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CHAPTER 14 � GENERAL MATTERS RELATING TO CIVIL LITIGATION

14.1 INTRODUCTION

The purpose of this chapter is to provide guidance to Magistrates in relation to some of the more common jurisdictional and procedural issues that arise in civil matters. This chapter can be contrasted with Chapter 15, which deals with common substantive matters that arise in civil cases in the District Courts.

14.2 CONSIDERATIONS RELATING TO JURISDICTION IN THE DISTRICT COURT

Before a Magistrate presides over any civil matter in the District Court, he or she must be satisfied that the court has jurisdiction to hear the matter and make an order. Although s 9 of the District Courts Act creates a presumption of jurisdiction with respect to a District Court Magistrate, this is a presumption only, and does not relieve a Magistrate of the duty to ensure that he or she is acting within the jurisdiction of the District Court. The following are some of the important considerations in this regard.

14.2.1 Geographic jurisdiction

Unlike the National and Supreme Courts, which have jurisdiction throughout the entire country, the District Courts have geographical jurisdiction only over the areas specifically provided for by statute. With respect to civil cases, geographic jurisdiction is determined mainly by the residence or place of business of a defendant or the place where the cause of action arose. Sections 13(2)(a) and (b) and 21(5) of the District Courts Act specify limits on the geographic jurisdiction of the court in relation to these matters.

14.2.2 Limitations related to causes of action

The types of cases that may be heard in District Courts are limited by the scope of the sections that provide for their jurisdiction. Section 21 of the District Courts Act provides for general civil jurisdiction with specific restrictions set out in s 21(4).

14.2.3 Monetary jurisdiction

Section 21(1) of the District Courts Act provides that the monetary jurisdiction in the District Court is K10,000 where the court consists of one or more Principal Magistrates, and K8,000 in other cases.

It is permissible for a plaintiff in a civil matter to bring a civil claim in excess of the monetary jurisdiction of the court. However, the amount of any order or judgment is limited by the monetary limit. It is not possible for a party to divide a claim into more than one part for the purpose of bringing each part of the claim within the jurisdiction of the court. This is sometimes referred to as splitting a claim. Section 38 of the District Courts Act prohibits the splitting of a claim.

<Legislation Quotation>

Section 154 of the District Courts Act provides that in cases where a successful set-off exceeds a complaint, judgment will go to a defendant. It also provides that where a bona fide set-off exceeds the monetary jurisdiction of the District Court (and where the defendant does not abandon the excess), no order should be made on the complaint.

14.2.4 Limitations by time

There are various public policies that are served in requiring parties to exercise their rights to bring an action within a certain time after a cause of action arises. These include the fact that memories fade and evidence tends to disappear as time goes by. It is also important that potential defendants are not exposed to an indefinite threat of litigation over something that happened in the distant past.

These interests are reflected in the provisions of the Frauds and Limitations Act. Sections 16-20 provide for the limitation of actions. Once the complainant�s cause of action is identified, this is generally a straightforward matter. The limitation period begins to run when the cause of action accrues.

Section 20 provides that the limitation periods for set-offs and counterclaims are considered separately from the plaintiff�s action. It is therefore possible that a plaintiff�s claim will be barred by the expiry of the relevant limitation period, but that a defendant in the same action will be able to proceed with the cause of action upon which the set-off or counterclaim is based.

14.2.5 Extension of limitation periods

The Limitation Act, at ss 21 and 22, provides for the extension of limitation periods in cases where a plaintiff is under a disability. Generally stated, the scheme of these sections is that in cases where the plaintiff is under a legal disability (due to age or otherwise) at the time that the cause of action accrues, the limitation period does not commence running until the plaintiff is no longer under a disability. In practice, these sections frequently apply to claims of persons who were infants at the time the cause of action accrued. This does not prevent an infant (or anyone else under a disability) from bringing an action while still under a disability: see also 14.3.1 below.

14.2.6 Dissolution of customary marriage

Section 22A of the District Courts Act now provides the District Court with jurisdiction in relation to confirmation of the dissolution of customary marriages.

It is important for Magistrates to recognise that this jurisdiction does not amount to the actual dissolution of a customary marriage. A court must hear evidence, which may or may not include a copy of an order from a Village Court with respect to the marriage, and, if satisfied that the marriage has been dissolved in accordance with custom, the court may issue a certificate accordingly.

