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Kavieng Niu Lodge Ltd v Anitua Ltd (trading as Anitua Corporate Services) [2025] PGNC 323; N11466 (4 September 2025)

N11466


PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]


WS NO. 395 OF 2024


BETWEEN
KAVIENG NIU LODGE LIMITED
Plaintiff


AND
ANITUA LIMITED TRADING AS ANITUA CORPORATE SERVICES
Defendant


KAVIENG: COLLIER J
04 SEPTEMBER 2025


PRACTICE AND PROCEDURE – application for strike out of defence – default judgment – summary judgment – unverified defence – whether leave to file affidavit – meaning of “liquidated demand” – exercise of discretion – Order 8 Rules 24 and 27 of the National Court Rules – Order 12 Rules 1, 25, 27, and 38 of the National Court Rules.


The plaintiff operated a hotel in Kavieng. The plaintiff and defendant entered a credit arrangement whereby employees of the defendant stayed at the plaintiff’s hotel with the issue of regular invoices for payment by the defendant. The defendant ceased paying invoices, and entered into a further repayment agreement to settle all outstanding debt over a period of time. The defendant failed to make scheduled payments as agreed. The plaintiff commenced recovery proceedings by way of Writ of Summons and Statement of Claim, seeking the amount of K212,180.00. The Statement of Claim bore a note requiring the defendant to verify its defence. The defendant filed a defence but did not verify it. The plaintiff subsequently filed a Notice of Motion seeking that the defence be struck out, or in the alternative an order for summary judgment in the plaintiff’s favour. At the hearing of the Notice of Motion the defendant sought to tender and rely on an affidavit of its lawyer, which it claimed verified the defence, and also established that the Notice of Motion was stale.


HELD: Leave be refused to the defendant to rely on the affidavit of its lawyer which it sought to tender at the hearing, in view of unexplained delays in filing of that affidavit and the prejudice it would cause to the plaintiff. The defendant’s defence was struck out as unverified. The plaintiff’s claim for K212,180.00 was a liquidated demand for the purposes of Order 8 Rule 24 and Order 12 Rules 25 and 27 of the National Court Rules. The fact that the plaintiff had also sought interest and costs did not mean that the claim was not a liquidated demand. The plaintiff was entitled to an order for default judgment for the liquidated amount claimed under those Rules. In the alternative, the plaintiff was entitled to an order for summary judgment for the liquidated sum claimed, under Order 12 Rule 38 of the National Court Rules, because there was no defence and the plaintiff had established evidence of the facts proving the essential elements of its claim. The plaintiff was also entitled to interest on the judgment sum, and costs.


Cases cited
Akefe v Gamato [2024] N10770
Dempsey v Project Pacific [1985] PNGLR 93
Grand Columbia Ltd v Anis [2020] N8323
Independent State of Papua New Guinea v Petroleum Resources Gobe Ltd [2024] SC2534
National Provident Fund Board of Trustees v Maladina [2003] N2486
Kanga v Kaya [2015] SC1461
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees [2006] SC837


Counsel
Mr Sanangke, for the plaintiff
Mr Dalu, for the defendant


  1. COLLIER J: Before the Court is a Notice of Motion filed by the plaintiff, Kavieng Niu Lodge Limited, on 29 January 2025. The Notice of Motion seeks the following relief:
    1. Pursuant to Order 12, rule 1 and order 8 Rule 27(a)(b) and (c) of the National Court rules to be read in line with Order 8 Rule 24 of the National Court rules the unverified defence filed by the Defendant on 15 November 2024 be struck out and judgment in the sum of K212,180.00 be entered in favour of the Plaintiff.
    2. Further and in the alternative, pursuant to Order 12, rules 1 and 38(1),(2) and (3) of the National Court Rules, summary judgment in the sum of K212,180.00 be entered in favour of the Plaintiff.
    3. Interest on the judgment pursuant to Judicial Proceedings (Debts on Damages) Act 2015 from the date of filing of the Writ herein until payment.
    4. Costs of these proceedings against the Defendant.
    5. Time abridged to the date of Settlement by the Registrar which shall take place forthwith.
  2. For the reasons outlined below, I am satisfied that the Court should grant the plaintiff the relief it has sought.

