WAMP NGA Holdings Limited v KK& Sons Limited (2011) N4219

• Jurisdiction: Papua New Guinea
• Judge: Sagu AJ
• Judgment Date: 23 February 2011
• Court: National Court
• Citation: (2011) N4219
• Docket Number: WS NO. 1292 OF 2009
• Year: 2011
• Judgement Number: N4219

Full Title: WS NO. 1292 OF 2009; WAMP NGA Holdings Limited v KK& Sons Limited (2011) N4219

National Court: Sagu AJ

Judgment Delivered: 23 February 2011

N4219

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1292 OF 2009

WAMP NGA HOLDINGS LIMITED

Plaintiff

AND

KK & SONS LIMITED

Defendant

Mt. Hagen: Sagu AJ

2011: 23rd February

CIVIL PROCEDURE - default judgment - liquidated demand - definition - requirement of service of motion and originating process - discretion to refuse even after default establish - circumstances of refusal

Cases Cited

Urban Giru –v Luke Muta & two others (2005) N2877

Kante Mininga -v- The State & Dr Scotty Maclfish (1996) N1458

Bela Kitipa -v- Vincent Auali & 3 Ors (1998) N1773

Dempsey v Project Pacific Pty Ltd [1985] PNGLR 93

Tindiwi -v- Nilkare [1984] PNGLR 191

Counsel

Priscilla Tamutai, for the Plaintiff

No appearance for the Defendant

RULING ON APPLICATION FOR DEFAULT JUDGEMENT

23rd February, 2011

1. SAGU AJ: The Plaintiff applied by motion for Default Judgment under Order 12 Rule 27 and 32 of the National Court Rules. I had reserved my decision which I now hand down.

Background

2. The Plaintiff on the 16th October, 2009, filed a Writ of Summons against the Defendant to recover a fix amount of money being a total sum of K147, 334.89 for services rendered to the Defendant. The Plaintiff Company is a fuel distributor who claims to have supplied fuel to the Defendant on a credit facility basis for the defendant to settle the debit on a mutual understanding. The Plaintiff under this arrangement supplied fuel from his Driveway Service Station in December 2007, January and February 2008 to the total value claimed. The Defendant refused to settle the invoices despite the Plaintiffs many attempts.

Motion for Default Judgment

3. The Plaintiff now seeks Default Judgment under Order 12 Rule 27 on the basis that the Defendant has defaulted in filing either it’s intention to defend nor its defence. The motion is supported by the following affidavits:-

1. Affidavit of Service by Post of Priscilla Tamutai sworn on the 31/3/2010 and filed on 7/4/2010,

2. Affidavit of Company Search by Priscilla Tamutai sworn on 29/3/2010 and and filed on 7/4/2010

3. Affidavit of Search by Jospehine Jureno sworn on 22/2/2010 and filed 5/3/2010.

4. Affidavit of Raphael Piel sworn on 23/10/2009 and filed on 26/10/2009

5. Affidavit of Camillus Kumbi sworn on 25/2/2010 and filed on 5/3/2010

The Law

4. Order 12 Rule 27 of the National Court Rules provide for entry of Default Judgments. Its reads:

(1) Where the plaintiff’s claim for relief against a defendant in default is for a liquidated demand only, the plaintiff may enter judgment against that defendant for a sum not exceeding the sum claimed in the statement of claim on that demand and for costs.

5. This provides a way of relief to the Plaintiff in the event of a defendant’s default. However, the court may enter judgment upon the application by the plaintiff where defendant is in default according to Rule 32 of Order 12 which I state below:-

Whatever, claims for relief are made by a plaintiff, where a defendant is in default, the Court may, on application by the plaintiff, direct the entry of such judgment against that defendant as the plaintiff appears to be entitled to on his writ of summons.

The exercise of this power is discretionary. I will come to that later.

Liquidated Demand Defined

6. Is the claim a liquidated claim since the Plaintiff’s application is under Rule 27. The Oxford Dictionary of Law, 6th edition published in 2006 defines the term Liquidated Claim as:-

“A demand for a fixed sum, eg. A debt of $50. Such a demand is distinguished from a claim for unliquidated damages, which is the subject of a discretionary assessment by the court.”

