PNG National Stevedores Pty Ltd v The Honourable Andrew Baing; PNG Harbours Board v PNG National Stevedores Pty Ltd

• Jurisdiction: Papua New Guinea
• Judge: Kapi DCJ
• Judgment Date: 09 April 1998
• Citation: (1998) N1705
• Court: National Court
• Year: 1998
• Judgement Number: N1705

National Court: Kapi DCJ

Judgment Delivered: 9 April 1998

N1705

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 363 OF 1995

BETWEEN:

PNG NATIONAL STEVEDORES PTY LTD

First Plaintiff

AND:

BANK OF SOUTH PACIFIC LTD

Second Plaintiff

AND:

THE HONOURABLE ANDREW BAING

First Defendant

AND:

PNG HARBOURS BOARD

Second Defendant

AND:

THE INDEPENDANT STATE OF PAPUA NEW GUINEA

Third Defendant

AND:

PNG HARBOURS BOARD

Cross-Claimant

AND:

PNG NATIONAL STEVEDORES PTY LTD

Cross-Defendant

Waigani: Kapi DCJ.

16th March, 9th April 1998

Practice and procedure – Application to set aside judgment – proper principles

Considered.

- Application under O 12 r 8(2)(b) of the National Court Rules.

- Application under O 1 r 8 of the National Court rules – Application

within a reasonable time O 1 r 9 of the National Court Rules.

F. Frank for the First Plaintiff

W. Neill for the Second Plaintiff

R.S. O’Reagan QC with E. Kamburi for the Defendants

9th April 1998

Kapi DCJ: This is an application to set aside a judgement entered on the 19th September 1996. It is necessary to set out the background to this application.

The first plaintiff commenced proceedings against the defendants for a mandatory injunction requiring the defendants to take necessary steps to repeal Statutory Instrument No. 2 of 1994 and in the alternative, for general damages.

The amended statement of claim pleads the following facts which are alleged to constitute the cause of action. In 1994 the second defendant amended s 192 of Harbours Board (General) (Amendment) By-Law (Cap 240) by Statutory Instrument No. 1 of 1994. The effect of this amendment was that a person may not carry on the business of stevedore within the boundaries of a declared port unless he is a holder of a licence. An application for such a licence:

“shall, subject to any agreement between the board and a person that applies, be made only by a person in the sense of a company that is 100% beneficially owned directly or indirectly by a citizen, but not by any such company in which the control exercisable in law or by any agreement between the company and a third part, or in practice, is maintained by a person other than a citizen.”

The effect of this law, it is alleged, was to enable citizen-owned stevedore companies to operate free from foreign-owned stevedore companies.

The first plaintiff was incorporated as a 100% citizen-owned company for purposes of carrying out stevedoring operations in the ports of Port Moresby and Lae. The first plaintiff applied and was granted a licence on or about 1st July 1994.

It is alleged that upon the granting of the licence, the first plaintiff proceeded at substantial expense to make elaborate preparations for commencing stevedoring operations in Port Moresby and Lae. The first plaintiff alleges that these preparations were taken out in reliance of the By-Law which provide, in particular, that the operations would be free of foreign competition.

In January 1995 the first defendant announced his intention to change the policy set out in Statutory Instrument No. 1 of 1994. In accordance with the change in policy, the second defendant repealed s 192 of Harbours Board (General) By-Law (Cap 240) by Statutory Instrument No. 2 of 1994. The new amendment relevantly provides that:

“..With effect from 1st January 1996 an application for a licence-

(a) shall be made only by a company in which Papua New Guineans hold not less than 51% of the share capital. In order to ensure that there is a smooth transition period, application for licence can be made by companies which do not fulfil the immediately preceding [sic] requirement between the period 1/1/95 and 31/1/95 inclusive.”

The first plaintiff alleges that the effect of this amendment was to cancel the closing of stevedoring operations in Papua New Guinea ports to foreign-owned companies.

The first plaintiff further alleges that by reason of the Statutory Instrument No. 1 of 1994 and the granting of licence to the first plaintiff pursuant to the provisions of the said Statutory Instrument, the defendants are estopped from changing that policy and subsequent repeal of the said Statutory Instrument. This is the basis for the claim for mandatory injunction.

