Albright Ltd v Mekeo Hinterland Holdings Ltd

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 30 September 2013
• Citation: (2013) N5774
• Court: National Court
• Year: 2013
• Judgement Number: N5774

Full : WS 258 OF 2012; Albright Limited v Mekeo Hinterland Holdings Limited and Lucas Dekene, Minister for Lands & Physical Planning and Romilly Kila-Pat, Secretary for Lands & Physical Planning and Independent State of Papua New Guinea (2013) N5774

National Court: Hartshorn J

Judgment Delivered: 30 September 2013

N5774

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 258 OF 2012

BETWEEN:

ALBRIGHT LIMITED

Plaintiff

AND:

MEKEO HINTERLAND

HOLDINGS LIMITED

First Defendant

AND:

LUCAS DEKENE, MINISTER FOR

LANDS & PHYSICAL PLANNING

Second Defendant

AND:

ROMILLY KILA-PAT, SECRETARY FOR

LANDS & PHYSICAL PLANNING

Third Defendant

AND:

INDEPENDENT STATE OF

PAPUA NEW GUINEA

Fourth Defendant

Waigani: Hartshorn J.

2013: July 24th,

: September 30th

Application to set aside a default judgment – whether National Court can set aside an inter partes default judgment - Order 12 Rule 8(2)(a) and Order 12 Rule 35 National Court Rules considered - Setting aside a judgment entered regularly entered, factors for consideration – consideration of exercise of court’s discretion - whether the State defendants are estopped from raising a defence on the merits – whether a defence disclosed

Cases cited:

Papua New Guinea Cases

Green & Co Pty Ltd v. Green [1976] PNGLR 73

Leo Duque v. Avia Andrew Paru [1997] PNGLR 378

Smith v. Ruma Constructions Ltd (2000) N1982

Lerro v. Stagg (2006) N3050

State v. Downer Construction (PNG) Ltd (2009) SC979

Rangip v. Loko (2009) N3714

Totamu v. Small Business Development Corporation (2009) N3702

Overseas Cases

Henderson v. Henderson [1843] Eng R 917

Evans v. Bartlam [1937] AC 473; 2 All ER 646

Collins Book Depot Pty Ltd v. Bretherton [1938] VLR 40

Vacuum Oil Pty Co Ltd v. Stockdale (1942) 42 SR (NSW) 239

Kok Hoong v. Leong Cheong Kweng Mines Ltd [1964] AC 993

Nicholson v. Nicholson [1974] 2 NSWLR 59

Port of Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 599

Counsel:

Ms. M. Wal, for the Plaintiff

Ms. J. Tindiwi-Paki, for the Second, Third and Fourth Defendants

30th September, 2013

1. HARTSHORN J: This is an application to set aside a default judgment.

Background

2. The plaintiff Albright Ltd (Albright), entered into a sub lease of land with the first defendant Mekeo Hinterland Holdings Ltd (Mekeo). Albright was to develop the land and was given exclusive rights to harvest timber and conduct agro forestry projects upon the land for a period of 98 years.

3. Albright contends that in December 2010 the National Court declared that Mekeo’s title to the land that had been granted to it in November 2007 was null and void.

4. Albright commenced this proceeding seeking damages against the State and the Minister and Secretary for Lands and Physical Planning (State defendants) for their negligence in failing to follow proper procedures under the Land Act when the title to the land was issued to Mekeo, and against Mekeo for misrepresenting that it had a valid title to the land. Albright claims in excess of K 153 million.

5. Default judgment was ordered against all of the defendants on 24th October 2012 after an inter partes hearing at which the State defendants were represented. The State defendants had filed a notice of intention to defend but had not filed a defence.

6. The State defendants now apply for the default judgment entered against them to be set aside pursuant to Order 12 Rule 8(2)(a) and Order 12 Rule 35 National Court Rules.

Contentions

7. The State defendants contend that the default judgment ordered against them should be set aside as the statement of claim does not disclose a reasonable cause of action against them and that this constitutes a defence on the merits. It is conceded by the State defendants that they do not have a reasonable explanation for why default judgment was allowed to be entered against them - they had not filed a defence. Further, they concede that there has been delay in applying to set aside the default judgment.

