DC826

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]
CIVIL JURISDICTION

DC NO. 328 OF 2007

ROMAN CATHOLIC ARCHODIOCESE OF PORT MORESBY t/a St. JOSEPH’S INTERNATIONAL CATHOLIC SCHOOL
Complainant /1st Cross-defendant

PATRICK PAINAP & MR. GO & ORS
2nd Cross-defendant

JOSEPH B. NANEI
Defendant /Cross-claimant

Port Moresby: Pupaka, PM

2007: 14th August 2007

Ms. A. Tangamasau for the Complainant
Mr. J.B. Nanei, the Defendant in person

28th August 2007

M. M. PUPAKA: This is a ruling on an application by motion upon notice for certain interlocutory orders. On 14th August 2007, by a notice of motion dated 5th April 2007, the complainant /cross-defendant moved to have the defendant’s cross-claim dismissed. It was said the cross-claim failed to disclose a reasonable cause of action and in any case it is vexatious and frivolous. It was also submitted that a cross-claim or a set-off filed without prior written notice to the complainant or filed without leave of Court is not permissible in the District Court and therefore is an abuse of the process.

A retrace of the history of this case would set things in proper perspective. This case was commenced on 24th February 2006 by the Roman Catholic Archdiocese of Port Moresby trading as St. Joseph’s International Catholic School, (the complainant), against Joseph B. Nanei, (the defendant), for outstanding and unsettled school fees, in the sum of K5,835.00.

The defendant filed a defence & cross-claim on 24th March 2006. The defence pleads denial of the complainant’s claim in its entirety and the cross-claim part of it is a demand for the following:

General damages of K4, 000.00, which is a ‘legal and equitable portion of the 2002 Australian excursion funds raised and donated’.

Special damages including refund of K4, 165.00 in 2002 School Fee overpayment; refund of Book Fee of K400.00; refund of Costs of Passport Fee of K30.00; and refund of K480.00 in excursion school grant.

There is nothing on file to show that the defendant informed the complainant in writing of his intention to file a set-off against the complainant’s claim. Equally non existent is any proof of leave of the Court having been sought or obtained to file the cross-claim. A defendant’s right to file and serve a set-off is not automatic. A defendant may only do that in accordance with Section 153 of the District Courts Act, which is the pertinent provision. That section reads:

"Division 2.—Set-off.

153.	Special defences to be notified to complainant.

(1)	Without the permission of the Court, the defendant in a complaint for a debt recoverable before a Court shall not—

(a)	set-off a debt or demand claimed or recoverable by him from the complainant; or

(b)	set up by way of defence and claim and have the benefit of illegality, infancy, coverture, or a Statue of Limitations or of his discharge under a law relating to bankrupt or insolvent debtors,

unless, a reasonable time before the hearing of the complaint, written notice of his intention to so set-off or to set up that defence, as the case may be, has been given to the complainant personally or by post or by causing it to be delivered at his usual or last-known place of abode or business or at his address for service set out in the summons on the complaint.

(2)	The defendant shall produce on the hearing a copy of the notice given under Subsection (1), and, unless it is admitted, shall prove that it was given in accordance with that subsection, and in default of that proof no set-off or defence specified in that subsection shall be set up except by consent."

I note that the defendant was granted leave to amend his defence and cross-claim on 5th May 2006. Also granted were certain other orders for two individuals and unknown others to be joined as 2nd cross-defendants. There was an order for the complainant to provide particulars. Costs of the application were ordered to be borne by the complainant as well. I cannot make out the logic of the cost order though. Presuming for the moment that the defendant was within his rights to file and serve a cross-claim in the first place, here he was, in the main, seeking to amend that which he ought to have done properly in the beginning. He cannot ask for or expect the complainant to pay for his cost of a preliminary litigation obviously caused by his own initial failure. In any event an amended defence & cross-claim was filed by the defendant on 18th May 2006.

However it remains a salient fact on record that the leave to file and serve an amended defence and cross-claim was granted as a result of an erroneous misconception on the part of the Court. The Court seems not to have been properly advised of the defendant’s failure to comply with the requirements of Section 153 of the District Courts Act. Needless to say the leave of court granted to amend what was really an irregular defensive pleading, neither rectified the initial breach nor did it amount to a post facto grant of permission to the defendant to file and serve a set-off. Therefore it follows that the cross-claim, either the original one or the amended version of it, was not properly filed and it cannot form a legitimate part of the defendant’s pleadings in this case.

There are other matters borne out by the facts disclosed so far as to the inappropriateness of the cross-claim too. First of all the beneficial interests in some of the heads of claims outlined in the cross-claim belong to and remain in the defendant’s children in the first instance. They maybe obviously suing through their father but the proceeding, especially in the identification of parties, ought to reflect that. That has not been done. Secondly there is the matter of the appropriateness of the cross-claim. The defendant, in the defence part of his defence & cross-claim, pleads total denial of the complainant’s claim. If the cross-claim really was intended to be a set-off in the spirit of Section 153 of the District Courts Act, then that clearly creates an absurd situation. A defence of set-off is inappropriate and improper when the complainant’s claim is fully denied on its own merits.

The file records show that the defendant later attempted to obtain default judgment on the cross-claim. Needless to point out that he had no right to do that in light of the foregoing but whether he actually progressed further with it is uncertain. However if he had been successful in that endeavor, one would think default judgment in relation to an irregularly commenced cross-claim would very much be void able to say the least.

