Kuriuci v BP (SP) Ltd [2000] FJHC 36; HBC0189J.1999S (6 March 2000)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO: HBC 189 OF 1999

BETWEEN:

LUSIANA KURIUCI
Plaintiff

AND:

BP (SP) LIMITED
1st Defendant

NEW INDIA ASSURANCE CO. LIMITED
2nd Defendant

Counsel: Mr A. Kato for Plaintiff
Mr M. Young for First Defendant

Hearing: 17th February 2000

Judgment: 6th March 2000

JUDGMENT

On 16th April 1999 the Plaintiff issued a writ of summons against the First and Second Defendant. She claimed for negligence in respect of the cancellation of a motor vehicle insurance policy in respect of her taxi Registration Number CP 906.

The Second Defendant filed a Statement of Defence on 11th May 1999. The First Defendant did not file a Defence, and Judgment in Default was entered on the 1st of November 1999.

The First Defendant now applies for Judgment in Default to be set aside and for leave to be granted for Third Party Notice to be issued to join Credit Corporation as a party.

The affidavit of Satendra Kumar, Acting Credit Manager of the First Defendant, states that no Defence was filed in this case because the parties were making an effort to settle the matter out of court. He states that the facts of the case are that the Plaintiff had a loan from the First Defendant to purchase CP 906 in the sum of $20,150.00 plus interest. The First Defendant had a Bill of Sale over the vehicle as security for the loan. The First Defendant took out insurance cover over the vehicle, with the Second Defendant.

In February 1999 the loan was taken over by Credit Corporation in full. The outstanding debt at that time was $13,586.00. The First Defendant then cancelled the insurance cover, and advised Credit Corporation, by letter to ensure that it took out fresh insurance in respect of the vehicle.

The basis of the writ of summons is that the vehicle subsequently got damaged in an accident. There was no insurance cover, and the Plaintiff now claims for the uninsured damages and consequential loss.

The applications were heard on 17th February 2000. Mr M. Young for the First Defendant submitted that the affidavit of Satendra Kumar disclosed a meritorious defence, and that the First Defendant should be permitted to go to trial on the merits of the case. On the issue of Third Party Notice he submitted that the First Defendant had shown that it had a good claim against Credit Corporation.

Mr A. Kato for the Plaintiff agreed that the First Defendant had a good claim against Credit Corporation, but submitted that the defence disclosed was not a meritorious one. He submitted that the Plaintiff was never informed that the insurance cover had been cancelled, and that the Plaintiff had paid the First Defendant the cost of the premium for the relevant period.

There is no suggestion that the judgment entered was irregular. The question of whether or not judgment should be set aside is a discretionary one. The White Book (Supreme Court Practice 1997 p.139) states as follows:

“The purpose of the discretionary power is to avoid the injustice which may be caused if judgment follows automatically on default. The primary consideration in exercising the discretion is whether the defendant has merits to which the court should pay heed, not as a rule of law but as a matter of common sense, since there is no point in setting aside a judgment if the defendant has no defence, and because, if the defendant can show merits, the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. Also as a matter of common sense the court will take into account the explanation of the defendant as to how the default occurred.”

The reasons given for the delay in this case, that is that there were efforts to settle the matter, and that there was a change of staff at the First Defendant’s company, are not compelling.

However, the defence disclosed in the affidavit of Satendra Kumar, and the draft Defence and proposed Third Party Notice, clearly disclose matters which ought to be permitted to be heard on the merits. The Plaintiff alleges a breach of duty on the part of the First Defendant when the insurance cover was cancelled. The First Defendant says that it ceased to have any responsibility for the vehicle, when it was refinanced by Credit Corporation. If this is so, then the proposed Defence goes to the very heart of the Statement of Claim. The papers annexed to the affidavit of Satendra Kumar shows that the First Defendant’s position regarding the insurance cover remained consistent. Furthermore paragraph 8(c) of the proposed Statement of Defence states that:

“The amount paid by Credit Corporation to settle the Plaintiff’s debt was adjusted for the amount owed in respect of the insurance cover over the vehicle so that the Plaintiff was only charged for the period 31 October, 1997 to the date the debt was cleared by Credit Corporation.”

Given the fact that the First Defendant claims the Plaintiff has no cause of action against it, it is clear that the Defence is a meritorious one. As such, despite the less than impressive reason for the non-filing of the Defence, I allow the application to set aside judgment in default and grant the First Defendant leave to defend, provided the Defence is filed with 14 days from the date of this decision.

I now turn to the application to file Third Party Notice.

Order 16 Rule 1 provides:

(1) Where in any action a defendant who has given notice to defend -

(a) claims against a person not already a party to the action any contribution or indemnity; or

(b) claims against such a person any relief or remedy relating to or connected with the original subject-matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or

(c) requires that any question or issue relating to or connected with the original subject-matter of the action should be determined not only as between the plaintiff and the defendant but also as between either or both of them and a person not already a party to the action then .... the defendant may issue a notice ..... containing a statement of the nature of the claim made against him, and, as the case may be, either of the nature and grounds of the claim made by him or of the question or issue required to be determined.”

Rule 1(2) provides that a defendant to an action may not issue a third party notice without the leave of the court unless the action was begun by writ and he issues the notice before serving his defence on the plaintiff.

In this case the action was begun by writ, and the Defendant is yet to serve the proposed Defence on the Plaintiff. There is therefore no requirement for leave.

Judgment in default is set aside. Defence must be filed within 14 days. Costs are in the cause.

Nazhat Shameem
JUDGE

At Suva
6th March 2000

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