N2602

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 982/01

OBADIA BUKA

AND:

JUDE BAISI
First Defendant

AND

NOTUS INVESTMENTS LIMITED
Second Defendant

KOKOPO:	LAY J.
13th, 27th August 2004

PRACTICE AND PROCEDURE – Summary Judgement O12 R38 – evidence of belief there is no defence – resisting summary judgement principles – Want of Prosecution – O10 R5 – delay by all parties – principles for striking out – O4 r 36, O10 r5 & Supreme Court O7 r 53 - lawyers to communicate with each other.

Cases cited:
Hornibrook Construction Limited v. Lihir [1998] PNGLR 53
Bruce Tsang v. Credit Corporation (PNG) Limited [1993] PNGLR 285
Curtain Bros (QLD) Pty. Ltd & Kinhill Kramer Pty. Ltd v. State [1993] PNGLR 285
Provincial Government of North Solomons v. Pacific Architecture Pty. Limited [1992] PNGLR 145
Ronald Nicholas v. Commonwealth New Guinea Timbers Limited [1986] PNGLR 133
Marksal Ltd & Robert Needham v. Mineral Resources Development Limited, Masket Iangaleo, Gerea Aopi and CharlesLepani N1807
Bank of south Pacific Limited v. Rau Wok N2118
General Accident and Life v. Ilimo Farm [1990] PNGLR 331
Mali Pyali & Jim Kaiya v. Chief Inspector Leo Kabilo & The State N2492

Counsel:
Mr. Joseph Nanei for the Applicant Defendants
Mr David Lidgett for the Respondent Plaintiff

The Defendants by Notice of Motion filed 28th June 2004 seek orders that the Plaintiffs statement of claim be dismissed for want of prosecution, that the Plaintiffs Defence to the Cross Claim be struck out and that judgement be entered on the Defendants cross-claim against the Plaintiff for K62,803.16.

The Plaintiff claimed in his writ for K10, 000 unpaid rent and K6000 for other specified damages.

The Defendants claimed in their cross claim the sum of K62,803.16 being money thrown away on improvements when they were forced out of the premises by the Plaintiff, loss of profit for the same reason, loss of trade store goods, and the value of assets seized by the Plaintiff.

The writ was issued 19th July 2001 and the last pleading, which was the Reply and Defence to the Cross Claim, was filed on 3rd September 2001.
 
The Defendants relied on the affidavits of the First Defendant sworn 28th June 2004 and 8th July 2004 and the affidavit of Joseph B Nanei sworn 24th June 2004. Those affidavits set out the bare facts of the heads of claim and the progress of the pleadings.

The Plaintiff and his lawyer filed affidavits explaining that the Plaintiff had been away from Kokopo as a circuit pastor, then he retired due to knee joint problems and had difficulty raising finance to engage a lawyer since his former lawyers ceased to act in September 2002

I will deal first with the application for judgment. The Defendants made their application under Order 12 Rule 38. I was referred to the case of Hornibrook Construction Limited v. Lihir [1998] PNGLR 53, a decision of Sevua J. In that case the Court said:

"The law in relation to summary judgment has been settled by the Supreme Court in Bruce Tsang -v- Credit Corporation (PNG) Ltd [1993] PNGLR 112 and followed in Curtain Bros (Qld) Pty Ltd & Kinhill Kramer Pty Ltd -v- The State [1993] PNGLR 285.

In both decisions of the Supreme Court, the Court said at 117 and 288 respectively:

"There are two elements involved in this rule:

(a)	evidence of the facts proving the essential elements of the claim; and

(b)	that the plaintiff or some responsible person gives evidence that in his belief there is no defence.

As to the second element, the plaintiff must show in absence of any defence or evidence from the defendant that in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that, upon the facts and/or the law, the defendant has no defence. The plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of fact or law. Whether a case should go to trial on these issues will be determined on the facts of each case."

The Defendants submitted that the First Defendants affidavits showed that there was no reasonable defence and that this fulfilled the requirement of the second element of the rule. The Defendants have certainly deposed to the broad facts of their counter claim sufficient to require the Plaintiff to "condescend upon particulars" in an answering affidavit. As the Supreme Court observed in the case of Provincial Government of North Solomons v. Pacific Architecture Pty. Limited [1992] PNGLR 145:

"We think the same principle applies in these cases as applies in the case of a defendant resisting an application for summary judgment. As Lord Blackburn said in Wallingford v Directors of the Mutual Society (1880) 5 AC 685 at p 704, the defendant must "condescend upon particulars". It is not enough to swear, "I say I owe the man nothing". Doubtless, if it was true, that you owed the man nothing, as you swear, that would be a good defence. But that is not enough. You must satisfy the Judge that there is reasonable ground for saying so."

