Mirebean Enterprises Ltd v Rachael Nathan in her capacity as the Administrator of the Estate of the deceased Nathan Kaugla, died intestate and National Gaming Control Board (2020) SC1984

• Jurisdiction: Papua New Guinea
• Judge: Salika CJ, Batari & Anis JJ
• Judgment Date: 31 July 2020
• Court: Supreme Court
• Citation: (2020) SC1984
• Docket Number: SCA NO. 154 OF 2017
• Year: 2020
• Judgement Number: SC1984

Full Title: SCA NO. 154 OF 2017; Mirebean Enterprises Ltd v Rachael Nathan in her capacity as the Administrator of the Estate of the deceased Nathan Kaugla, died intestate and National Gaming Control Board (2020) SC1984

Supreme Court: Salika CJ, Batari & Anis JJ

Judgment Delivered: 31 July 2020

SC1984

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 154 OF 2017

BETWEEN

MIREBEAN ENTERPRISES LTD

Appellant

AND:

RACHAEL NATHAN in her capacity as the Administrator of the Estate of the deceased NATHAN KAUGLA, died intestate

First Respondent

AND:

NATIONAL GAMING CONTROL BOARD

Second Respondent

Waigani: Salika CJ, Batari & Anis JJ

2020: 16th March & 31st July

APPLICATION TO DISMISS – Order 13 Rule 16(1) of the Supreme Court Rules – Section 155(4) of the Constitution and Section 8(1)(e) and 11 of the Supreme Court Act Chapter No. 37 (Amended to date) – preliminary issues – whether similar grounds had been raised before the Supreme Court – whether decision appealed not based on motion moved by the appellant

SUBSTANTIVE APPEAL – Appeal against exercise of Court’s discretion in refusing to set-aside its earlier decision that granted default judgment – default judgment regularly entered – whether the Court had invoked Order 12 Rule 35 of the National Court Rules before it proceeded to consider the merits of the application to set-aside default judgment – whether want of consideration fatal to the exercise of its discretion – rehearing of application to set-aside Court Order of 7 April 2017 – relevant tests considered - regularly entered default judgment – whether valid reasons disclosed for allowing judgment to be entered by default – reasons for non-attendance – whether application was made promptly – whether defence on merit or meritorious defence disclosed

PRACTICE & PROCEDURES – Order 12 Rule 8(2)(3) and 35 of the National Court Rules – Duty of Court to invoke only the source(s) stated in a notice of motion – whether Court was at liberty to consider Order 12 Rule 8(4) which was not what had been invoked to set-aside default judgment

Cases Cited:

Kitogara Holdings Pty Ltd v. NCDIC and Ors [1988-1989] PNGLR 346

Electoral Commission v. Pastor Bernard Kaku and William Powi (2019) SC1866

Albright Ltd v. Mekeo Hinterland Holdings Ltd (2014) SC1400

Arman Larmer Surveys Ltd v. Chan Consolidated Ltd (2014) SC1609

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

Counsel:

R J Webb SC with counsel assisting P Tabuchi, for the Appellant

G Pipike, for the First Respondent

D Kipa, for the Second Respondent

31st July, 2020

1. BY THE COURT: This matter was heard on 16 March 2020. We reserved our decision to a date to be advised.

2. Parties have been notified, and as such, we now deliver our judgment.

BACKGROUND

3. The plaintiff who had commenced proceedings in the National Court is deceased (the deceased). His interest in the matter is now being pursued by the first respondent as the administrator of his estate. The deceased’s claim in the National Court was this. On 10 August 2016, the deceased went to gamble (i.e., play pokies) at the business premises of the appellant. The appellant held a permit and operated poker machines which were issued and owned by the second respondent. The deceased paid K100 to the appellant and gambled using machine No. 5. During the course of the game, the machine paid or registered credits that were worth K31, 664,981.32. The appellant paid K1,600 to the deceased. The deceased was aggrieved so on 31 October 2016, he filed a writ of summons and statement of claim (the writ) in the National Court (the Court). He sued defendants which included the appellant and the second respondent, for breach of contract where he claimed damages which included the balance of his winnings, that is, a sum of K31,663,381.32.

