Kalang Advertising Ltd v Kuppusamy [2008] PGSC 15; SC924 (31 July 2008)

SC924

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 62 0F 2006

KALANG ADVERTISING LIMITED
Appellant

V

VISVANATHAN KUPPUSAMY
Respondent

Waigani: Kapi CJ, Gavara-Nanu J, Cannings J
2008: 29 February
31 July

PRACTICE AND PROCEDURE – conditional orders – failure to comply with conditions set by the National Court.

PRACTICE AND PROCEDURE – summary judgment – whether summary judgment can be entered on the own initiative of the National Court – Listing Rules 2005, Rule 15: summary disposal.

Facts

The respondent (then the plaintiff) commenced proceedings against the appellant (the defendant) in the National Court, claiming damages for breach of contract. The matter was set down for a directions hearing but only the plaintiff’s lawyer appeared. The Listings Judge adjourned the matter and made a conditional order, that:

Unless the defendant turns up in court and provides reasonable explanation for not turning up in court and assisting at directions hearing for today ... the defence shall be struck out and judgment entered for the plaintiff with damages to be assessed.

The defendant’s lawyer appeared on the appointed day and gave an explanation to the Listings Judge, but the Listings Judge was not satisfied with the explanation, which was also not supported by affidavit, and struck out the defence and entered judgment against the defendant with damages to be assessed. The defendant appealed, arguing that the Listings Judge erred in making both the conditional order and the order for summary judgment.

Held:

(1) The conditional order was a proper exercise of judicial discretion.

(2) Rule 15 of the Listings Rules 2005 permits the National Court to summarily determine a matter on its own initiative if a party or its lawyers fail to appear at a directions hearing.

(3) The lawyer’s explanation for not appearing in court was not supported by affidavit and the Listings Judge properly formed the opinion that the explanation was unsatisfactory.

(4) The Listings Judge properly concluded that the conditions to avoid striking out the defence and entry of summary judgment were not complied with.

(5) The appeal was accordingly dismissed.

Cases cited

The following case is cited in the judgment:

Baing and The State v PNG National Stevedores Pty Ltd and BSP Ltd (2000) SC627

APPEAL

This was an appeal against a decision of the National Court to strike out a defendant’s defence in a civil action for damages and to enter summary judgment on liability against the defendant.

Counsel

W Mapiso, for the appellant
G Gorua, for the respondent

31 July, 2008

1. BY THE COURT: This is an appeal against a decision of the National Court to strike out a defence in a civil action for damages and to enter summary judgment on liability against the defendant.

2. The respondent, Visvanathan Kuppusamy, was employed by the appellant, Kalang Advertising Ltd, as their chief engineer for several years under a written contract of employment. The contract was completed but not renewed and Mr Kuppusamy claims that he was not paid all that was due to him under the contract. He commenced proceedings (as plaintiff) against Kalang (the defendant), claiming damages for breach of contract.

3. Kalang filed a defence and the matter was set down for a directions hearing in accordance with the Listings Rules 2005. Unless stated otherwise the dates referred to below are in 2006.

4. On the appointed day, 11 May, Mr Kuppusamy’s lawyer, Ms Nidue, appeared. But there was no appearance for Kalang. The Listings Judge, Kandakasi J, adjourned the directions hearing to 19 May, and made a conditional order, that:

Unless the defendant turns up in court and provides reasonable explanation for not turning up in court and assisting at directions hearing for today ... the defence shall be struck out and judgment entered for the plaintiff with damages to be assessed.

5. On 19 May the matter was stood over to 23 May.

6. On 23 May Ms Nidue again appeared for Mr Kuppusamy and Mr Mapiso appeared for Kalang. His Honour drew Mr Mapiso’s attention to the order of 11 May and asked for his explanation. Mr Mapiso said that he was at the court that day but when the matter was called he happened to be outside the courtroom. The courtroom was packed and it was hard for him to get inside. Also there was a bit of confusion over the list and there was another matter concerning Kalang on the motions list before another Judge. He submitted that Kalang had been penalised sufficiently by having a costs order against it for the 11 May proceedings and it would be unfair if Kalang were stopped from having its defence heard.

7. His Honour observed that Mr Kuppusamy’s lawyers had filed an affidavit of service showing that the court’s order of 11 May was served on Kalang’s lawyers the next day, so Kalang’s lawyers had ample time to prepare an explanation for their non-appearance that day. Kalang’s lawyers should have prepared an affidavit setting out the facts on which they relied to support the explanation for their non-appearance on 11 May. But there was no affidavit and therefore no explanation.

8. In an ex tempore ruling his Honour held that the conditions prescribed by the order of 11 May to avoid striking out the defence and entering summary judgment were not complied with, ie the defendant, Kalang, had not provided a reasonable explanation for not turning up and assisting the court at the directions hearing on 11 May. His Honour proceeded to make an order, striking out the defence and entering summary judgment against Kalang, with damages to be assessed.

