Gesi v New Guinea Fruit Company Ltd [2011] PGNC 356; N4444 (21 October 2011)

N4444

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1430 OF 2010

SAMSON GESI

Plaintiff

V

NEW GUINEA FRUIT COMPANY LTD

Defendant

Goroka: Ipang AJ
2011: October 14 & 21

CIVIL LAW – Motions – Seeking to set aside default judgment entered on the 15th April, 2011 and for the defendant to file defence outside of the required time – Application refused on the basis that grounds for seeking orders in the motion were substantially raised by defendant /applicants lawyer on the 15th April, 2011 before default judgment was entered.

Cases Cited

Smith v Ruma Constructions (2002) SC 695,
Green & Co v Green [1976] PNGLR 73,
PNG & Davis v Banker [1977] PNGLR 386,
George Page Pty Ltd v Malipu Balakau [1982] PNGLR 140
Baing & Anor v PNG Nationsl Stevedores Pty Ltd & Anor (2000) SC627.
Leo Duque v Avia Andrew Paru [1977] PNGLR 378

Counsel

Ms. E.Janson, for the Defendant/Applicant
Mr. M.Apie'e, for the Plaintiff/Respondent

RULING ON MOTION

21st October, 2011

1. IPANG AJ: The applicant/defendant New Guinea Fruit Company Ltd applies to have the following orders granted and these are; (i) to have the default judgment granted on the 15th of April, 2011 and entered on the 19th of April, 2011 set aside and secondly (ii) that they be granted leave to file and serve its defence within 14 days.
   
2. The applicant /defendant relies on the Notice of Motion filed on the 8th August, 2011 the amended Notice of Motions filed on the 23rd September, 2011, the affidavit of Sally Watson sworn and filed on the 8th August, 2011, the affidavit of Elma Janson sworn on the 25th July, 2011 and filed on the 13th October, 2011. The main crux of the applicant/defendants argument for setting aside default judgment can be found in paragraph 5.1, 5.2, 5.3 and 6 of the submission and especially the affidavit of Sally Watson.
   
3. I am re-stating paragraphs 5.1, 5.2, 5.3and 6 to appreciate the arguments raised by the defendant /applicant. The defendant /applicant also referred to the following case authorities for setting aside default judgment, the cases of Smith v Ruma Constructions (2002) SC 695, Green & Co v Green [1976] PNGLR 73, PNG & Davis v Banker [1977] PNGLR 386, George Page Pty Ltd v Malipu Balakau [1982] PNGLR 140 and Baing & Anor v PNG National Stevedores Pty Ltd & Anor (2000) SC627.
   

5.1 Why judgment was allowed to be entered in default

1. The Writs was served on 19/11/2010. The defence was therefore due to be filed and served no later than 44 days later. Taking into account the Court vacation from 20/12/2010 to 31/1/2011 it is calculated that the time for filing a defence expired on 13/12/2011.
   
2. The managing director of the defendant/ applicant delivered the writs to Warner Shand Lawyers Goroka "shortly after" it was served on her.
   

100. Warner Shand Lawyers filed a Notice of intention to defend on 1/3/2011 but no defence was ever filed.
     

4. A notice of motion seeking default judgment was served on Warner Shand Lawyers on 17/3/2011.
   
5. The defendant only became aware of the application for default judgment on or about 8/4/2011 when the defendant's managing director Sally Watson attended Warner Shand's office on another matter. She later received a telephone call from Warner Shand that the hearing for the matter of the motion had been set for 15/4/2011. She rang Warner Shand to make an appointment with her lawyer but was unable to speak to her until the morning of the hearing when she was told to sign an affidavit. The affidavit was prepared a few minutes before the application was due to be heard. It was done in a rush and the defendant was not happy with it. It was clear that the lawyer was not prepared.
   
6. Sally Watson's affidavit which was sworn and filed on the same day as the hearing 15/4/2011 had a draft defence prepared by Warner Shand Lawyers annexed to it as Annexure "A" it simply traversed all the allegations in the statement of claim and claimed that Dr Banda who has filed an affidavit in processing annexing a report is not accredited and that the University of Goroka is not an accredited institution to conduct such research.
   

5.2 Why there has been a delay in making the application to set aside

1. After default judgment was entered the managing director of the defendant made a number of telephone calls to the principal of its lawyers Warner Shand Lawyers and facsimile letter but received no response as a result of which on about 5/5/2011 she gave instructions to Huon Lawyers.
   
2. Huon Lawyers are based in Lae whereas the managing director of the defendant is based in Goroka. It was necessary to instruct Goroka based lawyers to obtain copies of documents from the Court file and also clear instructions from the defendant's managing director regarding a number of matters that are testified to in her affidavit prepared by Huon lawyers which go to the merits of the defendant's defence. The managing director had not been advised by Warner Shand Lawyers what facts she should obtain and provide and so in effect in making the application to set aside the default judgments, she was starting from scratch.
   

100. As a result of the foregoing there was some delay in obtaining instructions and signing affidavits.
     

4. The instant application and its supporting affidavit which were prepared by Huon lawyers was filed on the 8.8.2011.
   

5.3 Defence on the merits

1. The defence is that the plaintiff's land is not adjacent to the defendant's land as pleaded in the statement of claim but is approximately 1 kilometer away, and further that waste from the defendants factory is not discharged directly on to adjoining land but is pumping into 2 waste ponds on its own land which, when full, are pumped out by a sewage contractor and discharged into the town sewage ponds.
   
