Wati v Shell Fiji Ltd [2002] FJHC 226; HBC0060D.2002S (29 August 2002)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0060D OF 2002S

BETWEEN:

SUNILA WATI
(father's name Dukhi Prasad)
of Lot 26, Maqbool Road,
Nadera, Suva, Domestic Duties.
Plaintiff

AND:

SHELL FIJI LIMITED
a limited liability company having its registered
office in Suva.
Defendant

Counsel for the Plaintiff: E. Veretawatini of Eroni Veretawatini Esq.
Counsel for the Defendant: J. Flower of Messrs Q.B. Bale & Associates

Date of Decision: 29 August 2002
Time of Decision: 9.30 a.m.

DECISION

This is an Application to Set Aside a judgment entered in default of defence pursuant to O.19 r.9 of the High Court Rules and under the inherent jurisdiction of the Court.

The Plaintiff filed a Writ of Summons against Shell Fiji Limited (the Defendant/Applicant) on 11 February 2002 alleging that through the negligent driving of one of its servants, the plaintiff suffered severe injuries, the particulars of which are detailed in the Statement of Claim.

According to the Affidavit of Service filed on 12 March 2002 by the plaintiff the Writ was served on the defendant at its registered office in Walu Bay, Suva on 28th February 2002. On 26th April 2002 the plaintiff, having searched and finding that the defendant had failed to give notice of its intention to defend within the prescribed time, entered interlocutory judgment against the defendant for damages to be assessed and costs. The interlocutory judgment is dated A26th April 2001' quite incorrectly and presumably a mistake in the Court's Registry. The date should read 26th July 2002.

On 24 June 2002, the defendant filed Summons which prayed for the following:

"1. That the Judgment in Default of Defence entered against the defendant on 26 April, 2001 be set aside and that the date there to be amended to read 26 April, 2002.

2. That the defendant be granted leave to defend the claim herein.
   
3. That there be a Stay of Execution of the Judgment pending the hearing of the application.
   
4. That the costs of this application be made costs in the cause."
   

In its Affidavit in support of the Summons, the defendant's Finance Manager Mr Steven Haines deposed that it had not received the Writ of Summons which according to the Affidavit of Service the plaintiff had sworn, had been served on the defendant's registered office in Walu Bay, Suva on 28 February 2002. Further Mr Haines stated that the Affidavit of Service does not identify to whom the documents were served and at any rate, the Acknowledgment of Service invariably would have been handed over to the defendant's solicitors. As the latter did not possess a copy, the defendant argued, it must be presumed that the Writ was not served. A proposed Statement of Defence was also annexed to this Affidavit.

In her affidavit in reply, the plaintiff clarified, in response to the defendant's assertion of non-service of the Writ, that the document was served on the receptionist at the defendant's Walu Bay office and that the endorsement on the back of the Writ was actually done by the same Mr Steven Haines, Finance Manager who had sworn to the contrary. The plaintiff filed as "Annex A" to her Affidavit a copy of the Writ that amongst other things bore the defendant's Finance Manager's endorsement.

The Court on 9 July, 2002 heard arguments by both Counsel on the defendant's Summons to Set Aside.

At the outset the defendant's Counsel on behalf of the Finance Manager and the deponent of the Affidavit in Support, offered his apologies to the Court. He acknowledged that the Writ had in fact been served on the defendant as detailed in the Affidavit of Service, contrary to the assertions outlined in his Affidavit.

The confusion arose, according to Counsel, from the fact that the defendant's Finance Manager do receive many documents in the course of his daily duties, and this may have contributed to an oversight to attend to this particular document.

While the Court accepts the retraction and subsequent apology made by the defendant on the service of the documents, it is nevertheless mindful of the fact that this is not the first incident that has come before it, where the defendant had equally denied receiving or being served by Court documents, notwithstanding the affidavit sworn by the other party, to the contrary. It could very well be the case that defendant and its management are inundated on a daily basis with documents and papers of all sorts. It would however do itself a great deal of good as a law-abiding corporate citizen, if it were to take more care and give due recognition to Court documents it receives no matter the nature of the claim or the party serving.

