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Asu v Kotbual Business Grouping [2014] PGNC 279; N5976 (18 December 2014)
N5976
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS 736 0F 2014
BETWEEN:
MARTIN ASU
First Plaintiff/Respondent
AND:
KOTBUAL BUSINESS GROUP INC.
Second Plaintiff/Respondent
AND:
MARYROSE MAUR together with all of your family members,
servants and agents
First Defendant/Applicants
AND:
MOLAM LIMITED together with all of servants,
agents and associates
Second Defendant/Applicants
Kokopo: Oli, AJ
2014: 18th December
2015: 20th May
CIVIL JURISDICTION - Practice & Procedure –Application to set aside Default Judgment for lack of service of the due process
on the defendant/applicant – First Defendant/Applicant denied being served with the due process – considered and rule
service of due process was done on the first defendant/applicant – but considered service done on first defendant/applicant
does not amount to service done on the second defendant/applicant under s. 431 of Company Act – No proof of service –
considered lack of service on second defendant –rendered default judgment entered against second defendant null and void –
application granted default judgment set aside – Considered ancillary order on eviction by reason of lack of service on second
defendant/applicant is also set aside.
Cases Cited:
Green v Green (1976) PNGLR 73
The Government of PNG & Davies v Barker (1977) PNGLR 386
Mapmaker's v BHP [1987] PNGLR 78
Provincial Government of North Solomon's v Pacific Architecture Pty Ltd (1992) PNGLR 145
Barlow Industries v Pacific Foam [1993] PNGLR 345.
Leo Hannet v ANZ Banking Group (PNG) Limited (1996) SC505.
Kitipa v Auali & Ors (1998) N 17173
Paraka & Ors v Kawa & The State (2000) N 1987
Kaluni v Warole (2001) N 2114.
Giru v Muta (2005) N 2877
The State & Ors v Josiah & Ors (2005) SC 792
Counsel:
Mr. Paul Yange, for the Plaintiff
Mr. Wesley Donald, for the Defendant
RULING
20th May, 2015
- OLI, AJ.: The Defendant/Applicant filed a motion under Order 12 Rule 1 of the National Court Rules to set aside the Default Judgment entered on behalf of the Plaintiff/Respondents on 12thday of December 2014 at 9:30am and move this
Honourable Court for Orders:
1. Pursuant to Order 4 Rule 42 of the National Court Rules the requirement of service of this Notice of Motion and the Affidavits in Support in the first instance is dispensed with.
- Pursuant to Order 12 Rules 1 and 35 of the National Court Rules and Section 155(4) of the Constitution, the Orders granted by the Court on 12 November 2014 are set aside and the entire proceedings dismissed for abuse of process and for
duplicity.
- Pursuant to Order 12 Rule 1 and Order 14 Rules 9 (a) and 10 (1) of the National Court Rules and Section 155(4) of the Constitution an order be granted staying the enforcement of the Orders made on 12thNovember 2014 until the Defendant/Applicants application in
terms of the Orders sought in paragraph 2 above is heard and fully determined.
- Costs of the application.
- Such further orders deemed fit by the Court.
- Time for entry of the order be abridged to the time of settlement by the Registrar which shall take effect forthwith.
2. However, the Statement Of Claim by Plaintiff/Respondent is stated hereunder:
STATEMENT OF CLAIM
- The first plaintiff/respondent is the chairman or chief of the Lamatlik clan, a traditional landowning clan which owns a part of the
Mining Lease (ML) land area over which the present Lihir Gold projects is currently located
- The second plaintiff/respondent is a duly registered business group owned by the members of the Lamatlik clan regulated by the customs
of that clan.
- The first defendant/applicant is an adult female from Lihir Island who is a director and shareholder of the second defendant (a registered
entity).
- Prior to and during the course of the Mining operations, the developer identified Lamatlik clan as one (1) of the traditional landowning
clans affected by the core activities of the mining projects. Accordingly, it allocated Portion 846 of the Lease for Mining Purposes
34 or LMP 34 (herein "the land") to the Lamatlik clan and its members for its commercial purposes.
- During the period between the year 1998 and 2000, the Lamatlik clan through its chairman the first plaintiff/respondent and its business
group (the second plaintiff/applicant) erected a commercial retail outlet (herein "the property" on the land.
- The said property was leased to the Defendant/Applicants under a 12 months rental agreement in the year 2001, terms of which were
recorded in writing. At the expiry of the 12 months period, the relationships between the parties (as lessor and lessee) continued
on a month-to-month basis as the parties were and are no strangers.