2. The defendant also says that the vegetation along the 1 kilometer length of the earthen drain between the defendant's land and the plaintiff's land is healthy and that the reason for the poor conditions of the plaintiff's coffee is waterlogged land, not effluent.
   

100. In answer to the allegations that the defendant's workers constructed a drain on the plaintiff's land the defendant says that the drain was already in existence before the defendant brought and occupied its land.
     

6. Was Default Judgment regularly entered or irregularly entered?

It is submitted that the judgment was irregularly entered in that it was in breach of the National Court Rules for failing to give the defendant /applicant a proper letter of forewarning giving the defendant at least 7 days notice to file a defence. Although the judgment was irregularly entered, it is not a nullity so judgment will not be set aside as of right and consequently the defendant must show a defense on the merits.

4. The plaintiff objected to the motion filed by the defendant/applicant. In filing his objection, the plaintiff relies on his affidavit sworn on the 16th August, 2011 and filed on the 18th August, 2011. The plaintiff also relies on the affidavit of his lawyer Mr. Apie'e sworn and filed on the 18th August, 2011.
   
5. Mr. S.Gesi, the plaintiff deposed of the following in his affidavit.
   
   1. He is the Plaintiff in the matter of WS NO: 1430 OF 2010 and he depose to his Affidavit to counter the Defendants motion to set aside the Default Judgment award in my favour on the 15th April 2011.
      
   2. The main ground on which he oppose the Defendants motions is the lengthy period of time it had taken them to finally file this motion, more than 4 months after the orders are given on the 15th April 201, they filed their motions to set aside the Default Judgment on the 8th of August 2011.
      
   3. Prior to that he said his case became due and he applied for and got Default Judgment through his Lawyers because the Defendant did not comply with the National Court Rules regarding their Defence as follows;
      
      1. The Defendants lead person at the time Ms. Sally Watson was served a copy of his Writ of Summons of 12th of November 2010, on the 19th of November 2010 by one First Constable Francis Kugame of the Goroka Police.
         
      2. The Defendants filed their Notice of intention to defend on the First of March 2011, some three months and ten days after service of the Writs on them.
         
      3. However they never filed their "Defence" and it was on the basis that I sought 'Default Judgment' and obtained it on the 15th of April 2011.
         
   4. Further to that, he believe that this Application to give leave to the Defendants Counsel then Ms. Matilda Irai of Warner Shand Lawyers in conjunction to our Motion for Default Judgment but this Application was refused and Default Judgment ordered in his favour.
      
   5. He believes that they are seeking the same orders that Ms. Irai sought for them on the 15th of April in conjunction with our motion and that could be an abuse of Process of the court.
      
6. Mr. Apie'e of Counsel for the plaintiff deposed the following in his affidavit:-
   
   1. He is the Plaintiffs counsel on record and he dispose to this his affidavit to make response to the Defendants motion filed on the 8th of August 2011seeking to set aside the 'Default Judgment' of 15th April 2011 and for the Defendants to file their Defense in the matter of WS No: 1430 of 2010.
      
   2. He received instruction to pursue a motion based on Order 12, Rule 1, and Order 12 rule 25 (b) of the National Court Rules after our search of the National Court file to WS No:14320 of 2010.
      
   3. His search had revealed that apart from filing a Notice of Intention to Defend some 3 months 10 days after service of the writs on Ms. Sally Watson on behalf of the Defendant, they still had not filed a Defence, let alone filed any motion or application to seek leave of the Court to file their defence out of time as required under Order 7 Rules (1) and (2)
      
   4. That basically meant that at that time the Defendant did not have a defence they could rely on so they sought to move the motion.
      
   5. The Motion and the supporting affidavit of Mr. Samson Gesi and his affidavit of search were filed on the 16th of March 2011 and duly served on the Defendant was set for the 1st of April but due to other delays actually set for hearing on the 15th of April 2011.
      
   6. On the 15th of April 2011, he turned up in Court and sought to move the Plaintiffs motion of 16th March 2011 before His Honour Deputy Chief Justice Salika.
      
   7. The Defendant was represented by Ms. Matilda Irai of Warner Shand Lawyers and in her counter and defence to our motion she made a substantive application for the Court to refuse our motion and for leave to be granted for the Defendant to file its Defence out of time pursuant to Order 7 Rules (1) and (2).
      

Court's Analysis

7. I have considered the submission by the defendant/applicant. I have had the benefit of listing to the tape recordings of the proceedings of WS No.1430 of 2010 on the 15th April, 2010. I can confirm that Ms. M.Irai of Warner Shand Lawyers was present in Court representing the defendant/applicant.
   
8. I can also confirm what the plaintiff had counter submitted opposing the defendant's/applicant's motion that substantially what has been raised by Ms. E.Janson of Huon Lawyers for the defendant/applicant for moving this motion was substantially argued before Ms. Irai of Warner Shand Lawyers for defendant/applicant before His Honour Salika DCJ on the 15th of April, 2011. If it was the negligence of the lawyers who first had the carriage of the matter in not filing the defendant/applicant's defence on time is not a valid reason for setting aside the default judgment. Courts have said this on a couple of occasions. This was also said in Leo Dugue v Avia Andrew Paru [1977] PNGLR 378.
   
9. This motion dated 8th August, 2011 by the defendant/applicant is more or less trying to get the second bite at the reliefs, the defendant /applicant had sought on the 15th April, 2011. Orders sought in the motion by the defendant /applicant is refused. Defendant /applicant to meet the cost of the proceedings.
   

_______________________________

Huon Lawyers: Lawyer for the Defendant/Applicant
Umba Lawyers: Lawyers for the Plaintiff/Respondent