N6334
	
	PAPUA NEW GUINEA		
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 56 OF 2015

	BETWEEN
ALOIS ALAURO MAIMA
Plaintiff

AND:
WALKAIMA ESSY
Provincial Advisor - Education Division
First defendant

AND:
SIMBU PROVINCIAL GOVERNMENT
Second Defendant

Kundiawa: Liosi, AJ.
           2016:  09th March

CIVIL PRACTICE AND PROCEDURE – Application to set aside exparte default judgment for being irregularly entered – Order 12 Rule 8 (2) (a) and Order 12 Rule 35 of National Court Rules – whether default judgment irregularly entered – principles discussed – application to extend time to file defendants defence out of time – Order 12 Rule 1 – principles applied – whether setting aside a default judgment entitles a party as of right to get extension 

Held
There must be defence on merits particularised – There were breaches of National Court Motions (Amendment) Rules 2005 rendering entry of default judgment irregular – Same principles apply in respect of grant of extension of time to file defence out of time. 

Cases Cited:
Andrew Baing & Anor v. PNG Stevedores Pty Ltd & Anor (2000) PGSC 1; SC627 (23 February 2000)
Christopher M Smith v. Ruma Constructions Ltd. (2002) PGSC 13; SC695 (11 October 2002)
Duma v. Hriehwazi (2004) PNGLR 237 N2526 
Giru v. Muta (2005) N2877
Green v. Green (1976) PNGLR 73
Kipane v. Anton & PNG Waterboard N2429
Leo Duque v. Aria Andrew Paru (1997) PNGLR 378	

Counsel: 
Mr M Yawip, for the Plaintiff 
Mr C Gagma, for the Defendants 

RULING 

9th March, 2016 

1.	      LIOSI AJ:  This is an application by the defendants pursuant to a notice of motion filed on 17th December 2015 seeking the following orders:-

1.1.	Pursuant to Order 12 Rule 8 (2) (a) and Order 12 Rule 35 of the National Court Rules, the default judgment made exparte in favour of the plaintiff on 4th -November 2014 and entered on 3rd December 2014 be set aside forthwith  for being irregularly entered.

1.2.	Pursuant to Order 12 Rule 1 of the National Court Rules, the entire proceedings be dismissed for lack of notice of intention to claim against; 

a)	The Simbu Provincial Government pursuant to Section 4 of the Claims By and Against the Simbu Provincial Government Act 2001 and or; 
b)	The State pursuant to Section 5 of the Claims By and Against the State Act.

1.3.	Alternatively, pursuant to Order 12 Rule 1 of the National Court Rules, the within proceeding be dismissed for been statute barred under the Statute of Frauds and Limitations Act 1998. 

1.4.	Pursuant to Order 12 Rule 40 of the National Court Rules, the entire proceedings be dismissed for no reasonable cause of action and for being frivolous, vexatious and an abuse of the process of the court. 

1.5.	Pursuant to Order 1 Rule 7 and 15, Order 7 Rule 6 (2) and Order 12 Rule 1 of the National Court Rules the time for filing of defendant’s defence be extended and leave be granted to file defence out of time within 14 days. 

1.6.	Costs be in the cause. 

2.     The defendants filed their written submissions on 18th April 2016. On 20th April 2016, the plaintiff was directed to file its submission by 28th April 2016. I now give my ruling. 

Background 

3.    This is a claim for higher duties allowance and housing allowance by the plaintiff against the defendants. The Writ of Summons endorsed with a Statement of Claim was filed on 6th February 2014. The defendants filed their Notice of Intention to Defend on 12th February 2014. 

4.    The plaintiff pleaded in his Statement of Claim that on 17th May 2004, the defendants appointed him as the Acting Simbu University Centre Director. He was at the material time a secondary school teacher, teaching at Kundiawa Lutheran Day High School. He worked there until 30th June 2008, which is a period of 4 years. On 1st July 2008 he was permanently appointed by the University of Papua New Guinea as the Simbu University Centre Director.

5.    The plaintiff was relying on the entitlements of a director position based on his employment contract with the University of Papua New Guinea and made a claim for higher duty allowance, as missed out for a period of 4 years. This was during the period of his care taker appointment on secondment from 2004 to 2008. The total sum of K170, 806.40 was claimed. 

6.    The plaintiff was relying on a Memorandum of Agreement signed between Simbu Provincial Government and the University of Papua New Guinea for the establishment of a University centre on 24th August 2005.  The amount claimed is for K52, 000.00 as pleaded in the Statement of Claim being for missed out housing allowance for a period of four years. 

7.    The defendants through its lawyers from Simbu Provincial Government’s legal division did file a Notice of Intention to Defend but failed to file its Defence. 

8.    The plaintiff filed it's Notice of Motion and Affidavit in Support on 28th May 2014 seeking for judgment to be entered in the sum claimed. Accordingly, on 4th November 2014 an exparte order for default judgment was made and entered on 3rd December 2014 in favour of the plaintiff. The sum ordered was K222, 806.40 as claimed in the Statement of Claim with interest totalling K17, 824.00 and a further order for payment within 60 days with costs.

9.    After grant of the exparte court order, the plaintiff pursued with the defendants payments of the judgment amount with interest and costs for more than the period ordered by the Court. Due to the default in satisfying the judgement amount, the plaintiff filed contempt proceedings against the defendants in OS 572 of 2015 which is pending. 

10.     After obtaining independent legal advice on the merits of the plaintiff’s entire claim, the defendants filed this motion. 

Issues
 
11.    Basically the issues relate to the orders being sought in the Notice of Motion. 

12.    The defendants have filed its motion relying on various grounds. I have perused the grounds and note that the grounds range from seeking leave to file defence out of time to dismissal of the entire proceedings. 

