Curlewis v Yuapa [2013] PGSC 54; SC1274 (6 September 2013)

SC1274

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA No. 103 OF 2008

BETWEEN:

LES CURLEWIS, as Branch Manager
First Appellant

AND:

REUBEN RENAGI as Pass Manager
Second Appellant

AND:

PROTECT SECURITY AND COMMUNICATIONS LIMITED
Third Appellant

AND:

DAVID YUAPA
Respondent

Waigani: Gavara-Nanu, Manuhu and Yagi JJ
2009: 25 September
2013: 06 September

PRACTICE & PROCEDURE – Notice to Admit Facts – Order 9 rr 29 (2), 30 (1) and 32 (2) of National Court Rules – Issues raised in the Notice to Admit Facts same as those raised in the Notice to Answer interrogatories – Notice to Admit Facts served on the appellants after the appellants served their Answers to interrogatories on the respondent – Whether Notice to Admit Facts an abuse of process.

PRACTICE & PROCEDURE – Notice to Admit Facts – Failure to respond to Notice to Admit Facts – Such failure partly attributed to Change of lawyers – Forewarning to apply for judgment served personally on the appellants following appellants' change of lawyers - Counsel for the appellants obtaining instructions late to defend the application for judgment – Defence disclosing defence on the merits – Exercise of discretion by the Court to enter judgment with damages to be assessed – Whether discretion properly exercised.

Case cited:
Papua New Guinea Cases

Ace Guard Dog Services Ltd v. Yama Security Services Ltd & Lindsay Lai Lai (2003) N2459
Breckwold & Co. (NG) Pty Ltd v. Groyke [1974] PNGLR 106
Curtain Bros (PNG) Ltd and Curtain Bros (QLD) Pty Ltd v. University of Papua New Guinea (2005) SC788
Kawaso Ltd v. Oil Search PNG Ltd SC1218
Patrick Basa v. Bob Dadae and Andrew Trawen – Electoral Commissioner of Papua New Guinea N4991
Public Officers Superanuation Fund Board v. Silas Imanakuan (2001) SC677
Westpac Bank (PNG) Limited and Ors v. Hugo Canning Company Pty Ltd (20 December, 1991).

Overseas cases cited

Air Marshall McCormack and Anor v. Vance [2008] ACTA 16
Australian Coal and Shale Employees Union v. The Commonwealth [1953] HCA 25; (1956) 94 C.L.R 621
House v. King [1936] HCA 40; (1936) 55 C.L.R 499
Micallef v. ICI Australia Operations Ltd & Anor [2001] NSWCA 274

Other Authorities cited

National Court Rules

Riche's Supreme Court Procedure New South Wales Vol. 1

The Law of Discovery in Australia by Bernard C. Cairns (1984)

Victoria Supreme Court Civil Procedure by Neal J. Williams

Counsel

J.Aisa, for the appellants
L.Tilto, for the respondents

6th September, 2013

1 BY THE COURT: The appellants appeal against the decision of the National Court given in Waigani on 18 August, 2008, to enter judgment for the respondent with damages to be assessed.

2. The judgment was entered following an application made by the respondent after failure by the appellants to respond to the notice to admit facts within 14 days after the service of the notice under Order 9 rr 29 (2), 30 (1) and 32 (2) of the National Court Rules.

3. After the close of pleadings the parties commenced discoveries and interrogatories. The parties filed their respective lists of documents on 24 September and 9 October, 2007.

4. On 25 March, 2008, the respondent filed and served a notice to answer interrogatories. The appellants filed and served their answers to interrogatories on 7 May, 2008.

5. On 1 July, 2008, the respondent filed and served the notice to admit facts and authenticity of documents on the appellants.

6. It is convenient to note at this juncture that Bradshaw Lawyers who were lawyers for the appellants ceased to act for the appellants on 11 June, 2008.

7. Thus, by 1 July, 2008, when the respondent served the notice to admit facts and authenticity of documents (notice to admit facts) on the appellants, the appellants had no lawyers acting for them. Indeed the notice to admit facts was served on the appellants at their own business address through their Human Resources Manager, Mr. Allan Maino.

8. On 24 July, 2008, in a letter addressed personally to the Managing Director of the third appellant and made attention to Mr. Maino, the respondent's lawyers reminded the appellants that 14 days period by which they were expected to respond to the respondent's notice to admit facts had expired on 15 August. The respondent's lawyers warned that if the appellants did not serve their response to the notice to admit facts by 30 July, 2008, the respondent would apply to Court for orders that the facts and documents specified in the notice to admit facts to stand admitted.

