Nand v Famous Pacific Shipping (NZ) Ltd [2010] FJHC 619; Civil Appeal 6 of 2009 (29 October 2010)

IN THE HIGH COURT OF FIJI
AT SUVA
APPELLATE JURISDICTION

CIVIL APPEAL NO. 6 OF 2009
(From Civil Action No. 414 of 2007 and Bankruptcy 45 of 2008)

BETWEEN:

KIRPA NAND
APPELLANT

AND:

FAMOUS PACIFIC SHIPPING

(NZ) LIMITED
RESPONDENT

Mr S Kumar for the Appellant
Ms R Naidu for the Respondent

DECISION

By motion dated 14 November 2009 the Appellant seeks the following orders:

"(A) That leave be granted to appeal out of time the ruling of his Worship Mr Ajmal Gulab Khan of 15 September 2008 refusing to set aside default judgment in Civil Action No. 414 of 2007.

(B) That an order for a stay of the ruling of his Worship Mr Ajmal Gulab Khan of 15 September 2008 refusing to set aside default judgment in Civil Case No. 414 of 2007.

(C) That an order for a stay of the receiving order made by her Worship Ms Mary L Muir dated 28 August 2009 in Bankruptcy Action 45 of 2008 pending the Appeal against that filed in lower court."

In support of the application the Appellant filed an affidavit sworn by himself on 16 November 2009. The application was opposed. The Respondent filed an affidavit sworn by Shalini Savitri Pratap on 18 February 2010. The deponent is the Sales and Marketing Manager of the Respondent. The Appellant filed a brief reply affidavit sworn by himself on 30 March 2010.

On 25 March 2008 a default judgment was entered against the Appellant in the Magistrates Court at Suva in Action No. 414 of 2007. Judgment was for the amount of $15,072.80 together with interest at the rate of 2.5% per month from 28 February 2007. The Appellant had failed to serve a Notice of Intention to Defend within the time prescribed by the Rules which had subsequently been extended by the court. When the matter was called in court on 25 March 2008, there was no appearance by or on behalf of the Appellant. A copy of the judgment was served on the Appellant on 23 April 2008.

A Bankruptcy Notice seeking payment of $15,072.80 was issued on 18 June 2008 and served on the Appellant on 20 June 2008.

By motion dated 9 July 2008 the Appellant applied to the Magistrates for an order that the default judgment be set aside. In a written Ruling dated 15 September 2008 the Magistrates Court (per Resident Magistrate Ajmal Gulab Khan) dismissed the application to set aside default judgment and ordered the Appellant to pay costs of $300.

In his Ruling the learned Magistrate found that the default judgment had been entered regularly. He noted that the application to set aside was made some three months after the entry of the default judgment and appeared to have been prompted by the Bankruptcy Notice, not as a result of the timely service of the Default Judgment. His Worship found that there was no satisfactory explanations either for the failure to serve the required Notice, for failing to appear on the date fixed or for the delay in applying to have the default judgment set aside.

The learned Magistrate took the view that the proposed Defence did not reveal any material that would provide the Defendant with a realistic prospect of defending the claim. The debt was not in dispute, only the quantum. The Defendant had not paid at that time any part of the alleged debt to the Respondent.

So far as prejudice was concerned, the Magistrate considered that the prejudice to the Respondent in being denied any payment of a debt that was in part admitted if leave was granted outweighed any prejudice to the Appellant if leave was not granted.

The grounds on which the Appellant proposes to appeal are set out in a Draft Grounds of Appeal annexed to the affidavit of Kirpa Nand sworn on 16 November 2009 and are as follows:

"1. That the learned trial magistrate erred in law and in fact by failing to apply the proper principles of law to set aside the default judgment.

2. That the learned trial magistrate erred in law and in fact in determining the entire case on affidavit evidence when the procedure in the Magistrate's Court is trial in summary manner.

3. That the learned trial magistrate erred in law and in fact in denying the Defendant/Appellant the rules of the Natural Justice by completely shutting him out from defending his case.

4. That the Appellant/Defendant seeks to file further grounds of appeal upon receipt of the Magistrate's notes."

It would appear that the Draft grounds document is also intended to serve as the draft notice of intention to appeal.

