Nasfund Contributors Savings &amp Loan Society Ltd (NCSL) v Koisen [2022] PGNC 12; N9298 (7 February 2022)

N9298

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 67 OF 2019

BETWEEN
NASFUND CONTRIBUTORS SAVINGS &
LOAN SOCIETY LIMITED (NCSL)
Plaintiff

AND
AVIA TAITA KOISEN
Defendant

Waigani: Linge A J
2021: 7^th December
2022: 7^th February

PRACTICE AND PROCEDURE – Non- compliance of courts directions by defendant – non-compliance at variance with the National Court Rules being relied on -application for striking out defence – whether Court can on its own initiative order Summary Judgment – breach of loan agreement not in dispute

Cases Cited:

Kawaso Ltd v Oil Search PNG Ltd [2017] PGSC16, SC1176
Baing v National Stevedores Pty Limited [2000] PGSC 1; SC627
Paul v Kispe [2001] PGNC 132; N2085
Kalang Advertising Limited v Visvanathan Kuppusamy [2008] PGSC 15; SC924

Counsel:

Ms V. Vee, for the Plaintiff
Ms A. Koisen, the Defendant in Person

RULING ON MOTION

7^th February, 2022

1. LINGE AJ: A ruling on the Notice of Motion filed on the 7 December 2021 by Nasfund Contributors Savings & Loan Society (hereinafter “NCSL”) seeking to strike out the defence filed by Avia Taita Koisen (hereinafter “Defendant”) and judgment be entered for NCSL.

2. I heard the Motion on the 17 December 2021. Both parties were represented or attended.

Facts

3. On the 6^th day of March 2013, NCSL entered into written agreement with the Defendant to lend to the Defendant the sum of K196,000.00, which the Defendant agreed to repay by the 6^th day of March 2018.

4. It was an express term of the Agreement that the Defendant would pay interest on the loan amount at the rate of 12 percent per annum.

5. In accordance with the terms of the loan agreement on the 6^th day of March 2013, NCSL advanced to the Defendant as loan the said sum of K196,000.00 into Avia Taita Koisen’s ANZ Bank Account No. 13435813, Port Moresby branch.

6. The Defendant defaulted on the loan at the expiry of the repayment period prompting NCSL on the 11 May to send a Letter of Demand to the defendant, to which the defendant responded on the 22 June 2018 providing details of her account for purposes of the restructure of the loan repayment.

7. Following further correspondence and negotiations of parties about the restructure of the Defendant’s outstanding loan account on the 3 August 2018 the Defendant accepted the following terms and conditions for the restructure.

(1) Loan Debt: K106,230.25

(2) Interest rate: 12% per annum

(3) Loan term: 60 Months

(4) Repayment: K2,000.00 monthly

(5) Security: Existing charge over NCSL savings

8. On the 15 August 2018, Defendant instructed NCSL to debit her general savings account maintained and operated by NCSL but by the 10 October 2018, NCSL wrote to the Defendant advising her that her restructured loan account was in arrears. The Defendant had failed to settle her loan despite the agreed restructure.

9. The Defendant has repaid to NCSL the total sum of K83,179.28 on account of the said loan. However, she remained in arrears inclusive of principal and interest due under the Agreement to NCSL.

10. At the time of the issuance of this Statement of Claim on the 8 February 2019 the balance of the said loan outstanding plus interest was K112,820.62 without interest thereon.

Plaintiff’s Evidence

11. NCSL relies on affidavits of Bernard Geita filed on the 27 September 2021 and affidavit of Justice Wiari filed on the 27 September 2021.

12. On 5 November 2020, NCSL transferred K70,000.00 from the defendant’s general savings account to the defendant’s loan account, reducing the Defendant’s loan balance to K70,429.50.

13. NCSL’s evidence confirm further transfers and repayments by the Defendant as:

(i) On the 13 January 2021, NCSL transferred K1,418.32 from the Defendant’s General Savings Account to her loan account, reducing the Defendant’s loan balance to K70,519.54.

(ii) On the 1 April 2021, the NCSL transferred K2,847.72 from the Defendant’s general savings account to her loan account, reducing the loan balance to K69,784.76.

(iii) On 1 July 2021, NCSL received a deposit of K2,000.00 from the Defendant, reducing the loan balance to K69,893.46.

14. As at the 13 December 2021 the outstanding loan balance which remained unpaid is K73,480.64 plus interest.

15. NCSL’s further evidence is that the Defendant had been in default of the Court directions of 10 September 2021 for failing to file affidavit of reliance, notices under the Evidence Act, Statement of Agreed and Disputed Facts and Settlement of Pleading Book.