9. On 9 August, 2008, the respondent conducted a search on the Court file and found that the appellants had not filed any response to the notice to admit facts.
10. On 18 August, 2008, the respondent's notice of motion filed on 7 August, 2008, was heard. The motion sought following relief:

(i) That pursuant to the Notice to Admit Facts And Authenticity of Documents filed by the plaintiff on 1 July, 2008, shall for the purposes of the proceedings stand admitted.

(ii) That judgment be entered against the defendants for damages and costs to be assessed.

(iii) Costs and incidentals of this application be paid by the defendant.

(iv) Any other orders the Court deems fit.

11. At the hearing of the motion Mr. Tyson Boboro of counsel for the appellants told the Court that his firm, Allens Arthur Robinson had just received instructions from the appellants and applied for the matter to be adjourned for two days so that the appellants could properly respond to the respondent's application. He submitted that since the respondent was seeking judgment, which if granted would settle the issue of liability in respect of all the claims made by the respondent against the appellants, it was only fair and proper that appellants be given the opportunity to respond properly to the respondent's application. Mr. Boboro also told the Court that his clients had given him a copy of the motion that morning and informed the Court that the appellants would concede costs if the motion was adjourned.

12. Mr. Levy Tilto of counsel for the respondent in opposing the application for adjournment told the Court that the motion was served on the appellants on 8 August, 2008, therefore they had sufficient time to prepare and argue the application. The Court refused Mr. Boboro's application and ordered that the motion be heard.

13. At the hearing Mr. Tilto submitted that appellants had sat on the matter and said that whilst they may have had problems securing new lawyers after the lawyers representing them initially withdrew, they were only themselves to blame for leaving it till very late to engage new lawyers. He argued that the appellants had failed to provide a reasonable explanation for their failure to respond to the notice to admit facts, thus the relief sought in the motion should be granted.

14. The Court basically accepted Mr Tilto's arguments and ruled inter alia, that pursuant to Order 9 r 29 (2), when the appellants failed to respond to the respondent's notice to admit facts within the required 14 days period, the facts specified in the notice "automatically" stood admitted.

15. The pertinent parts of the learned trial judge's ruling appear at pages 78 to 80 of the appeal book, which in our opinion form the basis of the ruling. His Honour said:

"So, there is therefore no need for a party who was served the notice to come into court and apply specific (sic.) orders to say that fact now stands admitted. There is absolutely no need for that because the rules speak for themselves. Once a party fails to answer to notice to admit facts or authenticity of documents, those facts stand admitted as from the expiry of the 14 day period and that 14 day period works from the or time the notice has been served. So there is no question about the effect of a failure to answer to notice to admit facts. In my view, it is automatic. Those facts remain admitted. And that is why you have provisions which talk about or which allow for judgment. And it is almost practically impossible for a party to with draw admissions.

Now, in this case the notice has been served on 1 July as I intimated. The 14 day expired on or about 15 July. Up to this day, that notice has not been complied with. No explanation has been provided why there has been failure to respond to that notice and to justify or place the basis to avoid the consequence stipulated under rule 29 (2) from operating. So, I accept the plaintiff's argument that the facts set out in the notice to admit facts stand admitted.

So, the question is, the effect of those facts standing admitted, are they sufficient to allow for a judgment in the terms asked for in the notice of motion by the plaintiff? The plaintiff is simply asking for judgment on the basis of admission with damages to be assessed. Now, that requires an examination of the facts that have been sought to be admitted. They cover from the period and the questions concerning or facts concerning prior notice to the plaintiff, the basis for termination which seems to be an allegation that the plaintiff was involved in a conduct that is described as an unlawful rampage and destruction of assets and properties belonging to certain ethnic groups. And then it goes on to talk about investigations and report being done and plaintiff not being allowed to have his input or comment on that report and be heard in his defence before the drastic step of him being dismissed.

There is an issue raised as to shift command. The plaintiff says he was not responsible at the time. Someone else was in-charge and when the members of the defendants were allegedly on this rampage or raid, somebody else was in-charge and not the plaintiff. The plaintiff also raises the issue of if indeed there was such an unlawful raid, the matter should have been reported to the police so criminal charges could have been laid.