14.2.7 Mediation

The District Court has also been vested with the jurisdiction to mediate in any civil matter. However, a particular Magistrate, in order to be qualified to mediate in the District Court, must be �approved by the Judicial and Legal Services Commission for the purpose�: see 14.6.1 below.

14.2.8 Ancillary jurisdiction

Rather than attempt to set out explicitly every type of order that a Magistrate can make in a civil matter, the District Courts Act contains sections that provide general authority to make orders that are appropriate. The regulations add to this flexibility.

14.3 PARTIES

14.3.1 Capacity

It is fundamental to the adversarial system that, except in rare circumstances, people choose for themselves whether or not to bring a civil claim to court. However, there are limitations on a person�s right to bring an action. One factor relating to a person�s ability to bring an action is the legal capacity of the intending claimant.

Without a statutory provision to the contrary, a person who is under a legal disability (from age or otherwise) does not have the legal capacity to bring a claim in court. However, s 39 of the District Courts Act eliminates this restriction in the case of infants. It provides:

<Legislation Quotation>

�(1)      A person under the age of 21 years may sue in a Court in all respects as if he were of full age.�

<End Legislation Quotation>

Similarly, s 39(3) provides that anyone over the age of 16 may be sued. This eliminates the requirement that in all cases a person under the age of 21 sues or is sued through a next friend or a guardian ad litem as the case may be.

However, s 39(3) of the District Courts Act provides Magistrates with a discretion by which they may require the appointment of a next friend or a guardian ad litem in particular cases where a person under the age of 21 brings a claim.

14.3.2 Standing

Although a person may have the legal capacity to bring an action in court, in order for that person to bring an action, he or she must have a sufficient relationship to the dispute or the issues that are to be decided. A sufficiently proximate relationship with these issues is often referred to as �locus standi�. This is not a matter of statute, but derives from the common law. A person is said to have locus standi if that person has a legitimate interest or sufficient interest in the proceedings. The matter of locus standi has been considered in a number of cases in Papua New Guinea.

Mamun Investments Pty Ltd v Paul Ponda [1995] PNGLR 1 is authority for the proposition that a party who has no legal or equitable interest in the subject matter of a claim has no standing to bring an action in relation to that subject matter.

However, standing cannot always be determined by the strict test used in Mamun. If, for instance, the case involves custody of a child or damages for nuisance, there may be no legal or equitable interest in subject matter. In such cases, the test of sufficiently proximate relationship may be the guideline to be used. There is nothing to prevent customary relationships from being taken into consideration in relation to this question.

14.3.3 Corporations as parties

An incorporated company is a separate legal entity from its shareholders or directors. This is as true for a small closely held company as it is for a much larger company. It may bring an action or be sued as any natural person can. In the National Court case of AGC (Pacific) Ltd v Woo International Pty Ltd [1992] PNGLR 100, the court considered an appeal from a District Court judgment involving the liability of a company pursuant to a guarantee. The following excerpt refers to the relevant provision of the Companies Act and is a clear explanation of the capacity of a corporation to sue and be sued.

<Case Quotation>

�The point is further illustrated by looking closely at one of the essential attributes or characteristics of a company as a corporate entity or body. And this is its capacity to sue and liability to be sued: s 18(4) Companies Act. When a wrong is done to the company, the company is the proper plaintiff to maintain, in its own name, an action for redress. Members, as such, have generally no standing to sue on behalf of the company. Similarly, if a company commits a wrong or incurs a liability in the course of its operations, it (and not the members or officials) is the proper defendant. This is sometimes referred to as the �proper plaintiff� rule or the rule in Foss v Harbottle (1843) 2 Hare 461, Ch 12 LJ 319. And the wrong obviously is the wrong (liability) committed by the officers and employees of the company. That a company is capable of suing and is liable to be sued in its corporate name is not merely an administrative convenience; it follows logically from the concept of separate legal entity and principles of agency. Thus, civil liability and criminal responsibility of the company arise from a myriad of situations through the acts and omissions of its servants and agents.�

<End Case Quotation>

It is not sufficient for the proper party to bring an action. That party must be properly named on the complaint. Similarly, a defendant must also be properly named. A Magistrate may only give judgment in favour of or against the parties as they appear on the complaint. If an artificial party is improperly named, then it is not a legal entity at all. An example of this can be seen in the case of The United States of America, on behalf of the Embassy of the United States of America, Papua New Guinea v W R Carpenters (Properties) Ltd [1992] PNGLR 185. In that case, it was held that the Embassy of the United States of America is not a legal person or �an entity� in law and, therefore, is not a proper party to an action.

