Two-Fifty Ltd v Lan-Yu [2022] PGNC 362; N9778 (30 June 2022)

N9778

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 553 OF 2021

BETWEEN:
TWO-FIFTY LIMITED
First Plaintiff

AND:
PRESLEY TAI in his capacity as the Managing Director of the First Plaintiff
Second Plaintiff

AND:
LAN-YU, in his capacity as the Employee of the Second Defendant
First Defendant

AND:
CHINA HARBOUR ENGINEERING COMPANY (PNG) LIMITED
Second Defendant

Goroka: Mugugia, AJ
2022: 30^th June

PRACTICE AND PROCEDURE – Plaintiffs’ application for default judgment against the Defendants - National Court Rules, Order 12, Rule 1 and Order 12 Rule 25(b) relied on - Whether default judgment should be entered against the Defendants – Considerations – Exercise of discretion - Default judgment entered against the Defendants.
Cases Cited:

Bank South Pacific Ltd. v. Tingke (2012) N4901
Giru v. Muta (2005) N2877

Counsel:

J. Topo, for the Plaintiffs
No appearance for the Defendants

RULING

30 June, 2022
1. MUGUGIA, AJ: The Plaintiffs’ claim is one of negligence against the Defendants. The First Defendant was employed by the Second Defendant as a driver. The Plaintiffs alleged that due to the First Defendant’s negligent driving, an accident resulted. The First Defendant was charged and arrested. The Plaintiffs instituted this Court proceeding on 6 September 2021, claiming general damages for negligence, general damages for frustration, hardship, trauma, fear and stress, loss of business, special damages, aggravated damages for loss of business, interest and costs of the proceedings.

2. Counsel for the Plaintiffs, Ms Jenny Topo moved on her clients’ motion filed on 10 May 2022, pursuant to Order 12, Rule 25(b) of the National Court Rules, seeking default judgment to be entered in favour of her clients with damages to be assessed. The Defendants were notified of the hearing date (30 June 2022). However, no one turned up in Court for the hearing. I allowed Ms Topo to make her clients’ application because I was satisfied that the Defendants were served with the motion and the supporting affidavits and were aware of the hearing date. I heard the Plaintiffs’ default judgment application ex-parte. This is my ruling.

3. The issue for determination is whether default judgment should be entered against the Defendants.

4. In making her clients’ application, Ms Topo relied on the following affidavits:

i) Affidavit in Support of Presley Tai filed on 10 May 2022;
ii) Affidavit of Search of Presley Tai filed on 10 May 2022;
iii) Affidavit of Service of Presley Tai filed on 28 June 2022; and
iv) Affidavit of Service of Andrew Ten filed on 14 December 2021.

5. Ms Topo took the Court through her clients’ written extract of submissions which was filed on 28 June 2022. The applicable cases relied on by Ms Topo were as follows:

• Kennedy v. Coca Cola Amatil (PNG) Ltd. (2011) N4946;
• Daniel Occungar v. Luke Kiliso & Others (2010) N4102;
• Kunton v. Junias (2006) SC929;
• Kina Finance Ltd. v. Andiki (2017) N7052;
• Mapua v. McNamara (2020) N8497; and
• Livuan v. Telikom PNG Ltd. (2021) N9232.
  

6. Ms Topo’s submission is that entry of default judgment is not a matter of right but a discretional matter for the Court. She referred to the case of Kunton v. Junias (2006) SC929, where the Supreme Court stated that the Court can take into account a wide range of considerations in deciding how to exercise its discretion whether to enter default judgment or not.

7. Ms Topo’s submissions were also on the check-list for default judgment which was set out by Cannings J in Giru v. Muta (2005) N2877. The check-list contains these six (6) pre-conditions which are:

1. Proper form
2. Service of notice of motion and affidavits
3. Default
4. Warning
5. Proof of service of writ
6. Proof of default

8. In applying the 6 pre-conditions to the present case, Ms Topo submitted as follows:

• The motion is in proper form. The notice of motion filed on 10 May 2022 is in the correct form, and accompanied by the Affidavit in Support of Presley Tai sworn on 6 May 2022, and filed on 10 May 2022, and the Affidavit of Search of Presley Tai sworn on 6 May 2022, and filed on 10 May 2022.
  
• There is proof of service of the notice of motion and supporting affidavits. The Affidavit of Service of the Notice of Motion, Affidavit in Support and Affidavit of Search of Presley Tai filed on 28 June 2022 confirms service of the notice of motion and affidavit.
  
• The Defendants are in default. The Writ of Summons was served on the Defendants on 10 September 2021. The date by which the Defendants should have filed their notice of intention to defend is 13 October 2021, and the date by which the Defendants ought to have filed their defence is 27 October 2021. They have not filed a notice of intention to defend or defence.
  
