N11247

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS (COMM) NO. 29 OF 2024 (IECMS)

BETWEEN:
JANE PAUL
First Plaintiff

AND:
KARE KARE INVESTMENTS LIMITED 1-84824
Second Plaintiff

AND:
NATIONAL DEVELOPMENT BANK LIMITED
Defendant

WAIGANI: CAREY J
2, 17 APRIL 2025

COURT ORDERS — non-compliance of Court Orders — whether Order 9 Rule 15(1) of the National Court Rules apply to matters commenced by Originating Summons. Whether Order 10 Rule 9A 15(1)(2)c may result in judgment against the Defendant.

The Plaintiffs sought judgment against the Defendant for failure to comply with Court Orders. The Defendant did not provide any reasonable explanation as to why there was non-compliance with the Chamber Orders. The disregard for the Court Orders were such that a determination by the Court as to whether judgment should be entered considered a number of factors. 

Held:
1.	Pursuant Order 12 Rule 1 of the National Court Rules (NCR), leave be granted to withdraw the Plaintiffs’ earlier Notice of Motion filed on 28th  November 2024.

2.	Applying Tumbiako v Kaiyo [2023] PGSC 142; SC2493, pursuant to Order 10 Rule 9A (15) (2) (c) of the NCR, the matter be summarily determined in favour of the First and Second Plaintiffs against the Defendant on account of the Defendant's failure to comply with the Chamber Orders of 21st  October 2024.

3.	Further and consequential to Orders 1, and 2 above, the following Orders sought in Orders 1(a) and 1(b) (iii) and 3 of the First and Second Plaintiffs' Originating Summons filed on 24th May 2024 be granted:

a)	an Order pursuant to Section 155(4) of the Constitution and Order 12 Rule 1 of the NCR that the Defendant is restrained from exercising its power of sale as mortgagee in seizing and selling the two properties described as Allotment 66, Section 529, Hohola (Gerehu), NCD in State Residential Lease Volume 33, Folio 147, NCD and Allotment 27, Section 21, Boroko (East Boroko), NCD in State Residential Lease Volume 11, Folio 173, NCD, and the Final Entitlements amount of K368,093.02 owed by the Defendant to the Estate of Late Mr. Moses Liu, the First Plaintiff’s late husband and former Managing Director of the Defendant, be used to offset the First and Second Plaintiffs' loan arrears, and any residual balance thereof be paid towards the First and Second Plaintiffs' loan balances;

b)	an Order that in the event the First and Second Plaintiffs fail to settle any remaining loan arrears amount within 6 months, the Defendant shall seize and sell Allotment 66, Section 529, Hohola (Gerehu), NCD in State Residential Lease Volume 33, Folio 147, NCD, at the market price and use the proceeds of the sale to settle the First and Second Plaintiffs remaining loan arrears; and

c)	The Defendant shall pay the First and Second Plaintiffs' costs of and incidental to this application and the proceeding on a solicitor client basis to be taxed if not agreed.

4.	Interest be awarded at the rate of 8% yearly on the sum of K368,093.02, being the gross Final Entitlements owing to late Moses Liu, from the date it was payable, specifically 30th October 2020, when he ceased employment with the Defendant, to the date of judgment and until the sum of K368,093.02 is paid in full by the Defendant, pursuant to Section 4 (1) and Section 6 (1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015.

5.	Time for entry of these Orders be abridged to the time of settlement by the Registrar which shall take place forthwith.

Cases cited
Aweto v Tobias [2020] PGNC 284; N8480
Kave v Yakaso [2014] N5693
Lomai v Seal (Manus)Ltd [2008] PGSC 57; SC1326
Paki v Motor Vehicle Insurance Ltd [2010] PGSC 2; SC1015
Tumbiako v Kaiyo [2023] PGSC 142; SC2493 
Wasis v Elias [2016] PGSC 5; SC1485

Counsel
Mr. Mek Tumul for the plaintiffs
Mr. Lionel Manua for the defendant

JUDGMENT

1.	CAREY J: This is the decision in relation to the Notice of Motion filed on 3rd March 2025 by Jane Paul (the First Plaintiff) and Kare Kare Investment Limited 1-84824 (the Second Plaintiff), collectively, the Plaintiffs seeking judgment against the National Development Bank (the Defendant).

