PNG Power v Ailan Seafoods Ltd [2018] PGNC 607; N8948 (30 July 2018)

N8948

PAPUA NEW GUINEA
[IN TH NATIONAL COURT OF JUSTICE]

WS 545 OF 2015

BETWEEN:
PNG POWER
Plaintiff

AND:
AILAN SEAFOODS LTD
First Defendant

AND:
REINHARD ERNEST MANGELS
Second Defendant

Kavieng: Kangwia J
2018: 23^rd February & 30^th July

PRACTICE AND PROCEDURE – notice of motion by defendants seeking orders to dismiss proceedings on the basis of res judicata – also motion seeks leave to file defence out of time –Whether proceedings should be dismissed as Res Judicata and Whether the defendants should be granted leave to file its defence out of time - court has wide discretion to grant general relief sought by applicants - Plea of res judicata must show that the same cause of action had been actually decided between the same parties and that the previous judgment extinguished the foundation of the claim to again set up the action; the result being final and conclusive - what the Defendants provided in support of their motion is insufficient to secure the plea of res judicata - Court therefore declines to grant the application on the plea of res judicata – leave is granted for the Defendants to file their defence out of time.

Cases Cited:

Titi Christian v Rabbie Namaliu (1996) OS No 2 of 1996
Telikom PNG Ltd v ICCC (2008) SC 906
Green v Green (1980) N28
Ruma v Christopher (1999) SC 600

Counsel

No Appearance for the Plaintiffs
M. Titus, for the Defendants

30^th July, 2018

1. KANGWIA J: The Defendants by notice of motion moved for the following orders:

1. That the entire proceedings be dismissed as res judicata: and
2. Leave to file their defence out of time.
   

2. The Plaintiffs have made no appearance to move their Notice of Motion filed on 28 September 2016 for Default Judgement and to strike out the Defendants motion to file its defence out of time.

3. This is the decision on the motion by the Defendants.

4. The Plaintiff is a Statutory Body tasked with providing electricity to consumers. The First Defendant is a company providing various services for a fee. The Second Defendant is the owner and director of the First Defendant Company.

5. By a Writ of Summons the Plaintiff sued the Defendants for a liquidated sum of K138, 707: 90 for a dishonoured cheque and unpaid bills. They claimed that the Defendants failed to pay for electricity they supplied.

6. In support of their motion the Defendants relied on the affidavits of Mr Michael Titus, Mr Reinhard Mangels and Mr Bruno Gilis. They submitted that the proceedings should be dismissed as res judicata. They claimed that the same matter went before the National Court in Kokopo in WS 810 of 2012 where the matter was dismissed with costs. They further gave various reasons for not filing their intention to defend within time.

7. Two issues arise for determination:

1. Whether the proceedings should be dismissed as Res Judicata; and
   
2. Whether the defendants should be granted leave to file its defence out of time?
   

8. The rules governing motions are covered under Order 4 Division 5 of the National Court Rules (NCR).

9. The NCR under Order 12 Rule 01 confers on the Court, general powers to grant or refuse to grant general relief in the following manner:

ORDER 12 JUDGEMENTS AND ORDERS

1. General relief
   

The Court may at any stage of any proceedings, on the application of any party, direct the entry of such judgment or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgment or order in any originating process.

10. Under this rule there is a wide discretion in the Court to hear and grant or refuse any application made by a party. It seems that any such order sought is regardless of whether it extends or not to the substantive relief sought in the Original Summons.

11. It is an established principle of law that the onus rests on the party that raises or makes an allegation to establish it.

12. In the present case the two main issues that arise for consideration are dealt with separately.

1. Whether the proceedings should be dismissed as Res Judicata.
   

13. The law on the application of the principle of res judicata is settled. In the case of Titi Christian v Rabbie Namaliu (1996) OS No 2 of 1996 the Court re-emphasized the principle that if the cause of action, the issue of facts and Law were the same the principle of res judicata and issue estoppel apply.