Then it goes to the termination of the plaintiff when there is no evidence regarding his involvement in the alleged raid. It goes on to talk about the plaintiff's meal allowance and shift allowances were never billed into his hourly rate of K4.15 as alleged by the defendants. And then it goes on to talk about other shift and meal allowances. Then final commentary is the plaintiff's date of commencement of employment which is put as 23 February, 2004. And finally, the plaintiff's termination being wrongful and punitive in nature. That is the facts that the plaintiff was required – sorry, defendants were required to admit. But they did not admit or deny and, therefore, by operation of the rules, those facts stand admitted.

In my mind, those facts almost exhaustively address the issue of liability as to the basis for termination and the plaintiff's allegation that there was no basis to terminate him and therefore his termination was unlawful and punitive in nature. That is his suggestion and that suggestion stands admitted and how can there be no judgment in the light of that outline of the relevant facts that goes into the crux of the issue of whether or not there was unlawful dismissal. And these facts seem to address that particular issue.

So, I take it that on those facts being admitted, there cannot be any argument that there should be liability or the judgment for the plaintiff with damages to be assessed on the basis of those admissions. I therefore uphold the application on the basis of those admissions. I, therefore, uphold the application and I will order judgment for the plaintiff with damages to be assessed. Costs of this application against the defendants". (Our underlinings).

16. The grounds of appeal are:

(a) The learned judge erred both in law and fact by rejecting the Appellant's arguments not to enter judgment against the Appellants merely for the failure to comply with the Notice when the Appellants and the Respondent had completed Discovery and Interrogatories, and the answers the Respondent required in the Notice were provided in the Interrogatories.

(b) The learned judge erred in law and in fact by failing to consider that the Appellants had a good defence on the merits which pleaded a series of disputed facts which can only be properly resolve through trial. These disputed facts include:

(i) sufficient notice was given to the Respondent prior to his termination.

(ii) the Respondent was terminated for gross misconduct in breach of his contract of employment and the Third Appellant's Employee's Code of Conduct.

(iii) the Third Appellant was entitled to dismiss the Respondent without notice or payment in lieu of such notice, instead the Third Appellant paid seven days salary in lieu of notice and paid all his other entitlements.

(iv) the Respondent is not entitled to damages for distress and frustration.

(c) The learned judge erred in law and in fact by failing to consider the Appellants' arguments that the Respondent could have been adequately compensated by an order for costs for the Appellants failure to comply with the Notice when it was clear that the Discovery process and the Appellants' Defence raised serious disputed facts which can only be resolved properly if the proceedings was determined through a proper trial.

(d) The learned judge erred in both law and in fact when by granting Respondent's application to admit the Notice and enter judgment for damages to be assessed based on the Appellant's failure to comply with the Notice when the Discovery process and the Appellant's Defence raised serious questions of disputed facts which can only be properly resolved by a proper trial.

17. The appellants submitted that the learned trial judge failed to exercise his discretion properly when entering judgment for the respondent because the appellants had a defence on the merits which raised serious issues which could only be properly resolved by a proper trial.

18. It was also submitted that the respondent's notice to admit facts was an abuse of process because the facts specified in the notice were same as those raised in the respondent's notice to answer interrogatories for which the appellants had already provided answers. It is to be noted that the respondent served the notice to admit facts after receiving appellants' answers to interrogatories.

19. The appellants also submitted that the respondent could have been sufficiently compensated with costs for the appellants' failure to respond to the notice to admit facts. In any event it was submitted that the appellants had given reasonable explanation to the Court for their purported failure to respond to the notice to admit facts, which seems to have been ignored by the trial court. Nonetheless, it was argued that even if the appellants had failed to respond to the notice to admit facts, the failure was not chronic or recurrent or persistent to prejudice the respondent's right to a fair hearing, if two days adjournment requested by the appellants was granted. Furthermore, there was no notice to set down for trial filed by the respondent. For these arguments the appellants placed reliance on Ace Guard Dog Security Services Ltd v. Yama Security Services Ltd & Lindsay Lai Lai (2003) N2459. This case was cited with approval by the Supreme Court in Curtain Bros (PNG) Ltd and Curtain Bros (Qld) Pty Ltd v. University of Papua New Guinea (2005) SC 788.

20. The respondent's main argument was that all the issues raised in the grounds of appeal are new and were not raised at the trial, therefore they could not be raised on appeal.

21. The respondent argued that the trial judge considered all the matters that were before him and his Honour properly exercised his discretion in entering judgment for the respondent. It was argued that appellants' failure to respond to the respondent's notice to admit facts was continuing and no explanation at all was given by the appellants for such failure. It was further argued that appellants had ignored the requirements of Order 9 r 29 (2) to their own peril and the just penalty for such failure was judgment against them.

