N6154

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 665 OF 2011

BETWEEN:

PAULA HAUS WIN LIMITED
Plaintiff

AND

FRANCIS KUNAI
Defendant

Mt Hagen: Frank, J
2015: 2 October

PRACTICE AND PROCEDURE- Application to set aside summary judgment-Principles applicable 

PRACTICE AND PROCEDURE- Service of documents- Service by post-Sufficiency of- Evidence of- Postal Services Act 1996,s, 7(3)

PRACTICE AND PROCEDURE- application to dismiss proceedings-frivolous, vexatious and abuse of process-National Court Rules, Order 12 Rule 40.

PRACTICE AND PROCEDURE- application to amend pleadings-Principles applicable-National Court Rules, Order 8 Rule 50(1).

Cases Cited: 
Arman Larmer Surveys Ltd v Chan Consolidated Ltd (2013) SC1253
Barker v The Government of Papua New Guinea, Davis & Bux [1976] PNGLR 340
Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112
Chief Collector of Taxes v Dickson Panel Works Pty Ltd and Others [1988] PNGLR 186
Christopher Smith v Ruma Construction (2002) SC695
Dr Yvonne Sapuri v Peter Kolly (2014) SC1310
Green & Company Pty Ltd v Green[1976] PNGLR 73
Kabil Worm and 101 Others v Sergeant Koken and The Independent State of Papua New Guinea [1996] PNGLR 58
Kerry Lerro v Philip Stagg (2006) N3050
Kumul Builders Pty Ltd- vs –Post and Telecommunication Corporation [1991] PNGLR 299
Molin Chapau v The Independent State of Papua New Guinea (1999) N1933
Mt Hagen Urban Local Level Government v Sek No. 15 Ltd (2009) SC1007
Nancy Tambe and Others v Linda Tamsen and Another (2004) N2714
O'Connor v Popondetta Engineering and Transport Co Pty Ltd [1967-68] PNGLR 363
Page P/L v Balakau [1982] PNGLR 140

Counsel:
Mr P.Dowa, for the plaintiff/respondent
Mr. J. Abone, for the defendant/applicant

RULING ON APPLICATION

2nd October, 2015
1. FRANK J: The defendant, by Notice of Motion filed on 29 August 2014("Motion"),applies, pursuant to Order 12 Rule 8(2),(3) and (4) of the National Court Rules("Rules"), (a) to set aside the summary judgement orders, one made on 19 July 2013 and entered on 26 July 2013("19/07/13-orders") and the other made on 11 July 2014 and entered on 16 July 2014("Orders"), and (b) for leave to be granted to the defendant to amend his defence, and(c) to have this proceeding dismissed as being frivolous, vexatious and an abuse of process. The summary judgment application was moved and the orders were granted on the same day.

2. The application is supported by three affidavits of the defendant (a) the first, sworn on 3 and filed on 4 April 2013, (b) the second, sworn on 7 and filed on 28 August 2013, and (c) the third, sworn on 28 and filed on 29 August 2014.

3. The plaintiff opposes the application, and in response, relies on the (a) Affidavit of Paulus M.Dowa sworn 30 May and filed 2 June 2015, (b) Affidavit of Service of Bicken Nickson sworn and filed on 11 July 2014 and (d) Affidavit of Arnold Mek sworn 12 October and filed 30 November 2011.

4. The terms of the orders are that:

1.	"The Defence filed on the 27th July 2011 be dismissed for pleadings a general denial under Order 8, Rule 28 of the National Court Rules. 

2.	A summary judgment be entered for the plaintiff pursuant to Order 12,Rule 38 of the National Court Rules in the sum of K35,970.00

3.	Interest at 8% be added on the principal judgment.

4.	Costs of this application be settled by the Defendant."

5. The 19/07/13-orders were in terms similar to those of the Orders but had an additional (fifth) order that:

" The defendants Cross Motion filed on 04th April, 2013 is dismissed for want of prosecution."

6. I deal firstly with the 19/07/13-orders. It was not contested that these orders were set aside on 15 November 2013. The defendant's lawyers lodged a minute of the 15 November 2013orders which was entered on 17 February 2014 as document No. 24. Order No.1 of the 15 November 2013 orders states that the ex-parte of 19 July 2012' is set aside. Mr. Abone of the counsel for the defendant pointed out that the reference to '2012' in it is a typographical error, and should have referred to '2013'. The plaintiff does not dispute this. Both Mr. Abone and Mr. Dowa of counsel for the plaintiff appeared before the court when the orders of 15 November 2013 were made. There is therefore no order made on 15 November 2013 that exists for it to be the subject of a setting aside application. That part of the application is dismissed.

7. The plaintiff opposes the application to set aside the Orders on the grounds that (a) this court does not have jurisdiction to hear and determine an application to set aside a summary judgment, (b) the Motion and supporting affidavit were served on the defendant:(c) the defendant has not taken steps to prosecute the Motion promptly despite it being filed on 29 August 2014 thereby allowing the plaintiff to take steps to enforce the Orders by having its costs under the Orders taxed.

