BP (South Sea) Company Ltd v Low [1998] FJHC 166; Hbc0577d.96s (1 December 1998)

Fiji Islands - BP (South Sea) Company Ltd v Low - Pacific Law Materials

AT SUVA

CIVIL JURISDICTION

CIVIL ACTION NO. 577 OF 1996

p class=MsoNormal alal align=center style="text-align: center; margin-top: 0; margin-bottom: 0"> BETWEEN:

BPT (SOUTH SEA) COMPANY LIMITED

Plaintiff

AND:

JOHN THOMAS LOW

1st Defendant

AND:

MICHAEL LOW 2nd Defendant

AND:

VASITI NAIKELEKELEVESI LOW

3rd Defendant

In consolidation with No. 591 of 1996

ass=MsoNormal alal align=center style="text-align: center; margin-top: 0; margin-bottom: 0"> BETWEEN:

BPT (SOUTH SEA) COMPANY LIMITED

Plaintiff

AND:

JOHN THOMAS LOW

1st Defendant

AND:

VASITI NAIKELEKELEVESI LOW

2nd Defendant

Ms. M. Chan for the Plaintiff

Mr. A. Tikaram for the Defendants

This is the Defendants' summons dated 8 September 1998 (in action No. HBC 577/96) for the following orders:

1. that the execution of and all further proceedings in this action to enforce the defaudefault judgment dated 4th day of December 1997 be stayed pending the determination of the Appeal;

2. that the exec of Order of this Honourable Court dated 17th day of Augustugust 1998 be stayed pending the determination of the Appeal;

3. that the proceedings under consolidated action No. HBC 591 of 1996 be stayed until the determination of the Appeal; and

4. the cost of this application abide byresult of the said Appeal.

The grounds on which the Defendants rely are set out in the affidavit of MICHAEL LOW sworn tember 1998.

The facts and background to the case

By Originating Summons in Action No. 591/96 filed in Court on 5 Decembe6 the Plaintiff is seeking king numerous Orders and Declarations as set out in the Summons and in support of the application Michael Lee, a Credit Manager, Fiji of the Plaintiff Company has filed an affidavit sworn 4 December 1996.

On 19 December 1996 in C.A. No/96 in the said action the defendants applied for orders as follows and filed an affidavit avit in support:

A. BPT (South Sea) Company limited, a duly incorporated limited liability company havi having its registered office at Suva, Fiji, the Plaintiff in this action, by itself or by its servant or agents or otherwise howsoever be restrained from:

i) advertising for sale or foreclosure and/or exercising its power of sale under unregistered Mortgage Deed dated 24 November 1995 or accepting and/or acting upon any tenders; and

ii) taking any further action until the final determination of the Plaintiff's cl's claim against the 1st and 2nd Defendant and one, Michael Low under High Court Civil Action No. 57 of 1996.

ORn> until further order of this Hois Honourable Court or for such further or other Order as to this Honourable Court shall seem just.

On 19 February 1997 I made the following order by consent on item (ove .

"On the basis of an undertaking by the Plaintiff, which undertaking has been given by the Plaintiff and received and acknowledged by the defendant, there is no need for an order of this Honourable Court as to the relief claimed in (i) of the application and as to the relief claimed in items (ii) of the application, the parties by consent request an adjournment to a date to be fixed at the Honourable Court's discretion".

Then on 11 June 1997 action No. 591/96 was bsent consolidated with Civil Action No. 577/96 which is bets between the same parties except that one Michael Low (brother of 1st defendant is the additional defendant. It was further agreed that no order was to be made on item (ii) hereabove.

According to the dants (as per 1st defendant's affidavit) the two actions viz. 591/96 and 577/96 are inter-reer-related. In 577/96 there is dispute as to accounts and 591/96 is based on a second mortgage in favour of the Plaintiff for the same accounts (in 577/96). The defendants say that the 591/96 action is 'mischievous' knowing well that the security they wish to enforce directly relates to the accounts which are in dispute. If the Plaintiff is allowed to proceed under 591/96 it will greatly prejudice the defendants and place their matrimonial home property in jeopardy and the Plaintiff on the other hand is a substantial corporation.

In view of the aboveement by consent in consolidating this Action No. 591/96 with Action No. 577/96 there was was no need to make any order under item (ii) of the said summons of the defendants (in 591/96).

Consideration of the issue

<0"> It is pertinent to note that despite the constion by consent of the two actions on 11.6.97 the plaintiffntiff went ahead and obtained a default judgment in Action No. 577/96 on 4 December 1997 for the sum of $422,997.00 together with interest at the rate of 1.5% per month from 1 November 1996 until payment in full plus costs.

