Kerry Lerro trading as Hulu Hara Investments Ltd v Philip Stagg as Chairman of Central Tenders Board and Valentine Kambori as the Secretary for National Planning and Rural Development and The Independent State of Papua New Guinea (2006) N3050

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi J
• Judgment Date: 20 April 2006
• Court: National Court
• Citation: (2006) N3050
• Docket Number: WS. NO. 1375 OF 2003
• Year: 2006
• Judgement Number: N3050

Full Title: WS. NO. 1375 OF 2003; Kerry Lerro trading as Hulu Hara Investments Ltd v Philip Stagg as Chairman of Central Tenders Board and Valentine Kambori as the Secretary for National Planning and Rural Development and The Independent State of Papua New Guinea (2006) N3050

National Court: Kandakasi, J

Judgment Delivered: 20 April 2006

N3050

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1375 OF 2003

BETWEEN

KERRY LERRO trading as HULU HARA INVESTMENTS LTD

Plaintiff

AND

PHILIP STAGG as Chairman of CENTRAL TENDERS BOARD

First Defendant

AND:

VALENTINE KAMBORI as the Secretary for NATIONAL PLANNING AND RURAL DEVELOPMENT

Second Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Defendant

Waigani: Kandakasi, J.

2006: 10 and 16 March

20 April

PRACTICE & PROCEDURE – Application to dismiss proceedings for failure to disclose reasonable cause of action - Whether failure to plead with particulars amounts to failure to disclose reasonable cause of action – Failure to disclose reasonable cause of action distinct and separate from failure to plead with particulars and or evidence – Separate consequences follow – Abuse of the Court’s process to apply to dismiss proceedings for failure to disclose reasonable cause of action when the basis for the application is based on lack of particulars and or evidence.

PRACTICE & PROCEDURE – Applicant seeking to set aside default judgment entered inter parte – Applicant neither opposing nor consenting to application for default judgment – Effect of – Orders by consent – Whether National Court has jurisdiction to entertain application – National Court has no jurisdiction.

PRACTICE & PROCEDURE – Application seeking to set aside default judgment and further extension of time to file and serve defence out of time – Earlier exercise of discretion in favour of applicant not made use of – No application for extension of time made within extended time – State having far more time to file defence than all other defendants – Effect of – No reasonable explanation provided for unreasonable delay and failure to comply with Court orders – Excuses of relocating office without explaining how it affected the giving of instructions and filing and serving of defence not reasonable explanation - Duties and responsibilities of employees of the State considered.

Papua New Guinean Cases Cited:

Jack Livinai Patterson v National Capital District Commission (05/10/01) N2145.

PNG Forest Products v The State [1992] PNGLR 85.

Kiee Toap v. The State & Ors (26/11/04) N2731.

Pius Nui v. Senior Sergeant Mas Tauda & Ors (21/12/04) N2765.

Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915.

Eliakim Laki and 167 Others v. Maurice Alaluku and Others (10/11/00) N2001.

Ronny Wabia v. BP Exploration Co Ltd & Ors [1998] PNGLR 8.

Mesia Novau v. Nimrod Mark & Electoral Commission [1992] PNGLR 229.

Polling v. Motor Vehicles Insurance (PNG) Trust [1982] PNGLR 228.

Bank of South Pacific Limited v PNG Nambawan Trophy Holdngs Limited & Ors (12/11/04) N2717.

Papua New Guinea Banking Corporation v. Jeff Tole (27/09/02) SC694.

The Independent State of Papua New Guinea v. Barclay Bros (PNG) Ltd (02/04/04) N2507.

Fly River Provincial Government v. Pioneer Health Services Limited (24/03/03) SC705.

Keboki Business Group Inc. v. The State & Morobe Provincial Government [1984] PNGLR 28.

Curtain Brothers (Queensland) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285.

Green & Company Pty Ltd (Receiver Appointed) v. Green [1976] PNGLR 73.

Christopher M Smith v. Ruma Constructions Ltd (11/10/02) SC695.

William Duma v. Yehiura Hriehwazi and Pacific Star Limited Trading as “The National” (14/04/04) N2526.

Bank of South Pacific Limited v. PNG Nambawan Trophy Holdngs Limited & Ors (12/11/04) N2717.

MVIT v. James Pupune [1993] PNGLR 370.

MVIT v. Salio Tabanto [1995] PNGLR 214.

