Kina Finance Ltd v Andiki [2017] PGNC 368; N7052 (21 September 2017)

N7052

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO.38 OF 2013

BETWEEN:
KINA FINANCE LIMITED
Plaintiff

AND:
EDDIE ANDIKI
Defendant

Waigani: David, J
2017: 6 & 21 September

PRACTICE AND PROCEDURE - mixed claim for liquidated damages and possession of land - application to enter default judgment –relevant principles considered and applied – order granting leave to defendant to file defence out of time - time for compliance not specified – default of defendant not established - application refused - National Court Rules, Order 4 Rule 14, Order 8 Rule 4, Order 10 Rule 9A(15)(2)(c) , Order 12 Rules 4, 25, 27, 30 and 31.

PRACTICE AND PROCEDURE - application for summary judgment
– relevant principles considered and applied – summary judgment available only in a very clear case – summary judgment available even where the defendant has not filed his defence - application granted - National Court Rules, Order 8 Rule 4(2) - Order 12 Rule 38.

Cases cited:

Agnus Kunton v John Junias (2006) SC929
Chief Collector of Taxes v T.A. Field Pty Ltd [1975] PNGLR 144
Curtain Brothers (Qld) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285
Commissioner General of Internal Revenue v Bougainville Copper Ltd (2009) N3857
Dep International Private Ltd v Ambogo Sawmill Pty Ltd [1987] PNGLR 117
Hornibrook Constructions Pty Ltd v Kawas Express Corporation Pty Ltd [1986] PNGLR 301
Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299
Ralph Augustine Saulep v ANZ Banking Group (PNG) Ltd (2016) N6395
Severinus Ampaoi v Bougainville Copper Ltd (2012) SC1166
Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112
The State v Henshi Engineering Pty Ltd [1998] PGSC51, SC594
William Duma v Eric Meier (2007) SC898; PGSC 34

Counsel:
Bobby Nutley, for the plaintiff
No appearance for the defendant

RULING

6^th & 21^st September, 2017

1. DAVID, J: INTRODUCTION: This is a ruling on the plaintiff’s application moved pursuant to a notice of motion dated 22 June 2017 and filed on 23 June 2017 which was later amended by the filing of an amended notice of motion dated 20 July 2017 and filed on 21 July 2017 (the application) claiming the following principal orders:
   

Pursuant to Order 10 Rule 9A(15)(2)(c) and Order 12 Rules 25(b) and 27 of the National Court Rules, default judgment be entered in favour of the plaintiff against the defendant for the liquidated sum of K421,855.76.

Alternatively, pursuant to Order 12 Rule 38 of the National Court Rules, summary judgment be entered in favour of the plaintiff against the defendant for the sum of K421,855.76.

Pursuant to the Mortgage and Order 12 Rule 30 of the National Court Rules, the defendant deliver possession of the mortgaged land contained in State Lease Volume 29 Folio 132 and more particularly known as Allotment 25 Section 349 (Hohola), Gana Vali Street, Gerehu Stage 2, NCD, (the Land) to the plaintiff.

Pursuant to Order 13 Rule 3(2) of the National Court Rules, leave be granted to the plaintiff to issue a writ of possession.

Pursuant to the Mortgage and Order 14 Rule 33 and 34 of the National Court Rules, the Land be sold at a market price by the plaintiff or its agents to satisfy the judgment with the balance, if any, to be paid to the defendant.

Pursuant to the Mortgage, the defendant shall pay the plaintiff’s costs on a lawyer/client or indemnity basis.

The defendant shall pay interest to the plaintiff on the judgment for damages pursuant to the Judicial Proceedings (Interest on Debt and Damages) Act.

2. The application was moved ex parte or in the absence of the defendant because the Court was satisfied that he was served with the application and supporting affidavits.
   

