Taila v Silas [2018] PGNC 249; N7334 (28 June 2018)

N7334

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 984 OF 2015

BETWEEN
ANDREW TAILA for and on behalf of himself and the aggrieved individual fire fighters whose particulars are contained in the Schedule to the Writ
Plaintiff

AND
ISSAC SILAS in his capacity as the Chief Fire Officer
First Defendant

AND
MUNARE UYASSI in his capacity as the Secretary for Department of Provincial & Local-Level Government Affairs
Second Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Waigani: Dingake J
2018 : 19, 28 June

PRACTICE AND PROCEDURE – Default Judgments – requirement to set aside – lack of standing fatal – Default Judgment set aside.

Cases Cited:

Ace Guard Dog Security Services Ltd and Yama Security Services Ltd v Telikom PNG Ltd (2004) SC757;
Albright Ltd v Mekeo Hinterland Holdings Ltd (2013) N5774;
Albright Ltd v Mekeo Hinterland Holdings Ltd (2014) SC1400;
Beno Maoko v Kevin Ling (2008 ) PGNC19 N3293;
Leo Hannet and Elizabeth Hannet v ANZ Banking Group (PNG) Ltd (1996) PGSC7 SC505;
Motor Vehicles Insurance Ltd v Nominees Niugini Ltd (2015) SC1435);
Soka Toligai v Julius Chan (2012) N4842;
The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603

Counsel:

Mr. D Wayne, for Plaintiff
Mr. W Mapiso, for Defendants

28^th June, 2018

1. DINGAKE J: By Notice of Motion filed with this Court on the 23^rd of May, 2018, defendants, (applicants) seek the following reliefs:

1.1 Pursuant to Order 12 Rule 1 of the National Court Rules, the defendants are granted leave to withdraw their two Notices of Motion filed on 1^st December, 2017 and 24^th April, 2018.
1.2 Pursuant to Order 12 Rule 8(3) & (4) and Rule 35 of the National Court Rules, the default judgment entered on 28^th July, 2017 is set aside.
1.3 Pursuant to Order 12 Rule 40(1) (a), (b) and (c) of the National Court Rules, the whole proceedings are dismissed on the grounds that:

1. The proceedings disclose no cause of action; or
2. The proceedings are frivolous and vexatious; or

100. Otherwise, the proceedings are an abuse of the process of the Court.

1.4 In the alternative of relief 2 and 3 above, and pursuant to the inherent jurisdiction of the Court and Order 12 Rule 1 of the National Court Rules, the Order of this Court made on 10^th April, 2018 is recalled and vacated.
1.5 In the further alternative to relief 3 above, and pursuant to Order 8 Rule 50(1) of the National Court Rules, the plaintiffs shall file and serve on the defendants an Amended Statement of Claim which shall set out the particulars of loss of salaries and benefits or alleged unpaid entitlements for each of the plaintiffs named in the proceedings within (21) days from the date of this order.
1.6 In the further alternative to reliefs 3, the defendants are granted extension of time pursuant to Section 9(a)(i) of the Claims By and Against the State Act 1996 to file and serve their defence outside of time within (14) days from the date of order.
1.7 In the further alternative to relief 3 above, and pursuant to Section 10 of the Claims By and Against the State Act 1996 the plaintiffs shall pay security for costs into Court.
1.8 Subject to the grant of relief sought under paragraph 4 herein, the defendants’ costs of and incidental to this application are to be paid by the plaintiffs severally and or jointly.
1.9 Time for entry of these orders is abridged to the time of settlement of the orders by the Registrar which shall take place forthwith.
1.10 Any other or further order deems fit by the Honourable Court.

2. The application to withdraw two Notices of Motions of the defendants filed on the 1^st of December, 2017 and on the 24^th April, 2018 is not opposed and is granted.

3. The plaintiffs are past and present fire fighters who are suing the defendants for breach of a Memorandum of Agreement (MOA) that their Association, (PNG Fire Fighters Association) signed with the third defendant on the 6^th of January, 1994 and September 2005, respectively. The 1994 MOA was revised, in 2005 and became effective in and from the 7^th September, 2015.

