Picket Fences (Fiji) Ltd v Vasutabu [2004] FJHC 302; HBC0236d.2003s (30 July 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0236 OF 2003

Between:

PICKET FENCES (FIJI) LIMITED
Plaintiff

-v-

NICK VASUTABU
Defendant

Mr. J. Savou for the Plaintiff
Mr. W. Archibald for the Defendant

DECISION

By motion dated 5 March 2004 the defendant (‘applicant’) applies to set aside default judgment entered herein on 28 July 2003 for the sum of $21,518.91.

An affidavit in support of Nick Vosutabu (the ‘applicant’) sworn 6 February 2004 has been filed.

The main ground for setting aside is that the applicant could not properly instruct his counsel to prepare his Statement of Defence as he was put to sea on the fishing vessel “Orcedia” as the supervisor of an expedition to collect bêch-de-mer from the waters around the Lau Group of Islands in Fiji. While he was at sea he became seriously ill in that he suffered a stroke which paralysed the right side of his body, consequently he was admitted to the CWM Hospital in July 2002. He has produced a medical report of his illness.

The applicant says that documents herein were served on his counsel Mr. Archibald and not on him personally and it was at that time that he was ‘put to sea’.

Because of his illness he was unable to contact his counsel to give him proper instructions concerning his defence to this action. He was also unable for some months afterwards to properly attend to his business matters.

The applicant says that he has a good defence to the claims made by the plaintiff and has annexed the proposed Statement of Defence to his said affidavit.

The applicant further says that the civil action No. 48/04 is at present pending in the Suva High Court wherein Atama Saulekaleka, the plaintiff herein and Jioji Savou are the first, second and third defendants respectively with the applicant as the plaintiff. He wants action No. 48/04 to be heard together with this action as the issues here relate to the transactions between the parties.

The respondent’s contention

In the affidavit of Atama Saulekaleka (the Managing Director of the plaintiff Company) in response, it is stated how an ‘agreement’ was entered into between the plaintiff and the defendant. At some stage the plaintiff asked for the return of a certain vehicle to it which the defendant refused. Subsequently the plaintiff came to know that the vehicle was the subject of an accident and was substantially damaged.

When the defendant refused to return the vehicle, the plaintiff sued the defendant for their losses. The vehicle, the plaintiff says, is now ‘a wreck and a write off’.

The defendant swore an affidavit in response to the said affidavit of the plaintiff denying the allegations.

He states, inter alia, that the motor vehicle concerned was damaged in an accident in January 2004 which was after these proceedings were commenced. He said that he had left the vehicle with a mechanic/panel beater for repairs. He was quoted $1800.00 for the repair work. Mr. Saulekaleka removed the vehicle from the mechanic’s premises before the repairs could be completed.

Principles on setting aside judgment

Under Or.13 r.10 the Court may set aside or vary ‘any judgment’ unconditionally or on terms.

The Court has a very wide discretion in an application of this nature but it is also guided by certain well known principles.

One of the principles 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”. (per Lord Atkin in Evans v Bartlam [1937] A.C. 473)

The basic principles applicable to setting aside judgments in the exercise of Court’s discretion are set out in Halsbury's Laws of England Vol 37 4th Ed. para 403, inter alia, thus:

“In the case of a regular judgment, it is an almost inflexible rule that the application must be supported by an affidavit of merits stating the facts showing that the defendant has a defence on the merits,... For this purpose it is enough to show that there is an arguable case for a triable issue.”

There it is further stated:

“There is no rigid rule requiring the applicant to explain why he allowed judgment to go by default, but nevertheless, at least in the case of a regular judgment, such explanation is obviously desirable to enable the court to exercise its discretion, especially as to any and if so what terms should be imposed.”

This was a ‘regular’ judgment obtained in default of defence. The defendant does not have a right to have it set aside but it is a matter for the exercise of discretion by the Court.