8. I deal with the jurisdiction issue first. The plaintiff submits that a party aggrieved by a summary judgement made pursuant to Order 12 Rule 38 can only challenge it by way of an appeal to the Supreme Court, and that this jurisdiction does not empower one judge to review a summary judgment granted by another judge of the National Court. In the result, this Court does not have the jurisdiction to hear and determine the application to set aside the Orders. Mr Dowa sites Christopher Smith v Ruma Construction (2002) SC 695 and Kerry Lerro v Philip Stagg (2006) N3050 as authorities for this propositions. 

9. In Smith (supra), the appellant has challenged, inter alia, a decision of the National Court setting aside a summary judgment granted by another judge. In the course of its determination of this ground of appeal, the Supreme Court considered the principles relevant to an application to set aside a summary judgment, Kapi DCJ said-

"So far as entry of default judgement under O 12 Division 3 of the Rules and summary judgment under O 12 r 38 are concerned, the basis upon which the respective judgments may be entered are different. The former is dependent upon satisfaction of default on the part of the dependant. Whereas the latter is dependent upon satisfying the court firstly that there is evidence of facts on which the claim is based and secondly that there is evidence given by the plaintiff or some responsible person that,in the belief of the person giving the evidence,the defendant has no defence to the claim. The trial judge was correct in his conclusion to this extent. 

However,it does not follow that the principles for setting aside either type of judgements are also different. This calls for close examination of O 12 r 8:"

10. His Honour then quotes the provisions of Order 12 Rule 8(2) and (3)(a),which are –

"(1)....

"(2) The Court may, on terms, set aside or vary a judgment-

(a)	 Where the judgment has been entered pursuant to Order 12 Division 3(default judgment); or

(b)	Where the judgment has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or 

(c)	When the judgment has been entered in proceedings for possession of land pursuant to a direction given in the absence of a person and the Court decides to make an order that the person be added as a defendant.

(3) The Court may, on terms, set aside or vary an order-

(a) where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or 

(b)...."

11. His honour continues –

"It is evident from this provision that the discretion to set aside a judgment under O 12 r 8 is the same whether a party is seeking to set aside a judgment under r 2 (a) (default judgement), (b) (judgment pursuant to a direction in absence of a party (c) (judgment for possession of land) or to set aside an order under r 3(a) (any order made in absence of a party). The words "The Court may, on terms, set aside or vary a judgment" are applicable to application to set aside all categories of judgments and orders set out above. 

 The discretion to set aside default judgment is also provided for under Order 12 r 35. The discretion to set aside under this provision is couched in identical terms to O 12 r 8(2) and (3). It follows from this that the principles governing the exercise of discretion would be the same.

 These principles are now settled in Green & Co.v Green [1976] PNGLR 73; PNG V Baker[1977] PNGLR 386; George Page Pty Ltd v Balakau [1982] PNGLR 140. The onus is on the applicant to satisfy the Court:

(1)	 Why the judgment was allowed to be entered in absence of the applicant.

(2)	 If there is a delay in making the application to set aside, a reasonable explanation as to the delay.

(3)	 That there is a defence on the merits."

12. Kandakasi J reached the same conclusion in these words:
 
"The law on an application to set aside an ex parte order is clear. Order 12 r,8(3) grants the National Court power to set aside an order made in the absence of one of the parties. This Court in Motor Vehicle Insurance (PNG) Trust v. Joseph Bure (unreported judgement) SC613, said the principles governing the application of a set aside of a default judgment applies in the context of an application for a set aside of an ex parte judgment in an originating summons. The judgment did not consider O 12 r 8 but as the Deputy Chief Justice reasons in his judgment, by reason of placing default judgments or orders in the same rule, the same principles apply. Even if that were not the case, I am still of the view that by virtue of s.155 (4) of the Constitution, I would adopt those principles and apply them. The reason for that is simple. Before a judgment or order of a court obtained in default or in the absence of other party could be set aside, the court must be satisfied that;

1.	There is a reasonable explanation for allowing judgment to go in as default or ex parte;

2.	The application is made promptly or if there is a delay there is a reasonable explanation for it; and

3.	That there is a defence or there is valid argument affecting the merits of the case.

In my view, these are the principles that govern and should guide a Court hearing an application to set aside an ex parte judgement or order. The issue for determination for the Court would be in terms of whether the applicant:

1.	Has provided reasonable explanation for allowing judgment to go in default or ex parte;

2.	Is making his application promptly or if there is a delay in that he has provided reasonable explanation for it; and

3.	Has disclosed a defence or an arguable case on the merits?

13. Lerro(supra) concerned an application to dismiss the entire proceeding on the grounds that it did not disclose a reasonable cause of action and that it was frivolous, vexatious and an embarrassment under Order 12 Rule 40 and Order 8 Rule 27 and an application to set aside the default judgment under Order 12 Rule 38. The court considered whether it had jurisdiction to hear the application to set aside. Kandakasi J dealt with this issue in these terms:

"40. Clearly, this is not a usual application for a set aside of a default judgement signed in default of a notice of intention to defend or a defence. Instead, it is an application seeking to set aside a judgement entered by the Court in default of filing a defence within further time extended by the Court and more so, after a default judgment signed after hearing the defendants and the plaintiffs on the latter's application for default judgement. Given that, the line of case authorities commencing with Green & Company Pty Ltd (Receiver Appointed) v. Green cited and relied on by the defendants are, in my view, inappropriate and irrelevant.

