N8107

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1717 OF 2015

BETWEEN:
HABOLO BUILDING & MAINTENANCE LTD
Plaintiff

AND:
HELA PROVINCIAL GOVERNMENT
First Defendant

AND:
WILLIAM BANDO,
Acting Provincial Administrator, Hela Provincial Administration
Second Defendant

Waigani: Polume-Kiele J
2018: 23rd March
2019: 4th September

PRACTICE & PROCEDURE - Application for entry of default judgment – Order 12 Rule 25, 27 & 28 – National Court Rules 

PRACTICE & PROCEDURE -  Application seeing dismissal of the entire proceedings pursuant to Order 12 Rule 1, Rules (40) (1) and Order 8 Rule 27 (1) - National Court Rules; Application for extension of time to file a defence out of time, Order 1 Rule 15 (1); Order 7 Rule 6 (2) National Court Rules;  National Court Rules.

Facts 	

The plaintiff’ claim is based on trespass by the defendants on its property, described as Section 2 Allotment 4, Tari, Hela Province (State Lease Volume 4 Folio 223). The claim for trespass is alleged to have occurred sometime in 2012. The defendants have continued to use the land to construct its administrative center during the period of transition as the Hela Transitional Authority to its present-day Provincial Government Headquarters without entering into a lease agreement for the use of the land and has failed to pay any consideration or value for the use of the land.

Demands for the vacant possession of the property has been ignored. 

The plaintiff seeks vacant possession of the land and damages for mesne fee commencing from 2013 to date.

Held: 

(1)	Order 12 Rule 32 of the National Court Rules gives the Court a wide discretion to enter or not to enter, default judgment. In that the Court still has a discretion to refuse to enter default judgment in cases where, for instance, the effect of the default judgment would affect the rights of other co-defendants or do not disclose a reasonable cause of action or that the default judgment cannot be sustained in law. (Kante Mininga v. the State (1996) N1458; Anton Kaluni v. Aiyale Warole (2001) N2114; Beecroft No. 51 Ltd v. Neville Seeto (2004) N2561. 

(2)	The entry of default judgement is not a matter of right even where the preconditions are satisfied (Lina Kewakali v The State (2011) SC1091). The decision whether or not to order default judgement remains a discretionary matter for the court (see also Agnes Kunton & Ors v John Junias & Ors (2006) SC929; Lambu v Torato (2008) SC953).

(3)	The pleadings are such that entry of default judgment would be sustained in law (Bella Kitipa v. Vincent Uali (1998) N1773). 

(4)	The application for entry of default judgment is declined.

(5)	The defendants’ application for dismissal of the entire proceedings pursuant to Order 12 Rule 1, Rules (40) (1) and Order 8 Rule 27 (1) of the National Court Rules is also declined.

(6)	Leave to extent time is granted to the defendants to file a defence out of time pursuant to Order 1 Rule 15 (1) of the National Court Rules. The defendants are granted 7 days from the date of this ruling within which to file and serve a defence to the claim. 

Counsel:

Mr. J Apo, for the Plaintiff
Ms. V Yabone, for the Defendants

RULING ON MOTION

4th September, 2019

1.	POLUME-KIELE J:	On 23rd March 2018, two motions were moved before me. One by the plaintiff seeking entry of default judgment or summary judgment pursuant to Order 12 Rule 25 and 27 and Rule 38 of the National Court Rules. The motion was filed on the 16 of October 2017 (Document No. 24) on the Court file. Several affidavits were relied upon in support of the application.  These are the affidavits of Newman Yuwi filed on the 16 of October 2017 (Document No. 25) Document No. 20 filed on 23 December 2016 and Document No. 3 filed on 2 December 2015.  

2.	The second motion by the defendants seeks dismissal of the entire proceedings pursuant to Order 12 Rule 1, Rules (40) (1) and Order 8 Rule 27 (1) of the National Court Rules. Alternatively, they seek leave of the Court to extent time to file a defence out of time pursuant to Order 7 Rule 6 (2) and Order 1 Rule 15 (1) of the National Court Rules. Furthermore, they also seek joinder of parties to the proceedings pursuant to Order 5 Rule 2 (b) of the National Court Rules and other reliefs as this Court deems fit.

3.	This is my ruling on the motions.

Plaintiff’s submission

4.	The plaintiff says that he is the proprietor of a state lease in the township of Tari, Hela Province. (Section 2 lot 4 Vol 16 Folio 223) (The Certificate of Title is referred to and marked as Annexure “C” – Affidavit of Newman Yuwi filed on the 2 of December 2015 (Document No. 3) on the Court file.  He says further that the Defendant trespassed on the property in 2012 with no efforts to acquire it or enter into a lease agreement and the defendants have continued to use it (the land) as its administration center at the time of the Hela Transitional Authority and its transition to the Provincial Government. 