4. The appellant and the second respondent did not file their notice of intention to defend and defence. So on 27 March 2017, the deceased applied for default judgment. The application was heard ex-parte before the Court on 7 April 2017. In an ex tempore decision made on the same day, the Court granted default judgment in the sum of K31,663,381.32, interest at 8 percent per annum and costs, against the appellant and the second respondent. The appellant and the second respondent heard of the Court’s decision. On 16 June 2017, they applied to set aside the default judgment order of the Court. The application was heard on 15 September 2017. The Court reserved its ruling to 27 September 2017. On 27 September 2017, the Court dismissed the application to set aside default judgment.

5. The appellant’s appeal stems from that decision.

PRELIMINARY MATTER

6. At the start of the appeal hearing, it was brought to our attention that also pending before us, was an application to dismiss the proceeding filed by the first respondent.

7. It was agreed we would hear both the application to dismiss and the substantive appeal together.

GROUNDS OF APPEAL/APPLICATION TO DISMISS

8. We firstly refer to the Appeal Book (AB). It was filed on 12 November 2019. The original Notice of Appeal had been amended. For our purpose, we refer to the Amended Notice of Appeal (ANoA). It is located at Tab 2 of the AB. There are 7 grounds of appeal. At the start of the hearing, grounds 1, 2 and 3 were abandoned. We set out the remaining grounds herein:

(4) His Honour erred in fact in failing to give weight of evidence that the maximum payout for all pokies machines in the country is K10,000.00 for 5 toea machines and K20,000.00 for 10 toea machines and the total amount won by the First Respondent in the sum of K31,664,981.32 was very excessive and unrealistic figure, yet a default judgement was awarded.

(5) The learned primary judge erred in:

(a) failing to consider Order 12 Rule 35 of the National Court Rules on the hearing of the Notice of Motion to set aside the judgment given on the 27th September 2017.

(b) failing to apply Order 12 Rule 35 of the National Court Rules to set aside the 27th September 2017 judgment;

(6) The learned primary judge erred in failing to find that a satisfactory explanation was given for the judgment to be entered in default.

(7) The learned primary judge erred in finding that there was not a defence on the merits or an arguable case.

9. We next refer to the Application Book. It was filed on 10 October 2019 (Application Book). The application to dismiss the appeal begins at page 3 of the Application Book. That application was subsequently amended. The amended application was filed on 20 May 2019 (the application). It is located at page 6 of the Application Book. We note that no amendments were made to the 3 grounds in the original application and as such, they appear the same. We set out the relief and grounds stated in the application herein in part, as follows:

FOR: -

(a) The entire appeal to be dismissed for being an abuse of process pursuant to the inherent jurisdiction and powers of the Supreme Court and in conjunction with its powers under Section 155 (4) of the Constitution and Sections 8(1)(e) and 11 of the Supreme Court Act 1975.

(b) Alternatively, directions be given under Section 185 of the Constitution, Section 42 of the Supreme Court Act 1975 and Order 11 Rule 9 of the Supreme Court Rules 2012 if the powers and jurisdiction of the Court to dismiss the appeal for abuse of process is unclear, is lacking or is wanting.

(c) Or such other order as the Court may make.

GROUNDS:

(a) This appeal is an abuse of process because the Appellant did not file any application before the National Court to set aside the default judgment order of 7th April 2017 and did not file any affidavit explaining its default or failure to file its defence and furthermore, the Appellant did not file any affidavit annexing a draft defence showing that it had a defence on merit.

(b) This appeal is an abuse of process because it is not brought in good faith as the Appellant was not hurt by the judgement of the National Court which ordered damages to be paid by the Second Respondent and not by the Appellant.

(c) This appeal is an abuse of process because the grounds of appeal seeks to challenge the errors made by the National Court in making or granting the order of 7th April 2017 when this order has been challenged in the National Court and the National Court reviewed that order on the 27th September 2017 and made another order thereby events have overtaken the making of the Order of 7th April 2017.

ISSUES

10. The main issues are:

(i) Whether the appeal filed herein is an abuse of process;

(ii) Whether the Court failed to have regard to Order 12 Rule 35 of the National Court Rules, and if so, whether the said want of consideration affected the jurisdictional basis of the application to set aside the default judgment, and whether the ground is sufficient for this Court to overturn the Court’s decision of 27 September 2017.

(iii) Whether there is evidence of satisfactory explanation given for allowing default judgment to be entered, that is, to the extent that this Court is able to grant the relief that is sought in the ANoA;

(iv) Whether there is evidence of proposed...