Anthony Nicholas Dempsey v Project Pacific Pty Ltd [1985] PNGLR 93

• Jurisdiction: Papua New Guinea
• Judge: Pratt J, Amet J, Woods J
• Judgment Date: 15 May 1985
• Citation: [1985] PNGLR 93
• Court: Supreme Court
• Year: 1985
• Judgement Number: SC291

Full Title: Anthony Nicholas Dempsey v Project Pacific Pty Ltd [1985] PNGLR 93

Supreme Court: Pratt J, Amet J, Woods J

Judgment Delivered: 15 May 1985

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

DEMPSEY

V

PROJECT PACIFIC PTY LTD

Waigani

Pratt Amet Woods JJ

1 November 1984

15 May 1985

PRACTICE AND PROCEDURE — Judgment by default — Claim for liquidated sum — What is "liquidated claim".

PRACTICE AND PROCEDURE — Judgment by default — Setting aside — Affidavits in support — Time for making — Affidavit of search incurably defective — Judgment must be set aside.

APPEAL — Costs of appeal — Issue first raised on appeal — Issue successful — No award of costs.

PRACTICE AND PROCEDURE — Affidavits — Affidavit of search in support of application — Time for making.

Held

(1) For the purpose of signing judgments by default, a claim is liquidated when it is ascertained or is capable of being ascertained by a simple calculation, as when there is no element of assessment on judgment.

Alexander v Ajax Insurance Co Ltd [1956] VLR 436 at 445, followed.

(2) A claim for a specified sum of money alleged to be owing as a result of the defendant, a director of the plaintiff company, being involved in dealings, in breach of fiduciary duty, in shares in property owned by the plaintiff company, was not a claim for liquidated damages.

(3) The affidavit of search in support of an application for the signing of judgment by default cannot be made until after midnight on the last day allowed for the filing of the defence or other relevant pleadings.

(4) A judgment by default entered on the basis of an incurably defective affidavit of search filed prematurely must be set aside.

(5) Where an appellant succeeds before the appellate court on an issue not fairly put or decided in the court below, he should not, as a general rule, be allowed his costs of the appeal.

Cases Cited

Alexander v Ajax Insurance Co Ltd [1956] VLR 436.

Anlaby v Praetorius (1888) 20 QBD 764.

Chard v Jervis (1882) 9 QBD 178.

Cook v Deeks [1916] 1 AC 554.

DPC Estates Pty Ltd v Grey and Consul Development Pty Ltd [1974] 1 NSWLR 443.

Dalgety Futures Pty Ltd v Poretsky [1980] 2 NSWLR 646.

Dye v Dye (1884) 13 QBD 147.

G L Baker Ltd v Barclays Bank Ltd [1956] 1 WLR 1409.

Gamble v Killingsworth [1970] VR 161.

Goddard v Jeffreys (1882) 46 LT 904.

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

Hussey v Horne-Payne (1879) 4 App Cas 311.

Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443.

Lagos v Grunwaldt [1910] 1 KB 41.

Luckie v Bushby (1853) 13 CB 864; 138 ER 1443.

NRMA Insurance Ltd v B & B Shipping & Marine Salvage Co Pty Ltd (1947) 47 SR (NSW) 273.

Papua New Guinea; The Government of and Davis v Barker [1977] PNGLR 386.

Paterson v Wellington Free Kindergarten Association Incorporated [1966] NZLR 468.

Post & Telecommunications Corporation v Takoa Pastoral Pty Ltd [1985] PNGLR 44.

Shaw v Holland [1900] 2 Ch 305.

Smeeton v Davara House Pty Ltd [1979] PNGLR 324.

Appeal

This was an appeal from a decision of McDermott J refusing to set aside a judgment obtained in default of filing pleadings.

Counsel

I Molloy and J R Steele, for the appellant.

C J Coady and C Diacos, for the respondent.