EVIDENCE

3. To support the application, the plaintiff relies on the following documents:
   

Affidavit of Service of the Writ of summons and the Notice of Claim for Possession on the occupant by Graham Agisi sworn and filed on 20 February 2013 (Court Document No. 3);
Affidavit of Service of the Writ of Summons on the defendant of Narepa Hannevo sworn and filed on 3 October 2013 (Court Document No. 4);
Affidavit of Service by Post of Kiso Kip Garo sworn and filed on 3 October 2013 ( Court Document No. 7);
Affidavit of Search of Graham Agisi sworn and filed on 3 October 2013 (Court Document No. 8);
Affidavit in Support of Daniel Bidar sworn on 2 October 2013 and filed on 3 October 2013 ( Court Document No.10);
Affidavit of Debt of Manilah Apawa sworn and filed on 3 October 2013 ( Court Document No.11);
Affidavit of Service of the Motion and Supporting Affidavits of Graham Agisi sworn and filed on 14 October 2013 (Court Document No. 12);
Affidavit of Search of Graham Agisi sworn and filed on 10 December 2013 (Court Document No. 14);
Affidavit of Search of Narepa Hanneva sworn on 7 October 2014 and filed on 8 October 2014 (Court Document No. 18);
Affidavit in Support of Nanadai Asigau sworn on 21 June 2017 and filed on 23 June 2017( Court Document No.23);
Affidavit of Search of Morea Raka sworn on 22 June 2017 and filed on 23 June 2017 ( Court Document No. 24);
Affidavit of Service of Flora Genia sworn and filed on 26 June 2017 (Court Document No. 25);
Affidavit of Service of Morea Raka sworn and filed on 26 July 2017 (Court Document No. 28);
Affidavit of Service of Morea Raka sworn on 2 August 2017 and filed on 3 August 2017 (Court Document No. 30);
Affidavit of Service of Flora Genia sworn on 3 August 2017 and filed on 4 August 2017 (Court Document No.31); and
Affidavit of Service of Flora Genia sworn and filed on 5 September 2017 (Court Document No. 32).

BRIEF BACKGROUND

4. The plaintiff, finance company and the defendant entered into a loan agreement No.PM60907815 comprising a Letter of Offer dated 15 July 2011 which was executed on 18 July 2011 and the Memorandum of Common Provisions Versions 1.1 dated 1 February 2010 (the loan agreement) whereby the plaintiff agreed to lend to the defendant cash advances by way of a housing loan up to a maximum of K264,00.00 secured by a registered mortgage number S52180 over the defendant’s property namely, Allotment 25 Section 349, Hohola, (Gana Vali Street, Gerehu Stage 2) NCD described in State Lease Volume 29 Folio 132 (the property). Under the loan agreement, the monthly installment was K2, 828.89 until final repayment on 6 July 2026. The plaintiff asserts that the defendant has defaulted in meeting his loan repayments under the loan agreement by paying K509.18 or other lesser amounts which were far less than the agreed monthly instalments and the default is continuing therefore it has exercised its powers of foreclosure and sale under the registered mortgage.
   
5. On 30 January 2017, the plaintiff filed a writ of summons endorsed with a statement of claim claiming, inter alia, liquidated damages in the sum of K277,364.93 being for outstanding loan; an order that the defendant deliver possession of the land to the plaintiff; an order that leave be granted to the plaintiff to issue a writ of possession; and in addition and in the alternative, an order that the plaintiff sell the land at market price then apply the sale proceeds to satisfy the plaintiff’s claim for damages, costs and interest owing to the plaintiff at the time of sale with the balance to be paid to the defendant.
   
6. On 1 February 2013, the plaintiff filed a Notice of Claim for Possession of the property pursuant to Order 4 Rule 14 (1)(c) of the National Court Rules.
   
7. On 18 February 2013 at about 10:40 am, one Graham Agisi, a legal clerk employed by O’Briens Lawyers (O’Briens) attended the property and served a sealed copy of the writ and the Notice of Claim for Possession on one Henry Hapu an occupier of the property and who identified himself as the house keeper: Affidavit of Service of Graham Asigi sworn and filed on 20 February 2013.
   
8. On 4 July 2013 at about 10:00 am, one Narepa Hannevo, a legal clerk employed by O’Briens attended the place of employment of the defendant located at PNG Power Limited’s head office at Hohola and personally served a sealed copy of the writ on the defendant: Affidavit of Service of Narepa Hannevo sworn and filed on 10 July 2013.
   