- The defendant/applicants were consistent with the payment of rentals between the periods 2001 up to 2004. Under the terms of a revised
agreement signed in 2005 (which expired two (2) years later) up to the date of filing of this Writ of Summons, the payments of rentals
by the Defendant/Applicants have been unsteady, arising from which the Plaintiff/Respondents have made losses. In most cases, the
defendant/respondents say that they have made payments directly into the Second Plaintiff/Respondents banking account and to other
accounts, though such were never true in a situation where they have never supplied copies of deposits slips (despite requests).
A cross-claim for these claims has been made under WS No.613 of 2014 initiated by the Defendant/Applicants.
- Emanating from the above and arising from the Plaintiff/Respondents view to renovate and expand the business practices on the property
that they have given notice to the Defendant/Respondents dated 20 March 2014 to vacate the property in a month's time. Such of the
notice was rejected and the Defendant/Respondents have continued to occupy the property along with filing of court proceedings in
the Lihir District Court and in the National Court here at Kokopo with a view to buy time and cause delay causing resultant financial
losses to the Plaintiff/Applicants up to the date of this Writ was filed.
THE PLAINTIFF/RESPONDENT THEREFORE CLAIMS:-
- For the above reasons the Plaintiff/Applicants claim the orders sought below.
(1) That Default judgment is entered in favour of the Plaintiff/Respondents with damages to be assessed on the unpaid rentals.
(2) The Defendant/Applicants and their servants, family members, friends, relatives, associates and their agents be evicted from the
land and property pursuant to Section 6 (1) (2) (b) of the Summary Ejectment Act within 30 days from date of the orders.
(3) A permanent injunction restraining the defendant/applicants from any interference with the land and property.
(4) Costs of an incidental to this proceeding.
FACTS
3. The brief facts surrounding this proceeding is that the Plaintiff/Respondent filed this action under Writ of Summons to recover
outstanding rentals from 2005 after the revised Rental Agreement, the payments on the month by month basis has been very unsteady.
However, the Plaintiff/Respondent also wish to have the property returned to have a quite enjoyment of their property currently being
occupied by the Defendant/Applicants. The Plaintiff/Respondent filed a motion on the 12th day of September 2014 at 9:30am to move
this Honourable Court for Orders:
- Pursuant to Order 12, Rule 25(a)&(b), 26, 28 & 30 of the National Court Rules;
(i) That Default judgment is entered in favour of the Plaintiff/Respondents with damages to be assessed on the unpaid rentals as sought
in paragraph 9(1) of the Statement of Claim.
(ii) That the Defendant/Applicants and their servants, family members, friends, relatives, associates and their agents are hereby
ordered to be evicted from the land known as Portion 846 of the Lease for MiningPurposes34 or LMP 34 and the improvements erected thereon pursuant to Section 6 (1) (2) (b) of the Summary Ejectment Act within 30 days from date of the orders as sought in paragraph 9(2) of the Statement of Claim. The Lihir Police Station Commander
and his men are to ensure compliance of these orders.
(iii) That a permanent injunction restraining the Defendant/Applicants from any interference with the land and property in terms of
paragraph 9(3) of the Statement of Claim.
ISSUE
4. The issue that emanate from this motion is:
- Whether or not the Plaintiff/Respondent has served the due process, the Writ of Summons on the Defendant/Applicants in this case.
- Whether or not the default judgment entered was a regularly entered judgment.
LAW
5. The law on effecting service of Court documents in this jurisdiction is well settled. The Court Users who wish to resolve their
conflict in court must follow the formal originating process before the National Court, and it is governed and regulated by the National Court Rules. The Order 6 provides for Service of Documents and Division (1) governs Service Generally. I will refer to them, in particular Order
6 Rules 2 & 3 of the National Court Rules, under Rules 2 & 3 provides:
2. Originating process. (9/2)
(1) Subject y Act, and to thes these Rules, originating process shall be served personally on each defendant.
(2) The cor service shall be signed and sealed as specified in Order 4 Rule 12.
(>(3) Where a defendant to any originating process serves a notice of intention to defend under Order 7, the originating process shall
be taken to have been served on him personally on the date on which that notice is filed or on such earlier date as may be proved.
3. Personal service: How effected. (9/3)
(1) Personal service of a document may be affected by leaving a copy of the document with the person to be served or, if he does not
accept the copy, by putting the copy down in his presence and telling him the nature of the document.
