N2428

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 145 of 2001

BETWEEN:

TIAGA BOMSON
-Plaintiff-

AND:

KERRY HART
First Defendant

AND:

BEN MANE
Second Defendant

AND:

NEW BRITAIN PALM OIL LIMITED
Third Defendant

LAE: KIRRIWOM, J.
2003: 7 & 14 July

PRACTICE AND PROCEDURE – Default Judgment – Notice of Intention to Defend filed within time – Defence filed outside time prescribed – No leave sought before filing – Delay in applying for default judgment – Application for leave to file defence out of time – Motion for dismissal of motion for delay in prosecution – Discretion to accept defence filed outside prescribed time on basis of defence on the merits – Failure to explain delay – Application for default judgment dismissed with costs – National Court Rules, O.1 r.15. O. 12 rr. 25 & 27

Cases cited:
Thomas Koral v Alex Kavie and Petrus Alex [1999] Unreported National Court Judgment – W.S. 286 of 1998. 
Luke Tai v Australia and New Zealand Banking Group (PNG) Limited [2000] Unreported National Court Judgment N1979
Robin Kipane v Felix Anton and PNG Waterboard [2003] Unreported National Court Judgment – W.S. No. 1675 of 2002

Counsel:
M. Mumure for the Plaintiff/Applicant
P.Ousi for the 1st, 2nd and 3rd Defendants/Respondents

14th July 2003

Kirriwom, J: There are two motions before me. The plaintiff’s motion is for the defendants’ defence to be struck out as being filed out of time and that default judgment be entered for the Plaintiff. This motion has been on foot since 15 October 2002. The defendants’ motion which was filed a little under a month from the Plaintiff’s motion prays for that motion of 15 October 2002 to be dismissed and prays for leave to be given to the defendants to file their defence out of time.

It is now about seven months since these two motions have been lying about in the file awaiting prosecution. Both parties are guilty of procrastination and I don’t know who comes with clean hands if equity has any say in both these applications. There is no explanation either way as to why the matter had been left in abeyance for months and finally came before the court.

This is a case commenced by writ of summons and the plaintiff is seeking amongst other associated and incidental reliefs damages for unlawful termination of employment with the Third Defendant. In order to appreciate the nature of the case and its prospects it is important to point out few pertinent dates and events as sign-posts for determining the direction in which the court must as a matter of law or equity follow to do justice in the circumstances.

CHRONOLGY OF EVENTS

1. 15/2/00	-	Plaintiff was terminated by letter signed by Personnel
Manager of New Britain Palm Oil Limited
(NBPOL) Ben Mane

2. 3/3/00	-	Letter written by Plaintiff to NBPOL Personnel Manager
withdrawing threat of legal action and requesting assistance

3. 15/02/01	-	Commencement of legal proceedings by Plaintiff through
Jackson Gah and Associates by issuing writ of summons

4. 7/3/01	-	Defendants filed Notice of Intention to Defend
5. 24/09/01	-	Defendants filed Defence.
6. 8/01/02	-	Notice of Change of Lawyers filed by Gamoga Lawyers on
behalf of the Plaintiff
7. 15/10/02	-	Plaintiff filed Motion to strike out defendants’ defence and
to enter judgment
8. 5/11/02	-	Defendants filed Motion, inter alia, for leave to file defence
out of time and for dismissal of Plaintiff’s motion for
judgment

Neither of the parties is relying on any new material other than those that have been filed since the proceedings were either commenced or assumed by the lawyers on behalf of the parties. I say this because the plaintiff was initially represented by Jackson Gah and Associates but this law firm has ceased operating and the plaintiff has since 8 January 2002 engaged Gamoga & Co Lawyers as his lawyers. The defendants have always been represented by Warner Shand Lawyers since 7 March 2001. 

Default Judgment

Plaintiff’s application is made under O.12 rr.25 and 27 National Court Rules for default judgment be entered against the defendants in that they have not filed their defence within time as required under the Rules. It is contended that the defence filed on 24 September 2001 be rejected as no leave has been sought and obtained for defence to be filed out of time.

