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National Development Bank Ltd v Iangalio [2012] PGNC 274; N4931 (19 November 2012)

N4931

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1174 OF 2007

BETWEEN:

NATIONAL DEVELOPMENT BANK LIMITED
Plaintiff

AND:

MASKET IANGALIO
Defendant

Waigani: Hartshorn J.
2012: 7th, 19th November

Application to set aside an ex parte order that dismissed a notice of motion for want of prosecution – Order 12 Rule 8 National Court Rules - principles

Facts:

This is an application by the defendant to set aside an ex parte order that dismissed his notice of motion for want of prosecution. The notice of motion that was dismissed had sought to set aside a default judgment that had been entered against the defendant.

Held:

The explanations given for the dismissal order being made in the absence of representation of the defendant and the defence not being prosecuted with due diligence are not reasonable, the orders sought by the defendant should be refused.

Cases cited:

Smith v. Ruma Constructions Ltd (2002) SC695
Provincial Government v. Tropical Charters Ltd (2009) N4160
Rangip v. Loko (2009) N3714
Gelu v. Somare (2009) N3647
Paradise Contractors v. Milne Bay Provincial Government (2010) N3975

Counsel:

Mr. A. Waffi, for the Plaintiff
Mr. R. G. Otto, for the Defendant

19th November, 2012

1. HARTSHORN J: This is an application by the defendant to set aside an ex parte order that dismissed his notice of motion for want of prosecution (dismissal order). The notice of motion that was dismissed had sought to set aside a default judgment that had been entered against the defendant (set aside motion).

Background

2. The plaintiff commenced this proceeding in October 2007 seeking judgment against the defendant as a guarantor. Default judgment was entered with damages to be assessed on 5th November 2010. Over four months later the defendant filed the set aside motion. The set aside motion was dismissed for want of prosecution on 11th May 2011 but was reinstated on 15th June 2011. Over one year later, the plaintiff successfully applied again to dismiss the set aside motion for want of prosecution. It is that dismissal order that the defendant seeks to set aside.

Contentions

3. The defendant contends that the dismissal order should be set aside as:

a) the reason the dismissal order was made in the absence of representation of the defendant was that counsel for the defendant had been prevented from attending the court on time because of traffic congestion.

b) there has not been any delay in making this application.

c) there is a reasonable explanation why the set aside motion was not prosecuted and the defendant has a defence on the merits.

4. The plaintiff contends that the dismissal order should not be set aside as:

a) the reasons given for the non-attendance by counsel for the defendant are not reasonable.

b) although there has not been delay in filing the motion to set aside the dismissal order, the defendant has not been diligent in defending this proceeding generally and the defendant is guilty of a lack of diligence and of delay in prosecuting his set aside motion.

c) the submissions as to a defence on the merits do not disclose such a defence.

Law

5. Both counsel submitted that this court has jurisdiction to set aside an ex parte National Court Order that dismisses a motion for want of prosecution and reliance was placed upon Paradise Contractors v. Milne Bay Provincial Government (2010) N3975, Morobe Provincial Government v. Tropical Charters Ltd (2009) N4160 and my decision of Rangip v. Loko (2009) N3714.

6. The defendant relies upon Order 12 Rule 8 (3), (4) and (5) National Court Rules. Order 12 Rule 8 (3) (a) is as follows:

"The Court may, on terms, set aside or vary an order-

(a) where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or..."

7. The principles governing the exercise of discretion as to whether an ex parte order should be set aside are well settled and were detailed by Kapi DCJ (as he then was) in Smith v. Ruma Constructions Ltd (2002) SC695: see also Rangip v. Loko (supra). The onus is on the applicant to satisfy the court:

a) why the order was allowed to be entered in the absence of the applicant,

b) if there is a delay in making the application to set aside, a reasonable explanation as to the delay, and

c) that there is a defence on the merits.

8. In this instance as the order sought to be set aside is a dismissal for want of prosecution and not a default judgment, the principle to be considered is whether there is a reasonable explanation for the proceeding, or here the defence, not being prosecuted with due diligence.

Discussion

9. It is clear that there was no delay in making this application as it was filed seven days after the dismissal order was made.