Under Order XXXVII of the Magistrates' Courts Rules, an Appellant should give notice of intention to appeal either by giving notice verbally to the court in the presence of the opposite party immediately after judgment is announced, or within 7 days by notice in writing served on the court and the Respondent (Rule 1). The grounds of appeal are to be filed in court and served on the Defendant within 1 month of the decision (Rule 3).

The decision which the Appellant seeks to appeal was dated 15 September 2008. The hearing took place on 10 September 2008. The Notice of Intention to appeal should have been filed and served by 22 September 2008 and the grounds of appeal by 15 October 2008. The Appellant's motion dated 14 November 2009 seeks leave to appeal out of time. In the absence of any material to indicate that a notice of intention to appeal has been filed and served, I shall regard the motion as an application for leave to file and serve a notice of intention to appeal out of time and as an application for leave to file and serve grounds of appeal out of time.

The application is made pursuant to Order XXXVII Rule 4 which states:

"On the Appellant failing to file the grounds of appeal within the prescribed time, he shall be deemed to have abandoned the appeal, unless the court below or the appellate court shall see fit to extend the time."

The Appellant has elected to seek enlargement of time from the Appellate Court, the High court, rather then from the court below, the Magistrates' Court. The rule clearly permits the application for enlargement in civil appeals to be made direct to the High Court upon the Appellant's election.

However, the rule refers only to extending time for the filing of grounds of appeal and does not deal with extensions for appeals where no notice of intention to appeal has been given. It may be that section 39 of the Magistrates Court Act, in an appropriate case provides the necessary jurisdiction for this Court to entertain a civil appeal from the Magistrates' Court notwithstanding that no notice of intention to appeal has been given, filed or served. (See Loks Crane and Contractors Limited –v- Clutch Systems (Fiji) Limited unreported Civil Appeal 31 of 1999 Lautoka delivered 17 July 2002 per Gates J (as he then was)).

Section 39 states:

"Notwithstanding anything hereinbefore contained, the High Court may entertain any appeal from a magistrates' court on any terms which it thinks just."

In determining whether it should exercise its discretion to allow the Appellant to file and serve a Notice of intention to appeal out of time, the court considers four matters. They are (a) the length of the delay, (b) the reasons for the delay, (c) the merits of the proposed defence and (d) any prejudice likely to result to the Respondent.

The words used in the legislation give the court an unfettered discretion which has to be exercised judicially taking into account established principles. The burden rests with the Appellant to satisfy the court that, in the circumstances, the justice of the case requires that it be given an opportunity to challenge the Ruling of the Resident Magistrate.

Dealing first with the length of the delay. In this case, the delay from the date of the decision to the date of the application is very substantial, in fact some fourteen months. The question for the court is what are the consequences for the Appellant of such a substantial delay. The position was discussed by Lord Donaldson MR in Norwich and Peterborough Building Society v. Steed [1991] 2 All ER 880 at page 885:

"Once the time for appealing has elapsed, the respondent who was successful in the court below is entitled to regard the judgment in his favour as being final. If he is to be deprived of this entitlement, it can only be on the basis of a discretionary balancing exercise, however blameless may be the delay on the part of the would-be appellant. ...."

In Palata Investments Ltd v. Burt and Sinfield Ltd [1985] 2 All ER 517 the delay was only three days and it was fully explained. In such circumstances the balancing exercise would be unlikely to come down on the side of refusing an extension of time, but in an extreme case of lack of merit it could do so. ....

.... In Palata's case the delay was as short as could be and was wholly excusable. The merits therefore played little part. In Rawashdeh –v- Lane (1988) 40 EG 100 the delay was very much longer – it was six weeks in fact – and was not wholly excusable. Much more merit was required to overcome it."

In the present case involving as it does a delay of about 14 months, it would seem to me that the Appellant is required to demonstrate that the merits of his appeal are sufficient to overcome the delay which to a very large extent will need to be at least partially excusable.

