Nambawan Super Ltd v Paul Paraka (trading as Paul Paraka Lawyers) [2020] PGNC 139; N8375 (22 June 2020)

N8375

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 1662 of 2016 (COMM)

BETWEEN:
NAMBAWAN SUPER LIMITED
Plaintiff

AND:
PAUL PARAKA trading as PAUL PARAKA LAWYERS
Defendant

Waigani: Anis J
2019: 13^th & 16^th December
2020: 22^nd June

INTERLOCUTORY APPLICATIONS – Two applications - Application for default judgment or alternatively for summary judgment - Order 12 Rule 28, Order 12 Rule 38(1) – National Court Rules – Application for extension of time to file defence out of time – Order 1 Rule 7, Order 7 Rule 6(2) - National Court Rules

DEFAULT JUDGMENT - Application for default judgment – default not disputed

LEAVE TO AMEND NOTICE OF MOTION – oral application by defendant to amend application to add additional source namely Order 7 Rule 6 – National Court Rules – uncontested – discretion – leave granted

EXTENSION OF TIME TO FILE DEFENCE OUT OF TIME – delay – explanation of delay – whether delay inordinate – explanation for failing to file defence within time – whether explanation valid or reasonable – defence – whether evidence shows defence on merit – interest of justice and prejudice – whom does interest of justice favour and whether the plaintiff has or will suffer prejudice – exercise of discretion

PRACTICE & PROCEDURES – draft cross-claim – whether a relevant consideration by the Court in an application for extension of time to file defence out of time – Order 8 Rule 38(2) - National Court Rules - considered

Cases Cited:

Luke Tai v. Australia and New Zealand Banking Group (PNG) Limited (2000) N1979
Kipane v. Anton and PNG Water Board (2003) N2429
Alois Alauro Maima v. Walkaima Essy (2016) N6334
William Duma v. Yehiura Hriehwazi (2004) N2526
Tipaiza v Yali, Governor Madang Province (2005) N2971
Michael Pundia v. Jerry Kiwai (2011) N4427
Agnes Kunton & Ors v John Junias & Ors (2006) SC929
David Lambu v Paul Torato (2008) SC953
Lina Kewakali v. The State (2011) SC1091
Ben Keimali v. Kotu Akema (2010) SC1061
Urban Giru v. Luke Muta (2005) N2877
Life Insurance Corporation (PNG) Limited v. Bank South Pacific Limited (2012) N4740
Niugini Civil and Petroleum Ltd v. West New Britain Development Corporation Ltd (2006) N4152
Jackson Walaun v. Royale Wilson (2016) N6272
Nick Aiyan of Lamatlik Clan v. Philemon Toizik and Ors (2016) N6457
Heva Jones Rarua v. Ballimore No. 39 Ltd (2019) N7830
Nambawa Super Ltd v. Paul Paraka (2018) N7686

Counsel:

Mr D Wood, for the Plaintiff
Mr P Paraka, in Person

RULING

22^nd June, 2020

1. ANIS J: Two (2) applications were heard together on 13 and 16 December 2019. I reserved my ruling thereafter to a date to be advised.

2. Parties have been notified so I will rule on them now.

BACKGROUND

3. The plaintiff is seeking damages for breach of contracts. It is also seeking outstanding rentals and other charges against the defendant. Its claim is made based on two contracts. The first is a commercial lease agreement (the lease) and the second is a deed of settlement and indemnity (the deed). The lease was signed earlier on 10 September 2013 whilst the deed was signed on 23 March 2016. Before 2017, the defendant used to occupy 3 levels of a story building that is owned by the plaintiff. The building is called Mogoru Moto (the building). The building is situated in down town Port Moresby in the National Capital District. The parties had differences in the past regarding rents and charges for the defendant’s occupation of the building as well as his occupation of the plaintiff’s other properties that had also been rented out to him. The disputes appeared to have continued even after the signing of the lease in 2013. So in 2016, the parties, it seems, have ironed out their differences by entering into the deed. In the deed, the parties set out terms whereby they each agreed to forgo their various past claims and objections concerning rental arrears and charges. It was agreed in the deed, amongst other things, that the rental payments for the lease of the building would resume on 1 April 2016. It was also agreed that the defendant would by March of 2016 pay the plaintiff a final rental arrears which was determined in the sum of K373,423.11.