5.	Various demands were made to have the Defendants acquire the land or enter into a lease agreement since 2012. Promises were made during discussions. Nothing materialized, Hence the initiation of this proceeding.

6.	The Plaintiffs claims vacant possession and damages for mesne fee since 2012 to date. 

Defendant’s submission

7.	The defendant’s response to the plaintiff’s claim is that whilst it notes that title to the subject land is now registered in the name of the plaintiff, there was never a time during the lifetime of the late Sir Matiabe Yuwi, or Angawai Habolo shareholders of the plaintiff company that they were registered proprietors of the subject land. In fact, at the relevant time of making arrangements for the construction of the Hela Provincial Headquarters, the late Sir Matiabe Yuwi was the Chairman of the Hela Transitory Authority and he did not disclose his interest in the subject land to the members of the Interim Hela Transitional Authority. This disclosure of ownership is now a surprise to the defendants. 

8.	Acting on the belief that the subject land was State land, The Hela Transitional Authority had agreed to construct three high rise buildings worth more than K80 million to house the Hela Provincial Headquarters. The construction of the Hela Provincial Headquarters was funded by donor aid.

9.	The defendants also raised issues relating to the propriety of obtaining title to the subject land, which only became apparent on or about 22nd August 2012.  The defendants have in fact filed an application seeking orders that the entire proceedings be dismissed pursuant to Order 12 Rule 1 and Order 12 Rule 40 (1) and Order 8 Rule 27 (1) of the National Court Rules and for joinder of parties under Order 5 Rule 2 (b) of the National Court Rules. 

10.	Other issues raised related to matters regarding the estate of the late Sir Matiabe Yuwi which are not properly before this Court so will leave this discussion here. However, what is relevant to these proceedings is the manner in which the plaintiff company is before this Court. In that since the plaintiff is a company, what are the legal processes upon which a company such as the plaintiff can be represented in litigation and the issue as to whether the Managing Director in this instance, Mr. Newton Yuwi has ostensible or apparent authority to file proceedings on behalf of the plaintiff company.  The Hela Provincial Government has invested considerable assets on the land for which it also seeks some value and consideration.

11.	The defendants also say that they have a defence on the merits particularly in relation to the propriety of the acquisition of the subject land by the plaintiff. 

Preliminary matters

12.	Before I proceed to discuss these applications, there is a need to point out several matters.

13.	Firstly, as regards the issue of s 5 Notice, it is quite clear that Notice of a Claim under s 5 of the Claims By and Against the State Act 1996 is not required where a Provincial Government is being sued independently of the State. (see MAPS Tuna Ltd v. Manus Provincial Government [2007] SC 857; Habolo Building & Maintenance Ltd v. Hela Provincial Government [2016] SC1549). The Supreme Court stated in Obiter Dictum and I quote, “If a person sues a provincial government from the State, and does not sue the State, it is not necessary to give a section 5 notice (MAPS Tuna Ltd v. Manus Provincial Government [2007] SC 857).  

14.	The corollary to this is that where there exist Provincial legislation akin to the Section 5 Notice under the Claims By and Against the State Act 1996, then the law is that “Notice of a claim against a Provincial Government is required (See William Powi v Niugini Building Supplies Ltd (2016) SC1501, The Supreme Court held that the leading case of Paul Tohian v Tau Liu (1998) SC566 requires compliance with section 5 of the Claims By and Against the State Act 1996 (giving notice of intention to make a claim against the State) is a condition precedent that must be complied with before court proceedings are issued against the State. 

15.	Otherwise, the proceedings are rendered incompetent (see the Supreme Court in SC Review No. 55 of 2013: Simbu Provincial Government v Thomas Sil t/a Perum Youth Stationary (Unreported Judgment dated 23rd February 2015) in which the National Court dealt with a similar issue but regarding the failure to comply with section 4 of the Claims By and Against the Simbu Provincial Government Act 2001(a provision akin to section 4 of the SHP Claims Act). 

16.	The Court held that proceedings initiated without first giving a valid notice to the Simbu Provincial Government under section 4 of the Claims By and Against the Simbu Provincial Government Act 2001 was incompetent. In adopting that principle, the Supreme Court was of the opinion that any court action filed against the Southern Highlands Provincial Government without a valid section 4 notice under the Claims By and Against the Southern Highlands Provincial Government Act 2000 was also incompetent.

17.	In these current proceedings, no evidence has been adduced to show that there is a Provincial Law passed by the Hela Provincial Government akin to the Claims By and Against the State Act 1996. 