(i)	Relevant Principles and Authorities

41. In my view, however, the proper line of authorities are those that start with the Supreme Court judgement in Christopher M.Smith v. Ruma Constructions Ltd particularly in relation to the National Court's jurisdiction to deal with an application to set aside default or summary judgements. In that case, the National Court entered summary judgment against the respondent in its absence. The respondent appealed to the Supreme Court against the judgement. There was some delay in prosecuting that appeal resulting in an application seeking to dismiss the appeal for want of prosecution by the respondent. The Supreme Court declined that application and directed the appeal be progressed to a hearing. Subsequently, the respondent withdrew its appeal and sometime later applied for a set aside of the summary judgment. The National Court heard and granted that application. On appeal the Supreme Court of which I was a member held at pp.6 and 7:30.

"The approach taken by the trial judge with respect is fundamentally wrong. In essence the learned trial judge reviewed the decision of Woods J. The trial judge had no jurisdiction to do this under an application to set aside judgement under O 12 r 8 of the Rules. This power belongs to the Supreme Court under the Supreme Court Act or s 155 (2) (b) of the Constitution...In fact in the present case, the respondent filed an appeal against the decision of Woods J...

The respondent could not seek to review the decision in the appeal to the Supreme Court. As I already pointed out the National Court has no jurisdiction to review a decision on summary judgement under O12 r 8."

14. The submission of counsel for the plaintiff is misconceived. Kandakasi J was, in Lerro (supra), saying that a person aggrieved by a summary judgment may appeal against it to the Supreme Court or apply to set it aside before the same court. Where that party appeals to the Supreme Court and discontinues it, he cannot seek to review it, after taking the appeal option.

15. This court is bound by Smith (supra). It has the jurisdiction to hear and determine the application to set aside the Orders. In that regard, the issues for my determination are whether the defendant has (a) provided reasonable explanation for allowing judgement to be entered in default or ex parte: (b) promptly made its application, or if there is a delay, whether it has provided reasonable explanation for it; and (c) disclosed a defence or an arguable case on the merits.

16. The chronology of events, according to the defendant, are as follows:-

 16.1 2 June 2014 - Date of filing of the plaintiff's motion for summary judgment:

 16.2 6 June 2014 - Date of the plaintiff's lawyers letter under which the plaintiff served sealed copies of the Motion and Mr Dowa's affidavit ("First Letter");

16. 3 20 June 2014 - Date when the motion was returnable;

16.4 20 June 2014 - Date of plaintiff's lawyers' letter under which the plaintiff advised the defendant that the hearing of the Motion had been adjourned to 11 July 2014("Second Letter");

16.5 11 July 2014 - Date when the motion was heard and orders made;

16.6 17 July 2014 - Defendant's lawyers received the First Letter;

16.7 18 July 2014 - The defendant's lawyers, by letter of this date, wrote to Mt Hagen National Court enquiring of what had occurred on 11 July;

16.8 18 July 2014 - The defendant's lawyers, by its letter of that date to the plaintiff's lawyers enquired whether the plaintiff had moved its Motion;

16.9 18 July 2014 - defendant's lawyers received the First and Second Letters;

16.10 5 August 2014 - date of plaintiff lawyers' letter under which the plaintiff posted to the defendant's lawyers a minute of the Orders ("Third Letter");

16.11 7 August 2014 - The third letter was posted in Mt Hagen, and this is confirmed by the date stamped by the post office on the envelope enclosing the Third letter, a copy of which comprised Annexure "B" to the Affidavit of Francis Kunai;

16. 12 15 August 2014 - The defendant's lawyers received the Third Letter, who say this is confirmed by the handwritten notation on it which said 'Received 15/Aug/2014'; 

16.13 29 August 2014 - Defendant's lawyers filed the motion and affidavit;

16. 14 12 September 2014 - Date of service of the Motion and supporting affidavits;

16. 15 10 October 2014 - Return date of the motion.

17. The plaintiff submits that its summary judgment motion and Mr Dowa's affidavit were served in compliance with the Rules and therefore the failure of the defendant in not attending and responding to it was without reasonable excuse. The defendant submits that it was not aware of the return and hearing dates of the Motion until after those dates had lapsed based on its chronology of events set out at paragraph 16, and this explains why the defendant's lawyers did not appear before the court on those dates.

