Wellcos Engineering Ltd v Yawari [2008] PGNC 220; N3443 (21 May 2008)

N3443

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 959 OF 2006

BETWEEN:

WELLCOS ENGINEERING LIMITED
Plaintiff

AND:

HAMI YAWARI – GOVERNOR OF SOUTHERN HIGHLANDS PROVINCE
First Defendant

AND:

BRIAN PEBO – ADMINISTRATOR OF SOUTHERN HIGHLANDS PROVINCE
Second Defendant

AND:

SOUTHERN HIGHLANDS PROVINCIAL GOVERNMENT
Third Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Hartshorn, J.
2007: 15 December,
2008: 21 May

Application to Dismiss Proceedings when Default Judgment Entered - Application to Set Aside Default Judgment - Provincial Legislation - Claims By and Against the Southern Highlands Provincial Government Act – Failure to give notice of intention to make a claim - Failure to personally serve writ of summons -whether irregularity or nullity

Facts:

The first, second and third defendants made an application to dismiss the proceedings for non-compliance with s.5 of the Claims By and Against the Southern Highlands Provincial Government Act 2000 and alternatively that the default judgment that had been entered be set aside pursuant to Order 12 rule 35 of the National Court Rules.

Held:

1. The court cannot determine an application aimed at dismissing the plaintiff's case after the court has already entered judgment in the plaintiff's favour, without first setting aside the judgment.

2. Notwithstanding that the first and second defendants were not served personally with the writ of summons, as they had taken fresh steps in the proceedings with knowledge of the service irregularity and had not deposed to a proposed defence on the merits, the application to set aside the default judgment against them was refused.

3. No notice of intention to make a claim was given to the Southern Highlands Provincial Government as required under s.4 of the SH Claims Act. The giving of such a notice is a condition precedent to the issuing of a writ of summons against the Southern Highlands Provincial Government.

4. The default judgment against the third defendant is set aside.

5. Leave is granted for the third defendant to file its notice of intention to defend and defence within 14 days of this decision.

Cases cited:

Page P/L v. Malipu Balakau [1982] PNGLR 140
Leo Hannett & Anor v. Australia and New Zealand Banking Group (PNG) Ltd (1996) SC505
Tohian and the State v. Tau Liu (1998) SC566
Bokin v. Independent State of Papua New Guinea (2001) N2111
Rabaul Shipping Ltd v. The State (2004) N2709
John Kewa v. Brian Mangipu (2004) N2720

Counsel:

Mr. J. Koi, for the Plaintiff
Mr. J. Kiwai, for the First, Second and Third Defendants

21 May, 2008

1. HARTSHORN, J: This is an application by the first, second and third defendants (Defendants) to:

a) dismiss the proceedings for non-compliance with relevant provisions of the Claims By and Against the Southern Highlands Provincial Government Act 2000 (SH Claims Act),

b) in the alternative, that default judgment be set aside pursuant to Order 12 rule 35 National Court Rules.

2. Although the notice of motion filed by Jerry Kiwai lawyers refers to the "Defendants" making the application, it is noted that the notice of motion is signed on behalf of "Lawyers for the First and Second Defendants", that the notice of change of lawyers filed by Jerry Kiwai lawyers is filed on behalf of the "First, Second and Third Defendants" and that the notice of ceasing to act filed by the Acting Solicitor General is in respect of the "First, Second & Third Defendants" and not the fourth defendant. Accordingly this application is treated as being made on behalf of the first, second and third defendants only.

3. The first question is whether this court can entertain the application to dismiss after judgment has been entered.

4. The cases of Rabaul Shipping Ltd. v. The State (2004) N 2709 and John Kewa v. Brian Mangipu (2004) N 2720 are authorities to the effect that once a judgment has been entered by this court, the court cannot determine an application aimed at dismissing the plaintiff's case after the court has already entered judgment in the plaintiff's favour, without first setting aside the judgment.

5. I am in agreement with this statement of the law and respectfully adopt it. Accordingly the orders sought in paragraph 1 of the notice of motion of the Defendants dated and filed 1 November 2007 are refused.

Default Judgment -setting aside

6. In support of the Defendants’ application were inter alia, 2 affidavits sworn by Mr. William Powi. The Defendants were not permitted to rely upon these affidavits however, as the plaintiff had filed and served a notice to cross examine and Mr. Powi was not present in court for that purpose.

7. As to the first defendant, the evidence filed on behalf of the plaintiff is that the writ of summons was served personally upon Mr. Kevin Kora, house boi, on 28 August 2006.

8. As to the second defendant, the evidence filed on behalf of the plaintiff shows that the writ of summons was sent by "TNT airmail" on 17th August 2006.

9. Clearly there has been a breach of Order 6 rule 3 National Court Rules as the first and second defendants were not served personally with the writ of summons.

