Albright Ltd v Mekeo Hinterland Holdings Ltd

• Jurisdiction: Papua New Guinea
• Citation: (2013) N5774
• Date: 30 September 2013
• Court: National Court
• Year: 2013

Full : WS 258 OF 2012; Albright Limited v Mekeo Hinterland Holdings Limited and Lucas Dekene, Minister for Lands & Physical Planning and Romilly Kila-Pat, Secretary for Lands & Physical Planning and Independent State of Papua New Guinea (2013) N5774

National Court: Hartshorn J

Judgment Delivered: 30 September 2013

Application to set aside a default judgment—whether National Court can set aside an inter partes default judgment - O12 r8(2)(a) and O12 r35 National Court Rules considered - Setting aside a judgment entered regularly entered, factors for consideration—consideration of exercise of court’s discretion - whether the State defendants are estopped from raising a defence on the merits—whether a defence disclosed

Cases cited:

Papua New Guinea Cases

Green & Co Pty Ltd v. Green [1976] PNGLR 73

Leo Duque v. Avia Andrew Paru [1997] PNGLR 378

Smith v. Ruma Constructions Ltd (2000) N1982

Lerro v. Stagg (2006) N3050

State v. Downer Construction (PNG) Ltd (2009) SC979

Rangip v. Loko (2009) N3714

Totamu v. Small Business Development Corporation (2009) N3702

Overseas Cases

Henderson v. Henderson [1843] Eng R 917

Evans v. Bartlam [1937] AC 473; 2 All ER 646

Collins Book Depot Pty Ltd v. Bretherton [1938] VLR 40

Vacuum Oil Pty Co Ltd v. Stockdale (1942) 42 SR (NSW) 239

Kok Hoong v. Leong Cheong Kweng Mines Ltd [1964] AC 993

Nicholson v. Nicholson [1974] 2 NSWLR 59

Port of Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 599

1. HARTSHORN J: This is an application to set aside a default judgment.

Background

2. The plaintiff Albright Ltd (Albright), entered into a sub lease of land with the first defendant Mekeo Hinterland Holdings Ltd (Mekeo). Albright was to develop the land and was given exclusive rights to harvest timber and conduct agro forestry projects upon the land for a period of 98 years.

3. Albright contends that in December 2010 the National Court declared that Mekeo’s title to the land that had been granted to it in November 2007 was null and void.

4. Albright commenced this proceeding seeking damages against the State and the Minister and Secretary for Lands and Physical Planning (State defendants) for their negligence in failing to follow proper procedures under the Land Act when the title to the land was issued to Mekeo, and against Mekeo for misrepresenting that it had a valid title to the land. Albright claims in excess of K 153 million.

5. Default judgment was ordered against all of the defendants on 24th October 2012 after an inter partes hearing at which the State defendants were represented. The State defendants had filed a notice of intention to defend but had not filed a defence.

6. The State defendants now apply for the default judgment entered against them to be set aside pursuant to Order 12 Rule 8(2)(a) and Order 12 Rule 35 National Court Rules.

Contentions

7. The State defendants contend that the default judgment ordered against them should be set aside as the statement of claim does not disclose a reasonable cause of action against them and that this constitutes a defence on the merits. It is conceded by the State defendants that they do not have a reasonable explanation for why default judgment was allowed to be entered against them - they had not filed a defence. Further, they concede that there has been delay in applying to set aside the default judgment.

8. Albright contends that the default judgment should not be set aside as:

a) there is no reasonable explanation for why the State defendants did not file a defence.

b) the default judgment hearing was inter partes and the State defendants were required to present their whole case concerning a defence on the merits and the delay in filing a defence. If they did not argue those points at the default judgment hearing, they are estopped from arguing those points now. Further, if they did argue those points then they are estopped from arguing them now.

c) the default judgment hearing was inter partes and the court has given its decision. Such a decision can only be challenged on appeal to the Supreme Court and cannot be set aside by the National Court.

d) this setting aside application has not been made promptly.

e) the State defendants have not properly disclosed a defence on the merits.

Setting aside an inter partes default judgment

9. I will consider whether this court is able to set aside an inter partes default judgment first. The National Court Rules upon which the State defendants rely are as follows:

Order 12 Rule 8(2)(a)

“The Court may, on terms, set aside or vary a judgement—

(a) where the judgement has been entered pursuant to Order 12 Division 3 (default judgement);”

Order 12 Rule 35

“The Court may, on such terms as it thinks just, set aside or vary a judgement entered in pursuance of this Division.”

10. These Rules permit this court to set aside a judgement or default judgement that has been entered under Division 3 of Order 12. There is no dispute, as I understand it, that the default judgement sought to be set aside was made under...