Issues for determination

18.	In these circumstances, the relevant issue for determination is the question of whether there is in fact a cause of action against the defendants for which a relief is sought for entry of default judgment or summary judgment for the default on the part of the defendants in complying with the requirements to file a defence within the period allowed under the Rules?

The law

19.	The relevant law relating to an application for default judgment are provided for under the National Court Rules. These are:

•	Order 12 Rule 25 states:

“(1)	A Defendant shall be in default for the purposes of this division:

(a)	where the originating process bears a note under Order 4 Rule 9, and the time for him to comply has expired but he has not given the notice; or

(b)	where he is required to file a defence and the time for him to file his defence has expired but he has not filed his defence; or
	
(c)	where he is required under Order 8 Rule 24 to verify his defence and the time for him to verify his defence in accordance with that rule (has expired but he has not verified his defence”.

20.	Other relevant applicable rules for default procedures includes: 

•	Order 12 Rules 26, 27 and 28 of the National Court Rules provides for entry of default judgment procedures. In this case, Order 12 Rule 28 of the National Court Rules states as follows:

“Where the plaintiff’s claim for relief against the Defendant in default is for unliquidated damages only, the plaintiff may enter judgment against the defendant for damages to be assessed and for costs”.

•	Order 12 Rule 32 of the National Court Rules states:

“(1)	Whatever claims for relief are made by a plaintiff, where a defendant is in default, the Court may, on application by the plaintiff, direct the entry of such judgement against that defendant as the plaintiff appears to be entitled to on his writ of summons

(2)	Notwithstanding Sub-rule (1), the Court shall not, under that Sub-rule direct entry of judgement for the possession of land unless satisfied of the matters mentioned in Rule 30 (2) and (4)”

•	Order 12, Rule 34 – Proof of Service of writ-

Judgment shall not be entered against the defendant under this Division unless:

(a)	an affidavit is filed by or on behalf of the plaintiff proving due service of the writ of summons or notice of the writ on the defendant; or

(b)	the plaintiff produces the writ of summons endorsed by the defendant’s solicitor with a statement that he accepts service of the writ on the defendant’s behalf and an affidavit is filed by or on behalf of the plaintiff proving the default of the defendant on which the plaintiff relies.

•	Order 4, Rule 49(19) (3) – of the National Court Rules - Default Judgment Procedure

(a)	Against individuals

(i)	An applicant for Default Judgment shall file the following documents:

(1)	Notice of Motion;

(2)	An affidavit of Service;

(3)	An affidavit of Search (of the Court file) conducted just before filing the motion;

(4)	An affidavit in support (to also attach copy of letter to the other party forewarning of the application, if a Notice of Intention to Defend has been filed);

(5)	A draft order for Default Judgment

(ii)….

(iii)…

(iv)	The affidavit of service must strictly comply with Order 12 Rule 34 of the National Court Rules, that is:

. 	the affidavit must prove due service of the writ, i.e. it must depose to date and time of service and on whom the writ was served;
·	a copy of the writ must be attached to the affidavit of service.

(b)	Against a corporate entity including the State

(i)	Motions on other statutory corporation and bodies must be effected in accordance with the requirements of the relevant statutory provision, e.g. s 431 (1) (a) to (f) (2) of the Companies Act;

(ii)	In order to assist the court, Counsel moving the motion must tender to the court copy of the relevant provision governing institution and service of court process against these entities.

•	Order 4 Rule 44 – Affidavits (service of the notice of motion for default judgment and supporting affidavits)

(1)	Where a notice of motion is founded on facts or on facts and documents, unless the court otherwise orders, an affidavit setting forth those facts and having annexed to it those documents (if any) shall be filed with the notice of motion, and a copy of the affidavits shall be served on the parties sought to be affected by the motion with the notice of motion.

(2)	A respondent may, before the date appointed for the hearing or, by leave of the court within such further time as may be fixed by the Court, file an answering affidavit and shall on the same day serve a copy of it on the applicant.

•	Order 6 Rules 2 of the National Court Rules –

1.	Mode of service (9/1)

Any document required or permitted to be served in any proceedings may be served personally, but need not be served personally unless personal service is required by these Rules or by order of the Court.
Order 2 Rule 3 – Vacation
(1)	There shall be a vacation in each year from 20 December to the following 31 January, both inclusive

(2)	Any Judge may sit in vacation for another and may in vacation exercise any authority which any Judge might exercise if he were present and sitting in Court

(3)	The time of vacation shall not be reckoned in the times appointed or allowed by the Rules for filing, delivering or amending and pleadings unless so directed by a Judge nor shall a pleading be delivered or amended, nor judgment be entered in default, unless under the direction of a Judge.