18. Order 4 Rule 42 provides that where notice of a motion is required to be served, it shall, unless the Court otherwise orders, be served not less than three days before the date named in the notice of hearing the motion. Order 6 Rule 4(1) (b) provides that where personal service of a document is not required, the document may be served by sending a copy of the document by pre-paid post addressed to the person to be served at his proper address. Order 6 Rule 4 (3) provides that where service of a document shall, unless the contrary is proved, be deemed to have been affected at the time at which the document would be delivered in the ordinary course of post.

19. Section 7(3) of the Postal Services Act 1996(As Amended) is also relevant as to the extent of the obligation of Post PNG with respect to letters sent through it by ordinary mail. I set out section 7 in full:

"7. Post PNG functions and objectives

(1)	Post PNG shall supply a letter service for the carriage within Papua New Guinea, by ordinary post, of letters that are standard postal articles.

(2)	 It is the objective of Post PNG that in view of the social importance of the letter service, the service be made available to as many people in Papua New Guinea as is commercially practicable.

(3)	 The letter service referred to in this section includes only delivery of a letter to the post office nearest to the recipients address, for collection by the recipient or his agent from that post office and does not include any obligation to deliver the letter to the recipient's address or premises."(Underlining added) 

20. The combined effect of these provisions of the Rules and subsection 7(3) of the Postal Services Act 1996 is that service of a document by ordinary mail will be deemed to occur on a date having regard to (a) the length of time it would ordinarily take for such mail to be moved from the post office where it is posted and placed in the mail box of the addressee ("mail box") for collection ("Delivery-period") and (b) the three days period prescribed by Order 4 Rule 42.

21. It is necessary therefore for a party who is involved in an issue concerning service by ordinary mail to adduce evidence to assist the court to determine the Delivery-period. Once the court makes these determinations, it only has to add on the three days prescribed by Order 4 Rule 42 to arrive at the period that must be allowed for service by ordinary mail to be effected in compliance with the Rules ("Service-Period").

22. It is not disputed that each of the First, Second and Third Letters were posted. The defendant's lawyers say it received both the First and Second Letters on the same date, 18 July 2014, notwithstanding that, according to the plaintiff, the First Letter was posted on 10 June 2014, and the Second Letter was posted 10 days later on 20 June 2014. Frome these, I infer that the date when the defendant's lawyers said it received the First and Second Letters was in fact the date when its agent visited and collected, from its mail box, these Letters, and not the date when these Letters were available in the defendant's lawyers' mail box for collection. The defendant's lawyers received the Third Letter on the tenth day (assuming it was posted on 5 August 2014) after it was posted. 

23. The plaintiff says it is difficult to prove that in fact the defendant's lawyers did not receive the First Letter and Second Letter earlier than 18 July 2014, and the evidence of the defendant in that regard is not reliable. There is a huge variance, if one is to go by the defendant's evidence, between the period it took for the defendant's lawyers to receive the First Letter (41 days after it was posted), the Second Letter (28 days after it was posted ) and the Third Letter (10 days after it was posted). To that extent, I agree with the plaintiff that the defendant's evidence is unreliable.

24. This does not mean, as the plaintiff suggests, that is not possible to gather and adduce evidence to assist the court in making a determination of the Service-period based on facts. Any party who relies on service of a document by ordinary mail must, if it is to succeed on that point, prove due service. The lawyers for each party might have records of correspondence exchanged by ordinary mail between Port Moresby and Mt. Hagen in other matters with different parties in which it has been involved showing how long it took for such mail to be made available for collection at its addressee's mail box, or sourced such evidence from an officer of Post PNG who would in the ordinary course of his duties have knowledge of such fact. This exercise has been undertaken before. See O'Connor v Popondetta Engineering and Transport Co Pty Ltd[1967-68] PNGLR 363, and Chief Collector of Taxes v Dickson Panel Works Pty Ltd and Others[1988] PNGLR 186. There is no evidence of such in the affidavits relied on by the plaintiff, nor was such an exercise undertaken by either party in support of its position with respect to the determination of the Motion. 

25. I consider, however, that it is not in the interest of the defendant to exaggerate its evidence that it received the Third Letter on the eighth day after it was posted as it would be prejudicial to its obligation to also demonstrate that the Motion was filed promptly. The defendant ought also to have adduced evidence for the court to determine the Delivery-period. It did not. I also assume that the Third Letter was posted on 5 August 2014, the date of this Letter. I also assume that the defendant's lawyers checked its mail box on a daily basis. This will mean that the Delivery-period is 10 days. I conclude that the Service-period is 13 days, once the three days under Order 4 Rule 42 is added on to the Delivery period.

26. The Service-period is applicable to determine whether a reasonable explanation has been given why defendant's lawyers did not appear before the court on the date when the summary judgment application was moved.

27. Given that the Second Letter was posted on 20 June 2014, the Service-period expired on 3 July 2014, about 10 days prior to the hearing of the summary judgment application. The result is that the explanation provided by the defendant for not attending and opposing the Motion is not a reasonable one. This result will be the same even if the assumptions in paragraph 25 were not made, because without those assumptions there is no evidence upon which the court could determine the Delivery-period, having rejected the defendant's evidence of the dates of its receipt of the First, Second and Third Letters for the reason set out in paragraph 23 as providing a reasonable explanation. 