At the outset an irregular cross-claim filed as a set-off cannot form part of the defendant’s pleadings. It would be irregularly commenced because the filing of it did not follow any leave of court nor was it preceded by a notice the type of which Section 153 of the District Courts Act speaks of.

The complainant filed a defence to the cross-claim on 15th June 2006.

There were several mentions of the matter thereafter. Appearances from parties seem to have tapered off and instances of non appearances were recorded. Absences of the presiding magistrate are apparent on the file as well. In the end all these finally culminated in an order for "struck out for want of prosecution" on 20th of January 2007. The court file’s endorsements show the reason for that struck out order to be the non appearance of both parties. Although it is not stated on the court file, one would think the struck out order was precipitated by a string of previous non appearances recorded immediately prior to the 20th January 2007 non appearance. 

It must be stressed that there is no specific indication on file as to which ‘proceedings’ were struck out or being struck out, on 20th January 2007. I say that because the entire proceedings, registered as Case No. 328 of 2006, is composed of the case commenced by the complainant in its Complaint & Summons upon Complaint and the defendant’s cross-claim – albeit notwithstanding the fact that the latter was always prima facie void able. Even if the defendant’s cross-claim was a claim on its own merits and not a demand for set-off under Section 153 of the District Courts Act for monies the complainant owed to the defendant, it was eminently possible to summarily deal with the Complaint & Summons upon Complaint and allow the defendant’s cross-claim to remain, or vice versa. Nothing of that sort happened. There was no orders like; "The complainant’s case is struck out and the cross-claim is fixed for mention…" or "the Complaint & Summons upon Complaint is struck out with costs to the defendant…" or some such specific order indicating that only one party’s case was being terminated and not both. So it seems that the Court summarily dealt with both cases on 20th January 2007 because both parties were absent that day. Therefore it can only mean that the entire case, composed of the complainant’s case and the defendant’s case in his cross-claim, was struck out.

Now that, i.e. the implication of the sweeping struck out order, seems not to have been clearly understood later by the parties. The import of it even escaped the presiding magistrate’s attention. I say that because whilst the complainant moved to reinstate its case the defendant did not. No one, particularly the defendant, seems to have thought that the defendant also needed to apply to have his cross-claim reinstated as well. The cross-claim always needed to be reinstated for the defendant to proceed with and progress it. The defendant’s cross-claim was not spared on 20th January 2007. It was, after that date onwards, no longer alive and pending.

The defendant incidentally objected to the application for reinstatement by the complainant. Despite that the complainant’s application was granted on 19th April 2007. The defendant asked for cost of the application and got it. Incidentally the defendant, when taking out the formal order of 19th December, actually wrote "…costs up to today". The presiding magistrate seems to have unconsciously endorsed that but that is not what the court actually said in relation to the costs incidental to the application. The Court had actually ordered costs of the reinstatement application to be borne by the complainant. There is a difference. Be that as it may, it cannot be said that the defendant’s cross-claim was revived by default, ridding piggyback upon the revived complainant’s case. The defendant clearly did not want the whole case to be revived at all. His clear intention is now a matter of record.

The defendant has not, as yet, moved the court for orders of reinstatement of his cross-claim. Therefore the defendant’s cross-claim, notwithstanding for the moment the fact that it was irregularly filed in the first place, is no longer pending today.

This second finding, on its own, would also adequately resolve the issue of the relief sought by the complainant in its motion. 

The defendant raised the issue of res judicata on the substance of the issues raised in the complainant’s notice of motion. He essentially contended that the last Court, which ordered reinstatement of the struck out Complaint & Summons upon Complaint, also fully dealt with the issue of validity of the cross-claim. The complainant on the other hand says that although the previous motion contained a request for the cross-claim to be struck out the issue was not reached by the last court.

If the issue of the validity of the cross-claim was litigated as the defendant says, there is no evidence or records of it. If the issue was fully resolved there is no record of it. As I alluded to above the defendant actually filed the formal orders for reinstatement afterwards. However, if ever there had been litigation on the issue of the cross-claim, having taken the liberty of filing a formal order which the complainant would normally do as mover of the motion, the defendant conspicuously omitted to state in the formal order that a relief sought for the strike out of the cross-claim was refused. One may say that the defendant was primarily concerned with setting the costs record straight at the time, lest it be forgotten. Indeed I do not think that there is anything wrong with the defendant filing the formal orders for reinstatement for the presiding magistrate to sign, but the point being made here is that if his cross-claim was not struck out, when that specific relief was sought by the other side, the defendant would have stated the fact of it, lest it be also forgotten. Ergo I find that the complainant is still within its rights to move for the cross-claim to be struck down.

Finally I must say that the parties have displayed a common erroneous presumption. They failed to realize from the beginning that the defendant’s cross-claim, even if it had been regularly commenced in the first place, is not alive and pending. This has been a fact lost on both parties, which incidentally has led to this application. It has been an obvious perception held by the defendant. This instant ruling clarifies the situation.

In the end, for one reason or the other, I find that the defendant’s cross-claim cannot form part of his pleadings. I also find that it is no longer part of his pleadings, even if it had been a part in the first place.

I would, for reasons of completeness, add that the parties proceed to have the matter of the complainant’s claim, the liability of it being denied as it is, set down for a hearing on the merits.

The complainant shall have its costs of this preliminary application.

_____________________________

Rageau Manua & Kikira Lawyers for the Complainant
J B Nanei & Co. Lawyers for the Defendant