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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS 937 OF 2017
BETWEEN:
FOXIE KAEAKA
AS THE CHAIRMAN OF THE BEHORI LAND INCORPORATED GROUP ILG NO.552
First Plaintiff
AND:
VICKY KOVER & MAX TOM
AS THE REPRESENTATIVES OF THE OCCUPANTS OF THE PORTION 2210
Second Plaintiff
AND:
FELIX KANGE
First Defendant
AND:
PUNDIA KANGE
Second Defendant
AND:
HENRY WASA
AS THE ACTING REGISTRAR OF TITLES DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Third Defendant
Waigani: Bre, AJ
2023: 20th September, 10th November
CIVIL PRACTICE AND PROCEDURE - Application to set aside – ex parte strike out of proceedings for want of prosecution - NCR O12R8 – Principles in exercise of discretion considered – error on face of Court record-conflict in dates-Defendants file Notice of Trial- Service of Court Order whether effective
Cases Cited
Aiwasi v Derari [2017] PGNC 15; N6602
Kakas v National Housing Corporation [2020] PGSC 84; SC2000
Kalinoe v Paul Paraka Lawyers [2014] PGSC 38; SC1366
Kundi v Minimbi [2019] PGNC 284; N8003
Reference
National Court Rules Order 12 Rule 8
Counsel
Mr. R. Otto, for the First & Second Plaintiffs
Mr. B. Lai, for the First & Second Defendants
No Appearance, Third Defendant
RULING
10th November 2023
1. BRE, AJ: INTRODUCTION: This is an application by the Plaintiffs to set aside Orders made by the Court on 08 April 2022 striking out the proceedings for want of prosecution.
BACKGROUND
2. The substantive proceedings concern a dispute over property described as, Portion 2210 State Lease Volume 12 Folio 173 Milinch of Granville, Fourmil Moresby, Central Province. The Plaintiffs currently occupy the property and claim it is their customary land. The Plaintiffs filed this proceeding on 12 September 2017 alleging fraud in the grant of the original and subsequent titles. The Plaintiffs obtained a restraining order on 02 August 2018 which has been in place since.
3. The Defendants claim they have had indefeasible title to the property since October 1993 and are the legal owners of the property. The property was allegedly transferred from the Second Defendant father to the First Defendant son sometime in 2016.
4. On 02nd December 2021, directions were issued setting the matter down for trial on 18th April 2023.
5. On 08th April 2022, the proceeding was struck out for want of prosecution when there was no appearance for the Plaintiffs.
6. On 01 September 2023, the Plaintiff filed a Notice of Motion to set aside the Orders of 08 April 2022.
PRELIMINARY MATTER
7. Counsel for the Plaintiffs sought an adjournment because he was recently engaged by the Plaintiff and not prepared to proceed. He indicated he would need further clarifications from his clients on their Affidavits which they filed in person.
8. The First and Second Defendant's Counsel Mr Lai, opposed the application on the basis that he was ready to proceed and pointed out that Counsel was appointed 16 days ago and had ample time to prepare and file an Affidavit requesting adjournment. Mr. Lai cited the case of Kalinoe v Paul Paraka Lawyers [2014] SC1366 as the legal authority for adjournments by Affidavit.
9. I agreed 16 days is sufficient time for the Plaintiffs lawyer to file an Affidavit seeking adjournment. I accepted Mr. Lai's submission and proceeded to hear the motion.
EVIDENCE
10. The Plaintiffs relies on the:
1) Affidavit of Foxie Kaeaka sworn on 30 August 2023 filed on 01 September 2023.
2) Affidavit of Max Tom sworn on 30 August 2023 and filed on 01 September 2023.
11. The First and Second Defendant relies on the:
1) Affidavit of Sergeant Bakandu Wingawi sworn on 13 September 2023 and filed on 13 September 2023.
2) Affidavit of Felix Kange sworn on 13 September 2023 and filed on 14 September 2023.
3) Affidavit of Felix Kange sworn on 18 September 2023 filed on 18 September 2023.
