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Kauba v Bais [2011] PGNC 161; N4447 (4 November 2011)

N4447

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1055 OF 2010

BETWEEN

JOSEPH ANDREAS KAUBA trading as J.A CONSTRUCTION
Plaintiff

AND

MORRIS BAIS COUNCIL MANAGER UNGGAI BENA LOCAL LEVEL GOVERNMENT
First Defendant

AND

UNGGAI BENA LOCAL LEVEL GOVERNMENT
Second Defendant

AND

EASTERN HIGHLANDS PROVINCIAL GOVERNMENT
Third Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Goroka: Ipang AJ
2011: 21 October & 4 November

CIVIL LAW – Motions by both the Plaintiff and First, Second and Third Defendants. Plaintiff motion seeks default judgment pursuant to Order 12, Rule 32 (1) of the National Court Rules and for Court to vary its Ex parte Orders pursuant to Order 12 rule 3 (a) of the National Court Rules. First, Second and Third Defendants motion seek leave to file their Defence out of time pursuant to Order 7 Rule 6 (2) of the National Court Rules.

PRACTICE AND PROCEDURE – Motion by First, Second and third Defendants for leave to be granted to file defence out of time–leave of court to file defence out of time mandatory to satisfy court with three (3) requirements and these are; (i) the applicants must explain why they did not file their defence within the prescribed time limit (ii) the Applicants must show a Defence on the merits and (iii) Applicants must satisfy court that the application was made promptly –this can be shown by a draft defence filed and must contain meritorious grounds- leave is granted to file defence within 7 days –Order 7 Rule 6 (2) of the National Court Rules.

Cases Cited

Itao v Kamara (2009) N3757
Motors Vehicle Insurance (PNG) Ltd v Sosie Joe (2007) SC 863
Luke Tai v Australia and New Zealand Banking Group Ltd (2000) N1979
Kumba v Pagalio (2010) N4089
Keboki Business Group (Inc) v State [1984] PNGLR 281
Independent State of Papua New Guinea v Keboki Business Group Inc & Morobe Provinsel Gavman [1985] PNGLR 369

Legislations

Public Finances (Management) Act, 1995
Provincial Governments Administration Act, 1997
Local Level Government Administration Act, 1997

Counsel

Mr.B.Koningi, for the Plaintiff
Mr.D.A.Umbu, for First, Second and Third Defendants
Nil Appearance, for the Fourth Defendant

RULING ON MOTIONS

04th November, 2011

1. IPANG AJ: Before me, are two (2) Notice of Motions by the Plaintiff and the First, Second and Third Defendants respectively. The First, Second and Third Defendants Notice of Motion is dated 19th of November, 2010. Their motion is basically seeking leave to file their Defence out of time pursuant to Order 7 Rule 6 92) of the National Court Rules. The Plaintiffs Notice of Motion dated 11th October, 2011 fairly recently filed basically seek default judgment to be entered against Defendants in the sum of K23, 563.00 being the balance of contracted sum claimed as special damages.
   
2. The approach I take to address both Notice of Motions is that I will deal with the Plaintiff's motion seeking default judgment first and then later deal with the Defendants motion to seek leave to file their Defence out of time. This approach is taken with a view that should in the event I grant default judgment sought by the plaintiff then I need not to go ahead to deal with Defendants Notice of Motion to seek leave to file their Defence out of the required time.
   

Plaintiff Submission (Motion)

3. The plaintiff relies on the following documents in support of his motion.
   
   1. His affidavit filed on the 11th October, 2011
   2. Affidavit of Service filed on the 13th October, 2011.
   3. Plaintiff's Affidavit of Search filed on the 1th October, 2011.
      
4. Issue
   
   1. Whether default judgment should be granted infavour of the plaintiff.
   2. Whether leave can be granted to the First, Second & Third Defendants to file their Defence out of time.
      
5. A part from the documents filed, the plaintiff argued that the First, Second and Third Defendants have filed their Notice of Intention to Defend dated 20th October, 2010 but they have not filed their respective Defences within the prescribed time or have not filed any at all. So, the defendants have not filed their Defence at all, the Court should enter default judgment for the liquidated amount of K23, 563.00 claimed.
   
6. The Plaintiff in seeking default judgment relies on Order 12, Rule 32 (1) of the National Court Rules. Order 12, Rule 32 (1) of the National Court Rules is in the following terms;
   

32. General

(1) Whatever claims for relief are made by a plaintiff, where a defendant is in default, the Court may. On application by the plaintiff, direct the entry of such judgment against that defendant as the plaintiff appears to be entitled to on his Writs of Summons.

7. Plaintiff says he has duly served his Writs of Summons (WS) basically to all the defendants as named in the Writ. He argued that the First, Second and Third Defendants respectively has a total of 44 due days which to file their Notice of Intentions to Defend and their Defence which had expired on Wednesday 13th October, 2011. He specifically signaled out the First, Second and Third Defendants that they have been in default of their Defence since 13th October, 2010.
   