(2) Personal service of a document on a corporation may be affected by serving the document in accordance with Sub-rule (1) on the
mayor, chairman or president of the corporation, or on the town clerk, clerk, secretary, treasurer or other similar officer of the
corporation.
(3) Sub-rule (2) applies in addition to any provision for service on a corporation made by or under any Act.
- However, the Service under the Company Act is provided under section 431 and it reads:
431. Service of Documents on Companies in Legal Proceedings.
(1) Notwithstanding the provisions of any other Act, a document, including a writ, summons, notice, or order in any legal proceedings
may be served on a company as follows:–
(a) by delivery to a person named as a director or the secretary of the company on the register;
(b) by delivery to an employee of the company at the company's head office or principal place of business; (underline is mine)
(c) by leaving it at the company's registered office or address for service;
(d) by posting it to the company's registered office, or address for service, or postal address;
(e) by serving it in accordance with any directions as to service given by the court having jurisdiction in the proceedings;
(f) in accordance with an agreement made with the company.
(2) The methods of service specified in Subsection (1) are the only methods by which a document in legal proceedings may be served
on a company in the country.
- The above provisions clearly stipulate in no uncertain terms that Originating Process must be personally served on each named defendants
on the Writ of Summons and also how personal service ought to be served on corporation made by or under any Act. I will refer to the service issue in my deliberations under the application of law to the facts hereunder.
APPLICATION OF LAW TO THE FACTS
- The Defendant/Applicants learned counsel submits that Plaintiff/Applicants have not served the Writ of Summons on the Defendant/Applicants
before proceeding to enter judgment by default. The defence further claim that the action by Plaintiff/Respondent is bad for duplicity
because there was already an action on foot namely; Between Defendant/Applicant and Plaintiff/Respondent titled WS No. 613 of 2014 between the same party over the same property and therefore defence counsel submit that the Plaintiff/Respondent have no good reason
to file another fresh proceedings. They would have just filed a cross-claim to further enhance their interest of unpaid rentals and
eviction remedy sought in the same cross-claim.
- The Defendants/Applicants Counsel in this proceedings have applied by way of Notice of Motion filed on 10th December 2014 to set aside
the orders granted ex parte on 12th November 2014 and to dismiss the entire proceedings for abuse of process and for duplicity.
- The application is made under Order 12 Rules 1 and 35 of the National Court Rules and Section 155(4) of the Constitution. The Defendants/Applicants in support of their application rely on 2 Affidavits to support their application. The first Affidavit
by defence counsel Mr Wesley Donald sworn and filed on 10th December 2014 and the second Affidavit by Mary Rose Maur sworn on 16th
December 2014 and filed on 2nd February 2015.
- In the Affidavit by defence counsel Wesley Donald, he stated at paragraph 3 that the Defendant/Applicants in this proceedings filed
a National Court Proceedings in Kokopo titled W.S. No.613 of 2014 against the Plaintiff/Respondents in this proceedings. The following further facts can be deduced in paragraphs 4 to 21. These facts
are as follows:
- (a) The Writ of Summons in the proceedings titled W.S No. 613 of 2014 was filed on 11th June 2014 which concerns a property known as Portion 846, Londolovit, Lihir Island, New Ireland Province within
the Mining Lease Area where the Plaintiff/Respondent in that proceeding and Second Defendant/Applicant in this proceedings has been
carrying on business for over 10 years and which property the Defendant/Applicants in that proceedings and the Plaintiff/Respondents
in this proceedings want the Second Defendant/Applicant to vacate the property.
- (b) The Writ of Summons clearly sets out the nature of the claim and the relief claimed by the Plaintiff/Respondent against the Defendant/Applicants,
(see Annexure "A").
- (c) In response to the said claim the Defendant/Applicants in that proceedings and Plaintiff/Respondents in this proceedings filed
a Defence and Cross Claim, (see Annexure "B"). The Plaintiff/Respondents also filed a Reply to the said Defence and Cross-Claim joining
issue with the matters raised in the Defence and Cross-Claim. The Defence and Cross-Claim was filed on 03 July 2014 while the Reply
was filed on 21st August 2014.
- (d) No advise or instructions has been received before 17th September 2014 that another proceedings (current proceedings) had been
filed by the Plaintiff/Respondents in this proceedings and the Defendant/Respondents in the earlier proceedings over the same property
claiming the same relief.
