Westpac Banking Corporation v Singh [1995] FJHC 49; HBC0436j.94s (9 March 1995)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. 0436 OF 1994

Between:

WESTPAC BANKING CORPORATION
Plaintiff

- and -

SAKATAR SINGH
s/o Bakshish Singh
Defendant

Mr. J. Howard for Plaintiff
Mr. G.P. Shankar for Defendant

JUDGMENT

This is an application by the defendant to set aside a default judgment regularly entered by the plaintiff bank on the 12th of October 1994 for the sum of $20,941.95 together with interest and costs.

The relevant dates in this application may be summarised as follows:

(1) On 8.9.94 the plaintiff bank issued its Writ of Summons out of the High Court Registry in Suva;

(2) On 21.9.94 the Writ of Summons together with an Acknowledgment of Service was personally served on the defendant at Ba Town;

(3) On 6.10.94 the solicitors for the plaintiff bank filed a search for Notice of Intention to Defend which was endorsed "NO DEFENCE ENTERED";

(4) On 12.10.94 default judgment was entered; and

(5) On 28.10.94 the defendant's motion to set aside default judgment was filed.

In the affidavit filed in support of the defendant's motion which is deposed by a clerk in defence counsel's office the following paragraphs appear:

"3. THAT on 26th September, 1994 I sent acknowledgment of service together with $11.00 filing fee."

Nothing is said about how? the acknowledgement was sent or where? it was sent to, nor indeed is it known what became of it. Certainly no 'Acknowledgement of Service' appears in the court file and even the copy acknowledgement annexed to the affidavit incorrectly identifies defence counsel's Lautoka agents as opposed to his Suva agents. (cf. with the backing to the proposed Statement of Defence.) I also note, that the copy acknowledgment very clearly deletes paragraph 4 which relates to an application to seek a transfer of the action by the High Court.

"4. THAT on 12th October, 1994 my principal Mr. G.P. Shankar took to High Court Registry, Suva Statement of Defence for filing. I am informed by Mr. G.P. Shankar and I verily believe that he was told that judgment had already been entered on 6th day of October, 1994 and therefore defence was not accepted."

In this instance quite clearly the statement that "judgment had already been entered on 6th October, 1994" is factually incorrect, and in any event it does not explain why judgment was allowed to go by default in the first place or why two (2) weeks was allowed to pass before the present application was filed.

I adopt the 'statement of principle' which guides the court's exercise of its discretion in applications such as the present as set out in para.403 of Halsburys 'Laws of England' Vol.37 (4th edn.) which reads (inter alia):

"In the case of a regular judgment, it is an almost inflexible rule that the application must be supported by an affidavit of merits, stating the facts showing that the defendant has a defence on the merits, ... For this purpose, it is enough to show that there is an arguable case or a triable issue."

and a little later in the same paragraph:

"There is no rigid rule requiring the applicant to explain why he allowed judgment to go by default, but nevertheless, at least in the case of a regular judgment, such explanation is obviously desirable to enable the court to exercise its discretion, especially as to any and if so what terms should be imposed."

I turn therefore to consider the proposed Statement of Defence in the context of the plaintiff bank's liquidated claim which is based on a demand for "... moneys now due and owing by the defendant to the plaintiff, for advances made to him at his request, together with interest thereon ...", to see whether or not it raises "... an arguable case or a triable issue".

In this latter regard the proposed Statement of Defence begins with a rather unhelpful blanket denial of all liability and then more specifically, "... to pay the sum claimed, interest or costs". The next four (4) paragraphs refers to a pending Civil Action No. 225 of 1992 in the Lautoka High Court which the defendant instituted against the plaintiff bank claiming various declarations, an injunction, accounts and other relief (hereafter referred to as the 'Lautoka action'), and which counsel claims is 'a similar action to' or 'consistent with' the present. I cannot agree.

Although the parties are the same, their capacities are reversed. Further so far as I can ascertain the 'Lautoka action' was primarily instituted by the defendant in an effort to restrain the exercise by the plaintiff bank of its 'mortgagee rights' and to obtain general damages. That differs fundamentally from the liquidated claim in the present case for the recovery of monies lent and advanced to the defendant which have become due and payable.

In brief, the defendant's main argument which is said to be 'common' to both actions, is that there is a serious dispute as to the amount of his liability to the plaintiff bank because the plaintiff bank improperly accepted and cleared forged cheques and debited other unauthorised items to his account.

No application has been made however for a summary order for an account under Order 43 of the High Court Rules as might be expected given the nature of the defendant's 'defence', nor has any attempt been made to identify the forged cheques; the amounts involved; or the dates when the same were debited to the defendants account.

Indeed I am left with the distinctly unfavourable impression that it is sufficient for a borrower in an action for the recovery of monies lent, to merely dispute the amount claimed by the lender without pleading a 'set-off' or counter-claim, in order to raise 'a triable issue' and leaving it to the lender to guess at what the correct amount might be. That cannot be right.

As was said by Lawton L.J. in Ellis Mechanical Services Ltd. v. Wates Construction Ltd. (1978) 1 Lloyds Rep. 33 (an 'Order 14' case) at p.36:

"... it has long been accepted that it is not an answer to a summons for judgment under Or.14 to say 'I dispute the claim and I suspect it has been wrongly formulated'. The ordinary practice is that there must be some real basis, not a shadowy basis for showing that there is an issue worthy of investigation by the Courts. The defendant's answer amounts to no more than 'We dispute the claim'. That is not enough."

(See also: Lord Denning's 'fourth proposition' in Associated Bulk Carriers Ltd. v. Koch Shipping Inc. (1978) 1 Lloyds Rep. 24 at 29.)

As for the 'Lautoka action' which was instituted in July 1992, I note that Sadal J. refused the injunction sought by the defendant in a short ruling delivered in December 1992 and, since then, the action appears to have lain dormant until the issuance of the present proceedings prompted a 'Notice to Proceed' dated 17th October, 1994.

Be that as it may I am firmly of the view that the existence of pending proceedings is not and does not give rise to a 'defence on the merits'. It may support a separate interlocutory application to strike out a claim as being 'vexatious' and an 'abuse of process' or alternatively, an application to stay or transfer the action but not otherwise.

The final paragraph of the proposed Statement of Defence makes reference to various securities held by the plaintiff bank and to the receipt by the plaintiff bank of proceeds under a Crop Lien. Again no dates or amounts are supplied but its relevance in the present context must be considered tenuous.

In this case having carefully considered defence counsel's submissions, the defendant's affidavit and the proposed Statement of Defence, I am not satisfied that the defendant has raised a "defence on the merits" to the plaintiff bank's claim, and accordingly the application is dismissed with costs to be taxed if not agreed.

(D.V. Fatiaki)
JUDGE

At Suva,
9th March, 1995.

HBC0436J.94S