2.	The Plaintiffs provided written submissions and made oral arguments supporting same.

3.	The Defendant assisted the court with oral submissions.

BACKGROUND
4.	 On 16th October 2024 Orders were issued by the Court.

5.	 Further Chamber Orders were issued by the Court on 21st October 2024 as follows:

1.	The Plaintiffs shall file and serve all relevant documents, including affidavits they intend to rely on for the trial by or before the 4th November 2024.
2.	The Defendant shall file and serve all relevant documents, including affidavits, it intends to rely on for the trial 14 days thereafter.
3.	The Statement of Agreed and Disputed Facts shall be filed and served 14 days thereafter.
4.	All notices under the Evidence Act shall be filed and served by or before 17th December 2024.
5.	The matter shall return to Court on the 6th of March 2025 at 930am for Status Hearing.
6.	Failure to comply with any of these orders may result in judgment being entered against the defaulting party/parties.
7.	Costs be in the cause.
8.	Time for entry of these Orders is abridged to the time of settlement by the Registrar which shall take place forthwith.

6.	 The Plaintiff filed a Notice for Discovery on 24th October 2024 and served the same along with the Court Order of 16th October 2024 and Chamber Order of 21st October 2024 on the Defendant’s lawyer.

ISSUES 

7.	(a) Whether judgment should be entered in favour of the Plaintiffs due to the Defendant’s default in filing or serving a verified list of documents as required by the Notice for Discovery filed and served on 24th October 2024, pursuant to Order 9 Rule 15(1) of the National Court Rules?
(b) Whether the Court should summarily dispose of the matter due to the Defendant’s non-compliance with the Chamber Orders made on 21st  October 2024, pursuant to Order 10 Rule 9A (15) (2) (c) of the National Court Rules and/or pursuant to Order 6 of the Chamber Orders of 21st  October 2024?

DETERMINATION
8.	  The Plaintiff argues that the Defendant is in breach of the Chamber Orders of 21st October 2024.

9.	 Specifically, the Plaintiff contends that the Defendant has not complied with Orders 2, 3 and 4 of the Chamber Orders of 21st October 2024 and in so doing Order 6 of the Chamber Orders applies.

10.	The Order 6 of the Chamber Orders state that, Failure to comply with any of these Orders may result in judgment being entered against the defaulting party/parties.

11.	The Plaintiff further avers that there has been no reasonable explanation given by the Defendant for non-compliance with the Chamber Orders.

12.	The Defendant acknowledges that there has been non-compliance with the Chamber Orders of 21st October 2024. 

13.	 A supplementary affidavit was filed on 19th February 2025 by the Defendant’s lawyer which did not indicate why there was non-compliance with the Chamber Orders of 21st October 2024.
14.	Moreover, this supplementary affidavit erroneously stated that the Mediated Agreement concluded the matter.

15.	 I am not persuaded by the Defendant’s oral submissions that there is any reasonable excuse as to why there was a failure to comply with the Chamber Orders of 21st October 2024.

16.	It is clear to this Court that the Defendant’s continuous refusal to comply with the Court Order coupled with submissions for the Notice of Motion which did not address reasonably why there was non-compliance with the Chamber Orders demonstrates a disregard to the Court Order.

17.	There was no application for dispensation of the National Court Rules in relation to non-compliance with the Court Orders.

18.	In Paki v Motor Vehicle Insurance Ltd [2010] PGSC 2; SC1015, the Supreme Court held:

“The finding of Davani J. concerning the appellant’s conduct as to the discovery of the invoices, and Her ruling to strike out the defence was in the circumstances proper and appropriate and in the exercise of discretion under O 9 r 15 of the National Court Rules.”

