Super Value Store Ltd v Dangkim [2019] PGNC 253; N8056 (20 August 2019)

N8056

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 459 of 2017

BETWEEN:
SUPER VALUE STORE LIMITED
First Plaintiff

AND:
STAR MOUNTAIN SUPERMARKET
LIMITED
Second Plaintiff

AND:
JOEL DANGKIM as
Managing Directorof STAR MOUNTAIN
INVESTMENT HOLDING LIMITED
First Defendant

AND:
STAR MOUNTAIN
INVESTMENT HOLDING LIMITED
Second Defendant

Waigani: Hartshorn J
2019: 20^th August

Application to file reply and defence to cross claim out of time

Cases Cited:
Papua New Guinea Cases

Albright Ltd v. Mekeo Hinterland Holdings Ltd (2013) N5774
Green & Co Pty Ltd (Receiver Appointed) v. Roger Britain Green [1976] PNGLR 73
Leo Duque v. Avia Andrew Paru [1997] PNGLR 378
Totamu v. Small Business Development Corporation (2009) N3702.
Workers Mutual Insurance (PNG) Ltd (in Liq) v. Sathasivan Sivakumaran (2012) N4637

Overseas Cases

Evans v. Bartlam [1937] AC473; 2 All ER 646

Counsel:

Mr. D. Levy, for the Plaintiffs/Cross Defendant
Mr. T. Yapao, for the Defendants/Cross Claimant

20^th August, 2019

1. HARTSHORN J: This is a decision on a contested application to file a reply and a defence to cross claim out of time.
   

Background

2. The plaintiffs/cross defendant (plaintiffs) commenced this proceeding claiming an alleged breach of a management agreement and an alleged breach of a shareholders agreement. Damages are claimed by the first plaintiff.
   
3. Both defendants filed their defence and the second defendant filed a cross-claim against the first plaintiff.
   
4. In one document the plaintiffs purportedly filed a reply to defence and the first plaintiff/cross-defendant filed a defence to the cross claim. It is conceded by the plaintiffs however, that this document was filed out of time.
   

This application

5. The plaintiffs submit that their application should be granted as:
   
   1. their reply and defence to cross claim were only out of time by about two months;
      
   2. after being requested to indicate their position, the defendants/cross claimant (defendants) took three and a half months to indicate that they took issue with when the reply and defence to cross claim were filed and served;
      
   100. no prejudice has been shown to have been occasioned or damage suffered by the defendants as a result of the late filing;
        
   4. it is in the interests of justice.
      
6. The defendants oppose the application as:
   
   1. the explanation for not filing in time is not adequate. It is clear that the delay was caused by internal management issues of the lawyers for the plaintiffs;
      

2. the draft defence to cross claim is only annexed to the affidavit of the lawyer for the plaintiffs. The cross defendant or someone in authority on its behalf should have deposed as to the cross defendant having a defence on the merits and should have given particulars of that defence.
   

The law

7. I reproduce that part of my decision in Workers Mutual Insurance (PNG) Ltd (in Liq) v. Sathasivan Sivakumaran(2012) N4637 which considered the relevant principles concerning an application to file a defence out of time:

“In the case of Duma v. Hriehwazi (2004) N2526, Kandakasi J. stated that the principles applicable to an application to set aside a default judgment with appropriate modification should apply to an application for leave to file and serve a defence out of time. In the case of Tipaiza v. Yali (2006) N2971, Cannings J. agreed that the factors to be taken into account on an application for an extension of time were; the extent of the delay, the reasons for the delay and does the defendant appear to have a good defence? To those factors he added one further; where do the interests of justice lie? I also make reference to the case of Green & Co. Pty Ltd (Receiver Appointed) v. Roger Britain Green [1976] PNGLR 73. That case involved an application to set aside a default judgment regularly entered. It was held that on such an application, the principal matter that must be shown by the applicant is that he has a defence on the merits. That statement of the law, in my view, is equally applicable to an application seeking an extension of the time in which a defendant may file its defence.”

Consideration

8. The plaintiffs rely upon amongst others Order 1 Rule 15 National Court Rules which provides for an extension of time to be granted. No objection was taken by the defendants to the jurisdictional basis relied upon for the orders sought.
9. As the principal matter that must be shown on an application such as this is that the applicant has a defence on the merits, I will consider this issue first.
10. As to a defence on the merits, the Supreme Court in Leo Duque v. Avia Andrew Paru [1997] PNGLR 378 said:

“It is clear to us from the authorities we have set out earlier in our judgment and subsequent cases in this jurisdiction that as a matter of practice, an applicant must in an affidavit state material facts showing a defence on the merits.”

11. In this instance, the plaintiffs have not given evidence showing a defence to the cross claim on the merits. It is apparent from a consideration of the draft defence however, that the plaintiffs have indicated more than what may be termed as a holding or general defence. Further, apart from submitting that the plaintiffs should show a defence on the merits, the defendants have not taken that issue further by giving any evidence to that effect, and no submission was made, that a defence has not been shown on the merits. There is no evidence given on behalf of the defendants, including as to any prejudice occasioned or any damage that may have been suffered due to the reply and defence to cross claim not being filed and served in time.
12. As to not filing the reply and defence to cross claim in time and any delay in making this application, it is the case that in this jurisdiction, delay caused by a lawyer is not a reasonable excuse. In this instance, the plaintiffs’ lawyers should have applied for an extension of time to file, or should have briefed out, if work pressures were preventing them from complying with time limits.
13. Here however, it cannot be said that the lawyers for the defendants assisted in progressing matters. They did not reply for about three and a half months after being requested to indicate whether they took issue with the reply and defence to cross claim being filed out of time. When they did eventually reply after a further letter was sent to them by the lawyers for the plaintiffs, it was to the effect that their instructions were that the plaintiffs should make this application.
14. As to the exercise of this court’s discretion, as I did in Albright Ltd v. Mekeo Hinterland Holdings Ltd (2013) N5774, I make reference to the House of Lord’s decision of Evans v. Bartlam [1937] AC473; 2 All ER 646 referred to in Green & Co Pty Ltd (Receiver Appointed) v. Roger Britain Green [1976] PNGLR 73 and recently referred to in the decision of David J in Totamu v. Small Business Development Corporation (2009) N3702.
15. In Evans v. Bartlam(supra), Lord Wright at 488 quoted with approval the following statement of Bowen, LJ in Gardner v. Jay (1885) 29 Ch 50, at p59:

“When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view of indicating the particular grooves in which the discretion should run, for if the Act or the Rules did not fetter the discretion of the Judge why should the Court do so?”

16. Taking that statement into account and in the circumstances, I am satisfied that the court should exercise its discretion and permit the plaintiffs to file their reply and defence to cross claim out of time. As the plaintiffs have not however, provided a proper explanation for the delay in not filing their reply and defence to cross claim in time, the defendants are entitled to their costs.

Orders

17. The court orders that:
    1. The relief sought in paragraph 1 of the notice of motion of the plaintiffs/cross-defendant filed 30^th April 2018 is granted;
    2. The plaintiffs/cross-defendant shall pay the defendants/cross claimant’s costs of and incidental to the said notice of motion on a party/ party basis;
    100. Time is abridged.

__________________________________________________________________
Manase & Co Lawyers: Lawyers for the Plaintiffs/Cross Defendant
Claimant Allens: Lawyers for the Defendants/Cross