Provincial Government of North Solomons v. Pacific Architecture Pty. Limited was concerned with an application to set aside a default judgement. But the same principle applies in both the situation of resisting summary judgement and applying to set aside default judgement; the onus of establishing that there is an arguable defence shifts to the Defendant (or Cross Defendant) once the Plaintiff (or Cross Claimant) has filed evidence of its claim. Here the Cross Defendant has not filed any affidavit in reply.

However, in both Bruce Tsang -v- Credit Corporation (PNG Ltd and Curtain Bros (Qld) Pty Ltd & Kinhill Kramer Pty Ltd -v- The State the Supreme Court found that, the party seeking summary judgement must give evidence that in their opinion there is no defence. It is an essential element of successfully maintaining a claim for judgement under Order 12 Rule 38. That is the clear requirement of the Rule. I do not read those Supreme Court authorities as saying that compliance with the second element of the Rule is not required if a defence is filed. Nor do I read them as saying that the second element can be fulfilled by evidence, attacking the defence, which falls short of a clear statement that the Plaintiff believes that the Defendant has no defence. There is no evidence of such a belief in the filed affidavits despite submissions to the contrary. Accordingly the Defendants cannot have judgement under the Rule.

The Second part of the Defendants application was made pursuant to Order 10 Rule 5 to strike out the Plaintiffs proceedings and it’s Defence to the Cross Claim for failing to set the matter down for trial within 6 weeks of the close of pleadings. The Defendants say the Plaintiff has delayed for 3 years 1 month. The Plaintiff submitted that the delay was not contumelious.

On the evidence before me, this is not a case where the Applicant Cross Claimant has written to get the Plaintiff to take steps in the proceedings, nor has it taken its own steps to set the matter down for trial. The Applicant Cross Claimant Defendant has sat on the matter, just as the Respondent Plaintiff has. Some sensible observations were made on this situation by Woods J. in Ronald Nicholas v. Commonwealth New Guinea Timbers Limited [1986] PNGLR 133 as follows:

"There is no doubt that the defendant can sit and do nothing when faced with a writ of summons and relative inaction. He may let sleeping dogs lie hoping that the dog may die a natural death. However, one must not forget that once an action has been started there is a remedy for any delay on the part of the plaintiff by the defendant coming to court and taking steps under the rules to compel the plaintiff to comply with the timetable of procedural requirements preliminary to having a matter set down. And the defendant himself could set it down if the plaintiff failed to do so. If a defendant does not do any of these things can he be said to have acquiesced in the delay or alternatively can he be said to have shown no concern or interest in the delay. When a defendant after many years suddenly shows concern and if the plaintiff has shown some action or has some excuse then the defendant should be prepared to accept the court saying that although the plaintiff may have delayed for many years, as you are both anxious that these proceedings be concluded, come to the court and litigate without any further delay.

An excellent analysis of the law on the inherent power to dismiss for want of prosecution is to be found in the case of Calvert v Stollznow an unreported decision of Cross J of the Supreme Court of NSW found in the Supreme Court Procedure NSW Service Vol 2 at 44 under Practice Decisions (Affirmed on appeal [1980] 2 NSWLR 749). His Honour in that case analysed Australian and English decisions. He notes that prior to 1967 the law in New South Wales and England tolerated delay within fairly wide limits. The principle being that there was no point in striking out an action which the plaintiff could immediately commence.

Then his Honour notes that in 1967 the Courts in England appeared to make a deliberate policy decision and adopted a new and sterner approach. See Salmon LJ in Fitzpatrick v Batger & Co Ltd [1967] 2 All ER 657 at 659: "It is of the greatest importance in the interests of justice that these actions should be brought to trial with reasonable expedition" and see Birkett v James [1978] AC 297.

However when one looks at these cases and other examples it is not necessarily a sterner approach but rather a more careful explanation and application of the principles that apply.

In the case of Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 and Birkett v James the courts laid down the following principle (at 298):

"That the power of the Court to dismiss an action for want of prosecution should be exercised only where the plaintiff’s default had been intentional and contumelious or where there had been inordinate and inexcusable delay on his or his lawyer’s part giving rise to a substantial risk that a fair trial would not be possible or to serious prejudice to the defendant."

Where there is a long delay "a balance must be struck as between the plaintiff and defendant and in the end the Court must decide whether or not in the balance justice demands that the action should be dismissed". See the words of Walsh JA in Witten v Lombard Australia Ltd (1968) 88 WN (Pt 1) (NSW) 405 at 411."