28. The fact that the Motion was filed on 29 August 2014, means that it took the defendant 14 days, after receiving notice of the Orders, to compile and file the Motion. I therefore conclude that the motion was filed promptly. With respect to the steps taken by the defendant to prosecute the Motion without delay, there is an explanation of the events that occurred between 5 April and 19 July 2013. Otherwise, the plaintiff could have applied to dismiss it for want of prosecution when this court dismissed the other motions for that reason on 4 April 2014. It did not. The plaintiff, however, prepared, filed and served its summary judgment application. There is no record, however, of what occurred on 10 October 2014 or thereafter from the endorsement on the court file or from the evidence up until the plaintiff filed a bill of costs to tax its costs awarded under the Orders ("Bill"), which was fixed for taxation on 25 May 2014. That Bill has since been taxed for which the taxing officer issued a Certificate of Taxation for K29, 205.00 in respect of the Bill. This Certificate is the subject of the defendant's Notice of Motion filed on 20 July 2015, the hearing of which has been adjourned pending the determination of the Motion ("pending-motion"). No explanation has been given by the defendant why the Motion was not moved between 10 October 2014 and 20 July 2015.

29. As to an arguable defence on the merits, it is apparent from the affidavits of Lina Wane and Bickson Nickson that Mr. Dowa's affidavit was the only affidavit served and relied on in support of the application for summary judgement, and upon which the Orders were made. Through Mr. Dowa's affidavit, the plaintiff simply confirmed the facts pleaded in the Statement of Claim ("Claim"), and challenged the competency of the defence filed by the defendant on 27 July 2011("Defence") on the basis that it pleads a general denial.

30. In the claim, the plaintiff alleges that between 17 April and 13 June 2013, the plaintiff requested for and the defendant rented out its accommodation of not exceeding 10 rooms and Conference room facilities and was provided meals ("Services") for which the plaintiff rendered an invoice for K4, 000, which invoice was settled on 16 July 2007, and that between 14 June and 14 July 2007, the plaintiff provided similar Services(excepting the hire of the Conference Room) to the defendant for the sum of K35, 970.00 ("Invoice") for the Services. It alleges also that the defendant issued a cheque for the invoice amount but this was dishonoured ("Cheque"). The plaintiff also claims not less than K13, 000 in special damages on account of costs incurred in chasing after the defendant for payment of the Invoice.

31. There is no evidence of the source of the funds which were used to settle the K4, 000.00 invoice. No facts were pleaded and no evidence was adduced to shed light on any exchange between the plaintiff and defendant that resulted in an agreement under which the Services were procured, that is, address issues such as whether the defendant personally requested the plaintiff to provide the Services, who on behalf of the plaintiff and the defendant discussed and agreed for the provision of the Services, whether such agreement was oral or in writing or partly written and oral, the place and dates relevant to such negotiation and agreement, the terms of such agreement and the occasion for which those Services were procured.

32. In his affidavits, the defendant says that that he (a) has no knowledge of entering any agreement in his personal capacity for the Services,(b) was not aware that the Services had been sought of, and rendered by the plaintiff; (c) did not sleep at the lodge; (d) only became aware of the claim when the Invoice was put before the committee for approval, and (e) the Services were rendered to the Jimmi Joint District Committee("Committee"). The defendant produced copies of (a) the Invoice, written out to "Jimmi District C", (b) the Cheque, drawn by "JIMI DISTRICT TREASURY OPERATING ACCOUNT, and (c) his letter dated 5 June 2007 to the District Administrator (to the attention of Mr Bal) in which he requested payment of, amongst others, the Invoice, (d) a 'Finance Form 3-Requisition for Purchase of Goods/Services' signed by Mr.Bal for the Invoice as being 'incurred by MP on various occasions', and (e) a signed Form 4-General Expenses in favour of the plaintiff on account of the Invoice. On these basis, he says, he is not liable for the Invoice and that the Committee is the proper party to be defending the Claim. 

33. The defendant also produced a copy of the writ of summons and statement of claim filed by the plaintiff in WS 506 of 2009("WS 506"), which the plaintiff had withdrawn without the consent of the defendant, in which the plaintiff sued for the same amount represented by the Invoice and another debt of K7,920. 00 pursuant to an invoice No.27 for similar Services rendered to the defendant in his campaign supporters during the June and July 2007 leading up to 2007 National elections. These facts, which point to the Invoice being incurred by the defendant in his personal capacity, are not part of those pleaded in the Claim. In WS 506,the defendant also filed a cross claim against the plaintiff seeking orders for the return of a motor vehicle acquired on 24 May 2007 for the Sandiap Health Centre alleging that one Paula Mek of the plaintiff had without right title or licence, forcefully taken possession of it in July 2007. If this vehicle was the personal property of the defendant, his cross claim over it would be prejudiced by the withdrawal of WS 506. The prejudice that would arise from this withdrawal is as to the costs incurred by the defendant in that proceeding.

