the court may exercise the inherent jurisdiction to set aside judgement. I would add other examples. The Court may set aside an order where there is a mistake (see Mune v. Paul Poto Unreported judgment of the Supreme Court dated 27^th September 1996, SC508) and where the court misapprehends the law or a fact (Autodesk Inc. v. Dyason [No. 2] (1992 – [1993] HCA 6; 1993) 176 CLR 300, Richard Dennis Wallbank & Jeanette Minifie v. The State [1994] PNGLR 78, 100-103). None of these examples are applicable in the present case. The third example given by Brennan J. in this class of exception is an irregularity (as distinct from a breach of the rules) which may be treated as a nullity. However, I have found that there is no irregularity of the rules and there is no other allegation of irregularity independent of the rules which may result in a nullity.

As I understand counsel for the defendants, he made a further submission that I should set aside the judgement on another ground, namely, that the matters pleaded in the amended statement of claim does not disclose a cause of action in law. He submitted that if the judgement entered in the present case is not set aside on this ground I would be giving effect to an injustice. With respect I do not consider this to be a valid ground on which the procedure of setting aside a judgement may be adopted either under the rules or in the exercise of the court’s inherent jurisdiction. This is not an irregularity of a kind upon which an application to set aside a judgement may be entertained. I will therefore not consider the submission that there is no cause of action.

The proper procedure for this is provided in O 12 r 40 (1) (a) of the National Court Rules. The defendants could have applied for this order before judgement. This case has moved on and there is a judgement. ; Supreme Court Act. Ho>. Howeverwever, I s, I shouldhould observe that as this was a consent judgement, no right of appeal exist pursuant to s 14(2) of the Supreme Court Act. I should also observe that the period in which a person may appeal has expired a long time ago.