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National Court of Papua New Guinea |
2128
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS. NO. 749 OF 2000
KUNDU CONSULTANTS LIMITED
- Plaintiff/Respondent
AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA.
- Dependant/Applicant
WAIGANI: LENALIA, J.
2001: 21, 25 May
PRACTICE AND PROCEDURE – Trial date set for assessment – Damages – Default Judgment – Default judgment entered on failure to file defence – Application to set aside struck out.
PRACTICE AND PROCEDURE – Assessment of Damages – Trial date set – Motion to dismiss for defective pleadings or to set aside – Defence on the merit – Whether affidavit shows defence on the merit – Principles – Defence on the merit.
CASES CITED:
The following cases are cited on judgment:
Green and Co. Pty. Ltd –v- Green [1976] PNGLR 73
Barker –v- The Government of Papua New Guinea [1976] PNGLR 340
The Government of Papua New guinea and Davies –v- Barker [1977] PNGLR 386
George Page Pty Ltd -v- Malipu Bus Balakau [1982] PNGLR 140
Counsel:
G. Toop, for the Plaintiff/Respondent
D. Lambu, for the Defendant/Applicant
25 May, 2001
LENALIA, J. This matter was not listed for trial on the 7 of this month, however Messrs. Toop and Kua brought it up before me submitting that due to the urgency of the matter and due to the fact that default judgment had been entered and since trial on damages would only been very brief, they indicated they wanted to proceed if time permitted the Court. I indicated to the lawyers that, the listing and been done and I was proceeding according to the cases that had been set. I indicated however that if the case set for trial on 21 of this month fell through, the lawyers should then bring this matter up. The case set for trial on that date fell through and this case was again brought to my attention.
Quite surprisingly to the Court, when the lawyers appeared on 21 May, their former submissions were not followed and diverted to arguing two motions. The first one being filed by the Solicitor General for and on behalf of the State and a Cross-Motion by the Respondent/Plaintiff. The Applicant filed the Notice of Motion on 16th of this month seeks the following orders:-
"1. Plaintiffs cause of action be dismissed for
(a) non disclosure of a reasonable cause of action pursuant to Order 8 Rule 27 (1)(a) of the National Court Rules.
(b) the action is prevented by the doctrine of "Res Judicata".
(c) Duplicity.
By a Cross Motion, the Plaintiff’s lawyers filed a cross-motion on 18th May, 2001 seeking orders that:-
"1. The Defendant’s motion be struck out on the grounds it is an abuse of the process, misconceive and vexatious.
The two motions were argued together. In order to fully comprehend the nature of the two notice of motions, I set out in brief some chronological events which took place from the time the Writ of Summons NO. 749 of 2000 was filed. The Plaintiff took out an action against the State for maritime services rendered to the State and it’s servant engaged in the Bougainville uprising between 1993 and 1996 following failure by the Defendant to honour the contract entered into between the Plaintiff and the Defendant through its servants, the Plaintiff took out an action against the Defendant WS. No. 268 of 1997 on which Woods, J. ordered the Defendant to pay the Plaintiff a sum of K182,200.00 together with costs and interest was well over K200,000.00.
On the current action WS No. 749 of 2000, the Plaintiff claims that certain invoices Nos. 100001 to 100043 and 200001 to 200036 related to the supply of marine service by their two vessels, "Buka Princess, Buka 1 and Buka 2" for the period from 15th of May 1993 to 15th of May 1996. The total amount claimed for that period is K6,571 000.00 according to the plaintiff’s pleadings.
The current proceedings on WS No. 749 of 2001 was filed on July 3 2000. It was served on the Solicitor General’s Office on 4th of the same month. The Defendant’s lawyers filed a Notice of Intention to Defend on August, 22 of 2000. A formal defence was filed on October 2 the same year but was refused on the basis it was filed out of time. On 9 August, the Plaintiff filed a Notice of Motion seeking Default Judgment and by 18th of that month judgment was entered in favour of the Plaintiff for damages to be assessed.
Following the above, the Defendant filed a notice to set aside the judgment but was struck out for want of prosecution and the matter was then brought before me for trial on assessment of damages but which trial was vacated due to the two motions, the subject of this judgment.
There are a number of contentions arising from the notice filed by the Defendant. First Mr. Lambu argued that the pleadings do not disclose a reasonable cause of action and the claim should be dismissed pursuant to Order 8 Rule 27 (1)(a). Order 8 Rule 27 (1)(a) provides.
"27. Embarrassment.
(1) Where a pleading –
- (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleadings; or
- (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings; or
- (c) is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceedings, on terms or otherwise, order that the whole or any part of the pleadings be struck out.
(2) The Court may receive evidence on the hearing of an application for an order under Sub-rule (1)."
