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Bank of South Pacific Ltd v Spencer [1983] PNGLR 239 (23 July 1983)

Papua New Guinea Law Reports - 1983

[1983] PNGLR 239 - Bank of South Pacific Ltd v Peter James Spencer 

[1983] PNGLR 239

N427

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

BANK OF SOUTH PACIFIC LIMITED

V

SPENCER

Waigani

McDermott J

21 July 1983

23 July 1983

JUDGMENTS AND ORDERS - Judgment irregularly obtained - To be set aside as matter of principle - National Court Rules, O. 1, r. 9.

A plaintiff issued a specially endorsed writ for liquidated damages and at the defendant’s request delivered a statement of claim seeking therein unliquidated or pecuniary damages. The defendant having failed to file a defence within time the plaintiff obtained judgment for the liquidated damages endorsed on the writ. On an application to set aside the judgment;

Held

(1)      A judgment irregularly obtained should as a matter of principle be set aside.

R. T. Company Pty Ltd v. Minister of State for the Interior [1957] HCA 39; (1957) 98 C.L.R. 168; Commercial Traders Ltd v. Furness (1962) 79 W.N. (N.S.W.) 528; Turner & Son Pty Ltd v. Rhodes [1970] 1 N.S.W.R. 305; and White v. Weston [1968] 2 Q.B. 647, adopted and applied.

(2)      In the present case the pleadings had changed the claim from one of liquidated damages to unliquidated or pecuniary damages and the judgment was therefore irregularly obtained and should be set aside.

Cases Cited

Anlaby v. Praetorius (1888) 20 Q.B. 764.

Commercial Traders Ltd v. Furness (1962) 79 W.N. (N.S.W.) 528.

Hughes v. Justin [1894] UKLawRpKQB 33; [1894] 1 Q.B. 667.

R. T. Company Pty Ltd v. Minister of State for the Interior [1957] HCA 39; (1957) 98 C.L.R. 168.

Turner & Son Pty Ltd v. Rhodes [1970] 1 N.S.W.R. 305.

White v. Weston [1968] 2 Q.B. 647.

Summons

This was an application made pursuant to the National Court Rules, O. 1, r. 9, to set aside a judgment irregularly obtained.22 July 1983

Counsel

D. Letcher, for the applicant/defendant.

B. Larkin, for the respondent/plaintiff.

Cur. adv. vult.

22 July 1983

MCDERMOTT J: This application is made pursuant to the new National Court Rules O. 1, r. 9, that the judgment was irregularly obtained.

The applicant defendant seeks to set aside the plaintiff’s judgment obtained on 31 May 1983, in default of delivery of a defence. The judgment purports to be for the sum claimed in a specially endorsed writ served on 24 January 1983.

The defendant appeared to this writ on 1 February 1983 and requested a statement of claim be delivered. The plaintiff in complying with this request took out a summons for directions on the 11 February and the consent order on it was made on 4 March 1983 under which the plaintiff was to deliver a statement of claim within 28 days and within a further 28 days of its delivery the defendant would deliver a defence. Although a statement of claim was delivered a consequent defence was not.

By taking this course of action the advantages which the plaintiff had under the specially endorsed writ and access to summary judgment procedure under the former O. XVIII were foregone. Instead the judgment was obtained under the former O. XXXI, r. 2, applicable to a debt or liquidated demand which is not defended in the manner required.

However, what is critical in this case is the nature of the statement of claim delivered. On its face it is a claim for pecuniary damages:

“And the plaintiff claims damages plus costs and interest.”

Paragraphs 6 and 8 state that the particulars owing under the guarantee and the damages costs and interest under the guarantee shall be supplied prior to hearing. Changes are possible.

The former O. XXIV, r. 1 says:

“Where a statement of claim is delivered, the plaintiff may therein alter, modify, or extend, his claim against any defendant who has appeared without any amendment of the endorsement of the writ.”

