Perelo & Associate Contractors Ltd v Mobutana [2014] PGNC 245; N5666 (16 May 2014)

N5666

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1220 OF 2004

BETWEEN

PERELO & ASSOCIATE CONTRACTORS LIMITED
Plaintiff

V

CHARLES MOBUTANA
First Defendant

AND

DAVID NAMA
Second Defendant

AND

BANK OF SOUTH PACIFIC LIMITED
Third Defendant

Lae: Sawong, J.

2014: 20 February & 16th May

PRACTICE AND PROCEDURE – Judgments and Orders – Application for default judgment – Failing to comply with Court Directions/Order relating to filing and Service of Defence – Order 12 Rule 25 & 28, Order 12 Rule 32

Facts

Following an earlier proceeding, in which the court had issued directional orders, the defendant failed to file its defendant within the time stipulated in the directional Order. The plaintiff then applied for default judgment under order 12 Rule 25(b) and Rule 28 of the National Court Rules.

Held

1. The plaintiff should have come to Court for further direction including directions for default judgment pursuant to Order 12 Rule 25(b) in conjunction with Order 12 Rule 32 not Rule 28.
   
2. Accordingly the motion was dismissed as being incompetent
   

Case Cited:

Koitachi Ltd v Walter Schnaubelt (2007) SC 870

Counsel:

N. Kubak, for the Plaintiff
J. Kais, for the Defendants

Ruling

16th May, 2014

1. SAWONG, J.: By a Notice of motion filed on 29th October 2013, the Plaintiff seeks two principal orders namely:
   
   1. Default judgment be entered against the Defendants pursuant to Order 12 Rule 25 (b) for failing to file and serve a defence within 14 days of the service of the Amended Statement of Claim, and
      
   2. Judgment be entered against the Defendants for damages to be assessed.
      
2. The plaintiff relies on the following affidavits in support of its motion;
   
   1. Two affidavits of Bomati Gesu and
   2. Affidavit of Mr Kubak of counsel
      
3. The defendants oppose the application. They rely on two affidavits of Mr Kais, of Counsel and the Affidavit of Mr Mugarenang
   
4. Both counsels have filed written extract of submissions and made brief oral submissions. I have read and considered the submissions and the affidavits relied on by each party. I thank counsels for their assistance.
   
5. A brief background is necessary. On 4th October 2013, I delivered a written ruling in respect of two contested motions. The details of the ruling and the circumstances leading to those motions are irrelevant for the present purposes. In that ruling I made the following orders:
   
   • (i) The plaintiff's amended Statement of Claim filed on 03/12/12 be set aside.
     
   • (ii) That leave is granted to the plaintiff to file and serve an Amended Statement of Claim properly signed by its lawyers within 14 days from today (ie. 04/10/13)
     
   • (iii) That the Defendants filed and serve their defence and cross claim within 14 days after service of the amended Statement of Claim.
     
   • (iv) Each party to pay their own costs.
     
6. On 4th October 2013, soon after the ruling referred to above, the plaintiff filed and served its' amended Statement of Claim on the defendants.
   
7. On 18th October 2013, the defendants filed their amended Defence and Cross claim. These were subsequently served on the plaintiffs lawyers on 10th December 2013.
   
8. This has now led to the current applications by the plaintiff.
   
9. The defendant's have raised preliminary issue that should be addressed first. Depending on the outcome of my ruling in respect of that preliminary issue, I may or may not address the motion by the plaintiff.
   
10. The defendants submit that the Motion is incompetent and should be dismissed as the motion is premised on the wrong provisions of the Rule of the Court.
    
11. It is submitted that default judgment under Order 12 Rule 25 (b) is not available where the default is in respect of time frame provided by a Court Direction or Order. Mr Kais relies on a statement contained in Part 17 Rule 2 of the New South Wales Supreme Court Rules (NSWSCR).
    
12. It is submitted further that judgment for damage to be assessed pursuant to order 12 Rule 28 NCR is sought in conjunction with Default under Order 12 Rule 25 (b), therefore this is not available in this case. He submitted that the plaintiff should have sought the relief in conjunction with an application for default judgment under Order 12 Rule 32 of the National Court Rules.
    
13. Mr Kubak did not address the competency issue in his written submissions. However in his oral submissions he submitted that the motion was competent.
    
14. The relevant Rules, in relation to application for default judgment is set out in Order 12, Division 3 of the National Court Rules. Division 3 contains Rules 24 to 36. In so far as the present application is concerned the relevant Rules are 25, 26, 27 and 32. The arguments raised in the competency issue relates to Rules 25, 27 and 32, but particularly Rule 25. I set out below the terms of Rule 25, which reads:
    

"25. Default. (17/2)

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 his defence; or

(c) where he is required under Order 8 Rule 24 to verify his defence and the time for him to verify his defence in accordance with that Rule has expired but he has not so verified his defence."

15. The issue raised by Mr Kais is a neat one. I am unaware of any decision in this jurisdiction in relation to the way the argument has been put in relation the interpretation and application of Order 12 Rule 25 (b) of the NCR.
    
16. Order 12 Rule 25 (b) is worded in similar terms as found in Part 17.2 of the NSWSCR. It reads:
    

"17.2 Default

2. A defendant shall be in default for the purposes of this Part-

a) .........

b) ..........

c) where he is required to file a defence and the time to file his

defence has expired but he has not filed his defence...."

17. The explanatory note relating to this provision states:
    

"17.2.1 Required to file a defence.

Rule 2(c) includes proceedings where directions have been given requiring the filing of a defence within a limited time .........However, once directions have been given in the proceedings it is generally inappropriate for a plaintiff to resort subsequently to the default procedures contained in this Part. If a defendant fails to comply with a direction for the filing of a defence – particularly where the defendant has appeared at, and taken part in, the directions hearing – a further application for directions should be made, and that application may include an application for default judgment pursuant to Pt 17 r 9: Altarama Ltd v Forsyth [1981] 1 NSWLR 188".

18. I accept and adopt the principles and apply them in this case. In the present case, the application was premised on order 12 Rule 25 (b) and Rule 28 of National Court Rule. These were not relevant provisions. The circumstances leading to the application by the plaintiff is not your normal case where the defendant has defaulted in filing his defence after a Writ of Summons has been served on him. Here the application stems from directions given by the Court and consequently the plaintiff ought to have sought the relief pursuant to Order 12 Rule 25 (b) in conjunction with Order 12 Rule 32 of the National Court Rule. As it is the Plaintiff has not set out the concise reference to the Court's jurisdiction to grant the relief sought. Order 4 r.49(8) NCR.
    
19. For those reasons, I conclude that the Motion is incompetent and is dismissed. It is unnecessary to consider the merits of the application.
    
20. Costs must follow the event.
    

_____________________________---______________
Norbert Kubak & Co: Lawyers for the Plaintiff
Huon Lawyers: Lawyers for the Defendants