Koroi v Native Land Trust Board [2011] FJHC 142; Civil Action 249.2005 (7 March 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No. 249 of 2005

BETWEEN:

INOKE KOROI, MOSESE NACAKE and ILAITIA BULI all of Waya Island, Yasawa, suing for and on behalf of the MAAQALI VUNABUEVU of Waya Island, Yasawa.
Plaintiffs

AND:

NATIVE LAND TRUST BOARD a body corporate duly constituted under Native Land Trust Act (CAP 134) and having its registered office at 431 Victoria Parade, Suva.
1st Defendant

AND:

LIKULIKU BAY LIMITED a limited liability company having its registered office at Earnst & Young, Chartered Accountants, Provident Plaza, Level 3, Module 2, 33 Ellery Street, Suva.
2nd Defendant

Before: Master Anare Tuilevuka
Solicitor: Young & Associates for the Plaintiff
NLTB In-House Counsel

Date of Ruling: 07th of March 2011

RULING

[1]. By way of background, the plaintiff ‘s claim against NLTB is based on an allegation of breach of fiduciary duty and forgery in obtaining consent from the landowning unit on the issuance of a tourism lease to Likuliku Bay Limited, the 2nd defendant. The claim was filed on the 2nd September 2005. It was served on NLTB on 5th September 2005. On 9th September 2005, NLTB acknowledged the writ. It then filed a statement of defence on the 4th of October 2005. Why this defence was accepted by the registry is a mystery firstly - because a default judgement was by then – already entered against NLTB on 28th September 2005 (albeit 5 days prematurely because NLTB really had until 3rd of October 2005 to file its defence - see ruling of Inoke J in Nelene De Beer v Reginald Ronald Raffe, Plantation Village Limited & Or [2010] HBC 24/08L which states that when Order 18 Rule 2 is read with Order 12 Rule 4, a defence has to be filed within 28 days of service of writ). Secondly – because when the defence was filed on 04th of October 2005, it was filed one day after its true due date.

[2]. It is also not clear to me what has since happened to the defence. In any event – it would appear that the default judgement entered on 28th September 2005 was irregular.

[3]. NLTB then filed a motion to set aside default judgment on 17th October 2005. The motion was opposed by the plaintiff by their affidavit filed on 30th November 2005. NLTB filed its response on 28th February 2006.

[4]. On 7th March 2006, Finnigan J heard and dismissed the application. He was of the view that there was no evidence on file to show that there was a defence on the merit.

[5]. But an irregular judgement should have been set aside as of right without the need for any defence on the merit to be shown. I extract below a portion of Hickie J’s review of the authorities on the point in Giesbrecht v Cross [2008] FJHC 356; Civil Action 540.2007 (25 November 2008).

D. IRREGULAR JUDGMENT AND THE MERITS OF THE DEFENCE

[55] The second part of the Respondent’s argument was that even if the Court held the Default Judgment to be irregular, then the Court has “a discretion under Order 2 of the High Court Rules to look at what the Defendant has actually put forward by way of a Defence”.

[56] At the hearing, Counsel for the Applicant submitted to the Court on this point:

“My learned friend made a point about irregular judgment and my learned friend says even if your Lordship decides to set aside even if your Lordship finds that the judgment is irregular your Lordship will then have to go and consider whether there is a defence on the merits or not but my Lord that is not the law. The law is if there is an irregular judgment it is to be set aside as of right and I would have thought that there was no need for any authority for the proposition – if it is an irregular judgment that’s it – it is irregular it should be set aside as of right and again I will provide your Lordship with an authority there is literally hundreds of authority on that point.”

Unfortunately, Counsel for the Applicant did not tender any authorities to the Court on this point either at the hearing or in his supplementary submissions.

[57] The question has been considered in Odgers on High Court Pleading and Practice (supra) at page 76:

“Where a judgment has been irregularly obtained, the defendant is entitled as of right to have it set aside on application by summons or by motion (under Order 2, rr. 1, 2) (see Anlaby v Praetorius [1888] UKLawRpKQB 55; (1888) 20 QBD 764; White v Weston [1968] 2 QB 647). The irregularities relied on must be specified in the summons and the application must be made within a reasonable time and before any fresh step is taken after knowledge of the irregularity. But before granting any application to set aside the judgment regularly obtained (i.e. strictly in compliance with the rules), the Court will require to be satisfied not only that the defendant had some reasonable excuse, e.g. illness, for failing to give notice of intention to defend but also as to its 'merits', i.e. that in the action itself there is some prospect of his being at least partly successful. An affidavit is usually necessary for this purpose."

[58] In Anlaby v Praetorius Fry and Lopes LJJ reversed a decision of the Queen's Bench Division to refuse to set aside a judgment obtained irregularly. As fry LJ noted at page 768-769:

"... the judgment entered ... was premature and irregular. 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 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. We were pressed with the argument that Order LXX., r.1, gives discretion to the Court which applies here. Rule 1 provides that "non-compliance with any of these rules, or with any rule of practice for the time being in force, shall not render any proceedings void unless the Court or a judge shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court or a judge shall think fit." But in the present case we are not concerned with an instance of non-compliance with a rule, nor with an irregularity in acting under any rule. The irregular entry of judgment was made independently of any of the rules; the plaintiff had no right to obtain any judgment at all. I do not think, therefore, that the case comes within r.1, and we must consider what is the right practice without reference to that rule. 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, has been obtained through some 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 of granting the defendant relief." (My emphasis)

Similarly, Lopes LJ held at 770-771:

"... the judgment entered by the plaintiff was premature and irregular ... without any right whatsoever. To obtain that judgment was a wrongful act, not an act done within any of the rules. The defendant is therefore entitled ex debito justitiae to have it set aside."

