Westpac Bank PNG Ltd v Pengkundi Ltd [2016] PGNC 56; N6231 (25 March 2016)

N6231

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS. NO. 402 OF 2015

BETWEEN

WESTPACT BANK-PNG LIMITED
Plaintiff

AND

PENGKUNDI LIMITED
First Defendant

AND

TONY PENGKUNDI and his, agent, servants and family and other occupants of Allotment 27, Section 301, Hohola National Capital District
Second defendant

Waigani: Davani, J
2016: 25th March

Counsel:
Mr. T. Awalua, for the Defendant's /applicant
Mr. R. Bradshaw, for the Plaintiff/respondent

DECISION

25th March, 2015

1. DAVANI, J: Before the court for hearing is Amendment Notice if Motion filed on 26th February, 2016 by Tingnii Lawyers, for and on behalf of the first and second defendant's (Applicants). The motion seeks amongst other orders, that this court set aside the ex parte court orders date 10th November, 2015. In heard all parties then delivered a brief extempore decision, dismissing the Applicants motion and informing all parties, that I will publish my reasons on the later date. This I now do.
   
2. The terms orders sought to be set aside, are these;
   
   1. The defendant give vacant possession to the plaintiff of the property described as Allotment27, section 301, Hohola National Capital District( the Property), the subject of State Lease Volume 92 Folio151.
      
   2. The Defendants give the vacant possession of the Property within 14 days.
      
   3. In the event the Defendant failed to give vacant possession of the Property to the Plaintiff within 14 days, an order that the members of the Royal Papua New Guinea Constabulary be at liberty to enter into the Property, evict the Defendant and to give possession of the Property to the Plaintiff.
      
   4. The Plaintiff cost of the proceedings will be paid by the Defendants, such costs to be taxed, if not agreed."
      

Background

3. The plaintiff commences the proceedings, seeking vacant possession of the Property because the defendant has default under a term of the loan agreement, the defendants had with the plaintiff. After being approached by Tony Pengkundi for assistance with finance, negotiation with the plaintiff resulted in the plaintiff offering the defendants banking facilities under a Business Finance Agreement ("BFA") for a loan total sum of K1, 040,000.00. Loan repayments were set at K23, 037.56 per month for 60 months. As security for the loan, the second defendant Tony Pengkundi granted a mortgage over the Property. The Loan draw down commenced on 18th July, 2012.The defendants start defaulting in March 2013. The proceedings for vacant possession were filed on 6th July 2015 and after an ex parte substantive hearing, orders to give vacant possession of the Property were made.
   
4. At the hearing of the application to set aside, I noted on questioning Mr. Awalua for the defendants, that he did not have before me in evidence the court order, the subject of the set aside application, and which could have resulted in a dismissal to set aside. However, Mr. Bradshaw for the plaintiff chose to hand up a copy of the court order and to respond to the application in full. I heard all parties in full.
   
5. Another preliminary, procedural point used by Mr. Bradshaw which could have resulted in the dismissal of the applicants to set aside, is that the application did not have jurisdictional bases i.e. the Notice of Motion did not state the sub provision of O.12 R.8 that the application was sought to be moved under, considering there are five (5) sub provisions. As with the above procedural point, I chose to hear parties in full, notwithstanding the clear jurisdiction flaw.
   

Evidence

6. Both the Plaintiff and the Defendants rely on several affidavits which I will refer to, where appropriate and necessary.
   

Submission by parties

7. Service; the Applicants main contention is that they were never informed or were never served the Originating Summons filed in these proceedings. At paragraph 27 of Tony Pengkundi's affidavit sworn and filed on 22nd February, 2016, he disposes that he had never received or was never served all correspondence and court documents, including demand notices purportedly issued by the plaintiff. He disposes further that this was the reason why the matter exceeded in ex parte and ordered made in his absence.
   
8. In response to those submissions, Mr Bradshaw referred me to several affidavits to demonstrate that the court documents including the plaintiffs default notices were either personally delivered to Tony Pengkundi, were delivered to defendants registered office and was delivered and received by persons residing on the property. I refer to the plaintiffs affidavits, referred to and relayed on by Mr Bradshaw, below.
   