Turning then to the reasons for the delay. The reason or reasons for the delay should initially be set out in the affidavit in support of the application. In paragraph 12 of his affidavit, the Appellant stated that the motion seeking to have the default judgment set aside was refused by the Magistrates Court. There were no dates referred to in that paragraph. In paragraph 14 the Appellant stated that he then changed his solicitors and obtained fresh legal advice from Messrs Sunil Kumar who explained to him that he should pay the sum admitted to the Plaintiff and that in relation to the amount in dispute there would be a hearing.

In paragraph 15 the Appellant states that Sunil Kumar then started appearing for him in Court. In paragraph 16 he states that on the advice of his new counsel he paid two cheques which came to a total of $5000 to the Respondent's solicitors. The dates on the two cheques were 3 November 2008 and 27 December 2008.

There is no information as to when the Appellant engaged the new law firm or when Sunil Kumar started appearing in court for the Appellant.

This is the only information in the affidavit that would explain the delay. There are no dates referred to and there is no material in the affidavit to explain why this application which is dated 14 November and filed in the court on 16 November 2009 sought leave to appeal out of time a decision that was dated 15 September 2008.

The explanation offered by Counsel during the course of his submissions was that the material before the court indicated that the Appellant was more concerned about dealing with the Bankruptcy notice. It seems to me that in doing so the Appellant has proceeded in the wrong order. The difficulty faced by the Appellant in proceeding the way in which he did was noted by Resident Magistrate Muir in her Ruling dated 28 August 2009 on the hearing of the Bankruptcy Petition filed by the Respondent and opposed by the Appellant. In paragraphs 14 to 18 the learned Magistrate stated:

"[14] The Judgment Debtor has admitted that his application to set aside the Default Judgment was dismissed and that there is no appeal pending.

[15] Counsel for the Judgment Debtor has informed the Court that the time for filing appeal has expired and that the Judgment Debtor is barred from appealing out of time as he did not give Notice of Intention to Appeal within 7 days of the Default Judgment as required by Order XXXVII rule 1 of the Magistrates Courts Rules.

[16] Counsel for the Judgment Debtor has also conceded that the time to appeal the Order dismissing the Debtor's application to set aside default judgment has also expired.

[17] There is no order for stay of execution of the Default Judgment.

[18] It is inescapable that the Default Judgment is final and executable.

To the extent that the Appellant's predicament was the result of advice given by his Solicitors, the following comments made by the Court of Appeal in Vimal Construction and Joinery Works Ltd –v- Vinod Patel and Company Ltd (unreported Civil appeal No. 93 of 2006 delivered on 15 April 2008) at paragraph 15 are worth noting:

"... in 2008 litigants should not assume that leave will be given to bring or maintain appeals or other applications where those appeals or applications are out of time unless there are clear and cogent reasons for doing so. A contention as to incompetence of legal advisers will rarely be sufficient and, where it is, evidence in the nature of flagrant or serious incompetence (R v Birks [1990] NSWLR 677) is required."

Has the Appellant shown clear and cogent reasons which would justify my granting the application? As I have already stated, the reason appears to be that the Appellant's legal practitioner sought to challenge the petition rather than pursue the Appellant's appeal in accordance with the Rules. I do not consider that the affidavit material or the assertion from the bar table constitute clear and cogent reasons.

Although it is not necessary for me to consider in detail the merits of the proposed appeal in an application such as the present, it is nevertheless appropriate to assess the grounds with a view to deciding whether or not any of them are likely to succeed if time were to be extended. I have carefully considered the Ruling of the Resident Magistrate dismissing the Appellant's application to have the default judgment set aside. I am satisfied that the learned Magistrate has considered and correctly applied the relevant principles in determining the application. I am therefore satisfied that the grounds of appeal would not succeed. I am also satisfied that any appeal would prejudice the Respondent by putting it to unjustified expense and delay. If the time for appealing were to be extended, the Respondent would have been denied the fruits of the judgment for well over two years.

In all the circumstances I consider such a delay could not be justified.

For the reasons which I have given I therefore dismiss the application for the orders sought and order the Appellant to pay the Respondents costs which I fix at $600.00 within 21 days from the date of this decision.

W D Calanchini
JUDGE

29 October 2010

At Suva