9. On 11 July 2013, the defendant filed a Notice of Intention to Defend these proceedings.
   
10. The defendant did not file his defence within the time limited for him to file his defence under the National Court Rules so on 3 October 2013, the plaintiff filed a notice of motion seeking default judgment.
    
11. On 12 December 2013, the defendant filed a notice of motion seeking leave to file his defence out of time.
    
12. On 10 July 2015, the parties moved their respective applications before Sakora, J, both of which were contested.
    
13. On 10 April 2017, His Honour delivered a ruling in which he refused the plaintiff’s application for default judgment and granted leave to the defendant to file his defence out of time. The minute of the order does not show how much time was given to defendant to file his defence.
    
14. On 1 May 2017, O’Briens forwarded to the defendant’s lawyers, Robert Mai & Company Lawyers, a number of documents including, a letter addressed to that firm dated 1 May 2017 and sealed copies of the writ and Notice of Claim for Possession via their email address namely, [e-mail]: Affidavit of Service of Flora Genia sworn and filed on 26 June 2017. By that letter, O’Briens forewarned the defendant that he had 14 days from the date of that letter to file his defence and in default, the plaintiff would prosecute the matter by applying to have the matter set down for trial.
    
15. The 14 days given for the defendant to file his defence lapsed on 15 May 2017 without the defendant filing his defence: Affidavit of Search of Morea Raka sworn on 22 June 2017 and filed on 23 June 2017.
    

ISSUES

16. The main issue I will need to determine is whether the Court should enter default judgment against the defendant? If that is answered in the negative, the alternative issue to determine will be whether summary judgment should be entered against the defendant? Peripheral issues arising from these issues will be addressed and determined during the course of the ruling.
    

APPLICATION FOR DEFAULT JUDGMENT

THE LAW

17. The law on default judgment is well settled in this jurisdiction. Entry of default judgment is not a matter of right, but a discretionary matter for the Court: Agnus Kunton v John Junias (2006) SC929. In Agnus Kunton v John Junias, the Supreme Court stated that the Court can take into account a wide range of considerations, which was not closed, in deciding how to exercise its discretion and these include:
    

whether the statement of claim raises serious allegations of fraud or deceit, in which case the interests of justice may require those allegations to be proved by evidence in a trial before judgment is given on the merits (Bala Kitipa v Vincent Auali, Supply and Tenders Board of Western Highlands Provincial Government and Others (1998) N1773);

the extent of the default by the defendant (John Kunkene v Michael Rangsu and The State (1999) N1917);

whether the defendant appears to have a good defence (Kunkene);

whether the statement of claim amounts to an abuse of process (Eliakim Laki and 167 Others v Maurice Alaluku and Others (2000) N2001);

whether the pleadings are vague, ie whether the statement of claim discloses a reasonable cause of action (Eliakim Laki and 167 Others v Maurice Alaluku and Others (2000) N2001, Urban Giru v Luke Muta and Others (2005) N2877);

whether the plaintiff has prosecuted his case diligently (Tiaga Bomson v Kerry Hart (2003) N2428);

whether the entry of judgment would prejudice the rights of co-defendants (Kante Mininga v The State & Others (1996) N1458, Beecroft No 51 Ltd trading as Ronnie's Hot Bread v Neville Seeto and Others (2004) N2561);

whether the interests of justice would be served by the entry of default judgment (Urban Giru v Luke Muta and Others (2005) N2877).

18. In a mixed claim where the statement of claim includes two or more of the claims specified under Order 12 Rules 27 (liquidated demand, 28 (unliquidated damages), 29 (detinue) and 30 (possession of land) of the National Court Rules and no other, the plaintiff may enter such judgment on any of those claims for relief by virtue of Order 12 Rule 31 of the National Court Rules. In relation to the claim for possession of land under Order 12 Rule 30, the qualifications to the rule are set out in Order 12 Rule 30(2) and (3) and these are:
    

No judgment will be entered unless the plaintiff files an affidavit:

showing whether any and, if so, what persons, other than parties to the proceedings were, on the date of filing the statement of claim, in occupation of any part of the land; and

proving, as to each of those persons (other than any person whose occupation he does not seek to disturb), either that the writ of summons and a notice pursuant to Order 4 Rule 14 has been served on him on a date not less than 10 days before the date on which the plaintiff seeks to enter judgment, or that he has ceased to be in occupation of any part of the land.