19.	Applying this in the present case it is instructive that the Court may exercise its discretion which may result in the defaulting party having the result of judgment being entered against them for their conduct as to discovery.

20.	However, this application is applicable insofar as it is applied within the construct of the National Court Rules.

21.	 Order 10 Rule 15 (1) of the National Court Rules indicates that:
“(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—
            (a) if the party in default is a plaintiff—an order that the proceedings be stayed or dismissed as to the whole or any part of the relief claimed by him in the proceedings; or
            (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 judgement be entered accordingly.”
22.	 The proceedings commenced by way of Originating Summons and if Order 10 Rule 15(1) (b) of the National Court Rules were meant to apply to anything other than a proceeding filed by way of Writ of summons, it would have expressly said so. It does not indicate this and therefore cannot be applied per the Plaintiff’s argument.

23.	 In Wasis v Elias [2016] PGSC5; SC1485 it states that:

“13. We add, a conditional or self-executing order is not one that should be treated lightly. We say this because the order itself puts the party subject of the order on notice that a certain consequence will occur at a specified date in the future if the conditions of the order are not met. Thus, it is of utmost priority that the party required to comply adhere to its terms. Failure may result in an unfavourable consequence.”

24.	 The Defendant has clearly demonstrated based on the evidence before this Court that they have been non-compliant with the Chamber Order of 21st October 2024. 

25.	In oral submissions the Defendant raised the question as to standing of Jane Paul as supported by supplementary affidavit filed on 19th February 2025 by the Defendant’s lawyer.

26.	This is insufficient in nature to sustain a legal argument without any further documentary evidence which would vitiate a claim being made by the First Plaintiff. 

27.	It would have been helpful for this court to have submissions by the Defendant as to how the question raised supports any argument to locus standi of the First Plaintiff with appropriate case authority. 

28.	 The Defendant’s counsel provided statements of fact per a subjective interpretation in the affidavit without any further explanation that has authority which renders such a submission an opinion which in of itself is insufficient for the Court to be able to properly make a determination that would be founded on legal basis. 

29.	 The Defendant’s counsel also provided explanation to comply with Order 2 of the Chamber Orders of 21st October 2024 in paragraphs 9 and 10 of the affidavit filed on 7th January 2025, which states:

“9. I am aware that we requested our client to complete and file and affidavit within the time as stated in the Chamber Orders. However, our client had difficulty in differentiating the claim for breach of Contract between an Employment Agreement and Contract for Loan and Mortgage Agreement as stated in the Originating Summons of the Plaintiff and sought our advice and accordingly we provided an advice and they instructed us to proceed with an Application for enforcement of the Mediated Agreement or alternatively for the dismissal of the proceedings for the reasons that the proceedings does not disclose a reasonable cause of action or is frivolous and vexatious or abuse of Courts’ process.
10. Accordingly, we caused a letter dated 9th December 2024 to the Plaintiffs lawyer and stating our view in respect of the proceedings.”

30.	 This affidavit does not provide a reasonable explanation for this court to consider as to why the Defendant has ignored and chosen to disregard the Chamber Orders to move this matter to a trial.

31.	The Defendant indicates what its intention was to do but even that what was intended did not occur.

32.	The behavior of the Defendant to compliance with the Chamber Orders indicates that there is an expectation that the Court will do nothing and accept this position as posited by the Defendant as that of superseding the Chamber Order.

33.	In Kave v Yakaso [2014] N5693 and Aweto v Tobias [2020] PGNC284; N8480 it was stated that non-compliance of Court Orders should result in a decision against the defaulting party because it is a serious matter.

34.	 In Tumbiako v Kaiyo [2023] PGSC 142; SC2493 it was held that:

“The matters were summarily determined pursuant to Order 10 Rule 9A(15)(2), which empowers a Judge of the National Court on his or her own initiative and in the exercise of judicial discretion to summarily dismiss proceedings in the event of want of prosecution. There was no error on the part of the primary Judge in exercising his discretion to summarily dismiss the relevant proceedings. There was no breach of the rules of natural justice, or error in the refusal to grant an adjournment.”

