Kumaran v University of Southern Queensland [2011] FJHC 631; Civil Action025.2011 (30 September 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. 025 OF 2011

BETWEEN:

ANANDA MAYA KUMARAN
(father’s name Ram Swamy Maran) of Nadi, Fiji, Campus Manager and Tutor.
Plaintiff

AND:

UNIVERSITY OF SOUTHERN QUEENSLAND
a duly constituted university with its head office at Toowomba, Queensland, Australia.
Defendant

Before : Master Anare Tuilevuka
Counsel : Messrs Mishra Prakash & Associates for the Plaintiff
Messrs Gordon & Company for the Defendant
Date of Ruling : 30 September 2011
(written ruling circulated on 06 October 2011)

RULING

INTRODUCTION

[1]. On 03 May 2011, a default judgement was entered against the University of Southern Queensland (“USQ”) in the sum of $26,000-00 for six months salary with damages and interest to be assessed. The USQ now seeks to set aside that default judgement under Order 13 Rule 10. Its application is supported by an affidavit of one Phillip Carne Candy, the Deputy Vice Chancellor of USQ.

[2]. Mishra Prakash & Associates had obtained leave to serve by way of e-mail and out of jurisdiction to USQ the Writ of Summons and Statement of Claim. The e-mail address that was stated was [e-mail]. In hindsight and with the benefit of detailed submissions on the point by Mr. Gordon, that leave was, admittedly, ill-considered.

[3]. The substituted service of an originating process by e-mail should only be allowed in the rarest of cases.

[4]. If I may sidetrack a little just to illustrate how some Courts are more technologically advanced in the area of service of court documents, at least in so far as interlocutory processes go, Master Harper of the Australian Capital Territory Supreme Court recently ordered that a default judgement could be served on defendants by notification on their Facebook pages. And on another occasion, the same Court had granted leave for substituted service by allowing certain court documents to be served by text message to a mobile phone[1].

[5]. In this case before me, Mr. Candy deposes that the e-mail went directly to USQ’s spam folder on 16 March 2011. It was not processed into any USQ staff member account. USQ was therefore not served at all. USQ was only alerted after it accepted service of the default judgement whenceupon it requested its IT section to retrace and locate the service mail. Mr. Candy asserts that USQ has a meritorious defence. The plaintiff was employed by a Chandra Williams Limited (“CWL”) and not by USQ.

[6]. Mr. Candy deposes that there was an Agreement between CWL and USQ which saw CWL promoting and teaching USQ’s educational packages in Fiji. In that capacity, CWL was to operate under the style and name of USQICF and was allowed to use the USQ emblem in Fiji. Notably, the words “International College Fiji” were printed under the emblem for USQICF letterhead and staff business cards in Fiji. But - according to Mr. Candy, this arrangement did not mean that USQ was the employer of all CWL-USQICF staff in Fiji. A copy of the Agreement is exhibited in Candy’s affidavit and marked USQ 6.

THE LAW OF SETTING ASIDE

[7]. An irregular default judgement is set aside as of right without the need to show a defence on the merits[2] whereas a default judgement entered regularly can only be set aside if the defendant is able to show firstly, a meritorious defence which has a real prospect of success and which carries some degree of conviction. For this purpose, a supporting affidavit disclosing the condescending particulars of the meritorious defence is mandatory (see Wearsmart Textile Limited v General Machinery Hire Limited and Anor Civil Appeal No. ABU 0030/1997).

[8]. Also, there must be some explanation as to why the default judgment was allowed (see Evans and Bartlam [1937] 2 All ER 646; see also Giesbrecht v Cross [2008] FJHC 356; Civil Action 540.2007 (25 November 2008) as per Hickie J’s discussion of the principles).

WAS DEFAULT JUDGEMENT REGULAR OR IRREGULAR?

[9]. I accept that the email that was sent to USQ was received in the University’s spam folder and was not processed to any particular recipient. For that reason, the default judgement entered was therefore irregular and should be set aside unconditionally as of right.

DEFENCE ON THE MERITS

[10]. Because the default judgement was irregular, USQ is not required to show a defence on the merits. However, it has filed an affidavit of merits anyhow with a draft statement of defence annexed, which I am inclined to review.

[11]. The draft defence reasserts the position that the plaintiff was employed by CWL trading as USQICF. In my view, it carries a great deal of conviction and has a real prospect of success for the following reasons.