7. I apply the definition established by the Supreme Court in 1985 in Dempsey v Project Pacific Pty Ltd [1985] PNGLR 93 Pratt J, Amet J, Woods J where their Honors adopted and applied the definition of “ Liquidated demand” provided for in the 1982 Annual Practice 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, then the sum is not a 'debt or liquidated demand' but constitutes 'damages'."

8. The Plaintiffs statement of claim is for a sum of K147, 334.89. It comprises of three months invoices due for the month of December 2007 at K34,129.35, January 2009 K103,116.01, February 2009 at K12,819.53 making a total of K147,33.89 for the supply of fuel to the defendant. This is a claim in debt for the specific sum of K147, 33.89 due and payable under the parties’ mutual understanding. The amounts are based on the supply of fuel dockets issued at the time of the sale of fuel. The amount need not require further investigation other than to consult and add them up by mathematical calculation to arrive at the total sum for the month and eventual grand amount claimed. I am satisfied that this is a claim that falls within the definition for liquidated demand under Rule 27 of Order 12.

9. What is the test to be applied in considering the application for the default judgment? Canning J in Urban Giru v Luke Muta and Two Others (2005) N2877 summarizes or rather provides what he refers to as a check list of 6 conditions to be satisfied when considering default judgments which I find very useful and will apply in this case. This checklist includes whether the originating process and the motion with supporting affidavits were duly served on the Defendant? Has the defendant defaulted in filing its’ defence? The Defendant’s default does not entitle an entry of judgment in favour of the Plaintiff. It is subject to the exercise of the Courts discretion as per Injia J (as he then was) in Kante Mininga -v- The State & Dr Scotty Maclfish (1996) N1458. I will come to that later.

Service of the Motion

10. Firstly, I must be satisfied that the Plaintiff provided sufficient notice of this motion to the defendant as it is required to do under Order 4 rule 38. The notice of motion was fixed for hearing on the 9/4/2010. Affidavits of Camillus Kumbi and Priscilla Tamutai under cover of a letter were posted to the Defendant’s registered postal address for service at P.O. Box 650 Mt. Hagen on the 29/3/2010. The motion was returnable 10 days from the date of service which is more than the 3 days notice required under Order 4 Rule 42. Furthermore, since the defendant is an incorporated company, service of the motion and supporting affidavits were effected in accordance with section 431(1)(d) of the Companies Act where the same were posted to the Defendant’s registered postal address as it appears in the IPA documents. I am satisfied that proper service of this application was effected. I also note that Ms. Tamutai wrote to the Defendants on the 16th November 2009 as a warning to remind the Defendant of it’s obligations to file it’s intention to defend and defence.

11. The defendant is not present however, I will exercise my discretion under order 4 rule 46(b) and proceed to hear and dispose of this motion since I have stated that the defendant has been duly served.

Default

12. The second issue is, has the defendant defaulted in filing its defense? The affidavit of search by Jospehine Jureno deposes to that on the 22nd February 2010 she conducted a search of the file in the National Court Registry which revealed that the defendant had not filed its Notice of Intention to Defend nor it’s Defence. I accept Josephine Jurneo’s affidavit and hold that no Defenses had been filed.

13. Division 3 of Order 12 provides for the process of obtaining Default Judgments on proceedings commenced by writ of summons. This Division consists of Rules 24 -36A. The defendant is in default if it’s conduct, falls into any of the 3 categories provided under Order 12 Rule 25 which states:-

“25. Default

The Defendant shall be in default for the purposes of this Division:-

(a) where the originating process bears a note under Order 4 Rule 9, and the time for him to comply has expired but he has not given the notice; or

(b) where he is required to file a defence and the time for him to file defence has expired but he has not filed his defence; or

(c) Where he is required to verify his defence………………….”

14. In this case the writ of summons had on it a note that the Defendant was required to file its notice of intention to defend within 30days and it was to comply with the rules of court relating to defence. Effectively the endorsement on the file read that the defendant was required to file its Notice of intention to defend within 30 days from after service under order 4 rule 11(b)(1) and for the defence to be filed within 44 days as required under Order 8 Rule 4. There is no notice of intention to defend nor a defence been filed.

15. However, whether the defendant is in default or not will depend on the critical issue of...