22. The respondent also argued that appellants have failed to demonstrate any error of law or fact or both in the decision of the trial judge. The appeal should therefore be dismissed with costs.

23. The issues at hand cannot be properly and fully addressed without regard being had to the use and purpose of interrogatories and notice to admit facts, the two documents to which these issues relate. It is therefore convenient at this juncture to make some observations regarding the use and purpose of interrogatories and notice to admit facts.

24. Firstly in regard to interrogatories, their principal purpose is to help parties to prepare their cases. Therefore in cases where answers to interrogatories are given in response to a notice to answer interrogatories, the answers should be genuine and truthfully stated. The answers should also be unambiguous and definite thus conveying clear and truthful information to the interrogator. The significance of answers to interrogatories lies in the fact that they are made on oath and are binding on the party giving them, especially if they are verified, as was the case here, and can be tendered in evidence against that party (Order 9 rr 17 (1) and (2), 18 (3) and 21 to 26 of the National Court Rules).

25. In that regard, it is also important to note that answers to interrogatories constitute evidence of the facts in issue and they stand in the same footing as any other form of evidence given on oath. Thus, answers to interrogatories cannot be treated lightly as if they are ordinary statements let alone ignored. For these reasons, the interrogator serving a notice to answer interrogatories must also do so in good faith. See, The Law of Discovery in Australia by Bernard C. Cairns (1984) at pp. 75 to 77 and 103; Victoria Supreme Court Civil Procedure by Neil J Williams (Butterworths) at pp. 184 to 185 and Principles of Practice and Procedure by O'Leary Hogan (Butterworths) at p. 233.

26. These principles apply to interrogatories filed by the parties in this case.

27. Secondly, in regard to the notice to admit facts, it would be or is an abuse of process if the facts specified in the notice are already with the party serving or giving the notice: Curtain Bros (PNG) Ltd (supra).

28. The decision appealed against here relates to exercise of discretion regarding practice and procedure. It is trite law that for the appeal to succeed the appellants must demonstrate that the learned trial judge erred in exercising his discretion in entering judgment for the respondent. In Curtain Bros (PNG) Ltd (supra), the Supreme Court adopted the oft cited principles which an appellate court should have regard to when deciding whether it should interfere with the decision of the primary judge. The principles were adopted from a passage from the judgment of Kitto J. in Australian Coal and Shale Employees Union v. The Commonwealth [1953] HCA 25; (1956) 94 C.L.R 621 at 627 which was adopted by Clarkson J, in Breckwold & Co. (NG) Pty Ltd v. Groyke [1974] PNGLR 106 at 112- 113. In Curtain Bros (PNG) Ltd (supra) the Supreme Court stated the principles in this way:

'The appellant Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction except where the exercise of that discretion is wrong. A discretionary judgment will be set aside if an identifiable error occurred in the exercise of the discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is unreasonable or plainly unjust" and such an error can be inferred."

29. These principles were stated broadly by the High Court of Australia in much earlier case of House v. The King [1936] HCA 40; (9136) 55 C.L.R 499 at 504 505 per Dixon, Evatt and McTiernan JJ:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

30. This appeal concerns the application of Order 9 rr. 29 (2), 30 (1) and 32 (2) of the National Court Rules, however, for purposes of completeness the rules are reproduced in full below:

29. Notice to Admit Facts

(1) A party to proceeding may, by notice served on another party, require him to admit, for the purposes of the proceedings only, the facts specified in the notice.

(2) If, as to any fact specified in the notice, the party on whom the notice is served does not, within 14 days after service, serve, on the party serving the notice to admit facts, a notice disputing that fact, that fact shall, for the purpose of the proceedings, be admitted by the party on whom the notice to admit facts is served in favour of the party serving the notice.

(3) A party may, with the leave of the Court, withdraw an admission under Sub-rule (2).

30. Judgment on admissions

(1) Where admissions are made by a party, whether by his pleading or otherwise, the Court may, on the application of any other party, direct the entry of any judgment or make any order to which the applicant is entitled on the admissions.

(2) The Court may exercise its powers under Sub-rule (1) notwithstanding that other questions in the proceedings have not been determined.

32. Notice to admit documents

(1) A party to proceedings may, by notice served on another party, require him to admit, for the purpose of those proceedings only, the authenticity of the documents specified in the notice.