Consideration of the application

21.	In this case, the plaintiff’s writ of summon was served on the defendants on the 30 of December 2015. Under the normal circumstances, the defendants (not the State) were required to file a defence within 44 days from service of the writ of summons. 

22.	I note that the writ was served during the vacation period. The relevant Rule that applies to this is Order 2 Rule 3 which provides that there shall be a vacation in each year from 20 December to the following 31 January, both inclusive. Hence, the time of vacation shall not be reckoned in the times appointed or allowed by the Rules for filing, delivering or amending and pleadings unless so directed by a Judge nor shall a pleading be delivered or amended, nor judgment be entered in default, unless under the direction of a Judge.

23.	In applying these requirements to the current proceedings, the period of 44 days upon which a defendant is required to file a defence would run from the 1 of February 2016 and expire on or about the 16 of March 2016. That is from the 1-28 of February 2016 is 28 days and from the 1-16 March 2016 is 16 days, a total of 44 days.

24.	This takes us to the remaining issue of whether there was default within the meaning of the Order 12 Rule 25 of the National Court Rules.  The rule in question reads:

“25.	Default. (17/2)

A defendant shall be in default for the purposes of this Division—

(a)	where the originating process bears a note under Order 4 Rule 9, and the time for him to comply has expired but he has not given the notice; or

(b)	where he is required to file a defence and the time for him to file his defence has expired but he has not filed his defence; or

(c)	where he is required under Order 8 Rule 24 to verify his defence and the time for him to verify his defence in accordance with that Rule has expired but he has not so verified his defence.”

25.	Many judgments on this provision of the Rules have been published and I need not repeat all of the judgments. The basis of the principles applied are well settled and provided for under Order 12 Rule 25 of the National Court Rules. Additional rules or requirements and checklists now provide that certain ticks be checked off when considering an application for entry of default judgment; all for purposes of doing justice on the merits of and circumstances of each particular case (Hilary Singat v Commissioner of Police (2008) SC910).Amongst those requirements is the need to forewarn a defendant before filing and moving an application for default judgment (Mapmakers Pty Ltd v Broken Hill Pty Ltd) where the Court held that it is a good practice to forewarn a defendant who has filed a notice of intention to defend before filing and moving for default judgment (see also The Government of Papua New Guinea and Richard Harold Davis v. Stanley Barker)  where the Court agreed with this principle that this was good practice and by agreeing with similar views expressed in Pope v. Aberdeen Transport Co. Pty. Ltd. In situations where no forewarning has been given, this failure may be a ground for setting aside the judgment.

26.	A forewarning before filing and applying for default judgment serves two purposes.  The first part is to alert the defendant that the time within which he is required to file and serve a defence has expired. The second part is to allow the defendant more time as allowed under the rules to file and serve a defence. In all, the purpose of a forewarning letter is to alert a defendant who might have inadvertently overlooked the need for filing and serving its defence within the prescribed time limits the opportunity to do so all for the purposes of doing justice on the substantive merits of a case as opposed to a judgment based purely on technicalities and deficiencies or defaults in compliance with the rules of the Court, which are only a means to an end and not an end in them. 

27.	At the same time, the requirement also ensures that, a defendant is not taken by surprise by a default judgment. It avoids the possibility of an application to set aside a default judgment, causing unnecessary costs to the Court’s time and expenses. Similarly, it is also important to conduct of a search of the relevant court file to ensure that, there is no defence in the court file before filing and moving for default judgment.  Such a search must be conducted at the time of filing the motion; not prior to. This is to ensure that at the time of filing the motion for default judgment there is in fact no defence on the Court file. 

28.	Not meeting this requirement can invariably result in a default judgment being set aside. This is because, in some cases, a defendant may have filed his or her defence but could have inadvertently overlooked the need to serve the defence on a plaintiff or that the defence may have been sent to the wrong address or person.  Hence, a search of the relevant Court file would reveal whether a defence has been filed or not. 

29.	Overall, the above requirements are in accordance with the notion of “default” within the meaning of Order 12 Rule 25 which provides that there can only be a default if no notice of intention to defend (Rule 25(a)), or a defence (Rule 25(b)) or a verified defence (Rule 25(c) (as the case might be) has not been filed.  Where any of these documents is filed, strictly speaking, there can be no default in respect of any of them, even if they are filed outside the time limits imposed by the Rules. The default has to be in terms of filing the documents in question and not the time limits for filing it.