The defendants' Summons to set aside the said default judgment was heard by me and I made a conditional order on 17 August 1998 as follows:

(a) The default judgment entered herein on 4 December 1997 be set aside on condition that the defendants either deposit the sum of $200,000.00 (about half the judgment amount) in Court or give security for that amount to the satisfaction of the plaintiff within 21 days of this decision failing which the said default judgment shall remain and be of full force and effect and that if deposited the said sum of $200,000.00 shall be placed on interest bearing term deposit by the Chief Registrar;

(b) the defendants file Statement of Defence andterclaim, if any, within 21in 21 days from the date of this decision;

ass=MsoN=MsoNormal style="margin-left: 36.0pt; margin-top: 0; margin-bottom: 0"> (d) I award costs of this application against the defendants in the sum of $200.00 to be paid within 7 days."

On 31 August 1998 the defendants filed Notice of Appeal seeking an Order that my judgment ;be partially set aside in e in that the 1st, 2nd and 3rd Appellants be granted unconditional leave to defend Suva High Court Civil Action No. HBC577 of 1996 and for a Stay (or enforcement of Judgment) thereof"

p class=MsoNormal stal style="margin-top: 0; margin-bottom: 0"> My said decision of 17 August 1998 sets ouarly the reason for my making the conditional order. It is t is not like giving judgment against them. The defendants are merely challenging the exercise of my discretion in making the order to deposit moneys into Court. Should the Plaintiff fail in its claim the said sum will be returned to them. A substantial sum, which is very close to half a million dollars, is involved and the defendant has not convinced me that the whole amount claimed is in dispute.

There are two parts to the order in my said Decision. Oneo deposit money into Court, and the other is to file a Stat Statement of Defence. If the defendants are challenging the payment into Court, what about the filing of Statement of Defence within the time allowed. They have not done that and no explanation has been given for not doing so.

Having heard both counsel and having considered the affidavit evidence filed herein subject to what I say hereafter, I am not convinced that there are cogent reasons for allowing the application of the defendants. On the facts and circumstances of this case, in the exercise of my discretion I consider that that was the proper order to make. No adequate or any reason has been advanced why they do not wish to comply with the order except that they disagree with that part of the order against which they are appealing. They neither say that they cannot raise the sum ordered nor do they say that they cannot give security for the award to the satisfaction of the Plaintiff. Nothing of course is said as to why Statement of Defence has not been filed.

Although the defendants had failed to file Statement of Defence when they should have, there is one aspect of this case which has caused me some concern and that arose when I heard this application and another application in Action No. 591/96. It is this. When the Plaintiff obtained default judgment there was already an order by consent for consolidation of the two actions.

Although was no Order of the Court as to what procedure is to be followed on consolidation, the Plae Plaintiff went ahead and obtained judgment as if the two actions are to be dealt with separately. What was the purpose of consolidation then?

In my view the procedure ad by the Plaintiff was not proper. The Court could have given directions as to the future core course of action had counsel asked for it. Also the fact that the subject-matter of the two actions are so closely related particularly in relation to how much is exactly owed by the defendants which involves delving into accounts the right decision cannot be arrived at without a hearing on consolidation. For this reason also it was improper of the Plaintiff to proceed the way it did. I raised this issue during the hearing of this application but no satisfactory or any explanation was forthcoming.

Although I am merely dealing with certain specifiect of the application, in view of my comments on what I th I think was a procedural irregularity, the proper course for Plaintiff to follow is to proceed by following the procedure laid down on consolidations or seek further direction from the Court.

p class=MsoNormal stal style="margin-top: 0; margin-bottom: 0"> The only ion Appeal is whether the Court erred in making the order for deposit of money into Court.

The order by consent to consolidate is before the Court and so is the default judgment. The counscounsel are facing a dilemma. The default judgment has to be got rid of first before further direction on consolidation could be given by the Court. If counsel were to agree by consent to set aside the default judgment unconditionally then the Order which, unless Counsel wish to address me, I would make is that the Plaintiff file Statement of Claim (incorporating in it the claims in the two actions) within 21 days and thereafter the action take its normal course. This would save a lot of unnecessary waste of time.

For these reasons, although I do not find any merit in the defendanpplication, however, bearing in mind that when I heard the the setting aside of judgment I was being asked to decide on that issue alone and taking into account the observations that I have made on what I think was a procedural irregularity, I will grant the application for stay and the other orders sought in items 2 and 3 of the Summons. The costs are to be costs in the cause.

D. Pathik

Judge

At Suva

1 December 1998

Hbc0577d.96s