National MBF Finance (Fiji) Ltd v Manaseitava [2001] FJHC 188; HBC282.2000 (4 May 2001)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 282 OF 2000

Between:

NATIONAL MBF FINANCE (FIJI) LIMITED
Plaintiff

And

EMILY MANASEITAVA
Defendant

Ms. P. Narayan for Plaintiff
Mr. I. Tuberi for Defendant

DECISION

By motion dated 7 November 2000 supported by an affidavit the applicant/defendant has applied to set aside default judgment entered against her in this action on 31 August 2000.

An affidavit in reply has been filed by the respondent/plaintiff and a reply thereto by the applicant. Also, as ordered, the parties filed written submissions.

On 7 July 2000 the Plaintiff had issued a Writ of Summons against the defendant for the sum of $22,843.52 being the balance sum of money due under a Hire Purchase Agreement (hereafter referred to as the ‘agreement’) as set out in detail in the Statement of Claim.

The loan was to the defendant’s husband Dominiko Manaseitava. She was the guarantor under the agreement. Her husband died on 19 June 1999.

Since the Statement of Defence was not filed, the plaintiff obtained a default judgment for the said sum on 31 August 2000.

Consideration of the application

In her affidavit in support of the application, the essential point raised the applicant is that although she signed the guarantee document she was not explained its contents. This was on 19 August 1995. She said that she "had no knowledge and was never involved either directly or indirectly with my husband’s business or any dealings or transactions pertaining to the same." But she says that she was given copies of the Plaintiff’s letters of demand concerning her husband’s debt sometime in March or April 2000 after the repossession and the sale of the vehicle the subject of the agreement.

On a mention date in this action on 2 March 2001, the Deputy Registrar allowed defendant to file proposed Statement of Defence and a Reply to Affidavit in Reply to plaintiff’s affidavit.

The plaintiff/respondent in Reply states, inter alia, that it was a regular judgment and that the defendant has no defence to the action. It says that the amount is justly due under the Guarantee and Indemnity agreement dated 29 August 1995.

It is asking that the defendant’s application be dismissed with costs.

The setting aside of a default judgment is always a discretionary matter for the Court and under Order 13 Rule 10 of the High Court Rules 1988 it is provided that:

"Without prejudice to rule 8(3) and (4), the Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this order."

The judgment herein will only be set aside if the defendant produces evidence that she has a good defence on merits or raises an arguable or triable issue.

There are two main points which the defendant has raised in her proposed defence. One is that the content of the guarantee document was not explained to her by Mrs. Duri Whippy who brought the document to her for signature. There is no affidavit before me from the Plaintiff denying the allegation except to say, according to Mr. Taniela Matakibau (Legal Executive with Plaintiff), that "it is strict policy of the plaintiff that all agreements executed by its customers and their guarantors be explained to them and such was that case in this instance" (Item 4 of affidavit of 1 February 2001). The other point raised by the defendant is contained in item 4 of proposed Defence as follows: "... that the guarantee period only lasts for the lifetime of the Hirer and since the Hirer has died on the 19th day of June 1999 of Heart attack her guarantee lapses on the above date."

In these circumstances the Court has to consider whether the judgment should be set aside or not. I am reminded of the words of Lord Denning M R in Burns v Kondel (1971) 1 Lloyd’s Rep. 554 at 555 that the defendant need only show a defence which discloses an arguable or triable issue." This I find the defendant has done.

In considering this application I have borne in mind certain principles on which a Court acts where it is sought to set aside a judgment arising out of a failure to comply with the Rules. They are contained in the following passages in the judgment of Lord Atkins in Evans v. Bartlam (1937) 2 All E.R. 646 at 650:

"I agree that both R.S.C. Ord. 13, r. 10, and R.S.C., Ord. 27 r.15, gives a discretionary power to the judge in chambers to set aside a default judgment. The discretion is in terms unconditional. The courts, however, have laid down for themselves rules to guide them in the normal exercise of their discretion. One is that, where the judgment was obtained regularly, there must be an affidavit of merits, meaning that the applicant must produce to the court evidence that he has a prima facie defence. It was suggested in argument that there is another rule, that the applicant must satisfy the court that there is a reasonable explanation why judgment was allowed to go by default, such as mistake, accident, fraud or the like. I do not think that any such rule exists, though obviously the reason, if any, for allowing judgment and thereafter applying to set it aside is one of the matters to which the court will have regard in exercising its discretion. If there were a rigid rule that no one could have a default judgment set aside who knew at the time and intended that there should be a judgment signed, the two rules would be deprived of most of their efficacy. 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 been obtained only by a failure to follow any of the rules of procedure."