4. On the 28^th of July, 2017, default judgment was entered against the defendants for damages to be assessed.

5. In order to prepare for assessment of damages the respondents, made a successful application before this Court to be supplied with payslips.

6. The thrust of this application is to set aside the default judgment of 28^th July, 2017, after previous attempts to do so were abandoned. The default judgment was granted after an inter-partes hearing.

7. The applicants submit that the entry of default judgement was irregularly entered and that the proceedings were a nullity.

8. It is trite law that a defendant can apply to the National Court to set aside a default judgement which was obtained after an inter-partes hearing. (Albright Ltd v Mekeo Hinterland Holdings Ltd (2013) N5774; Albright Ltd v Mekeo Hinterland Holdings Ltd (2014) SC1400; Motor Vehicles Insurance Ltd v Nominees Niugini Ltd (2015) SC1435).

9. In this case, the applicants contend that the default judgment was entered irregularly because the applicants are not parties to the MOA referred to earlier, as the Agreement was between the Independent State of PNG and the PNG National Fire Fighters Association.

10. The applicants contend that the entry of the judgment was not only irregular but a nullity, requiring that it be set aside by this Court.

11. The respondents (plaintiffs) contend that they have standing to sue. They contend that by virtue of Section 57(2) of the Public Services Conciliation and Arbitration Act, the Attorney General can apply to Court on behalf of the State to ensure compliance and that plaintiff’s too have standing to sue to ensure compliance with respective agreements.

12. The law on standing is settled. Persons who are not parties to an agreement have no standing to enforce its terms. Absence of standing is a fundamental flaw that renders the proceedings a nullity because it is a condition precedent to commencing an action.

The absence of the necessary standing also means there is no reasonable cause of action (Soka Toligai v Julius Chan (2012) N4842).

13. The issue of standing is fundamental as it strikes at the jurisdictional competence of a Court to hear a matter and being a competency issue it can be raised at any stage of proceedings (Ace Guard Dog Security Services Ltd and Yama Security Services Ltd v Telikom PNG Ltd (2004) SC757).

14. In the case of Leo Hannet and Elizabeth Hannet v ANZ Baking Group (PNG) Ltd (1996) PGSC7; SC505, the Supreme Court observed that there are two classes or categories of default judgments, those that are entered regularly and those not entered regularly. It further observed that where a proceeding is a nullity then the proper course for the Court is to set aside such a proceeding as a matter of law.

15. There is indeed a respectable lineage of cases that make it clear that a contract cannot confer rights or impose obligations arising under it to parties not privy to it. (Beno Maoko v Kevin Ling (2008) PGNC 19 N3282; The Papua Club Inc v Nasaum Holdings Ltd (2004) N2603).

16. In this case, a perusal of the Memorandum of Agreements dated 10^th December, 1993 and revised in 2005 makes it clear that the applicants are not parties to the MOA. The parties are the Independent State of PNG and PNG National Fire Fighters Association.

17. There is nothing in any law that confers upon the applicants the

power to sue on the Agreement aforesaid.

18. Without the necessary standing the plaintiffs could not maintain a cause of action against the defendants. The Public Services Conciliation and Arbitration Act does not do so.

19. It follows in my view that the proceedings instituted by the applicants are a nullity in law for want of standing and default judgment obtained thereby liable to be set aside as such.

20. Having regard to the above, it is unnecessary to address the balance of issues or grounds raised by the applicants.

21. In the result, I make the following orders:

21.1 Pursuant to Order 12 Rule 1 of the National Court Rules, the defendants are granted leave to withdraw their two Notices of Motion filed on 1^st December, 2017 and 24^th April, 2018.
21.2 Pursuant to Order 12 Rule 8(3) & (4) and Rule 35 of the National Court Rules, the default judgment entered on 28^th July, 2017 is set aside.
21.3 Pursuant to Order 12 Rule 40(1) (a) and (c) of the National Court Rules, the whole proceedings are dismissed on the grounds that;

1. The proceedings disclose no cause of action and amount to abuse of Court process.
   

22. The applicants have not prayed for an order as to costs and I do not grant it.
___________________________________________________________
Express Legal: Lawyers for the Plaintiff
Guardian Legal Services: Lawyers for the Defendant