Chand v Commissioner Northern [2005] FJHC 430; HBC0054D.2002B (22 November 2005)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0054D OF 2002B

BETWEEN:

SUBASH CHAND
(f/n Jag Prasad) of Bulileka,
Labasa, Businessman trading as Subash Chand
Bulldozing Works.
PLAINTIFF

AND:

COMMISSIONER NORTHERN of Labasa.
1ST DEFENDANT

ATTORNEY-GENERAL OF FIJI
2ND DEFENDANT

Counsel for the Plaintiff: A. Sen: Maqbool & Co.
Counsel for the Defendant: A. Tuilevuka: Attorney-General’s Chambers

Date of Decision: 22 November, 2005
Time of Decision: 9.30 a.m.

DECISION

This is the Defendant’s Summons to set aside a default judgment entered against them on 8 November 2002. The application was filed on 19 July 2004 and is made pursuant to Order 19 r. 19 of the High Court Rules. It further seeks stay of execution and that they be granted leave to file their Statement of Defence.

The facts of this case are as follows. The Plaintiff operates a road building and construction company out of Labasa town. In or around July 2001, the Plaintiff and his Company were contracted for the upgrading of the road from Nasasa to Nadogo.

The cost of the project was $45,000.00. According to the Defendants, the project was being financed by Seacology Foundation, a US – based non-governmental organisation. Its local agent, one Mr Saula Vodonaivalu, was introduced to the Plaintiff. However an initial payment of $5,000.00 was raised and paid for by the 1^st Defendant, which was according to them, “paid as a gratuitous contribution by the Government of Fiji as a mark of support for Seacology’s project with the Plaintiff”. The payment was raised through a Local Purchase Order (LPO) No. 821798 dated 10 July, 2001, with the entry in the “Description of Goods/Service” Column as follows:

“Please Upgrade Nasasa/Nadogo Road First Phase.”

A letter dated 14^th September, 2001 sent from Mr Vodonaivalu of Seacology, to the Plaintiff purported to terminate his services on the road project. A copy of the letter was also sent to the office of the 1^st Defendant. It would appear, from the Plaintiff’s letters to the 1^st Defendant and annexed to his affidavit of 2 August, 2004, that the Plaintiff continued on with the project. On 4 July 2002, a demand for the amount of $40,000.00, the balance of the cost of the project, was made by the Plaintiff’s solicitors against the first Defendant, which subsequently led to the filing of the Writ on 2 August, 2002.

The Chronology of the events following the filing of the Writ underlines the somewhat casual and even indifferent attitude on the part of the Defendants to take any action. Both the Defendants were served with the Writ, the 1^st Defendant on 6^th August, the 2^nd on 2^nd August and affidavits of service were filed on 7^th and 5^th August 2002 respectively. The Defendants failed to file and acknowledgement of service required under Order 12 nor their notice of intention to defend required under Order 13. On 19^th September, the Plaintiff filed his Order 77 rule 6 Summons for leave of the Court to enter default judgment against the State. When the matter came before the Court on 26 September, it ordered that service of the Summons on the 2^nd Defendant be effected in accordance with Order 77 r. 3 adjourning the Summons to 21 October, 2002. The Plaintiff complied, and the necessary affidavit of service was filed on 24 September. Still no documents were filed by the Defendants. On 21 October when the matter was called the Defendants failed to appear. The Court, thereupon granted leave for judgment in default to be entered against the State, which Order was sealed by the Plaintiff on 7 November 2002. In accordance with the requirements of section 20 of the Crown Proceedings Act (Cap. 24), the Plaintiff on 9 December, 2002 issued and served the Defendants a certificate of indebtedness in the amount of $40,000.00 which had been adjudged as owing by the Defendants to the Plaintiff. Evidence show that the Plaintiff’s solicitors wrote letters to both the Solicitor-General’s office and to the Permanent Secretary of Finance seeking payment of the amount. As a last resort, the Plaintiff on 7 June, 2004 began contempt proceedings against the Defendant. On 19 July 2004, the Defendants finally filed their Summons to set aside the default judgment.