34. The plaintiff also submits that there was evidence in the affidavit of Arnold Mek to support the summary judgement application and the Orders. This affidavit is in identical terms to the facts pleaded in the Claim apart from the production, as annexure to it, of copies of the plaintiff's certificate of incorporation, two invoices, both numbered 27, however, one dated 8 August 2007 being a summary version of the other dated 9 August 2007. It does not address those matters raised in paragraph 31. The matters referred to in paragraphs 32 and 33 also put the facts pleaded and evidence of the plaintiff in dispute.

35. Although, the explanation provided in not appearing to oppose the summary judgment application was not reasonable based on the evidence, and the defendant had not accounted for the delay in prosecuting it, the plaintiff, on the other hand, took no steps to dismiss it and allowed it to be heard. 

36. In Green & Company Pty Ltd v Green[1976] PNGLR 73, O'Leary A.J, in dealing with an application to set aside a judgment entered in default of filing and serving a defence within the time prescribed for doing so, at pages 76 and 77,said:

"On an application to set aside a judgment by default, entered regularly, the principle matter that must be shown by the applicant is that he has a defence on the merits. In fact, it has been said that it is an "almost inflexible rule" that the court will not accede to the application unless the applicant does show such a defence: see Gamble v. Killingsworth. Obviously, on any such application, a court would be bound to consider "whether any useful purpose is served by acceding to the application. Plainly no useful purpose is served if it appears that if the judgement was set aside and the action allowed to go to trial, there would be no possible defence": see Bayview Quarries Pty.Ltd. v. Castley Development Pty. Ltd., per Sholl J. It is sufficient, however, for the applicant to show a prima facie defence on his affidavit: Evans v. Bartlam per Lord Atkin.

But the applicants must do more than that. He should as well explain his default in allowing the judgment to be signed against him, (Evans v.Bartlam and the application should be made as soon as possible after the judgment comes to the knowledge of the defendant: Rosing v Ben Shemesh."

 It has been said that delay in moving to have a judgment set aside is not in itself important, unless it results in some injustice to the other party or it enables rights of third parties to intervene: See Grimshaw v.Dunbar, per Jenkins L.J. With respect, I agree that is so. Very often delay can be compensated for by the imposition of appropriate terms as to costs or otherwise. But there are cases where the delay is such that of itself, it must work a prejudice to the other party and where it would be an injustice to him to allow the case to be re-opened."(Underlining added)

37. Delay in itself would not be important, but delay prejudicing the other part, or delay enabling rights of third parties to intervene, would be material: Rosing v Ben Shemesh [1960] V.R 173 at 176, cited in Page P/L v Balakau [1982] PNGLR 340.

38. Ultimately, it is a matter of discretion, having regard to all relevant matters. The Court has an unfettered discretion to set aside a regularly entered default judgement after taking into account all those and other relevant matters: Barker v The Government of Papua New Guinea, Davis & Bux [1976] PNGLR 340. 

39. Matters relevant, on account of which default judgements have been set aside or which may be grounds for so doing, notwithstanding that no reasonable explanation or defence on merit has been shown by affidavit, include the following:

(a)	 a default judgement entered in breach of the law including the requirements of service prescribed by statute: Kabil Worm and 101 Others v Sergeant Koken and The Independent State of Papua New Guinea[1996] PNGLR 58;

(b)	 a default judgement entered for a quantified judgment sum when the claim was for unliquidated damages, however, it was quantified and judgment entered for it in default without a trial for the assessment of damages: Molin Chapau v The Independent State of Papua New Guinea (1999) N1933;

(c)	 Where there is evidence suggesting that another person against whom the defendant intends to make a cross claim might be liable to the plaintiff and not the defendant, and the refusal to set aside default judgment affected the substantive right of the defendant to contest the issue of liability and to prosecute its cross claim: Arman Larmer Surveys Ltd v Chan Consolidated Ltd(2013) SC 1253

40. In my view, it is in the context of the considerations set out in and reflected by these decisions that, in Dr Yvonne Sapuri v Peter Kolly (2014) SC 1310, the Supreme Court said:

" 16. It is undoubtedly a serious step to shut out a defendant who wants a trial on the merits from having such a trial. In some cases, even when an explanation as to why a judgement was allowed to go in default appears thin, the existence, verified as to its factual foundation by affidavit, of a defence on the merits may well persuade a judge that the default judgement ought to be set aside. The court has a discretion to exercise."(Underlining added) 

41. All of these, as was held in Smith (Supra), apply in respect of an application to set aside a summary judgement.

42. These considerations are consistent with the purpose of summary judgment, which is to enable a plaintiff to obtain judgment without trial, if he can prove his claim clearly and if the defendant is unable to set up a bona fide defence, or raise an issue against the claim which ought to be tried in the first place: Kumul Builders Pty Ltd-vs-Post and Telecommunication Corporation [1991] PNGLR 299, at page 300. 