In its Summons, the defendant relies on O.19 r.9 and O.45 r.10 of the High Court Rules and the inherent jurisdiction of the Court. Counsel on behalf of the defendant argued that although the defendant had failed to give notice of its intention to defend through omission, it nevertheless possesses a perfectly good defence. The defence on the merits need only disclose an arguable or triable issue.

The defendant admits that an accident involving one of its vehicles, Registration No. DJ 799, and a taxi Registration No. E 0584 driven by one Hari Prasad Sharma f/n Tota Ram Sharma had occurred on 8 October 1999. While the defendant is unaware that the plaintiff had been a passenger in the taxi at the time of the accident nor that she had suffered injuries as claimed as a result of the collision, it has evidence to show that the taxi driver, Hari Prasad Sharma, was the driver found by the Police to be at fault. Mr Sharma, according to the defendant's counsel, was subsequently convicted of careless driving and fined $35.00 by the Suva Magistrates' Court (Magistrates' Court Case No. 5451/01). As such, Counsel argued, Mr Sharma, the taxi driver, almost certainly should be the defendant in this proceedings instead of the present defendant.

The plaintiff's Counsel maintained that there is no ground to set aside the judgment which had been regularly obtained. Generally a default judgment can only be set aside if it was irregularly obtained. In this instance, the Counsel argued, the Writ had been properly served on the defendant, a fact now acknowledged by the defendant, the Affidavit of Service filed and followed by Search for Defence, before the judgment in default of defence was entered. There was no instance of irregularity at all.

Both Counsel, following the hearing, consented to filing skeleton arguments and the Court reserved its decision.

THE LAW ON SETTING ASIDE

The law is fully explored by Lord Greene M R in Craig v. Kanssen [1943] 1 KB, 256. Lord Greene first referred to Daniell's Chancery Practice, 8th ed; Vol. I., p. 708 which stated:

"A judgment may also be set aside for irregularity. If the irregularity consists in non-compliance with one of the rules, the Court or the judge may either set it aside, or amend or otherwise deal with it in such manner and upon such terms as the Court or judge may think fit."

Lord Greene then referred to Anlaby v. Praetorious [1888] 20 QB 764 where although a judgment had been obtained in default of defence, it was found to be made prematurely and therefore irregular.

There Fry LJ said at p. 768:

"In such a case the right of the defendant to have the judgment set aside is plain and clear. The Court acts upon an obligation; the order to set aside the judgment is made ex debito justitiae, and there are good grounds why that should be so, because the entry of judgment is a serious matter, leading to the issue of execution, and possibly to an action of trespass."

Fry L J later on declared that:

"There is a strong distinction between setting aside a judgment for irregularity, in which case the Court has no discretion to refuse to set it aside, and setting it aside where the judgment, though regular, had been obtained through some slip or error on the part of the defendant, in which case the Court has a discretion to impose terms as a condition for granting the defendant relief."

Lord Greene also referred to Hamp-Adams v. Hall [1911] UKLawRpKQB 129; [1911] 2 KB 942, a case for default in appearance, as authority for both the exercise of the Court's jurisdiction under the rules and as well as illustrative of the exercise of the Court's inherent jurisdiction.

In discussing all of the cases above, Lord Greene concluded that they clearly establish

"That a person who is affected by an order which can properly be described as a nullity is entitled exdebito justitiae to have it set aside." (Page 262)

The principles enunciated by Lord Greene M R in Craig v Kanssen (supra) was followed by the Fiji Court of Appeal in Subodh Kumar Mishra v Car Rentals (Pacific) Ltd., FLR Vol. 31 1985, 49.

The inherent jurisdiction of the Court to set aside a default judgment that appears to have been by all accounts, regularly obtained can only be done in the most severe of circumstances. The Applicant must satisfy the Court that there is a reasonable explanation why the judgment was allowed to go by default, and at any rate there is a very strong defence and that to allow the judgment to stand would be patently wrong in law.