[12]. Firstly, the Agreement between CWL and USQ sets out clearly in clause 13 of Schedule Three that all teaching staff are employed by CWL, although USQ reserved the right to veto and screen their appointment, obviously, for “quality control” purposes.

Schedule Three
ADMINISTRATION
13	USQ reserves the right to screen teaching staff employed by Chandra Williams Ltd to teach into USQ programs. Chandra Williams Ltd will forward CVs of teaching staff before the start of each teaching period for USQ’s review. In the case of Faculty of Business courses, CVs should be emailed to [e-mail] USQ reserves the right to veto any Chandra Williams Ltd teaching appointment it deems inappropriate to the USQ program. In each case USQ will inform Chandra Williams Ltd of the reason for this veto and Chandra Williams Ltd can appeal this decision where evidence is available that the teacher involved is acceptable in Chandra Williams Ltd's judgement. (my emphasis)

[13]. Secondly, the letter of 25 November 2005[3] (see below) which terminated the plaintiff's employment was concluded and signed by Mr. Ivan Williams as Dean of USQICF:

25 November 2005

Acting Campus Manager

USQ Nadi

Dear Mr. Kumaran

It is with great regret that I have to inform you that the Directors of USQ International College Fiji have decided to discontinue campus operations in Nadi as from 28 February 2006. Consequently it is my sad duty to give you three months' notice of the termination of your appointment as Senior Tutor and Acting Campus Manager beginning 1 December 2005. We would be grateful if you would continue to act in your dual capacity to the end of February 2006 and to help us to ensure that the wind down of our Nadi operations is accomplished efficiently and with minimum dislocation to the students' progress.

You will I know, be concerned about the welfare of your students consequent upon this decision. Those who have been studying full-time will be offered the opportunity to transfer to the Suva Campus or to continue their studies through our distance education system which is being strengthened. We are in the process of planning how the fullest possible support can continue to be offered in 'the west' to those who study part time or 'at a distance'.

The Directors have asked me to convey to you their sincere thanks for the great efforts you have made to make our Nadi Campus effective and efficient. They acknowledge that it is of no fault of yours that we have been unsuccessful financially in Nadi. Moreover, they recognize that the conditions under which you and your staff have worked for most of the past two years have been less that propitious. Your adaptability and resilience and your continued optimism have been impressive.

I trust that this three months' notice will give you time to secure the senior post you deserve with another organization, and I send you the Directors' best wishes for your future.

Yours sincerely

1. Ivan Williams

Dean, USQICF.

(my emphasis)

[14]. Obviously, the party that severed the plaintiff's employment was USQICF. And there is nothing before me to suggest that USQICF had acted on that occasion on the authority of or as agent of USQ.

[15]. Thirdly, a letter dated 4 October 2006[4] to USQ signed by Mr. A Ivan Williams as Dean and CEO of USQICF seems to be yet another confirmation that the managerial prerogative of reducing the staff establishment did vest with SWL/USQICF. Below is the relevant extract from that letter:

''We have moved the College from Harm Nam Building to the premises occupied by our own College for Higher Education Studies (CHES) thereby saving some $7,000 per month in rent. We have reduced our full- time staffing considerably.

[16]. Fourthly, there is no direct evidence placed before me (such as a letter of offer of employment) to suggest that USQ did in fact engage the plaintiff into the position of tutor/campus manager in the first place. On the contrary, the only letter of offer on record (see below) which the plaintiff had tendered at the hearing of assessment of damages is the one dated 20 January 2004 from USQICF and signed by A. Ivan Williams on behalf of the Chandra/Williams partnership.

(CHES Emblem on letter head)

The temporary address of

UNIVERSITY OF SOUTHERN QUEENSLAND INTERNATIONAL COLLEGE

197 Princess Road

Suva

20 January 2004

Mr. Ananda Maya Kumaran

C/o NZPTC (TO BE COLLECTED BY Mr Kumaran)

Sarju Prasad Building

Vakabale Street

Lautoka

Dear Mr. Kumaran

I have pleasure in offering you a post of Senior Tutor, at the Nadi campus of the USQ International College of Fiji, at a salary of $26,000 per annum. As student enrolments grow and finances allow, your remuneration will improve.