35.	 I remind myself that the National Court is bound by Supreme Court decisions insofar as to when they are precedent.

36.	 In this proceeding it is clear that in the exercise of my discretion I may summarily dismiss the matter when considering all before the Court.

37.	I am persuaded by the Plaintiffs arguments that the Defendant’s failure to comply with the Chamber Orders should not go unnoticed and judgment should be entered against the Defendant as a result of this non-compliance.

38.	Court Orders are mandatory and not discretionary in nature and when parties to a proceeding determine that they will not follow the court orders without reasonable explanation they should anticipate an outcome that is not favorable to them in the interest of justice to all parties. 

39.	In Lomai v Seal (Manus)Ltd [2008] PGSC 57; SC1326 it was held that, “The National Court did not err in dismissing the proceedings. The appellant failed to comply with a self-executing order and it naturally followed that the proceedings were dismissed.”

40.	The Defendant in this proceeding failed to comply with a self-executing order and so it naturally follows that judgment is now being entered against the Defendant as the defaulting party as indicated through the Chamber Orders.

ORDERS

1.	Pursuant Order 12 Rule 1 of the National Court Rules (NCR), leave be granted to withdraw the Plaintiffs’ earlier Notice of Motion filed on 28th November 2024.

2.	Applying Tumbiako v Kaiyo [2023] PGSC142; SC2493, pursuant to Order 10 Rule 9A (15) (2) (c) of the NCR, the matter be summarily determined in favour of the First and Second Plaintiffs against the Defendant on account of the Defendant's failure to comply with the Chamber Orders of 21st October 2024.

3.	Further and consequential to Orders 1, and 2 above, the following Orders sought in Orders I(a) and I(b)(iii) and 3 of the First and Second Plaintiffs' Originating Summons filed on 24th May 2024 be granted:

a)	an Order pursuant to Section 155(4) of the Constitution and Order 12 Rule 1 of the NCR that the Defendant is restrained from exercising its power of sale as mortgagee in seizing and selling the two properties described as Allotment 66, Section 529, Hohola (Gerehu), NCD in State Residential Lease Volume 33, Folio 147, NCD and Allotment 27, Section 21, Boroko (East Boroko), NCD in State Residential Lease Volume 11, Folio 173, NCD, and the Final Entitlements amount of K368,093.02 owed by the Defendant to the Estate of Late Mr. Moses Liu, the First Plaintiff’s late husband and former Managing Director of the Defendant, be used to offset the First and Second Plaintiffs' loan arrears, and any residual balance thereof be paid towards the First and Second Plaintiffs' loan balances;

b)	an Order that in the event the First and Second Plaintiffs fail to settle any remaining loan arrears amount within 6 months, the Defendant shall seize and sell Allotment 66, Section 529, Hohola (Gerehu), NCD in State Residential Lease Volume 33, Folio 147, NCD, at the market price and use the proceeds of the sale to settle the First and Second Plaintiffs remaining loan arrears; and

c)	The Defendant shall pay the First and Second Plaintiffs' costs of and incidental to this application and the proceeding on a solicitor client basis to be taxed if not agreed.

4.	Interest be awarded at the rate of 8% yearly on the sum of K368,093.02, being the gross Final Entitlements owing to late Moses Liu, from the date it was payable, specifically 30th October 2020, when he ceased employment with the Defendant, to the date of judgment and until the sum of K368,093.02 is paid in full by the Defendant, pursuant to Section 4(1) and Section 6(1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015.

5.	Time for entry of these Orders be abridged to the time of settlement by the Registrar which shall take place forthwith.

Ordered accordingly.

Lawyers for the plaintiffs: Tumul Legal
Lawyers for the defendant: Rageau, Manua & Kikira Lawyers