SUBMISSION
12. Counsel for the Plaintiffs, Mr. Otto, submitted the Plaintiffs were not aware of the trial date nor the proceedings being struck out until the Plaintiff started working on the property. He explained the Plaintiffs were without legal representation when the matter was struck out on 08 April 2023. Mr. Otto also pointed out the conflicting dates in the Notice of Trial being 18th April 2022 and the date on the Court endorsement as reasonable grounds for the order of 08th April 2022 to be set aside.
13. The Defendant’s Counsel, Mr Lai urged the Court to ensure all guiding principles in exercising discretion to set aside are met by the Plaintiff. He submitted that the Plaintiffs have not provided a reasonable explanation of why the Court Order should be set aside. Mr Lai also relied on the cases of White Corner Investments Ltd (trading as Glazeworks Glass & Aluminium) v Noka Builders Ltd [2020] PGNC 121; N8316 (13 May 2020) and Wawoi Guavi Timber Company Ltd v Molu [2016] PGSC 32; SC1514 (21 July 2016) and Kundi v Minimbi [2019] PGNC 284; N8003 (18 September 2019).
14. As to the conflicting dates, Mr. Lai submits the date on the court endorsement of 08th April 2022 is erroneous as the trial date was 18th April 2022 and he relies on the Affidavit of Felix Kange. Mr. Lai submits that this application should be treated as an application to set aside a regular order not an irregular order as the Plaintiffs were aware of the trial date.
ISSUE
15. Whether the Court Order of 08 April 2022 can be set aside.
LAW
16. The Plaintiffs primary relief sought is to set aside the Court Order of 08 April 2022 pursuant to Order 12 Rule 8 (2), (3) and (4) of the National Court Rules (hereinafter 'NCR'). I find that Order 12 rule 35 and Order 4 rule 49 (19)(4)(1) NCR are not relevant and do not apply.
Order 12 Rule 8NCR is in the following terms:
"8. Setting aside or varying judgement or order.
(1) ...
(2) The Court may, on terms, set aside or vary a judgement—
(a) where the judgement has been entered pursuant to Order 12 Division 3 (default judgement); or
(b) where the judgement has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or
(c) when the judgement has been entered in proceedings for possession of land pursuant to a direction given in the absence of person and the Court decides to make an order that the person be added as a defendant.
(3) The Court may, on terms, set aside or vary an order—
(a) where the order has been made in the absence of a party, whether or not the absent party is in default of giving
a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order;
or
(b) where notice of motion for the setting aside or variation is filed before entry of the order.
(4) In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgement) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.
(5) This Rule does not affect any other power of the Court to set aside or vary a judgement or order."
ANALYSIS
17. Firstly, the jurisdictional basis of setting aside dismissal orders issued in the absence of parties has been settled in the recent five-member supreme court case of Cragnolini v Tasion and Leia (2023) SC2464 that the National Court can set aside a dismissal order made in the absence of a party on procedural fairness grounds.
18. The jurisdictional basis of Order 12 Rule 8(3) to set aside an order was relied on in Kundi v Minimbi to refuse an application to set aside based on the Plaintiff lawyer's unsatisfactory reasons for not attending the hearing of the motion.
19. The Court’s power under Order12 Rules8 (2) and (3) of the National Court Rules is discretionary and must be exercised on proper principles. The guiding principles in the exercise of discretion have been restated in Cragnolini v Tasion with the additional criteria of interest of justice applied by the Supreme Court in Kakas v National Housing Corporation [2020] PGSC 84; SC2000 (15 September 2020) as:
(i), why the judgment was allowed to be entered in absence of the
applicant,
(ii), If there is a delay in making the application to set aside, a reasonable explanation as to the delay,
(iii), by affidavit stating material facts disclosing a defence on merit or there is an arguable case, and
(iv) where does the interest of justice lie?
