The Supreme Court has overturned a ruling against the government in a case involving the Pacific Games Organising Committee.
The Committee was established under the Pacific Games Organization Act to conduct the 2019 Pacific Games in Tonga.
On May 17, 2017, the Government of Tonga decided to withdraw from hosting the Games.
On July 27 of that year the Committee decided to wind up its affairs and agreed to terms upon which its employees would be terminated. In each case the Committee accepted a contractual liability to pay them for the early termination of their contracts.
In September 2017, the plaintiffs’ Counsel wrote to the Minister of Finance giving notice that the Government was responsible for payment of the employment contracts.
On January 9 this year the plaintiffs began proceedings to recover their money from the Committee and from the Kingdom.
No statement of defence was filed by the Kingdom and on the plaintiffs’ application judgment in default of defence as to liability was entered against the Kingdom on August 2, 2018.
The Kingdom applied for the default judgment to be set aside on August 22 this year.
The Kingdom argued that there was good reason for its failure to file a defence, as the parties’ preference was to reach a negotiated settlement.
Following negotiations between the two parties, the government received an undertaking that if no settlement was reached the Kingdom would be given time to file its defence. I
In his summing up of the case, Lord Chief Justice Paulsen said it was the Kingdom’s case that the plaintiffs attempted to ‘steal a march’ by applying for judgment by default.
Lord Chief Justice Paulsen said the plaintiffs argued that the Kingdom had been granted extensions of time to file its defence, which was considerably overdue and the ‘undertaking’ did not grant the Kingdom ‘unlimited time’ to file a defence.
When the government failed to respond to the settlement offer, the plaintiffs contend, they were entitled to apply for judgment by default without giving further notice.
“The Kingdom was overdue in filing its defence and it would have been prudent to have done so,” the judge said.
The judge said he accepted that when he applied for judgment on the plaintiffs’ behalf, their lawyer was not breaching his undertaking, at least according to its terms, if not its spirit.
“It was known that the government intended to file a defence if there was no settlement,” the judge said.
Against the background of the extensions of time that had been given, the undertaking, the unfinished settlement negotiations and discussions that had occurred, it was understandable that the government considered there was no need for him to file the Kingdom’s defence.
“The Kingdom’s applications are successful. The judgments in default of defence obtained by the plaintiffs are set aside.”
The main points
- The Supreme Court has overturned a ruling against the government in a case involving the Pacific Games Organising Committee.
- The Committee was established under the Pacific Games Organization Act to conduct the 2019 Pacific Games in Tonga.