N2491

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE AT MT HAGEN]

WS 979 OF 1999

BETWEEN:

KERENGE KAUPA alias
KERENGA KUN
Plaintiff

AND:

INDEPENDENT STATE OF
PAPUA NEW GUINEA
Defendant

Mt. Hagen: Davani .J
2003: 18 December
2004: 7 January

Practice and Procedure – Application to set aside judgment irregularly entered – should be set aside as of right – application under O. 12 R. 35 of the National Court Rules.

Practice and Procedure – Judgment irregularly entered – application must be made within a reasonable time – affidavit in support must depose to reasons why judgment allowed to be entered by default – who deposes the affidavit in support.
O. 1 R. 9 of the National Court Rules.

Practice and Procedure – Judgment irregularly entered – will not be set aside if party took fresh step with knowledge of irregularity.
O. 1 R. 9 of the National Court Rules.

Cases cited:
Anlaby v Praetorious (1888) 20 QBD 764
Bank South Pacific Limited v. Spencer [1989] PNGLR 239
Leo Hannet and Elizabeth Hannet v. ANZ Banking Group (PNG) Ltd SC505 per Kapi DCJ, Los and Salika JJ dated 16.8.96

Counsel:
M. Konge for the Plaintiff/Respondent
J. Kiwai for the Defendant/Applicant

7 January 2004

RULING
(Application to Set Aside Default Judgment)

DAVANI .J:	The Defendant/Applicant (‘Applicant’) moves by Notice of Motion filed by Paraka Lawyers on 3.11.03 seeking to set aside default judgment obtained by the Plaintiff on 13.12.99 as being irregularly entered, such application being moved pursuant to O. 12 R. 35 of the National Court Rules (‘NCR’). This application is supported by the affidavit of Luke Vava Jnr sworn on 23.10.03 and filed in this court on 3.11.03.

O.12 R. 35 of the NCR reads;

"35	Setting aside judgment
The Court may, on such terms as it thinks just, set aside or vary a judgment entered in pursuance of this Division."

The Plaintiff/Respondent (‘Plaintiff’) opposes the application.

The Application

The Applicant submits that Default judgment was irregularly entered because the time period within which it was to have filed its Notice of intention to Defend had not yet expired when the Plaintiff applied for Default judgment which was granted.

It is necessary that I set out a chronology of the pleadings filed to then appreciate the Applicants submissions. These are;

1.	The Writ of Summons and Statement of Claim was filed on 9.9.99 (‘Summons’);
2.	Personal service of the summons was effected on the personal secretary to the Solicitor-General Kisolel Kiapin on 11.11.99;
3.	On 13.12.99, the Plaintiffs lawyer filed application for Default Judgment, for failure to file Notice of intention to Defend;
4.	On 13.12.99, the court heard the application for Default judgment, awarded judgment and which was entered on 14.12.99.

The Applicants submits that after the Office of the Solicitor-General was served with the Summons on 11.11.99, that it had 60 to 90 days to serve its Notice of intention to Defend. The Applicant submits this relying on s. 9 (a) (i) (ii) of the Claims By and Against the State Act No. 52 of 1996 (‘Claims Act’). This section reads;

"9.	FILING OF DEFENCE BY THIS STATE

Notwithstanding anything in any other law, in any proceedings for a claim against the State, the time within which the State shall be required to file a defence or appear in response to a summons on complaint (as the case may be) shall be –
(a)	in a claim commenced by writ in the National Court –
(i)	where the statement of claim is endorsed on the writ – before the expiry of 60 days after the date of expiry of the time limited for it to give notice of intention to defend; or
(ii)	where the statement of claim is not endorsed on the writ – before the expiry of 60 days from the date of service of the statement of claim or
…
or such further time as the court before which the action is instituted, upon sufficient cause being shown, allows."
					(my stress)

The State submits the time period of 60 to 90 days within which to file and serve Notice of Intention to Defend would have expired on 24.3.00, excluding the court vacation period which would run from 20.12.99 to 31.1.00. It submits the Plaintiff should not have applied for default judgment at the expiration of the 30 day period because the Defendant/Applicant still had time within which to file.

The Plaintiff however submits that the summons carries a notice that the prescribed Notice of intention to Defend must be received in the National Court Registry within 30 days after service of the summons upon the Defendant. In submitting that, the Plaintiff relies on O. 12 R. 25 (a) of the NCR which states;

"25	Default (17/2)
A defendant shall be in default for the purposes of this Division –
(a)	where the originating process bears a note under Rule 9 of Order 4, and the time for him to comply has expired but he has not given the notice;
…"

However s. 9 of the Claims Act is specific in that it states in no uncertain terms that "Notwithstanding anything in any other law…". That means O. 12 R. 25 (a) does not apply. The Claims Act prevails.

