Larsen, Holtom, Maybin Company Ltd v McConnel Dowell (Fiji) Ltd [1995] FJHC 168; Hbc0190d.95s (22 November 1995)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. 0190 OF 1995

Between:

LARSEN, HOLTOM, MAYBIN & COMPANY LIMITED
Plaintiff

- and -

McCONNEL DOWELL (FIJI) LIMITED
Defendant

Mr. A. Gates for the Plaintiff
Mr. G. Keil for the Defendant

RULING

On the 12th of April 1995 the plaintiff company issued a Writ claiming the refund of a sum of $18,550 being the full purchase paid by the plaintiff company to the defendant company in February 1992 for the purchase of a 'XEROX PLAN 2511 WIDE FORMAT PRINTER' machine for use in its business.

In its Statement of Claim the plaintiff company complains that the printer was not reasonably fit for the purpose for which it was required or stated, nor was it of 'merchantable quality'. Complaint was also made of 'the constant breakdown in the operation of the printer' and the failure on the part of the defendant company 'to repair the printer properly, competently, with skill and in good time'. In the result the plaintiff company claims to be entitled 'to reject the printer' and 'to recover the purchase price paid'.

On the 2nd of May 1995 the defendant company's solicitors lodged an 'acknowledgement of service' indicating the defendant company's intention to contest the proceedings. Seventeen (17) days later on the 19th of May 1995 the plaintiff company's solicitors lodged a praecipe searching for a defence and in the absence of any, default judgment was entered on the 22nd of May 1995.

The present application to set aside the default judgment was lodged on the 28th of June 1995. It is supported by an affidavit sworn by the Area Manager of the defendant company in which he deposes to the misplacement of the plaintiff company's Writ as a result of the defendant company shifting its business premises at the time and, more particularly, it is deposed (that):

"9. DESPITE inviting the defendant's solicitors to request further time to file and serve a Defence the plaintiff's solicitors filed a judgment in default of defence without any further notice or warning to the defendant or its solicitors on the 19th May 1995 ...";

and

11. On the 23rd May 1995 the defendant's solicitors wrote to the plaintiff's solicitors expressing their surprise that ... the plaintiffs solicitors had entered judgment in default and giving notice that the defendant intended applying to have the Default Judgment set aside."
    

There is also annexed to the affidavit a proposed Statement of Defence in which the defendant company whilst admitting the purchase of the printer machine by the plaintiff company, denies "... that the printer constantly broke down ..." as alleged by the plaintiff company.

The Statement of Defence also makes reference to the 'trouble-free' use that the plaintiff company had gotten out of the machine "... between its delivery in February 1992 and December 1993 ...". In the result the plaintiff's claim to be entitled to reject the printer and to a refund of the purchase price is seriously challenged.

The managing clerk of the plaintiff company's solicitors has filed an affidavit opposing the application, in which he deposes that: "... on 28th April 1995 a copy of the Writ was hand delivered to the defendant's solicitor's office" and also, to the fact that: "time expired for the service of a Defence on 16th May 1995." Complaint was also made that "the Defendant's conduct has been tardy and has misled the plaintiff into pointless negotiations."

At the hearing of the application counsel for the defendant company referred to the correspondence and dates leading up to the entry of 'default judgment' and submitted that the plaintiff company's solicitors had

"adopted an inconsistent position in their offer to give more time."

Counsel for the plaintiff company on the other hand whilst denying any 'inconsistency' in the offer of further time and the entry of 'default judgment', quite properly conceded that (on paper at least) the defendant company had shown an 'arguable defence' although its explanation for the delay in filing it was doubted. Counsel also highlighted the five (5) weeks that had elapsed from the time default judgment was entered until the present application was brought as further evidence of the defendant company's lack of expedition in the matter.

Bearing in mind the guiding principles laid down in the judgment of Lord Atkins in Evans v. Bartlam (1937) A.C. 473 at 480, I have come to the conclusion that the defendant company has amply demonstrated that there are triable factual and legal issues in the case, not the least of which, is the right of the plaintiff company to rescind the contract and/or recover the purchase price, and whether the defendant company's behaviour amounted to a repudiation of the contract and/or was in breach (if any) of a 'warranty' or a fundamental condition of the sale.

In all the circumstances this is an appropriate case to grant the defendant company leave to defend on the following conditions:

(1) that the defendant company pay into court the sum of $6,000 (six thousand dollars) within fourteen (14) days of the date hereof;

and

(2) That a properly particularised Statement of Defence be filed and served on the plaintiff company within seven (7) days of compliance with condition (1) above.

The action is to follow its normal course thereafter.

(D.V. Fatiaki)
JUDGE

At Suva,
22nd November, 1995.

HBC0190D.95S