THE APPEAL

9. Kalang has appealed against the entry of summary judgment, arguing that his Honour erred in making both the order of 11 May and the order of 23 May. The notice of appeal contains five grounds of appeal but they really boil down to two and raise the following issues:

• Did the Listings Judge err when making the order of 11 May?
  
• Did the Listings Judge err when making the order of 23 May?
  

DID THE LISTINGS JUDGE ERR WHEN MAKING THE ORDER OF 11 MAY?

10. Mr Mapiso, for Kalang, submits that his Honour erred in two respects. First, no application was made for such an order, so his Honour should not have made the order of his own volition. Secondly, there was no good reason to make such an order.

11. We reject those submissions as under the Listings Rules, the Listings Judge may on his or her own initiative summarily dispose of a matter if a party or its’ lawyer fail to appear at a directions hearing.

12. Rule 15(1) and (2) (summary disposal) of the Listings Rules state:

(1) The Court may summarily determine a matter:

• (a) on application by a party; or
• (b) on its own initiative; or
• (c) upon referral by the Registrar under (3) below.
  

(2) The Court may summarily dispose of a matter in the following circumstances:

(a) for want of prosecution since filing the proceedings or since the last activity on the file; or
(b) for a failure to appear at any of the listing or directions hearings by a party or his lawyer;
(c) for non-compliance of any order or directions previously made or issued by the court at any of the listings processes.

13. The relevant rules here are:

• 15(1)(b): the court may summarily determine a matter on its own initiative; and
  
• 15(2)(b): the failure of a party or its lawyer to appear at a directions hearing is a sufficient ground for exercise of the court’s discretion to summarily dispose of a matter.
  

14. This means that the Listings Judge could have, on the day of the directions hearing, 11 May, made the orders that he actually made on 23 May. However, his Honour did not summarily determine the matter on 11 May. He gave the party that failed to appear, Kalang, a right to be heard, by making a conditional order, ie an order the terms of which were conditional upon the happening of some event in the future; the event being their failure to provide the explanation required by the court. The order of 11 May was not a self-executing order, as it made provision for the exercise of a further judicial function at a later time; the function being the determination of whether Kalang gave a satisfactory explanation. Conditional orders of this nature are a proper exercise of judicial power (Baing and The State v PNG National Stevedores Pty Ltd and BSP Ltd (2000) SC627).

15. His Honour did not err in law on 11 May by making the order on his own initiative; and we are satisfied that the failure of Kalang’s lawyer to appear that day was a good enough reason to make the order.

DID THE LISTINGS JUDGE ERR WHEN MAKING THE ORDER OF 23 MAY?

16. Mr Mapiso submitted that his Honour erred in that:

1. no application was made for such an order;
2. there was a sufficient explanation given for the non-appearance of Kalang’s lawyer on 11 May;
3. Kalang had a strong defence as the claim was time-barred;
4. 11 May was the first time that Kalang’s lawyer had failed to appear;
5. the parties were progressing well with their pleadings and the matter was nearly ready for trial;
6. the costs order of 11 May adequately compensated the other party for any prejudice;
7. no substantial delay was caused by the adjournment of the directions hearing on 11 May;
8. the matter was not mentioned on 19 May, so the conditional order of 11 May no longer had any effect.
   

17. We reject the first submission for the same reasons given in relation to the order of 11 May. The Listing Rules make it clear that orders for summary disposal can be made on the own initiative of a Judge.

18. As for the second submission, we agree with the Listings Judge that the explanation proffered by Mr Mapiso could only be properly put to the court in the form of an affidavit. The same goes for submission Nos 3, 4 and 5. All of these matters should have been put in an affidavit.

19. It is not sufficient for lawyers who are formally asked, via a court order, for an explanation for their non-appearance at a directions hearing or about anything to do with the conduct of proceedings, to simply attend court and give an oral explanation. The explanation should be given in an admissible form.

20. As for submission No 7, this is a useful point to have made but in the absence of an affidavit detailing the background of the matter it lacks any factual basis.

21. We reject submission No 8 as the terms of the order of 11 May necessarily implied that Kalang’s explanation would need to be forthcoming whenever the matter next came before the court.

22. We therefore reject all of Kalang’s submissions. The Listings Judge properly concluded that the conditions to avoid striking out the defence and entry of summary judgment were not complied with. No error of law accompanied the exercise of judicial discretion. We will dismiss the appeal and confirm the orders of the National Court.

ORDER

(1) The appeal is dismissed;

(2) the orders of the National Court are confirmed;

(3) the appellant shall pay the costs of these proceedings to the respondent on a party-party basis, to be taxed if not agreed.

Judgment accordingly.

W Mapiso: Lawyer for the Appellant
Kassman Lawyers: Lawyers for the Respondent