N6272
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1020 OF 2015

BETWEEN:
JACKSON WALAUN
Plaintiff

AND:
ROYAL WILSON
Defendant

Kokopo: Anis AJ
2016: 4 & 13 May 

CIVIL LAW:  Order 12 rule 25(b) of the National Court Rules - motion for default - Order 7 Rule 6 of the National Court Rules - motion for leave to file defence out of time - default established - computation of time in pleading discussed - whether tests for leave to file defence out of time met - nature of claim requires matter to be properly tried - application of discretion - default judgment refused - leave to file defence out of time granted

Case cited:

George Viritia v. Alois Mabep (2011) N4236
Lina Kewakali v. The State (2011) SC1091
Luke Tai v. Australian and New Zealand Banking Group (PNG) Ltd (2000) N1979)
Michael Pundia v. Jerry Kiwai (2011) N4427

Counsel:

S Tedor, for the Plaintiff
M Titus, for the Respondent

RULING

13 May, 2016	

1.     ANIS AJ:  I have two applications before me.  The first is by the plaintiff for default judgment, and the second is by the defendant for leave to file its defence out of time.

2.    The Court heard both applications together on 4 May 2016.  I reserved my ruling to today at 9:30am.  

3.  This is my ruling.

APPLICATIONS

4.  At the hearing, I found both applications properly before the Court.  Secondly, despite the fact that the defendant filed its application on the hearing date of the plaintiff's application on 4 May 2016, the plaintiff's counsel did not take issue with service.  On that basis, the Court proceeded and heard them together.

BACKGROUND

5.    The plaintiff seeks damages for personal injuries he said he suffered from an alleged vicious attack by the defendant and his supporters.  The plaintiff alleged that the incident occurred on 30 January 2015, at 11pm at Andersons Supermarket's bus stop in Kokopo, East New Britain.  He alleged that the defendant used a stick to beat him and then dragged him out of a vehicle that he was in, onto the road.  There the plaintiff said the defendant and his supporters kicked and beat him up badly.  The plaintiff said he lost his right eye in the attack and suffered other injuries to his body.  He also seeks enforcement of his constitutional rights under section 37 of the Constitution.

ISSUES

6.    I set out the issues herein:

(i)	Whether the defendant has defaulted in filing his defence; and

(ii)	If so, whether the defendant:

(a)	applied promptly;
(b)	provided a valid reason for the delay; and
(c)	has demonstrated with evidence that he has a defence on merit.

LAW

(I)  DEFAULT JUDGEMENT

7.     The Plaintiff relies on Order 12 Rule 25 to seek default judgment.  At the hearing, I pointed out to counsel that Order 12 Rule 25 was broad and that he did not state the precise sub-rule therein.  Counsel informed the Court that the relevant provision was actually Order 12 Rule 25(b).  The defendant did not raise any objection and I allowed the plaintiff to make his application.

8.    I read Order 12 Rule 25(b) herein:

25.	Default. (17/2)

A defendant shall be in default for the purposes of this Division—   

...
(b)	where he is required to file a defence and the time for him to file his defence has expired but he has not filed his defence; or
...

9.    I am satisfied that Order 12 rule 25(b) is the correct rule relied upon by the plaintiff.

10.   There is no need to refer to the case law here.  The National Court Rules on point is clear.  If a defendant fails to file his notice of intention to defend within 30 days (i.e., from the date he is served with a writ of summons) and he has not sought leave from the Court to file his defence, a plaintiff may apply for default judgment and the Court in the exercise of its discretionary power shall make a ruling on whether to grant or refuse to grant the application.  I discussed these in detail below in my judgement.

(II)  LEAVE TO EXTEND TIME TO FILE DEFENCE

11.    The defendant relies on Order 7 Rule 6 of the National Court Rules as the basis for his application.

12.    Order 7 Rule 6 reads:

6.	Late notice. (11/6)

(1)	A defendant may give a notice of intention to defend at any time without      leave.

(2)	Where a defendant gives a notice after the time limited for doing so, he shall not, unless the Court otherwise orders, be entitled to file a defence or do any other thing later than if he had given a notice of intention to defend within that time.

13.    I am satisfied that Order 7 Rule 6 is the correct rule relied upon by the defendant.

14.    There is no exhaustive list that sets out the requirements for an applicant to meet, before the Court can grant leave to extend time to file a defence out of time.  However, there are common requirements that have been identified by the case law.  For this purpose, I will refer to two cases.  