8. Plaintiff says he has already rendered his building maintenance service to the First, Second and third Defendants already at the cost of K27, 363.00 and has received two (2) installment payments already. The two (2) installment payments he received are as follows; (i) K3, 500.00 Cheque No. 5243899 dated 29th December, 2003 and, (ii) K300.00 Cheque No. 024578 dated 20th July, 2006. The two (2) installment payments add up to a sum of K3, 800.00. Plaintiff seeks default judgment in the sum of K23, 563.00 plus 8% interests and costs. Plaintiff says he has rendered his service; he has already received two (2) installment payments so he should be paid the balance of what is owed to him.
   
9. First, Second and Third Defendants have not specifically filed affidavits in regard to the Plaintiff's Notice of Motion filed on the 11th of October, 2011. But the defendants have raised arguments which are basically same as they advanced in seeking leave to file their Defence out of time. Radis Bayupe, the District Administrator of Second Defendant deposes in his affidavit of 19 November, 2010 that after the Writ was served on the Second and the Third Defendants, he spent some time going through the records to verify and establish if in fact a contract was actually awarded to the plaintiff.
   
10. After checking the record, he said he caused a letter to the Provincial Administrator of the Third Defendant. From the records, Bayupe stated he was able to establish that; (i) there was no copy of letter of invitation from the Second or third Defendant to the Plaintiff; (ii) there was no copy of letter enclosing the quotation from the plaintiff to the Second and Third Defendant for deliberations and approval, and (iii) there was no copy of contract approved by the Second or Third Defendant.
    
11. Bayupe deposes that if a contract was approved or work given to the plaintiff then whoever awarded the contract does not have the legal authority or capacity to approve and award the contract. Bayupe said the only legal authority or body is the Second Defendant's Finance Executive Committee.
    
12. There are crucial and serious matters raised regarding compliances by the plaintiff with Public Finances (Management) Act 1995, the Provincial Governments Administration Act 1997 and the Local Level Governments Administration Act, 1997. Generally, the matters raised cover need for compliance with Public Policy and Law. Referring to paragraphs 8,9,10 and 11 of the Statement of Claim raises the question of First Defendant's authority and financial & legal capacity to commit Second, Third and Fourth Defendant's to such a contract. Refer to the Halbury's laws of England (4th Ed. 1974), vol. 9 paragraph 695, Keboki Business Group (Inc) v State [1984] PNGLR 281 and Independent State of Papua New Guinea v Keboki Business Group Incorporated & Morobe Provinsel Gavman[1985] PNGLR 369. These cases referred held that contracts with the State are regulated by legislation apart from other legislations specifically and principally the Public Finances (Management) Act, 1995 and certain regulations and financial institutions made there under which include procedures for supply and tender. Under the legislation and regulations only certain specified persons have power to bind the State or "to enter in to and execute any contract or agreement." On the basis of this explanation, I refuse to grant the plaintiff's motion for the default judgment.
    
13. Having ruled against the plaintiff's motion, I now turn to the Defendants motion also on foot seeking leave to file their Defence out of the normal prescribed time allowed. The First, Second and third Defendants seek leave to file their Defence out of time pursuant to Order 7 Rule 6 (2) of the National Court Rules. Order 7 Rule 6 (2) States:
    

6. Late Notice (11/6)

(2) "Where a defendant gives a notice after the time limited for doing so, he shall not, unless the Court otherwise orders, be entitled to file a defence or do any other thing later than if he had given a notice of intention to defend within that time"

14. In order to successfully move the motion to seek leave of the court to file their Defence out of time, the Defendants must satisfy three (3) requirements. The three (3) requirements the Applicants/First Second and Third Defendants must satisfy the Court are;
    
    1. The applicants must explain why the applicant did not file their Defence in time.
    2. Applicants must show a Defence on the merits. A draft Defence on merits should be attached. An Affidavit in support should also be filed.
    3. The application must be made promptly.
       
15. These are three (3) requirements that need to be satisfied in order for leave to be granted for the Defence to be filed out of time. It is mandatory for the applicant to seek leave of the Court. There are number of Judgment's clearly expressing this mandatory requirement. Refer to Thai Itao v Elias Kamara & Others (2009) N3757; Luke Tai v Australia and New Zealand Banking Group (RNG) Ltd (2000) N1979; Kumba v Pagalio (2010) N4089; Motor Vehicles Insurance Ltd v Joe (2010) SC 863.
    
16. Bayupe received the Writ of Summons on the 19th August, 2010. On the 20th October, 2010 the First, Second and Third Defendants filed their Notice of Intention to Defend. Bayupe said after the Writ of Summon was served on the Second and third Defendant, he had spent some time going through the records to verify and establish if a contract was in fact awarded to the plaintiff. From the draft Defence on merit and that the Second and Third Defendants have filed Notice of Motion on the 19th of November, 2010 seeking leave to file their Defence out of time, which I am also satisfied of the compliance by First, Second and Third Defendants is grant leave to the First Second and Third Defendants to file their Defence within 7 days from the date of this order pursuant to Order 7 Rule 6 (2) of the National Court Rules. Costs be in the cause.
    

_______________________________

Koningi Lawyers: Lawyer for the Plaintiff

Umba Lawyers: Lawyer for the First, Second & Third Defendants
Nil Appearance for the Fourth Defendant