N6006

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1485 OF 2014

BETWEEN

PETER KOLLY
Plaintiff

AND

JOHN BRUNTAL
First Defendant

AND

MARY POPELIAU
Second Defendant

AND

DONNA KABANA
Third Defendant

AND

BANK OF SOUTH PACIFIC LIMITED
Fourth Defendant

Waigani: Ipang, J
2015: 19th March & 15th May

CIVIL - MOTION – Plaintiff seeking to strike out Defendants' defence and default judgment to be entered on liability with damages to be assessed – Order 9, Rule 15 (1) (b) National Court Rules.

CIVIL - MOTION – Defendants' motion seeking an order that the discovery of the documents in the Notice of Discovery filed limited to paragraph one (1) of the Notice – Order 9 rule 3 and Order 12 Rule 1 of the National Court Rules – Defendants be granted leave to file and serve further affidavits – Order 4, Rule 31 National Court Rule – Defendants be granted leave to amend their defences – Order 8 Rules 50 & 51 National Court Rules

Cases Cited

Ace Guard Dog Security Services Ltd v Lailai (2003) N2459
Aisip Duwa v Ronald Senge [1995] PNGLR 140
POSF v Sailas Imanakuan (2001) SC 677
Credit Corporation v Gerald Jee [1988-1989] PNGLR 11
Wenan Elkum v PNG [1988-1998] PNGLR 662
Hornibrooks Construction v Kawa Express Corp [1986] PNGLR 166
John Cybula v Nings Agencies [1978] PNGLR 166
Philip Takori v Simon Yagari PGSC 3; SC 905 (29.02.08)
Kunton v Juniar [2006] PGSC 34; SC 929 (28.09.06)
Mulley v Manifold (1959) 103 CLR 345

Counsel:

Plaintiff in Person
Mr. J. Brooks, for Defendant

15 May, 2015

1.	IPANG, J: There are two (2) motions before this Court. The plaintiff's motion is dated 7th November, 2014 and the defendants' motion filed on the 31st October, 2014. I will deal with the plaintiff's motion first and later address the defendants' motion. Plaintiff by his motion dated 7th November, 2014 seeks the following orders: 

(i)	The Fourth Defendants' defence filed on the 17th October, 2013 be struck out and Default Judgement be entered on liability with damages to be assessed against the Fourth Defendant for want of filling List of Documents pursuant to Notice of Discovery filed on the 17th of October, 2014. Applicant/Plaintiff relies on Order 9, Rule 15 (1) (b) of the National Court Rules.

(ii)	Alternatively, Defendants Notice of Motion filed on the 31st October, 2014 is misconceived and be dismissed as defendants' time for compliance has expired. Applicant/Plaintiff relies on Order 12 Rule 4 (1) & (2) of the National Court Rules.

(iii)	Defendants pay the Plaintiff's cost of and incidental to this application.

(iv)	Any further orders this Honourable Court deems appropriate.

2.	The plaintiff's motion is supported with his submission filed on the 19th of March, 2014.

3.	In a nutshell, the plaintiff submitted that the Defendants' defence is not a defence rather it is just a general denial without specifically stating the facts or basis upon which the plaintiff's cause of action is based on. Plaintiff also stated that Defendants failed to comply with his Notice of Discovery filed on the 17th October, 2014 for the listing of documents to be made available to the Court. Therefore, the plaintiff submitted that there is no new evidence material to deny the fact, pleading on the plaintiff's Statement of Claim.

4.	Plaintiff further said his Notice for Discovery was filed on the 17th October, 2014 and his Notice to Produce Documents was filed on the 10th of November, 2014. All were served on First and Fourth Defendants to produce the detail of the cheque of K1 million. Plaintiff says the Defendants produced irrelevant bulk of documents rather than producing real evidence about the cheque.

5.	Basically, the defendants say they have complied with the Notice of Discovery. Plaintiff's Notice for Discovery was for three (3) categories of documents;

(a)	The final Investigation Report into the alleged fraudulent cheque that in some respects gave rise to these proceedings;

(b)	All cheque vouchers cleared by the plaintiff while working with fourth defendant for a six month period; and

(c)	The final outcome of the findings of the defendants' enquiries into the allegedly fraudulent cheque.

6.	Defendants in response say:

(a)	They filed a List of Documents on 31 October 2014, within the 15 days specified in the Notice;

(b)	At item 1 of Schedule of the List of Documents the defendants have produced the only Report that came into existence as to the fourth defendant's enquiries into the purportedly fraudulent cheque that in some respects gave rise to these proceedings. In discovering this Report the plaintiff has complied as to the documents sought in paragraphs 1 and 3 of the plaintiff's Notice for Discovery.