4. On 22 December 2016, the plaintiff commenced this proceeding, that is, after it determined the lease on 9 December 2016. It says that contrary to the terms of the lease and the deed, the defendant had defaulted in paying his rents to the building as at 1 April 2016 to the time when the lease was determined. It also says that the defendant has breached the terms of the deed, and in particular, of his obligation to pay the K373,423.11 by March of 2016. It claims, amongst others, a liquidated sum of K2,626,425.50, damages, interest and cost.

THE 2 APPLICATIONS

5. What I have before me is the 2 applications. For the plaintiff, its notice of motion was filed on 8 August 2017. It seeks default judgment or in the alternative summary judgment, with damages to be assessed. As for the defendant, his notice of motion was filed on 25 August 2017. He moves on the balance of the relief sought in his application, that is, for extension of time to file his defence out of time. The defendant also says that he intends to file a cross-claim if leave is granted.

COMMON GROUND

6. The defendant concedes that he was out of time to file his defence and cross-claim within the required time under the National Court Rules. This of course explains why he is seeking extension of time in regard to his application. In addition, I must say that I have considered the written submissions and evidence filed by the parties in regard to this issue, as I will explain below in my judgment. And I find and am satisfied that the defendant has defaulted in filing his defence.

7. I will proceed to hear arguments in relation to the defendant’s application, and determine whether he should be granted leave to file his defence out of time, or whether his application should be dismissed and whether I should instead grant default judgment or alternatively summary judgment with damages to be assessed, in favour of the plaintiff.

PRELIMINARY ISSUE

8. I note from the written submissions of the plaintiff where it questions the source of the defendant’s application. The plaintiff submits that the correct source to invoke to apply for extension of time to file defence out of time would ordinarily be Order 1 Rule 15 of the National Court Rules. In this case, the defendant has pleaded Order 1 Rule 7 as his source in his application. At the opening, the defendant orally sought leave of the Court to include Order 7 Rule 6 of the National Court Rules, as part of its sources in his application. The oral application was not contested.

9. I have considered the rules and the submissions. To me, I will grant leave to the defendant to amend his application to include Order 7 Rule 6 as his additional source to the relief which he seeks. Firstly, I note that his oral application appeared unopposed. Secondly, I take into account the interest of justice, and in particular, of the need for the Court to make a determination in regard to the substance of the defendant’s application. But having made this decision, I note that it still does not resolve the plaintiff’s argument. The plaintiff submits that ordinarily the correct rule should be Order 1 rule 15. Let me, as a start, set out the 2 rules, that is, Order 1 rule 15 and Order 7 Rule 6, herein:

15. Extension and abridgement. (2/3)
    

(1) The Court may, on terms, by order extend or abridge any time fixed by the Rules or by any judgement or order.

(2) The Court may extend time under Sub-rule (1) as well after as before the time expires whether or not an application for the extension is made before the time expires.

(3) The period within which a person is required by these Rules or by any order to serve, file or amend any pleading may be extended by consent without an order for extension.

.....

6. Late notice. (11/6)
   

(1) A defendant may give a notice of intention to defend at any time without leave.

(2) Where a defendant gives a notice after the time limited for doing so, he shall not, unless the Court otherwise orders, be entitled to file a defence or do any other thing later than if he had given a notice of intention to defend within that time.

10. Which of these rules is the correct source to be relied upon for one to apply for extension of time to file his or her defence out of time? Let me refer to the case authorities for assistance. I think the one on point is the case of Luke Tai v. Australia and New Zealand Banking Group (PNG) Limited (2000) N1979. The Deputy Chief Justice Sir Mari Kapi (as he then was), stated in part, and I quote:

This conflict can be avoided if the critical words are interpreted to take into account the requirements in O 1 r 15, O 7 r 6 (2) and O 8 r 4 (b) of the Rules. It is well established principle of interpretation of statute that:

“While we are to collect what the legislature intended from what it has said, we must look, not at one phrase or one section only, but at the whole of the Act ....”

......

Taking these principles into account, I would interpret the critical words in context to mean a defence filed in accordance with the Rules. That is to say, a defendant who has allowed time to expire may file defence in accordance with O 1 r 15 (3), or in accordance with O 1 r 15(1) or in accordance with O 7 r 6 (2).