13.    Whilst noting that various grounds have been advanced to deal with the matter. I intend to deal with the issues raised in the order as they appear in the defendant's notice of motion. 

The first issue is should the exparte default judgment be set aside. 

14.    Pursuant to Order 12 Rule 8(2)(a) and Order 12 Rule 25 of the National Court Rules, the default judgment made exparte in favour of the plaintiff on 4th November 2014 and entered on 3rd December 2014 be set aside forthwith for been irregularly entered. 

Setting Aside Exparte Default Judgment 

15.     The law is spelt out in Order 12 Rule 8 (2) and Order 12 Rule 35 of the National Court Rules. The case law is Green v. Green (1976) PNGLR 73. The considerations in this case are that there must be a defence on merits which is a principal consideration. See Andrew Baing & Another v. PNG Stevedores Pty Ltd (2000) PGSC 1; SC627 (23 February 2000). Such a defence must be sufficiently particularised to enable the court to be satisfied that it is reasonable that particular defence must be raised. In addition the plaintiff must explain his default in allowing the judgment to be entered. Finally the application should be made as soon as possible after judgment comes to the knowledge of the defendant. 

16.    The Notice of Motion is supported by the Affidavit of Walkaima Essy filed on 17th December 2015 with a draft defence attached as annexure “B”. I have perused the draft defence of the defendants and I note there is defence on merits which is the principal consideration in such applications. The draft defence particularised raises serious flaws and failure to comply with conditions precedent or mandatory requirements relating to giving notice of claims to the relevant authorities. This includes Simbu Provincial Government and the State. I say this noting the plaintiff’s contention he did give notice to the Simbu Provincial Government. There is also the defence of the claim being statute barred as the alleged cause of action may have arisen between May 2004 to June 2008. 

17.    The first defendant further denies the plaintiff was appointed as acting director of Simbu University Centre on 17th May 2004 and ceased on 30th June 2008. Further that the plaintiff was only appointed as the caretaker on secondment from teaching duties at Kundiawa Lutheran Day High School to the Simbu University Centre on the same teaching service commission salary scale by letter dated 10th May 2004. In my view the legality or otherwise of this claim is pivotal on the interpretation of this letter. 

18.    Apart from the defence on the merits been raised, the defendants have further raised irregularities and breaches of Motion Amendment Rules  as discussed in the case of Giru v. Muta (2005) N2877. The case lays out 6 preconditions including 7 days forewarning notice where a notice of intention to defend has been filed, affidavit of search and proof of default. These preconditions were not satisfied or complied with. These are matters that will need to be properly argued. 

19.     The first defendant in his affidavit at paragraph 6, 7, 8,9,10 explains how the default judgement was allowed to be entered. That is that the lawyers failed them. In respect of the third condition relating to filing the application as soon as possible. I note the major factor in delay may have been the absence of a resident Judge after the exparte default judgment was entered. 

20.     In any event, noting the meritorious defence raised. I will give the benefit of the doubt to the plaintiff. I therefore order that the exparte default judgment entered on 4th November 2014 and entered on 3rd December 2014 be set aside for been irregularly entered. I say this because there is an option to dismiss the entire proceedings for being statute barred. I however deem it more appropriate and proper that the issues raised be substantially and properly argued.

Extension of time and Leave to file Defence out of time.

21.    Having made the order to set aside the exparte order of 4th November 2014, the question arises as to whether time should be extended to file defence out of time. The law relating to this is set out in Order 1 Rule 7 and 15, Order 7 Rule 6 (2) and Order 12 (1) of the National Court Rules. The rule gives discretionary powers to the court to make orders for extension of time for filing defence and to grant leave to file defence out of time within a certain period. The consideration that there must be defence on merits is again applicable herein. See Leo Dugue v. Aria Andrew Paru (1997) PNGLR 378. The Supreme Court therein held as follows: 

“It is clear to us from the authorities we have set out earlier in our judgment and subsequent cases in this jurisdiction that as a matter of practice, an applicant must in an affidavit, state material facts showing a defence on merit.”

In the present case, it was the responsibility of the appellant to state material facts showing a defence on merits. As we have indicated before, the appellant filed an affidavit setting reasons why judgment was entered but he failed to state any facts which show any defence on the merits.

22.     The requirement to obtain leave to file defence out of time is set out in the case of Kipane v. Anton and PNG Water Board (2003) N2429 where the court held as follows;

“Under Order 1 ruler 15 the Court has power to extend time either on its own volition or on application. In other words it is within the discretion of the Court to extend time where it has expired. And Order 12 rule 25(b) says that,' a defendant shall be in default..... where he is required to file a defence and the time for him to file defence has expired and had not filed his defence.’ While the literal reading of this rule appears to allow late filing of defence, reading the rules as a whole, the requirement under Order 7 rule 2 may go begging and this was an overriding consideration in Luke Tai v. Australia and New Zealand Banking Group (PNG) Ltd (supra), and I endorse the view expressed by Kapi, DCJ. There is no question in my mind that the combined operation and effect of Order 1 rule 15, Order 7 rule 2 and 6 (2), and Order 12 rule 25 (b) is that the defendant must seek and be given leave to file his defence. He cannot get away from his default or failure ........ ”

23.    Considering the above, I consider the defendants have defence on merits that warrant grant of extension and leave to file defence out of time. I hereby grant extension and leave to file defence out of time. Having made that order it is not necessary for me to address the other orders been sought. 

24.    The formal Orders of the court are: 

1.	The Exparte Orders of the 4th November 2014 are set aside. 
2.	The defendant is granted leave to file it’s defence out of time within 14 days. 

Ruling and Orders Accordingly, 

Public Solicitor:   Lawyers for the Plaintiff		
Gagma Legal Services:   Lawyers for the Defendants