SC2859

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

SCREV NO 3 OF 2025

SUPREME COURT REVIEW PURSUANT TO SECTION 155(2)(b) OF THE CONSTITUTION, APPLICATION BY

BETWEEN
SAO LIN QWA
in his capacity as the Managing Director of Jian Fu Ning Limited 
First Applicant 

AND
JIAN FU NING LIMITED
Second Applicant

AND
JOE TEINE
Respondent

WAIGANI: DAVID J, CHRISTENSEN J, WIMALASENA J
27 FEBRUARY 2026, 16 MARCH 2026

REVIEW – Default judgment – review of set aside application not sought – absence of full transcript of primary judge’s decision – absence of application for leave to rely on fresh evidence – consideration of statutory bar at entry of default judgment – s 16 of the Frauds and Limitations Act 1988 – statutory defence – bar to remedy not right – obligation of lawyers – dispensation of justice on a review 

Default judgment with liquidated damages in the amount of K39 190.80 was entered against the first and second applicants in a claim contending unpaid employment benefits.  The applicants seek a review of the order for entry of default judgment, after the National Court refused an application to set aside the judgment.  The review contends that the claim the subject of default judgment was statute barred pursuant to s 16 of the Frauds and Limitations Act 1988.    

Held

1.	A review sought to be conducted without the entire reasoning of the primary judge limits the court’s capability to undertake the review. 

2.	Lawyers are officers of the court with a duty firstly to the court and must ensure that a court exercises its discretion properly in accordance with the law.  

3.	In circumstances where it is unknown whether a statutory bar issue was considered at the entry of default judgment, the dispensation of justice requires remittal to the National Court.  

Cases cited

Arman Larmer Surveys Limited v Chan Consolidated Limited [2013] PGSC 29, SC1253
Avei v Maino [2000] PNGLR 157
Geru Holdings Limited v Kruse & Ors [2023] PGSC 141, SC2492
Giru v Muta [2005] PGNC 83, N2877
Independent State of Papua New Guinea v Toka Enterprises Limited [2018] PGSC 89, SC1746
Kunkene v Rangsu [1999] PGNC 80
Kunton v Junias [2006] PGSC 34, SC929
Mirendean Enterprises Ltd v Kaugla [2018] PGSC 83, SC1726
Motor Vehicles Insurance Ltd v Kiangua [2015] PGSC 70, SC1476
State v PNG Defence Force & Other [2023] PGSC 24, SC2374
Vailala and Purari Investment Limited v Frontier Holdings Limited & Ors [2025] PGSC 84, SC2762
Waranaka v Dusava [2009] PGSC 11, SC980
Yamu & Anor v Harry & Anor, SC1909

Counsel

C Gagma for the applicants
E Misikali for the respondent 

1.	BY THE COURT: This review is brought pursuant to s 155(2)(b) of the Constitution and raises issues as to whether a claim the subject of default judgment was statute barred pursuant to s 16 of the Frauds and Limitations Act 1988.    

2.	On 14 July 2025, an application for review of that decision was filed, and leave was granted for review on 11 July 2025.

3.	We conclude that the only outcome that will meet the interests of justice in this case is to uphold the review and remit the matter for a further hearing as to an application to set aside the default judgment.  

Background

4.	In order to understand the decision we have reached it is necessary to set out in detail the background to this review. 
5.	By way of writ of summons filed 12 December 2023, the respondent sought payment of final entitlements from the applicants.  The respondent claimed that he was employed as a security and public relations officer from January 2012 to June 2016.  

6.	The respondent left the applicant’s employment for personal reasons and claimed that he later followed up with the applicants for payment of his final entitlements.  The applicants declined to settle any amount, and the respondent sought the assistance of the Department of Labour and Industrial Relations.  Based on a calculation produced by them, the respondent demanded payment.  The last of this was by way of a letter of demand sent with the assistance of the Public Solicitor on 30 October 2023.  The applicants made no payments and the claim was filed.  

7.	On 12 December 2023, the writ of summons was personally served on the first applicant, with proof of service indicated by the letter ‘X’.  

8.	On 4 March 2024, a file search was undertaken by the respondent revealing that no notice of intention to defend or defence were filed.  