10. As to why the dismissal order was allowed to be made in the absence of representation on behalf of the defendant; counsel for the defendant in his evidence deposes that after a number of adjournments, the plaintiff's motion filed on 18th June 2012 was set for hearing at 1:30 pm on 21st September 2012. On 21st September he left the court in the lunch hour after appearing in other matters in the morning and returned to his office to obtain his file for this matter. He arrived at his office at 1.00 pm because of the traffic congestion. At his office he "attended to some signing of documents and letters before picking up the file to head back to Court." Then because of heavy traffic congestion, it took another 30 minutes for him to be taken back to the courthouse, by which time the dismissal order had been made.

11. Counsel for the plaintiff submits that this explanation is not reasonable. The traffic congestion is commonly known to all lawyers who regularly appear at the Waigani Supreme and National Courts and lawyers should plan accordingly. Here, counsel for the defendant was aware of the traffic congestion when he returned to his office and instead of attending to signing documents and letters, he should have obtained his file and immediately returned to court, especially when the set aside motion had previously been dismissed in circumstances where there was a failure of representation on behalf of the defendant to prosecute the set aside motion.

12. The traffic congestion in Waigani and its surrounds is not a new phenomenon. On the day in question, counsel for the defendant experienced for himself how congested the traffic was when he returned to his office. To then remain in his office signing documents and letters instead of immediately returning to court is not credible to my mind or demonstrates a failure to comprehend the necessity of punctuality in attending court to protect a client's interest. This is especially so given the circumstances of the previous dismissal of the setting aside order. In my view, the explanation given by counsel for the defendant is not reasonable.

13. As to an explanation for the defence not being prosecuted with due diligence; Mr. Peter Kuman, the principal of Kuman Lawyers, the lawyers for the defendant, deposes in essence that since the set aside motion was reinstated, the reason that it was not moved was because the court file was missing and that there were discussions concerning the plaintiff discontinuing this proceeding. There is no evidence that the court file was missing apart from statements in letters from Kuman Lawyers suggesting that this was the case. If the court file was missing the parties should have liaised with the National Court Registry to arrange for a supplementary file to be created. There is no evidence of this. As to court staff or the Registry contributing to the delay, as I remarked in Gelu v. Somare (2009) N3647, it is not appropriate for an applicant to sit and wait for a reply from the Registry. It is always open to an applicant to file a notice of motion seeking further directions or a hearing date if they believe that by writing to the Registry they are not obtaining satisfaction. The fact remains that no action was taken to prosecute the set aside motion after it had been reinstated, from the end of July 2011 until the end of June 2012 apart from a file search being requested and a letter being written on 27th March 2012 to the Registry requesting that the set aside motion be listed for hearing.

14. The action taken in June 2012 by the defendant's lawyers was the filing of an affidavit, after the plaintiff had filed the motion seeking to dismiss the set aside motion for want of prosecution. As to the discussions concerning a possible discontinuance, until a discontinuance has occurred, the onus is upon the defendant to prosecute his set aside motion, especially as it had been reinstated following a previous dismissal for want of prosecution.

15. After giving consideration to the explanation for the defence not being prosecuted diligently, I am not satisfied that it is reasonable in the circumstances, those circumstances including that the set aside motion was seeking to set aside a default judgment entered in November 2010, and that the set aside motion had itself been reinstated, with costs awarded against the defendant, after having previously been dismissed for want of prosecution.

16. Notwithstanding that this is an application to set aside an order dismissing a motion for want of prosecution as distinct from an application to set aside a default judgment, the defendant has argued that he has a defence on the merits. I will consider the submissions made in this regard. The defendant argues that he is a joint guarantor and therefore is not able to be sued on his own. As to this argument, the court was not referred to any documentary evidence in support of this proposition. The defendant further argued that there was an issue with service of documentation in this proceeding. As to this argument, the court was satisfied that all necessary service had been effected at the time that it entered default judgment against the defendant. These submissions as to a defence on the merits are rejected.

17. As I have found that the explanations given for the dismissal order being made in the absence of representation of the defendant and the defence not being prosecuted with due diligence are not reasonable, the orders sought by the defendant should be refused.

Orders

18. The Orders of the Court are:

a) The orders sought in the defendant's notice of motion filed 28th September 2012 are refused,

b) The plaintiff's costs of and incidental to the motion shall be paid by the defendant,

c) Time is abridged.
____________________________________________________
Namani & Associates Lawyers: Lawyers for the Plaintiff
Kuman Lawyers: Lawyers for the Defendant