[59] In White v Weston (supra) Russell and Sachs LJJ confirmed that Anlaby v Praetorius was still good law. As Russell LJ observed at page 659:

"The defect is in my judgment so fundamental as to entitle the defendant as of right ex debito justitiae to have the judgment avoided and set aside."

And Sachs LJ similar held at page 662:

"Once the right to set aside is found ex debito justitiae, the reasoning behind the judgments in Anlaby v Praetorius remains good ..."

[60] In view of the above, as this Court is satisfied that the Default Judgment has been "irregularly obtained, the defendant is entitled as of right to have it set aside on application by summons".........

[6]. The records will show that following Finnigan J's ruling, NLTB then filed another summons to set aside the same default judgment. The 2nd application was supported by some 33 affidavits of various personnel working at NLTB and also the Director of the 2nd defendant and also member of the landowning unit. However, due to non-appearance of the 1st defendant in Court on this pending application, the summons was struck out in December 2009.

[7]. The plaintiff then filed a notice of hearing on assessment of damages as per the default judgment entered on 7th March 2006 by Finnigan J. The 1st defendant then filed a notice of motion for stay of proceedings on the ground that it was filing an appeal for interlocutory judgment of Finnigan J at the Fiji Court of Appeal.

[8]. Whilst that motion remains pending – NLTB then files an application to reinstate its 2nd setting aside application that was struck out in December 2009. NLTB submits that it has defence on the merits.

• (i) Issue of consent for de-reservation of the subject land, which the 1st defendant submits, that all proper procedures and policy were complied with which resulted in the consent being obtained from the LOU of 72% which is more than the requisite of consent.
  
• (ii) Issue of fraud/forgery in obtaining LOU consent, which the 1st defendant submits that this allegation by the plaintiff is disputed. Further the 1st defendant submits that such evidence to support that such consent was not obtained fraudulently is by the 30 plus affidavits in support filed together with the 2nd setting aside application which it now seeks the court's discretion to reinstate.
  
• (iii) Issue of representative capacity which the 1st defendant submits that majority consent had already been obtained from the LOU which goes to show that the plaintiff's do not have interest in the said land and thus do not have the locus standii to instituted this action for and or behalf of the Mataqali Vunabuevu.
  

[9]. The plaintiff submits that NLTB has not prosecuted its appeal of Finnigan J's decision but has decided to pursue the reinstatement of its 2nd application to set aside default judgment.

[10]. The plaintiff submits that the High Court is now functus because there is a High Court judgment refusing to set aside a default judgment. They submit that the NLTB cannot now apply for second time to set aside the default judgment when it was first refused by Finnigan J hence the application is misconceived. The proper cause, according to the plaintiff, is to appeal the decision of Finnigan J.

[11]. Young and Associates highlight that, in the affidavit of Ela Manuku filed in support of NLTB's application now before me, there is some reference that NLTB at one stage was intending to appeal. NLTB according to the plaintiff has not explained why it has not pursued that course. This according to the plaintiff is an abuse of process and the setting aside is bound to fail even if it is reinstated. The plaintiff further submits as follows:

• (i) The Court cannot bend backwards to accommodate incompetence or ignorance of legal representatives of NLTB. The sentiments expressed by Justice Gordon Ward, President of the Court of Appeal in the case of NLTB v Rajesh Kumar & Anor – Civil Appeal No. 54 of 2004 is of general universal application of all matters of procedure and application.
  
• (ii) Hence, NLTB's application for reinstatement should be dismissed with cost and we submit a sum of $5,000.00 for wastage of time and the fact that this Court agreed to vacate a hearing date for the assessment of damages amidst the strenuous protest of counsel for the plaintiff's against the adjournment in order to give NLTB an opportunity to pursue into baseless application for reinstatement.
  

[12]. To reiterate, if the default judgement was entered five days before the due date of filing of the defence – then it was an irregular judgement which should be set aside as of right. But the fact of the matter is – that until the judgement is set aside – it remains in force.

[13]. Mindful of that background, the basic issue before me is whether or not I can set aside my striking out of the second application to set aside default judgement.

[14]. In Yenktamma v Colonial Mutual Life Assurance Services Ltd [2011] FJHC 57; HBC 348.2008 (9 February 2011) - Wickramasinghe J dealt with a motion for reinstatement of a matter that had been struck out by Master Udit also under Order 25 Rule 9. Wickramasinghe J first noted that – under Order 59 Rules 8 and 11 – an appeal is "the only remedy available to a party who is aggrieved by a decision of striking out by the Master".

[1]. Having noted that, and having concluded that the notice of motion for reinstatement before her was therefore irregular –Wickramasinghe J then overlooked that irregularity under Order 2 of the High Court Rules and proceeded to consider the application along the principles of reinstatement. In taking that course, Wickramasinghe J took into account the fact that the plaintiff was acting and appearing in person. She however refused to reinstate the action after considering the application along the ordinary principles for reinstatement.

[15]. Applying the above, I do not have jurisdiction to set aside my own ruling. It must be appealed to a single judge of the High Court. I am however inclined to refer this application to a single judge of the High Court in Lautoka under Order 59 Rule 4 of the High Court Rules. I do so for two reasons – firstly, to avail to NLTB the opportunity to make submissions along the line of Yenktamma v Colonial Mutual Life and, secondly, for the judge to consider the application in the context of the irregular default judgement that forms a major part of the background to this case (as discussed above).

[16]. Having said all that – the plaintiff is entitled to costs on this application but I would rather reserve any ruling on that for now until the file is referred back to me from a single judge of the High Court. The Deputy Registrar is to issue a Notice of Adjourned Hearing before a judge.

Anare Tuilevuka
Master

At Lautoka
07th March 2011.