Kumba v Pagalio [2010] PGNC 92; N4089 (17 August 2010)

N4089

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 909 2009

BETWEEN:

CHRISTINE KUMBA
Plaintiff

AND:

DR. JOSEPH PAGALIO, DEPARTMENT OF EDUCATION
First Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

Waigani: Sawong .J
2010: 11th & 17 August

PRACTICE AND PROCEDURE – plaintiff seeks default judgment by notice of motion – defendants have also filed notice of motion seeking leave to file defence out of time – claim of plaintiff based on negligence - principle issue is whether default judgment should be granted to the Plaintiff - Court's power to enter default judgment is discretionary - statute regulates Court's power in granting default judgment for a liquidated amount or claim against the State – in a claim for liquidated amount, no default judgment shall be entered unless claim is for a debt – parts of plaintiffs claim are time barred – motion dismissed - s12 (3) Claims by and Against The State Act, s16 Frauds and Limitations Act, Order 12 Rules 25, 27 and 32(i) of the National Court Rules

PRACTICE AND PROCEDURE - motion by defendant for leave to file defence out of time – leave of court to file defence out of time mandatory – onus on applicant to demonstrate three matters to court - must explain why the applicant did not file its Defence in time - Must show a Defence on the merits – satisfy court that application was made promptly – only draft defence filed which contains meritorious grounds – leave granted to file defence within 7 days - Order 1 Rule 15 of the National Court Rules.

Cases Cited:

David Sode & Others v. Nelson Pane & Others (2008) N3278
Kante Miniga v. The State (1996) N1458
Luke Tai v. Australia and New Zealand Banking Group (PNG) Ltd (2000) N1979
Motor Vehicles Insurance (PNG) Ltd v. Sossie Joe (2007) SC863
Michael Varapik v. Penias Tadak & Others, (Unreported Judgment of the National Court dated 18 June 2010), WS 140 of 2010.
Tiega Bomson v. Henry Hart (2003) N2428
Thai Itao trading as Thibin Building Maintenance v. Elias Kamara & Others (2009) N3757,
Thomas Koral v. Alex Kavie & Petrus Alex (1999), Unreported and Unnumbered National Court Judgment, WS 286 of 1998

Counsel

E. Waifaf, for the Plaintiff
S. Koim, for the Defendants

17th August, 2010

DECISION

1. SAWONG .J – By an Amended Notice of Motion, the Plaintiff seeks default judgment for a liquidated amount of K45,731.68.

2. The Defendants have also filed a Motion seeking leave to file a Defence out of time. I heard both Motions and reserved a ruling in both Motions. This ruling is in respect of both those Motions.

3. As the Motion by the Plaintiff is first in time, and as both Counsels' addressed their Submissions on that first, I am going to consider and make a ruling on that Motion first.

Brief Background

4. The Plaintiff is a primary school teacher who was teaching at various primary schools in the National Capital District. She was teaching until January 1998, when she was placed in a pool. Since then till she filed the present proceedings, was not teaching and consequently has not received any salaries. She has lost income. She was aggrieved by the decision of the Defendants and has filed this proceedings, claiming a sum of K45,731.68, comprising of loss of salary, leave entitlement and under payments.

5. The claim is based on negligence.

Plaintiff's evidence

6. The Plaintiff relies on 4 Affidavits in support of her application. These are:-

(i) Affidavit of Service of Section 5 Notice

(ii) Affidavit of Service of the Writ of Summons

(iii) Affidavit of Search sworn on 30 November 2009 and filed on 18 December 2009.

(iv) Affidavit in support by the Plaintiff sworn on 15 June 2010 and filed on 22 June 2010.

7. The Defendants have not filed any answering Affidavits.

The Issues

8. The principle issue to determine is whether default judgment should or ought to be granted to the Plaintiff. There are equally other important issues that require careful considerations, because the Defendants are covered by the provisions of a statute, namely the Claims by and Against the State Act.

Law

9. The Motion is founded on Order 12 Rules 25, 27 and 32(i) of the National Court Rules. These reads:

"25. Default

A Defendant shall be in default for the purposes of this Division –

(a) where the originating process bears a note under Order 4 Rule 9, and the time for him to comply has expired but he has not given the Notice, or

(b) where he is required to file a Defence and the time for him to file his Defence has expired but he has not filed this Defence; or ...

27. Liquidated demand
    

(1) Where the Plaintiff's claim for relief against a Defendant in default is for a liquidated amount only, the Plaintiff may enter judgment against that Defendant for a sum not exceeding the sum claimed in the Statement of Claim on that demand and for costs."

10. These rules have been judicially considered and interpreted in many cases, (see Thai Itao trading as Thibin Building Maintenance v. Elias Kamara & Others (2009) N3757, Kante Miniga v. The State (1996) N1458.

11. The Court's power to enter default judgment is discretionary, as the expression "may" is used in Order 12 Rule 27.

12. It has been submitted on behalf of the Plaintiff, that although the Defendants have filed their Notice of Intention to Defend, they have not filed their Defence either within the time prescribed or at all. It was submitted that since the Defendants have not filed their Defence at all, the Court should enter default judgment for the liquidated amount claimed.

13. Counsel for the Defendants opposed the application and urged the Court to refuse the application. He has raised several points in his Submissions.

14. First, he submitted that default judgment cannot be sustained in law. He has relied on Section 12(3) of the Claims by and Against the State Act. Secondly, he submitted that the Plaintiff has not conducted and filed on fresh or more recent search of the file.