(2) If, as to any document specified in the notice, the party on whom the notice is served does not, within 14 days after service, serve, on the party serving notice to admit documents, a notice disputing the authenticity of the document, the document shall, for the purpose of the proceedings, be admitted by the party on whom the document is served.

(3) A party may, with the leave of the Court, withdraw an admission under Sub-rule (2).

31. From the plain reading of these rules it is clear that they confer a broad discretion on the Court when deciding penalty for non compliance.

32. The principles enunciated in Curtain Bros (PNG) Ltd (supra) and House v. King (supra) were succinctly stated in the more recent case of Micallef v. ICI Australia Operations Pty Ltd & Anor [2001] NSWCA 274, where Heydon JA (Sheller JA and Studdert AJA agreeing) said at [45]:

"As a result, Garling DCJ had to make a discretionary decision on a matter of practice and procedure – an extremely important one, having potentially serious consequences for the plaintiff, but a discretionary decision on a matter of practice and procedure nonetheless. Any attack on decision of that character must fail unless it can be demonstrated that the decision-maker:

(a) made an error of legal principle,

(b) made a material error of fact,

(c) took into account some irrelevant matter,

(d) failed to take into account, or gave insufficient weight to, some relevant matter, or

(e) arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning".

33. These principles were adopted in Air Marshall McCormack and Anor v. Vance [2008] ACTA 16, which was also cited by the Supreme Court in the recent case of Kawaso Ltd v. Oil Search PNG Ltd SC1218, which followed Micaleff (supra).

34. The principles applied in these cases apply equally to failure to comply with directions of the court as was the case in Kawaso (supra).

35. Whether a non compliance relates to the requirements of a rule or directions of the court, dismissal of a case without trial ordered on the basis of such non compliance in our opinion should only be in clearest of cases where the failure is recurrent and that the party moving would or is likely to suffer irredeemable or serious prejudice as a result of such non compliance and that the party moving cannot be sufficiently compensated by costs; or where the failure is persistent and deliberate thus making the failure extra ordinarily serious thus resulting in irredeemable or serious prejudice to the party moving and where non-compliance is symptomatic of the failure to prosecute the proceeding: Curtain Bros (PNG) Ltd (supra); Ace Gurad Dog Security Services Ltd (supra); Patrick Basa v. Bob Dadae and Andrew Trawen – Electoral Commissioner of Papua New Guinea N4991; Air Marshall McCormack and Anor (supra) and Kawaso (supra).

36. In Westpac Bank (PNG) Limited and Ors v. Hugo Canning Company Pty Ltd, which was adopted by the Supreme Court in Curtain Bros (PNG) Ltd (supra), the Supreme Court comprising Kapi DCJ (as he then was), Hinchliffe and Sheehan JJ, (20 December, 1991) considered an application by the plaintiffs to strike out the defendant's defence and enter judgment for them for failure by the defendant to give discovery under Order 9 r 15 (1) (b) of the National Court Rules. The Court said:

"The purpose of O 9 r 15 is to ensure compliance with notice, or more particularly orders for discovery to enable parties to "get on" with the trial. This order of a Court dismissing a party is not one made for that purpose and does not carry out the intent of the rule. In the result, the dismissal of the party from the action for failure to give discovery can only be justifiable when the court finds that the failure or refusal can be seen as a tactic to abort the trial."

37. The principles applied in these cases also demonstrate that any decision by the Court to summarily determine or dismiss a case should not be readily made and that such decision should only be made in clearest of cases where there is evidence that the conduct of the defaulting party is intentional and the right of the opposing party to a fair hearing has been seriously or irredeemably prejudiced or denied.

38. Having regard to these principles the question is; did the learned trial judge err in his decision to enter judgment for the respondent thus providing the basis for this Court to interfere with the decision? After thorough and careful consideration of the decision, we are of the opinion that his Honour did fall into a number of errors. He did so by applying wrong principles, misstating the law, overlooking relevant facts and taking into account irrelevant matters.