Cur adv vult

15 May 1985

PRATT J: The first and major ground of appeal on this matter claims that the motion judge wrongly refused to set aside judgment entered by default against the appellant. Entry of judgment arose from a failure by the appellant to comply with an order of McDermott J to "make, file and serve an affidavit of documents", within fourteen days, failing which "the defendant's defence to be struck out". Judgment in the sum of K169,625, the amount claimed in the writ, was entered on 3 April 1984. I would agree with Bredmeyer J that the judgment was entered not so much because of a failure to observe the order of McDermott J, but because such failure led to a position where there was in effect no defence filed — in short, judgment was entered following failure to plead to and deny the matters contained in the statement of claim.

The appellant says that the respondent/plaintiff should have applied for judgment under the National Court Rules, O 12, r 32, which provides for entry of judgment by the court in accordance with the entitlement of the party making application. The plaintiff, it is said, could not apply under O 12, r 27, because the claim was not liquidated, nor under O 12, r 31, because there were no claims in the statement which came within O 12, rr 27-30. What this submission amounts to is really a further assertion that there was no proper basis upon which to make a claim for a liquidated demand and the Registrar in entering judgment as for a liquidated demand did so in circumstances which did not permit such a claim to be mounted.

In reply the respondent asserts that the nature of the claim was properly one entitling judgment to be entered for a liquidated demand in the sum claimed. Further, says the respondent, if the judgment had been wrongly entered, then the judgment itself should not be set aside but only that part which deals with quantum.

The principles upon which the courts may set aside a judgment by default are covered most adequately in the National Court decision of Green & Co Pty Ltd v Green [1976] PNGLR 73 and by the Supreme Court in The Government of Papua New Guinea and Davis v Barker [1977] PNGLR 386. The principles are similar to those developed in most other common law jurisdictions. So far as concerns the present appeal, it is conceded that if judgment were wrongly entered because the claim was not for a liquidated demand but should have been a claim for general damages, then that part at least of the judgment which covered the amount claimed should be set aside "ex debito justitiae and without terms — except as part of the condition of an order as to costs" (Green at 75 where O'Leary AJ cites from a number of English authorities). There is some argument however as to whether or not both the judgment and the sum entered against the defendant should be set aside or whether the court should simply sever that part of the judgment whih deals with the award of damages from the main part which enters judgment against the defendant and substitute for the award an order for assessment of damages. I shall deal with this aspect a little later on. For the time being suffice it to say that there is a straightforward and direct conflict between the parties. The one says entry is correct because the amount claimed was an amount representing a liquidated demand. The other says that this is not the case, and that the nature of the dispute precludes any claim for a liquidated demand.

LIQUIDATED DEMAND

The facts upon which the appellant relied in his statement of claim to establish a liquidated demand allege a fiduciary duty in the defendant in relation to his dealings with the plaintiff. This is said to have arisen whilst the defendant was a director and in control of a company to which the plaintiff company transferred its title and interest in land and dwellings thereon constructed by them some time earlier. The company was incorporated to "give effect to a corporate strata title scheme". It is further alleged that the defendant failed to transfer the appropriate shares to the plaintiff. Indeed the defendant took them in his own name for a sum of K5,375 and then sold them for K175,000 thereby failing to account to the plaintiff, it is said, for the balance of K169,625.

I would pause here to mention that a number of aspects must come into operation before one could state that the sum of K175,000 represented the value of the property transferred. Further, if the property were overvalued or undervalued, then additional difficulties emerge quite apart from the problem as to what, if any, relationship existed between the plaintiff and the defendant, and to what extent that relationship was connected with the value of the shares and the value of the dwelling which those shares represented.

As often occurs within the law one can think of examples which on the one side represent a clear liquidated demand and on the other represent a clear claim for damages to be assessed. It is where the two areas overlap however that difficulties occur, as in the present situation before us. It is obvious that in order to establish whether the appellant falls on one side or other, it is necessary to attempt some sort of definition as to what constitutes a liquidated demand.

In the 1982 Annual Practice, par 6/2/4a, the definition of liquidated demand which has been used for many years still appears in these terms:

"A liquidated demand is in the nature of a debt, i.e. a specific sum of money due and payable under or by virtue of a contract. Each amount must either be already ascertained or capable of being ascertained as a mere matter of arithmetic. If the ascertainment of a sum of money, even though it be specified or named as a definite figure, requires investigation beyond mere calculation,...