We hope that, if you accept this offer, you will take up the post as soon as possible. Mr. Subhas Chandra particularly, is anxious that you start no later than Monday 26 January, and we are grateful to you for offering to undertake duties other than teaching as needs arise. It is essential that we market the USQICF vigorously and immediately, and we hope that this is something you would be willing to do.

The functions and responsibilities of the position will be worked out during the next few weeks in discussions in which you would be involved if you accept this offer. A proper contract would then be drawn up.

I would be grateful for your written response and, if you accept, I look forward to working with you in this exciting venture.

Yours sincerely

A Ivan Williams

on behalf of the Chandra/Williams partnership.

The College for Higher Education Studies P.O Box 3941 Samabula Suva Fiji

Phone [phone] or 3386732 Fax: [phone] E-mail/;[e-mail]

COMMENTS

[17]. USQ's draft defence is exhibited and marked USQ 3 in Mr. Candy's affidavit. It pleads that the arrangement between USQ and USQICF was purely a commercial one under which the latter was allowed to use the former's educational materials for Fiji students studying for a USQ qualification online. The plaintiff's case theory depicts USQ as the principal that operated through CWL, its Fiji agent, trading as USQICF. This may be true in so far as USQICF had promoted USQ's educational packages in Fiji as evidenced by their Agreement[5] which is exhibited and marked USQ 6 in Candy's affidavit - however, USQ's assertion that it had nothing to do with the plaintiff's employment carries a great deal of conviction. Pamela Steele's (USQ Lawyer) affidavit in reply re-asserts the defendant's case.

CONCLUSION

[18]. The default judgement is hereby set aside unconditionally for irregularity.

• (i) the defendant is to file and serve its statement of defence within 14 days i.e. by 20 October 2011.
  
• (ii) the plaintiff is to file and serve its reply within 14 days thereafter i.e. by 03 November 2011.
  

[19]. This case is adjourned to Monday 07 November 2011 at 8.30 a.m. for mention. Costs in the cause.

.................................
Anare Tuilevuka
Master

At Lautoka
06 October 2011

---

^[1] see reference to this ruling in a Sydney Morning Herald article by Nick Abrahams, Partner and Partner and Sydney Office Chairman of law firm, Deacons, December 12 2008.
^[2] The principles are explained in the case of Wearsmart Textiles Limited v General Machinery Hire Limited (1998) FJCA 26; ABU0030 of 1997 (Unreported), where the Fiji Court of Appeal said:

‘The general principles upon which a Court should act on an application to set aside a judgment that has been regularly entered, are set out in the White Book, i.e. The Supreme Court Practice 1997 (Volume 1) at p.143. They are as follows:

"Regular judgment – if the judgment is regular, then it is an (almost) 13/9/5 inflexible rule that there must be an affidavit of merits, i.e. an affidavit stating facts showing a defence on the merits (Farden v. Richter [1889] UKLawRpKQB 79; (1889) 23 Q.B.D. 124. At any rate where such an application is not thus supported, it ought not to be granted except for some very sufficient reason," per Huddleston, B., ibid. p.129, approving Hopton v. Robertson (1884) W.N. 77, reprinted 23 Q.B.D. p. 126 n.; and see Richardson v. Howell (1883) 8 T.L.R. 445; and Watt v. Barnett [1878] UKLawRpKQB 21; (1878) 3 Q.B.D. 183, p.363).

For the purpose of setting aside a default judgment, the defendant must show that he has a meritorious defence. For the meaning of this expression see Alpine Bulk Transport Co. Inc. v. Saudi Eagle Shipping Co. Inc., The Saudi Eagle (1986) 2 Lloyd’s Rep. 221, C.A., and note 13/9/14. "Discretionary powers of the Court," below.

On the application to set aside a default judgment the major consideration is whether the defendant has disclosed a defence on the merits, and this transcends any reasons given by him for the delay in making the application even if the explanation given by him is false (Vann v. Auford (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, and may therefore be relevant to the credibility of his defence and the way in which the Court should exercise its direction."

^[3] marked USQ 5 in Candy’s affidavit.
^[4] marked USQ 7 Candy’s affidavit.
^[5] Part 1 of the Agreement sets out the purpose of the Agreement as follows:

.... to provide a basis for co-operation between the parties whereby certain University of Southern Queensland (USQ) programs, will be offered by distance education under the auspices of Chandra Williams Ltd.