Hula v Baul [2025] PGNC 178; N11310 (16 May 2025)

N11310

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 52 OF 2019 (CC1)

BETWEEN
MAXAL HULA
Plaintiff

AND
NIGEL TREVOR BAUL
First Defendant

AND
NATIONAL HOUSING CORPORATION
Second Defendant

AND
OSWALD TOLOPA, Acting Secretary for Lands and Delegate of the Minister for Lands and Physical Planning
Third Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

AND
ROSSO PROPERTY MANAGEMENT LIMITED
Fifth Defendant

WAIGANI: MAKAIL J
15, 16 MAY 2025

PRACTICE & PROCEDURE – Application to set aside final judgment – Principles of setting aside final judgment referred to – Finality in litigation – Trial conducted in absence of a party – Reasonable justification or excuse for allowing judgment to be passed in party’s absence – Affidavit stating material facts on defence on merits or demonstration of an arguable case – National Court Rules – Order 10, rule 12(2) & (3)

PRACTICE & PROCEDURE – Where a party changes solicitor/lawyer – Requirement for Notice of Change of Lawyers to be filed and served on opposing party – Failure to serve Notice of Change of Lawyers – Effect of – National Court Rules – Order 2, rule 35

Cases cited
Bank of South Pacific v Nathan Piari (2005) N3245
Lady Ni Cragnolini & Teddy Tasion v Henry Leia (2023) SC2464

Counsel:
Mr E Sassingian for plaintiff
No appearance for first, second, third & fourth defendants
Mr L Evore for fifth defendant

RULING

1. MAKAIL J: On 7^th September 2023 the trial of this matter was conducted where the third and fourth defendants attended by their respective legal counsels. The first, second and fifth defendants did not attend notwithstanding that they were served the writ of summons on 15^th May 2019, 6^th February 2019 and 10^th March 2019 respectively pursuant to the affidavit of service of Skere Kiage sworn and filed on 22^nd July 2019 and affidavit of service of Kelly Sebby sworn and filed 9^th October 2019.

2. The judgment was reserved and on 30^th April 2025 was delivered where a finding of fraud was made against the fifth defendant in procuring title to the property described as Allotment 154 Section 51, Granville, Konedobu, National Capital District and registered as State Lease (Residence Lease) Volume 72, Folio 42. Amongst others, an order was granted to set aside the title of the fifth defendant’s property and for the Registrar of Titles to transfer the title of the property to the plaintiff pursuant to a Contract of Sale and Transfer Instrument with the second defendant.

3. Following the judgment, on 9^th May 2025 the fifth defendant filed a notice of motion and seeks, amongst others, an order to set aside the judgment of 30^th April 2025 the fifth defendant filed a notice of motion and seeks, amongst others, an order to set aside the judgment of 30^th April 2025 on the grounds that it was not notified of the trial date, hence did not attend and heard pursuant to Order 10, rule 12(2) of the National Court Rules (“NCR”).

4. The general rule is that there must be finality in litigation where a judgment is passed. However, there are exceptions to this general rule. In this case, the plaintiff does not contest the fifth defendant’s reliance on Order 10, rule 12(2) (supra) as conferring jurisdiction on the Court in the case “where the Court proceeds with a trial in the absence of a party, and at or at the conclusion of the trial a verdict is given or a finding or assessment is made, the Court, on mention by that party, may, on terms, set aside or vary the verdict, finding or assessment, and may give directions for the further conduct of the proceedings.”

5. However, Mr Sassingan of counsel for the plaintiffs did indicate that the plaintiff contests the motion on the grounds that first, it was filed and served outside seven days as required by Order 10, rule 12(3) of the NCR, this rule states that, “ A motion under sub-rule(2) must be made on notice and the notice must be filed and served not more than seven days after the giving of the verdict or the making of the finding or assessment,” and any dispensation of this requirement sought by the fifth defendant should be refused.

6. Secondly, this is a case where the fifth defendant’s lawyers filed a notice of appearance and abandoned the fifth defendant. It is also a case of fifth defendant’s lawyers not being diligent in defending the fifth defendant. These grounds operate against the grant of the motion.

7. According to the Bank of South Pacific v Nathan Piari (2005) N3245, Order 1, rule 7 of the NCR can be engaged to dispense with the requirement of Order 10, rule 12(3) of the National Court Rules and extend time to file and serve a motion to set aside a final judgment, interalia, “...if justice requires that the severity of a rule should be relaxed then the Court should relax it, there [is]some reasonable justification or excuse for non-compliance with the rule the non compliance with which is sought to be waived.........”

8. Accepting that to be the case for the Court’s exercise of discretion to dispense with the strict requirement of seven days’ notice under Order 10 rule 12(3) (supra) and noting that the fifth defendant’s notice of motion was filed on 9^th May 2025 which was two days after the period of seven days had lapsed/expired on 7^th May 2025, it is accepted that the delay is minimal and not adverse to the fifth defendant’s request for dispensation.

9. However, the fifth defendant’s sole director’s assertion at paragraphs 5, 6, 7, 8, 9, 10, 11, 12 and 13 of his affidavit sworn on 8^th May 2025 and filed on 9^th May 2025, amongst others, that instructions were given to Davidson and Company Lawyers and a Notice of Intention to Defend was filed on behalf of the fifth defendant on 8^th July 2021 and since then, he was occupied with his duties as a member of the National Parliament and the National Executive Council as well as his own businesses and saw little information from the fifth defendant’s lawyers about the progress of the matter until he was surprised to learn on or about 2^nd May 2025 from the National newspaper that a judgment was handed down by the National Court ordering the return of the title of the property to the third defendant for forfeiture, that he took steps to retain the current lawyers to represent the fifth defendant, fall short of a reasonable justification or excuse for the dispensation of the seven days period under Order 10, rule 12(3) (supra).
10. Similarly, the explanation by the former lawyers of the fifth defendant Ms Natasha David at paragraphs 3 to 11 of her affidavit sworn and filed on 9^th May 2025, inter-alia, that ever since filing the Notice of Appearance, she received no correspondence or communication either from the plaintiff’s lawyers or National Court Registry as to the progress of the proceedings, listing of the matter for directions hearing, setting down of the matter for trial and notice of trial, hence did not attend for the fifth defendant, failed to meet the minimum requirement of “some reasonable justification or excuse for non-compliance with the rule under Order 10, rule 12(3)” (supra) for it to be waived or dispensed with.