10. Pursuant to the Supreme Court decision of Leo Hannett & Anor v. Australia and New Zealand Banking Group (PNG) Ltd (1996) SC505, this is an irregularity that falls within Order 1 rule 8 National Court Rules, but is not a nullity.

11. The discretion to set aside in such circumstances is,

"....subject to the practice that an applicant must show a defence on the merits. In this regard we adopt the opinion of Greville Smith in Page P/L v. Malipu Balakau"[1982] PNGLR 140.

12. In this instance no defence on the merits has been filed by or on behalf of the first and second defendants.

13. A further consideration here is that the first and second defendants have taken steps in the proceedings after a fresh step has been taken in the proceedings by them with knowledge of the irregularity, Order 1 Rule 9 National Court Rules, Leo Hannett’s case (supra).

14. A notice of intention to defend was filed on behalf of the first and second defendants by Ame Lawyers on 24 November 2006, a further notice of intention to defend was filed on behalf of the defendants by the Acting Solicitor General and on 12 June 2007, and notice of ceasing to act was filed by the Acting Solicitor General on 7 July 2007.

15. This documentation would not have been filed without the instructions and consent of the first and second defendants. To give those instructions or consent, the first and second defendants had to be aware of the proceedings although given the above evidence, that did not come from personal service.

16. In the circumstances therefore, although there was an irregularity in the service of the proceedings upon the first and second defendants, as they have not deposed to a proposed defence on the merits and as they have taken fresh steps in the proceedings as referred to, the application to set aside the default judgment against the first and second defendants is refused.

17. As to the third defendant, the Southern Highlands Provincial Government (SHPG), it is contended that no notice of claim was given as required by s. 4 SH Claims Act and that service of process, the writ of summons, was not served as required by s. 5 of the SH Claims Act.

18. Pursuant to s. 4 SH Claims Act, a notice in writing of intention to make a claim is required to be given within a period of 6 months after the occurrence out of which the claim arose or where the claim is for a breach of contract, within a period of 6 months after a claimant became aware of the alleged breach.

19. There is no evidence given on behalf of the plaintiff that such a notice was given.

20. Evidence filed on behalf of the plaintiff is that the writ of summons was purportedly served upon the SHPG by "TNT airmail" on 17 August 2006.

21. Pursuant to s. 5 SH Claims Act, service of process shall be served on the Administrator of the Southern Highlands Province personally or by leaving the process with a person apparently occupying the position of personal secretary to the Administrator at certain specified times.

22. Service of the writ has not been effected in accordance with s. 5 SH Claims Act.

23. Do the facts of the notice of intention to make a claim not being given and the writ of summons not being served correctly, constitute irregularities or nullities?

24. In respect of no notice of an intention to make a claim being given, to my mind, guidance in this regard can be obtained from considering the approach of the courts to non-compliance with s. 5 Claims By and Against the State Act (Claims Act).

25. In the Supreme Court case of Tohian and the State v. Tau Liu (1998) SC566, it was held that notice of an intention to make a claim against the State is a condition precedent to the issuing of a writ of summons. Notice under s.5 must be given first before the writ is issued. The requirement to give notice to the appropriate person and the method of serving the notice are mandatory; Bokin v. Independent State of Papua New Guinea (2001) N2111. The notice must be given "within a period of six months after the occurrence out of which the claim arose", or if the claim is for a breach of contract, "within a period of six months after the claimant became aware of the alleged breach".

26. The reasoning in these cases applies equally to Provincial Legislation. Consequently, notice of intention to make a claim against the SHPG is a condition precedent to the issuing of a writ of summons.

27. I reject the argument that as notice was given pursuant to s.5 Claims Act to the Solicitor General, notice of intention to make a claim did not need to be given under the SH Claims Act. The Southern Highlands Provincial Government is named as a separate party in these proceedings. Section 5 SH Claims Act applies in such a case.

28. In the absence of any evidence of such a notice of intention to make a claim being given, I am of the view that this is an appropriate case for the court to exercise its discretion and set aside the default judgment in respect of the third defendant, the Southern Highlands Provincial Government.

29. Given the above finding it is not necessary to consider further the question of the service of the writ of summons upon the Southern Highlands Provincial Government.

Orders

30. The orders sought in paragraph 1 of the notice of motion dated and filed 1 November 2007 of the first, second and third defendants (notice of motion) to dismiss the proceedings are refused.

31. The orders sought in paragraph 2 of the notice of motion for the default judgment entered against the first and second defendants to be set aside are refused.

32. The order sought in paragraph 2 of the notice of motion for the default judgment entered against the third defendant to be set aside is granted.

33. The third defendant is granted leave to file its notice of intention to defend and defence within 14 days of today.

34. Costs of this application are to be costs in the cause.

__________________________________

Kelly Naru Lawyers: Lawyers for the Plaintiff
Jerry Kiwai Lawyers: Lawyers for the First, Second and Third Defendants
Solicitor-General: Lawyers for the Fourth Defendant