Beecroft No 51 Limited trading as Ronnie's Hot Bread v Neville Seeto, Barry Tan, Stephen Tan, TST 4 Mile Limited, John Maddison and Bank South Pacific Limited (2004) N2561

• Jurisdiction: Papua New Guinea
• Judge: Davani J
• Judgment Date: 10 June 2004
• Court: National Court
• Citation: (2004) N2561
• Year: 2004
• Judgement Number: N2561

Full Title: Beecroft No 51 Limited trading as Ronnie's Hot Bread v Neville Seeto, Barry Tan, Stephen Tan, TST 4 Mile Limited, John Maddison and Bank South Pacific Limited (2004) N2561

National Court: Davani J

Judgment Delivered: 10 June 2004

1 Practice and Procedure—Application for default judgment—requirements of service of originating process upon a company, discussed—search of company register and results of search of register must be deposed to in affidavit.

2 Practice and procedure—application for default judgment—court has discretion to enter or refuse application

3 Kante Mininga v the State and 2 Others N1458, Bela Kitipa v Vincent Uali and 3 Others N1773

Ruling on application for default judgment

___________________________

N2561

IN THE NATIONAL COURT OF

JUSTICE AT WAIGANI

PAPUA NEW GUINEA

WS 322 of 2004

BETWEEN:

BEECROFT NO. 51 LIMITED trading as RONNIE’S HOT BREAD

Plaintiff

AND:

NEVILLE SEETO

First Defendant

AND:

BARRY TAN

Second Defendant

AND:

STEPHEN TAN

Third Defendant

AND:

TST 4 MILE LIMITED

Fourth Defendant

AND:

JOHN MADDISON

Fifth Defendant

AND:

BANK SOUTH PACIFIC LIMITED

Sixth Defendant

Waigani: Davani, .J

2004: 7, 10 June

Practice and Procedure – Application for default judgment – requirements of service of originating process upon a company, discussed – search of company register and results of search of register must be deposed to in affidavit.

Practice and procedure – application for default judgment – court has discretion to enter or refuse application

Cases and authorities cited in the judgment

Kante Mininga v the State and 2 Others N1458

Bela Kitipa v Vincent Uali and 3 Others N1773

D. Dotaona for the Plaintiff/Applicant

R. Lindsay for the First and Fourth Defendants

RULING

(Application for default judgment)

10th June 2004

Davani .J: The plaintiff moves for default judgment by way of Notice of Motion filed on 20th May 2004. Default judgment is sought to be entered against the first and fourth defendants with damages to be assessed on the value of the banking equipment and other assets. Default judgment is also sought to be entered against the first and fourth defendants with damages to be assessed in relation to damages for trespass to goods and unlawful detention of goods, conversion, general damages, exemplary damages, special damages and punitive damages.

The application is opposed by the first and the fourth defendants.

The application

The application is supported by the affidavit of David Dotaona sworn on 20th May 2004. In that affidavit, Mr Dotaona refers to personal service of the Writ of Summons and Statement of Claim (‘Writ’) upon the first defendant. Service was effected on the first defendant personally by Mr Canisius Karingu on 5th April, 2004 at 4.20pm. This was done in compliance with O. 6 R. 2 (1) of the National Court Rules (‘NCR’) which states that originating process shall be served personally on each defendant.

As the service upon the fourth defendant, Mr Dotaona refers to service upon the fourth defendant’s registered office by a Mr Geoffrey Szeto. Mr Szeto swore an affidavit on 19th May, 2004 to which he deposed that he served copy of Writ of Summons and Statement of Claim on the fourth defendant’s registered office Dabill Management and that Dabill Management received and signed for it. Although Mr Szeto states that Dabill Management is the defendant’s registered office, I do not have before me a company search showing that Dabill Management is the fourth defendant’s registered office. I say this relying on s. 167 (2) of the Companies Act 1997 which states that the address for service of a company may be the company’s registered office or another place but that it shall have a readily identifiable street address and that it shall be a place that is readily accessible during normal business hours. S. 167(3) of the Companies Act also states that a company’s address for service at any particular time is the place that is described as its address for service in the register at that time. The register in the interpretation provisions of the Company’s Act means the register kept pursuant to s. 395 (1) of the Companies Act. S. 395 (1) of the Companies Act states that the Registrar of Companies shall ensure that a register of companies, both registered or deemed to be registered is kept in Papua New Guinea and that this is kept by means of records or electronically stored information.

This therefore means that the search clerk should have attended at the company’s office and conducted a search of the Companies register to obtain details of the fourth defendants registered office and to then effect service upon it. Having effected service, the search clerk or lawyer should then file an affidavit to which he should attach a copy of the company search results showing the registered office of the company and also depose to details of service upon that registered office. In this case this was not done. I find service upon the fourth defendant was irregular.

Another issue that arises is the fourth defendant’s correct title or description. It may be that it is described as another entity in the Companies register. However no objections have been raised by the plaintiff as to the name of the fourth defendant.

However, before filing an action against the company, the person suing must firstly conduct a search of the Companies register to obtain the correct company name because as is common knowledge and as is provided in s. 16 of the Companies Act, a company is a separate legal personality, a legal entity in its own right, separate from its shareholders and continues in that capacity until de-registered. If the fourth defendant is not sued in the correct name, then it should object or raise objections. But it has not done that.

In relation to the application for default judgment against the first defendant, I note that Gaden’s Lawyers filed Notice of Intention to Defend on 4th May, 2004 for and on behalf of the first and fourth defendants. The plaintiff through its lawyer forewarned the first and fourth defendants of the intended application for default judgment, and that such was done by letter dated 7th May, 2004 which was delivered to Gadens Lawyers on the same day. In that letter, Mr Dotaona requested that Gadens Lawyers file a Defence for an on behalf of the first and fourth defendants by 5.00pm on Monday, 17th May, 2004 failing which the plaintiff would move for default judgment without further notice. In response to that letter, Mr Lindsay for the first and fourth defendants, sent letter dated 17th May, 2004 to Dotaona Lawyers requesting a further 7 days within which to file his clients’ Defence for the reason that he had just recently received documents from his client and was perusing the same to enable him to then prepare and file the defences. However Mr Dotaona did not respond to that letter and proceeded to file the application for default judgment.

Evidence and the law

Before embarking on discussions as to whether default judgment should be entered, it is appropriate at this time to refer to the defences filed on behalf of fifth and sixth defendants. The fifth defendant was at the date of the filing of their Writ of Summons and Statement of Claim, in the sixth defendant’s employ within its assets management division. The sixth defendant is a bank. In their Defences, the court notes that the Jimm Trading Limited who was the registered proprietor of the property, had entered into a loan agreement with the sixth defendant. The Defence pleads that if the plaintiff had leased the premises from Jimm Trading Limited then this was in breach of that loan agreement entered into between the sixth defendant and Jimm Trading Limited. It pleads further that Jimm Trading Limited was contractually bound to seek the sixth defendant’s approval to then enter into the arrangement which the plaintiff alleges it had entered into with Jimm Trading Limited and which is pleaded in pargraph No. 9 of the plaintiff’s Statement of Claim. The sixth defendants plead that because Jimm Trading Limited...