- (e) On 17th September 2014 Mary Rose Maur did advise of a certain court documents including a Notice of Motion filed on 9th September
2014, Affidavit of Martin Asu filed on 21st July 2014, Affidavit of Service by Martin Asu filed on 8th August 2014 and Affidavit
of Paul Yange filed on 8th September 2014.
- (f) The documents referred to in paragraph 1.2(e) above seeks judgment against the Defendants by way of Notice of Motion filed on
8th September 2014 for failure to file an Intention to Defend or a Defence. The Affidavit by Martin Asu filed 21st July 2014 had
also deposed to facts to support that the Second Defendant/Applicant be evicted from the subject property.
- (g) When instructions were sought from Mary Rose Maur whether she had received any other court documents before the documents referred
to in paragraph 1.2(e) above she said no. The Defendant/Applicants denied receiving the Writ of Summons in this proceeding.
- (h) That a proposal was made to the Plaintiff/Respondents Lawyers on 7th October 2014 to settle all disputes over the disputed property.
That on 19th October 2014 the Plaintiff/Respondents Lawyer did ask what the instructions for settlement were and that the Second
Defendant/Applicant was requested to provide the particulars of the claim.
- (i) On 11th November 2014 the office of Defendant/Applicants Lawyers was locked preventing him to gain access the next day. On 12th
November 2014 the Plaintiff's Lawyer advised by a text message that he was proceeding with the application for Default Judgment which
he did despite requests to allow adjournment to allow time for the Defendants/Applicants to appear.
- (j) In the Orders that were obtained on 12th November 2014 through Default Judgment was granted in terms of paragraph 2 and 3 of the
Notice of Motion filed on 8 September 2014, together with Orders for the Second Defendant/Applicant to vacate the property under
Section 6 (1) & (2) (b) of the Summary Ejectment Act, within 1 month.
- (k) The Defendants/Applicants applied to set aside the Default Judgment on 10th December 2014.
The Affidavit by Mary Rose Maur in Support of the Application
- The first Defendant/Applicant filed an affidavit in this matter in support of the application and states:
- (a) That she was only aware of the proceedings titled W.S No. 613 of 2014 filed on behalf of the Second Defendant/Applicant of which company she is the Managing Director and has never received any other
court documents for any other proceedings including the current proceedings.
- (b) That she has seen the signature on the cover page of a Writ of Summons which is Annexure "A" to the Affidavit of Martin Asu filed
on 8th August 2014 and says although the signature looks similar to her signature, it is not her signature. She denies ever receiving
the Writ of Summons referred therein.
- (c) That the only documents she remember receiving are the documents she received on 17thSeptember 2014, which she referred to her
counsel carriage of this matter.
- (d) That the documents she received were thought to be for the proceedings she filed which is titled W.S NO.613 of 2014, especially the Cross-Claim by the Defendant/Applicant Cross-Claimant in that case who are Plaintiff/Respondents in this case WS No 736 of 2014. The settlement proposal that was been considered she believed related to the Cross-Claim.
- (e) That she did not hear of any other news until 12th November 2014 when her lawyer advised that he had been locked out of his office
and that the Plaintiff/Respondents intended to proceed with the application for Default Judgment.
- (f) That on 4th December 2014 she received a Court Order from the Plaintiff/Respondents Lawyers and immediately instructed her Lawyers
to set aside the Default judgment.
Submission by Defence Counsel
- The Defendants/Applicants learned counsel submits that the Default Judgment was obtained irregularly and should be set aside "es debito justitiae". It means the judgment ought to be set aside as a matter of right for breaches of the National Court Rules relating to service. The Judgment ought to be set aside also on the basis that it is a nullity that the current proceedings duplicate
the proceedings filed earlier WS No 613 of 2014 and is an abuse of the Court process.
- The only Affidavit relied upon for service on the Defendants/Applicants is the Affidavit of Martin Asu sworn on 8 August 2014 in which
he says that he purportedly served Mary Rose Maur personally. However, Mary Rose Maur has denied ever receiving such document and
says that the signature looks like hers but it's not hers. The original copy of the Writ of Summons that was purportedly served has
not been produced to verify that service was properly affected. A closer look at the front page of the Writ of Summons shows that
someone had written the particulars of the service but the signature does not appear to be written by hand and may have been pasted
onto the copy of the Writ of Summons from previous documents signed by Mary Rose Maur or that someone else signed on her behalf.