11. The Luke Tai case was applied in the cases of Kipane v. Anton and PNG Water Board (2003) N2429 and Alois Alauro Maima v. Walkaima Essy (2016) N6334. Justice Kirriwom in Kipane’s case, stated these and I quote:

Under Order 1 r.15 the court has power to extend time either on its own volition or on application. In other words it is within the discretion of the court to extend time where it has expired. And Order 12 r. 25(b) says that ‘a defendant shall be in default....where he is required to file a defence and the time for him to file defence has expired and had not filed his defence’. While the literal reading of this Rule appears to allow late filing of defence, reading the Rules as a whole, the requirement under O. 7 r. 2 may go begging and this was an overriding consideration in Luke Tai v Australia and New Zealand Banking Group (PNG) Ltd (supra), and I endorse the view expressed by Kapi, DCJ. There is no question in my mind that the combined operation and effect of O.1 r.15, O.7 rr. 2 and 6(2) and O.12 r.25 (b) is that the defendant must seek and be given leave to file his defence. He cannot get away from his default or failure by discreetly leaving documents with the court registry and hope to have met the requirements of the Rules. It is unfortunate that the registry personnel are not equipped with the necessary skills and training to be able to make on the spot decision on what documents are to be accepted for filing and which ought to be rejected as defective.

12. I adopt the above decisions herein to the present case. I will add by saying that in an application for extension of time to file defence out of time, it is sufficient to plead Order 1 Rule 15, or Order 12 Rule 25(b), or Order 7 Rule 6, that is, together or otherwise, as the source(s) to the relief. I will remark that in practice, parties do also ask the Court to invoke its powers under section 155(4) of the Constitution. All these citations, to me, tend to cause Courts to create additional rules and decisions which are evident in recent developments of the National Court Rules and in the case law. Sometimes, these can become cumbersome, confusing and perhaps one may even argue whether Courts are reading too much into these rules when trying to figure out whether a correct source has been cited in an interlocutory matter. There is a danger, in my view, that these may eventually lead to a situation where compliance of specific rules may overtake or become more important or relevant than the actual problem or substance of an interlocutory matter that is before the Court for determination that is lodged by an aggrieved party. I caution or remind myself of these with this remark.

13. In conclusion, I find that the defendant, at the very last minute, correctly applied for and has now been granted leave to amend his application to add a further source, namely, Order 7 Rule 6 of the National Court Rules. Therefore and for reasons stated above, I am satisfied that Order 7 Rule 6 is a correct source where the defendant may invoke to apply for extension of time to file his defence out of time. I will now consider the merit of the defendant’s application.

ISSUES

14. The issues before me are as follows:

(i) Whether there was delay in making the application, and if so, whether the delay was inordinate;

(ii) Whether the defendant has a valid reason(s) for not filing his defence within the time that is specified under the National Court Rules;

(iii) Subject to or regardless of my findings on issues 1 and 2, whether the defendant has a valid defence as alleged that should warrant this Court to refrain from exercising its discretion to enter judgment in default or summary in favour of the plaintiff, and instead allow the defendant time to file and serve his defence out of time;

(iv) Which party does the interest of justice favour when considering exercise of discretion?

EXTENSION OF TIME TO FILE DEFENCE OUT OF TIME

15. The relevant tests for seeking extension of time to file defence out of time, although not exhaustive, have been settled over time in the case law. See cases: William Duma v. Yehiura Hriehwazi (2004) N2526, Tipaiza v Yali, Governor Madang Province (2005) N2971 and Michael Pundia v. Jerry Kiwai (2011) N4427. I summarise them as follows:

1. The applicant must provide a reasonable or valid explanation for failing to file his or her defence within time;
2. If there had been a delay in making the application, the applicant must provide a reasonable or valid explanation for the said delay;
3. The applicant must demonstrate with evidence that there is a defence on merit;
4. Who will suffer prejudice if the extension is granted or otherwise?
5. Which party does the interest of justice favour?
   

16. The Court’s power of course remains discretionary. In other words, even if I am satisfied that the above requirements have been met, I could nevertheless decide against exercising my discretion, that is, depending on the circumstances of the case. But the said discretion can only be exercised judicially, that is, based on proper principles of law or fairness. See cases: Agnes Kunton & Ors v John Junias & Ors (2006) SC929; Lambu v Torato (2008) SC953, Lina Kewakali v. The State (2011) SC1091, Ben Keimali v. Kotu Akema (2010) SC1061 and Urban Giru v. Luke Muta (2005) N2877.