It is not necessary for a plaintiff to bring an action against all the defendants against whom the plaintiff has a cause of action. Even where a plaintiff has a cause of action against more than one defendant, it is entirely up to the plaintiff to decide which defendant or defendants to sue. Where only one or some of several jointly liable defendants are sued, and the plaintiff is successful against the defendant or defendants who are sued, those defendants may claim against the unnamed defendants for contribution for their portion of liability: see District Courts Act, s 149.

14.3.4 The state as a party

With respect to claims in contract and tort, the Claims By and Against the State Act provides a right and procedure for suing the state:

<Legislation Quotation>

�2.        A person making a claim against the State in contract or in tort may bring a suit against the State, in respect of the claim, in any court in which such a suit may be brought as between other persons.�

<End Legislation Quotation>

The Act is silent with respect to suits against the state where the cause of action arises other than in contract or tort. However, there is case authority to the effect that the state may be sued in relation to declarations and presumably other causes of action.

In all cases where the state is being sued, it is sufficient to name the defendant as �The Independent State of Papua New Guinea�. It is unnecessary to name particular office holders: see Arawe Logging Pty Ltd and Thomas Krokio v The Independent State of Papua New Guinea and Minister for Forests [1988-1989] PNGLR 216.

The Claims By and Against the State Act also provides that service upon the state must be upon the Principle Legal Advisor or a person approved by the Minister to receive service. The Act also provides that �The State� may be a plaintiff in the same way as a natural person.

14.3.5 Unincorporated businesses as parties � The Business Names Act

When bringing an action in court, it is generally necessary for a plaintiff to name a proper legal entity as a defendant. This may be a natural person or some artificial legal entity. However, in some cases, where a corporation or person carries on a business, it is not easy for members of the public (including potential plaintiffs) to know the proper legal name of the entity that they are doing business with, whether it is a person or a corporation. The Business Names Act creates a scheme whereby anyone carrying on a business is obliged to register the name of the business. A public register is created which allows persons to learn the proper legal name of any business. Potential plaintiffs are therefore theoretically able to determine the proper legal name of any entity carrying on business in Papua New Guinea.

However, although it is an offence not to do so, not all legal entities that carry on business bother to register under the Business Names Act. This can make it impossible for a plaintiff to know the legal entity that is operating the business in relation to which the cause of action arose. Section 28 of the Business Names Act provides some relief to plaintiffs in such cases.

14.3.6 Business groups as parties � The Business Groups Incorporation Act

The Business Groups Incorporation Act provides for the creation of a legal entity known as a �business group�. In some ways, a business group is like an incorporated company under the Companies Act. Section 17 provides that a business group is a corporation and may sue and be sued in its corporate name.

14.3.7 Associations as parties � The Associations Incorporation Act

The Associations Incorporation Act provides that an association that is incorporated under that Act is also capable of suing and being sued in its corporate name.

14.4 COMPLAINTS AND DEFENCES

Before a civil case proceeds to hearing, a cause of action must be made out. It should be possible for both the defendant and the Magistrate to discern, before evidence is called, what the claim is about and the basic legal framework on which it rests. In cases in the District Courts, a plaintiff, especially one without representation, may be unsure of the legal basis of the cause of action. Even if the plaintiff is clear, in his or her own mind, of the basis of the claim, it is often the case that the complaint as filed does not set out clearly what the cause of action is.

The National Court Rules require that parties proceeding in the National Court file detailed pleadings. These pleadings ensure that both parties and the Judge understand the basic legal framework of the action and the main factual allegations supporting it.