(c)	The defendants have given verified discovery and have deposed that this is the only document in existence within their custody or control that relates to paragraphs 1 and 3 of the Notice for Discovery issued by the plaintiff.

(d)	The plaintiff has provided no evidence as to whether there are any other documents in existence and as such there is a prima facie presumption that the defendants' verified List of Documents is compliant.

(e)	As to the documents sought in paragraph 2 of the Notice for Discovery, in the List of Documents the defendants depose that those documents are clearly not relevant to the matters in dispute in these proceedings as they have no relevance at all as to whether the plaintiff was unfairly dismissed in the circumstances, or as to whether the plaintiff was defamed as he alleges, or if he was assaulted by the first defendant as he alleges.

(f)	Further, the documents sought in paragraph 2 of the Notice for Discovery are the subject of third party confidentiality requirements on the part of the fourth defendant (cheques belonging to various third parties) and again are simply not relevant to any issue in dispute in these proceedings and are not discoverable;

(g)	Finally, the documents (cheques) sought in paragraph 2 of the Notice for Discovery cover a 6 month period, and it is quite likely the plaintiff dealt with a very large number of cheques in that period and it would be entirely oppressive for the defendants to have to try and go through their records to ascertain what cheques were cleared by the plaintiff in a 6 month period in circumstances where those cheques have no relevance at all to the issues as between the parties in these proceedings.

7.	Defendants concluded that they have complied with their obligation to give proper discovery and have relied on the following case authorities; Ace Guard Dog Security Services Ltd v Lailai (2003) N2459; Aisip Duwa v Ronald Senge [1995] PNGLR 140; POSF v Salias Imanakuan (2001) SC 677; Mulley v Manifold (1959) 103 CLR at 345; Credit Corporation v Gerald Gee [1988-1989] PNGLR 11; Wenan Elkum v PNG [1988-1989] PNGLR 662; Hornibrooks Construction v Kawas Express Corp [1986] PNGLR 301; John Cybula v Nings Agencies [1978] PNGLR 166

8.	The plaintiff is seeking an order for default judgment pursuant to Order 9 Rule 15 (1) (b) of the National Court Rules for the Defendants' failure to give Discovery or List of Documents to the Plaintiffs. The Order 9 Rule 15 (1) (b) states:

"Default

(1)	Where a party makes default in filing or serving a list of documents or affidavit or other document, or in producing any document as required by or under this Division, the court may make such order as it thinks fit, including-

(b) if the proceedings were commenced by Writ of Summons and the party in default is a defendant – an order that his defence be struck out and that judgment be entered accordingly."

9.	In the case of Ace Guard Dog Security Services & Yama Security Services Ltd v Lindsay Lailai (supra) Sakora, J considered three (3) requirements that need to be satisfied in order for a default judgment to be entered against the Defendants for failing to give discovery of documents to the plaintiffs. The three (3) requirements are:

(i)	Whether there was default on the part of the Defendants in complying with Plaintiff's Notice for Discovery according to the National Court Rules;

(ii)	If so, whether the default provision of the National Court Rules ought to be enforced against the Defendants; and 

(iii)	 In the alternative, if discovery is found to have been made in accordance with the Rules, whether such discovery was sufficient and adequate."

Whether discovery by the Defendants was sufficient and adequate

10.	The plaintiff filed his Notice of Discovery on 17 October 2014. Defendants filed a List of Documents on the 31 October 2014, within the 15 days specified in the Notice. The Defendants have produced a report that came into existence as to fourth defendants' enquiries into the purported fraudulent cheque. Defendants say this is the only document in existence within their custody or control which relates to paragraphs 1 and 3 of the Notice of Discovery issued by the plaintiff. As to the documents referred to in paragraph 2 of the List of Discovery, the Defendants say that these documents are not relevant to the matters in dispute in this proceeding.

11.	It is without doubt that the Defendants have complied with Plaintiff's Notice of Discovery but whether such discovery was sufficient and adequate. In Credit Corporation (PNG) Limited v Gerald Jee [1988-1989] PNGLR 11 at p.12. This case justified the core function of discovery process. The court stated:

".... the function of the discovery of documents is to provide the parties with the relevant documentary material before the trial so as to assist them in appraising the strength or weakness of their respective cases, thus to provide the basis for the fair disposal of the proceedings before or at the trial or to adduce in evidence at the trial relevant documentary evidence material to support or result the case made by or against them, to eliminate surprise at or before the trial relating to documentary evidence and to reduce the costs or litigation...."