Mr. Lambu argued sporadically that, there are various factors affecting validity of the claim. The first is that, with the magnitude of such a contract involving a huge amount of money could not have been entered into in isolation of the requirement of applying the Public Finance Management Act. That the contract had not been through a Public Tenders Board as required by the Act and such contract would have to be approved by His Excellency the Governor General of Papua New Guinea.
The second ground relied on by the defence relates to the question of "res judicata". On this ground, in Mr. Kua’s affidavit filed on 16th of this month in support of their motion says at paragraph 3 (a)(b) that the pleadings in the current action WS. No. 749 of 2000 are not only similar but exactly the same as to those facts that were pleaded in WS No. 268 of 1997 by the Plaintiff. Mr. Kua further says that the order by Woods, J. on WS No. 268 of 1997 was not for a breach of contract but on "quantum meruit" basis according to calculations he had made himself.
The third point argued by Mr. Lambu is that the action by the Plaintiff is now statute barred. He submitted according to the State of Frauds and Limitation Act – Ch. No. 330, the claim is well over some six (6) years and the Plaintiff could not be possibly be allowed to maintain it’s claim. On that argument the Frauds and Limitation Act 1998 s.16 provides for the limitation of actions in contract and tort not to be brought after the expiration of six (6) years commencing on the date on which the cause of action accrued. However, the same section provides exceptions to ss. 17 and 18 to the extent of admiralty jurisdiction and claims on specific performances.
Mr. Lambu further urged that given the circumstances of this claim and the fact that the Plaintiff had not properly pleaded their cause coupled with the fact that there was no proper contractual terms, the Plaintiff cannot possibly come up with a bare figure of over K6,000,000.00
Mr. Toop argued the contrary saying that for an application to set aside an order entered by default must be made within reasonable time and there should be a defence on the merit. Mr. Toop was rather critical about the way the Solicitor General’s office has handled this claim. The Deputy Solicitor General Mr. Gelu had file a Certificate of Readiness for assessment of damages, physically means that is the end of the pleadings. Mr. Toop further argued that, the manner the Defendant’s lawyers have adopted borders on estoppel because the defence has now reactivated what is now the dead issue.
The Plaintiff’s lawyer further submitted that, the defence counsel has not explained why they let the judgment to be entered by default and in absence of any explanation, the motion filed by the Defendant should be dismissed. Part of their argument is that the defence had already been given time, not only that but sufficient time to file their defence. Mr. Toop said, though pleadings of the two actions (WS. No. 268 of 1997 and WS No. 749 of 2000) may be similar, the current claim arose out of unpaid invoices on maritime services rendered to the State by the Plaintiff’s vessels on the waters of Bougainville during the uprisings.
On the evidence in support of their cross-motion Mr. Kubak says in his affidavit sworn to on 18th of this month that the current claim emanates from the same factual background for which the Plaintiff is now seeking damages for the balance of their agreed contract with the State and there remains the outstanding balance of K6,277,500.00. Mr. Kubak further says at page 3 of his affidavit how is it that the defence now seeks leave to file a defence when the default judgment had not been set aside and as far as he knows, this is the second time assessment of damages has been frustrated by the Defendant’s lawyers and that, the Defendant had the opportunity to do what they seek now from August of 2000 up to 4th of December last year they did nothing about the judgment entered by default and they cannot now come before this Court and purport to challenge the judgment entered by default in favour of the Plaintiff. He further says, the course taken by the Defendant’s lawyers is nothing less than total abuse of the process.
There are two other affidavit evidence which have been filed in support of the cross-Motion, one by Mr. Simon Gilal and the other by Mr. Fred Martens which I do not wish to cover essentially because they are evidence of the parties dealings and the terms of the contract itself which I believe have been put in the Plaintiff’s pleadings.
It is settled law that in order for the Court to exercise it’s discretion in favour of an application to set aside an order previously entered by default, an applicant must show by credible evidence the principles enunciated in Green & Company Pty Ltd -v- Green [1976] PNGLR 73 and The Government of Papua New Guinea and Davies -v- Barker [1977] PNGLR 386. The principles enunciated there say that:-
(a) The applicant must explain the reason why the judgment was allowed to be entered by default.
(b) The application to set aside a default judgment should be made promptly.
(c) The applicant must show by evidence he has a prima facie evidence on the merits.
(d) As a matter of practice an application to set aside a judgment by default regularly obtained should be granted only on an affidavit or affidavits disclosing a defence on the merits: Bank of South Pacific Limited -v- Spencer [1983] PNGLR 293.
see also: George Page Pty Ltd -v- Malipu Bus Balakaui [1982] PNGLR 140.