15. Thirdly, he submitted there was conflicting evidence to support this application.

16. Finally, he submitted it would be against public policy to grant a default judgment in the circumstances of this case.

17. Having considered the evidence and the Submissions, I would in the exercise of my discretion refuse the application. I do so for a number of reasons. First, whilst I accept that the Defendants have defaulted in filing their Defences, Section 12(3) of the Claims by and Against the State Act, regulate the Court's power in granting default judgment for a liquidated amount or claim against the State.

18. Counsel for the Plaintiff, in his submissions in reply did not respond to this statutory barrier.

19. Section 12(3) reads:

"12. Judgments against the State

(1) ...

(2) ...

(3) Where in a claim against the State, the State is in default within the meaning of the National Court Rules, then notwithstanding that a plaintiff's claim is for a liquidated demand, judgment shall not be entered against the State for the sum claimed unless the claim relates to a debt only, in all other cases judgment shall be entered for damages to be assessed are, where appropriate, for costs." (underline mine)

20. To my mind, it is clear that this provision makes it plainly clear that even if the State is in default in a claim for liquidated amount, no default judgment shall be entered for that liquidated claim. The only exception is if the liquidated claim is for a debt. This leads me to the next point.

21. In the pleadings in the Writ, upon a quick perusal of it, the pleading would suggest that the claim is one of a debt. However, upon a closer examination of the pleading, it is clear that this claim is not a clear case of a debt. Her claim is based on negligence. But there is no evidence supporting her assertion that indeed she was earning the amount of K538.70 in 2008 and 2009. There is a payslip advice of her salary in 2010 but here is no pay advice or slip evidencing her earnings in, for instance 2007. Further in the Writ, she claimed a sum of K26,377.40 and an unspecified amount for alleged underpayments for the years 2000 to 2008.In her affidavit in support, she makes a bold assertion with figures without any supporting documentary evidence in arriving at her amount.

22. These comments apply equally to her claim for leave entitlements. In that regard, I note that there is no supporting evidence, e.g her salary slip notice showing what she was earning and how she alleges an under payment.

23. Moreover, some parts of her claim for under payment may well be time barred, pursuant to the provisions of Frauds and Limitations Act, in that parts of her claim under this heading is or may well be over 6 years.

24. Furthermore, there is no evidence of any letter of forewarning of this application by the Plaintiff. An attempt was made by Counsel for the Plaintiff, to introduce this piece of evidence from the bar table but I refused to accept as it was not proper to do so.

25. In the circumstances, it is my view that default judgment should not be given for the reasons I have given. I would therefore dismiss the Motion by the Plaintiff.

Motion by the Defendants

26. I next consider the Motion by the Defendants for leave to file a Defence out of time. The Motion was founded on Order 1 Rule 15 of the National Court Rules. Order 1, Rule 15 reads;

"15. Extension and abridgement

(1) The Court may, on terms, by order extend or abridge any time fixed by the Rules or by any judgment or order."

27. It is now settled law that the need to obtain leave of the Court to file a Defence out of time is mandatory. See Thomas Koral v. Alex Kavie & Petrus Alex (1999), Unreported and Unnumbered National Court Judgment, WS 286 of 1998; Luke Tai v. Australia and New Zealand Banking Group (PNG) Ltd (2000) N1979; Tiega Bomson v. Henry Hart, N2425; Motor Vehicles Insurance (PNG) Ltd v. Sossie Joe (2007) SC863; Thai Itao v. Elias Kamara & Others (2009) N3757; David Sode & Others v. Nelson Pane & Others (2008) N3278; Michael Varapik v. Penias Tadak & Others, (Unreported Judgment of the National Court dated 18 June 2010), WS 140 of 2010.

28. It is also well established that the applicant must satisfy the Court of three matters. These are;

(i) The applicant must explain why the applicant did not file its Defence in time.

(ii) Must show a Defence on the merits. A draft Defence ought to be attached to the Affidavit in support.

(iii) The application was made promptly.

29. The onus is on the applicant to demonstrate these matters to the Court.

30. Counsel for the applicant submits that he has offered an explanation which is reliable, in that there was an oversight on his part in not filing the Defence in time.

31. He submitted that, not counting the Court's vacation period, a period of only 6 months has gone by when this application was made. He says that the application was made promptly. In addition, he submits that the draft Defences is on the merit and not a mere denial.

32. Counsel for the Plaintiff/Respondent submits that the Court should not accept the application by Counsel for the applicant, in that the explanation reveals that the lawyer was at fault. He did not act diligently and the Court should not accept or condone his behaviour.

33. Further, he submitted that this application was not made promptly. A period of six months has lapsed. This is unreasonable.

34. On this aspect, I note that the Plaintiff/Respondent also contributed to this, in that she sat on her right and did not act promptly. She contributed to the delay in not prosecuting her matter diligently.

35. As to whether there is defence on the merit, Counsel for the Respondent submits that the draft Defence is so general or vague and is in that any merit.

36. Having reviewed the draft Defence, in my view, the draft Defence does contain some meritorious ground, see for instance, paragraphs 5, 7, 8 and 9 of the draft Defence.

37. In those reasons, I would grant leave to the Defendants to file their Defence within 7 days from today.

38. In the overall circumstances of this case and for the reasons I have given, each party must bear their own costs.

_______________________________________
N Tame Lawyers: Lawyer for the Plaintiff
Solicitor-General: Lawyer for the Defendants