12.	David Bamford, "Principles of Civil Litigation", Law Book Company, 2010 Ed. at p. 176 stated the following in terms of the issue of full discovery:

"At the core of discovery are the rules that determine whether a documents needs to be disclosed. In general terms, documents that are or have been in the party's possession that are relevant to the dispute must be discovered. There are really three critical parts to determining is a document needs to be discovered – the definition of "documents" possession and relevancy and the question of how broadly each of these are to be interpreted."

13.	At pp. 176 – 177 D. Bamford (supra) gave the definition of "Documents, Possession and Relevancy."
 
i. Documents: The term "documents" is given very wide definition by the rules and the Acts Interpretation Acts. Virtually any medium which records information constitutes a "documents" for discovery purposes. ....Film, photos, discs, tapes, and even stone tablets with hieroglyphics would appear to fall within the definition.... The development of electronic records has further extended the concept of documents..." 

The Rules (Supreme Court Rules) and the Acts Interpretation Acts referred to are those of some Australian States like South Australia and Queensland. 

In our jurisdiction, Order 1 Rule 6 of the National Court Rules offers the definition to are those of some Australian States like South Australia and Queensland.

ii. Possession: The Concept of possession of documents in the context of discovery is different from the legal concepts found in property law. While almost all the rules relating to discovery refer to "possession" many rules also use other concepts like "custody" "power" and "control". This is because civil litigation process designers have usually sought to bring as many documents as possible within the scope of discovery. So documents owned by someone other than the party but in the party's possession are required to be discovered. Documents which are not in the part's physical possession but are controlled by the party or documents over which the party has an enforceable right may also be subject to disclosure.

It is important to note that possession is not limited temporally to the time discovery is made. It includes documents that were in possession of the party, including those that may have been destroyed.

iii. Relevancy: In most jurisdictions documents must be relevant to issues raised by the pleadings. ....Even if the documents would be inadmissible at trial they are still required to be disclosed if they are relevant. Traditionally, relevance has been given a very wide interpretation. The relevancy test, often described as the Peruvian Guamo test, includes both documents that directly affected the case and documents that ere not directly related to the case but which would nevertheless lead to a "train of inquiry" that would produce such information. The test, in subsequent cases, has been stated in very broad terms – a party must discover any document which will "throw light on the case".

14.	Plaintiff through his Notice for Discovery filed on the 17 October 2014, required Defendants to give discovery of the following:

1.	Full details of the final investigation report of K1.million Cheque No. 38398 Serial No. 033119, drawn from the Department of Lands and Physical Planning made payable to Mr. John Koi.

2.	All cheques vouchers cleared by the Plaintiff while employed by Bank South Pacific from the month of January 2013 to the month of June 2013.

3.	First and the Fourth Defendant to inform or provide to this Court the final outcome of their findings regarding fraud and scan cheque as cause of action arose from and subsequently, termination of the plaintiff.

15.	The second list of documents as contained in paragraph 2 of the plaintiff's Notice of Discovery regarding all cheques vouchers cleared by the plaintiff while employed by Fourth Defendant from January 2013 to June 2013 is irrelevant for the purpose of this current proceeding. Documents contained in paragraphs 1 and 3 of the Plaintiff's Notice of Discovery are relevant in my view. In paragraph 23 (b) of Defendants submission, Defendants say they have produced the only Report regarding Fourth Defendant's enquiries into the purported fraudulent cheque. Thus, they said they have complied with paragraphs 1 and 3 of the Plaintiff's Notice for Discovery.

16.	Plaintiff says such relevant documents have not been discovered therefore such discovery is insufficient and inadequate that Defendants' defence has not support of any material documents. As a consequence of this, Plaintiff submitted that Defendants' defence be struck out pursuant to Order 12 Rule 1 of the National Court Rules and default judgment be entered in favour of the Plaintiffs.

17.	In my view, there is a proper way out of this rather than quick hast to seek default judgment. In the Supreme Court case of Philip Takori v Simon Yagari PGSC 3; SC 905 (29 February 2008) the court made the following observation:

"The National Court often hears a lot of applications and readily grants orders aimed at correcting the kinds of deficiencies we speak of or order compelling a plaintiff (or a defendant) to take corrective measures. These kinds of orders are made with a view to doing justice on the substantive merits of the case at less costs and delay to the parties. Hence, the practice of the National Court that we are aware of is often one of slow to finally shutting out a party except in clearest cases and where there is deliberate and inexcusable failure to comply with Court orders or the Rules of the Court, only as a last resort and only if no measures of amendments will do." (Underlining mine)

18.	The entry of default judgment is not a matter of right. There are certain preconditions that have to be satisfied (refer Kunton v Junias [2006] PGSC 34; SC 929 (28.09.06) but even when all are satisfied, the decision whether to enter default judgment is a matter for the discretion of the Judge under Order 12 Rule 32 (general) of the National Court Rules.