15.   The first case is Michael Pundia v. Jerry Kiwai (2011) N4427.  Justice Makail held and I read:

8.  I turn to the third defendant’s application for leave to file its defence out of time.  The principles for application for leave to file a defence out of time are essentially that:

1.	The applicant must provide a reasonable explanation for the failure to file a defence within time;
2.	If there is a delay in bringing the application, a reasonable explanation for the delay;
3.	The applicant must demonstrate that there is a defence on merit; and
4.	There will be no prejudice if leave is granted.

16.    The second case is George Viritia v. Alois Mabep (2011) N4236.  Justice Sawong held and I read:

First is that, a defendant who seeks leave to file his defence out of time must give a reasonable explanation as to why he or she did not file his defence within time.  Secondly the applicant must show or demonstrate that he or she has a defence on the merits.  A draft defence should be annexed to the affidavit in support of the application for leave.  Thirdly, he or she must make the application for leave promptly.
(Underlining is mine)

DEFAULT

17.   During the hearing, it was obvious that the defendant has defaulted in filing his pleading. Both counsels agreed that the defendant 'was out of time by one day' to file his defence.

18.   The plaintiff' relied on the affidavit of Mr Tedor filed on 29 March 2016.  Mr Tedor stated at paragraphs 7 and 8 of his affidavit that the defendant filed its purported defence 1 day outside the 44 days required period.  The defendant practically said the same thing at paragraph 7 in his affidavit filed on 4 May 2016, which is that he was out of time to file his defence by 1 day.

19.    I will rule on this now.  I agree generally that the defendant is in default of filing his defence.  But I disagree with counsels' assertions that the defence was filed 1 day outside the 44 days requirement.  I will explain below.

MISCONCEPTION - COMPUTING TIME

20.   The relevant rule is of course Order 7 Rule 6 of the National Court Rules.  I will restate it herein since it will be the centre of my discussion.

6.	Late notice. (11/6)

(1)	A defendant may give a notice of intention to defend at any time without leave.

(2)	Where a defendant gives a notice after the time limited for doing so, he shall not, 
      unless the Court otherwise orders, be entitled to file a defence or do any other thing later than if he had given a notice of intention to defend within that time.

21.   The correct case law on point is the case of Luke Tai v. Australian and New Zealand Banking Group (PNG) Ltd (2000) N1979.  Counsel for plaintiff pointed this out in his submission and I concurred that the case law was relevant and on point.

22.   His Honour the late Chief Justice Sir Mari Kapi who was then the Deputy Chief Justice held and I read in part:

If a defendant fails to file notice within the prescribed period, he may do so at any time without leave of the Court (O7 r 6 (1)). However, if a defendant files notice outside the prescribed period, he may not file defence or do any other thing without the leave of the Court (O 7 r 6 (2)). A defence filed without leave in these circumstances would be invalid (Thomas Koral v. Alex Kavie & Petrus Alex (Unreported judgment of the National Court dated 11 June 1999, N1899).

23.   I have already ruled above that I disagreed with both counsels on the point that the defendant filed his defence 1 day outside the 44 days required period for the defendant to file his defence.  Counsels, in my opinion, erroneously computed time on the basis that the defendant had filed his notice of intention to defend within the 30 days time limit (prescribed period).  This is what happened:  The defendant filed his notice of intention to defend on 30 September 2015, which was 2 days after the prescribed period or the 30th day which was on 28 September 2015.  He is permitted to do so (i.e., to file his notice of intention to defend outside the prescribed period) by Order 7 Rule 6(1) of the National Court Rules.  But because he has filed his notice of intention to defend outside the prescribed period, Order 7 rule 6(2) prevents him from filing his defence without leave of the Court.  Secondly, computation of time does not continue to run for a further 14 days like in a normal case where a defendant has filed his notice of intention to defend within the prescribed period.  In my opinion, the computation of time in the present matter ended as well on 28 September 2015 when the prescribed period reached its end.  And it makes perfect sense in my opinion because that is where Order 7 Rule 6(2) kicks-in or automatically becomes operational and requires the defendant to seek leave of the Court to file his defence since the pleading time has run out or has stopped.

24.    Such misconceptions appear common despite existence of rules and case law on point.  So let me conclude my discussion by setting out four (4) common different scenarios and apply Order 7 Rule 6 of the National Court Rules and the principles held in the case of Luke Tai, in an effort to hopefully clarify or give a better understanding to the rules concerning default and computation of time:

(i)	First scenario:  The defendant files his notice of intention to defend outside the prescribed period say on the 32nd day computed from the date when he received the writ of summons and statement of claim (writ).  He files his defence shortly after say on the 37th day computed from the date when he received the writ.  Does he require leave of Court to file his defence?  Answer:  Yes he does.

