Christopher M Smith v Ruma Constructions Ltd (2002) SC695

• Jurisdiction: Papua New Guinea
• Judge: Kapi DCJ, Los J, Kandakasi J
• Judgment Date: 11 October 2002
• Citation: (2002) SC695
• Court: Supreme Court
• Year: 2002
• Judgement Number: SC695

Full Title: Christopher M Smith v Ruma Constructions Ltd (2002) SC695

Supreme Court: Kapi DCJ, Los J, Kandakasi J

Judgment Delivered: 11 October 2002

1 Appeal—Appeal from National Court exercising discretionary powers.

2 Practice and Procedure—Application to set aside summary judgment—Principles applicable—Does not include the power to review the decision to enter summary judgment.

3 Ruma Construction Pty Ltd v Christopher Smith (1999) SC600, Tsang v Credit Corporation [1993] PNGLR 112, Chief Collector of Taxes v TA Field Pty Ltd [1975] PNGLR 144, Independent State of Papua New Guinea v Colbert [1988] PNGLR 138, MVIT v Joseph Bure (1999) SC613, SCA No 18 of 1999: The Honourable Andrew Baing and The Independent State of PNG v PNG National Stevedores Pty Limited and Bank of South Pacific Limited (2000) SC627 and PNGBC v Jeff Tole (2002) SC694 referred to

___________________________

SC695

PAPUA NEW GUINEA

{In the Supreme Court of Justice at Waigani]

SCA No. 48 of 2000

BETWEEN:

CHRISTOPHER M. SMITH

Appellant

AND:

RUMA CONSTRUCTIONS LTD

Respondent

Waigani: Kapi DCJ., Los J., Kandakasi J.

1st, 11th October 2002

Appeal – Appeal from National Court exercising discretionary powers.

Practice and Procedure – Application to set aside summary judgement – Principles applicable – This does not include the power to review the decision to enter summary judgement.

R. Radshaw for the Appellant

B. Frizzell for the Respondent

11th October 2002

KAPI DCJ: This is an appeal against a decision of the National Court which set aside a summary judgment. Application for leave to appeal was granted on 22nd February 2002 and the appeal has come before us for determination.

It is necessary to set out the relevant facts giving rise to this appeal. On 27th May 1997, Christopher Smith (Appellant) filed a writ of summons with the National Court seeking specific performance of an agreement for the sale of land or in the alternative, claims damages against Ruma Constructions Limited (Respondent).

On 8th October 1997, the appellant filed notice of motion seeking summary judgment against the respondent under O 12 r 38 of the National Court Rules (Rules). The motion came on for hearing before Woods J on 10th November, 1997 and summary judgment was entered on liability with damages to be assessed in absence of the respondent or it’s lawyers.

The respondent filed an application for leave to appeal as well as a notice of appeal against the entry of summary judgment on 19th December 1997 (SCA No. 86 of 1997). On 21st May 1998, application was filed to dismiss the appeal for want of prosecution. On 4th June 1998 Supreme Court directed that the Appeal Books to be filed within 14 days of the order.

Application for leave to appeal was heard on 22nd and on 25th March 1999 the Court ruled that the summary judgment was final in nature and the notice of appeal on foot should proceed to hearing on the merits (see Unreported Judgment of the Supreme Court dated 25th March 1999, SC600).

Several months later on 13th August 1999, the respondents discontinued the appeal.

The summary judgment remained in place and the appellant filed notice of motion on 11th November 1999 for directions to set the matter down for assessment of damages. On 17th December 1999 the National Court directed the appellants to file affidavits by 16th February 2000 and the respondents to file affidavits in reply by 29th February 2000.

On 12th January 2000, the appellant filed affidavit of Mark Kelep in support of assessment of damages. On 8th February 2000, the appellant filed his own affidavit. There is no record of any affidavits in reply by the respondent. The matter was finally fixed for assessment of damages on 11th May 2000.

The matter did not proceed to trial because the respondent filed a motion on 19th April 2000 seeking to set aside the summary judgment. This motion was heard by Sakora J on 19th July. On 2nd August 2000, he set aside the summary judgment and gave leave to the respondent to file its defence. This has led to this appeal.

The grounds of appeal may be summarized as follows:

1. That the trial judge erred in concluding that Woods J had evidence demonstrating the existence of real and serious issues of fact and law.

2. The trial judge erred in applying the principles relevant to an appeal from the summary judgment of Mr Justice Woods dated 10th November 1997 rather than the principles to set aside a summary judgment.

3. The trial judge erred in not having regard to the delay of the respondent in applying to set aside the summary judgment of 10th November 1997.

4. The trial judge erred in law in failing to have any regard to the failure of the respondent to explain how it allowed the summary judgment to be entered in its absence on 10th November 1997.

Ground 1

The trial judge concluded that Woods J had before him the following situation:

“1. There was no appearance by or on behalf of the defendant.

2. Two Notices of Intention to Defend on behalf of the defendant.

3. The affidavit of the Managing Director of the defendant company, Mr Des Bogaart, sworn 21 October 1997 adverting to and dealing with each of the factual issues (assertions) in the plaintiff’s Statement of Claim.

Thus the learned judge had before him real and serious issues of fact and law. The circumstances here, therefore, could hardly be said to have presented to the Court a ‘clear’ case for granting, let alone entertaining, the plaintiff’s application pursuant to O 12 r 38 NCR”

Was there any pleading before Woods J which put in issue matters on fact or law? It is not disputed that the respondent did not file any defence although two notices of intention to defend were filed on its behalf by its lawyers. It follows from this that the respondent did not put in issue matters of fact and law by way of pleading.

Was there any evidence disclosing disputed matters of fact and law alleged in the Statement of Claim? General Manager of the respondent, Des Bogaart swore to an affidavit on 21st October 1997 and was filed on 22nd October 1997. However, the respondent or his lawyers did not appear on the hearing of the motion on 10th November 1997, and this affidavit was not led in evidence. Therefore, this affidavit was not before Woods J. Consequently, the trial judge erred in concluding that Woods J had this evidence before him.

Ground 2.

The application to set aside summary judgment is said to be made pursuant to O 12 r 8 (2) (b) of the Rules. The trial judge dealt with the appropriate principles in the following passage:

“Mr Payne suggests that O 12 r 6 (2) (b) NCR does not distinguish between a default judgment or a summary judgment. This, in my opinion, is not correct, because Sub-rule (2) (a) does in fact specifically deal with default judgments. Therefore, Sub-rule (2) (b) must only envisage the situation such as this facing the defendant following the Court’s exercise of power under r 38 of this Order. In any case, there is also a specific rule covering default judgments: r 35 (supra).

Thus, the principles governing the entry of default judgments and their setting aside are different from those relating to summary judgments, just as the rules for these are different.”

Counsel for the appellant submits that the trial judge fell into error in coming to this conclusion.

So far as entry of default judgment under O 12 Division 3 of the Rules and summary judgment under O 12 r 38 are concerned, the basis upon which the respective judgments may be entered are different. The former is dependent upon satisfaction of default on the part of the defendant. Whereas the latter is dependent upon satisfying the court firstly that there is evidence of facts on which the claim is based and secondly that there is evidence given by the plaintiff or some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim. The trial judge was correct in his conclusion to this extent

However, it does not follow that the principles for setting aside either type of judgments are also different. This calls for close examination of O 12 r 8:

“8. Setting aside or varying judgment or order.

(1) The Court may, on terms, set aside or vary a judgment –

(a) where the judgment has been entered pursuant to Order 12 Division 3 (default...