For the Defendants to succeed, they must satisfy the Court that:

(i) there is a reasonable explanation why the judgment was allowed to go by default,

(ii) there has not been an unreasonable delay in the making of their application,

(iii) they have prima facie defence, and

(iv) the Plaintiff will not suffer irreparable harm if judgment is set aside.

In respect of both (i) and (ii), this Court cannot find any scintilla of evidence to support the contention that there was a good reason why the judgment was allowed to go to default or that they had made the application to set aside promptly and within a reasonable time. Mr Jovesa Vocea, in his affidavit of 19 July 2004 in support of the application, says that the Defendants had not filed any documents including a defence because they had been negotiating with Seacology, on behalf of the Plaintiff for further payments. This reason alone is wholly inadequate. It is the obligations of the Defendants to file the necessary documents to protect their interests and maintain the status quo, even while they were working for a resolution or a settlement to the problem. The filing of appearance and defence are done within a specified period prescribed by the High Court Rules. That the Defendants had failed to file their appearance or intention to defend, within the requisite, 14 days from the dates of the service of the Writ but waited for almost 2 years before applying to have the judgment set aside, with the excuse that they had been negotiating payment of money to the Plaintiff is not acceptable to this Court. This in fact lends further credence to the belief that the Defendants did not act promptly or within a reasonable time to set aside the judgment. It is an inevitable conclusion, looking at the chronology of the proceedings, for the Court to hold that not only did the Defendants not advanced a reasonable explanation why they allowed the judgment to go by default, but they had failed abysmally to act promptly to file their application.

Is there merit in the defence? The essence of the defence is the absence of written or oral contract between the Plaintiff and the Defendants, notwithstanding the Plaintiff’s belief of the existence of it. Furthermore, the Defendants argue that at no stage in the project were they acting as agents of Seacology and that the contract was between the Plaintiff and Seacology and no other party was involved.

While it is not appropriate for this Court to try and resolve the issues between the parties at this stage of the proceedings, it must nevertheless satisfy itself that not only is there a good defence, but that it has some prospect of success. In Wearsmart Textiles Ltd. V. General Machinery and Hire Ltd. FCA No. 30.1997, the Court of Appeal stated it this way:

“It is not sufficient to show a merely “arguable” defence as was earlier believed. The parties seeking to set aside judgment must have á real prospect of success” and “carry some degree of conviction.”

It is clear from the affidavit evidence of both the Plaintiff’s and Defendants’ that it was the 1^st Defendant who had called for quotation for the upgrading of the Nasasa-Nadogo road. The Plaintiff’s quotation was accepted by the 1^st Defendant. It is also agreed that the initial payment of $5,000.00 for the project was made by the 1^st Defendant notwithstanding the claim that it was merely goodwill payment. The Defendants do not deny receiving the Plaintiff’s letters dated 10 July 2001, 12 July 2001, 5 October 2001, 20 November 2001 and 7 January 2002 requesting progressive payment from the 1^st Defendant specifically for the work done. The Defendant, at no time, responded in writing to say that Seacology was responsible for payment. The overwhelming weight of evidence seems to me to be that while the Defendants may have an arguable case in their defence, it does not on the face of it demonstrate a real likelihood of it succeeding. The fact of the matter is, notwithstanding the letter from the agent of Seacology to the Plaintiff, the latter had every reason to believe that the payment of the project would be made by the Defendants. I do not therefore find any substance in the Defendants’ argument of merit in their defence.

There is on the other hand ground in favour of the Plaintiff’s argument that he stands to suffer irreparable harm if judgment is set aside. He had obtained a judgment that had been regularly obtained. He is continued to be denied the fruits of his litigation for more than 3 years, and will continue to do so if the Defendants application to set aside is granted.

I turn finally to the issue of whether it is fatal to the Defendants’ application that its application is made under Order 19 instead of Order 13. The decision in Reijieli Dioge v. Muniam Chetty & Ors. HBC0053.2002 is distinguished on its facts alone. The law is as stated by Lord Atkin in Evans v. Bartlam (1937) AC 480, that the Court has the power to set aside a judgment where “it has only been obtained by a failure to follow any of the rules of procedure.”

The Defendants’ Summons is dismissed.

Costs to the Plaintiff is summarily assessed at $250.00.

F. Jitoko
JUDGE

At Labasa
22 November, 2005