N4836

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

W.S.NO. 1007 OF 2008

BETWEEN:

NATIONAL FISHERIES AUTHORITY
Plaintiff

AND:

CHARLES TIPI
Defendant

Waigani: Kariko, J
2012: 19th & 20th March

PRACTICE & PROCEDURE – CIVIL JURISDICTION – Summary judgement - Failure to give discovery – Application to strike out defence and enter judgement – O9 r15(1)(b) National Court Rules – Claim based on allegations of fraud – Exercise of discretion – Application refused. 

Facts: 

After the close of pleadings, the plaintiff gave Notice for Discovery which the defendant failed to comply with. The plaintiff applied for summary judgement for failure to give discovery.

Held:

(1)	The court should be slow to exercise the discretionary powers under O9 r15(1)(b), National Court Rules to strike out a defence and enter judgement but may do so where the failure to give discovery is intentional. 

(2)	O12 r 37, National Court Rules is not applicable where summary judgement is sought pursuant to O9 r15(1)(b), National Court Rules;.

(3)	Summary judgement upon default in giving discovery should not be entered where the claim is based on allegations of fraud, unless the failure has been intentional.

Cases cited:

MVIL v Rex Paki (2006) N3212
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC 837
Bala Kitipa v Vincent Auali, Supply and Tenders Board of Western Highlands Provincial Government and Others (1998) N1773

Counsel:

Mr F Kuvi, for the plaintiff
Mr G Lau, for the defendant

20th March, 2012

1.	KARIKO J: This proceeding relates to a property described as Section 213 Allotment 11 Lae (the property) which the National Fisheries Authority (the NFA) had a State lease over until it was purportedly transferred by the Authority to the defendant Charles Tipi (Tipi) in 2007. NFA has filed this action claiming title over the property while arguing that the purported transfer of title was a result of fraud committed by Tipi corruptly acting in collusion with certain officers from the Department of Lands. 

2.	The plaintiff filed its defence on 29th October 2008 and it appears pleadings closed thereafter. 

Application to dismiss

3.	On 20th August 2010 the NFA served Mr.Tipi with a Notice for Discovery giving him 15 days to file and serve his List of Documents. To date, Tipi has failed to comply.

4.	The non-compliance prompted the NFA to make this application pursuant to O9 r15(1)(b) of the National Court Rules (NCR) for the defendant's defence to be struck out and judgement entered in favour of NFA in terms of the relief sought in the statement of claim.

5.	The statement of claim seeks these main relief: 

•	Declaration that the purported contract of sale for the transfer of the property by NFA to Mr.Tipi is null and void;

•	Declaration that the relevant transfer deed following the purported contract for sale is also null and void; and 

•	Order for Registrar of Titles to remove from the register Mr. Tipi as the title holder of the property and revert the title to NFA. 

Order 9 rule 15(1)(b)

6.	Order 9 rule 15(1)(b) of the NCR grants to the National Court discretionary power to make "such order as it thinks fit" where a party has defaulted in complying with the requirements of the NCR in relation to discovery and inspection. Where the proceeding is by way of a writ of summons and the defaulting party is the defendant, the orders the court may make include, but are not limited to "an order that his defence be struck out and that judgement be entered accordingly".

7.	The court should be slow to exercise the discretionary powers under O9 r15(1)(b) to strike out a defence and enter judgement but may do so where the failure to give discovery is intentional; see MVIL v Rex Paki (2006) N3212. 
 
8.	It is now going up to 19 months since Mr.Tipi was due to file and serve his list of documents. This is inordinate delay. No explanation has been properly put before the court by way of affidavit in response to the application. Mr Lau for the defendant informed the court from the bar table that he had had difficulty contacting his client and had not received instructions either on the list of documents or this application. On the face of it, this is simply unacceptable. However based on what is before me, I am unable to conclude that Mr.Tipi has intentionally failed to give discovery.

9.	Mr Lau submitted that summary judgement ought not to be entered as this is prohibited by O12 r 37 NCR which provides that where the plaintiff's claim is based on an allegation of fraud, as is the case in the present proceeding, summary judgement is not available under O 12 Division 4 – Summary Disposal. In support of the submission, Mr Lau referred to the decision in Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC 837. 

10.	But in the present case judgement is not being sought under O 12 Division 4 – Summary Disposal but pursuant to O9 r15(1)(b) which is found under O9 Division 1 – Discovery and Inspection of Documents. I therefore consider that O12 r 37 is not applicable.

11.	The rationale why a claim should not be summarily determined where it is founded on allegations of fraud is that fraud is a serious allegation and may amount to a criminal offence, so in the interest of justice the claim should be properly tried. For the same reasons, this court has held that default judgement should not be granted where the statement of claim raises serious allegations of fraud and deceit, as the interests of justice require those allegations to be proved by evidence in a trial before judgment is given on the merits; Bala Kitipa v Vincent Auali, Supply and Tenders Board of Western Highlands Provincial Government and Others (1998) N1773. 

12.	Again for these same reasons, I consider that the court should not enter judgement upon default in giving discovery where the claim is based on allegations of fraud, unless the failure has been intentional. 

13.	I am inclined to give the defendant another chance to give the discovery requested but penalise him for the default to date which I consider as quite unreasonable. 

Orders

14.	After considering all the circumstances, I order as follows: 

•	The plaintiff's application for the defendant's defence to be struck out and judgement entered is refused.

•	The defendant shall pay the plaintiff's costs of and incidental to this application on a solicitor-client basis.

•	Time for the defendant to give discovery pursuant to the notice for discovery filed by the plaintiff on 20th August 2010 is extended to 16th April 2012.

•	The defendant's lawyers shall take serious and meaningful steps to obtain instructions from the defendant to give discovery pursuant to the notice for discovery filed by the plaintiff on 20th August 2010.

•	This matter shall return to court on 19th April 2012 for mention, and further directions if necessary.

•	The time for entry of these orders is abridged to the time of settlement by the Registrar which shall take place forthwith. 
___________________________________________________

Elemi Lawyers: Lawyer for the Plaintiff
Kumul Legal Group: Lawyer for the Defendant