Under the Rules, after giving notice of intention to defend on 7 March 2001 the defendants had 14 days to file their defence, which means by the 22nd March, 2001- O.8 4(1)(a) and (b) of the National Court Rules. However if the plaintiff was also alert at the time, he could have through his lawyers at the time acting for him reminded the defendants through their lawyers that they had already defaulted after 22 March, 2001 and unless they did so within the next 14 days he would move to file judgment in default. His former lawyers were obligated to pursue this if the Rules were to strictly apply. But the plaintiff was content to let the matter take its slow pace as it suited his convenience and I will explain this shortly.

The need to obtain leave to file defence out of time is mandatory as I ruled in Thomas Koral v Alex Kavie and Petrus Alex [1999] Unreported National Court Judgment – W.S. 286 of 1998. In that case the defendants were eleven days out of time when they took steps to file their defence without obtaining leave which was objected to by the plaintiff. The court said ‘…whilst the defendants were at liberty to give notice of intention to defend at any time outside the time prescribed, that notice was conditional on the defendants obtaining leave from the court to file their defences. The defendants had not obtained such leave before proceeding to file their defences, as such the defence filed is ultra vires O.7 r.6(2) of the National Court Rules. This Rule is expressed in mandatory terms.’ This decision was followed in Luke Tai v Australia and New Zealand Banking Group (PNG) Limited [2000] Unreported National Court Judgment N1979 by Kapi, DCJ and in my very recent judgment I adopted the same reasoning in Robin Kipane v Felix Anton and PNG Waterboard [2003] Unreported National Court Judgment – W.S. No. 1675 of 2002. Unlike the present case, in Robin Kipane v Felix Anton and PNG Waterboard (supra) the defendants did not appear and oppose the motion for default judgment.

The defendants in this case are vigorously opposing the plaintiff’s motion and moved a counter motion to dismiss the plaintiff’s application and are also seeking orders that their defence filed out of time be accepted or in the alternative, leave be given to them to file their defence out of time. The defendants rely on the affidavits of Kerry Hart sworn 15th December, 2002, Himson Waninara sworn 5th December 2002, Himson Waninara, sworn 1st November, 2002, Ben Mane, 1st November, 2002, Kerry Hart sworn 5th November 2002. There is also an affidavit reply sworn by the plaintiff on 14 November 2002 and filed 15th November, 2002. I have read the affidavits filed in support which I need not set out in the judgment.

The combined evidence deposed to in all the affidavits filed in defence and in support of the defendants’ motion is that the plaintiff had foregone his right of legal action against the third defendant or all the defendants for that matter by letter dated 3rd March 2000 when he withdrew his threat of legal action and sought favours from the third defendant. This was just a little under a month after his termination of employment by the third defendant. As the result of the letter that he wrote and subsequent dealings with the defendants, several large contracts were given to the plaintiff as the contractor under the name Sarakolok West Transport Limited by the third defendant from June 2001 to December 2001 to the total value of K999,384.00. The contracts were executed by the plaintiff and another as or on behalf of the contractor and one Maxwell Karau as representative of the third defendant, witnessed by the first defendant in most if not all of those contracts. These contracts were awarded to the plaintiff on the strength of and in response to the letter that he wrote on 3 March 2000 see Annexure "A" in Kerry Hart’s affidavit referred to earlier and also Annexure "A" in Himson Waninara’s affidavit of 1st November 2002 already referred to. The letter is addressed to the Personnel Manager, NBPOL – Mosa, P.O. Kimbe WNBP and reads:

Attention: Ben Mane

Dear Sir,

RE: WITHDRAWAL OF REMARKS ON LEGAL ACTION

As per my telephone conversation with you and further phone call with Kerry Hart this morning Friday 3rd March.

I wish to withdraw my verbal remarks I made on Saturday 26th February with reference to above subject. I apologise for comments made and I am very sorry for what has happened. I have accepted company decision as final.

Having considered all perspective (sic) avenues and possible repercussions on my future I kindly ask the management to consider my apology and assist me wherever possible.

Should I seek employment with other organisations or be self employed, I should not be victimised for doing so and must feel free to do business with the company should opportunity persist.

I remain await your favourable consideration.