(b) Where, before entry of judgment, any person has filed notice of motion for his addition as a defendant, a plaintiff shall not enter judgment until the motion is disposed of.

PLAINTIFF’S SUBMISSIONS

19. The plaintiff contends that the application for default judgment should be granted on the basis that; first, the defendant has failed to file his defence out of time pursuant to an order of the Court granted by Sakora J on 10 April 2017; and secondly, the default has continued despite the defendant being forewarned by a letter from the plaintiff’s lawyers to his lawyers dated 1 May 2017 that the matter will be prosecuted further if he failed to file his defence within 14 days of that letter.
    

REASONS FOR RULING

20. I will now apply the considerations suggested in Agnus Kunton v John Junias to the present case.
    
21. However, before I do that, I must state at the outset that I am satisfied that:
    

(a) the application is in the proper form and is supported by a number of affidavits enumerated above;

(b) the application and the supporting affidavits have been served on the defendant on the strength of the affidavits relating to service enumerated above or that the affidavits were relied on by the plaintiff to move the earlier application for default judgment (Affidavit of Service of Morea Raka sworn and filed on 26 July 2017) (Affidavit of Service of Flora Genia sworn and filed on 5 September 2017);

(c) the plaintiff issued a warning letter to the defendant dated 1 May 2017 (Affidavit of Service of Flora Genia sworn and filed on 26 June 2017);

(d) the defendant was served with the writ and notice of claim for possession on the strength of the affidavits relating to service of those documents enumerated above and that the defendant had filed a notice of intention to defend and later engaged his lawyers to defend the proceedings by making a successful application to file his defence out of time; and

(e) there is strong affidavit evidence before the Court proving that the defendant has failed to file his defence out of time as ordered by Sakora, J on 10 April 2017 despite being forewarned by the plaintiff on 1 May 2017: Affidavit of Search of Morea Raka sworn on 22 June 2017 and filed on 26 June 2017, Affidavit of Service of Flora Genia sworn and filed on 26 June 2017.

22. In relation to 21(e) above however, the minute of the order by Sakora, J granted on 10 April 2017 does not specify the time limit as to when the defendant was required to file his defence although a period of about 3 months has transpired since the defendant was granted leave and the subsequent filing of the application. The delay is unreasonable and there is no explanation before the Court from the defendant for the delay. None of the parties has made an application to seek clarification under Order 8 Rule 59 of the National Court Rules or the Court has not acted on its own motion to clarify the order. However, by not rectifying the error on the face of the minute of the order, that particular order in my view is vague and ambiguous and the defendant should not be penalised for that. The defendant will not be in default as a result.
    
23. In addition, an order granting leave to file a defence out of time usually has a time specified for compliance because the time for filing of a defence cannot run in perpetuity by virtue of Order 12 Rule 4(1) of the National Court Rules. If a time limit were not specified, then it would defeat the purpose of filing a defence quickly within the times prescribed under the Order 8 Rule 4 of the National Court Rules.
    
24. Under Order 12 Rule 4(6) of the National Court Rules, where a judgment or order requires a person to do an act, but does not specify a time within which he is required to do the act, the Court may, by order, require him to do the act within a specified time. That rule states:
    

“Where a judgement or order requires a person to do an act but does not specify a time within which he is required to do the act, the Court may, by order, require him to do the act within a specified time.”

25. That has not occurred in the present case either by the Court acting on its on motion or on application of any of the parties.
    
26. In the present case, Order 8 Rule 4 of the National Court Rules does not apply due to the intervention of the Court on the defendant’s application in granting leave to the defendant to file his defence out of time under Order 7 Rule 6(2) of the National Court Rules.
    