43. For the reasons I have given, notwithstanding that the defendant has not provided a reasonable explanation and has not shown that he has moved the Motion promptly, in all circumstances, and having regard to the defendant's demonstration by evidence that he has a defence on the merits, in the exercise of my discretion, I grant the application to set aside the Orders.

44. There is another reason why I grant the application to set aside the Orders. The requirements of Order 12 Rule 38(1) (b) did not exist when the Orders were made. That provision of the Rule provides:

"(1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff-

(a)....; and 

(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed, the Court may, by order, direct the entry of such judgment for the plaintiff on that claim or part, as the nature of the case requires,"(Underlining added).

45. 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, where it, at pages 117 and 118, said: 

"There are two elements involved in this rule;

(a)	Evidence of the facts proving the essential elements of the claim;

(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 facts or law. Whether a case should go to trial on these issues, will be determined on the facts of each case. However, the authorities show that the summary jurisdiction should only be invoked in a clear case; see Chief Collector of Taxes v TA Field Pty Ltd [1975] PNGLR 144," (underlining added)

46. The affidavits read in support of the summary judgment application are those referred to in paragraph 3(a), (b) and (c). The deponent of each of these affidavits was not the plaintiff or a person who fell within Order 12 Rule 38(1) (b), that is, an officer or some other responsible person of the plaintiff. The deponent of each of these affidavits also does not say that in his or her belief, the defendant has no defence to claim or part, or no defence except as to the amount of any damages claimed. He or she could not say so. The affidavit of Mr. Mek also does not depose to such belief. 

47. I now deal with the application for the dismissal of this proceeding. It is made under Order 12 Rule 40 and Order 8 Rule 27. Order 12 Rule 40 provides-

"40. Frivolity, etc. (13/5) 

(1)	 Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceeding-

(a)	......; or

(b)	 The proceedings are frivolous or vexatious; or

(c)	The proceedings are an abuse of the process of the court, the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

48. The Supreme Court in Mt Hagen Local Level Government v. Sek No.15 (2009) SC 1007, at paragraphs 27 to 30 conveniently set out the requirements of Order 12 Rule 40(1)(a), (b) and (c) as follows:

"27.The terms "vexatious", "frivolous", " abuse of process of the Court" and " reasonable cause of action" under O. 12 r. 40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia[1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori & The State(2006) N3050; Philip Takori & Others v. Simon Yagari & 2 Others (2008) SC 905. These cases say the same thing. 

28.	The law with regard to an application for dismissal of proceedings based on O. 12 r. 40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro's case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori's case (supra).

29.	 The phrase 'disclosing a reasonable cause of action' consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i)	A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

(ii)	The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii)	The purpose of O.12 r. 40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv)	A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and (is) bound to fail if it proceeds to trial.

(v)	A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

30.	 In an application under O. 12 r.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded."

49. The defendant says that this proceeding is frivolous on the basis that he is the wrong party because he did not procure and use the Services and that the Services were rendered to the Committee.

50. The plaintiff has not pleaded with clarity the facts and circumstances referred to in paragraph 31. The defendant did not assist in the defence he filed when he simply pleaded that he does not recall entering into any agreement with the plaintiff for it to provide the Services. The defendant was then the member for Jimi Open Electorate in the National Parliament. In that capacity, he was a member of both the Joint Provincial Planning and Budget Priorities Committee under section 25(1) (a) of the Organic Law on Provincial Governments and Local Level Governments ("Organic Law") and the Joint District Planning and Budget Priorities Committee under section 33A of the Organic Law to know whether the Services were procured by the committee. The Invoice was brought to his attention for payment as a member of the Committee. He also wrote to the District Administrator requesting that payment for the Invoice be effected. Even if he was not personally liable, he might have been aware what the Invoice was for. He also has not clarified and demonstrated with reference to matters such as those referred to in paragraph 31,32 and 33 that no facts are in dispute or that the committee or another person is in fact liable for the Invoice. Those matters may be provided by way of better particulars.

51. The cause of action is sufficiently disclosed in the Claim. I am not satisfied that the claim cannot possibly succeed and is bound to fail. It is not frivolous. 

52. The defendant also submits that the proceeding is vexatious for the reason set out in paragraph 32 and based on the evidence that the plaintiff had filed WS 506 and thereafter withdrew it after the defendant had filed a cross claim. There is no evidence that the plaintiff is not serious or has instituted and is maintaining this proceeding for reasons or motives other than for the recovery of the alleged debt represented by the Invoice. For these reasons and those upon which I refused the application on the ground that this proceeding is frivolous, which I adopt, I am not satisfied that the Claim or this proceeding is vexatious. 