Paul Torato & Anor v. Sir Tei Abel & Ors [1987] PNGLR 403.

Peter Lipsey v. The Independent State of Papua New Guinea [1993] PNGLR 405.

Coecon Limited (Receiver/Manager Appointed) v. The National Fisheries Authority of Papua New Guinea and The Independent State of Papua New Guinea (28/02/02) N2182.

Simon Mali v The State (03/04/02) SC690.

Re Peter Naroi [1983] PNGLR 176.

Joseph Kupo v Steven Raphael, Secretary for the Department of Defence Force (28/05/04) SC751.

Lupi Iohoi v. Motor Vehicle Insurance (PNG) Trust [1993] PNGLR 366.

Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali & Ors (08/10/02) N2289.

Andrew Baing v PNG National Stevedores Pty Ltd (23/02/00) SC627.

Overseas Cases Cited:

Dyson v. Attorney General [1911] I KB 410.

Nagle -v- Feilden [1966] I AII ER 689 at 697 [1966] 2QB 633.

Allen -v- Gulf Oil Refining Ltd [1981] 1 All ER 353; [1981] AC 1000.

Attorney General of the Duchy of Lancaster v. London and North Western Railway Co. [1892] 3 Ch 274.

Read v. Brown (1888) 22 QBD 128.

Hubbuck & Sons Ltd v. Wilkinson Heywood & Clark Ltd [1899] 1 QB 86.

Counsel:

Mr. M. Kombri, for the Defendant/Applicants

Mr. D. Kop, for the Plaintiff/Respondent

20th April 2006

1. KANDAKASI J.: Before me is an application by the defendants seeking to dismiss the plaintiff’s claim for failure to disclose a reasonable cause of action and that the claim is frivolous, vexatious and an embarrassment within the meaning of O.12 r.40 and O.8 r.27 of the National Court Rules (the Rules). Alternatively, they are applying for a set aside of a default judgment entered against them and for extension of time for them to file and serve their defence out of time pursuant to O.12 r.35 of the Rules. The Court signed the default judgment after hearing both the defendants and the plaintiff following the defendants further default in filing and serving their defence within further time extended by the Court.

2. The plaintiff opposes the application. For the first part of the application, the plaintiff argues that his pleadings disclose a reasonable cause of action. As for the second part of the application, he argues that the defendants are at no liberty to make their application particularly when the Court had already granted further time for them to file and serve their defence out of time and that they appeared at the hearing of the plaintiff’s application for default judgment and were heard before the decision to enter default judgment against them. Further the plaintiff argues that, even if the defendants were at liberty to bring their application, they have not offered any reasonable explanation for allowing judgment to go in default and have delayed without any reasonable explanation in making the application since the signing of the default judgment against them.

Relevant Issues

3. These arguments and therefore the application, raise the following issues for determination by the Court:

1. Whether the plaintiff’s statement of claim fails to disclose a reasonable cause of action and is therefore frivolous, vexatious and an embarrassment within the meaning of O.12 r. 40 and O.8 r. 27 of the Rules?

2. Does the Court have the necessary jurisdiction to hear and determine the defendants’ application to set aside the default judgment that was entered inter partes?

3. Has the defendant made out a case for a set aside of the default judgment and for further extension of time for them to file and serve their defenses out of time?

4. The last two (2) issues are separate and distinct from the first issue. I will deal with the first issue first. Thereafter I will turn to deal with the second and third issues in that order.

5. In order to properly understand and determine the application before the Court, it is necessary to understand the relevant background. I therefore turn to the relevant background which starts on 24 September 2003, with the plaintiff filing his writ of summons. On 26 September 2003, he served the writ of summons on the third defendant and on the first and second defendants on 7 October 2003. On 29 October 2003, the Solicitor General filed a notice of intention to defend for and on behalf of all the defendants.

6. Following default in a filing and serving of the defendants’ defence, the plaintiff filed a motion for default judgment on 18 May 2004, which he amended on 20 May 2004. The defendants responded with a cross motion filed on 20 May 2004, seeking a dismissal of the proceedings for not disclosing reasonable cause of action and in the alternative, an extension of time for them to file and serve their defence out of time. The Court heard these motions on 19 November 2004 and decided to decline the plaintiff’s application for default judgment and granted the defendant’s further time until 17 December 2004, to file and serve their defence. The defendants did not file and serve their defence within the time extended by the Court. That resulted in the plaintiffs filing on 22 December...