• Warning of the default judgment application has been given to the Defendants. Fourteen (14) days warning was given to the Defendants before the filing of the default judgment application. This was in letter dated 24 February 2022 to the Defendants.
  
• Proof of service of the writ of summons is contained in the Affidavit of Service of Andrew Ten filed on 14 December 2021, and the Affidavit in Support of Presley Tai filed on 10 May 2022. Annexure marked with the letter “F” is the Details of Service Form.
  
• There is proof of default. In the Affidavit of Search of Presley Tai filed on 10 May 2022, he deposed that numerous searches were conducted at the Goroka National Court Registry. His searches revealed that the Defendants failed to file their notice of intention to defend and defence within 44 days as stipulated under Order 7, Rule 6 and Order 8, Rule 4 of the National Court Rules. The Defendants have defaulted on their part.

9. Ms Topo invited the Court to look at the considerations established by the Supreme Court in Kunton v. Junias (2006) SC929. She set out these considerations in her submissions and applied them to this particular case. I have considered all her submissions on the considerations as applied in this case.

10. In Bank South Pacific Ltd. v. Tingke (2012) N4901, Kandakasi J (as he then was) stated, and I quote:

“6. Whether default judgment should be entered is dependent on the following factors of whether or not:

(a) the writ of summons with a statement of claim endorsed thereto has been duly served on the defendant; and

(b) the time period for filing of the defendant's defence has expired; and

(c) the defendant has not filed and served his or her defence; and

(d) a search of the court file has been carried out at the expiry of the deadline for the filing of the defence which has revealed no defence being filed; and

(e) the plaintiff has forewarned the defendant of the plaintiff's intention to apply for default judgment where a notice of intention to defend has been filed; and

(f) the defendant has not filed and served his or her defence.”

11. The case of Giru v. Muta (2005) N2877 sets out six pre-conditions that should be considered in an application for default judgment. These pre-conditions are:

1. Proper form
2. Service of notice of motion and affidavits
3. Default
4. Warning
5. Proof of service of writ
6. Proof of default

12. In this case, Cannings J held that if all items on the checklist are satisfied, the matter is ripe for entry of default judgment. However, a plaintiff is not entitled to default judgment as of right. The court still has a discretion to exercise. Entry of default judgment is a matter for the discretion of the Court.

13. I adopt the statements made by the learned judges in the two cases referred to above, and the principles enunciated in the cases, and apply them in this particular case.

14. I apply the 6 pre-conditions in this particular case, and present these findings with reasons:

(1) Proper form

The Plaintiffs’ motion for default judgment is in the proper form. The Defendants are in default of Order 12, Rule 25(b) for failing to file their defence. The jurisdictional basis relied on by the Plaintiff is correct.

The Plaintiffs’ motion for default judgment is supported by the Affidavit in Support of Presley Tai filed on 10 May 2022, which sets out the evidence in support of the order for default judgment sought in the motion.

(2) Service of notice of motion and affidavits

Both the motion and affidavit in support were served on 16 May 2022. The Affidavit of Service of Presley Tai filed on 28 June 2022 confirms service on the Second Defendant’s Manager one Wang Ao.

(3) Default

Searches of the court file have been carried out by the Plaintiffs. The Court file searches revealed that the Defendants did not file their notice of intention to defend and defence. They are clearly in default because of non compliance with Order 12, Rule 25(b) of the National Court Rules.

(4) Warning

The Plaintiffs warned the Defendants in their letter dated 24 February 2022 to the Second Defendant’s Managing Director. This letter is Annexure marked “G” in the Affidavit in Support of Presley Tai filed on 10 May 2022.
(5) Proof of service of writ

The Affidavit of Service of Andrew Ten filed on 14 December 2021 confirms service of the writ of summons on the Defendants.

The time period for filing of the Defendants’ defence had expired, and they did not file their defence within the required time. The affidavits relied on by Ms Topo show proof of default.

15. This is a case where the Defendants are in default because they were required to file a defence, and the time for them to file had expired but they had not filed their defence. The basis on which the application was made is on account of the Defendants’ default under Order 12, Rule 25(b) of the National Court Rules. The Defendants have clearly defaulted.

16. I am convinced that the Plaintiffs have made out a case for default judgment to be entered against the Defendants for failure to file their defence. Entry of default judgment is a matter for the discretion of the Court. I exercise my discretion in this case and enter default judgment against the Defendants.

FORMAL ORDERS:

17. I make the following orders:

1. Default judgment is entered against the Defendants, with damages to be assessed.

2. The Defendants shall pay the Plaintiffs’ costs.

3. Time for entry of these orders is abridged to the date and time of settlement of these orders by the Registrar which shall take place forthwith.

The Court orders accordingly.
_____________________________________________________________
J. Topo: Lawyer for the Plaintiffs