DELAYS?

17. The writ of summons and statement of claim was filed on 22 December 2016 (the writ). The writ was served on the defendant’s Tarua Ogela on 26 December 2016. This is evident from the affidavits of Terry Injia filed on 8 August 2017 and 28 December 2016. I note that although personal service was not effected, evidence shows that the defendant had arranged for the writ and the application documents to be served through his staff Mr Ogela, who had received the court documents on behalf of the defendant, on 26 December 2016. The defendant has also conceded that in his submissions in Court. I am therefore satisfied and find that service of the writ and the application documents had been duly effected on the defendant on 26 December 2016. The defendant filed his notice of intention to defendant on 26 January 2017. I note that filing and service of the notice of intention to defendant is not an issue. So if there is any doubt as to the service of the writ, then Order 6 Rule 2(3) of the National Court Rules shall, in my view, come into play. It reads, and I quote in part:

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 that notice is filed or on such earlier date as may be proved.

18. Let me now address or compute time to determine whether there were delays in the matter. A court vacation period, which commences from 20 December to 31 January each year, is excluded for purposes of computing time to file notice of intention to defend and defence. See cases: Life Insurance Corporation (PNG) Limited v. Bank South Pacific Limited (2012) N4740 and Niugini Civil and Petroleum Ltd v. West New Britain Development Corporation Ltd (2006) N4152. More precisely, Order 2 Rule 3 of the National Court Rules states, and I quote:

(1) There shall be a vacation in each year from 20 December to the following 31 January, both inclusive.

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

(3) The time of the vacation shall not be reckoned in the times appointed or allowed by these Rules for filing, delivering or amending any pleading 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.

19. The writ and notice of intention to defend in the present case, were filed and served during the court vacation period, that is, in December of 2016 and in January of 2017. As such, computation of time to file notice of intention to defend and defence shall commence as of 1 February 2017. Forty-four days as of 1 February 2017 would be 16 March 2017. See case: Jackson Walaun v. Royale Wilson (2016) N6272.

20. The defendant’s application was filed on 25 August 2017. If I compute the delayed period from 16 March 2017, it will be 5 months 9 days. However, I note that consents had been obtained by the defendant from the plaintiff on 2 separate occasions, to file his defence out of time. Evidence of these are contained in Mr Injia’s affidavit filed on 8 August 2017. The first extension was granted by the plaintiff in its letter dated 23 May 2017 to the defendant. It is attached as annexure A1 to Mr Injia’s affidavit. I note that a copy of letter was also emailed directly to the defendant on the same day. The plaintiff extended the time for the defendant to file his defence out of time, from 15 May 2017 to 3pm on 30 May 2017. By 3pm on 30 May 2017, the defendant did not file his defence. On 5 June 2017, the plaintiff, through its lawyers, wrote another letter to the defendant where it, amongst others, granted the defendant a further extension of time to file his defence out of time. The letter is marked as annexure B1 to Mr Injia’s affidavit of 8 August 2017. This time, time was extended to close of business at 3pm before or by 16 June 2017. By 16 June 2017, the defendant did not file his defence. On 19 June 2017, the defendant wrote to the plaintiff requesting for further extension of time to be granted to him. The letter is annexed as annexure Z-20 to the defendant’s affidavit filed on 1 September 2017. It is also marked as annexure D to Mr Injia’s affidavit of 8 August 2017. The plaintiff denied the request for a further extension of time. Its denial is contained in its letter to the defendant dated 21 June 2017. It is marked as annexure E1 to Mr Injia’s affidavit of 8 August.

21. The defendant files his application requesting extension of time to file his defence out of time on 25 August 2017. If I compute the delay period based on the letter by the plaintiff that had refused to extend time, which is dated 21 June 2017, the delay period would be 2 months 4 days. If I compute delay based on the expiry date of the second extension which was 16 June 2017, the delay period would be 2 months, 9 days. The latter, in my view, should and is the correct delayed period for this purpose.

22. I find that the defendant had delayed for a period of 2 months 9 days before he filed his application.

EXPLANATIONS FOR DELAY OF 2 MONTHS 9 DAYS

23. The next question I have is this. What is the explanation given by the defendant for the delay of 2 months, 9 days? I refer to the defendant’s evidence which is his affidavit of 1 September 2017. The defendant gives his reasons at paragraphs 172, 173, 174 and 175. At paragraph 172, the defendant states, and I quote:

172.The month of June and July were peak period during the election campaign, and at our campaign headquarters distraction was part of the chaotic situation, I couldn’t find the peace to undertake the preparation of the Defence.