9. In relations to the courts documents including the Originating Summons filed in this proceeding Mr Bradshaw referred me to Jimmy Lakoro's affidavit of service, sworn on 28th October, 2015 and filed on November, 2015. Therein, Ms. Lakoro disposes that on Monday, 3rd August, 2015, at about 10.40 am, she personally served Tony Pengkundi, sealed copies of the court documents filed on 6th July 2015, which were Originating Summons; Notice of Possession; Annexure "A" to that affidavit is a copy of the cover sheet to the Originating Summons, upon which Tony Pengkundi signed, as having received the documents, Mr Pengkundi claims that his signature was forged. I find this accusation to be total embarrassment for Mr. Pengkundi, considering that he is known to the Plaintiff's staff that he is their customer, having visited them on many occasions. Other than that, this is not the proceedings of raising allegations of fraud and forgery and I will, with no hesitation dismiss them.
   
10. Apart from Jenny Lakoro, Steven Gabie, Bradshaw Lawyers employed clerk, deposes in his affidavit sworn and filed on 4th November, 2015, that he did, on Wednesday, 21st October, 2015, attend at the allotment 27, Section 301, Hohola, the Property, and delivered to a male adult, identified as Nathan, two letters dated 20th October, 2015, from Bradshaw Lawyers, address to Mr Tony Pengkundi and to the occupants. Enclosed to those letters were sealed copies of court documents filed on the 6th July, 2015, which were Originating Summons; Notice of Possessions; Notice of Jenny Lakoro, Robert Bradshaw and Goli Laka. The letter advice that substantive matter will be heard by the National Court at Waigani on 5th November 2015, at 9.30am and that Bradshaw Lawyers will proceed with the hearing of the matter.
    
11. Then there is the affidavit of a lawyer (now Acting Judge) Thomas Anis, sworn and filed on 9th September 2015. Attached to his affidavit are three (3) letters from Bradshaw lawyers. They are all dated 12th of August, 2015. The first letter is address to Tony Pengkundi at Allotment 27, section 30, Hohola, which is the Property. The second letter is address to Pengkundi Limited of P. O. Box 225, University. And the third letter is addressed to Pengkundi of P. O. Box 225, university. The letters inform the addressee of the substantive hearing, schedule for 10th September, 2015 at 9.30am. The letters also request that addressee attend court and defend the matter.
    
12. I have heard and which is not disputed, that P. O. Box 225, are the defendants postal address which they used in their correspondence to the Plaintiff. Some of these letters are attached to affidavits of Robert Bradshaw, sworn on 26th February, 2016 and filed on 26th February, 2016, annexure "B". The other affidavit is that of Jenny Lakoro, sworn on 2nd March, 2016 and filed on 3rd November, 2015. Attachments "A" and "B" are letters from Tony Pengkundi as Director of Pengkundi Limited to Jenny Lakoro, which has his postal address as P. O. Box 225, University.
    
13. Indeed, the defendants submissions that they were not aware of the existing court proceedings cannot hold because of annexure "A" and "B" to Jenny Lakoro's affidavit, which are letters from Pengkundi Limited and Tony Pengkundi, speak of the defendants needing time to find the funds to either pay for a lawyer and or to clear up the arrears. Indeed I find that the defendants were aware of the existing court proceedings.
    
14. As to the correct place and the address for service, Mr Bradshaw referred me to s.431 (1) (a) (b) (c) (d) of the Company's Act. This provision reads;
    

"SECTION 431, SERVICE OF DOCUMENTS ON COMPANIES IN LEGAL PROCEEDINGS;

431(1) notwithstanding the provisions of any other Act, a document including a writ, summons, notice or in any legal proceedings may be served on accompany as follows:

(a) By delivering to a person named as a director or the secretary of the company on the register;

(b) By delivering to a employee of the company's head office or principal place of business;

(c) By posting it to the company's registered office, or address for service, or postal address;

(d)...

15. Mr Bradshaw painstakingly took me through the several affidavits as I refer to above, to demonstrate that service by the plaintiff upon the defendants, was done and completed, in full satisfaction of s.431(1)(a)(b)(c) and (d) of the Company's Act.
    
16. Evident in relations to who the director/s and shareholders of the defendants are, can be found in the company extract of Pengkundi Limited, attached as annexure "B" to Tony Pengkundi's sworn and filed on 8th March, 2016. Therein, Tony Pengkundi is listed as the only Director and only shareholder.
    
17. And I am fully satisfied, that service was affected upon Plaintiff's sole Director and sole shareholder, Mr Tony Pengkundi (s,431(1)(a) and affidavit of service of Jenny Lakoro sworn on 28th October, 2015 and filed on 3rd November, 2015; affidavit of Steven Gabie sworn on and filed on 4th November, 2015).
    