9.	On 13 March 2024, the respondent filed a notice of motion indicating application for default judgment would be made pursuant to O 12, r 25 and 27 of the National Court Rules.   This, along with the supporting affidavits, was personally served on the first applicant on 29 March 2024.  He again acknowledged the proof of service with the letter ‘X’.  

10.	The application was first heard on an unknown date.  The parties did not provide this information, and no transcript is available with respect to that portion of the application.  

11.	The matter returned to court on 15 May 2024, and, per the transcript, the respondent relied on an affidavit from an officer of the Provincial Labour Office as to the damages sought.   The application for default judgment was then granted in accordance with the notice of motion per O 12, r 25, r 27 National Court Rules, that is, on a basis of default by the defendant with a liquidated demand.  

12.	The applicants agreed to settle the judgment debt but made only a part payment, in the amount of K10 000.00.  

13.	On 18 September 2024, the respondent sought a garnishee order which was granted ex parte.    

14.	On 6 March 2025, the applicants, now legally represented, sought to set aside the entry of default judgment, per a notice of motion filed 16 October 2024.   The issue of the proceeding being time barred was raised in that application.  The Court, being differently constituted to when default judgement and the garnishee order was entered, dismissed the motion.  

15.	On 28 March 2025 application for leave to review the order of 15 May 2024 was filed. On 11 July 2025, the applicants’ application for leave to review was granted.  

16.	On 14 July 2025, the application for review was filed, seeking review of the order of 15 May 2024.  That is, the order for entry of default judgment, and not the orders refusing to set aside the default judgment.  The grounds of review contend errors in law and/ or fact, namely:

(a)	The claim was plainly statute barred as the respondent was only employed with the applicants from January 2012 to June 2016, but did not file a claim until December 2023.  That is, a period of almost eight years, being outside the period of six years provided by s 16 of the Frauds and Limitations Act;

(b)	The applicants were wrongly named in the proceeding, inconsistently with company extracts from the Investment Promotion Authority;

(c)	The claim was ambiguous as to the respondent’s position and wages with the company; and 

(d)	The evidence relied upon to establish the damages payable was inadequate.  

Applicants’ submissions

17.	The applicant’s submissions on the review focused on the merits of each ground alleged.  Most pertinently, it was submitted that the cause of action was statute barred because of s 16 of the Frauds and Limitations Act 1988 which relevantly provides:

(1)	  Subject to Sections 17 and 18, an action – 

(a)	That is founded on simple contract or on tort [ ...] 

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued. 

18.	The applicants submit that, in accordance with the statement of claim, the cause of action accrued at the latest from June 2016, resulting in it being commenced eight years after accrual.   It is submitted that the primary judge ought to have identified this issue and refused to enter default judgment.  

19.	The applicant relied on in support of their submission the authority of Vailala and Purari Investment Limited v Frontier Holdings Limited & Ors [2025] PGSC 84, SC2762. This authority confirms the uncontroversial principle that “[i]t is necessary...when considering the question of time bar in any proceedings,  to first identify the cause of action, and then determine whether there is a statutory time limit for commencing the action” (at [24]).   In addition, the applicant relied on Geru Holdings Limited v Kruse & Ors [2023] PGSC 141, SC2492 which again considered the issue of time barred proceedings.  These authorities do not advance the applicant’s position on the review because, as explained further below, this court is not able to assess whether the primary judge engaged with those requirements.  

20.	Additionally, the applicants’ submissions related to the reasons why the applicants did not respond to the service of documents, contending that improper party names were utilised and that the first applicant experienced language barriers.   

Respondent’s submissions

21.	The respondent raised a preliminary issue as to the competency of the review.  This related to non-compliance with O 5, r (4)(e) of the Supreme Court Rules involving the contents and style of form used in the application for review.  The respondent appeared to accept that inadequate notice of this issue was given and a contention of incompetency on this ground was not strongly pressed.  We do not find the review to be incompetent on this contended basis.  

22.	However, a further contention as to competency was strongly pressed.  This involved a submission that the wrong order was sought to be reviewed.  It was submitted that the set aside application was more properly the order relevant for review: Arman Larmer Surveys Limited v Chan Consolidated Limited [2013] PSC 29, SC1253; Mirendean Enterprises Ltd v Kaugla [2018] PGSC 83, SC1726.  The respondent gave ‘notice’, by way of their written submissions, as to this issue in a relatively timely manner.  