BACKGROUND

  1. The only evidence of substance on the Court file in respect of the substantive issues raised by the writ of summons and statement of claim filed on 7 October 2024 is that filed by the plaintiff. It follows that to the extent that the Court can understand relevant background facts, it must have regard only to the evidence of the plaintiff.
  2. Materially, the plaintiff owns and operates Kavieng Niu Lodge, a hotel which provides accommodation and facilities services in Kavieng, New Ireland Province.
  3. The defendant is a company which, relevantly, organises travel for corporate purposes.
  4. In 2020 the plaintiff entered into a credit arrangement with the defendant whereby the plaintiff agreed to provide accommodation services to employees, agents and officers of the defendant. The parties further agreed that after the provision of accommodation services, the plaintiff would invoice the defendant for payment and the defendant would then pay for those services.
  5. Between February 2022 and December 2022 the plaintiff issued eight invoices to the defendant. The evidence of Ms Fiona Merebo, Manager of the plaintiff, in her affidavit sworn 29 January 2025, is that the following invoices have not been paid by the defendant:

(together, the unpaid invoices).

  1. The unpaid invoices total K212,180.00.
  2. In a writ of summons and statement of claim filed 7 October 2024, the plaintiff sought payment of the amount outstanding of the unpaid invoices.
  3. The evidence of Ms Merebo was also to the effect that the plaintiff had made many demands on the defendant for the payment of the unpaid invoices. Relevantly, Ms Merebo deposed:
    1. I had sent numerous emails and made numerous phone calls to Anitua following up on the payment of the outstanding debt and on all those occasions, Anitua promised to settle the debt but kept deferring actual payments. At no time did Anitua questioned the legitimacy of the debt.
...
  1. On 17 October 2023, I met with the former CEO of Anitua, Mr Julian Counsel regarding the debt and he informed me that Anitua recognised the debt as owing but could not make the payments due to their internal cash flow issues.
  2. On that same day (17 October 2023), KNL and Anitua entered into a repayment agreement that specified a repayment schedule that would allow Anitua to settle all outstanding debt owing to KNL over a period of time and release pressure on Anitua cashflow.
  3. I signed the repayment agreement on behalf of KNL and Mr Julian Counsel – CEO and Anitua former CFO, Breden Raftery co-signed the agreement on behalf of Anitua.
Annexed hereto and marked with the letter “J” is a true copy of the said agreement.
  1. Unfortunately and despite signing the agreement, Anitua di not make the scheduled payments as agreed as its cash position did not improve.
  2. Therefore, on 15 August 2024, KNL instructed Nelson Lawyers to file debt recovery proceedings against Anitua for the recovery of the outstanding debts.
...
  1. I verified that that payment of K19,052.00 by Anitua to KNL was indeed made, which reduced the total amount of debt owing to K212,180.00.
  2. Pursuant to my instructions, Nelson Lawyers sent Anitua a letter of demand for payment of the full outstanding balance of K212,180.00 on 17 September 2024, which Anitua has failed to do.
(errors in original)
  1. On 15 November 2024 the defendant filed a Defence.

