Automart Ltd v Reddy [1992] FJHC 40; Hbc0369j.91s (23 September 1992)

IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

ACTION NO. 369 OF 1991

BETWEEN:

AUTOMART LIMITED
a limited liability company
having its registered office at Suva
Plaintiff

AND

MANIKAM REDDY
(f/n Batiga) T/A Manikam's Cab
of Rosawa Street, Labasa, Businessman
Defendant

Mr. M.B. Patel: For the Plaintiff
Mr. T. Fa: For the Defendant

Dates of Hearing: 14th, 21st April and 28th August 1992
Date of Interlocutory Judgment: 23rd September 1992

INTERLOCUTORY JUDGMENT

The Defendant applies by Notice of Motion dated 24th of January 1992 to set aside a judgment in default of appearance entered in favour of the Plaintiff on the 19th of August 1991 in the sum of $25,231.32 together with interest at the rate of $9.32 per day from the 1st of August 1991 until payment and $65.00 costs. The application is made under Order 13, Rule 10 of the High Court Rules 1988.

The facts of this case are as follows:-

On the 19th of August 1991 a default judgment was entered against the Defendant in the High Court at Suva. Thereafter on the 23rd of August 1991, the solicitors for the Plaintiff filed a Bankruptcy Notice against the Defendant at the Labasa Magistrate's Court. Due to the Defendant's non-appearance on the 29th of October 1991 a Receiving Order was made against him. On the 7th of February 1992 the Defendant filed a Notice of Motion seeking an order that would stay the execution of the default judgment. On the 7th of February 1992 I granted the stay requested.

On the 10th of March 1992 the Plaintiff requested and was granted consent from the Official Receiver to take legal proceedings.

The Statement of Claim alleges that the Defendant owes the Plaintiff the money it claims on account of the sale of various motor vehicles by the Defendant on behalf of the Plaintiff between the 15th of December 1990 and the 28th of May 1991. The present amount claimed is the balance including the interest, said to be due to the Plaintiff.

In addition the Plaintiff states that four cheques were drawn by the Defendant in favour of the Plaintiff but were dishonoured and the Plaintiff therefore claims the sum of $20.00 on account of dishonour fees.

In seeking leave to set aside the default judgment the Defendant swore an affidavit on the 22nd of January 1992 exhibiting to it a proposed Statement of Defence. The reason given by the Defendant for his not opposing the Bankruptcy Petition against him and for his non-appearance at the Labasa Magistrate's Court on the 29th of October 1991 is that this was the first time anybody had issued legal proceedings against him and he was not very familiar with the procedures he should follow.

The proposed Defence denies that the Defendant owes the Plaintiff any money at all and further that there was no agreement between him and the Plaintiff to pay interest. Paragraph 3 states simply that the cheques drawn by the Defendant in favour of the Plaintiff had nothing to do with the account or the sum claimed by the Plaintiff. There is no amplification of this statement.

The Defendant also seeks further particulars of the claim but in my view the crux of the Defendant's case rests upon paragraphs 6, 7 and 8 of the proposed Defence. These paragraphs allege that the Defendant was employed by the Plaintiff to sell its cars in Labasa on a commission basis. He had sold 12 cars and was entitled to a commission of $2,000.00 for each car, amounting in total to $24,000.00 which has not been paid by the Plaintiff.

Paragraph 7 states that the Defendant placed an order with the Plaintiff to purchase two Toyota Crown diesel cars at a price of $39,000.00. It states that the Defendant paid a deposit of $13,000.00 and the balance of $26,000.00 was approved for payment by the Fiji Development Bank. The Defendant further says that the cars were not purchased because the Plaintiff brought in benzene cars and thereafter the Defendant stopped the transaction and instructed the Bank not to release the sum of $26,000.00.

Paragraph 8 claims that on or about 30th of May 1991 the Defendant paid a sum of $4,000.00 into the Plaintiff's Bank account in Lautoka for which sum the Plaintiff has not accounted.

In response to these allegations the Plaintiff by an affidavit sworn on the 5th of March 1992 generally denies the Defendant's claims. The Plaintiff alleges that the Defendant failed to act promptly to set aside the judgment entered against him and that he has been simply delaying the Plaintiff so as to gain time. The Plaintiff also says that it puts the Defendant to strict proof of the matters stated in paragraph 6 of the proposed Defence, apparently at least tacitly conceding that the Defendant may have some defences to put before the Court.

In Evans v. Bartlam (1937) A.C. 473 the House of Lords held that although there is no rigid rule requiring an Applicant to explain why he allowed judgment to go by default, nevertheless at least in the case of a regular judgment, such explanation is obviously desirable. At page 480 Lord Atkin said:

"The principle obviously is that unless and until the Court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure."

The discretion to set aside the judgment is unrestricted and unconditional. Order 14 Rule 11 of the High Court Rules states that any judgment given against a party who does not appear may be set aside or varied by the Court on such terms as it thinks just. The test is not whether a Defendant has a good defence on the merits but whether he is able to show a defence which discloses an arguable or triable issue - see Drayton Gift-ware Limited v. Varyland Limited (1982) 132 New L.J. 558.

In some ways the present case is similar to that of Miles v. Bull (1968) 3 ALL E.R. 632 in which Megarry J. gave the Defendant leave to defend because he had satisfied the Court that there was "an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial", these being the words in Order 14 Rule 3.

His Lordship held there that the last words were very wide. They also seemed to him to have special significance where, as in the case before him, most or all of the relevant facts were under the control of the Plaintiff and the Defendant would have to seek to elicit by discovery, interrogatories and cross-examination those which would assist her.

In the instant case it seems to me that most of the relevant facts are under the control of the Plaintiff and it seems to me a suitable case for the delivery of interrogatories after discovery has been obtained. The answers to those interrogatories may well give the Court and indeed the parties a more realistic appreciation of their relative strength and weaknesses.

Accordingly I am prepared to give the Defendant the order he seeks and I order that the Defendant deliver a defence to the Statement of Claim within fourteen days of the date of this order and thereafter the pleadings take their normal course. The costs of this application will be in the cause.

JOHN E. BYRNE
J U D G E

HBC0369J.91S