24. The defendant also states this second reason. He said he had 2 trials that were set down for hearing in Mt Hagen and at Waigani from the 15^th and the 16^th of August, 2017. He said that he had to prepare for them; he said he had no lawyer assisting him at that time.

25. I have considered the submissions of both counsel. In my view, I do not find the explanations for the delay of 2 months and 9 days, reasonable or valid. The circumstances of this case is different. Let me explain. The defendant was served with the writ on 26 December 2016. He was not served directly but I have covered that above in my judgment. He therefore had, as of that date to the last date of his final extension which was on 16 June 2017, a total period of about 6 months to file his defence, that is, including the extended period that had been consented to by the plaintiff. When I look at that time frame and compare that with the normal 44 days requirement under the National Court Rules for a defendant to file his or her notice of intention to defend and defence, the defendant has had about 4 sets of 44 days within which to file his defence. Three of the sets consist of the number of days when the Court was in vacation and the days that had been consented to by the parties. So despite having these extended time to file his defence, the defendant had decided to use the time to do things that are unrelated to this proceeding. Now, I note that those were decisions which the defendant was entitled to make at his own free will. But by so doing, the defendant has firstly failed to file his defence within the 44 days that is allowed under the National Court Rules, as well as within the extended period as agreed to by the parties at those two occasions as covered above in my judgment. Not only that, the defendant’s decision to spend the months of March, April, May and to as far as 16 June 2017 on other matters, was done during the period not when he was entitled to file his defence as of right but after he had obtained extra time for the sole purpose of filing his defence out of time. In other words, the defendant’s own evidence shows that he was deliberately using the extended period in March, April, May and June attending to other matters such as campaigning and attending to other Court cases. And when the defendant was finally denied a further extension on 21 June 2017, which was the date when the plaintiff notified him, he, as shown in his own evidence, uses a further 2 months, 9 days, to continue with his election campaign and other matters that are not related to his defence or the proceeding. In other words, the defendant’s defiance to file his defence and to instead put his efforts elsewhere continued for a further 2 months and 9 days before he filed his application for extension of time to file his defence out of time.

26. Therefore and as stated, I am not satisfied that the defendant has provided a reasonable or valid reason for the delayed period of 2 months 9 days before he filed his application.

REASON(S) FOR NOT FILING DEFENCE WITHIN 44 DAYS

27. The next issue is whether the defendant has shown valid reasons for not filing his defence within the time required under the National Court Rules, in this case, within 44 days.

28. Based on the submissions of both parties, there is no real issue on computation of time, that is, of the fact that the due date for filing a defence by the defendant fell on 15 or 16 March 2017. In my view, the correct last date should be 16 March 2017 as already stated above in my judgment. So I ask myself this. What was or were the explanation(s) given for not filing the defendant’s defence before or by 16 March 2017, and is or are they valid reason(s)? I refer to the defendant’s affidavit of 1 September. The relevant depositions may be found at page 38 starting at paragraph 164. The defendant begins by saying that he filed and served his notice of intention to defend on the plaintiff on 26 January 2016. He then discusses the interim proceedings that occurred in Court before Justice Hartshorn on the 14^th, 16^th and 30^th of December of 2016. He also deposes that the threat of evicting him from his office which he had held for over 22 years had also affected his mind during that time. The defendant then at paragraph 170, states these:

170. 170. On 17^th April, 2017, I nominated and contested the NCD Governor’s Seat in the 2017 General Elections. From April 2017 to 31^st July, 2017, I was heavily involved in the election campaign and it was difficult for me to sit down to undertake a process of review of all my old materials in respect of the Lease of the premises from 2004 – 2016. The work was tedious and difficult especially when all our records were relocated after the removal process at the Mogoru Moto Building, and retrieving them once again from where they were also took some time.
     

29. I note that the defendant did not depose evidence to show what he did from 1 February 2017 to 16 March 2017. That period is the 44 days period where he was required to file his defence. What was his explanation for not filing his defence during that time? As stated, he does not explain that in his evidence. The only deposition I may consider where the defendant appears to give a reason for not filing his defence within the 44 days, is in regard to his state of mind. He states at paragraph 168, and I quote:

168. 168. It was difficult to bear the thought of being evicted and locked out from a premises that I commenced my legal career for over twenty-two (22) years ago in 1994, and had been part of my life, and such thought affected my state of mind.
     