19.	In my view the interest of justice would not be served by entry of default judgment (See Urban Giru v Luke & Ors (2005) N2877). I refuse the orders sought in the Plaintiff's motion dated 7th November 2014. As to paragraph one (1) of the motion, it is my view that Plaintiff should seek formal orders of the court compelling Defendants to provide further and better particulars of the discovery. Defendants have only produced the only Report regarding Fourth Defendant's enquiries however Plaintiff sought discovery specifically for Final Investigation Report into the alleged fraudulent Cheque and the final outcome of the findings of the Defendants into the alleged fraudulent Cheque. Plaintiff to consider Order 9, Rules 5, 6 & 7 of the National Court Rules (NCR).

DEFENDANTS' MOTION

20.	By their motion filed on the 31 October 2014, Defendants seek the following orders:

1.	The discovery of the documents specified in Notice for Discocry filed on the 17 October 2014, shall be limited to document specified in paragraph 1 of the Notice namely a report by Copland Karau variously dated 18 July 2013 and 22 July 2013, pursuant to Order 9 Rule 3 and Order 12 Rule 1 of National Court Rules.

2.	The Defendants be granted leave to file and serve further affidavits, including the affidavits in support of this motion, on or before a dated to be set by the court and the Plaintiff to file any affidavit in reply 14 days thereafter pursuant to Order 4 Rule 31 and/or Order 12 Rule 1 of the National Court Rules.

3.	The Defendants be granted leave to amend their respective defences by inserting further paragraphs the matters set out in the sheet annexed to this Notice and also annexed to the affidavit of John Brutnall sworn on the 31 October 2014.

21.	Given my ruling that the Plaintiff specifically sought discovery for the final Investigation Report and of course the final outcome of the findings of the Defendants regarding the alleged fraud, the natural consequence of this will mean, I will not grant the order sought in the first paragraph of Defendants' motions.

22.	In paragraph 2 of their motion filed on the 31 October 2014, Defendants seek an order for leave to be granted to them to file further affidavits. Defendants say prior to the hearing that was set down for 20 October 2014, the Court made an order that parties were required to file all affidavits by 17 October 2014. Subsequently, the trial date was vacated. Since that time the plaintiff has filed further affidavits so as the defendants. Defendants say discovery has been given and further issues have arisen. Defendants say they seek an order for parties be allowed to file affidavits after 17 October 2014 and that those affidavits can be relied on at trial if the party that filed the affidavit seek to rely on them. Plaintiff has not respond to this order sought by the Defendants. I will grant the order sought by the Defendants in paragraph 2 of their motion.

23.	In paragraph 3 of their Notice of Motion, the Defendants seek an order that they be allowed to amend their defence. Defendants made this application pursuant to Order 8 Rule 50 of the National Court Rules. The Order 8 Rule 50 states:

"50. General (20/1)

(1)	 The court may, at any stage of any proceedings, on application by any party or of its own motion, order, on terms that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such as the court thinks fit.

(2)	 All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings.

(3)	 Where there has been a mistake in the name of a party, sub-rule (1) applies to the person intended to be made a party as if he were a party".

24.	Plaintiff objected to Defendants' application to amend their defence filed on the 17th October 2013 saying the time for compliance has expired and the pleading has been closed. The matter is ready for trial. Plaintiff says Defendants filed their defence on the 17 October 2013 and to date it is One (1) year, One (1) month to amend their defence.

25.	Because of the reason(s) advanced by Defendants in seeking leave to amend their defence and for obvious reasons I gave in my ruling on the plaintiff's application, it is only fitting that I grant the Defendants' application to amend their defence. The grant of this application will not greatly prejudice the Plaintiff.

26.	The orders of this court in summary are as follow:

1.	Plaintiff's application for Defendants' defence to be struck out and Default Judgment be entered is refused.

2.	Plaintiff to file fresh application seeking orders for discovery of Final Investigation Report and Findings into the alleged fraudulent Cheque. Plaintiff to consider Order 9 Rules 5, 6 & 7 of the National Court Rules.

3.	The order sought in paragraph one (1) of the Defendants' motion is refused.

4.	The order sought in paragraph two (2) of the Defendants' motion is granted.

5.	The order sought in paragraph three (3) of the Defendants' motion is granted.

6.	Costs be in cause.

_____________________________________________________________
Lawyer for the Plaintiff: In person
Ashurst Lawyers: Lawyer for the Defendants