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Mirendean Enterprises Ltd v Kaugla [2018] PGSC 83; SC1726 (2 November 2018)

SC1726

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO.154 OF 2017

BETWEEN:
MIRENDEAN ENTERPRISES LTD
First Appellant

AND:
THE STATE
Second Appellant

AND:
NATHAN KAUGLA
First Respondent

AND
NATIONAL GAMING CONTROL BOARD
Second Respondent

Waigani: Salika DCJ, David & Neil JJ
2018: 30^th October, 2^nd November

SUPREME COURT APPEAL – Practice and Procedure - Objection To Competency of Appeal – objection to competency of objection to Competency

Cases Cited

Lowa v Akipe [1991] PNGLR 265
Nominees Niugini Ltd v Independent Public Business Corp (2017) SC1646
Kuli v O'Neill (2014) SC1331
Mountain Catering Ltd v Punangi & Ors (2013) SC1225
Manda v Yatala Ltd (2005) SC795
Pacific Equities & Investments Ltd v Goledu (2009) SC962
Turia v Nelson (2008) SC949

Counsel

Mr Imal, for the First Appellant
Mr Pipike, for the First Respondent
Mr Varitimos Q.C. with Mr Sioni, for the Second Respondent

JUDGEMENT

2 November, 2018

1. BY THE COURT: BACKGROUND: The First Respondent (Mr Kaugla) played on a gaming machine at the premises of the First Appellant (MEL). The gaming machine was licensed by the Second Respondent (NGCB) to MEL. The gaming machine showed a "jackpot" of many millions of kina (jackpot). Mr Kaugla asked MEL's manager for the cash value of the jackpot but was informed that K1, 600 only was available at that time and to return the next day to collect the rest. The rest of the jackpot was not paid so then Mr Kaugla commenced a claim in the National Court to recover the rest of the jackpot.

2. MEL and NGCB were defendants named in the claim. They did not file a Notice of Intention to Defend or a Defence and Mr Kaugla then proceeded to obtain a Judgement in default on 7 April 2017 (Default Judgement) because those papers had not been filed as was required by the National Court Rules (NCR). An appeal was filed seeking to overturn the Default Judgement but that was discontinued and instead an application was made to the National Court to set aside the Default Judgement. That application was dismissed by the National Court on 27 September 2017 (Order). This appeal SCA 154 of 2017 (Appeal) is from that Order.

PROCEDURE

3. The NCR sets out a simple procedure to obtain a judgement where the claim is for a specific amount and where the defendant has not responded to defend the claim. Typically this is a debt recovery action by a service provider who have done work under a contract, invoiced the work but not been paid. It is a simple procedure to be used where the issues are clear.

4. It means that a judgement will be entered by the court without the other party being heard. This type of judgement is called a default judgement and because the other party has not put their case, the procedure has safeguards to ensure there is not a miscarriage of justice. One safeguard is that the defendant may apply to the National Court to set aside the default judgement. A defendant must give reasons to support the

application such as to explain the delay in not complying with the NCR, show a prima facie defence and so on. This is a simpler procedure than an appeal and it is seen as appropriate, to give the other party a "second chance" to be heard.

OBJECTIONS TO COMPETENCY

5. Mr Kaugla has objected (Mr Kaugla's Objection) to the Notice of Appeal that MEL has filed. He says that the Notice of Appeal is out of time because it is an appeal against the Default Judgement which was made on 7 April 2017. An appeal to the Supreme Court must be filed within 40 days of the decision which is the subject of the appeal. He says that the Order made on 27 September 2017 is referred to in the Notice of Appeal simply to mask the real purpose of the Notice and he suggests that is to overturn the Default Judgement and avoid the NCR.

6. In turn MEL has objected to Mr Kaugla's Objection as it was not served on MEL or on NGCB within two weeks of Mr Kaugla filing his Objection. There was a delay of over a month in serving it. Supreme Court Rules (SCR) Order 7 Rule 15 is specific "...shall, within 14 days... serve a copy..."

7. In addition, MEL says that Mr Kaugla's Objection does not meet the basic requirement of an objection, namely to show the jurisdictional basis on which it is made.

8. To deal firstly with MEL's Objection, it is clear that Mr Kaugla's Objection was not served as required by the SCR. Mr Kaugla does not explain why there was that delay. Clearly Mr Kaugla's Objection is out of time. MEL and NGCB cite Lowa v Akipe [1991] PNGLR 265 and Nominees Niugini Ltd v Independent Public Business Corp. (2017) SC1646. Those cases clearly state that once the timeframe has elapsed, that the applicant has lost their opportunity to proceed to hearing of their application. Manda v Yatala Ltd (2005) SC795 expressed the same opinion.

9. Mr Kaugla's counsel cited Kuli v O'Neill (2014) SC1331 that the Supreme Court has discretion to hear an objection in certain circumstances. The Nominees Niugini case commented on the Kuli case as follows: "the Court has discretion which must be exercised on a proper basis and the nature and validity of the objection is the key in the Court exercising its discretion to allow an objection filed out of time." The Court would

consider the NCR and the authorities which detail what the Court has to consider in deciding to whether or not to set aside the Default Judgement.

10. That is what the Appeal is about: Did the Court when it made its Order on 27 September 2017 err in not letting MEL and NGCB have the opportunity to present their defence, e.g. did the Court properly consider explanation for the delay by MEL or NGCB; did the Court properly consider the draft defence as having merit or no merit; did the Court properly consider the other issues as noted in the decided cases. It is plain that the Appeal is about the Order of 27 September 2017 and the process whereby the Court arrived at its decision. It follows that the Notice of Appeal is within 40 days of the Order of 27 September 2017 and Mr Kaugla's Objection is misconceived in seeing the Notice of Appeal as against the Default Judgement of 7 April 2017.

ORDERS

11. The Court orders that:

1. The Objection to Competency of Mirenbean Enterprises Ltd and the National Gaming Control Board is upheld in regard to the Objection to Competency of Nathan Kaugla.
2. The Objection to Competency of Nathan Kaugla to the Notice of Appeal filed 31 October 2017 by Mirenbean Enterprises Ltd, is dismissed.
3. The costs of both Objections shall be costs in the Appeal.
4. The Appeal is set for directions on the next day for Directions.

________________________________________________________________Begisegil Legal Services: Lawyer for Mirenbean Enterprises Ltd
Twivey Lawyers: Lawyer for National Gaming Control Board
GP Lawyers: Lawyer for Nathan Kaugla