30. Whilst I do appreciate the reason, which may be the case in the situation as explained by the defendant, I am not satisfied that that may be regarded as a valid reason or excuse for such a failure. The fact that the defendant had not been paying rent for occupying the building since March of 2016 and the fact that the actions to evict him was by the owner of the building which is the plaintiff, in my view outweighs this reason given by the defendant. Other facts as deposed to by the defendant show that he had dealt with the matter on 30 December 2016 and also before that. In addition to the 44 days, given that court vacation period is not counted, the defendant essentially had an extra 1 month and 5 days from 26 December 2016, to file his defence. In total, he had about 79 days to file his defence from the date and time when he was served with the writ. It does not also help his argument if I take into account his evidence where he says that in April of 2017, he nominated to stand for the 2017 General Elections. To me, the defendant appears to clearly demonstrate that he did not give priority to this case and file his defence within time. He instead chose to do other things during the time. Now that he is being asked to explain himself why he failed to comply with the court rules, he provides no valid reasons to justify his inaction.

31. In the end, I find that the defendant has failed to show any valid reason why he failed to file his defence within the 44 days plus the extra month and 5 days that had been allowed under the National Court Rules.

DEFENCE ON MERIT

32. The next consideration is defence on merit. I ask myself this. Does the defendant have a defence on merit that I should consider and thus exercise my discretion and grant him leave to file his defence out of time?

33. A good place to begin in my view would be the writ. The lease and the deed are pleaded therein. The material terms of the deed include the following, (i), it was agreed under clause 1 that the plaintiff shall withdraw or forgo its outgoing charges of K3,448,840 for the period between on or about 2004 to May/June 2010, (ii), it was agreed under clause 2 that the defendant shall withdraw any reservation to his objections to the outgoing charges of K2,254,447 for the period between June 2010 and June 2013, (iii), it was agreed under clause 4 that as of 1 March 2016, the defendant owes the plaintiff K373,423.11 as outstanding rental arrears, (iv), it was agreed under clause 5 that the defendant shall immediately settle its rental arrears of K373,423.11, and (v), it was agreed under clause 6 that the defendant shall as at 1 April 2016, commence paying his rents under the lease on a monthly basis in advance of each month. And as stated, the plaintiff claims that the defendant breached these material terms of the deed, and it seeks, amongst others, a total of K2,626,425.50 which it says is due under the deed as well as the lease, that is, for the agreed arrears and the rents that had been due for the duration of the lease until its determination in December of 2016.

34. Copies of the lease and the deed are adduced in evidence. They are attached as annexures MM1 and MM2 respectively to the affidavit of Merv Moniz filed on 22 December 2016. They are also attached as annexures E and A respectively to the defendant’s affidavit of 1 September 2017.

35. Let me now consider the evidence adduced by the defendant. I refer to the defendant’s affidavit of 1 September 2017. It is a very thick affidavit numbered as document 37 in the Court file (affidavit of 1 September). The defendant also filed 2 additional affidavits on the same date which I refer to as affidavits 1 and 2. I have also considered them together with his submissions. I note that the defendant mainly relies on his affidavit of 1 September. The relevant depositions are contained at paragraphs 139 to 152. Let me summarise them with my observations, as follows:

(i) The defendant admits or acknowledges his contract with the plaintiff, that is, the deed which was entered into on 23 March 2016 and also in regard to its determination on 9 December 2016;

(ii) The defendant begins by saying that the plaintiff had used “unfair tactics” to secure the deed;

(iii) The defendant deposes and provides evidence of his attempts to secure funds to pay his rent and rental arrears as agreed to in the deed;

(iv) The defendant deposes and provides evidence of extensions sought between himself and the plaintiff through its agent, to extend time from month to month since April of 2016, to allow him time to secure funds to settle his rents and arrears that were due under the lease and the deed; and

(v) The depositions prove or confirm that the defendant failed to pay his rents and arrears as agreed, that is, from the date the deed was signed on 23 March 2016 to the determination of the lease on 9 December 2016.

