[1997] PNGLR]

PAPUA NEW GUINEA

[supreme court of justice]

LEO DUQUE

v

AVIA ANDREW PARU

waigani: kapi dcj; salika, sevua jj
15, 18 October 1996

Practice and procedure - Application to set aside default judgment - Negligence of a lawyer cannot constitute a reasonable explanation for allowing judgment to be entered - Applicant must set out in affidavit the material facts which give rise to a defence on the merits.

Facts

Owing to the negligence of the lawyers for the defendant now appellant, no notice of intention to defend or defence were filed and default judgment was entered for the plaintiff now respondent. Appellant’s application to set aside the default judgment in the National Court was refused on the basis that the default judgment was regularly entered.

Held

1.	We consider that where a person chooses to instruct a lawyer to act on his behalf, he does so on the basis that the lawyer will be responsible for looking after his interest. If a lawyer allows a judgment to be entered then he must give a reasonable explanation. In this instance, the lawyers concerned have not given any explanation whatsoever. Hence the trial judge was correct in dismissing the application.

2.	As a matter of practice, when an application is made to set aside a default judgment arguing merit of the defence case, an applicant must, in an affidavit, state material facts showing a defence on the merits. In the present case, the appellants have not done that. A proposed defence or a lawyer’s affidavit simply stating an opinion on the strength of the case is not sufficient.

Counsels

J Baker, for the appellant.
B Lomai, for the respondent.

18 October 1996

By the court. The plaintiff ("respondent") commenced proceedings in the National Court for wages and other claims against the defendant ("appellant"). The appellant defaulted in filing a defence and the respondent obtained judgment in default. 

The appellant then filed application to set aside judgment. The matter came before Andrew J. and he refused to set it aside. In his brief reasons for decision he concluded:

"I am satisfied that the judgment in this matter was regularly entered.

The applicant in seeking to set aside the judgment says that his former lawyers were at fault in failing to file a defence. I am not satisfied that this is a sufficient reason to set aside the judgment."

The appellant has appealed against this decision. He relies on three grounds as follows:

"3.	Grounds:-

(a)	His Honour erred in law in not giving any or any proper consideration to the Appellant's draft defence, which disclosed a defence on the merits.

(b)	His Honour was wrong in law in finding that the Defendant gave no reasonable explanation as to why judgment was allowed to go by default.

(c)	His Honour erred in law in that he gave paramount consideration to the reasons for failing to file a defence rather than to the existence and merits of the defence."

Ground 3 (b).

The law relating to setting aside a default judgment is settled in this jurisdiction. An applicant is required to show (a) a reasonable explanation as to why judgment was allowed be entered by default (b) show by affidavit material facts which shows a defence on the merits (see Green and Co Pty Ltd v Green [1976] PNGLR 73; Barker v The Government of Papua New Guinea and Bux [1976] PNGLR 340; The Government of Papua New Guinea v Barker [1977] PNGLR 386; George Page Pty Ltd v Malipu Bus Balakau [1982] PNGLR 140).

In relation to the first requirement, the appellant filed an affidavit setting out the explanation for the delay. In essence he explained that he instructed Mr. Sawi Sitapai of Karingu Sitapai Lawyers who assured him that notice of intention and defence had been filed. In fact the defence was not filed and he attributes this to the negligence of his lawyers at the time.

Counsel for the appellant has submitted that the appellant has done everything in his power and therefore the failure on the part of his lawyers is a reasonable explanation for allowing judgment to be entered by default.

On the other hand, counsel for the respondent has submitted that the trial judge was correct in dismissing this explanation.

In support of his submissions, counsel for the appellant has referred to cases dealing with conduct of lawyers in relation to failure to lodge an appeal (Donigi v Base Resources Limited [1992] PNGLR 110; New Zealand Insurance Company Limited v Chief Collector of Taxes [1988-89] PNGLR 522; State v Colbert [1988] PNGLR 138) and conduct of lawyers in relation to giving notice of claim (Rundle v Motor Vehicles Insurance (PNG) Trust [1987] PNGLR 38). These cases deal with different issues and considerations and therefore are not very helpful in resolving the issue before us.