The respondent argues that I read the writ and statement of claims together as the claim is still the same; this is clear from the writ and amplified by the statement of claim. I am unable to agree with this submission. The pleadings have changed the plaintiff’s claim from one of liquidated damages to one of pecuniary damages. It being no longer a claim for a sum certain, I fail to see how a judgment for one could be obtained when the defendant defaulted with pleadings.

Under the former rules it was not necessary to file a statement of claim so its contents were unknown to the Registrar when the default judgment was obtained. In my view the judgment was irregularly obtained.

Does the default in pleading mean that the irregular judgment can now be varied into a regular interlocutory judgment?

The applicant argues that the judgment be set aside as a matter of principle. I have been referred to a number of authorities in support of this submission commencing with Anlaby v. Praetorius (1888) 20 Q.B. 764, where the default judgment entered was premature and irregular. At 768 Fry L.J said:

“In such a case the right of the defendant to have the judgment set aside is plain and clear. The Court acts upon an obligation; the order to set aside the judgment is made ex debito justitiae, and there are good grounds why that should be so, because the entry of judgment is a serious matter, leading to the issue of execution, and possibly to an action of trespass.”

The equivalent of the former O. XCIII r. 17, was pressed as giving the court a discretion. The court was of the view the irregular entry of judgment was made independently of the rules and without right. At 769:

“There is a strong distinction between setting aside a judgment for irregularity, in which case the court has no discretion to refuse to set it aside, and setting it aside where the judgment, though regular, has been obtained through some slip or error on the part of the defendant, in which case the court has a discretion to impose terms as a condition of granting the defendant relief. But although the Court is bound to set aside an irregular judgment ex debito justitiae, it has always exercised a discretion as to costs, and has imposed terms as a condition of the exercise of that discretion ...”

This course was followed in Hughes v. Justin [1894] UKLawRpKQB 33; (1894) 1 Q.B. 667 when a judgment was obtained against the defendant for a liquidated demand notwithstanding the earlier settlement of the claim by the parties.

That I should not let the judgment stand at all is seen in R. T. Company Proprietary Ltd v. Minister of State for the Interior [1957] HCA 39; (1957) 98 C.L.R. 168. This case concerned a claim where the debt or liquidated demand was expressed as a claim against each of the defendants in the alternative but the judgment entered in default of pleadings was against the defendants jointly. At 170 Dixon CJ said:

“But I think that I ought not to allow the delay or the course taken by the defendants before Fullagar J to operate to keep on foot against the defendants an irregular judgment imposing on them a liability jointly to which the claim did not extend. It is an irregular judgment and ought not to be on the records of the Court notwithstanding that I can see that the imposition of a joint liability is probably a matter which has no great practical importance.”

Commercial Traders Ltd v. Furness (1962) 79 WN (N.S.W.) 528; Turner & Son Pty Ltd v. Rhodes [1970] 1 N.S.W.R. 305 and White v. Weston [1968] 2 Q.B. 647 are also to the point.

Because of the view I take of the course adopted by the plaintiff, I consider these authorities relevant and applicable in this jurisdiction. The rules of court recently adopted, as indeed the former rules, have a long pedigree and are in the main similar to those applicable in the jurisdictions from which these cases were decided. Because the obtaining of a default judgment has many ramifications, it is important that judgments be regular. In this case I do not consider it appropriate to exercise my discretion in any other way than to set aside the judgment dated 31 May 1983, and I do so.

The dispute between the parties or more particularly the claim (of whatever amount) which the plaintiff has is an old one. I order that the plaintiff shall have seven days in which to amend the statement of claim if that is desired or serve written notice to the defendant that no amendment will be made and that the defendant do file and serve a defence as required by the rules within seven days after being served with the amended defence or service of written notification that the present statement of claim stands.

Orders accordingly.

Lawyer for the applicant: Russell Hay.

Lawyer for the respondent: Beresford Love Francis & Co.