(ii)	Second scenario:  The defendant files his notice of intention to defend outside the prescribed period say on the 33rd day computed from the date when he received the writ.  He files his defence after that and when he computes the time from the date he received the writ, he discovers that his defence was filed on the 44th day again computed from the date when he received the writ.  Does he require leave of Court to file his defence?  Answer:  Yes he does.

(iii)	Third scenario:  The defendant files his notice of intention to defend within the prescribed period.  After that, he files his defence on the 45th day computed from the date when he received the writ.  Does he require leave of Court to file his defence?  Answer:  Yes he does.

And would it be correct for the defendant to argues or say that he was out of time to file his defence by 1 day?  Answer:  Yes, because he filed his notice of intention to defend within the prescribed time and as such computation of time continued for the additional 14 days and ended on the 44th day.  Therefore, he is correct to say that he was out of time to file his defence by 1 day.

(iv)	Fourth scenario:  The defendant files his notice of intention to defend outside the prescribed period.  He files his defence after that.  When he computes the time from the date when he received the writ, he notices that his defence was filed on the 45th day.  Does he require leave of Court to file his defence?  Answer:  Yes he does.

And would it be correct for the defendant to argue or say that he was out of time to file his defence by 1 day?  Answer: No, and the reason being that there was no continuity in computation of time since he failed to file his notice of intention to defend within the prescribed period or within 30 days.(emphasis mine)

25.  The defendant's case herein matches scenario (iv).

DELAY

26. There is no doubt that there was delay by the defendant in filing his application.  The application for leave to file defence out of time was filed, served and heard on 4 May 2016 together with the plaintiff's application for default judgment.

27.   The defendant filed his notice of intention to defend on 30th September 2015.  That was two days after the prescribed period.  As such, from that day onwards to 4 May 2016, there was a delay of about 7 months.  That is a considerable delay.

28.    I am satisfied that the defendant did not apply promptly to seek extension of time to file his defence out of time.

29.   I will consider the next issue.

EXPLANATION FOR DELAY

30.     I turn to the defendant's evidence.  I refer to his own affidavit filed on 4 May 2016.  The defendant said he engaged Mr Motuwe to act for him and he blames his lawyer for not filing his notice of intention to defend and defence, and he also makes other serious allegations against Mr Motuwe.  I note that Mr Motuwe is not a party and he cannot respond to the allegations labelled against him by the defendant herein.  And I note that I cannot duly consider and determined the allegations at this hearing because the issues on point are not properly before me.  If the defendant has issues with his former lawyer, assuming Mr Motuwe had acted for him, then that would be a matter for the defendant to take up with Mr Motuwe.

31.    In the present case, I note that Mr Motuwe did not file a formal notice of appearance for the defendant in the matter.  What is also relevant is the fact that the notice of intention to defend and the purported defence, of which were filed out of time, were signed by the defendant in person.  I note that a law firm did not prepare the two court documents.  They appear to have been prepared by a layperson, and I will assume that the defendant prepared them himself.  Both documents have the defendant's address for service.

32.    I rule now that I am satisfied that the defendant had been acting in person in relation to his matter up until May 2016 when he engaged Titus Lawyers to act for him.

33.    I note that Titus Lawyers filed a Notice of Change of Lawyers on 3 May 2016 followed by the present application.  This was done soon after the defendant engaged them to act for him.  I am satisfied that Titus Lawyers took steps without delay to act for the defendant.

34.   But over-all, I do not find any valid explanations provided by the defendant to show why he was unable to file his application much earlier.  Because I have also ruled that the defendant had acted without a lawyer before he engaged Titus Lawyers, I will consider both findings together with the others after I finish with my discussions and rulings on the other issues.

MERITORIOUS DEFENCE

35.    The defendant states he has a meritorious defence and he deposed that in his affidavit.

36.    I note that the claim is not a liquidated claim.  The claim involves alleged serious physical assaults on the plaintiff .The plaintiff claims that he suffered permanent injuries as a direct result of an attack upon him by the defendant and his supporters.  The sum of money claimed by the plaintiff is close to about one third or half a million.  I note that the National Court Rules prevents a party from seeking summary judgment in relation to personal injury claim (see Order 12 Rule 37(c)).  However, I note that no such restriction is placed in a default judgment application so this Court has the power to order default judgment on a claim that involves personal injury.

37.    The defendant's defence as deposed to in evidence alleged that the plaintiff stole his vehicle which was why he and those assisting him had to use force to apprehend the plaintiff and for him to recover his vehicle.  In my opinion, the allegations are serious and I think it would be in the interest of justice that these allegations are properly set out and proven in Court.  This is a type of claim which in my opinion should be properly tried.  I am of this opinion as opposed to all the technical arguments that have been raised herein concerning an application for default judgment. 