20. As to regular or irregular Orders the Court in Makop v Billy Parako (2004) N2593 differentiates in simple terms, a regular and irregular order which was adopted and applied in Yai-pupu v Yai-Pupu [2023] PGNC 173; N10359 (26 June 2023) at [10] and On v Parako [2004] PGNC 187 at [2]; N2593 (24 June 2004) N2593 as follows:
"In applications like this, the initial inquiry is whether the ex parte order was made regularly or not. Where an ex parte order has been made irregularly, the only just remedy is to rectify the irregularity by setting aside the ex parte order. Non-compliance with an important procedural requirement under the National Court Rules is usually considered as an irregularity, which generally results in an ex parte order being set aside. On the other hand, where an ex parte order has been made regularly or in compliance with relevant procedural requirements, setting it aside is dependent on what is just and fair in all the relevant circumstances; and, what is just and fair is dependent on the reasons for the non-appearance which permitted the matter to proceed ex parte; the merits of the applicant’s case; and, the promptness of the application to set aside ex parte order.
21. Basically, a finding of lack of procedural fairness will result in the order being irregular and subject to being set aside. Before proceeding to address the discretionary principles, I make the following findings of fact.
22. Findings of fact
23. (i) Why the judgment was allowed to be entered in absence of the Applicant.
24. On the face of the Court record, there appears to be a miscarriage of justice. The Court summarily disposed off the proceedings a week early on 08th April 2022 and not 18 April 2022. The Court Endorsement indicates the matter was heard on 08 April 2022 and struck out for non-attendance by the Plaintiffs. The Plaintiffs may be aware of the 18 April 2022 as the trial date through their lawyer who attended the directions hearing on 02 December 2021, but not the 08th of April 2022.
25. Further, the procedural right to file the Notice of Trial belonged to the Plaintiffs, not the Defendants. Any doubts they may have had with the Plaintiffs ability to file the Notice of Trial could be addressed through the summary disposal process available under the Listing Rules Order 10 rule 9A NCR
26. Additionally, since the Defendants filed the Orders of 08 April 2022 on 11 May 2022, they had ample time between then and service on 01 November 2022, to apply to correct the error in the date through Order 8 rule 59 NCR. I find the Defendants acted in haste and should have let due process take its course.
27. I find there are sufficient reasons to explain why the Plaintiffs were absent on the 08 April 2022 and there appeared to be a procedural irregularity against the Plaintiffs.
28. (ii) Whether there is any reasonable explanation for the delay in making the application to set aside.
29. For this criterion, I consider two aspects of delay by the Plaintiff which are drawn from reasonable inferences I make from the findings of fact.
1) Delay after 18 April 2022 of approximately one year eight months from May 2022 to September 2023,
2) Delay after 01 November 2022 of ten months after service of the order of 08 2022 on Vicky Kover.
30. I infer that the Plaintiffs knew about the trial date of 18 April 2022 because their lawyer was in attendance when the Directions setting the matter down for trial on 18 April 2022 were issued on 02 December 2021.
31. This inference is also confirmed by the Plaintiffs Affidavits deposing to instructing the lawyer to file the Notice of Trial as soon as possible.
32. If the Plaintiffs were concerned about what may have transpired on the 18 April 2022, they should have taken some proactive steps to confirm the status and would have discovered the summary disposal order of 08 April 2022. The same applies to the ten-month delay timeframe. It appears the Plaintiff delayed in taking any actions during these two time frames for whatever reasons, which are not in evidence. A litigant must proactively litigate its claim.
33. In terms of whether the delay is reasonable or not, delays in time periods of two weeks 14 days, one month and 20 days and two and a half years were found to be unreasonable. See K92 Mining v David Towe (2023) N10139, PNG Ports Ltd v China Nanjing (2023) N10500 and White Corner v Noka Builders.
34. In White Corner v Noka Builders, the Court did not accept the reasons for being absent and in failing to comply with directions concerning the discovery process. Based on this reason alone refused the application to set aside the order striking out the defence and awarding liquidated damages. This case is distinguished in that there has been no default of directions orders by the Plaintiffs.
35. I find the Plaintiff's have not provided a reasonable explanation to justify the delay in bringing this application, although it seems clear to me that they may have been under a mistaken believe that the restraining orders of August 2018 was still in place.
36. (iii) Whether there is an arguable case.
