Mapmakers Pty Ltd v BHP Company Ltd [1987] PGLawRp 496; [1987] PNGLR 78 (12 May 1987)

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PRACTICE - Application to set aside judgment by default - Practice of forewarning opposing lawyers of intention to enter judgment ought to be adopted - Failure to adopt practice not grounds for setting aside judgment - National Court Rules, O 12, r 8.

Whilst it is a desirable practice that should be adopted, that lawyers intending to have a judgment entered in default of pleadings, should forewarn the lawyer on the record for the other party of his intentions, in the absence of Rules of Court or other statutory provisions in relation to such a practice, a judgment by default regularly entered cannot be set aside ex debito justitiae for failure to adopt such practice.

This was an application on notice seeking to set aside a judgment entered in default of pleadings.

KIDU CJ.: This is an application under O 12, r 8 of the National Court Rules to set aside a default judgment entered on 26 March 1987.

On 3 November 1986 the respondent filed a writ of summons. As the applicant is an overseas company (Australia) the respondent applied for and obtained, on 12 November 1986, leave to serve the applicant with a notice in lieu of the writ of summons outside Papua New Guinea. A sealed copy of this notice in lieu of the writ was forwarded by registered mail to the applicant on 3 December 1986. The applicant was given 45 days from the receipt of the notice to file a notice of intention to defend.

The applicant’s notice of intention to defend was filed by its lawyers (Beresford Love Francis & Co) on 23 December 1986.

Unfortunately, for the applicant, no defence was subsequently filed as required by O 8, r 4 of the National Court Rules. The reason for this appears in Mr Goodman’s affidavit dated 15 April 1987. One of his colleagues, a Mr Bolam, has filed the notice of intention to defend. Mr Goodman was then on recreation leave and knew nothing about the matter. It appears that after the notice of intention to defend was filed the case was allocated to Mr Goodman. But when he returned from leave he was not informed of the matter. And because of this time ran against his client and on 26 March 1987 the respondent had a default judgment entered against the applicant. It was when this judgment was served on his firm that Mr Goodman became aware of the matter.

So on 16 April 1987, 10 days after the default judgment was served Mr Goodman filed the present application to have the judgment side aside.

Mr Goodman advances two arguments in favour of his client’s application. The first argument is based on the ex debito justitiae principle. It is contended that it is a practice in this jurisdiction (if it is not it should be, says Mr Goodman) that the lawyer intending to have a default judgment entered should forewarn the lawyer on record for the defendant beforehand.

I am aware that some lawyers (acting for plaintiffs) in this jurisdiction do inform lawyers for defendants of their intention to have judgments entered by default. However, I cannot say that this is the usual practice. I am personally aware of many cases where lawyers acting for plaintiffs have not informed lawyers for defendants of their intention to enter judgment by default.

The plaintiff entered the default judgment according to the Rules. If there is such a practice it is not required by or set out in the Rules. It cannot therefore be given the status contended for by Mr Goodman. Under the existing law only judgments irregularly entered are set aside ex debito justitiae (as required in the interests of justice). As no Rules or laws were breached in the entry of the default judgment I reject Mr Goodman’s first submission.

The second submission is based on well established principles. It prays for this Court’s discretion to be exercised in favour of the applicant. It is for the applicant to establish why the default judgment, regularly entered, ought to be set aside. To do that the applicant must, by affidavit evidence advance a reasonable explanation as to why judgment was allowed to go by default, an explanation why there is a delay in bringing the application and material adverting to a defence on the merits of the application. See Green & Co Pty Ltd v Green [1976] PNGLR 73, George Page Pty Ltd v Malipu Bus Balakau [1982] PNGLR 40, and the The Government of Papua New Guinea and Davis v Barker [1977] PNGLR 386.

In this case the application was filed as soon as the default judgment was served on the applicant’s lawyers. So we are concerned only with why judgment was allowed to be entered by default and whether there is a defence on the merits.

I have already adverted to the reasons given by Mr Goodman. The applicant engaged the law firm of Beresford Love Francis & Co. It did not engage Mr Goodman in his own right as a lawyer. That is what the documents in the file show. The importance of this is that the fact that Mr Goodman went on leave should not have meant that the matter was to be filed away and forgotten. But this did happen. After the statement of claim was served on the applicant a notice of intention to defend was filed on 22 December 1986. Having filed this notice the lawyers for the applicant were aware that a defence had to be filed and served on the respondent.

If Mr Goodman was on leave it was the responsibility of the firm to ensure that another lawyer looked after the file. The failure in doing this has resulted in judgment being entered by default of pleading.

Mr Goodman was back on the job before judgment was entered. Presumably he had the applicant’s file with him. Why didn’t he check it? In par 4 of his first affidavit dated 15 April 1987 he deposes as follows:

“Due to an error in my office the matter of the notice of intention to defend being filed was not brought to my attention until a copy of the judgment was served on the offices of Beresford Love Francis & Co on 6 April 1987.”

What was the “error” in his office? Was it the fact that there was a failure to inform Mr Goodman about the notice of intention to defend being filed. Such a failure cannot be sanctioned by this Court. It is abundantly clear that the applicant had a default judgment entered against it as a result of its lawyers’ failure to properly attend to the matter. Be that as it may that failure by itself does not determine the matter in favour of the respondent. Lawyers for the respondent (plaintiff) having been served with the notice of intention to defend were put on notice that a defence was to be filed and when the stipulated time was about to expire or had expired common courtesy required that a caution that a default summons was to be entered ought to have been given to the respondent’s lawyers. I consider that this practice should be adopted by all lawyers.

Mr Goodman’s two affidavits with their annexures do raise more than mere denials. I consider they show a prima facie defence. There are comprehensive statements of facts in the document annexed to Mr Goodman’s affidavit dated 27 April 1987. I do not intend to reproduce them.

In the circumstances I consider that the respondent be given an opportunity to defend the claim on merit.

N1>(b) That the applicant pay the costs of the respondent of this application and costs relevant to the entry of the default judgment.

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Papua New Guinea Law Reports

Mapmakers Pty Ltd v BHP Company Ltd [1987] PGLawRp 496; [1987] PNGLR 78 (12 May 1987)

Papua New Guinea Law Reports - 1987