N7271

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1087 of 2017

BETWEEN

ROBERT SABIJON AQUINO
Plaintiff

AND
PUONG CHIN CHIENG
First Defendant

AND
TAN LIAN LEE
Second Defendant

AND
JCA LUMBER CO (PNG) LIMITED
Third Defendant

Waigani: Hartshorn J.
            2018: 21st, 22nd March, 

JUDGMENT - Application for Default Judgment –service not properly effected – application unnecessary and bound to fail – solicitor client costs awarded

Counsel:

Mr. A.D. Lora, for the Plaintiff
Mr. M. Maiteng, for the Defendants

Oral decision delivered on

22nd March 2018

1.	HARTSHORN J: This is a decision on a contested application for default judgment.

Background

2.	This proceeding concerns a dispute over a share sale agreement. The plaintiff claims the sum of K1,350,000.00 from the first and second defendants. This is claimed to be 90% of the purchase price for 70% percent of the shares in the third defendant. 

This application

3.	The plaintiff’s ground for seeking default judgment is a failure by the defendants to file their defences in time. The plaintiff relies upon in Order 12 Rule 27 National Court Rules. 

Preliminary
Whether correct National Court Rule relied upon

4.	The defendants submit that the amended notice of motion of the plaintiff is incompetent as it does not cite the correct National Court Rule to be able to invoke this court’s jurisdiction. Order 12 Rule 27 is not the correct Rule. It should be Order 12 Rule 32(1) National Court Rules it is submitted.

5.	From a perusal of Order 12 Rule 27, I am satisfied that it provides jurisdiction for this Court to enter judgment for a liquidated sum and that a plaintiff is able to make application under this Rule. This is so as Order 12 Rule 26(a) National Court Rules provides that where a defendant is in default, the plaintiff may take the steps mentioned in Rules 27 to 33. That is what has occurred here. The plaintiff has taken a step pursuant to Rule 27. Consequently, this objection by the defendant is not sustained. 

Service 

6.	The Defendants submit that the plaintiff has not established proof of service of the writ personally on the first and second defendants, and upon the third defendant as required under the Companies Act. 

7.	The evidence is that the writ of summons and statement of claim were served by Abel Yolen, a senior constable of police, on 26th October 2017. Mr. Yolen deposes that at Apartment 6, Section 216, Lot 3, Kitogara Street, Gordons Five, he handed a copy to the first defendant’s agent and employee Ms. Yen. This does not constitute personal service upon the first defendant as required by the National Court Rules. 

8.	As to service upon the second defendant Mr. Yolen deposes, “I personally served the second defendant by also personally handing him a copy in the same manner.”

9.	Mr. Robert Duno then clarifies matters by deposing twice that he was present when the police handed the Writ to Ms. Yen who received it on behalf of the first and second defendants. This does not constitute personal service upon the second defendant, even if Ms. Yen said she had authority to accept service on behalf of the defendants. 

10.	As to service upon the third defendant, there is no evidence. 

11.	A notice of intention to defend was filed on behalf of the defendants on 27th November 2017. Pursuant to Order 6 Rule 2(3) National Court Rules:

“(3)	Where a defendant to any originating process serves a notice of intention to defend under Order 7, the originating process shall be taken to have been served on him personally on the date on which the notice is filed or on such earlier date as may be proved.” 

12.	Consequently, as there is no satisfactory evidence to prove service upon the defendants, service of the Writ of Summons shall be taken to have been served personally on the date the notice of intention to defend was filed. 

13.	That was on 27th November 2017. When the Court vacation is taken into account, it is clear that the defendants filing of their defence on 22nd January 2018 is within time.

14.	Consequently, the application for default judgment should be refused. 

15.	As to costs, the defendants seek their costs on a solicitor client basis and submit that the plaintiff’s lawyers were put in notice that their application was misconceived, the reasons why, and that solicitor client costs would be sought, if the plaintiff persisted with the application. 

16.	I am satisfied that the defendants are entitled to their costs on this basis. It is clear that service was not properly effected upon any of the defendants and that their defence was filed in time. This application was quite unnecessary and was bound to fail but the plaintiffs’ lawyers persisted nevertheless, causing the defendants to incur unnecessary costs. Consequently a solicitor client costs order should be made. 

Orders

17.	  The formal Orders of the Court are:

a)	All of the relief sought in the plaintiff’s amended notice of motion filed 19th February 2018 is refused;

b)	The plaintiff shall pay the defendants’ costs of and incidental to the said amended notice of motion on a solicitor client basis;

c)	Time is abridged.
__________________________________________________________________
Andano David Lawyers: Lawyers for the Plaintiff                                     
Holingu Lawyers: Lawyers for the Defendants