23.	Nonetheless, it is a competency issue without merit, at least at this stage in this particular proceeding.  Leave to review the default judgment order has already been granted, enlivening this court’s review jurisdiction of that order.  
24.	As to the grounds of the review, in particular the statutory bar issue, the respondent submitted that it was a statutory defence that ought to have been pleaded by the applicants in the National Court if it was sought to be relied upon.  The respondent relies on the majority in Motor Vehicles Insurance Ltd v Kiangua [2015] PGSC 70, SC1476 in support of this submission.  

25.	We accept that MVIL v Kiangua has bearing on the statutory bar issued raised in this review.  In a circumstance where default judgment was entered with no appearance filed by the appellant, it was found by the majority that there could not be reliance on s 31 of the Wrongs (Miscellaneous Provisions) Act 1975 in an appeal against the order as to damages. Section 31 of the Wrongs (Miscellaneous Provisions) Act 1975 relevantly provides:

31.         LIMITATION OF ACTIONS UNDER PART IV.

Only one action under this part lies for and in respect of the same 
subject-matter of complaint, and every such action must be commenced within three years after the death of the deceased person.

26.	Kassman J (in the majority) observed at [99], citing authorities omitted for current purposes, that: 

Limitation is a procedural matter, and not one of substance: the right continues to exist even though it cannot be enforced by action...a procedural bar does not go to the jurisdiction of the court...

.... the defendant must plead the statute as a defence.  It is not the court’s task to raise the question of time limits and the court has jurisdiction to hear a matter even though the time has expired.  This is because expiry of the time does not affect the substance of the claim but only the remedy.  

The statute is procedural, not substantive.  If the statutory period expires before action is brought, the plaintiff’s right is not extinguished.  

27.	Logan J (also in the majority) observed similarly at [115], stating that:
...s 31 of the Wrongs Act, in my view, bars the remedy but not the right.  In other words, if the limitation defence is not pleaded, and here there was no defence at all filed, the proceeding is competent, even though the claim relates to a wrong which occurred more than three years after the death of the deceased person concerned. 

28.	The majority in MVIL v Kiangua found that the National Court had not erroneously entered default judgment. It is relevant to emphasise though that the circumstances in MVIL v Kiangua are distinguishable from the current matter.  Firstly, it was an appeal, secondly, it was an appeal against an order for damages, and thirdly, it was concerned with the statutory bar provided by the Wrongs (Miscellaneous Provisions) Act 1975.  It may very well be that the principles espoused in MVIL v Kiangua as to the statutory bar issue are of equal application when raised with respect to the Frauds and Limitations Act 1988.  It is though unnecessary for us to decide in the current matter given the conclusion we have otherwise reached.  

Consideration

29.	There are difficulties for the applicants in establishing their contention that the review be upheld.  These are twofold.  

30.	Firstly, this court does not have the benefit of the full transcript from the decision to enter default judgment.  A review involves this Court considering and making findings not on the actual decision itself, but rather, on the decision making process that was applied by the primary judge: Avei v Maino [2000] PNGLR 157; Waranaka v Dusava [2009] PGSC 11, SC980.    

31.	The portion of transcript that is available reveals that the entry of default judgment occurred from a continuation of an earlier hearing of the application.  The portion of transcript that is available relates primarily to ventilation of the issue as to damages.   This Court is therefore unable to assess the correctness of otherwise of the decision making process as to the entry of default judgment with reference to the full reasoning of the primary judge.  

32.	Secondly, the applicants rely in their submissions on the review on apparent fresh evidence, not having applied for leave to do so (as to the requirement to do so on a review, see, eg State v PNG Defence Force & Other [2023] PGSC 24, SC2374).   This evidence was relied upon at the application to set aside default judgment but is not evidence that is currently available as it did not form part of the decision that is now subject to review. It appears to be evidence relevant to the reasons why the applicants did not respond to the initial claim.  

33.	The applicants submitted that an appeal, or review, against the set aside decision was not brought as, it was contended, the court did not consider their submissions at the application.  This submission entirely misconceives the determination on 6 March 2025.  The transcript reveals that the court heard from the parties and had regard to the affidavit of the first applicant.  In any event, even if the applicant’s submission is correct (which it is not), this was not a bar to the filing of an appeal or review against the order.  An order was made that could have been the subject of appeal or review.  