PRELIMINARY ISSUE

  1. At the hearing of the Motion on 3 September 2025, the defendant sought leave to hand up and rely on an affidavit of the defendant’s lawyer, Ms Jan-Maree Ainui, sworn on 2 September 2025. The affidavit was described as “Affidavit Verifying Defence” (2 September affidavit).
  2. The plaintiff objected to the defendant relying on the 2 September affidavit, on the basis that the defendant had not served the plaintiff with the affidavit prior to the hearing, and certainly not three clear days before the hearing.
  3. In summary, the 2 September affidavit annexed communication between the parties’ solicitors regarding when the Motion would be moved by Kavieng Niu Lodge. Mr Dalu for the defendant submitted that he relied on the affidavit to support a submission that the Motion was stale and should have been moved within 1 month of being filed. Although Mr Dalu did not specifically identify the legislation on which he relied for this submission, I understand that he refers to Order 4 Rule 49(17) of the National Court Rules which provides:
17. Dismissal /Striking out of Motions
The Court may of its own motion or upon application strike out or dismiss a Motion which is not prosecuted within one (1) month after it is filed or if it is adjourned twice
  1. At the hearing, I provisionally accepted Ms Ainui’s affidavit and informed the parties that I would consider whether to grant leave for it to be relied on by the defendant when considering the Motion.
  2. After considering Ms Ainui’s affidavit, I have determined not to grant leave for the defendant to rely on it. I have so decided for the following reasons.
  3. First, the plaintiff’s Notice of Motion was filed on 29th January 2025. In his affidavit sworn 21st February 2025, a lawyer for the plaintiff, Mr Florian Cherake, deposed that on 13th February 2025 he personally served on Ms Ainui documents including the plaintiff’s Notice of Motion filed on 29th January 2025. It follows that the defendant has been aware for at least six months that the plaintiff had filed the Notice of Motion presently before the Court. I am satisfied that defendant could, at any time within the last six months, have filed and served the affidavit.
  4. Second, the matter was listed to come before me on 1 September 2025, on which date the Notice of Motion was listed for hearing. The defendant has offered no explanation for why it did not file and serve Ms Ainui’s affidavit before the hearing.
  5. Counsel for the plaintiff submitted that, if I granted leave to the defendant to rely on Ms Ainui’s affidavit, the plaintiff would be prejudiced in the absence of an opportunity to respond to it. Having the matter return at a later date, in circumstances where there is currently no resident National Court Judge in Kavieng, could result in a significant delay to determination of the present proceedings. I my view such a delay would not be in the interests of the just and expeditious resolution of proceedings.
  6. Finally, and in any event, I consider that the affidavit is of little utility. Mr Dalu for the defendant submitted that I should treat the Notice of Motion as stale. I am not prepared to do so on the Court’s own motion, and in the absence of an application by the defendant to that effect. I am also not persuaded that the delay in the listing of the Notice of Motion can be attributed to any want of prosecution by the plaintiff.
  7. Accordingly, it is appropriate that I now turn to the Notice of Motion before the Court.