18. Although, Mr Awalua submits that service upon a company, must be at its registered office, which is correct, he could not refer me to the correct Company's Act. In any event, s 431(1) (a-d) states that legal proceeds on a company, may be served on the Company's Director of Secretary, on an employee of company at its head office or principle place of business, by living it at Company's office or address for service; or by posting it to the company's registered office or address for service or postal address. And as I have seen above, by the several affidavits filed by the plaintiff to prove service, I am satisfied, that it has fully complied with s.43 (1) (1) (a-d) of the Company's Act.
    
19. Apart from service I have been asked to take note of the fact that the plaintiff has had to ask for an adjournment several times because the defendants were not in Court, although they have been informed through the various means referred to above. The two affidavit of Thomas Anis sworn and filed on 9th September, 2015, and sworn on 16th October,2015, and filed on 22nd October 2015, have attached several letters that were sent to Tony Pengkundi and to Pengkundi Limited, informing them of the hearing dates and that they must attend to defend the matter. In my view, the plaintiff has gone out of its way to serve the originating process upon them. It has also gone out of its way to inform the defendants of the date for substantive hearing. To which the defendants paid little or no attention.
    
20. Indeed, the plaintiff has properly and fully complied with service.
    

The law on application to set aside the ex parte order.

21. In an application to set aside an ex parte order, the court must be satisfied that;
    
    1. There must be a reasonable explanation for allowing the order to be made ex parte;
    2. The application is made promptly or if there is a delay, there is reasonable explanation for it; and
    3. There if defence on merits.

(see Christopher Smith v Constructions Ltd (2002) SC 694; Elema v Pacific MMI Insurance Ltd (2007) SC1321)

22. Reasonable Explanation- the overwhelming undisputed evidence before me is that the defendants chose to ignore the court proceedings and were on foot, because he had been served the Originating Summons, amongst other court documents. This is demonstrate through his letter to the plaintiff which are attached as annexure "A" and "B" to Jenny Lakoro's affidavit sworn on 2nd March 2016, and filed on 3th March, 2016. In those letters, Mr Pengkundi advises that he cannot get a lawyer to defend the proceedings and does not know "how to turn up at the court."
    
23. Even after he was informed of the hearing date, Mr Pengkundi chose not to turn up in court to defend the proceedings. His Lawyers have not referred me to any evidence that states otherwise. I find there is no reasonable explanation for allowing judgment to be entered in his absence.
    
24. Application made promptly- although when I delivered the extempore ruling, I noted that the application was made promptly, I have now, after a thorough review of the chronology of proceedings and the document filed, note that nor to be the case. Bradshaw Lawyers sent the defendant a sealed copy of the court orders to give vacant possessions, by letter dated 11th November, 2015. Mr Tony Pengkundi sent a letter to Bradshaw Lawyers dated 9th December, 2015, asking for more time to pay the debt. These letters are attached as annexure "A" and "B" to the affidavit of Robert Bradshaw, sworn on 25th February, 2016. The motion to set aside the order to vacate was filed by Tingnii Lawyers on 22nd February, 2016. The defendant have not provided an explanation as to why they did not filed the application to set aside, before the end of 2015.
    
25. Defence on merit; having received the entire affidavit before me, including Mr Pegkundi's affidavit sworn and filed on 22nd February, 2016 and affidavit sworn and filed on 8th March 2016, I note that the affidavits dispose to not being served with the Originating process and to a debt claim. In fact, I have already found that the defendants were properly served and that claims of fraud have no place in these proceedings to give vacant possession.
    
26. Indeed, these are not meritorious defences.

Conclusion

27. The defendants have not fully satisfied this court, that the ex parte court order dated 5th November, 2015, ought to be set aside. I will dismiss the application, with orders that the defendants pay the plaintiffs costs of the application, and to be taxed if not agreed.
    

Formal Orders:

28. These are the formal orders of the Court.
    
    1. The Amended Notice of Motion filed by Tingnii Lawyers on 26th February, 2016, is dismissed.
       
    2. The first and the second defendants will pay the Plaintiff's cost of the application, to be taxed not agreed.
       
    3. Time for entry of these orders is abridged to time of settlement to take place forthwith.

___________________________________________________________
Bradshaw Lawyers : Lawyers for the Plaintiff

Kimbu and Associate : Lawyers for the second and third defendants/ applicant