27. According to Order 12 Rule 4(1) of the National Court Rules, a judgment or order which requires a person to do an act shall specify the time within which he is required to do the act. According to Order 12 Rule 4(2), the time limit shall, unless the Court otherwise orders, be 14 days after the date of service of a minute of a judgment or order on the person required to do the act. Sub-rules (1) and (2) apply to a judgment or order which requires a person to pay money, but not to a judgment for possession of land or for delivery of goods: Order 12 Rule 4(3) and (4) of the National Court Rules. In the present case, as no time limit was specified in the order of 10 April 2017 within which the defendant was required to file his defence, sub-rule 6 becomes relevant for reasons I have given already.
    
28. I now apply the above considerations suggested in Agnus Kunton v John Junias to the present case.
    
29. As to whether the statement of claim raises serious allegations of fraud or deceit, in which case the interests of justice may require those allegations to be proved by evidence in a trial before judgment is given on the merits? No.
    
30. As to the extent of the default by the defendant, I have stated already that the defendant has not defaulted for reasons I have given notwithstanding that a period of about 3 months had expired since the grant of the order of 10 April 2017 to the time of filing of the application.
    
31. As to whether the defendant appears to have a good defence, there is none filed by the defendant nor has he filed an affidavit responding to the application and properly brought before the Court stating that he has an arguable defence or that there is a real question to be tried. The plaintiff is exercising its power of foreclosure and sale under the registered mortgage for the defendant’s failure to honour the loan agreement. From the affidavit evidence of Nanadai Asigau (annexure “F”), the defendant has made fortnightly payments below the monthly rate agreed and has been in default continuously. The affidavits of Daniel Bidar and Manilah Apawa provide additional evidence in support of that fact. Mr Asigau states that the defendant does not have a valid or arguable defence to the plaintiff’s claim.
    

31. As to whether the statement of claim amounts to an abuse of process? I answer that in the negative. The plaintiff’s statement of claim discloses a reasonable cause of action. The plaintiff is exercising its power of foreclosure and sale under the registered mortgage for the defendant’s failure to honour the loan agreement.

32. As to whether the pleadings are vague, ie whether the statement of claim discloses a reasonable cause of action? No, the pleadings are not vague. The plaintiff’s statement of claim discloses a reasonable cause of action. The plaintiff is exercising its power of foreclosure and sale under the registered mortgage for the defendant’s failure to honour the loan agreement.
    
33. As to whether the plaintiff has prosecuted his case diligently, I think, generally it has, particularly from 10 April 2017 to the date of filing the application. In any event, there is no evidence before the Court to demonstrate that it has not prosecuted its case diligently.
    
34. As to whether the entry of judgment would prejudice the rights of co-defendants, no one has intervened to be joined as a co-defendant. No one’s rights will be prejudiced. The writ and Notice of Claim for Possession were served on one Henry Hapu who identified himself as the house keeper at the property on 18 February 2013, but to this date he has not applied to be joined as a co-defendant.
    
35. As to whether the interests of justice would be served by the entry of default judgment, I think it will not if entered immediately because no time limit for compliance was specified in the order of 10 April 2017.
    
36. This is a mixed claim where the plaintiff is claiming relief for liquidated damages and possession of land with consequential orders. The plaintiff is exercising its power of foreclosure and sale under the registered mortgage for the defendant’s failure to honour the loan agreement. There is evidence of the arrears in the affidavits of Daniel Bidar, Manilah Apawa and Nanadai Asigau. With regard to the claim for possession of the property, I am satisfied on the evidence before me that the requirement under Order 4 Rule 14 of the National Court Rules has been satisfied and that no one has applied to be joined as a co-defendant.
    

CONCLUSION

37. Most of the considerations for the entry of default judgment against the defendant have been satisfied by the plaintiff. However, technically, the defendant will not be in default because the order of 10 April 2017 granting leave to the defendant to file his defence out of time prescribes no time limit for compliance. The application for default judgment, in my view, was filed prematurely. Therefore, in the exercise of my discretion, I will refuse to grant the plaintiff’s application for default judgment.
    

APPLICATION FOR SUMMARY JUDGMENT

THE LAW

38. The jurisdictional basis for this application upon which the plaintiff relies is Order 12 Rule 38(1) of the National Court Rules. The rule states:
    

“38. Summary judgement. (13/2)

(1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff-

(a) there is evidence of the facts on which the claim or part is based; and

(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,

the Court may, by order, direct the entry of such judgement for the plaintiff on that claim or part, as the nature of the case requires......”