We have not found any case in our jurisdiction, which deals with negligence of lawyers as providing a reasonable explanation for allowing judgment to be entered. 

We consider that where a person chooses to instruct a lawyer to act on his behalf, he does so on the basis that the lawyer will be responsible for looking after his interests. If a lawyer allows a judgment to be entered then he must give a reasonable explanation. It cannot simply be ignored. A lawyer may be able to give a reasonable explanation for allowing judgment to be entered in default. 

In the present case, Karingu Sitapai Lawyers have not given any explanation whatsoever for their failure in filing a defence. This is professional negligence on the part of the lawyers. This can hardly be a reasonable explanation. In our view the trial judge was correct in dismissing this explanation. We would dismiss this ground of appeal.

Grounds 3 (a) and (c).

Counsel for the respondent has conceded that the trial judge failed to consider whether there was any defence on the merits.

Both counsel have agreed that, as there was evidence led on the question of defence on the merits and that parties argued these matters, this was an issue the trial judge ought to have determined. It follows from this that this Court has jurisdiction to enquire into the issue and give its decision (see s 16 (c) of the Supreme Court Act Ch No. 37.

The appellant relies on the affidavit of Mr George T. Yapao who was the new lawyer for the appellant. He made the application to set aside judgment. He annexed a proposed defence and simply deposed in paragraph 7 of his affidavit the following:

"Upon instructions I know and believe that if this judgment is set aside and the matter is allowed to proceed to trial proper, the Defendant has a good prospect of success."

Counsel for the respondent has submitted that this affidavit failed to provide any material facts giving rise to a defence on the merits.

The appellant himself also filed an affidavit in support of the application. Counsel for the respondent has submitted that this affidavit also failed to raise any facts, which would give rise to a defence on the merits.

On the other hand, counsel for the appellant has submitted that it is sufficient for the lawyer to simply make reference to his instructions and simply express a legal opinion that there is a defence on the merits.

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 the merits.

In the present case, it was the responsibility of the appellant to state material facts showing a defence on the merits. As we have indicated before, the appellant filed an affidavit setting out the reasons why judgement was entered but he failed to state any facts, which shows any defence on the merits. A proposed defence prepared by the lawyer is not capable of serving this purpose. The expression of opinion by the lawyer that there is good prospect of success can only amount to a legal opinion. It is not capable of raising the material facts.

We are not satisfied that there is a defence on the merits.

Counsel for the appellant, in passing made reference to paragraph 6 and 7 of the statement of claim as follows:

"6. The defendant thereafter in 1991 to 1994 induce the plaintiff into believing that they were legally married and continue to obtain favours from others by using the plaintiff's name and her children's name.

PARTICULARS OF CLAIM

(a)	Defendant misrepresented himself to the Institute of Public Administration to entitle himself to a married accommodation that he was legally married to the plaintiff and had two children namely Tani and Pepe.

(b)	The defendant use the plaintiff's payslip to assist him to obtain a loan with South Pacific Bank Waigani and ANZ Bank Boroko without the consent of the plaintiff.

(c)	The defendant further use the plaintiff's name to buy a vehicle, Nissan Patrol, particulars of which will be made known at the trial.

7.	By reason of the defendant's inducement and misrepresentation, the plaintiff has suffered loss and damages and nervous shock."

He submitted that these paragraphs do not disclose a cause of action in law. In our view this would be the subject of a separate application under the National Court Rules to strike out this part of the claim as disclosing no reasonable cause of action. 

This may be relied upon as part of the defence on the merits where both applications are heard together (see The Government of Papua New Guinea v Barker (supra)). However, there was no such application in the court below and no such application was made before us to consider this application. Therefore we cannot deal with this issue.

In the end result we dismiss the appeal with costs.

Lawyers for the appellant: Henao Lawyers.
Lawyers for the respondent: Joe Wal Lawyers.