When dealing with limitations on monetary jurisdiction of the District Court, court registry personnel should be able to explain to intending claimants the relevant limitation on jurisdiction by the amount claimed. It may also be appropriate for a Magistrate to explain to a party the relevant limitation. The options available to the party may also need to be explained. In relation to many claims (especially those that exceed K10,000 by some amount), it can be to a claimant�s practical advantage to bring a claim in the District Court, before a Principal Magistrate, with full knowledge that the maximum monetary award can be no more than K10,000. This may be the case where the costs and delay entailed in bringing the claim in National Court would outweigh the amount that will be foregone by bringing the claim in the District Court.

Formal pleadings are not automatically required in the District Courts. Section 28 of the District Courts Act provides that civil claims are to be commenced by way of a complaint. A complaint, in Form 15, provides for a complainant to state the �subject matter� of the claim only. In many cases, such a statement will be sufficient to alert both the defendant and the Magistrate to the legal basis of the claim.

14.4.1 Involvement of court personnel in drafting complaints

Unrepresented persons frequently ask court personnel for advice about what should be included in a complaint. In some cases, even where no advice is requested, it will be apparent to a clerk who is asked to file a complaint that the complaint is insufficient in some respect. Court personnel sometimes assist a complainant in drafting a complaint. However, court personnel should be very cautious about their involvement in this capacity. Any involvement that could be construed as legal advice should be strictly avoided. In most cases, this will include any advice about the drafting of a complaint.

Legal information may be distinguished from legal advice. It is permissible for court personnel to provide legal information to complainants and defendants. Legal advice is typified by telling a person what he or she should do in particular circumstances. Legal information does not include advice about what should be done, but may provide straightforward factual information about court procedures and requirements.

One exception to the general rule is where, pursuant to s 156 of the District Courts Act, a clerk is asked to file a default summons. In such a case, a clerk is obliged to discern whether a claim is for a debt or other liquidated sum, advise the complainant and proceed accordingly: see 14.6.2 below.

14.4.2 Obtaining particulars from the complainant

There are steps that can be taken to provide clarification of the claim before evidence is called. Pursuant to s 135 of the District Courts Act, a Magistrate may require further particulars of the plaintiff�s claim. The same discretion exists in relation to set-offs pursuant to s 136.

There are two technical drawbacks to s 135. The first is that the defendant must make an application for particulars. A Magistrate might deal with this drawback by informing a defendant that such an application can be made and would be favourably considered.

The second drawback is that the application may only be made at the hearing. Leaving an application for particulars to this late stage of the proceedings can result in an application for an adjournment and subsequent delay where the particulars raise allegations for which the defendant is unprepared.

The effect of the second drawback may be minimised if court personnel who review and file complaints in the first instance are alert to complaints which fall short in detail and which are likely to result in an application under s 135. Details may then be provided in the complaint at the outset of the matter.

14.4.3 Particulars from the defendant

Although greater emphasis is placed upon the particulars of a complaint than on the defence, s 140 of the District Courts Act provides that a Magistrate may order that the defendant, prior to evidence being taken, �give a concise statement of his defence to the complaint and of the points on which he relies�. A Magistrate should make use of this provision where there is any doubt what the real outstanding issues are. Where a defendant is represented or otherwise able to provide one, a written statement should be considered rather than an oral one.

Requiring a concise statement of defence can be an effective means of highlighting the real outstanding issues between the parties. This in turn can eliminate confusion and irrelevant evidence and save time for the court and the parties.

Defendants in claims for debt have a specific obligation to notify the plaintiff of particular defences upon which they intend to rely. These defences, set out in s 153 of the District Courts Act, are illegality, infancy, coverture, a Statute of Limitations or discharge under a law relating to bankrupt or insolvent debtors. Unless notice is given in compliance with s 153, a defendant is prevented from raising any of these defences at the hearing.

14.4.4 Amendment

Where a complaint is not clear, or where allegations have changed since it was filed, an amendment of the complaint to reflect the true issues between the parties may be in order. Section 133(4) of the District Courts Act provides:

Section 138 provides:

As is the case with particulars, an amendment can result in a defendant becoming aware of a significant change in the nature of the complaint. When this happens for the first time at a hearing, an adjournment may be appropriate to allow a defendant to prepare to meet the complaint as amended.

