Commodity Development Pty Ltd v Karai [1994] PGNC 41; N1260 (11 February 1994)

N1260

PAPUA NEW GUINEA
(NATIONAL COURT OF JUSTICE)

APP. 77/93

COMMODITY DEVELOPMENT PTY LTD

v

PETER KARAI

Rabaul: Doherty, J.
11 February 1994

District Court Act S 25 - Setting aside ex parte judgements - National Court precedents properly followed.

The Appellant appealed against an Order of the District Court refusing to set aside an ex parte Order because no defence was shown on the merits.

HELD: Although S 25 District Court Act and O 12 R 35 National Court Rules are not the same, the wording is sufficiently similar and similar principles apply. Hence the District Court properly applied the National Court precedents.

CASES CITED:
Barker -v- Government of Papua New Guinea and Davis and Bux [1976] PNGLR 340.
Green & Co. Pty Ltd -v- Green [1976] PNGLR 73.
Fleming -v- Gwale Dau [1983] PNGLR 339.

Mr Ousi for the Appellant
The Respondent in person

DECISION

DOHERTY, J.: The Appellant Corporation appeals against a decision of the Rabaul District Court which refused to set aside an Ex parte Judgement entered in favour of the respondent; that is the Complainant in the lower court.

It appears from the facts that the respondent filed what was called a Default Summons in the lower court and the matter came for hearing after service. In actual fact the case was treated, not as a Default Summons but as an ordinary summons, was listed for trial and there was an ex parte hearing of the complainant. The Complainant gave evidence, he appears not to have called any witnesses.

The Appellant, the Defendant in the lower court, had been represented initially by counsel. According to the record he had asked for adjournments in order to try to find the files relating to the case.

There has been a previous adjournment then the matter was set for hearing on the 22nd October 1993 at 8:30am. Apparently both parties appeared on that day and there is an affidavit from Counsel from the company showing that he did appear at 8:30, the matter was not called, and it was adjourned apparently awaiting another Magistrate to come and deal with it.

It was then heard in the absence of the lawyer. Exactly what time it was heard that day I do not know, the judgement was entered on the 25th October, that is on the Monday, the hearing apparently was on Friday 22nd October.

In a supporting Affidavit, the lawyer for the company explains that he had waited and then he went in and attended National Court being unaware that, in fact, a Magistrate must have arrived and started to hear the case. He applied under Section 25 of the District Court Act to have the matter set aside and that application was refused. He appeals against that decision.

Section 25 provides that a conviction or order were one party does not appear may be set aside on the application of the Court on such terms as to costs or otherwise as a court thinks just and the court, on service on the other party, and on such reasonable notice as the court directs may proceed to a hearing.

I notice in passing that provisions of Section 159 of the District Court Act were not used. I think that was a reasonable procedure because, although the Summons was originally a Default Summons, it was not treated as such in the District Court.

The Affidavit in support of the Application to set aside stated that the lawyer appeared, and presents a reasonable explanation why he did not actually attend the hearing. He filed his affidavit and his explanation 3 days after the Order was entered.

The grounds for refusing the setting aside of the application was apparently because there was no defence on the merits. There is a court record showing that on the 12th November, the learned Magistrate refused to set it aside and he states, "the Defendant had the case adjourned, he ample time to find out the information as to the progress of the case, judgement will be properly entered if the defendant wants to set aside he must not only show his reason for non appearance, but also his defence on the merits and he did not do so." (sic)

Counsel for the Appellant before me argues that the defence on the merit is a proceedings under Section 159 of the District Court Act and that does not apply to Section 25.

The National Court has considered the provisions in the National Court Rules for setting aside ex parte judgements on several occasions. The leading cases are Barker -v- The Government of Papua New Guinea and Davis and Bux [1976] PNGLR 340 and Green & Co. Pty. Ltd -v- Green [1976] PNGLR 73. These related to the former National Court Rules but have been followed since the introduction of the New Rules, for example, in Egger -v- The Post & Telecommunication Corporation unreported.

The precedents show that three (3) conditions have to be met for the setting aside of a regularly entered default judgement. They were as follows (and I quote here from Page 341 of the [1976] Papua New Guinea Law Reports):-

"(1) There must be an affidavit stating facts showing on a defence on the merits.

(2) There must be a reasonable explanation why judgement was allowed to go by default; and

(3) The Application must be made promptly and within a reasonable time."

These were the 3 grounds that have been followed on numerous occasions by the National Court in considering applications under the National Court Rules to set aside a default judgement regularly entered.

The provisions of the National Court Rules are set out in Order 12 R 35, and state that a Court may on such terms as it thinks just set aside or vary, a judgement entered in pursuance of the division, (that is the default provisions).

It will be noted the similarity of this rule to the wording of Section 25 of the District Court Act which provides an Order or conviction made, may be set aside on application to the Court on such terms as to costs or otherwise as the Court thinks just.

Mr Ousi argues that there was no order or application made for the filing of defence provided for in the District Court Act S 138, that practise having grown up in some District Courts.

Normally that provision depends first on an application a Plaintiff seeking to have a defence filed. It is not a mandatory provision and the District Court is not obliged to order filing of a defence on its own violation.

The Plaintiff did not seek to have a defence filed and I think this may well be because he is a villager and does not know the rules and the laws relating to courts. I note also that counsel who appeared for the appellant did not volunteer one.

The District Courts when applying Section 25 have consistently and regularly adopted the National Court decisions in Green & Co. Pty Ltd -v- Green and Barker -v- The Government of Papua New Guinea and others, (supra). The National Court rules and the District Court are 2 distinct and different pieces of legislation with different provisions and, as I have quoted above, have different but similar provisions relating to the setting aside of ex parte default judgments. As was stated by the late Chief Justice in Fleming -v- Gwale Dau (1983) PNGLR 339 at 340 where Magistrates are bound by decisions of the National Court and the Supreme Court they must adhere to any directions given by these courts. I have not been referred to any precedent directing the District Court to follow the ruling in Barker -v- State of Papua New Guinea and others (supra) nor have I been able to find such a ruling, but given the similarity in the National Court rules and S 25 District Court Act together with the same principals of justice involved, I think it was quite proper for the District Court to adopt the procedures and principals in the Barker Ruling.

I cannot find any error in the part of the learned Magistrate, I think he was entitled to follow the National Court decisions which have been consistently followed in the application of Section 25. I accept that there was a misunderstanding on the part of the Counsel for the Appellant and it was not his fault that he did not appear, it was a fault partly of the Court. On the face of the record, the judgement was regularly entered and there is no defence on the merits presented to the District Court. I have gone through the evidence in the lower court to ask myself if there was a bona fide case for setting aside and if the facts themselves show that the learned Magistrate erred in finding for the plaintiff.

On the face of the evidence it is arguable that the respondents failed to check the numbers of the fermentery etc. of cocoa brought and although, if the case was fully argued the appellants may have been able to convince the magistrate they were not negligent, on the facts before him he was entitled to find as he did and to enter this judgement. There has been no defence on the merits shown in the application to the District Court and I consider the learned Magistrate properly followed the precedents.

I agreed with the findings of the District Court and I do not uphold this appeal.

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Lawyer for the Appellant: Warner Shand
Respondent appeared in person