- There appears to be a cleverly orchestrated plan to institute the duplicate proceedings to cause confusion with the intention that
there be Default on the part of the Defendant/Applicants which the Plaintiffs/Respondent then intended to capitalize or bring the
matter to completion. This can be noted from the Affidavit of Martin Asu filed on 21 July 2014 who deposes to matters already are
subject of the proceedings titled W.S. No.613 of 2014. But one wonders why he could not file the said Affidavit in the proceedings over the same matter and to proceed with a separate action
for Default Judgment in the manner he did.
- There is no evidence that each of the Defendant/Applicants were served or properly served. In this case of the First Defendant/Applicants,
each of the persons represented needed to be served but were never served.
- The Defendant/Applicants submits that any proceedings over the same matters raised in an earlier proceeding that seeks to defeat the
earlier proceeding constitutes an abuse of the Court process and that needs to be set aside as a matter of law.
- In a number of various cases in this jurisdiction that the setting aside of Default Judgments have been discussed. The leading case
is that of Green –v- Green (1976) PNGLR 73 affirms that any judgment obtained irregularly ought to be set aside as a matter of right without the Applicant showing
a Defence on the merit. In the other cases on this point includes; The Government of PNG & Davies v Barker (1977) PNGLR 386, Leo Hannet v ANZ Banking Group (PNG) Limited (1996) SC505, Provincial Government of North Solomon's v Pacific Architecture Pty Ltd (1992) PNGLR 145.
- The cases referred to above succinctly set out the law relating to setting aside of Default Judgments entered irregularly which can
be set aside on the basis of irregularity and nullity. In this application the order ought to be set aside for irregularity and the
proceeding dismissed for been a nullity in that it duplicates an earlier proceedings in which the Plaintiff/Respondents as Defendant/Applicants
have entered a Defence and Cross-Claim.The Plaintiff/Respondent learned counsel confirms the proceedings titled WS No. 613 of 2014 between second Plaintiff/Respondent and second Defendant Cross-Claimant where he also confirms that his client filed cross-claim
in their response by filing their intention to defend the action by first and second Defendant/Applicant, who were first and second
Defendant/Cross-Claimant in WS No. 613 0f 2014.
Plaintiff/Respondent counsels submission and file anaffidavit in opposing the Motion to set aside Default Judgment.
- The Plaintiff/Respondent learned counsel submits that Plaintiff/Respondents are entitle to default judgment simply because the defendant/applicant
have failed to file notice of intention to defend or have not filed their particulars of defence within time limit of 30 days therefore
by right under the National Court Rules, the Plaintiff/Respondents are entitled to judgment by default. The Counsel refers to affidavit
by first Plaintiff/Respondent to highlight the service affected by him and also in support of the judgment obtained by default.
- The first Plaintiff/Respondent Mr. Martin Asu on 12th day of March 2015, filed a sworn affidavit and states the following under Oath:-
- He is the First Plaintiff/Respondent and an Executive Officer of the Second Plaintiff/Respondent.
- In this proceeding, his lawyers advised that default judgement against the Defendant/Applicants. The judgment mainly concerns orders
for eviction of the Defendant/Applicants from the property, subject to this proceeding.
- After two (2) months since judgment, I am now advised by my lawyers that the Defendant/Applicants have filed an application to set
aside the default judgment.
- Among other grounds to set aside the default judgment, he was advised that Mary Rose Maur has deposed an affidavit stating that she
did not receive the Writ of Summons (the originating process in this process) disputing that she signed the proof of service document.
- The first Plaintiff/Respondent reply to first Defendant/Applicant statements on Service and state the following:-
- (a) That on the morning of 8th July 2014, one Rodrick Tetu (an accountant employed with Kotbual Business Group) gave him a set of
copy of Writ of Summons filed in this proceeding, who advice that the lawyer has directed them to effect service of that document
upon Mary Rose Maur personally.
- (b) That accordingly, he left their office located at Potzlaka LLG Station and preceded to Londolovit town along with the LLG's driver
(Mr. Engelberth Tekenbiak). As they approached Mahan hamlet (where Mary RoseMaur resides) before reaching town, they entered the
premises of Mary Rose Maur. He enquired with the children playing outside the house and asked to see Mary Rose Maur.
- (c) However, Mary Rose Maur came out of the house and He delivered the set of Writ of Summons and the related Statement of Claim to
her. He also asked her to sign on the service details form created on a copy of the Writ of Summons. As she was signing it, she said
in Tok Pisin "yumi luk stupid lo kot namel lo yumi yet" (translation – we look like a fool to have legal proceedings among ourselves), I then replied and said "Yu yet yu laikim and yumi putim lo kot".
