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Praise Hire Cars Ltd v Leka [2018] PGNC 552; N7715 (8 May 2018)

N7715

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1023 OF 2016

BETWEEN
PRAISE HIRE CARS LTD
Plaintiff

AND
DIANNE LEKA, Department of Police
First Defendant

AND
TONY HASU, Department of Police
Second Defendant

AND
GARI BAKI, Commissioner of Police
Third Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Dingake J
2018: 16^th April, 8^th May

DEFAULT JUDGMENT - PRACTICE AND PROCEDURE – Application for Default Judgment – Defence not filed – preconditions for entry of default judgment met – Court has a discretion to refuse to enter default judgment if there are cogent & convincing reasons not to do so.

Cases Cited:

Giru v Muta 2005 PGNC 83;
Tima v Korohan (2006) PGNC 21;
Kumban Pagalio (2010) PGNC 92.

Counsel:

Mr. K. Teine , for Plaintiffs
No Appearance, for Defendants

8^th May, 2018

1. DINGAKE J: This is an application for default judgment against the defendants.

2. The application is made pursuant to Order 12, Rule 32 and or Order 12 Rule 27 of the National Court Rules. By Notice of Motion dated the 18^th of December, 2017, the Plaintiff/Applicant prays that default judgment be entered against the Defendants for liquidated sum of One Hundred and Forty-two Thousand, Seven Hundred and Ninety-two Kina, Ten Toea (K142,792.10) and other ancillary relief.

3. The cause of action is founded on breach of Contract (Vehicle Lease Agreement). The plaintiff alleges that the defendants have failed to pay outstanding payments for vehicles leased to it. The applicant also prays for damages allegedly occasioned to one of the leased vehicles, namely Toyota Land Cruiser 10 Seater – Reg. No. BDX 265.

4. It is not in dispute that this is a claim for liquidated demand.

5. It is common cause that the defendants have not filed any defence within the time prescribed by the National Court Rules or at all.

6. The question that falls for determination is whether this Court should grant the default judgment against the defendants as prayed.

7. It is trite learning that whether or not to grant the default judgment against the defendants is a matter of the exercise of discretion by the Court. It bears emphasizing that such discretion must be exercised judicially and not arbitrarily. Put differently, the Court must be satisfied that there are cogent and credible reasons not to exercise its discretion in favour of granting the default judgment.

8. In the case of Giru v Muta 2005 PGNC 83, the Court, (per Cannings J), helpfully sets out six pre-conditions to be met before a default judgment could be granted which I need not traverse.

9. Counsel for the Third and Fouth Defendants, Mr. Mileng correctly conceded that all the pre-conditions set out in the case of Giru, were complied with save that the supporting affidavit did not make reference to the issuance of the notice of intention to apply for default judgment.

10. The argument by Mr. Mileng that the supporting affidavit did not make reference to the fore warning letter, is in the circumstances of this matter, without merit because there is evidence that such a letter was served on 31^st of October, 2017, at the Office of the Department of the Attorney General.

11. It must be noted that even where the six pre-conditions set out in the Giru case have been met the Court may still refuse default judgment if there are cogent and convincing reasons to do so.

12. In this case I find that there are three reasons that militate against the granting of the orders sought.

13. The first is that there is authority for the preposition that if the motion for judgment is more than three weeks old, the lawyer must conduct a fresh search no more than three days before the motion is moved (Tima v Korohan (2006) PGNC 21). This application was filed on 1^st December, 2017. It is more than three weeks old and no search was conducted three days before the motion was moved.

14. The second reason is that this claim being for a liquidated demand cannot be granted pursuant to Section 12(3) of the Claims By and Against the State 1996, that prohibits same. It seems plain to me on the basis of Section 12(3) of the aforesaid Act and the authority of Kumban Pagalio (2010) PGNC 92 that judgment cannot be entered against the State for a liquidated claim unless it is for a debt.

15. The third reason is that in terms of section 2A (2) of the aforesaid Act, a claim arising out of supply of goods or services to the State may only be enforceable if the supplier of goods or services produces a properly authorised Integrated Local Purchase Order and Claim (ILPOC) or an authority to Pre-commit Expenditure, which the applicant failed to do.

16. In all the circumstances of this matter and having regard to the reasons stated above, I am not convinced that it would be appropriate to grant the default judgment sought by the Applicant.

17. In all the circumstances of this case, this application is without merit and it is refused.

18. In the premises:

(a) The application for default judgment is refused.
(b) There is no order as to costs.

________________________________________________________________
Lakakit & Associates Lawyers: Lawyers for the Plaintiffs
No Appearance: Lawyers for the Defendants