38.    The allegations raised by the plaintiff are equally serious.  Both parties appear to blame each other in relation to the incident. 

39.    But then I also note that when I look at the Court file, both parties have not filed one single evidence to support the pleaded facts.  I find no concrete evidence therein to support either the plaintiff or the defendant.  And I think the explanation may be that it is too early at this stage for such evidence to be adduced in Court.  And that may go on to support my view that the matter should be properly pleaded and tried.  And I think this is the turning point for me where I consider that the matter should, in the interest of justice, go for trial.

40.    There is case law which supports the approach this Court is about to take.  I refer to the Supreme Court case of Lina Kewakali v. The State (2011) SC1091...On point, the Supreme Court held and I read:

23.	In applications for default judgment, the applicant is saying that the defendant has not complied with the Rules of Court and that therefore, the plaintiff is, as of right, entitled to default judgment. A Court hearing an application for default judgment, should not just ‘tick the boxes’ so to speak but must also review the Statement of Claim to see if the action is one where default judgment can be entered.  O.12 R.32 of the National Court Rules gives the Court a wide discretion to enter or not to enter, default judgment. Even when proof of due service or process on a defendant or proof of the default is established by the plaintiff/applicant, the Court still has a discretion to refuse to enter default judgment in cases where, for instance, the effect of the default judgment would affect the rights of other co-defendants or do not disclose a reasonable cause of action or that the default judgment cannot be sustained in law. (Kante Mininga v. the State (1996) N1458; Anton Kaluni v. Aiyale Warole (2001) N2114; Beecroft No. 51 Ltd v. Neville Seeto (2004) N2561; Urban Giru v. Luke Muta (2005) N2899).  In this case, the Trial Judge obviously saw the inadequacies in the Statement of Claim and ordered as he did. In Bala Kitpa v. Vincent Auali (1998) N1773  another category was added that where a claim in a Writ raises serious allegations of fraud or deceit on the part of the plaintiff, in certain cases, the interest of justice would require those allegations to be proved by evidence in trial before judgment is given on the merits.
(Underlining is mine)

41.    I am satisfied that the allegations raised by the defendant in his supporting affidavit filed herein raise serious contentious facts and issues.  I cannot simply disregard them at this juncture.

42.    I am not satisfied that the plaintiff has provided some evidence to back up his claim.  Like I said, this is a type of claim where I think default judgment is not an appropriate relief or will do justice to both parties.  This matter should be properly tried on its merits.  The serious allegations of assaults upon the plaintiff which also appear criminal in nature as well as the claim by the defendant that the plaintiff had stolen his vehicle which led to the confrontation and assaults, should in my view be all dealt with by a trial court.

PREJUDICE

43.    I note that I did not set this heading down as one of the issues.  But it is also a valid consideration identified in the case of Michael Pundia v. Jerry Kiwai (supra), so I will discuss prejudice briefly here.

44.    I note that refusing the motion for default judgment will not prejudice the plaintiff.  The defendant has now engaged a lawyer on record so I do not expect this matter to drag on.  The parties should take steps to have the trial ready without delay.

45.   I also note that an order for costs should be in order in favour of the plaintiff to cater for possible prejudices in that regard, that is, costs thrown away or incurred by the plaintiff by lack of actions or defaults caused by the actions or inactions of the defendant.

EXERCISE OF DISCRETION

46.   I will exercise my discretionary power and refuse the plaintiff's application for default judgment.

47.    I will further exercise my discretionary power and grant an extension of time of 5 days from the date of this Court Order for the defendant to file and serve his defence.

COSTS

48.    I will award costs of both applications against the defendant.  The costs shall include today's appearance as well as the appearances on 4 May 2016 and 29 April 2016.

THE ORDERS OF THE COURT

1.	The plaintiff's application for default judgment filed on 29 March 2016 is refused.

2.	The defendant's application for leave to extend time to file his defence out of time is granted on the basis that the defendant is to file and serve his defence within 5 days from the date of the order of the Court.

3.	The defendant shall pay the plaintiff's costs of these applications and that shall include the costs of the two previous attendances on 4 May 2016 and 29 April 2016, on a party/party basis which shall be taxed if not agreed upon.

4.	Time for entry of the order is abridged to the date of settlement by the Registrar which shall take place forthwith.

The Court orders accordingly,

Sialis Tedor Lawyers:  Lawyers for the Plaintiff
Titus Lawyers:   Lawyers for the Defendant