14. The Supreme Court in Telikom PNG Ltd v ICCC (2008) SC 906 restated the conditions for the application of the doctrine of res judicata as:

(i) The same question was decided in both proceedings
(ii) The Judicial decision said to create the estoppel was final
(iii) The parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the doctrine is raised.

15. These conditions act as a bar to any new action involving the same claim or cause of action.

16. In order for res judicata to succeed it is necessary to show that the cause of action was the same and the Plaintiff had the opportunity of recovering it in the earlier proceeding but for his own fault that he is now seeking to recover it again.

17. Plea of res judicata must show that the same cause of action had been actually decided between the same parties and that the previous judgment extinguished the foundation of the claim to again set up the action; the result being final and conclusive.

18. In the present case the Defendants have claimed in the supporting affidavits that this same matter was determined under WS 810 of 2012 and was dismissed inter parties for want of prosecution on 19 November 2014.

19. Apart from the above information there is a fundamental problem associated with this application. The Defendants are relying on a decision of a Court that has no refined orders of the Court or the orders issued by the trial Judge. At least a copy of the decision or reason for the decision or any transcript arising out of the earlier proceeding and information as to whether the decision referred to was final would enable success in a plea of res judicata. A Court order or decision is always mandatory for effective implementation and enforcement.

20. In the present application what the Defendants provided in support of their motion is insufficient to secure the plea of res judicata.

21. The Court therefore declines to grant the application on the plea of res judicata.

2. The second issue is whether the Defendants should be granted leave to file its defence out of time.
   

22. The Court is conferred power under O 7 r (6) (2) of the National Court Rules as to grant of leave to file a notice of intention to defend.

23. It is not in dispute that the Writ of Summons was filed on 28 April 2015 and served on 11 May 2015. The time period permitted by law to file a notice of intention to defend lapsed on 10 June 2015. The notice of motion for leave to file a Notice of Intention to Defend out of time was filed at Kokopo on 3 May 2016.

24. It is clear that the Defendants were in default by 11 months or so.

25. In order for leave to be granted the Defendant as Applicant must show that:

1. A reasonable explanation existed for the delay and
2. That there was a defence on its merits

(See Green v Green (1980) N28; Rumo v Christopher (1999) SC 600)

26. The Defendants are in breach of the requirement under Order 7 R (1) & (4) of the National Court Rules to file a notice of intention to defend within the required time limit.

27. They submitted that they could not file an intention to defend within time due to lack of service of the Writ of Summons, the inaction by their lawyers and the need to obtain the services of a qualified technician to obtain advice from which a defence could be filed.

28. On the claim that of lack of service of the writ of summons as one of the reasons for not filing the Notice of Intention to Defend is in my view baseless. The records succinctly show that the writ was served on 11 May 2015. Evidence of service by Napoleon Kigolena attests to service of the Writ of Summons on the Manager of the First Defendant at their office.

29. On the claim that inaction by their previous lawyers was the reason for not filing the Defence is not a good reason to seek leave to file a notice after the lapse of the required time period. The plaintiffs are at liberty to sue their lawyers for professional negligence. This claim is rejected as unreasonable.

30. On the need to obtain the services of a qualified technician to obtain advice before filing the Defence is also not a reasonable explanation. There is undisputed evidence that the summons was served and accepted by the Defendants. The least the Defendants could have done was file an intention to defend before seeking an expert’s advice. They failed in that regard. It seems the defendants did nothing after accepting service.

31. Despite that there is wide discretion in the Court to still grant the application. In the present case they sought evidence and view of an expert as to why they think they were overcharged. That goes to the heart of the claim.
The allegation of inflated power bill should be established to avoid paying what was claimed in the Writ of Summons. The Plaintiff has made no appearance to oppose that allegation and the reason of expert evidence remains unchallenged.
In view of that consideration the Court will exercise its discretion to grant leave for the Defendants to file their defence out of time.

32. Formal Orders:

1. Leave sought is granted with costs of this application in favour of the Plaintiff on a Solicitor Client basis.
2. Hearing date to be fixed at the NCO.

________________________________________________________________
No Appearance for the Plaintiff
M. Titus Lawyers: Lawyers for The Defendants