37. To meet this criterion, the Plaintiff has to file an Affidavit deposing to the merits of the case. The Plaintiff’s Affidavit’s do not state any grounds related to the merit of the case. However, I note the Affidavits relied on by the Plaintiffs were filed by themselves as there were not legally represented. I consider that they may not be aware of the requirement to file an Affidavit deposing to the merits of the case. Their Affidavit only explains the reasons for their absence and delay, to an extent.
38. Considering that, I perused the evidence from both parties Affidavits relied on in this application, the Amended Statement of Claim and the Amended Defence and the application and decision giving rise to the amended pleadings etc,.to appreciate the background and substantive nature of the case.
39. There have been other cases where the Court has perused the Court file records. In Kundi v Minimbi, the Court considered the Court File to ascertain the background and nature of the proceedings where no affidavit was filed. See also Aiwasi v Derari.
40. The Plaintiff raises allegations of fraud to obtain various declarations the effect of which is to revisit the original grant of the State lease over the disputed property, Portion 2210, to the Second Defendant and subsequently to the First Defendant. The Plaintiffs claims customary ownership of Portion 2210. The Defendants state they have had legal title to Portion 2210 since October 1993.
41. Mr Lai submits the Plaintiff has no arguable case and any rights they may have is now time barred. These issues are not before me for consideration and are substantial as they go to the merit of the cause of action. I have also not sighted a copy of the State Lease on the Affidavits relied on by the Parties. The allegations are a matter for trial proper.
42. In Cragnolini at [30], the Supreme Court distinguished Thomas Barry v Joel Luma to decide that where the National Court dismisses proceedings after considering the merits of the case, the dismissal order finally concludes the matter and should not be set aside. However, where due process and procedural fairness has not been observed, the order should be set aside.
43. Fraud allegations concerning property transfers are serious matters as it goes to the grant of the title and is a matter warranting proper trial of the facts and issues in dispute. These proceedings were struck out due to non-appearance of the plaintiffs. The Plaintiffs did not attend because the matter was listed a week early. There is a procedural irregularity that must be set aside.
44. For this criterion, I find the merits of the case were not considered in striking out the matter and the proceedings raise fraud allegations which require proper consideration at the trial proper.
45. (iv) where does the interest of justice lie?
46. The interests of justice require procedural fairness be accorded to all parties to properly litigate their case. The interest of justice also require finality of proceedings and quiet enjoyment of the property for the person who has proper legal title to the property.
47. In Kakas v National Housing Corporation [2020] PGSC 84; SC2000 (15 September 2020) the Supreme court applied the additional criteria of the Court's inherent jurisdiction to do justice where there was a delay of ten months to file the application to set aside the orders. The Court considered the merits of the case which related to allegations of fraud concerning the transfer of title in State property and reinstated the National Court proceedings in the interest of justice.
48. The Supreme Court decided at [61]:
"In the end, when we consider the delay of twelve months occasioned largely by the appellants’ lawyers tardiness which is inexcusable, the second and third respondent’s right to quiet enjoyment of the property and the serious allegation of fraud against the respondents, it is in the interests of justice that an order to set aside the summary dismissal order would have been the appropriate order to make in the circumstances. "
49. I find the interest of justice outweighs other considerations where there is procedural irregularity and the case concerns allegations of fraud.
Restraining Orders
50. As to the relief sought for extension of the restraining Order of 02 August 2018, I do find there may be some merit in the Defendant's argument that Plaintiff may have taken for granted the protection of the restraining order to slow the progress of the proceedings, I make this finding from my observation of inactivity since Vicky Kover was served on 01 November 2023.
51. This relief was not argued fully nor in proper form and remains open for hearing at another time. The Plaintiff is at liberty to move its motion regarding this relief at a date to be allocated by the Registry.
CONCLUSION
52. Considering all the foregoing discussions, I find that the interest of justice in ensuring procedural fairness outweighs the other considerations and rule in favor of the Plaintiffs Applicants.
COSTS
53. Costs are discretionary. Costs follow the event.
ORDER
54. The formal Orders of the Court are:
Ruling accordingly
________________________________________________________________
Themis Lawyers: Lawyers for the Plaintiff
Lai Lawyers: Lawyers for the Defendants
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