14.5 CIVIL HEARINGS IN THE DISTRICT COURT

14.5.1 Matters to confirm before proceeding

It is useful for a Magistrate and beneficial for parties if, before proceeding with a contested civil hearing, a Magistrate checks to ensure that matters are in order. The following checklist includes routine matters that a Magistrate should consider before proceeding. In District Courts where civil hearings are preceded by a mention at which both parties attend, these matters should be considered at that stage. Where such a preliminary appearance does not take place, these matters should be considered at the earliest opportunity in advance of the leading of evidence.

14.5.2 Procedure at civil hearing

The procedure for a civil hearing in the District Court is similar to that of the National Court. In a contested hearing, parties are entitled to call witnesses and to cross-examine the witnesses called against them. This is an application of the rules of natural justice. Specific application of these rules in a civil context is set out in detail in 4.8.

14.5.3 Defendant called upon to admit or deny facts

Section 139 of the District Courts Act requires that, at the commencement of a civil hearing, the Magistrate reviews the substance of the complaint with the defendant and asks the defendant why an order should not be made against him or her. This step, in effect, obliges a defendant to either deny facts alleged or raise a defence to meet the allegations. This step is therefore capable of bringing out the real issues in the proceedings and, like obtaining particulars or requiring a statement of defence (see 14.4.3), can be a means of simplifying the proceedings before they begin. Of course, if a defendant, on being confronted with the complaint pursuant to s 139, does not show cause why an order should not be made, a Magistrate should consider making whatever order is appropriate in favour of the plaintiff.

When a defendant answers with a denial of the plaintiff�s allegations, or raises facts or a defence in his or her own favour, the defendant�s points must be taken down in writing pursuant to s 145.

When allegations of the plaintiff are not admitted, or where a defence is alleged, the hearing must proceed. Section 141 provides the outline procedure that applies to the hearing. Section 142 provides that a civil hearing should accord as closely as possible with a civil hearing in the National Court.

14.5.4 Recording evidence during a civil hearing

During a hearing, the evidence of all witnesses must be taken down in writing and signed by the witnesses. As any Magistrate knows, this can be a time consuming process. However, it is necessary in order to preserve any meaningful opportunity for either party to appeal a decision following upon the evidence. All exhibits must also be marked and a list of exhibits compiled.

The central rule of evidence is that of relevance. Often a Magistrate is required to inquire into the relevance of evidence that is being adduced during a civil hearing. Irrelevant evidence should not be admitted. Section 137 of the District Courts Act has the effect of limiting the plaintiff�s evidence to that which concerns the demand as set out in the complaint or the summons as amended. For a fuller discussion of relevance and other evidential issues, see Chapter 5.

14.5.5 Contempt etc

Occasionally, during the taking of evidence in a civil hearing, a witness (who may or may not be a party) will either refuse to be examined, deliberately speak falsely (prevaricate) or misbehave in court in a manner that disrupts proceedings or shows disrespect. The District Courts Act contains a number of provisions that allow a Magistrate to deal with such situations.

Section 70 provides that where a witness refuses to be examined, proceedings may be adjourned for up to eight days and the witness committed to custody. If necessary, the same procedure may be repeated when court reconvenes.

A person in contempt may be convicted of an offence pursuant to s 277 immediately upon the offence being committed. A fine of up to K100 may follow. However, unlike other criminal convictions, where a Magistrate is functus officio upon conviction and sentencing, fines imposed under s 277 may be remitted in whole or in part by a Magistrate on the apology of the offender: see 3.1.3 for further discussion of the court�s powers in relating to contempt and related matters.

When dealing with troublesome witnesses, a Magistrate must be restrained. It does not assist matters to react with anger, and to some extent often plays into the hands of the troublesome witness. An even-tempered but firm response works best. It is usually advisable to give witnesses a warning that a repetition or continuation of their conduct will not be tolerated, and to point out that repetition or continuation will be met with specific consequences. In a worst case scenario, where a person in court, whether a witness or not, threatens or uses violence, the provisions of the Arrest Act, the Criminal Code or the Summary Offences Act are available to deal with the circumstances.

14.5.6 Discontinuation to avoid dismissal

Section 147 of the District Courts Act serves as a means for a plaintiff (or defendant advancing a set-off) to avoid the dismissal of a case where evidence at a hearing falls short of what is required to succeed. It allows the plaintiff to discontinue at any stage of the hearing (before judgment) and reserve the right to �sue afresh in respect of the same matter.� Such a step may cause considerable inconvenience and expense to the opposing party and expose the other party to the threat of ongoing litigation. Section 147 provides that a Magistrate may redress this by making an order for the immediate payment of reasonable costs in this event.