It is stated in The Supreme Court Practice 1993 p.137-138 that:

“... the major consideration is where the defendant has disclosed defence on the merits, and this transcends any reasons given by him on the delay in making the application even if the explanation given by him is false (Vann v Awford (1986) 83 L.S. Gaz. 1725, The Times, April 23, 1986 C.A.). The fact that he has told lies in seeking to explain the delay, however, may affect his credibility of his defence and the way in which the Court should exercise its discretion”.

A useful summary of the factors to be taken into consideration is to be found under Notes to Or.13 r.9 of The Supreme Court Practice 1995 Vol 1 at 142 which I have considered and which is, inter alia, 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 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.

There it is further stated:

“The foregoing general indications of the way in which the court exercises discretion are derived from the judgment of the Court of Appeal in Alpine Bulk Transport Co. Inc. v. Saudi Eagle Shipping Co. Inc., The Saudi Eagle [1986] 2 Lloyd’s Rep. 221, C.A., at p. 223, where the earlier cases are summarised. From that case the following propositions may be derived:

(a) It is not sufficient to show a merely “arguable” defence that would justify leave to defend under Order 14; it must both have “a real prospect of success” and “carry some degree of conviction”. Thus the court must form a provisional view of the probable outcome of the action.

(b) If proceedings are deliberately ignored this conduct, although not amounting to an estoppel at law, must be considered “in justice” before exercising the court’s discretion to set aside.”

Also on the subject of setting aside default judgment, in Davies v Pagett (1986) 10 FCR 226 at 232 a Full Court of the Federal Court of Australia said as follows and I concur and which I have borne in mind in considering this matter:

“The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. Any limitation upon that opportunity will generally be justified only by the necessity to avoid prejudice to the interests of some other party, occasioned by misconduct, in the case, of the party upon whom the limitation is sought to be imposed. The temptation to impose a limitation through motives of professional discipline or general deterrence is readily understandable; but, in our opinion it is an erroneous exercise of the relevant discretion to yield to that temptation. The problem of delays in the courts, egregious as it is, must be dealt with in other ways; for example, by disciplinary actions against offending practitioners and by a comprehensive system of directions, hearings or other pretrial procedures which enable the court to supervise progress – and, more pertinently non-progress – in all actions.”

Consideration of the application

I shall now consider the application to set aside bearing in mind the background facts of the case and applying the principles applicable to it.

As stated above to enable the Court to properly exercise its discretion there are certain basic preconditions which have to be fulfilled by an applicant. They are:

(i) reasons why judgment was allowed to be entered by default, (ii) application must be made promptly and without delay and (iii) an affidavit deposing to facts that show that the defendant has a defence on the merits. (Pankaj Bamola & Anor v Moran Ali FCA 59/90).

As far as (i) & (ii) above are concerned, the learned counsel for the applicant has given reasons why Statement of Defence was not filed.

It is (iii) above which has to be given serious consideration. I have already referred to authorities bearing on this aspect of the matter. As already stated, the major consideration is whether the ‘defendant has disclosed a defence on the merits, and this transcends any reasons given by him on the delay in making the application even if the application given by him is false’. And as Lord Denning M.R. said in Burns v Kondel (1971) 1 Lloyd’s Rep. 554 at 555:

“We all know that in the ordinary way the Court does not set aside a judgment in default unless there is an affidavit showing a defence on the merits. That does not mean that the defendant must show a good defence on the merits. He need only show a defence which discloses an arguable or triable issue.”

I find on the affidavit evidence before me and on a consideration of all the material put to Court, that there is a substantial and meritorious defence disclosed.

The Court has a discretion in the matter in the case of a regular judgment where a defence on merits has been shown. If the judgment is set aside, the Court may award costs payable by the defendant and upon other terms.

Conclusion

In the outcome, in the exercise of my discretion and applying the principles and authorities stated above within which the defendant has brought himself; the judgment ought to be set aside. The plaintiff will not be prejudiced in any way and it will be able to recover payment of any judgment as it cannot be said that the defendant is not able to meet his obligations if judgment goes against him.

The judgment is ordered to be set aside with costs against the defendant in the sum of $250.00. The defendant is ordered to file a Statement of Defence within 14 days from the date of this judgment failing which the judgment will stand.

D. Pathik
Judge

At Suva
30 July 2004