In Evans v Bartlam [1937] AC 473, Lord Atkin ruled that Order XIII., r.10, which is the equivalent of O.13 r.10 of our High Court Rules, gave a discretionary power to the judge in Chambers to set aside a default judgment. He added:

"The discretion is in its 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 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." (P. 480)

The other rule which his Lordship referred to is that the applicant must satisfy the Court that there is a reasonable explanation why the applicant allowed a default judgment to be obtained, although he doubted that such a rule existed.

The rationale for the unconditional discretion that allows the Court to intervene is explained by Lord Atkin is Evans v Bartlam (supra) as follows:

"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 only been obtained by a failure to follow any of the rules of procedure." (P. 480)

He added as a proviso:

"But in any case in my opinion the Court does not, and I doubt whether it can, lay down rigid rules which deprive it of its jurisdiction. Even the first rule of Affidavit of merits could, in no doubt rare but appropriate cases, be departed from." (P.480)

Lord Atkin's pronouncement was endorsed and followed by the Fiji Court of Appeal in The Fiji Sugar Corporation v Mohammed Ismail FLR Vol. 34 1988, 75.

APPLICATION

It is true that the affidavit of the Finance Manager of the defendant in the present case asserting that there was failure of service, was effectively negated by his own late admission that the Writ was in fact received and acknowledged by him personally. However, the Counsel for the Applicant, in both his oral as well as written submission, contended that notwithstanding the strength or otherwise of the supporting affidavit, the defendant still has a prima facie defence. The defendant for example, Counsel argued, is not necessarily the correct party to these proceedings, given the evidence obtained from the police with regards to the details of the motor vehicles' accident and the subsequent careless driving conviction of the taxi driver in which the plaintiff had been travelling at the time of the accident.

The guideline set down by Lord Atkin in Evans v Bartlam (supra) as to the necessity of the filing of Affidavit of merits obviously if strictly applied to the present case, will not assist the defendant.

But the Court is nevertheless mindful of the fact that there is a distinct possibility of an injustice if the default judgment were allowed to stand. At any rate, the Court, in the exercise of its discretion need not abide strictly to the guidelines of Lord Atkin, as His Lordship himself had pointed out above. The Court will set aside a default judgment if circumstances require it. It is sufficient in certain situations that the defendant has raised triable issues and prima facie defence, in its submissions.

In the case before it, the Court is of the view that the defendant has indeed raised triable issues and prima facie defence in its submissions and should be allowed to come in and defend the action. But having said that the Court also takes note of the fact that all of these could have been avoided if the defendant had paid due care and attention to Court documents served on it. Should the Court set aside a regular judgment where the defendant is at fault, the plaintiff is perfectly entitled to be awarded costs.

There is finally the question whether there has been undue delay before the application to set aside was made. Although the default judgment was sealed on 26 April 2002, it is not known the precise date the sealed judgment was served on the defendant. What is clear is that the Solicitors for the defendant filed its Summons to Set Aside on 24th June 2002, almost two (2) clear months later. There is however no indication of dilatoriness on the defendant's part before taking step to challenge the judgment. So long as the application is made within a reasonable time, the Court is loathed to intervene. While there is no hard and fast rule on what amounts to a "reasonable time" the Courts have in the past held for example, that a year was far too late to set aside service out of jurisdiction: Reynolds v Coleman [1887] UKLawRpCh 173; (1887) 36 Ch.D 453, and four (4) months in a case of an application to set aside Service of a Writ claiming "damages for personal injuries": Pontin v Wood [1962] 1QB 594. I am satisfied that the defendant in this Case had acted within a reasonable time frame to apply to set aside.

For the reasons I have explained, I order that the Interlocutory Judgment entered on 26 April 2002 be and is hereby set aside.

Leave is granted to the defendant to file its acknowledgment of Service and Defence within 7 days and 14 days respectively.

I award $300 to the plaintiff as costs.

F. Jitoko
JUDGE

At Suva
29 August 2002