30.	For instance, under the Rules, the filing of a notice of intention to defend can be done even outside the time limits. Order 7 Rule 6(1) allows a defendant to file and serve his or her notice of intention to defend outside the prescribed time limits without leave of the Court. However, a defendant who does so, is not at liberty to file and serve his or her defence out of time or take any other step in the proceedings without leave of the Court. If he files a defence outside the time limited for him to do so and without leave of court, this failure would render the filing of his defence as being irregular and invalid for that purpose. However, it does not mean that, there is no defence filed to the claim. Rather, it renders the defence or step taken without leave, irregular and invalid but a defence remain valid until declared as irregular or invalid.

31.	A defendant faced with such a situation is at liberty to take steps to regularize or validate his defence upon application and showing good cause for doing so. Until such a defence is regularized or validated, no further step can validly be taken by reason of the irregularity or invalidity (see Philip Takori & Ors v. The Independent State of Papua New Guinea & Ors) where the State filed and served its notice of intention to defend and defence out of time without leave of the Court and then proceeded to successfully apply for summary judgment which the National Court granted. Mr. Phillip Takori being aggrieved by the decision, appealed to the Supreme Court. The Court upheld the appeal and held that the State was at no liberty to make the application by reason of filing its notice of intention to defend out of time and its defence also out of time without leave of the Court.  The Court was of the view that, the State could not file and then successfully apply for summary judgment without first obtaining the leave of the Court to do so. 

32.	In the present case, there is no issue that the defendants filed their notice of intention to defend. It was filed on the 11 of January 2016 and served on the same date at about 5.00 p.m. on one, Wapsy Nosam of Apo and Company Lawyers, Unit 1 Flat 1, Section 9 Lot 6, Winter Street, Port Moresby, NCD.

33.	It is noted that the defendants have not filed a defence to the claim. They now seek leave of court to extent time to file a defence out of time.  The plaintiff has also come to court to move an application for entry of default judgment and or summary judgment on the default of the defendants in filing a defence within the requisite period in filing a defence under the rules. 

34.	The defendants have in fact filed an application seeking orders that the entire proceedings be dismissed pursuant to Order 12 Rule 1 and Order 12 Rule 40 (1) and Order 8 Rule 27 (1) of the National Court Rules and for joinder of parties under Order 5 Rule 2 (b) of the National Court Rules.

35.	Here, there is no issue regarding the service of the writ of summons. A notice of intention to defend was filed by the defendants on the 11 of January 2016 by their lawyers, Greg Manda Lawyers. This confirms service (see Kanturk Ltd v Joe Kawage (2016) N6330) where the Court held that “By virtue of Order 6 Rule 2(3) National Court Rules therefore, as the writ shall be taken as being served upon the defendant personally, as the defendant by filing his notice of intention to defend has waived any irregularity in how the writ was served”.

36.	In SC No. 1 of 1998; Reservation Pursuant to Section 15 of the Supreme Court Act (2001) SC 672, the Supreme Court (comprised of Amet CJ, Los J, Sheehan J, Salika, J and Sakora J) held that the term “the State” in section 13 (no execution against the state) of the Claims By and Against the State Act includes provincial governments. However, in a proceeding where there is no claim against “the State” a section 5 notice under Claims By and Against the State Act 1996 is not necessary. This view was adopted in the Habolo Building case (supra) in which the Supreme Court stated: “if a person sues a provincial government, as distinct from the State and does not sue the State, it is not necessary to give a section 5 notice.” 

37.	Having set out the relevant principle of law applicable to the requirements of s 5 notice and the application for default judgment under Order 12 Rule 25 of the National Court Rules above, I now discuss the issue of whether the plaintiff has a claim against the defendants. An issue which has been raised by the defendants but not adequately canvassed by the parties. The reason I raise this is principally based on the question of whether the plaintiff has a cause of action against the defendants and an issue that would entitle the plaintiff to claim for damages to be assessed or for summary judgment if this court was minded to make such a ruling.

38.	The plaintiff, in its statement of claim, claims to be an entity incorporated under the Companies Act 1997 and is therefore capable of suing in that name and style.  The plaintiff states further that it is the proprietor of a State Lease Vol 16 Folio 223 over the property described as Section 2 Allotment 4, Tari, Hela Province. If the plaintiff’s claim is to be successful, it must be supported by some resolution passed by its shareholders to lodge a claim against the defendants.  In this case, the plaintiff has not pleaded such a resolution being passed.

39.	Upon perusal of the Company’s Extract dated 26 October 2015, it is apparent that the Shareholders of the Company are listed as (i) Sir Matiabe Yuwi (1 share) and (ii) Mr. Angawai Habolo (1). Also, before this Court is a Medical Certificate of Death of the late Sir Matiabe Yuwi dated 6 May 2014 (Annexure “A”) to the affidavit of Peter Yuwi sworn on the 9 of February 2018 and filed on 12 February 2018 (Document No. 29).  