CONSIDERATION

Strike out of Defence and Default Judgment

  1. In respect of the relief the plaintiff seeks for the strike out of the defendant’s defence filed on 15 November 2024, the plaintiff relies on Order 8 Rule 24 and Rule 27(1)(a), (b) and (c) and Order 12 Rule 1 of the National Court Rules. These Rules provide as follows:
ORDER 8
24. Defence: verification
(1) Where a plaintiff, by his statement of claim, makes a claim against a defendant for a liquidated demand, but no other claim, and the statement of claim bears a note requiring the defendant to verify his defence, the defendant shall verify his defence, that is to say, he shall, within the time limited for filing his defence, file an affidavit verifying his defence to the claim in accordance with this Rule.
(2) Subject to sub-rule (4) the deponent making an affidavit verifying a defence shall, in the affidavit, swear that the defence is true in substance and in fact.
(3) An affidavit verifying a defence may be made—
(a) by the defendant; or
(b) where the defendant is a Minister or officer of the Government of Papua New Guinea sued in his official capacity—by some officer of the Government having knowledge of the facts; or
(c) where the defendant is a corporation or a body of persons which, by law, may be sued (whether in its own name or in the name of any officer or other person) by some member or officer of the corporation or body having knowledge of the facts; or
(d) where the defendant is a disabled person—by his guardian at law.
(4) The Court may, by order, give leave to a defendant to file, instead of an affidavit in accordance with sub-rules (2) and (3), an affidavit by such deponent and as to such facts in or towards verification of his defence, or instead of verification of his defence, as the Court may determine.
(5) A defendant may apply for an order under sub-rule (4) without filing or serving notice of the motion.
(6) A defendant filing an affidavit verifying his defence shall, on the day of filing, serve the affidavit and, where the affidavit is filed pursuant to an order under sub-rule (4), serve the order, on the plaintiff.
(7) The affidavit required by or under this Rule in relation to a defence may be subscribed to the defence.
...
27. Embarrassment, etc
(1) Where a pleading—
(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings; or
(c) is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceedings, on terms or otherwise, order that the whole or any part of the pleading be struck out.
...
ORDER 12
1. General relief
The Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating process.
  1. Plainly, application of Order 8 rule 24 of the National Court Rules is dependent on :
  2. The leading authority on considering whether a claim is one for a liquidated debt is Dempsey v Project Pacific [1985] PNGLR 93. In Dempsey, Pratt J relevantly observed:
For a most comprehensive and erudite dissertation on the concept of liquidated demand it is not possible to go past Sholl J in the Victorian case of Alexander v Ajax Insurance Co Ltd [1956] VicLawRp 5; [1956] VLR 436...I would respectfully adopt his Honour’s conclusion (at 441) that:
The application of the rule cannot be limited to such claims only as those where the jury would be bound by the figures or the calculations adopted by the parties’ agreement. For example, the case of a claim on a common count before a jury for the reasonable price of goods would involve an assessment by the jury, upon evidence, as to what was reasonable, and yet that would for historical reasons be a “liquidated demand”.
I continue to adopt his Honour’s words when he sums up an old definition of the term, being just as relevant today. At 445 his Honour’s definition runs; any claim:
(a) for which the action of debt would lie;
(b) for which an indebitatus (or common) count would lie, including those cases formerly covered by the quantum meruit or quantum valebant counts, notwithstanding that the only agreement implied between the parties in such cases was for payment at a “reasonable” rate;
(c) for which covenant, or special assumpsit, would lie, provided that the claim was for a specific amount, not involving in the calculation thereof elements the selection whereof, was dependent on the opinion of a jury.
  1. The authority of the decision in Dempsey on this issue was recently reiterated by the Supreme Court in Independent State of Papua New Guinea v Petroleum Resources Gobe Ltd [2024] SC2534 where their Honours said as follows:
    1. Moiga v Hembehi also offers a helpful reminder of the enduringly authoritative statements made in this Court in Dempsey v Project Pacific Pty Ltd (supra) concerning the difference between a liquidated and an unliquidated claim. In that case, at 95 – 96, Pratt J (Amet J agreeing) stated:
“A liquidated demand is in the nature of a debt, i.e. a specific sum of money due and payable under or by virtue of a contract. Each amount must either be already ascertained or capable of being ascertained as a mere matter of arithmetic. If the ascertainment of a sum of money, even though it be specified or named as a definite figure, requires investigation beyond mere calculation, then the sum is not a ‘debt or liquidated demand ’ but constitutes ‘damages’.”