16. Further, NCSL evidence deposes to the Defendant’s failure to comply with the Directions of the 10 September 2021 even after an extension was granted by the Court on the 12 November 2021.

17. The evidence also attests that the Defendant did not make any appearance in court on the 12 November 2021, 30 November 2021 and 7 December 2021 except her last-ditch appearance on the 14 December 2021.

Defendant Evidence

18. Defendant did not file any affidavit and gave no oral evidence.

Submission by the plaintiff

19. Ms Vee for NCSL submits that the defendant had been in default of the Court directions since 10 September 2021. In particular, the Defendant had been in default in not filing any affidavit she intends to rely on and giving of notices under the Evidence Act.

20. Further, Defendant failed to comply with the Extension Order granted on the 12 November 2021.

21. Ms Vee submits that the Defendant did not appear on the 12 November 2021, 30 November 2021 and 7 December 2021 and her last-ditch appearance on the 14 December 2021 without proper application for any extension for compliance is disrespectful to the Court and its due process.

22. Counsel submits that the non-compliance by the defendant warrant granting of the order.

23. She submits also that the defendant does not deny the amount of K73,480.64 outstanding, and the Court’s time must not be wasted over a matter that, can be lawfully determined at this juncture.

Defendant’s Submission

24. In response to NCSL’s counsel’s submission the Defendant submits that the Court has the discretion and urge the Courts to have regard to its inherent power stipulated in Section 155 (4) of the Constitution to act fairly in dispensing justice.

25. She refers to Kawaso Ltd v Oil Search Ltd (2012) SC1176 and submits that in the interest of justice the Court considers her over all situation and specially as she does not deny the amount of the loan outstanding.

26. She submits that during the material times she had the misfortune of being held up and robbed by criminal elements of her computer and phone while reversing out of her residence. That she sustained injury to her right arm when her reversing car ran over it and injuring it necessitating her hospitalization. The loss of her computer and mobile phone which were her virtual office handicapped her.

27. She submits that she has a cash flow situation which impacted her ability to repay however she acted in good faith to try and repay and did make some payments to reduce the original claim.

Finding of Facts

28. At the time of the issuance of this Statement of Claim on the 8 February 2019 the balance of the loan outstanding with interest was K112,820.62.

29. On 5 November 2020, NCSL transferred K70,000.00 from the Defendant’s general savings account to her loan account, reducing her loan balance to K70,429.50.

30. NCSL transferred K4,266.04 out of the Defendant Defendant’s general savings account to her loan account in January and April 2021; a payment of K2,000.00 by the Defendant in July 2021 reducing the loan balance to K69,893.46.

31. As at the 13 December 2021 the outstanding loan balance inclusive of interest is K73,480.64.

32. In relation to the court proceeding, on the 10 September 2021, I gave Directions for the filing of affidavits, notices under the Evidence Act and Statement of Agreed and Disputed Facts and Settlement of Pleading Book.

33. When the matter retuned on the 12 November 2021, I granted extension to the Directions to the 26 November 2021. At the expiry of the Court granted extension NCSL had complied with relevant parts of the Directions, but the Defendant continues to be in non- compliance of the Directions of 10 September 2021,

34. The Defendant did not make any appearance in person or through a counsel when the matter was called on the 27 October 2021, 12 November 2021, 30 November 2021 and 7 December 2021.

Ruling on the Motion

35. NCSL’s Notice of Motion filed on the 7 December 2021 seeks orders pursuant to Order 9 Rule 25 (1) (b) of the National Court Rules and Order 4 Rule 31, National Court Rules.

36. I set out the first Rule relied on:

Order 9 Rule 25(1)(b), “Where a party makes default in compliance with an order under Rule 21 or 24 to file or serve a statement or affidavit, the Court may make such order as it thinks fit including:

(a) ........................
(b) if the proceedings were commemorated by writ of summons and the party in default is a defendant – an order that his defence be struck out and the judgment be entered accordingly.”

37. NCSL must establish that the Defendant had defaulted in complying with directions or orders relating to the discovery of documents. Specifically, default under Rule 21 (Statement in answer to interrogation) or default under Rule 24 (failure to answer interrogatories sufficiently).