40.	Given that one of the shareholders has since passed on, his interest in the company will have to be dealt with according to law. The remaining surviving shareholder Mr. Angawai Habolo remains. There appears however to be no resolution passed by the remaining surviving shareholder or the administrator or executor of the estate of the late Sir Matiabe Yuwi as to the affairs of the plaintiff company. 

41.	On the face of records, there appears to be no resolution passed by the shareholders as to the institution of these proceedings and therefore the question posed is, who authorises the Directors as in this case to pursue these proceedings?  That is a matter which would go to the merits of the claim so I will leave it here as I am not dealing with the substantive issues raised in this claim.

42.	However, it is relevant to the issue of whether there is a serious question to be tried and or that a grant of entry of default judgment can be entered in law? In this case, although the plaintiff on record is the proprietor of the subject land, I must point out that it must at this juncture be able to point positively to the basis that those who purport to act on its behalf and having the authority to do so. Hence, questions have to be asked as to how one is entitled to damages claimed in the sum of K1, 440,000.00 in mesne fee for the use and occupation of the land described as Section 2 Allotment 4 Tari, Southern Highlands Province.

43.	Under the Rules, an application for default judgement involves exercise of discretion. The Plaintiff is entitled to apply for default judgement under Order 12 Rule 25 of the NCR where the Defendants have failed to file their Defence within requirements under the Rules for filing of a defence after service of the writ.

44.	For purposes of this present application, the plaintiff says that the defendants have not complied with the Rules of Court. Consequently, the plaintiff says further that because the defendants have defaulted in filing their defence within the requisite period allowed under the Rules, it is entitled as of right, to entry of default judgment. 

45.	Given these circumstances, a court hearing an application for default judgment in its role as an adjudicator should not only just ‘tick the boxes’ so to speak. The Court must also take time to conduct an enquiry of the pleadings pleaded in the statement of claims to appraise itself of the nature of the claim and to also assess whether the pleadings disclose action as one where default judgment can be entered.  

46.	Order 12 Rule 32 of the National Court Rules gives the Court a wide discretion to enter or not to enter, default judgment. Therefore, the checklist and or requirement stated in the case of Urban Giru v Luke Muta [2005] PNGLR 387 and applied in the case of Bank South Pacific Ltd – v- Robert Tingke (2012) N4901 are relevant in determining whether or not default judgment can be entered even when proof of due service or process on a defendant or proof of the default is established by the plaintiff/applicant. In that the Court still has a discretion to refuse to enter default judgment in cases where, for instance, the effect of the default judgment would affect the rights of other co-defendants or do not disclose a reasonable cause of action or that the default judgment cannot be sustained in law. (Kante Mininga v. the State (1996) N1458; Anton Kaluni v. Aiyale Warole (2001) N2114; Beecroft No. 51 Ltd v. Neville Seeto (2004) N2561. 

47.	In Lina Kewakali v The State (2011) SC1091, the Supreme Court held that entry of default judgement is not a matter of right even where the preconditions are satisfied, as the decision whether or not to order default judgement remains a discretionary matter for the court (see also Agnes Kunton & Ors v John Junias & Ors (2006) SC929; Lambu v Torato (2008) SC953). Matters that this Court can take into consideration in exercising discretion, include (amongst others) the question of whether the defendants appear to have a good defence (Kunkene v Rangsu & the State (1999) N1917; the extent of default by the defendant (Kunkene v Rangsu & State (supra); whether the pleadings are vague, i.e. whether the statement of claim discloses a reasonable cause of action (Laki v Alaluku (2000) N2001. This is because, ”even if the plaintiffs establish proof of due service of process on a defendant and proof of default, the Court still has a discretion to refuse to enter default judgment in cases where the effect of the default judgment would prejudice the rights of other co-defendants, or that the pleadings are so vague or do not disclose a reasonable cause of action or that the default cannot be sustained in law..”: (Kante Mininga v Independent State of Papua New Guinea, Doctor Ponifasio and Doctor Scotty Maclfish (1996) N1458).

48.	Furthermore, where the plaintiff’s cause of action or entitlement to sue depends on a statute, it is crucial for the plaintiff to plead the necessary facts to bring him within that statute: Sear v. Lawson (1881) 16 Ch. D. 121; Read v. Brown (1988) 22 Q.B.D 128. 

49.	Finally, the court has inherent powers to take firm control of the proceedings to ensure that the business of the court is conducted in an orderly and fair and timely manner and to ensure that justice is done in the particular case, and this includes making necessary orders to progress a case (Karl Paul v. Aruai Kispe, The Regional Manager, PNG Forest Authority (2001) N2085).