If a plaintiff (or defendant, in relation to a set-off) does not discontinue in accordance with s 147, a Magistrate is free to dismiss the claim (or set-off) as the merits of the case on the evidence adduced requires. This is simply part of a Magistrate�s duty to make an order after the parties have completed adducing evidence and have made their submissions.

14.6 DISPOSITION WITHOUT CONTESTED HEARING

14.6.1 Mediation

As mentioned in 14.2.7, a Magistrate may attempt to resolve a dispute by acting in the capacity of a mediator. Such a practice should be encouraged where resources allow.

Although s 22B of the District Courts Act provides for specific persons to act as mediators, it should be remembered that just as parties are free to settle a dispute by themselves out of court through a process of negotiation, so they are free to engage anyone else who they both consent to act as a mediator, arbitrator or in some other capacity in relation to the settlement of their dispute. A Magistrate should encourage such attempts when they do not create difficulties in accommodating last minute requests for adjournments that adversely affect the orderly flow of other cases through the court.

For more information on mediation and out-of-court settlement of disputes, see Chapter 24.

14.6.2 Where defendant does not appear

Section 143 of the District Courts Act provides options to a District Court Magistrate where a defendant does not appear. If there is evidence on oath:

(a)        that the defendant has been served 72 hours before the time of the hearing, or otherwise in accordance with an order for substituted service; and

(b)        it appears that there is no sufficient ground for an adjournment,

the court may either proceed to hear the claim ex parte or adjourn the hearing.

If grounds for an adjournment are apparent, a Magistrate should reset the hearing date far enough in the future so that service may be effected on the defendant at least 72 hours in advance of that date.

14.6.3 Default summons

The determination of disputes should not require more time, expense or use of judicial resources than necessary. Complainants are entitled to the speediest possible justice. The District Courts Act provides for an accelerated procedure where a claim is made for repayment of a debt or for a liquidated sum of money. In such cases, a greater onus is placed upon a defendant to take immediate steps to defend, in the absence of which a complainant may seek judgment without a court hearing. Sections 155-159 of the District Courts Act provide for default judgments. The provisions contained in these sections seek to balance the need for speedy justice with the procedural requirements of natural justice.

14.6.4 Liquidated claims

Default judgments only apply where a complaint is for a liquidated amount of money. A claim in debt is for a specific amount, and is an example of a liquidated claim. So is any other claim where the amount claimed is able to be made certain by mathematical calculations from factors which are in the possession or knowledge of the party from whom the demand is being made. For example, a claim for arrears of rent pursuant to a lease would, in most cases, be a liquidated amount. However, if the claim includes a component for an amount that requires assessment at trial, such as loss of opportunity or general damages, the claim is not a liquidated one.

Unliquidated damages are sometimes considered to be liquidated claims and therefore mistakenly made the subject of a default summons. Claims brought by way of a default summons that do not involve a liquidated claim should not be allowed to proceed. Similarly, court personnel, as well as Magistrates, should be alert to other cases where a default summons is the appropriate means of proceeding, and should provide appropriate information to members of the public whose claims are obviously liquidated ones.

Even where a claim is for a liquidated sum, a Magistrate, in processing a default judgment, should be mindful that, although neither party may be present, he or she is performing a judicial act. Magistrates should be particularly mindful of two matters in particular.

An example of a claim that could be mistaken for a liquidated claim could occur in relation to damages to a vehicle. The amount claimed may be based on a repair estimate obtained by the plaintiff. While this may result in a specific amount being claimed, that specific amount is based on an opinion and has not been incurred as an expense. The basis of the calculation might not be available to the defendant. Even if it is, it is a matter of opinion and not fact until the damages are actually completed and paid for.

A Magistrate, in dealing with a default summons, should also be careful to ensure that the requirements of service have been complied with. These requirements are set out in s 157 of the District Courts Act. Although a defendant may apply to set aside a judgment based on a default summons, he or she is only able to do so if there has been proper service. Otherwise, it may not be until enforcement of the judgment has commenced that the defendant becomes aware of the judgment. At such an advanced stage, an application to set aside a default judgment entails a great deal of wasted time and effort, and it creates added stress and conflict for the parties.