- (d) That Mr. EngelberthTekenbiak was present and saw or witnessed all of these has happens in front of him.
- (e) That upon receiving the signed proof of service details copy of the Writ of Summons from Mary Rose Maur, they left Mahan and went
back to Potzlaka LLG station, where he returned the completed service details form to Rodrick Tetu for emailing to our lawyer.
- (f) That he stated that the denial made by Mary Rose Maur is a complete lie.
- (g) But apart from what is stated in our defence and cross-claim in proceedings WS No. 613 of 2014, Martin Asu stated that the Defendant/Applicants have not paid rentals for the property since 2005 up to this date.
- (h) That defendant/applicants were given notice to vacate on 12th March 2014 and up to this week, it is well over 12 months since
they were given notice to vacate.
- (i) That according to him, he said that the defendant/applicants do not have a defence to object to claim for eviction relief.
- (j) That in all of the circumstances in this case, the application to set aside default judgment be refused with cost.
- (k) That all material facts deposed to herein are true and correct to the best of my knowledge.
The Court Analysis of Evidence before Court
- The Court having heard and considered the submissions by both counsels and affidavit from Martin Asu and Mary Rose Muar, including
affidavits from each counsels as well, I have come to form the following observations and conclusions:
- (i) That there is a great conflict and disparity between first plaintiff/respondent and first defendant/applicant stories pertaining
to the circumstances upon which the Writ of Summons was allegedly served by Martin Asu on Mary Rose Maur. Mr Martin Asu'sversion
of how he served the Writ of Summons on Mary Rose Maur in the presence of LLG driver Mr. EngelberthTekenbiak, he was able to recall
the natural reaction at the time when the Writ of Summons was served and received by Mary Rose Maur. Mr Martin Asu said and I quote
"As she was signing it, she said in Tok Pisin "yumi luk stupid lo kot namel lo yumi yet" (translation – we look like a fool
to have legal proceedings among ourselves), I then replied and said "Yu yet yu laikim and yumi putim lo kot".. Whilst corroborator Mr. Engelberth Tekenbiak was around to witness the event, he made no affidavit to that effect, does not make the
event refer to by Martin Asu is untruthful, but it is indeed a demonstration of a reactionary response by Mary Rose Maur of the event
in question. But I have the benefit to surf through the number of documents signed by Mary Rose Maur as the author in respect to
two letters dated 21st and 29th April 2014 she caused and wrote to Messer's Mr. Alphonse Wetim and Mr. Martin Asu as Board Members
of Kotbual Business Group (Inc.) c/- Nimamar LLG Potzlaka Station – Lihir Island, New Ireland Province. I also have the benefit
to see her own affidavit sworn on 16th December 2013 and filed on 2nd February 2015 clearly demonstrate that signatures of Mary Rose
Maur have the same resembles and structure in the other documents I have referred to apart from the Writ of Summons service effected
on her on 6th October 2014 at 2.40pm at Londolovit Town. When I put all this together I find first defendant/applicant denial that
due process was not served on her is not true and reject her denial and confirm that Martin Asu did serve the Wit of Summons on Mary
Rose Maur and it was signed by her own signature and not by someone else she claim to be.
(ii) That I come to form the above conclusion because the first defendant/applicant is merely denying her signature on the Writ of
Summons cover page, but there is sufficient documentary evidence with compelling common sense and logic dictate at the small local
community population at Londolovit Town, Lihir Ireland, that justice pendulum does not swing in her favour. That is to say that the
service of Writ of Summons was done at the community where Martin Asu could not make a mistake on which the first defendant/applicant
is at her place of residence when the service of the Writ of Summons was affected. They may not like each other in this case, but
my observation on the two letters she signs as the authors confirm her signatures and same in the affidavit she deposes to the court.
Whilst court is mindful of the fact that in the absence of any expert scientific forensic evidence done on the cover page of Writ
of Summons over Mary Rose Maur's signature, I am convinced and believe that it was the signature of that of Mary Rose Maur and it
could not be through a work of a genus piece of IT copy and paste work as defence counsel claim to be. In the absence of any independent
expert contrary supporting evidence coming from first defendant/applicant, I therefore conclude that Service was properly executed
and served on the first defendant/applicant Mary Rose Maur.
(iii). The other important issue on service in this case is whether the due process was served on corporate entity, namely Molam
Limited, the 2nd defendant/applicant according to section 431 of the Company Act. My surfing of the Court file reveals that there was no proof of service filed on due process being served on the second defendant/applicant.