36. What do I make of this evidence? I refer to the claim by the defendant of alleged “unfair tactics”. Evidence adduced by both parties show that the deed appeared to have been entered into upon the free will of the parties. The deed shows claims of sums of monies and objections from both sides that had to be forgone by the parties in order to move forward with their business dealings. The defendant is a private practitioner with more than 20 years of legal experience. I find it difficult to accept his claim or defence as deposed to in his affidavit to be valid. Also, I note the following from correspondences that had exchanged between the parties which are attached as annexures “Z5 to Z15 to the affidavit of 1 September. The defendant starts off by asking for extension of time to secure funds to pay for his rentals and arrears in accordance with or as per the terms of the lease and the deed. The defendant continues to ask for extensions after April, May and June of 2016, without complaining in regard to the deed and the lease. Then at annexure Z-11, which is a letter by the defendant dated 28 July 2016, the defendant begins to raise arguments against the deed. This started and continued it seems only after or when frustration started to mount between the parties because of broken promises by the defendant to pay his rents and arrears. I can see the pattern there and to me, I wonder whether the defendant has any real arguments against the deed and the lease. The defendant, according to the evidence of both parties, shows that he had no issues from the time he signed the deed and from months that followed after that. There is also evidence adduced by the plaintiff which shows that the defendant had also given evidence in another proceeding where he had admitted to the lease and the deed as well as their terms and conditions. I refer to annexures MM21 and MM22 to the affidavit of Mr Moniz filed on 22 December 2016. The Court proceeding is OS 115 of 2014. His Honour Justice Yagi appeared to have covered the matter in his ruling. I say this with reference to annexure MM23 of Mr Moniz’s affidavit which attaches a copy of the said Court’s decision. With these, it raises, in my view, the question of whether the defendant should have appealed the decision to the Supreme Court, and if he has not then whether he should not be allowed to raise them again here in this proceeding.

37. The defendant makes references to or of his intention to rely on the Fairness of Transactions Act 1993 (FT Act) and also his intention to nullify the lease and the deed. In addition to my considerations and findings above, let me say this. The lease and the deed may be transactions within the meaning of the FT Act. And they were both signed or transacted by the parties well over 3 years. The lease was signed on 10 September 2013 and the deed on 23 March 2016. Section 11 of the FT Act sets out the time limitation within which one may commence proceedings under the Act. It states, and I quote in part:

(1) Any proceedings under this Act shall, subject to Subsection (2), be commenced soon after the party aggrieved by the transaction to which they relate suffers the disadvantage or becomes aware of the matters which amount to or constitute the unfairness, as the case may be, but no action shall lie later than three years after the date of the transaction.

(bold lettering mine)

38. See also the cases: Nick Aiyan of Lamatlik Clan v. Philemon Toizik and Ors (2016) N6457 and Heva Jones Rarua v. Ballimore No. 39 Ltd (2019) N7830.

39. It could appear therefore that the intended defence or action by the defendant may be time-barred under the FT Act. I am therefore not satisfied that there may be a valid defence or argument in that regard. The next point I wish to make is this. The defendant indicates that he intends to also seek nullification of the lease because of various reasons including the fact that the lease was not stamped pursuant to the Stamp Duties Act Chapter No. 117. I note that this argument had been raised and had been dealt with earlier in this proceeding by Justice Hartshorn on 17 December 2018. See case: Nambawan Super Ltd v. Paul Paraka (2018) N7686. But again, I repeat my findings on the evidence above, and in so doing, I also ask myself these. How will this proposed defence or claim weigh against the fact that the defendant had occupied the building since 2013, and also of the fact that since 2016, the defendant had occupied the building without paying any rent for its use? Or why did the defendant not bring its claim immediately to the attention of the plaintiff at the material time? And why did the defendant not vacate the premises in the first place for the said reason but instead continued to occupy the building? Again and if there is no valid lease as alleged, then why did the defendant resist vacating the plaintiff’s building to the extent that he had to be forcibly removed by the plaintiff, or what was the alternative arrangement that had been in place between the parties where I could look to and consider as a prima facie reason that may justify the defendant’s action in occupying a commercial building of the plaintiff for almost a year without paying rent? The defendant, with respect, has not explained that to this Court.

40. Instead, I find the plaintiff’s evidence cogent in terms of establishing its claim based on its pleading or the writ. I make particular reference to the affidavit of Merv Moniz filed on 22 December 2016 and also to the affidavits of Andrew Esler filed on 25 February 2019 and 5 April 2019.