11. On the other hand, as the plaintiff’s counsel submitted, this is a case of the fifth defendant’s former lawyer’s filing a Notice of Appearance on 11^th May 2023 (Amended Notice of Appearance was filed on 24^th May 2023) and abandoning the fifth defendant. It is also a case of the defendant’s former lawyers not being diligent in conducting the matter on behalf of the fifth defendant. Chief amongst them is the filing a Notice of Appearance instead of a Notice of Change of Lawyers because Davidson & Company Lawyers were the first lawyers for the fifth defendant and by operation of Order 2, rule 35 of the NCR one is required to be filed and served unlike a Notice of Appearance in these terms:

“35. Change of solicitor

(1) Where a solicitor acts for a party in any proceedings, the party may change his solicitor.

(2) Where a party changes his solicitor, he shall file notice of change and serve the notice on the other parties and where practicable, his former solicitor.” (Emphasis added).

12. Secondly, notwithstanding this procedural breach, there is no evidence of a proof of service of the Notice of Appearance by David and David Co Lawyers on the plaintiff’s lawyers if it were a Notice of Change of Lawyers noting that service of the Notice of Change of Lawyers is necessary by operation of Order 2, rule 35 (2) which reads, “ (2) Where a party changes his solicitor, he shall file a notice of change and serve the notice on the other parties and where practicable, his former solicitor” and serve the notice on other parties. The lack of service was also conceded to by counsel for the fifth defendant in submissions that the first lawyers through the address of service provided in the Notice of Intention to Defend falls short of a reasonable explanation and is self-serving. It is a case of shifting the blame by the fifth defendant and its former lawyers to cover up for their failure to diligently defend the proceedings.

13. In the absence of service of the Notice of Appearance, the plaintiff’s lawyers cannot be expected to notify David and David Co Lawyers of the progress of the matter including service of the Notice of Trial and Notice of Trial date. Service of the Notice of Change of Lawyers, but in this case, erroneous as it was, a Notice of Appearance, is so fundamental and basic yet the fifth defendant’s former lawyers got it all wrong. The fifth defendant cannot now shift the blame to the plaintiff and his lawyers for not notifying its former lawyers of the progress of the matter and the date of trial.

14. Thirdly, in her affidavit, Ms David did not explain the steps she took to attend to the matter including communicating with the lawyers for the plaintiff and attending to directions hearing and listings, noting that she asserts in her affidavit that there have been several adjournments of the matter due to no appearance by parties which reinforces the plaintiff’s submission on lack of due diligence by the fifth defendant’s former lawyers and call for a professional negligence action against its former lawyers.

15. Finally, the additional submission that the Registry staff failed to notify the fifth defendant’s first lawyers through the address of service provided in the Notice of Intention to Defend fall short of a reasonable explanation and is self-serving. Again, it is a case of shifting the blame by the fifth defendant and its former lawyers to cover up for their failure to diligently defend the proceedings.

16. Equally, the fifth defendant must share some of the blame for allowing the matter to progress to trial and passing of judgment because of its failure to actively engage with its former lawyers to defend the allegations against it. Further, it is no reasonable justification or excuse to say that the matter was left in the hands of the former lawyers, and they will attend to it on its behalf and expect the discretion of the Court to be exercised in its favour.

17. For the foregoing reasons, the application to dispense with the requirement of seven days’ notice under Order 10 rule 12(3) (supra) and allow the notice of motion to be filed and served outside seven days is refused. This being the case, the notice of motion is further dismissed as being an abuse of process and in breach of Order 10 rule 12(3) (supra).

18. In any case, on account of what has been presented in relation to why the judgment was allowed to be entered in the fifth defendant’s absence, and the reasons given, no reasonable justification or excuse has been given to support the Court’s exercise of discretion in favour of the fifth defendant as discussed in Lady Ni Gragnolini & Teddy Tasion v Henry Leia (2023) SC2464.

19. Secondly, as discussed in Lady Ni Gragnolini case (supra), the assertion by the fifth defendant’s sole director at paragraph 14 of his affidavit (supra), fall short of satisfying the minimum requirement/test that the affidavit must state material facts disclosing a defence on merit or there is an arguable case. The other additional matters pointed out by counsel for the fifth defendant in submissions in relation to a mortgage being registered for the property following transfer of title to the fifth defendant, lack of pleading of fraud against the fifth defendant as opposed to transfer of title being unlawful and lack of Section 5 notice to the State are unsupported by evidence and/or fall short of establishing a defence on merits or demonstrated an arguable case.
20. In any event, it is not supported by any authority for the proposition that a party other than the State as in this case, the fifth defendant, has standing to take up the issue of lack of Section 5 notice under Claims By and Against the State Act, 1996.

21. For the foregoing reasons, the notice of motion is dismissed with costs to the plaintiff, to be taxed, if not agreed.

Ruling and orders accordingly
________________________________________________________________
Lawyers for plaintiff: Sassingian Lawyers
Lawyers for third & fourth defendants: Acting Solicitor General
Lawyers for fifth defendant: Ashurst Lawyers