The section 431 of Company Act provides:
431. Service of Documents on Companies in Legal Proceedings.
(1) Notwithstanding the provisions of any other Act, a document, including a writ, summons, notice, or order in any legal proceedings
may be served on a company as follows:–
(a) by delivery to a person named as a director or the secretary of the company on the register;
(b) by delivery to an employee of the company at the company's head office or principal place of business; (underline is mine)
(c) by leaving it at the company's registered office or address for service;
(d) by posting it to the company's registered office, or address for service, or postal address;
(e) by serving it in accordance with any directions as to service given by the court having jurisdiction in the proceedings;
(f) in accordance with an agreement made with the company.
(2) The methods of service specified in Subsection (1) are the only methods by which a document in legal proceedings may be served
on a company in the country.
- Turning to this case, the very important issue is whether the second defendant/applicant was served with the due process, when the
Writ of Summons was served on the first defendant/applicant. I am of the view that since the first plaintiff/respondent is a party
to the proceeding, the service was done on her personally as a party and not on Molam Ltd as a Company. However, does the service
being affected on the second defendant/applicant, as the director and shareholder amount to service being affected on Molam Ltd Company.
My response to this is in the negative. The section 431(1) (b) of the Company Act is very clear and specific in that any other Act, a document, including a writ, summons, notice, or order in any legal proceedings may be served on a company by delivery to an employee
of the company at the company's head office or principal place of business.
- There is no IPA Company Extract that will verify Molam Ltd's Registered Head Office and usual place of business. In the absence of
such a very important document, I can only make some assumptions that where first defendant/applicant conduct business, is that the
place where she resides or is that it's usual place of business or is that the same as their registered head office is located. However,
I am placed in a very unfortunate situation where these assumptions are prone to human error. But what is very clear, in this case,
is that Plaintiff/Respondent failed to file a proof of service, even if the service was executed to a wrong person nor at the usual
place of business or neither at its registered head office. In the absence of these very requisite ingredients of service requirements,
I have no other option but to rule that no service of due process was served on the second defendant/applicant who is entitled to
be served with the due process as required under the law. I therefore reject the plaintiff/respondent contention that service was
effected on the second defendant/applicant as erroneous and in breach of the enabling legislation of Company Act.
- (iv) The other legal issue is whether the default judgment entered was regularly entered. The defence counsel submit that the plaintiff/respondent
default judgment was erroneously entered when plaintiff/respondent failed to quantify the liquidated rental arrears from 2005 to
the time when this Writ of Summons was issued. The periods in question can be computed, however, they were never pleaded in the Statement
of Claim quantified liquidated sum rather than just state that the rental arrears will be assessed as damages. This is creating an
uncertain unliquidated sum claim when in fact it is within their control to plead it as they did in the cross-claim in the proceedings
titled WS No. 613 of 2014. But one asks the question, why this figures were pleaded in the plaintiff/respondent cross-claim in the matter titled WS No. 613 of 2014 by defendant/applicant and not in this case.
- What became apparent to me is the fact that there are two separate proceedings running parallel together in the same Civil Track Court
Room 2. The defence counsels suggestion that plaintiff/respondents were aware of defendant/applicants case WS No. 613 of 2014 being on foot earlier where they have made very elaborate defence particulars in defence and also seek in their cross-claim quantified
liquidated rental arrears outstanding to-date. Why take out a separate proceeding on the same matter and between the same parties
when there is one proceeding already before the Court of law in Civil Track Court Room 2. The learned counsel for plaintiff/respondent
did provide some explanation that he acted on his clients instructions as the action was entirely different in nature and that his
client was merely asking the court for the rental arrears and repossession of their property to enhance their quite enjoyment of
their property. The plaintiff/respondent counsel submits that defendant/applicant were given sufficient advance notice to vacate
the property some twelve months ago, but all they were receiving was deafening silence. However, the defence counsel strongly contest
that the proceedings titled WS No. 736 of 2014 by plaintiff/respondents amount to duplicity and abuse of court process therefore proceedings should be dismiss in its entirety.