34.	The approach of the applicants involves a review of the wrong order of the National Court and a review on partial information with a result that this Court is stifled in its ability to consider the merits of the review.  This does not result in this review being incompetent, for the reasons given above at [23], but it does have consequences for the capability of this court to engage with the merits of the review.  

35.	Nonetheless, the issues raised, particularly as to the statutory bar, are concerning. With reference to the material that is available to this Court, a statutory defence may have been available and it may have led to a conclusion that default judgment ought not have been entered: Kunton v Junias [2006] PGSC 34, SC929; Kunkene v Rangsu [1999] PGNC 80; Giru v Muta [2005] PGNC 83, N2877.  

36.	The respondent submits that it would be unfair to the respondent to uphold the review on this basis, with it submitted that had this issue been properly raised by the judge in the National Court there would have been an opportunity for it to be addressed with evidence and submissions from the respondent.   It is submitted that it cannot be assumed that the claim was statute barred, with it being reasonable to infer that evidence or submissions could have been made to address the issue as to when the cause of action accrued.  

37.	There is force in the respondent’s submission that this review being upheld may involve an aspect of unfairness to the respondent. There is also force in the respondent’s submission that an application of MVIL v Kiangua favours their contentions, albeit the distinguishing features identified above at [28] arise.   

38.	Nonetheless, it still does not, in our respectful view, entirely disavow the respondent from responsibility to have ensured the primary court was cognisant of the potential for a meritorious defence.  On the claim as pleaded, an issue as to when the cause of action accrued was apparent and needed to be drawn to the court’s attention for consideration by the court when default judgment was sought.  

39.	We are of the view that the responsibility to have considered the statutory bar issue does not fall solely on the primary judge.   Lawyers are officers of the court and have a duty firstly to the Court.  This includes ensuring that the Court exercises its discretion properly and in accordance with the law.  The statutory bar issue in this matter ought to have been drawn to the Court’s attention when default judgment was sought for the primary judge to be satisfied as to when the cause of action accrued and whether a time bar defence arose.  We cannot be certain as to whether this issue was raised, or considered, or determined, given the misconceived approach by the applicants with this review (cf Yamu & Anor v Harry & Anor, SC1909).  

40.	The absence of the entire reasoning of the primary judge, of the apparent fresh evidence, and of any evidence in reply that the respondent may wish to rely on prevents this court from determining the primary ground of review.  The respondent may very well have a reasonable explanation, and answer, to the statutory bar issue. 

41.	The test applicable to a grant of review under s 155(2)(b) of the Constitution is settled.  As Injia CJ explained at [17] in Independent State of Papua New Guinea v Toka Enterprises Limited [2018] PGSC 89, SC1746:

An application for review may be allowed if it is in the interest of justice to do so, that there are cogent and convincing reasons and exceptional circumstances that show some substantial injustice is manifest or the case is of special gravity; and that there are clear grounds meriting a review of the decision.

42.	The statutory bar issue raised is such that we are satisfied that there are cogent and convincing reasons and exceptional circumstances that show some substantial injustice is manifest and there are clear grounds meriting a review of the decision. It is appropriate to exercise the inherent power of this Court to review all judicial acts of the National Court as provided by s 155(2)(b) of the Constitution.  

43.	In order to give effect to the paramount consideration of dispensation of justice (s 158(2) Constitution) in this review, the only available course is to uphold the review with a remittal to the National Court for a further application to set aside the default judgment to be heard and determined.  Both parties have a responsibility to ensure that all relevant evidence and submissions are made to assist the National Court in making its decision.   

44.	There has been an entirely unsatisfactory approach to this matter both in the National Court and the Supreme Court. The primary responsibility for the unsatisfactory approach in the Supreme Court lies with the applicants.  Accordingly, despite their review being upheld, costs are to be borne by applicants. 

Orders

45.	For those reasons, the following orders are made:

(1)	The application for review is upheld. 

(2)	The proceeding is remitted to the National Court for hearing of an application to set aside the default judgment of 15 May 2024, to be instituted by the filing of further notice of motion.  

(3)	The garnishee order of 18 September 2024 is stayed until further orders of the National Court.  

(4)	The applicants are to pay the costs of the respondent of and incidental to the review on a party-party basis if not agreed.  
________________________________________________________________
Lawyers for the applicants: Gagma Legal Services
Lawyer for the respondent: Public Solicitor