50.	The court has a very wide discretion to enter default judgment. As Injia J (as he was then) held in Kante Mininga v. The State (1996) N1458.  Order 12 Rule 32 of the NCR gives the court a wide discretion to enter default judgment.  Even when proof of due service of process on a defendant and proof of the default is established by the plaintiff/applicant the court still has discretion to refuse to enter default judgment…”

51.	In Bella Kitipa v. Vincent Uali (1998) N1773, the Court categorized the situations where application for default judgment can be refused.  These were:

(1)	The effect of the default judgment would prejudice the rights of other co-defendants; or

(2)	The pleadings are so vague or do not disclose a reasonable cause of action; or

(3)	The default judgment cannot be sustained in law.”

52.	In determining whether the circumstances outlined above applied to this case, I am satisfied that the issue as to the rights of other co-defendants do not arise as default judgment has already been entered against the First, Second, Third, Fourth, Fifth, Sixth and Seventh Defendants on the 7th of July 2015 and has not been set aside. 

53.	However, the two remaining circumstances and or situations established in Bella Kitipa v. Vincent Uali (supra) will still need to be considered and determined. 

54.	In this case, I will deal with the issue of determining whether the pleadings are vague or do not disclose a reasonable cause of action and then determine whether default judgment can be sustained in law. In this regard, I have conducted a cursory inquiry of the pleadings in the Statement of Claim to determine whether the pleadings disclose a reasonable cause of action against the Defendants. In that exercise, I will have to examine the plaintiffs’ statement of claim particularly in regard to the question of the pleading of the necessary facts so as to disclose a cause of action against the defendants. 

55.	Firstly, I note that the Plaintiff has pleaded ownership of title over the subject land and has copy of the title to prove his claim. Whilst it is noted that the plaintiff had title over the property, the fact remains that those pursuing the claim may not have the authority to do so given the differing views expressed by the purported beneficiaries of the estate of the late Sir Matiabe Yuwi and the absence of any specific resolution by the remaining surviving shareholder of the interest in the plaintiff company, a Mr. Angawai Habolo. 

56.	These events and or occurrences do have an impact on the validity of the proceedings. Upon further enquiry of the pleadings, I find that the plaintiff has not pleaded the necessary facts giving rise to the actions or the nexus or connection within which these actions or omissions were committed. Hence, the issue of establishing a nexus or connection to the claim or entitlement comes into play. In Jack Pinda v Sam Inguba (2012) SC1181, the Supreme Court held that the lack of pleading is a point of law and must be founded on a proper pleading of a cause of action in law ...” Paul Gigmai -v- Motor Vehicles Insurance Limited (2004) SC750.

57.	Other matters which I must point out in these proceedings relate to the manner in which the first application for default judgment was mounted which led to the appeal and now this subsequent application, matters raised here relates to the period allowed for filing pleadings during the Court Vacation and how time is reckoned with. For this case, the Writ was filed on the Defendants on the 30 of December 2016 during Court Vacation. According to Order 2 Rule 3 (1) of the National Court Rules, the Court vacation runs from 20 December to the following 31 January. In this case, 31 January 2016. The Defendant filed their NOID on the 11 January 2016 which is within time. Although strictly speaking, they have 30 days (Order 4 Rule 11 of the National Court Rules) to file their notice of intention to defend which would take them to about or on 3 March 2016. They have then 14 days from the 3rd of March 2016 to file their defence which would expire on the 17 March 2016. I also note the defendants had filed an application to dismiss the entire proceedings on or about 11 of January 2016 which was heard on the 12 of January 2016 which the defendants were at liberty to do so after having filed a notice of intention to defend (See Waim No. 85 Ltd v The State (2015) SC1405). This led to a ruling for dismissal and subsequent appeal which was upheld on the 24 of November 2016. 

58.	The plaintiff in this present case opposes the defendants’ application for leave to extent time to file a defence out of time on grounds of substantial delay. They say that from the date of Supreme Court order of 24 November 2016, it is 1 year 3 months and no reasonable reasons have been provided by the defendants as to the delay in seeking leave of court to extent time to file a defence out of time. Therefore, the plaintiff seeks entry of default judgment for damages to be assessed. 

59.	The plaintiff says that it has a clear cause of action known in law based on the principles of ejectment and damages for trespass. The Plaintiff has a certificate of title. Further, the Defendants do not appear to have defence on the merit?