38. In Baing v National Stevedores Pty Limited [2000] PGSC 1; SC627 where the appellant did not comply with Order of the National Court for discovery of documents. The Supreme Court at p.5 stated, “In the present case the appellants did not comply with the terms of the conditional orders of 13 September 1996. That being the case, the First Respondent ought to have then applied to the Court in accordance with Order 9 Rule 25 (1) (b) of the National Court Rules to have the appellants defence struck out and judgement entered.”.

39. NCSL’s evidence clearly identifies the non-compliance by the Defendant of Court Directions of 10 September 2021 which relates to the non- filing of affidavits, notices under the Evidence Act, filing of Agreed and Disputed Facts and Settlement of Pleading Book.

40. Clearly NCSL is relying on non-compliance which is in variance with the National Court Rules that it seeks to invoke, and I am faced with the dilemma where on the one hand there is evidentiary non- compliance by the Defendant of the Court Direction of 10 September 2021 requiring judicial action and on the other hand the non-compliance by the Defendant does not relate to discovery of documents, in terms of Order 9 Rule 25 (1) (b) of the National Court Rules.

41. These are two procedural processes each having its own requirements and are quite distinct from each other. A core function of the Court is to construe the existing rules in aid of achieving on orderly expeditious disposal of cases in a fair manner. It must not be expected for it to cure procedural deficiency on the part of a litigant.

42. In Paul v Kispe [2001] PGNC 132, Injia J – held “Parties cannot expect the Court to be their legal adviser, consultant, counsellor, draftsman or editor. The integrity and standard set by the Courts and the integrity of the legal profession must be protected”.

43. In Kalang Advertising Limited v Visvanathan Kuppusamy [2008] PGSC 15; SC924 The Supreme Court dealt with an appeal against a conditional order of the National Court made at the Listing hearing for the defence to be struck out and judgment entered for the plaintiff with damages to be assessed,

44 In dismissing the appeal, the Supreme Court held that the conditional order was a proper exercise of judicial discretion made pursuant to Order 10 Rule 9A 15 otherwise the Listing Rules, which permits the National Court to summarily determine a matter on its own initiative if a party or his lawyers fail to appear at a direction hearing.

45. The Defendant is not only in default of the Directions but also failed to appear in the directions and listings hearings since the 10 September 2021. Thus, it would be within the Court’s right to proceed in its own initiative under Order 10 Rule 9A 15 to order summary disposal.

46. However, NCSL is relying on an application, and it is that application that the Court must rule upon and for that I must be satisfied that the procedural requirements are complied with or in the alternate it is a matter where the court can exercise its discretion to dispense with strict requirement of the Rules.

47. I consider that discretion does not include curing an obviously wrong use of the Rules. NCSL’s reliance on this Rule is inappropriate as the proceedings have not proceeded by way of interrogations. NCSL simply misconstrued the Rules of Court.

48. The Defendant had not denied that she was in default of the loan repayment. She had made some repayments in good faith, even exhausted her general savings account by authorizing transfers to her loan as part payment of the loan.

49. In particular on the 5 November 2020 NCSL transferred K70,000.00 from the Defendant’s general savings account to her loan account, reducing her loan balance to K70,429.50. NCSL transferred K 4,266.04 out of the Defendant’s general savings account to her loan account in January and April 2021 and a payment of K 2,000.00 by the Defendant in July 2021 reducing the loan balance to K69,893.46.

50. The Defendant is seeking the Court’s invocation of Section 155 (4) of the Constitution pleading at the relevant times she sustained injuries as a result of criminal holdup and loss of her office laptop computer containing her documents. That she sustained injury to her right arm when her reversing car ran over it and injuring it necessitating her hospitalization.

51. In the interest of justice and the duty of the Court to dispense justice, I allowed the Defendant to make submission and to explain her situation.

52. As regards NCSL’s second order it seeks, pursuant to Order 4 Rule 31(1), which reads:

“The Court may exercise its powers under this Rule at any time after the commencement of the proceedings”,

This does not provide a procedural basis for seeking relief from non compliance or breach of the court directions and so I have not deliberated on it.

Order

53. Accordingly, I order as follows:
    1. NCSL’s application to strike out the defence and to enter judgment is refused.
    2. The Defendant is given 14 days to comply with Directions Order 4 and 5 of 10 September 2021.

3. Thereafter orders 6 and 7 of the Directions will follow.

4. Parties are at liberty to make application within 3 days notice.

5. Parties bear own costs.

______________________________________________________________
NSCL In-House Counsel: Lawyers for the Plaintiff
The Defendant in Appearing Person