- To put above defence counsels contention on duplicity and abuse of court process into real legal procedural perspective, I refer to
well established outline of default judgment procedures, the following cases clearly articulate the process. In the landmark case
of Mapmakers v BHP [1987] PNGLR 78, and Paraka & Ors v Kawa & The State (2000) N 1987, and Kaluni v Warole (2001) N 2114. See the case of Giru v Muta (2005) N 2877 for a checklist of 6 preconditions on an application for a default judgment. These are: (1). Proper form, (2). Service
of Notice of Motion and Affidavits. (3). Default. (4) Warning. (5). Proof of service of Writ. (6) Proof of Default.
- However, in the case of Kitipa v Auali& Ors (1998) N 17173, it was held that rule 34 under order 12 of the NCR gives the court discretion in ordering a judgment by default. The judge held that a default judgment may still not be entered even
where a proof of the due service of the Writ has been given where the effect of the default judgment would prejudice the rights of
other co-defendants, or that the pleadings are so vague or do not disclose a reasonable cause of action or that the default judgment
cannot be sustained in law.
- Turning to this case, I am inclined to accept the legal contention by the defence counsel but not in particular the relief or outcome
defence counsel seeks. In the interest of justice and the justice of the case demands, that it is only fair in view of this case,
that in all fairness to the parties in this case, I would rule that both proceedings be consolidated and be dealt with together as
one. The parties be allowed to file any further pleadings or any additional affidavits to file before matter is set for trial proper.
In saying this I am mindful of the fact that, if the parties willingness at the 11th hour of a possibility to settle out of Court,
it could be a real win/win option as an alternative to amicably settle this matter. But it takes parties good will, commitment and
willingness to go down the path through Alternative Dispute Resolution track of which is available at the parties' disposal.
- Whilst on the pre-requisite procedural legal issue demand as a matter of law, that second defendant/applicant, as a legitimate Company
is unreasonably disadvantage and prejudiced by the default judgment when due process was not served according to the service requirement
under section 431 of the Company Act by plaintiff/respondent. Furthermore, the pleading on the rental arrears is so vague that the default judgment cannot be sustained
in law (see Kitipa v Auali & Ors supra).
- In the case of Barlow Industries v Pacific Foam [1993] PNGLR 345, the Supreme Court discussed the situation of a mixed claims which was for a liquidated amount. And see the Supreme Court case in
The State & Ors v Josiah & Ors (2005) SC 792. Where a claim is for relief against the defendant in default is for unliquidated damages only, the plaintiff may only enter judgment
against the defendant for damages to be assessed and for cost: O12 r 28. In this case the plaintiff/respondent neither pleaded unliquidated
damages in rental arrears but seek relief for default judgment for damages and cost to be assessed by the court was pleaded in the
motion filed seeking judgment by default against the defendant/applicants. Despite obvious bad pleading on the face of the Statement
of Claim by plaintiff/respondents, the much worse scenario is no proper service of Writ of Summons on the second defendant/applicant,
as legal requirement under section 341 of the Company Act.
- It is even much worse and serious omissions by plaintiff/respondents, who also breach simple principle of law on Equity that says;
"he who comes to court must come with clean hands" to seek relief before the court of law according to the rule of law. That is, to secure a judgment by default when in fact service
of Writ of Summons on judgment debtor, the second defendant/applicant was not properly served according to section 431 of the Company Act. I am convinced that the first plaintiff/respondent on behalf of the second defendant/respondent, as a corporate entity, has failed
to comply with the due process of the law under the National Court Rules and Company Act on service process accordingly. Therefore, plaintiff/respondent coming before the court to seek relief under the National Court Rules has placed the second defendant/applicant under disadvantage and very unfair, who is deprived of all its right under the Company Act for lack of service and also to respond to claim being filed against second defendant/applicant by plaintiff/respondent in this case.
- I have considered all of the above legal and factual considerations and have arrived at the above conclusions that, I am satisfied
that the judgment entered by default was irregular and also the ancillary order on eviction issued also ought to be set aside. I
do so now.
The Court orders accordingly.
ORDER
- The Court accordingly makes the following orders:
- That the application by defendant/applicant to set aside the default judgment and also the ancillary order on eviction issued against
the defendant/applicants on 12th November 2014 are set aside forthwith.
- The parties apply to the court to have both matters WS No. 613 of 2014 and WS No. 736 of 2014 consolidated and dealt with together
as one.
- The matter return to the Registry for relisting before the next call-over Civil list.
- The cost be in the cause.
- The time for entry of these orders is abridged to the time of settlement by the Registrar which shall take place forthwith.
_______________________________________________________________
Kamen Lawyers: Lawyer for the Plaintiff
Donald & Company Lawyers: Lawyer for the Defendant
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