60.	If there are any issues or objections relating to the propriety of obtaining title to the land, these matters are not raised before the Court and or are irrelevant matters for determination. Furthermore, any issues raised in relation to the Company structure is for the Company own structure and shareholder and further, any requirement to ensure that there are relevant materials must back up any draft defence (Duma v Hriehwazi [2004] N2526 in which the Court stated:

“For I was and am still of the firm view that, a satisfactory explanation must be provided for allowing prescribed time limits to expire. Such explanation should include a provision of evidence of steps meaningfully taken toward a filing of a defence but for the time limits. The explanations should come from the defendant and in the case of a company, a responsible person having knowledge of the relevant facts. I arrived at that view because, there is no provision in the rules or in any law that allows for an automatic extension of the time limits under the Rules of the Court. Instead, it is something that is within the jurisdiction and discretion of the Court to allow on a proper case made out for an extension of the time stipulations, to avoid unnecessary delays and costs to the parties and unnecessary waist of the Court’s limited judicial time.

Also, I was and am still of the view that, if a defendant is able to provide an explanation for allowing time to expire that alone is not enough. He or she has a further obligation to demonstrate by appropriate evidence that he or she has a good defence on the merits which warrants a hearing. The reason for this is again, the need to avoid unnecessary delays in a plaintiff getting to judgement, avoidance of unnecessary costs to the parties and wastage of the Court’s limited judicial time.

Applying the above principles to the application before me, I found that the defendants did not provide a reasonable explanation for allowing the time limits for the filing of their defence to expire and that the affidavit in support did not disclose a defence on the merits. The draft attached to Mr. Gomez’s affidavit had no factual foundation for it Hence; I concluded that without any factual foundation in the affidavit in support of the application, there could be no draft defence. The statement of facts in an affidavit from a defendant or a responsible person must disclose the basis for a draft defence.

I alluded to the need to do that in Vivisio Seravo v Jack Bahafo. I was then and now still persuaded by what the Supreme Court said in Provincial Government of North Solomons v. Pacific Architecture Pty Ltd. There the Supreme Court said at p.148:

…. [T]he defendant must ‘condescend upon particulars.’ It is not enough to swear ‘I say I owe the man nothing. Doubtless, if it is true, that you owed the man nothing, as you swear, that would be a good defence. But that is not enough. You must satisfy the Judge that there is reasonable ground for saying so.”

The Supreme Court reaffirmed this in its subsequent judgment in Leo Duque v. Avia Andrew Paru, in these terms:

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

In the present case it was the responsibility of the appellant to state material facts showing a defence on the merits. As we have indicated before, the appellant filed an affidavit setting out the reasons why judgment was entered but he failed to state any facts which shows any defence on the merits. A proposed defence prepared by the lawyer is not capable of serving this purpose. The expression of opinion by the lawyer that there is good prospect of serving this purpose. The expression of opinion by the lawyer that there is good prospect of success can only amount to a legal opinion. It is not capable of raising the material facts.”

61.	In this present case, the defendants rely on the affidavit of William Wai Bando sworn on the 18th of July 2017 and filed on 12 February 2018 in support of their application for leave to extent time and to file a defence out of time.  He deposes to being the second defendant and therefore has personal knowledge of the facts attested to in his affidavit and the draft defence attached to his supplementary affidavit filed on 13 of March 2018. 

62.	Upon perusal of the reasons provided in both affidavits, I have formed a view that given various circumstances under which the State agencies had embarked on the funding of the construction of the Hela Provincial Headquarters and the value of the assets erected on the subject land including the various aspects of the draft defence raised particularly in relation to paragraphs 4.4 which states that the Hela Transitional Authority took possession of the subject land on or about 17 May 2012. If the plaintiff had title over the property it would have raised objections then but it did not. Further, the late Sir Matiabe Yuwi was the Chairman of the Transitional Authority, he also did not and or failed to raise any objections to the construction of the Hela Provincial Headquarters on the subject land which is valued at more than K80 million.  In addition, paragraph 9.1 of the draft defence raised issues of irregularity or impropriety in the filing of these proceedings on the basis that Mr. Newton Yuwi lacks standing to represent the plaintiff company and that no shareholder’s meeting has been had to authorise the institution of these proceedings. Further, the interest of the estate of the late Sir Matiabe Yuwi rests with the Public Curator.

Application for joiner

63.	In relation to the application for joinder, I view this application not correctly raised before the Court. I make no finding on it except to say that this is a matter for those interested in these proceedings to pursue individually and separately if they so wish.

64.	Given all these matters and in the exercise of discretion, entry of default judgment is declined. Leave to extent time is granted to the defendants to file a defence out of time. Such defence to be in conformity with the draft defence annexed to the affidavit of William Bando filed on the 12 of February 2018. 

Order of the Court 

(1)	The application for entry of default judgment is refused.

(2)	Extension of time is granted to the defendants to file a defence out of time within 7 days from the date of this ruling.

(3)	Costs are in the cause.
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Apo & Co Lawyers:  Lawyers for the Plaintiff		
Greg Manda Lawyers: Lawyers for the Defendants