Kipalan v AGC (Pacific) Ltd and Kaime No 3 Pty Ltd [1998] PGSC 31; SC583 (29 September 1998)

Unreported Supreme Court Decisions

SC583

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SCA 37 OF 1998
BETWEEN: SIR ALBERT KIPALAN
APPELLANT
AND: AGC (PACIFIC) LIMITED
1ST RESPONDENT
AND: KAIME NO. 3 PTY LIMITED
2ND RESPONDENT

Waigani

Kapi DCJ Hinchliffe Sheehan JJ
29 September 1998
9 October: 1998

APPEAL – default judgement – judgement entered by Deputy Registrar ultra vires – purported amendment of judgement by adding third party – appellant.

Counsel

Mr D. Stevens for the Appellant

Mr W. Arua for the 1^st Respondent

DECISION

KAPI DCJ, HINCHLIFFE SHEEHAN JJ: This is an appeal against the decision of the National Court which declined to set aside a default judgement entered against the second respondent on 22^nd May 1998. It arises out of a claim by the first respondent AGC (Pacific) Limited against the second respondent Kaime No. 3 Pty Limited.

In February 1996 the 1^st Respondent, AGC (Pacific) Pty Limited (AGC) issued a writ of summons against the 2^nd Respondent Kaime No.- 3 Pty Limited (Kaime) under WS 142/96. At the time there were no other parties to the suit. The claim was for monies owning under a lease agreement in respect of plant and machinery. In April of 1996 default judgement was entered by the Deputy Registrar of the National Court against Kaime for the sum of K61,322.00. That judgement was sealed on 30^th April 1996.

On 12^th July of that year AGC moved to amend the writ by adding as 2^nd Defendants, five persons including the Appellant Sir Albert Kipalan as guarantors of the contract between AGC and Kaime. The order for that joinder was sealed on 19^th July 1996. The amended writ was purportedly served on the Appellant on 4^th September 1996.

On the 14^th January 1997 on the application of AGC, a writ for levy of property was sealed by the National Court under WS142/96 which named AGC as Plaintiff and Kaime alone as Defendant. That order issued “in respect of the judgement entered on 30^th April 1996”.

The next step taken under WS 142/96 was the entry of default judgement against the Appellant on 4^th June 1997. That was followed on 5^th March 1998 by a Garnishee Order Nisi against funds of the Appellant. The Appellant learning of the garnishee moved to have it set aside and also sought to have the default judgement set aside and the opportunity to defend the claim against him. Upon the National Court declining those applications that the appellant now appeals to this Court.

The appeal is based on grounds first that the judgement is irregular because no notice pursuant to practice directions 1 of 1987 was given to the Appellant. Secondly the entry of judgement by a Deputy Registrar was ultra vires. There was also the further ground which emerged during the hearing of this application namely, that the amendment to the original writ whereby the Appellant was joined as a second 2^nd Defendant after the entry of judgment against the 1^st Respondent and without notice to the Court of that fact was irregular.

The learned trial judge declined to set aside the default judgment against the Appellant. He was not satisfied that the Appellant’s claim in his affidavit to have received no service of documents of any kind was insufficiently detailed, to answer the sworn affidavits of service filed on behalf of AGC. In any case in his view the claim to a defense had no basis in law. The grounds of appeal brought before this Court that the entry of judgement was ultra vires the Deputy Registrar, and the challenge to the amendment of the writ after entry of judgement against the Kaime were not raised before him.

The first ground asserting that the Respondent had not given prior notice of intention to proceed to default judgment in terms of National Court Practice Direction 1 of 87 was not challenged before us. Accordingly in terms of the Direction it “may be” in the discretion of this Court, “a ground for setting aside the judgement”. But the challenge to powers of a Registrar to enter default judgment is a challenge to the validity of the judgement itself.

Mr Steven for the Appellant relied on the decision of Doherty, J in Paul Paraka v Madang Provincial Government (unrep. N1596). The Learned Trial Judge determined that in fact the present National Court Rules which were installed in 1983 give no power to Registrar of the National Court to enter default judgement. Mr Arua for the Respondent did not dispute the validity of that decision but pointed out that the decision was delivered over a year after the default judgement in this case Appellant had already been entered against the Appellant.

We are satisfied that the Appellant must succeed on this ground and accept the exposition of law set out in the decision of Doherty, J. Her historical analyses of the relevant rules in that decision and the conclusions drawn by the learned judge are adopted by this Court.

While the remaining ground would appear to provide an even more compelling reason for setting aside judgement against the Appellant, it was not specifically pleaded. Therefore as this appeal is already decided, there is no need to pursue the matter further although the National Court record before this court discloses apparent significant anomalies of procedure. Accordingly the appeal is allowed. The orders of garnishee and the judgement against the Appellant are set aside. There will be order for costs in favour of the Appellant.

Lawyer for the Appellant - Maladina Lawyer

Lawyer for the Respondent - Patterson Lawyer