39. Firstly, his Honour ruled that once the appellants failed to respond to the notice to admit facts within the 14 days period required under Order 9 r 29 (2), the facts specified in the notice "automatically" stood admitted. His Honour said the respondent did not need to go to Court and apply for the facts to be admitted because under the rule the facts automatically stood admitted. With respect we are of the opinion that his Honour misstated the law here because whether the facts stood admitted or not was still for the Court to decide for which the Court had to exercise its discretion as provided under the Order 9 r 30 (1). With respect we find that his Honour misconstrued Order 9 r 29 (2). This rule does not operate to automatically admit facts in the event of the party served with a notice failing to respond within the 14 days period. Furthermore the rule does not confer on the Court power to automatically order judgment against party failing to respond to the notice. That power is conferred by Order 9 r 30 (1) and the power is discretionary. With respect in this case there was no exercise of discretion by the learned primary judge because of the way he construed Order 9 r. 29 (2). This was a clear and demonstrable error.

40. Secondly, we consider that his Honour failed to consider and take into account the fact that the facts specified in the notice were already given to the respondent by the appellants in their answers to interrogatories. In other words it was unnecessary for the respondent to serve the notice on the appellants because the facts specified in the notice were already provided to him by the appellants. Also most if not, all the documents specified in the notice were already provided to the respondent by the appellants in their list of documents. The end result is that the notice was an abuse of process.

41. We also find that his Honour wrongly exercised his discretion on 18 August, 2008, when he refused to grant the adjournment sought by the appellants' lawyer because the respondent's notice of motion seeking judgment had been given to him that morning. We cannot see how the adjournment which was sought for only two days could prejudice the respondent's right to a fair hearing. His Honour was told by the appellants' lawyer that his clients would concede costs if adjournment was granted. We are of the opinion that in the circumstances costs would have been sufficient compensation for the respondent if adjournment had been granted. The failure by the appellants to respond to the notice to admit facts was unintentional and was not contumelious. There is also no evidence that the respondent suffered irredeemable or serious prejudice or was likely to suffer such prejudice as a result of the appellants' failure to respond to the notice to admit facts. In our opinion the reasons given by the appellants for non compliance were reasonable and satisfactory in the circumstances. We therefore find the decision to enter judgment against the appellants was unreasonable and was not of a kind a reasonable tribunal could have made.

42. Furthermore, we find that the learned trial judge overlooked or ignored the fact that when the appellants were served with the notice they had no lawyers. We find that His Honour failed to properly consider and take into account the fact that the appellants not being lawyers may not have appreciated the requirements of the rules, especially the requirement under Order 9 r 29 (2) that they had to respond to the notice within 14 days after service of the notice and the consequences of not complying with the rule. In our opinion these matters should have provided a reasonable explanation for the appellants' failure to respond to the notice within the 14 days period.

43. With respect we find that his Honour was very rigid in his application of Order 9 r 30 (1) thus resulting in his failure to properly exercise his discretion. In fact, his Honour's approach that once the appellants failed to respond to the notice, the facts specified in the notice "automatically" stood admitted and therefore it was unnecessary or that there was no need for the respondent to go to Court and apply for judgment was tantamount to not exercising his discretion at all. This was a fundamental error of law.

44. The function of the court is to do justice between parties and it cannot do that when rules of court are applied rigidly as in this case; after all rules are intended to be conducive and a means to achieving justice. The rules are meant to be used as servants of justice, that aim should not be compromised by excessive rigidity in the application of the rules: Public Officers Superanuation Fund Board v. Silas Imanakuan (2001) SC677. See also Richie's Supreme Court Procedure New South Wales at p. 2064.

45. It should also be stated that admissions of facts either by failure to respond to a notice to admit facts as in this case or otherwise, does not automatically entitle a party to judgment. That is always a matter for the discretion of the Court. See Richie's Supreme Court Procedure, New South Wales at pp. 2421 to 2423.

46. Finally we reject the argument by the respondent that the matters raised in the grounds of appeal are new. The matters raised in the grounds of appeal raise either issues of law or facts or both which either his Honour should have addressed but did not or misconstrued or overlooked or over emphasized. We therefore have the power to consider them: Curtain Bros (PNG) Ltd (supra).

47. For the foregoing reasons we find that the learned trial judge erred in law and fact or both when ordering judgment for the respondent.

48. We find that the appellants have made out all the grounds of appeal and we allow each ground of appeal.

49. The appeal is therefore allowed with costs. The Orders of the Court are as follows:

(a) The appeal is allowed.

(b) The decision of the trial court is quashed.

(c) The matter is reverted back to the National Court to be tried. We order that the matter be brought before a Civil Listings Court for a trial date to be given.

(d) The respondent will pay the appellants' costs of the appeal.

50. Orders accordingly.
________________________________________

Allens Authur Robinson: Lawyer for the appellants
Kari Bune Lawyers: Lawyer for the respondent