14.6.5 Procedure in relation to default summons

A default summons must be served at least six days before the return date. Service must be in accordance with s 157 of the District Courts Act and be supported by an affidavit. A defendant who wishes to dispute the claim in the default summons must respond at least two days before the return date. A defendant is provided with a form of defence in the default summons itself. Where a defendant files a defence and serves it in accordance with s 157, the defendant is entitled to a contested hearing.

Where a defendant does not file a defence, judgment may be entered in favour of the complainant on the return date. No hearing is necessary and the complainant need not attend. However, a Magistrate, in considering whether to enter judgment in this way, must be mindful that he or she is performing a judicial role.

14.6.6 Where defendant attends in response to default summons

A defendant may appear at the return date for the default summons without having first filed a defence in accordance with the provisions of s 157 of the District Courts Act. When this occurs, a Magistrate has the discretion, but is not obliged, to grant a hearing to the defendant. The onus should be placed on a defendant to satisfy the court that he or she should be granted an opportunity to defend the claim: see s 159; see also 14.6.8 where relevant considerations for setting aside a default judgment are considered.

Where a Magistrate allows a defendant an opportunity to defend, an adjournment may be appropriate and, where a complainant is not present, would certainly be granted. Terms and conditions, including an order for costs may also be appropriate.

14.6.7 Ex parte hearings

Section 143 of the District Courts Act provides that a hearing may proceed in the absence of a defendant where a defendant does not appear in response to a summons or at a time to which the matter has been adjourned.

Experience on the bench teaches that, in nearly all contested cases, there are �two sides to the story�. An ex parte hearing is, by its very nature, a departure from the normal adversarial process. Although ex parte hearings nearly always occur as a result of a choice made by a defendant, and even though an ex parte order can be set aside, it is necessary for a Magistrate to treat evidence adduced at an ex parte hearing with care. The plaintiff must prove the case on the basis of evidence adduced. A Magistrate in an ex parte hearing, as in a contested hearing, must remain neutral and unbiased.

14.6.8 Setting aside ex parte orders

If at an ex parte hearing an order is made in favour of a plaintiff, a defendant may make an application to set aside the order.

The National Court case of Commodity Development Pty Ltd v Peter Karai [ t/c ] PNGLR 463 provides guidance for the exercise of discretion in relation to an application to set aside an ex parte order. The principles that guide Magistrates are the same as those that guide Judges of the National Court in similar applications:

1.         There must be an affidavit stating facts showing a defence on the merits.

2.         There must be a reasonable explanation of why judgment was allowed to go by default.

3.         The application must be made promptly and within a reasonable time.

The fact that in the first instance a defendant is not automatically required by the District Courts Act to file a defence, unless required to do so pursuant to s 138, does not relieve a defendant from demonstrating a defence on the merits.

Where an ex parte order is set aside, a District Court Magistrate has the option of making a final determination of the case on its merits at the time the ex parte order is set aside, or adjourning the case for a hearing. This decision will be guided in most cases by the readiness of both parties to proceed with a contested hearing at the time the ex parte order is set aside and the availability of court time for the hearing.

14.7 ORDERS

Chapter 25 provides guidance for Magistrates in making orders and giving reasons for orders. Further considerations relating to orders and judgments in civil matters are set out below.

14.7.1 Lump sum or payments by instalments

The most common type of order for compensation or damages is an order for the payment of a lump sum of money. Once this type of order is made, the entire sum becomes due and payable immediately. This is how the common law has developed. The National Court has departed from this on occasion using its inherent powers: Aundak Kupil and Kauke Kensi v Independent State of Papua New Guinea [1983] PNGLR 350. However, the District Court has specific jurisdiction to make an order for compensation by instalments.

When making orders pursuant to s 165 of the District Courts Act, a Magistrate should consider whether the ability of a defendant to pay compensation over time may be diminished or impaired and thereby prejudice the ability of a plaintiff to recover.

Further, the terms of an order pursuant to these sections should be spelled out very clearly in order that a defendant will not be able to frustrate the intention of the order.