This is not a matter where the Plaintiff has been ignoring the Defendants efforts to get the suit ready for trial, such as in the case of Marksal Ltd and Robert Needham v Mineral Resources Development Limited, Masket Iangaleo, Gerea Aopi and Charles Lepani N1807. Nor is this a case such as the case of Bank of south Pacific Limited v.Rau Wok N2118 where the applicant defendant gave lengthy written notice to the Plaintiff of its intention to make an application under Order 10 Rule 5, which the Plaintiff ignored.

The Applicant Defendant’s counsel referred me to the case of General Accident Fire and Life v Ilimo Farm [1990] PNGLR 331, a decision of the Supreme Court. In that case their Honours said:

"The dismissal of those actions was upheld and shortly after, in the three leading cases which were heard together and which, for brevity, we shall refer to as Allen v McAlpine, the Court of Appeal laid down the principles on which the jurisdiction has been exercised ever since. Those principles are set out, in our view accurately, in the note to the Rules of the Supreme Court 1965 (Eng) O 25, r 1, of the current White Book, The Supreme Court Practice 1988 (1987), Vol 1, J I H Jacob (ed), at 438. The power should be exercised only where the court is satisfied either: (1) that the default has been intentional and contumelious, for example, disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give "rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between them and a third party".

I refer later to the points numbered (1), (2)(a) and (b) in the above extract as the General Accident Fire and Life v Ilimo Farm principles.

Ronald Nicholas v. Commonwealth New Guinea Timbers Limited cited above was concerned with an application made under Order 4 Rule 36 of the National Court Rules. General Accident Fire and Life v Ilimo Farm was an application made under Order 7 Rule 53 of the Supreme Court Rules. There can be no quarrel with the principles set out in those cases. The principles by which the Court exercises its discretion are the same whether the application is made under Order 4 Rule 36 (general failure to prosecute) or Order 10 Rule 5 (failure to set down) of the National Court Rules or Order 7 Rule 53 (failure to prosecute an appeal) of the Supreme Court Rules. The facts will vary according to the nature of the case, but the principles do not.

The issue here is, have the Applicant Defendants brought themselves within any of the bases on which the Court should exercise its discretion to strike out proceedings for want of prosecution? The Court has made no order which the Plaintiff has failed to obey. The Applicant Defendants have not taken steps such as writing to the Plaintiff asking the Plaintiff to set the matter down for trial. Nor have the Defendants asked the Plaintiff to consent that the matter be set down by the Defendants. There is no correspondence from the Defendants to the Plaintiff which the Plaintiff has ignored. There is no evidence that the Plaintiff’s delay will give rise to a substantial risk that it is not possible to have a fair trial. In fact there is no evidence that there is any such risk.

This is a case in which, because of the lack of action by all parties, the comments of Davani J. in the case of MALI PYALI & Ors, and JIM KAIYA & Ors, v. Chief Inspector Leo Kabilo, and The Independent State Of Papua New Guinea N2492 are apposite. There Her Honour said:

"In fact, the Applicants former lawyers took no steps at all since their filing of a Reply on 23.12.97. Lawyers must come to court with clean hands. If they both did not conduct the matter in an efficient manner, then they both cannot say the other did not do anything but sit on the file. (see Panga Coffee Factory Pty Ltd, Highlands Coffee Export Pty Limited and Kum Farming and Trading Pty Limited, Coffee Industry Corporation Limited SCA 22 of 2001 delivered on 26.4.01 by Los, Injia and Davani, JJ)."

Where a party becomes concerned with the lack of progress in a matter, the first re-action should not be to file an application to the Court. There should be communication between the parties. There seems to be a great reluctance by lawyers to use the telephone. A carefully planned telephone call can be very effective. That is especially so if the lawyer initiating the call advises his opposing counterpart that he has made a written record of the conversation. A litigation lawyer advised that his opponent has made a written record of the telephone conversation must know it is for one purpose, which is to use it as evidence in the litigation. If a telephone call brings no results within the requested period or a reasonable period, a letter should follow bringing the other party’s attention to the lack of response to the telephone call. These are the minimum steps which any party to litigation should take before filing an application to strike out proceedings for want of prosecution. What is a reasonable time to allow for a response to the letter will depend upon how long it has been since the last step was taken in the action. If both parties have ‘gone to sleep’ on the file for a very long time, a longer period should be allowed to enable fresh instructions to be obtained.

I do not disagree with the proposition that it is always the Plaintiff who has to take the next step in the proceedings to get the matter ready for trial. But where the Plaintiff fails to take the next step, before the Court visits the Plaintiff with the extreme sanction of dismissing its action, the Court will have regard to the General Accident Fire and Life v Ilimo Farm principles.

Because the Defendants have not made any attempt to communicate with the Plaintiff prior to filing this application, they have not brought themselves within the General Accident Fire and Life v Ilimo Farm principles. The application is refused.

Costs shall follow the event.
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