53. The defendant also applies to dismiss the Claim and this proceeding as an abuse of process. Order 8 Rule 27(1) (c) provides that where a pleading is otherwise an abuse of process of the Court, the Court may at any stage of the proceedings, on terms or otherwise, order that the whole or any part of the pleading be struck out. The defendant did not make any specific submission with respect to Order 8 Rule 27(1) (c) as to why the Claim is an abuse of process. If it is for those grounds advanced to say that it is frivolous or vexatious, I dismiss it for same the reasons I dismissed the application on those grounds. No specific submission has been advanced also to show how or why this proceeding is otherwise an abuse of process. I refuse the application for the dismissal of this proceeding.

54. The defendant also seeks leave to amend his defence. Order 8 Rule 51 provides:

 "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 manner as the Court thinks fit.

(2)	 All necessary amendments shall be made for the purpose of determining the real question 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)	.....

(4)	.........'''

55. In Nancy Tambe and Others v Linda Tamsen and Another (2004) N2714, Injia J (as he then was) summarized the considerations relevant to such application, which I adopt, thus:

"There are many relevant considerations which the Court will consider in determining the application. Five of those are summarized by Gavara-Nanu J in The Papua Club Inc v Nusaum Holdings Ltd (No 1)(2002) N2273. In Michael Kewa v Elias Mai Kombo(2004) N2688. Cannings J added (3) more considerations to the list. The eight (8) considerations are:

1.	Will the amendment enable the Court to determine the real question in controversy between the parties?

2.	Will the amendment correct any defect or error in the proceedings?

3.	Will the amendment cause real prejudice or injustice to the other party?

4.	Is the application for such amendment made mala fide or bona fide?

5.	Can the other party be fairly compensated with costs for the amendment? 

6.	Is the party prevented by its conduct or the manner in which the proceedings have progressed from being permitted to amend its pleadings?

7.	Where do the interests of justice lie?

8.	Is the proposed amendment efficacious? That is, is it a proper amendment?

56. The factual dispute raises an issue whether the defendant is personally liable for the Invoice. The defendant intends to raise this in the defence he intends to file. Allowing the amendment will clarify and raise the relevant issues raised for the court's determination, including the issue raised by the defendant as to whether he is the proper party, Neither party will be prejudiced otherwise than in respect of costs. None of the other considerations are present or apply against the grant of the application. The justice of the case therefore favours the grant of the application. In the circumstances, I grant the application to amend the Defence.

57. I also consider, having regard also to those matters raised in paragraph 31 and 32 that it would also be appropriate for the plaintiff to consider and if it is satisfied that it ought to amend its Claim. If the Claim is amended to address to address those or any other relevant matter, the defendant will be obliged also to clarify his position with respect to such matters so that the real issues for determination are clear from the pleadings. The basis upon which I granted leave to amend the Defence also apply in favour of the Claim. I therefore grant the plaintiff leave to amend its Claim.

58. In summary, I have refused the defendant's application to dismiss this proceeding, and granted the defendant's applications to set aside the Orders and for leave to amend his Defence. I have also granted leave to the plaintiff to amend its Claim.

59. The effect of the 15 November 2013 orders (setting aside the 19/07/13-orders) is that the motion referred to in paragraph 5 is reinstated. I dismiss that motion for want of prosecution and for the reasons that it seeks orders for the dismissal of this proceeding on the same grounds advanced in support of the Motion, and for leave to amend the Defence which has been granted pursuant to the Motion.

60. With respect to costs, I am of the view, in light of the matters I have raised in this judgment and those herein, that each party should bear its own costs of and incidental to the Motion. The plaintiff moved its application for summary judgement when the defendant did not move its motion referred to in paragraph 5, and on account of the defendant's denial of the Claim in a general way, when having regard to those matters pointed out in this judgment, he could have better pleaded his defence or position for the plaintiff to appreciate before filing and prosecuting its summary judgment application. The plaintiff, on the other hand, filed and moved its summary judgment application when it could have addressed the defendant's motion to amend its defence. The matters I have raised with respect to the lack of sufficient particulars of the facts being pleaded affects both the Claim and the Defence. Whilst costs would ordinarily follow the event under Order 22 Rule 11, both parties have, by their pleadings and conduct allowed the summary judgment application and the Motion to be pursued. Ultimately, the Motion was partly successful. 

61. The Orders are:

 61.1 The Cross Motion filed on 4 April 2013 is dismissed;

61.2 The application to set aside the orders made on 19 July 2013 and entered on 26 July 2013 is dismissed;

 61.3 The application to dismiss this proceeding is dismissed;

61.4 The orders made on 11July 2014 and entered on 16 July 2014 are set aside;

61.5 Leave is granted to the plaintiff to file and serve an amended statement of claim if it considers appropriate by Friday, 16 October 2015; 

61. 6 Leave is granted to the defendant to file and serve an amended defence by Friday, 30 October 2015;

61.7 The plaintiff shall file and serve its Reply to the amended defence filed pursuant to order 61.6 hereof with 14 days of it being served with such defence;

61. 8 Each party shall bear its own costs of and incidental to the Motion.

________________________________________________________________
Paulus M. Dowa Lawyers: Lawyer for the Plaintiff/Respondent
Parkil Lawyers: Lawyers for the Defendant/Applicant