In that same case and to like effect Woods J stated, at 101: “a claim is liquidated when it is ascertained or is capable of being ascertained by a simple calculation, as when there is no element of assessment on judgment”.
  1. As pointed out in Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees [2006] SC837 at [31], the mere fact that a plaintiff its Statement of Claim sets out a calculation in figures and claims a specific amount and requires the defendant to verify its defence does not convert an ordinary action for damages into a liquidated claim. In Kumagai, the plaintiff’s claim in the National Court included one for an unpaid debt, as well as punitive damages. The Supreme Court in Kumagai observed:
    1. ... A claim for any category of damages is an integral part of a claim for damages in tort or contract. In an action for damages which includes a claim for punitive damages, the claim for “punitive damages” is an additional claim within the meaning of “and no other claim” in O.8 r.24(1). The Defendant is not required to verify its Defence to such claim. Default judgment under O.12 r.25(c) is not available in respect of a claim which includes “punitive damages”.
  2. Nonetheless, the inclusion of a claim for consequential relief (being interests and costs) by a plaintiff in a Statement of Claim does not prevent the claim from being one for a liquidated debt. As the Supreme Court continued in Kumagai:
    1. Thirdly, Order 12 Rule 27 by implication, prescribes the types of relief which may be included in a default judgment entered under O.12 r.25(c) as consequential relief and these are orders for costs and interest. Pursuant to Order 12 rule 27, the Court can only grant default judgment under O.12 r.25(c) for the “specific sum claimed in the Statement of claim with costs” and interest at a specific rate. The Court cannot grant judgment for unliquidated damages such as in punitive damages.
  3. In the present case the plaintiff’s claim is for the amount of the unpaid invoices, interest and costs. I am satisfied that the claim of the plaintiff is a liquidated demand for the purposes of Order 8 Rule 24 of the National Court Rules.
  4. Next, for the purposes of Order 8 Rule 24, the Statement of Claim must have included a note requiring Anitua to verify its defence. The first page of the Writ of Summons and Statement of Claim clearly includes such a note.
  5. It follows that the defendant was required to verify its defence. No affidavit was filed by the so doing, and it is unable to now rely on an affidavit of Ms Ainui on which it has now (very belatedly) sought to rely.
  6. In the circumstances Order 12, rule 25(c) of the National Court Rules is applicable. This Rule provides:
ORDER 12
25. Default
A defendant shall be in default for the purposes of this Division—
(a) where the originating process bears a note under Order 4 Rule 9, and the time for him to comply has expired but he has not given the notice; or
(b) where he is required to file a defence and the time for him to his defence has expired but he has not filed his defence; or
(c) where he is required under Order 8 Rule 24 to verify his defence and the time for him to verify his defence in accordance with that Rule has expired but he has not so verified his defence.
  1. As Kandakasi J (as his Honour then was) found in similar circumstances in National Provident Fund Board of Trustees v Maladina [2003] N2486, failure to verify a defence in terms of Order 8 Rule 24 attracts the operation of Order 12 Rule 25 of the National Court Rules, on the basis of the strike out of the defence.
  2. I further note Order 12 Rule 27 which provides:
27. Liquidated demand (17/4)
(1) Where the plaintiff's claim for relief against a defendant in default is for a liquidated demand only, the plaintiff may enter judgement against that defendant for a sum not exceeding the sum claimed in the statement of claim on that demand and for costs.
(2) Where a claim for a liquidated demand includes interest at an unspecified rate, interest accruing after the date of filing the statement of claim to the date of entry of judgement shall, for the purposes of judgement under this Division be reckoned at the rate of 8% yearly.
  1. In the present circumstances it follows that the defendant is in default, and the plaintiff is at liberty to seek that the Court enter default judgment against the defendant pursuant to Order 12 Rule 27 of the National Court Rules.
  2. As I explained in Akefe v Gamato [2024] N10770:
Plainly, the entry of default judgment against a party is a matter of the Court’s discretion: see for example Chief Executive Officer, Telikom PNG Ltd v Minji [2023] SC2437 at [29]-[30], Bank of South Pacific Ltd v Tingke [2014] SC1355 at [9], Kunton v Junias [2006] SC929. Examples of considerations which may influence the exercise of the Court’s discretion were set out in Kunton at [21] as follows:
whether the statement of claim raises serious allegations of fraud or deceit, in which case the interests of justice may require those allegations to be proved by evidence in a trial before judgment is given on the merits (Bala Kitipa v Vincent Auali, Supply and Tenders Board of Western Highlands Provincial Government and Others (1998) N1773);
the extent of the default by the defendant (John Kunkene v Michael Rangsu and The State (1999) N1917);
whether the defendant appears to have a good defence (Kunkene);
whether the statement of claim amounts to an abuse of process (Eliakim Laki and 167 Others v Maurice Alaluku and Others (2000) N2001);
whether the pleadings are vague, ie whether the statement of claim discloses a reasonable cause of action (Eliakim Laki and 167 Others v Maurice Alaluku and Others (2000) N2001, Urban Giru v Luke Muta and Others (2005) N2877);
whether the plaintiff has prosecuted his case diligently (Tiaga Bomson v Kerry Hart (2003) N2428);
whether the entry of judgment would prejudice the rights of co-defendants (Kante Mininga v The State & Others (1996) N1458, Beecroft No 51 Ltd trading as Ronnie's Hot Bread v Neville Seeto and Others (2004) N2561);
whether the interests of justice would be served by the entry of default judgment (Urban Giru v Luke Muta and Others (2005) N2877).
  1. In the present circumstances I am satisfied that default judgment should be entered in favour of the plaintiff against the defendant, in circumstances where:

Alternative Claim for Summary Judgment

  1. In the alternative the plaintiff sought summary judgment pursuant to Order 12, Rules 1 and 38(1),(2) and (3) of the National Court Rules in the amount of K212,180.00.
  2. Principles relevant to a summary judgment determination under Order 12 Rule 38 were recently outlined by Kariko J in Grand Columbia Ltd v Anis [2020] N8323. There his Honour observed:
9. The Court’s power to enter summary judgement under O12 r38 National Court Rules is a discretionary one. The relevant principles in considering summary judgement are well settled in this jurisdiction. In the case of Hornibrook Construction Limited v Lihir [1998] PNGLR 53 for example, Sevua, J stressed that:
“There are two elements involved in this rule:
(a) evidence of the facts proving the essential elements of the claim; and
(b) that the plaintiff or some responsible person gives evidence that in his belief there is no defence.
As to the second element, the plaintiff must show in absence of any defence or evidence from the defendant that in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that, upon the facts and/or the law, the defendant has no defence. The plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of fact or law. Whether a case should go to trial on these issues will be determined on the facts of each case.” (My underlining)
10. Order 12 r38(1) permits the Court to enter summary judgement on part of the relief claimed by a plaintiff.
11. Summary judgement should be declined if there is a serious conflict on questions of fact or law; Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112.
  1. Importantly, I also note the following observations of the Supreme Court in Kanga v Kaya [2015] SC1461:
10. It is uncontroversial that there are two formal requirements for entry of summary judgment expressly prescribed by Order 12, Rule 38(1). The plaintiff must present evidence of:
(a) the facts on which the claim is based; and
(b) the belief of the plaintiff or some responsible person that the defendant has no defence.
11. If both those requirements are not met, summary judgment cannot be ordered. If both are met, summary judgment may be entered, but this is a matter of discretion which must be exercised judicially taking into account relevant considerations, in particular whether it is a clear case involving no serious dispute on any question of fact or law (Chief Collector of Taxes v T A Field Pty Ltd [1975] PNGLR 144, Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112, Curtain Bros (Qld) Pty Ltd & Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285).
  1. In the present case :
  2. In the circumstances, I am satisfied that, in the alternative, the plaintiff is entitled to summary judgment in the amount it has claimed.

Interest and Costs

  1. Pursuant to Order 12 Rule 27(2) of the National Court Rules, interest on the judgment debt is to be calculated at 8% annually from the date of filing of the writ of summons and statement of claim, to the date of payment. I shall make an order to that effect.
  2. It is also appropriate that costs follow the event, and that the defendant pay the costs of the plaintiff of and incidental to the proceedings, to be taxed if not otherwise agreed.

THE COURT ORDERS THAT:


  1. Leave be refused for the defendant to rely on the affidavit of Jan-Maree Ainui sworn on 2 September 2025.
  2. Judgment be entered against the defendant in the amount of K212,180.00
  3. The defendant pay interest on the amount in Order 2 at a rate of 8% per annum from the date of filing of the writ of summons and statement of claim, to the date of payment.
  4. The defendant pay the costs of the plaintiff of and incidental to the proceedings, to be taxed if not otherwise agreed.
  5. Time abridged to the date of Settlement by the Registrar which shall take place forthwith.

Lawyers for plaintiff: Nelson Lawyers
Lawyers for defendant: Ainui Legal Services

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