41. For these reasons, I am therefore not satisfied that the defendant has established that he has a defence on merit.

INTEREST OF JUSTICE/PREJUDICE

42. I will consider the factors, interest of justice and prejudice, together.

43. For the reasons I have stated above in my judgment, it is obvious, in my view, that the interest of justice for this case favors the plaintiff. The lease and the deed are not validly disputed by the defendant in his own evidence as well from the evidence adduced by the plaintiff. Other evidence that had been relied upon by the defendant in earlier proceedings, which have been provided herein, also support the plaintiff’s claim regarding the lease and the deed. The defendant’s own evidence does not deny the fact that he had failed and continues to fail, to pay the arrears and the outstanding rents for 2016 based on the lease and the deed. The dealings were commercial in nature and as it is, the plaintiff is the one that had and continues to suffer, that is, having incurred unsettled debts and now, after 4 years, is still waiting to be paid by the defendant.

44. It is also important to state here that the plaintiff had been reasonable towards the defendant. The plaintiff had consented on 2 occasions to extend time for the defendant to file his defence out of time. The final extension of time lapsed on 16 June 2017. So from the time the defendant was served with the writ on 26 December 2016, he had a total of about 6 months to file his defence but had failed to do so. And he has demonstrated no valid reasons for not filing his defence within time. The damning evidence, in my view, which was impliedly admitted to by the defendant, is the fact that he had used the extended period granted by the plaintiff for him to file his defence out of time, to nominate, campaign and stand for the 2017 National General Elections. To me, it appears to demonstrate or imply bad-faith on the part of the defendant to the plaintiff, in the sense that the extension of time was sought and granted on the understanding that the defendant would use that time to file his defence. Instead, the defendant, as he has demonstrated, had used the time to do other things. Let me also be clear here. The defendant, like any citizen, is entitled to exercise his democratic right to vote or to stand for public office such as a member of parliament. But as I have stated, it cannot amount to a valid reason for not filing his defence out of time. The defendant had ample time and opportunities, to file his defence.

45. The plaintiff, in my view, is also the person that is prejudiced and will continue to be prejudiced if the matter is delayed and proceeds to a substantive hearing without any legal or valid defence disclosed. I have found that the defendant does not have a valid defence and as such, continuous delay in reaching a finality in this matter will only be prejudicial to the plaintiff.

PROPOSED CROSS-CLAIM

46. The defendant’s intention to file his cross-claim is dependent upon extension being granted to him to file his defence out of time. Order 8 Rule 38(2) of the National Court Rules provides that a person may file a cross-claim within the time allowed to file his or her defence. In other words, a defendant is permitted in an existing proceeding, to file a cross-claim but subject to or as long as it is filed within the time that is allowed for filing a defence. Because I have now refused to grant the extension, there is no time within which the defendant could file a cross-claim if he wishes to, in this proceeding.

47. Let me also say that it is not the Court’s role, in such an application, to also consider whether there is a valid cross-claim. To do so, in my view, may be seen as exceeding or abusing exercise of discretion. If extension is granted to a defendant to file a defence out of time, the time may also be used to file a cross-claim. Whether the cross-claim has merit or not, should, in my view, be treated the same way as a statement of claim. An aggrieved party may challenge the cross-claim in the usual way at an appropriate time but of course only after it is actually filed. I do not think that it is my role to also consider and decide beforehand, in an application for extension of time to file defence out of time, whether a party has, would or may have a valid cross-claim or cause of action.

EXERCISE OF DISCRETION

48. For these reasons, I will refuse the defendant’s application for extension of time to file his defence out of time.

49. I have already ruled that the defendant is in default, so I will enter default judgment in favour of the plaintiff with damages to be assessed.

COST

50. Cost award is discretionary. I will order cost to follow the event. I will order the defendant to pay the plaintiff’s cost of the applications, on a party/party basis to be taxed if not agreed.

ORDERS OF THE COURT

51. I make the following orders:

1. The defendant’s notice of motion filed on 25 August 2017 where he seeks extension of time to file defence out of time, is refused.
   
2. Default judgment is entered in favour of the plaintiff with damages to be assessed.
   
3. The defendant shall pay the plaintiff’s costs of the applications on a party/party basis which may be taxed if not agreed.
   
4. Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly
________________________________________________________________
Ashurst PNG: Lawyers for the Plaintiff

Paul Paraka in Person