Vinod Patel and Company Ltd v Bulewa [2003] FJHC 330; HBC0286.2002 (10 July 2003)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No.: HBC0286 of 2002

BETWEEN:

VINOD PATEL & COMPANY LIMITED
Plaintiff

AND:

KELEMEDI RAKUVE BULEWA
Defendant

For Plaintiff: Mr. S. Sharma
Defendant in Person

DECISION ON SETTING ASIDE

This is an application to set aside a default judgment entered against the defendant on 14th October 2002 for the sum of $57,129.85. The default judgment had been entered regularly.

The defendant says he failed to file defence as both before and subsequent to the issue of writ of summons parties were conducting discussions with a view to settlement, and the plaintiff had agreed to forbear from proceeding further with the action.

He says that he had no accounts with the plaintiff at Ba and Nausori but only at Centre Point. He alleges that the plaintiff imposed interest without his consent. He has made payments of $1500 to $2000 per month for approximately two years, and some, of these payments have not been credited to his account.

The plaintiff in its affidavit in reply sworn by its internal auditor says that the defendant had applied to it for purchase of hardware materials on credit terms. It annexed an account application form and a personal guarantee given by the defendant. The amount in the application form that is signed by the defendant shows that the defendant agreed to pay interest at the rate of 1.25% per month on overdue accounts. It also shows that the defendant had to pay for all purchases made in a month by 25th of the following month so after that unpaid amount would be an overdue account. The written documents signed by the plaintiff show that he agreed to payment of interest and interest was not unilaterally imposed.

In this action no acknowledgement of service was filed by the defendant so default judgment was entered pursuant to order 13, Order 13 Rule 10 gives court powers to set aside judgment entered in default of acknowledgement of service. It reads:

'Without prejuance 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.'

This Rule gives the court the discretion to set aside or vary judgment on terms if it wishes. In exercising its discretion whether to set aside a default judgment or not the courts consider certain principles. These were expressed by Fatiaki J. as he then was in FNPF Board v. Shri Dutt 34 F.L.R. 67 at 69 C as follows:

'(a) Whether the defendant has a substantial ground of defence to the action.

(b) Whether the defendant has a satisfactory explanation for his failure to enter an appearance to the writ and

(c) Whether the plaintiff will suffer irreparable harm if the judgment is set aside.'

He went on to add that it was also proper to consider any delay in making an application and whether the plaintiff has commenced any process of execution of the default judgment.

I am satisfied that the defendant has a satisfactory explanation for failing to file an acknowledgement of service and file his defence as some as settlement talks were going on.

The next issue is whether the defendant has shown a prime facie defence or defence on merits or a defence with a reasonable chance of success?

The defendant admits owing approximately $18,000.00. He does not explain in his affidavit how he arrived at this figure. He does not state the exact sum he paid to the plaintiff by providing receipts. He deposes that he made some payments that were not credited to his account.

The defendant does not deny purchasing the goods. He is only disputing the amounts. The onus is on him to prove that payments have been made and not make bald statements.

Having said that, however, I note the plaintiff’s affidavit also does not contain a statement of accounts showing transactions between the parties. The accounts would have settled the matter. As the pleadings stand now all the evidence that the plaintiff has shown is that it is owed $57,129.85 and interest. The defendant says I owe only $18,000.00. He is disputing the rest. His defence may be weak but it can only be tested by cross-examination in the absence of plaintiff not having given details of the accounts.

In Evans v. Bartlam 1937 A.C. 473 which is the leading authority on exercise of discretion in setting aside Lord Atkin at page 480 stated.

'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 procedures.'

This action has not been decided on merits. However the defendant admits owing a certain sum. I have the powers under the Order 13 Rule 10 to set aside or vary any judgment. Accordingly in the exercise of my discretion I set aside the default judgment entered on 14th October 2002 and vary it as follows:

(a) Judgment for the plaintiff in the sum of $18,000.00. The plaintiff is at liberty to execute the judgment for this sum.

(b) As for the balance, the default judgment is set aside and the defendant is to file his defence in 14 days.

(c) I award costs to the Plaintiff summarily assessed at $300.00.

[ Jiten Singh ]
JUDGE

At Suva

10th July 2003