And at 656 it is further stated:

"The primary consideration is whether he has merits to which the Court should pay heed; if merits are shown the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. This point was emphasized in Watt v. Barnett [1878] UKLawRpKQB 28; 3 Q.B.D. 363 ..................... He has been guilty of no laches in making the application to set aside the default judgment, though as Atwood v. Chichester, [1878] UKLawRpKQB 4; 3 Q.B.D. 722 and other cases show, the Court, while considering delay, have been lenient in excluding applicants on that ground. The Court might also have regard to the applicant’s explanation why he neglected to appear after being served, though as a rule his fault (if any) in that respect can be sufficiently punished by the terms as to costs or otherwise which the Court in its discretion is empowered by the rule to impose. The appellant here has an explanation, the truth of which is indeed denied by the respondent, but at this stage I see no reason why he should be disbelieved on what appears to me to be a mere conflict on affidavits."

Plea of non est factum

On the plea of non est factum, in the matter of allegedly not being explained the guarantee, the plaintiff says that she willingly signed the guarantee; she is literate being the senior programme assistant.

Upon the effect of signing a legal document the learned counsel for the plaintiff referred to the cases of Gallie v. Lee and Another (1969) 1 All E.R. 1062 or 1072 C.A. and Saunders [Executrix] Estate of Rose Maud Gollie (deceased) v. Anglia Building Society [1970] 3 All E.R. 973. Although what is stated in these cases is clear, nevertheless without a trial of the issue it would not be possible to say what the true position was in regard to the defendant’s complaint although it would appear that she cannot avoid liability on a plea of non est factum. In the footnote No. ‘10' to Halsbury Vol.12 4th Ed. para. 1366 it is stated:

"A person who looks through an agreement and signs it, although he says he does not understand it, cannot avoid liability on a plea of non est factum because it does not carry out a prior verbal agreement: Blay v. Polland and Morris (1930) 1 K.D. 628 C.A."

On the aspect of not being ‘explained’ the following passage from Hals. (ibid) para 1336 ought to be borne in mind by the defendant:

"Before a party executes a deed, it should be read by him, or correctly read over or fully and accurately explained to him, and he cannot be required to execute it until this has been done. If he is content to execute it without so informing himself of its contents, it will in general be binding on him, even though its contents are materially different from what he supposed, and even though he is himself illiterate or blind. However, if the party executing the deed acts with reasonable care and yet is mistaken or misled (in particular, if he is illiterate or blind and it is falsely read over or falsely explained to him), and in consequence there is radical or fundamental distinction between what it is and what he believed it to be, not attributable to a mistake of law as to its effect, the plea of non est factum will be available and the deed will be void. Even though all the requirements for avoiding the deed on this ground may not be fulfilled, a misled executing party may be able to treat the deed as voidable under the law relating to misrepresentation, or it may be void as executed under a mutual mistake of fact."

Conclusion

To conclude, bearing in mind the affidavit evidence before me and considering the authorities, I consider that certain essential facts remain in dispute and there is also question of law involved as a result of the plea of non est factum. There is an arguable defence. Whilst I say this I still think the defendant will have an uphill battle trying to satisfy the Court in regard to the plea that she has raised. I therefore think that the issue herein should not be finally resolved by me on the affidavits alone filed herein but should proceed to trial.

I therefore allow the application and set aside the default judgment. The defendant is ordered to file and serve Statement of Defence within 14 days. Thereafter the action to take its normal course. The costs are to be costs in the cause.

D. Pathik
Judge

At Suva
4th May 2001