This Court has discretion under O.12 r. 8 to set aside or vary a judgment or order pronounced by it or another judge. As to the circumstances of the motions before me, O.12 r.35 empowers the Court to set aside a judgment entered by default pursuant to O.12 Division 3. which relates to judgments made in default of compliance with requirements of the rules to file an Intention to defend followed by a formal defence pursuant to O.4 r.9 of the Rules. In comparison with procedures adopted under O.12 rr.8 and 35, they are different from procedures adopted in O.10 r.12 which relate to ex parte verdicts given at the conclusion after a trial has been conducted in absence of a party in which it has been said that the discretion under O.10 r.12 must be exercised sparingly in certain circumstances because such a verdict is given after consideration of all the evidence for the party who appeared and the finding of facts made thereupon should not be taken lightly and disturbed unless special grounds are shown to exist for doing so. An applicant must therefore show by affidavit special reasons why the verdict was allowed to be given and he must show that he has an arguable case on the merit.
In the motion filed by the Defendant in this claim, evidence in support of the motion show that what the Plaintiff now claims in their current claim and their pleadings is exactly the same as what was pleaded in WS No. 268 of 1997. I now direct your attention to the Statement of Claim, on WS No. 749 of 2000, paragraph 13 contains a tabulated five column list of particulars. The heading on those five columns are headed as follows:-
DATE PROVIDED PARTICULARS OPERATIONAL INV. AMOUNT
DOCKET NO.
By going through the list in paragraph 13 of the current particulars of claim and by comparing that with paragraph 10 of WS. No. 268 of 1997 is to this Court a reproduction of what the plaintiff had claimed for in 1997. Apart from that, despite the fact that paragraphs 9, 16 and 19 make references to sums of K6,571,000.00, K6,570,000.00 and K6,277,500.00 respectively, this cause has not been properly pleaded. As to what that figure is being claimed is not clear from the Plaintiff’s current pleadings. By observation of their tabulated columns, I am lead to believe that the period for which the Plaintiff has claimed for in 1997, is exactly pleaded in the current pleadings for which the Plaintiff cannot claim twice.
According to the doctrine of "res judicata", a final judgment of a competent court disposes once and for all of the matters decided, so that they cannot be raised again between the same parties or their privies. It is against public policy, and oppressive to the individual, to re-agitate disputes which have been litigated once and for all to a finish. These two ideas are expressed in the maxims "interest reipublicae ut sit finis litium," and "nemo debet bis vexari pro una causa".
The doctrine involves two factors. First a party is forever precluded from disputing what was necessarily decided, he is said to be estopped "per rem judicatam". Secondly, a party who has recovered judgment is forever precluded from claiming on his original cause of action. "Res judicata" arises only out of a final judgment of a competent court. The word "final" is used in contradistinction to interlocutory orders or interlocutory decree which are not final judgment. A final judgment is one which purports finally to determine the rights of parties and binds them even though an appeal may be brought, see 315 Ch. 13 "Cross on Evidence" 2nd Australian Edition.
Thus, surely, the Plaintiff has basically pleaded in their current pleadings for the same period for which they have claimed for in 1997 and have been given a judgement in their favour would in my view be prevented by the maxims "interest reipublicae ut sit finis litium" and "nemo debet bis vexari pro una causa".
The purpose of pleadings has been said to define the issues of facts or of law. The central role that the process plays is well summarized in an article "The present importance of pleadings" (1966) by Master 1 H Jacob at 171 it says:-
"Moreover, pleadings do not only define the issues between the parties for the final decision of the court at the trial; they manifest and exert their importance throughout the whole process of the litigation. They contain the particulars or the allegations of which further and better particulars may be requested or ordered, which help still further to narrow the issues or reveal more clearly what case each party is making. They limit the ambit and range of the discovery of documents and the interrogatories that may be ordered. They show on their face whether a reasonable cause of action or defence is disclosed. They provide a guide for the proper mode of trial, and particularly for the trial of preliminary issues of law or fact. They demonstrate upon which party the burden of proof lies, and who has the right to open the case. They act as a measure for comparing the evidence of a party with the case which he has pleaded. They determine the range of the admissible evidence which the parties should be prepared to adduce at the trial. They delimit the relief which the court can award. They provide the basis for the defence of res judicata in subsequent proceedings by reference to the record in the earlier proceedings." (emphasis added)
The argument raised by the defence in relation to the validity of the contract and breaches of the Public Finance Management Act and the fact that a contract of such magnitude would have to go through the Governor General for his approval are to this Court issues to be raised in a defence at the trial proper.
Having said that, this cause has not been properly pleaded and taking into consideration the principles laid down in authorities I have referred to in relation to setting aside judgment entered by default, I am of the view this claim cannot be maintained at it’s current status. I must say there is or are defences on the merit. Under such circumstances, the Rules required this Court to first order that:-
The Plaintiff is at liberty to commence fresh proceedings pursuant to O.12 r7 of the Rules. The Plaintiff shall meet the costs of these proceedings to be taxed by the Taxing Master if not agreed.
___________________________________________________________________
Lawyer for the Plaintiff: Gregory Thomas Toop, Lawyers
Lawyer for the Defendant: The Solicitor General
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