Yours faithfully

Signed
Tiaga G. Bomson

Cc: 	Himson Waninara – Legal Officer NBPOL
Harry Hart – Construction and Facilities Manager

This is the letter that lays the basis for the defendants’ indemnity plea against the plaintiff and they contend that contracts were awarded to Sarakolok West Transport Limited, the company that the plaintiff worked for as the result of that letter and the third defendant was entitled to expect the plaintiff to withdraw his action as he promised. I note that since the filing of the writ in February 2001 there was a long period of inactivity on this case because for a time between June 2001 to December 2001 and thereafter, the plaintiff was happy and content to enjoy the benefits that were flowing to him on the contracts awarded to him and Sarakolok West Transport Limited from the third defendant while this proceeding was left in abeyance. However, for reasons unexplained, he resurrected this action in October 2002 with this motion for default judgment. I do no accept the affidavit filed in support of that motion as saying anything much other than stating that the defendants filed their defence out of time. It does not explain the long delay for him to suddenly see fit to reactivate this case. From the time of the issue of the writ on 15 February 2001 to 15 October 2002 when this motion was filed, a period of one year and eight months had lapsed and there was hardly any action either way on this case. 

Without pre-empting any outcome this proceeding might take ultimately on the facts as they are appearing before me, I don’t think the plaintiff can come as easily as he thinks he can and ask for default judgment when the evidence before me show him to be a person who cannot keep a promise. In his affidavit in reply sworn 14th November 2002 he makes these comments:

3. 	If there were any discussions between myself and the defendants the said discussions took place prior to me instituting this claim.
4. 	My letter marked as Annexure "A" in the affidavit of Himson Waninara filed on 5th November 2002 was written on 3rd March 2000 and not 3rd March 2001 as stated in paragraph 3 of his said affidavit.
5. 	Sarakolok West Transport Limited was awarded contracts on its own merits and not 	because of my employment with the said company.

The plaintiff acknowledges the discussions prior to issuing the proceeding but he does not explain as to why he decided to commence this action notwithstanding the belief he had created in the minds of the defendants. He refers to that letter annexed to the affidavit of Himson Waninara’s but fails to explain the legal implications of that letter as far as promissory estoppel and waiver principles in equity are concerned and the futility of this case based on this premise. And finally when the benefits of the contracts have ceased flowing and he too had left the employ of Sarakolok West Transport Limited, he claims the contracts to that company had nothing to do with him and seeks to pursue this case that he has seen fit to neglect.

I find that the plaintiff has delayed unduly to prosecute his motion and also to bring this case to finality and in equity, he does not come with clean hands and I am not inclined to grant him the relief he seeks. I therefore dismiss his motion with costs.

However I am persuaded on the face of the materials and evidence before me that the defendants have a good case to defend on the merits. And for the reasons I have discussed earlier, I will accept as valid the defence as filed as the defendants’ defence to this claim. There is no need for me to consider the defendants’ application for leave to file their defence out of time. Though they had clearly defaulted, I have accepted that they were misled by the plaintiff. Their desire to defend the case is plain enough from the step they took in giving notice of intention to defend not long after the writ was filed in the ordinary course under the Rules. And I am convinced that had it not been for the contracts that were flowing to Sarakolok West Transport, their defence would have been filed. In the exercise of my discretion under O.1 r.15 N.C.R., I grant the defendants the relief they seek in paragraph 2 of their notice of motion. The cross-application must therefore succeed and costs be awarded against the plaintiff.

The manner in which the parties have been dillydallying around with this case is a gross abuse of the legal process. The integrity of the Court system rests on the users of the court who come to it with genuine grievances. This case must be prosecuted without further delay and in that regard I give these directions as to the further conduct of the case with a caution for the plaintiff to give serious consideration in continuing further with this claim:

1.	Unless settled sooner, the plaintiff shall file his reply to the defendants defence within two weeks from today.
2.	If there are any requests for further and better particulars, they must be attended to promptly and without delay.
3.	Pleadings be completed by the end of July.
4.	This matter must be listed for trial in August or September, 2003, otherwise the defendants are at liberty to apply for orders.

Costs for the Defendants.

Lawyers for the Plaintiff: Gamoga & Co Lawyers
Lawyers for the 1st, 2nd & 3rd Defendants: Warner Shand Lawyers