8. Albright contends that the default judgment should not be set aside as:

a) there is no reasonable explanation for why the State defendants did not file a defence.

b) the default judgment hearing was inter partes and the State defendants were required to present their whole case concerning a defence on the merits and the delay in filing a defence. If they did not argue those points at the default judgment hearing, they are estopped from arguing those points now. Further, if they did argue those points then they are estopped from arguing them now.

c) the default judgment hearing was inter partes and the court has given its decision. Such a decision can only be challenged on appeal to the Supreme Court and cannot be set aside by the National Court.

d) this setting aside application has not been made promptly.

e) the State defendants have not properly disclosed a defence on the merits.

Setting aside an inter partes default judgment

9. I will consider whether this court is able to set aside an inter partes default judgment first. The National Court Rules upon which the State defendants rely are as follows:

Order 12 Rule 8(2)(a)

“The Court may, on terms, set aside or vary a judgement –

(a) where the judgement has been entered pursuant to Order 12 Division 3

(default judgement);”

Order 12 Rule 35

“The Court may, on such terms as it thinks just, set aside or vary a judgement entered in pursuance of this Division.”

10. These Rules permit this court to set aside a judgement or default judgement that has been entered under Division 3 of Order 12. There is no dispute, as I understand it, that the default judgement sought to be set aside was made under this Division. Neither of the above Rules state that they only apply in respect of a judgment made ex parte or in the absence of a party or person, or before entry of a judgment or order, as do Order 12 Rules 8(1), (2)(b) and (c) and (3)(a) and (b).

11. Reliance is placed by Mekeo on the case of Smith v. Ruma Constructions Ltd (2000) N1982. In that case, Sakora J. said as to the power to direct the entry of summary judgement:

“When the power has been exercised when both parties have been present, the direction or order is a final order, and the other party can only challenge it on appeal……”

12. These comments are with respect, obiter, as the decision that was sought to be set aside in Smith v. Ruma (supra) was made in the absence of the defendant. This case is also distinguishable from the present case as it concerned an application under Order 12 Rule 8(2)(b) National Court Rules to set aside a summary judgment ordered in the absence of the defendant, as distinct from a default judgment ordered after an inter partes hearing, as is the case here.

13. Counsel for Mekeo also relies upon the case of Lerro v. Stagg (2006) N3050 for the proposition that this court does not have jurisdiction to set aside a default judgment entered inter partes. I note from a perusal of this decision that Order 12 Rule 8(2)(a) is not discussed or considered and although Order 12 Rule 35 is mentioned, it is not specifically discussed or considered. Further, the facts of Lerro v. Stagg (supra) can be distinguished from the facts of this case, as this case does not concern a further extension of time by the court to file a defence as occurred in Lerro v. Stagg (supra).

14. In Rangip v. Loko (2009) N3714, as to setting aside a final order, I said:

“although the general rule is that a court ordinarily has no power to set aside a final order once it has been passed and entered, Order 12 Rule 8 National Court Rules and the New South Wales equivalent, Pt 40 r 9 from which our Rule is derived, deal with several exceptions to the general rule: Ritchie’s Supreme Court Procedure Vol. 1 40.9.”

15. I then referred to the New South Wales Supreme Court decision of Nicholson v. Nicholson [1974] 2 NSWLR 59, where Jenkyn J., after noting that the power to set aside or vary an order can be given to a court by a statutory provision or a validly made rule, considered Pt 40 r 9, which is the same as Order 12 Rule 8 and concluded at p.64 that its application is not limited to interlocutory orders but applies also to final orders.

16. Given this, I am satisfied that this court does have jurisdiction to set aside an inter partes default judgment pursuant to the Rules relied upon by the State Defendants.

Setting aside a judgment entered regularly

17. The State defendants refer to the following cases that have set out the matters that the court should consider in determining whether a regularly entered default judgment should be set aside: Green & Co Pty Ltd v. Green [1976] PNGLR 73; Barker v. The Government of Papua New Guinea & Ors [1976] PNGLR 340; The Government of PNG & Davis v. Barker [1977] PNGLR 386; George Page Pty Ltd v. Malipu Bus Balakau [1982] PNGLR 140; Provincial Government of North Solomons v. Pacific Architecture Pty Ltd [1992] PNGLR 145; Hannet and Hannet v. ANZ Banking Group (PNG) Ltd (1996) SC505; Leo Duque v. Avia Andrew Paru [1997] PNGLR 378; Smith v. Ruma Constructions Ltd (2002)...