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Maliso v Ombudsman Commission [2021] PGNC 473; N9130 (10 September 2021)

N9130

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 1118 OF 2018

HOWARD MALISO

Plaintiff

V

OMBUDSMAN COMMISSION

First Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Second Defendant

Waigani: Tamade AJ

2021: 31^st August

PRACTICE AND PROCEDURE – application by first defendant to set aside default judgment – first defendant initially not named as party to proceedings but added after application of joinder – default judgment granted when first defendant was not a party to proceedings – first defendant argues that default judgment be set aside as it has defence on merits -application to set aside default judgment is granted – Order 12 rule 8(2)(a) & (5) & Order 12 rule 35 National Court Rules

Cases Cited:

Green v Green [1976] PNGLR 73

Nanagia v Issac Sailas & Ors (2013) N5457

Gigira Development Corporation Limited v Komo Umbrella Joint Venture Limited (2016) N6785

Map Makers Pty Ltd v BHP Company Ltd [1987] PNGLR 496

Albright Ltd v Mekeo Hinterland Holdings Ltd [2013] PGNC 262; N5774

Imig v Tuka [2013] PGNC 294; N5243

Counsel:

Mr Howard Maliso, Plaintiff in Person

Mr Kik, for the First Defendant

Ms Kulumbu, for the Second Defendant

10^th September, 2021

1. TAMADE AJ: This is an application by the First Defendant the Ombudsman Commission pursuant to Notice of Motion filed on 5^th November 2020, to set aside default judgment entered on 11^th June 2020.
   
2. At the time the default judgement was entered, only the State was named as a Defendant and the Ombudsman Commission was not yet a party. The Ombudsman Commission became aware of these proceedings through the State after the entry of default judgement and proceeded to file a joinder application which was granted and included them as the First Defendant in these proceedings on 22^nd October 2020.
   
3. The substantive claim by the Plaintiff basically seeks unpaid entitlements and other heads of damages against the State however the claim is essentially against the Ombudsman Commission as the former employer of the Plaintiff at the material time.
   
4. The First Defendant proceeded to conduct file searches on the matter and upon realizing that a default judgement was already entered, they filed this application to set aside the default judgement. I enquired with Ms. Kulumbu of the State as to her position and she states that the Ombudsman Commission is the instructing client and therefore they would support the application by the First Defendant. The plaintiff opposes this application, and this is my ruling.
   
5. At the outset, I pointed out to parties that this is a peculiar matter to me as the First Defendant is attempting to set aside a judgement that was made on liability which it was not a party to the proceedings when the default judgement was made. I asked parties to address me on the law in this regard whether a party being joined after the entry of default judgement can apply to set aside the default judgement.
   
6. Mr. Kik of the First Defendant made written submissions and spoke at length on the requirements of the principles of setting aside default judgements and directed my attention to case law in that regard. I pointed out to Mr. Kik that the cases he submitted were different in that the applicants were in fact parties to those proceedings when entry of default judgement was entered.
   
7. Mr. Kik states that he cannot find any specific case law on the point raised however draws my attention to Order 12 Rule 8(2)(a) and (5) of the National Court Rules which states that:
   
   • (2) The Court may, on terms, set aside or vary a judgement-
     • (a) Where the judgement has been entered pursuant to Order 12 Division 3 (default judgement); or...

(5) This rule does not affect any power of the Court to set aside or vary a judgement or order.

8. Mr. Kik also relies on Order 12 Rule 35 of the National Court Rules which states that:
   

The Court may on such terms as it thinks just, set aside or vary a judgement entered in pursuance of this division.

9. In setting out the principles for setting aside a default judgement entered ex parte, Mr. Kik relies on the cases: Green v Green [1976] PNGLR 73, Nanagia v Issac Sailas & Ors (2013) N5457 and Gigira Development Corporation Limited v Komo Umbrella Joint Venture Limited (2016) N6785.
   
10. The case of Map Makers Pty Ltd v BHP Company Ltd [1987] PNGLR 496, the Court considered the principles involved in considering whether a default judgement should be set aside. These considerations include the reasons based on Affidavit evidence on why the judgement was allowed to be entered on default and whether there was a defence on merits.
    
11. In the case of Green v Green [1976] PGNC 26, the Court laid down these considerations for the setting aside of default judgement as:
    
    1. There must be a defence on merit. That such a defence should be particularized and in detail to allow for such a defence to be raised.
    2. The applicant should explain his default in allowing the default judgement to be entered.
    100. The application to set aside the default should be made as soon as possible after the applicant is made aware of the default judgement and
    4. And any prejudice or injustice to the other party or rights of third parties to intervene must be taken into account.
       