39. The authorities concerning entry of summary judgment show that the Court exercises a discretionary power and the power may be exercised where two elements are present namely; first, there must be evidence of the facts proving the essential elements of the claim; and second, the plaintiff or some responsible person must give evidence that in his belief there is no defence: Chief Collector of Taxes v T.A. Field Pty Ltd [1975] PNGLR 144; Hornibrook Constructions Pty Ltd v Kawas Express Corporation Pty Ltd [1986] PNGLR 301; Dep International Private Ltd v Ambogo Sawmill Pty Ltd [1987] PNGLR 117; Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299; Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112; Curtain Brothers (Qld) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285; The State v Henshi Engineering Pty Ltd [1998] PGSC51, SC594; William Duma v Eric Meier (2007) SC898; PGSC 34; Commissioner General of Internal Revenue v Bougainville Copper Ltd (2009) N3857; Severinus Ampaoi v Bougainville Copper Ltd (2012) SC1166; Ralph Augustine Saulep v ANZ Banking Group (PNG) Ltd (2016) N6395.
    
40. The principles relating to summary judgment applications were summarised by Lay J in Commissioner General of Internal Revenue v Bougainville Copper Ltd where at paragraphs 13 to 15 of the judgment, His Honour said:
    

“13. A recent Supreme Court decision setting out the principles is William Duma v Eric Meier (2007) SC898; PGSC 34, Injia DCJ, Batari and Gabi JJ where the Court said at [10]:

“The principles relating to applications for summary judgment are well settled in this jurisdiction. Summary judgment is a discretionary power and may be granted if there is evidence of facts on which the claim is based and evidence is given by some responsible person that in his belief the defendant has no defence to the claim or part of the claim (see Hornibrook Constructions Pty Ltd v Kawas Express Corporation Pty Ltd [1986] PNGLR 301 and Bruce Tsang v Credit Corporation (PNG) Limited [1993] PNGLR 112). The discretion conferred on the Court should be exercised in a clear case and with considerable care. Summary judgment should be granted only where there is no serious triable issue of fact or law. If there is no dispute as to fact and there is clear admissions of the claim or part of the claim then judgment must be entered for the plaintiff (see Chief Collector of Taxes v T.A. Field Pty Ltd [1975] PNGLR 144; Dep International Private Ltd v Ambogo Sawmill Pty Ltd [1987] PNGLR 117; Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299; and Curtain Brothers (Qld) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285).”

14. And in Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112 at 117 and Curtain Brothers (Qld) Pty. Ltd and Kinhill Kramer Pty. Ltd v The State [1993] 285 at 288 the Supreme Court said:

“As to the second element, the plaintiff must show in the absence of any defence or evidence from the defendant, that in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that, upon the facts and / or the law, the defendant has no defence. The plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of fact or law. Whether a case should go to trial on these issues will be determined on the facts of each case”.

15. The United Kingdom courts have said that the procedure should not be used to obtain an immediate trial which requires determining points of law taking hours or days and requiring the citation of many authorities: Home and Overseas Insurance Code Ltd v Mentor Insurance Co (UK) Ltd [1983] 3 All ER 74 at 77; or the judge conducting a mini trial: Swain v Hillman & Anor [1999] EWCA Crim 2251 at [20], per Lord Woolf MR.”

41. The bottom line is that summary judgment will not be granted where there are serious issues of law and fact raised either in the pleadings or evidence. In other words, the Court’s discretion in favour of an applicant should only be granted in a very clear case and with considerable care.
    
42. Summary judgment is available even where the defendant has not filed his defence by virtue of Order 8 Rule 4(2) of the National Court Rules.
    

PLAINTIFF’S SUBMISSIONS

43. The plaintiff essentially submits that from the evidence it has adduced, it has satisfied the two elements that need to be met for a successful application under Order 12 Rule 38(1). These are; firstly, there is sufficient and clear evidence before the Court of the facts on which the claim is made namely, the claim arises from a breach of the loan agreement by the defendant to enable it to conclude that there is no triable issue of fact and no arguable defence in law; and secondly, the plaintiff through its Asset Recoveries Manager, Mr Asigau, has given evidence that in his belief the defendant does not have a valid or an arguable defence to the plaintiff’s claim.
    