In the alternative, the first plaintiff alleges that the change in policy and the subsequent adoption of the policy in Statutory Instrument No. 2 of 1994 has prevented it from commencing stevedoring operations in Port Moresby and Lae. The first plaintiff alleges that this is unconscionable conduct and therefore it is entitled to damages.

The first and third defendants filed a defence. The second defendant was represented by different lawyers and it filed a defence as well. It is not necessary for the present purposes to set out the defence in detail.

In so far as it is relevant to the application before me, the lawyers for the first plaintiff served Notices of Discovery on the first and third defendants on the 5th August 1996. When no list of documents were filed and served, lawyers for the first plaintiff filed a motion on the 22nd August 1996 for orders for discovery of documents. An order was made on the 30th August 1996 and entered on 11th September 1996 requiring the first and third defendants to file and deliver documents within seven days of making the order.

This order was served on first and third defendants on the 12th September 1996.

When no documents were filed and served by the seventh day from the making of the order, first plaintiff obtained the following order on the 13th September 1996:

”IT IS THIS DAY ODERED BY CONSENT

1. That the first and third defendants make file and deliver a list of documents verified by affidavit within forty-eight hours (48) of the making of this order.

2. That in default of compliance with this order and on the filing of an affidavit of non-compliance the defence be struck out and interlocutory judgement be entered for the plaintiff against the first and third defendants.

3. That the first and third defendants pay the plaintiff’s cost incidental to this application in any event.”

The order was entered on 19th September 1996.

The question of liability in respect of the action between the first plaintiff and the second defendant was set down for hearing on the 10th February 1998.

The application to set judgement against the first and third defendants was filed on 10th February 1998 and set down for hearing on the same date. The parties agreed to hear both matters together. Both matters were adjourned on 10th February and set down for hearing before me on the 16th March 1998.

At the hearing, by consent, judgement was entered for the second defendant with costs in respect of the action against the second defendant.

I heard the application to set aside judgement against the first and third defendants.

The general rule is that a perfected judgement cannot be recalled or varied, for the public interest requires that the judgement when it is entered should conclude the litigation.

There are some exceptions to this general rule. Brennan J. conveniently sets out these exceptions in Permanent Trustee Co. (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd 1976 28 FLR 195 at 198:

“The exceptions fall into three categories: those which are founded upon the inherent jurisdiction of the court to ensure that its procedures do not effect injustice; those which are authorised by statute, and those which override the general rule in order to give relief where the judgement is obtained by fraud or by an agreement which is void or voidable.

When the inherent jurisdiction of the court is invoked, the court will inquire whether the entered judgement correctly expresses the court’s decision (Re Swire (5)) or perhaps whether it requires amendment to keep its records in conformity with the real position (Mercer Alloys Corporation v Rolls Royce Ltd. (6)) or whether the judgement proceeded from a hearing which was so irregular as to be treated as a nullity (Craig v Kanssen (7); Cameron v The Cole (8). The jurisdiction may be invoked by application in the proceedings in which judgement was entered.

The cases which are authorised by statute are various, and the procedure for invoking the statutory jurisdiction depends upon the statute. Thus, an appellate court which is given the jurisdiction to hear an appeal from a judgement will be vested with a power to set the judgement aside, but the power cannot be exercised by the court from which the appeal may be brought (Re St. Nazaire Co. (9); The Liverpool [Steamship Enterprise of Panama Inc., Liverpool (Owners) v Ousel (Owners), The Liverpool] (10)). On the other hand, the slip rule (O. 31, r. 11) or the rules relating to the setting aside of judgements obtained by default (O. 14, r. 10; O. r. 14) vest the jurisdiction under those rules in the court which entered the judgement.

When the litigant has a right to set aside the judgement on the ground of fraud, however, the fraud must be alleged in a fresh action brought to try the issue (Flower v Lloyd (11); Jonesco v Beard (12)). Similarly, where the judgement is entered by consent, and a party alleges that the agreement pursuant to which the...