12. I have read the Affidavit of Richard Pagen sworn on 3^rd November 2020 and filed on 5^th November 2020. Mr. Pagen has authority to depose to the affidavit on behalf of the First Defendant. He says that the Commission has a defence on merit and Mr. Kik submits that annexure RP2 of Mr. Pagen’s Affidavit is a draft Defence of the First Defendant it will file if granted leave. The proposed Defence by the First Defendant indicates that the Commission had paid out all the entitlements of the Plaintiff as well as stating that the Plaintiff had signed a Deed of Release for same. This is an aspect of the defence that has merit amongst other defences and denials proposed to be relied on. The draft Defence has particularized the Defence as well.
    
13. In explaining why, the First Defendant allowed the default judgement to be entered, Mr. Pagen states in his Affidavit evidence filed on 5^th November 2020 at paragraph 6 that the Commission was made aware of these proceedings through the Office of the Solicitor General on 6^th October 2020. I note that the Plaintiff was never a party to the proceedings then and sought to be joined after default judgement was entered.
    
14. The Plaintiff was joined to these proceedings as a Defendant on 22^nd October 2020 and filed this application soon thereafter on 5^th November 2020 after conducting court file searches on the status of the matter. I accept the First Defendant’s explanation that it took every step it could to come before this Court seeking to set aside the Default judgement.
    
15. I also accept the First Defendant’s explanation that as it was not named in the proceedings and was not served with any court documents, it was not aware of this matter. Had it been named and was aware of this matter, it could have taken steps to prevent an entry of a default judgement.
    
16. Mr. Kik submits in satisfying the last consideration in the setting aside of a default judgement that, the Court must do so in the interest of justice. The Plaintiff’s claim for unpaid entitlements is in exorbitant amounts and the First Defendant states that they have paid out his dues and the claims are baseless. I am drawn to the proposed Defence that the Plaintiff had signed a Deed of Release in exchange for his entitlements and therefore in that light, I agree that the default judgement should be set aside in the interest of justice and the matter shall proceed to hearing proper on trial.
    
17. Mr. Kik has also referred me to the case of Albright Ltd v Mekeo Hinterland Holdings Ltd [2013] PGNC 262; N5774(30 September 2013). His Honour Justice Hartshorn quoted this passage from the Albright case as to what Jordan CJ said in the New South Wales decision of Vacuum Oil Pty Co Ltd v Stockdale [1942] NSWStRp 31; (1942) 42 SR (NSW) 239 at pp 243-244:
    

“The question is whether, upon the material that has been placed before us, there is a real likelihood that it would be unjust to the defendant to allow the judgement to stand. If so, it should be set aside on such terms as will minimise the possibility of injustice to the defendant. If not, we should not interfere.”

18. I adopt this reasoning that it would be unjust to allow the default judgement to stand against the First Defendant as they have a proposed defense on merits, and they have taken all required steps to come before this Court.
    
19. Ms. Kulumbu’s response is that they support the First Defendant’s application as the First Defendant is the tort feasor.
    
20. I have also heard the Plaintiff Mr. Maliso and note that Mr. Maliso gives to this Court a long winding explanation in answering my question as to why he did not name the Ombudsman Commission as a Defendant as the Ombudsman Commission was his employer at the time and was paying his salary. Mr. Maliso suggests to me that due to some conversations he had with officers employed by the Ombudsman Commission at the time, he deliberately chose not to name the Ombudsman Commission but sought to rely on naming the State for the State to inform the Ombudsman Commission and to my mind, having an expectation that the State will ultimately be responsible in settling his claim.
    
21. Mr. Maliso is a learned person in law. All parties should be properly named as tort feasors and not only the State. ‘’The State also cannot be used as a milking cow”, a phrase commonly used by our Courts. Direct tort feasors who fall under the ambit of the State should be specifically named to ensure they answer to such claims and properly assist the Court as all matters in dispute to ensure adequate resolution with all proper and relevant parties.
    
22. I will grant the First Defendant’s Notice of Motion filed on 5^th November 2021 and I now make the following orders:
    
    • (1) Terms 1 and 2 of the First Defendant’s Notice of Motion filed on 5^th November 2020 is granted.
    • (2) The default judgement entered on 11^th June 2020 is set aside.
    • (3) The Defendants are to file their Defence to the Plaintiff’s claim by or before Friday 24^th September 2021.
    • (4) Any replies by the Plaintiff are to be filed by or before 8^th October 2021.
    • (5) Parties are to attend Court on 12^th October 2021 at 9:30am for Directions Hearing to progress this matter to trial.
    • (6) The Plaintiff will meet the First Defendant’s costs of the application.
    • (7) Time is abridged to the date of these orders to take effect forthwith.
      

Orders accordingly.

Plaintiff in person

Ombudsman Commission in House Counsel: Lawyers for First Defendant

Solicitor General’s Office: Lawyers for the State