The Claims Act overrides O. 12 R. 25 (a) and in this case that meant the Applicant still had a further 30 days to file its Notice of intention to Defend. Applicants counsel referred me to several authorities, one of which was Bank South Pacific Limited v. Spencer [1989] PNGLR 239 where a principle of law in applications to set aside irregularly entered judgments was set. In that case, the court held;

"there is a strong distinction between setting aside a judgment for irregularity, in which case the court has no discretion to refuse to set it aside, and setting it aside where the judgment, though regular, has been obtained through some slip or error on the part of the Defendant, in which case the court has a discretion to impose terms as a condition of granting the defendant relief."

I find the court erred when it entered judgment before the expiration of the mandatory 90 days as provided in s. 9 of the Claims Act which means the Default Judgment is irregular and should be set aside, as of right.

However, O. 1 R. 9 of the NCR qualifies the right to set aside an irregularly entered judgment. O. 1 R. 8 and 9 read;

"8	Non-compliance with Rules not to render proceedings void

Non-compliance with any of these Rules, or with any rule of practice for the time being in force, shall not render any proceedings void, unless the Court 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 upon such terms, as the Court thinks fit."

"9	Application 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, or if made after the party applying has taken any fresh step with knowledge of irregularity."

O. 1 R. 8 is clear in that proceedings may be set aside either wholly or in part and in such manner as the court thinks fit. But O. 1 R. 9 unequivocally states that applications to set aside for irregularity must be made within a reasonable time and that the party applying to set aside should not have taken any fresh steps in the proceedings with knowledge of the irregularity. (see Leo Hannet and Elizabeth Hannet v. ANZ Banking Group (PNG) Ltd SC505 per Kapi DCJ, Los and Salika JJ dated 16.8.96). I again return to the chronology of the pleadings to demonstrate whether the Applicant did take fresh steps with knowledge of the irregularity and whether it made this application to set aside within a reasonable time.

•13.12.99	}	Default judgment for the Plaintiff was ordered and entered  14.12.99	}	respectively.

•27.9.02	}	The Plaintiff obtained orders to proceed to trial by
 10.2.03	}	exchange of affidavits and then written submissions.

•14.4.03		Paraka Lawyers filed Notice of Change of Lawyers

•3.11.03	Paraka Lawyers filed this application to set aside default judgment for being irregular.

I have seen that after Default Judgment was taken out, the Plaintiff applied to the court for directions as to how this matter should proceed. The court records does not show whether the orders were obtained by consent or after arguments were heard. Neither counsel have addressed me on this so I will assume the matter was either argued or the Plaintiff proceeded to obtain orders in the Defendants absence. It therefore means, the Defendant did not take any fresh steps with knowledge of the default judgment, which will jeopardize their likelihood of default judgment being set aside. To illustrate, I refer to Leo Hannet (supra), where the Hannets agreed to pay a certain amount of money as a result of garnishee proceedings filed against them, which proceedings were taken out after a default judgment was entered against them in a debt claim. The National Court refused to set aside default judgment because although judgment was found to be irregular because proper service was not effected, the Defendants had not shown a defence on the merits. The Defendants appealed and the Supreme Court dismissed the appeal because:

1.	The Appellant had taken fresh steps when they knew or had known that Default judgment had already been taken out. The court held that the Appellant by taking these steps, had waived his right to set aside.

2.	The Appellant did not show a Defence on the merits.

In this case, default judgment was irregularly entered because the time period within which to file a Notice of Intention to Defend had not expired when the court entered default judgment. This is similar to the common law case of Anlaby v Praetorious (1888) 20 QBD 764 where default judgment was entered before the time limited for filing Defence had expired. The court set aside default judgment because parties were entitled ex debito justitiae to have it set aside (or for the court to exercise its discretion in one way, namely to set aside judgment in the circumstances).

This then takes me to the terms of O. 1 R. 8 and O. 1 R. 9. Firstly O. 1 R. 9 – was the application made within a reasonable time? Default Judgment was taken out on 13.9.99. The Office of the Solicitor-General was then acting for the Defendants. There is no affidavit either from the Solicitor-General or his employed lawyers explaining why judgment was allowed to be entered by default and why, since September 1999, no steps had been taken to set aside default judgment. The Affidavit deposed to by Luke Vara Jnr, lawyer, of Paraka Lawyers sworn on 23.10.03 does not provide any explanation at all.

I find there has been an unreasonably long delay in applying to set aside for which no explanation is provided. In fact the present status of these proceedings is that pursuant to the courts orders of 27.9.02 which were entered on 10.2.03, the matter will proceed by way of affidavits and written submissions. I note the Plaintiff filed its submissions on 25.9.03 and that it is now for the Defendant to do so.

In relation to O. 1 R. 8, I find I can set aside the whole proceedings as being irregular and on terms. However O. 1 R. 9 is clear in that proceedings may be set aside for irregularity but "shall not be allowed unless it is made within a reasonable time…". In this case, a delay of 4 years and 1 month is not a reasonable time.

I will dismiss the application to set aside. The Applicant shall pay the Plaintiffs costs of the application.
_____________________________________________________________________
Lawyer for the Plaintiff/Respondent	:	Kopunye Lawyers
Lawyers for Defendant/Applicant		:	Paraka Lawyers