REASONS FOR RULING

44. Has the plaintiff provided evidence of the facts proving the essential elements of the claim? Yes, it has. There is sufficient and clear evidence contained in the affidavits of Daniel Bidar, Manilah Apawa and Nanadai Asigau that the plaintiff and the defendant entered into the loan agreement whereby the plaintiff agreed to lend to the defendant cash advances by way of a housing loan up to a maximum of K264,000.00 secured by a registered mortgage number S52180 over the property and the loan was to be paid off by monthly instalments of K2,828.89 until final repayment on 6 July 2026. The loan agreement has been breached by non-payment of monthly instalments of K2,828.89 and arrears have accumulated with interest over time: affidavits of Manilah Apawa (annexure “A”) and Nanadai Asigau (annexure “F”).
    
45. There is evidence to show that the plaintiff issued a Notice of Default dated 25 October 2011 to the defendant (annexure “D” of Daniel Bidar’s affidavit) which was served on the defendant on 26 October 2011 by prepaid registered post at the Port Moresby Post Office to the defendant’s usual address at c/-PNG Power Limited, PO Box 1105 Boroko, National Capital District: Affidavit of Service by Post of Kiso Kip Garo sworn and filed on 3 October 2013 (Court Document No. 7). By that Notice of Default, the plaintiff requested the defendant to settle the outstanding loan which at 25 October 2011 stood at K259,874.11. According to the Notice of Default, a Notice of Demand dated 6 October 2011 was issued to the defendant earlier and when he failed to make the payment demanded, the Notice of Default was issued. The defendant has failed and neglected to settle the loan arrears through the agreed monthly instalments of K2,829.89, but has been paying fortnightly repayments of K509.18 or K469.18 instead contrary to the loan agreement: see affidavits of Manilah Apawa (annexure “A”) and Nanadai Asigau (annexure “F”). The fortnightly repayments of K509.18 or K469.18 are insufficient to reduce the loan arrears with interest continuing to accumulate. Nanadai Asigau states that as of 1 May 2017, total accumulated arrears was K421,855.76 and the defendant had made a total repayment of K57,079.08.
    
46. Has the plaintiff or some responsible person given evidence that in his belief there is no defence? Yes. Nanadai Asigau has.
    

CONCLUSION

47. In my view, this is a clear case for summary judgment to be entered in favour of the plaintiff against the defendant. I have considered the repayments the defendant has made through the payment of lesser amounts identified already which were far below the monthly instalments agreed to under the loan agreement of K2,829.89, but that in itself is a clear indication of breach of the loan agreement. Despite being given the opportunity to file his defence by an order of the Court on 10 April 2017, the defendant has yet to file his defence or an affidavit in response to the application showing that he has an arguable defence or that there is a real question to be tried.
    
48. The balance of the relief sought are consequential in nature and having entered judgment in favour of the plaintiff, I propose to grant all of them which I now do.
    

ORDER

49. The formal orders of the Court are:
    
    1. the application for default judgment is refused.
    2. the application for summary judgment is granted.
    3. judgment is entered in favour of the plaintiff for the sum of K421,855.76.
    4. the defendant deliver up possession of all that land contained in Allotment 25 Section 349 Hohola (Gana Vali Street, Gerehu Stage 2 in the National Capital District and described in State Lease Volume 29 Folio 132.
    5. leave is granted to the plaintiff to issue a Writ of Possession.
    6. the plaintiff or its agents sell the land at market price to satisfy the judgment with the balance, if any, to be paid to the defendant.
    7. the defendant shall pay the plaintiff’s costs on a lawyer/client or indemnity basis.
    8. the defendant shall pay interest to the plaintiff on the amount of K421,855.76 pursuant to the Judicial Proceedings (Interest on Debt and Damages) Act.
       

Ordered accordingly
_______________________________________________________________
O’Briens: Lawyers for the Plaintiff