Fiji National Provident Fund v Irwin [2013] FJHC 408; Civil Action28.2009 (15 August 2013)

IN THE HIGH COURT of FIJI AT LABASA
NORTHERN DIVISION

Civil Action No: 28 of 2009

BETWEEN:

FIJI NATIONAL PROVIDENT FUND
a body corporate established under the FNPF Act (Cap. 219)
having its registered office at Provident Plaza, 33 Ellery Street, SUVA.
PLAINTIFF/RESPONDENT

AND:

ROBIN IRWIN
of Matalaqere, Wausau Savusavu, in Fiji and

GRAHAM OLDRIEVE
of Unit 3 Waterfront Building,
Savusavu, Businessman.
DEFENDANT/APPLICANT

Counsel: Mr. Sadiq Esq. for the applicant.
Ms. L. Baleimatuku for the respondent.

RULING

Introduction.

By summons issued on the 10 August 2012 returnable on the 6 September the 1st Defendant made an application to set aside default judgement entered against him. The summons sought the following orders:-

1. THAT the judgment entered herein on the 2nd day of October, 2009 against the said applicant/defendant in default of statement of defence be set aside;

2. THAT the applicant/defendant be given leave to defend this action and to file the Statement of defence;

3. THAT the execution of the said Judgment be stayed pending the hearing and determination of this action;

4. THAT such further or other Order be made as this Honourable Court deems just; and

5. THAT the costs of this application be costs in the cause.

The application was made under Order 13, 14 and 19 of the High Court Rules 1988 and upon the inherent Jurisdiction of the Court. In support of the application the applicant Robin Irwin filed an affidavit which states so far as is relevant the following:-

(1). That he denies being indebted to the plaintiff as claimed although he admits to having given a guarantee but states that that guarantee was limited to his assets in Fiji as stipulated under paragraph 15 of the deed of guarantee.

(2). That the said clause 15 of the deed of guarantee clearly states that:-

“It is hereby agreed that the recovery of any amount due and payable under this guarantee shall be limited to the Local asset of the guarantor.”

(3). That although he had intentions to own assets in Fiji, but due to certain circumstances could not get any asset and hence have no asset whatsoever in Fiji;

(4). That he admits to being served with a writ of summons on the 29 July at Savusavu but that no defence was filed because he was negotiating with the plaintiff on behalf of a company called Kilowen (Fiji) Ltd to pay the debt off and that for this purpose he had gone to England to borrow money from overseas but that the negotiations fell through;

(5). That he later became sick and had to go to New Zealand for treatment and later he had a coronary by-pass and that he could not file a defence;

(6). That he did not receive a copy of the judgement and he believes that he should have been given a copy fourteen days after judgement was given;

(7). That he has a good defence;

(8). That the Summons for Summary Judgment issued on the 21 August 2009 was not served on him and that he only became aware of the judgement when he was served with a bankruptcy notice. And that he went to New Zealand for medical treatment before he could do anything about the bankruptcy notice;

(9). That the plaintiff had advanced the money to Savusavu Harbourside Limited under a first registered mortgage over it CL 13772 and therefore the money is well secured;

(10). That the Savusavu Habourside Limited is owned by three companies namely, Kilowen (Fiji) Ltd with a 51% share, Fiji Investment Corporation an arm of the Government which has 33% shares and Kontiki Growth Fund which has about 16% share;

(11). That it is inequitable to sue him for the whole amount while the said three owners who would be benefitting from the said project are not contributing to the payment of the debt;

(12). That the said judgement entered against him was irregular in that:-

(a). That in the Summons for Summary Judgment which was issued on the 21st August, 2009 at the Labasa High Court, the Respondent/Plaintiff claimed special damages and so the Court entered the Judgment for special damages, whereas in the Writ of Summons it claimed the money being lent and advanced to Savusavu Harbourside Limited.

(b) That no particulars of the special damage was given either in the Writ of Summons or in the Summons for Summary Judgment and hence it is irregular.

(c). The Plaintiff never pleaded the special damage in any of the said Summons, and hence the said Judgment is irregular;

(13) He therefore prays that the judgement be set aside and he be given leave to defend the matter and execution of the judgement be stayed pending the determination of the matter.

The plaintiff opposes the application and in its affidavit in reply sworn by its Commercial Loans Manager states so far as is relevant the following:-

(1). That the defendant is truly indebted to the plaintiff for the amount of $2,312,013.38 under his personal guarantee made to the Respondent for the loan take by Savusavu Harbourside Limited a company for which the Applicant was a Director;

(2). That the Deed of Guarantee sufficiently provides for the rights of the plaintiff as lender for recovery of the debt;

(3). That the plaintiff disputes the defendant’s statement at paragraph 5 and further state that upon the plaintiff taking up the position to recover the loan amount under the Guarantee it was revealed that the defendant had disposed of all his assets to other family members. The disposal of assets by the plaintiff therefore negates his statement under oath that he has never owned any assets locally;

(4). That the plaintiff has complied with relevant legal processes in obtaining a Judgement by Default against the defendant and that the onus was on the defendant to file a defence and that his failure to do so resulted in default judgement entered against him and his excuses of being sick is rather lame as he could have instructed a solicitor;

(5). That the plaintiff disputes that the defendant was not served with the summons for summary judgement and further states that all the necessary legal procedures have been followed;

(6). That the plaintiff has sufficient powers under the guarantee to exercise recovery.

(7). The plaintiff confirms that the Savusavu Habourside Limited is owned by three companies but further states that one of the company, Kilowen (Fiji) Limited, is a company 100% owned by the defendant;

(8). That the application to set aside judgement and the stay of execution is made three years after judgement was obtained which shows the defendant’s lack of interest in the matter;

(9). That the plaintiff has diligently pursued this action since 2009 and should not be prejudiced by the defendant’s lack of interest or negligence in defending himself;

(10). That the application should be dismissed with costs.

At the conclusion of the oral hearing on the application on the 3 June 2013 the parties were requested to provide their written submissions, the defendant/applicant within 21 days and the plaintiff/respondent 14 days thereafter. Both parties provided useful submissions.

The defendant’s counsel submits that:-

(1). The defendant could not file a defence because he was sick and had to go to New Zealand for medical treatment;

(2). That the plaintiff then filed a summons for summary judgement on the 21 August 2009 for the sum of $2,312,013.38 and that the Court granted judgement for that amount on the 2 October 2009.

(3). That no copy of the said judgement was served on him and he had no knowledge of it neither was he served with the summons for summary judgement.

(4). That the only time the defendant came to be aware of the summary judgement was when he received a Receiving Order and that he thereafter took immediate steps to apply for the judgement to be set aside;

(5). That the summary judgement was irregular in that it was contrary to clause 15 of the Deed of Guarantee which limits the guarantee to his assets in Fiji and there being no asset in Fiji there could be no judgement whatsoever;

(6). That the judgement was in excess of the guarantee and contrary to Clause 15 and therefore was irregular;

(7). That the guarantor’s (defendant’s) liability is secondary hence the plaintiff ought to have made the claim against the Savusavu Habourside Limited for which the defendant had given the guarantee and accordingly the judgement is irregular;

(8). That judgement was entered for too much. A Judgment for more than the amount actually due at the time Judgment is entered is bad and will be set aside and bankruptcy proceedings taken on such a Judgment are bad even though the bankruptcy notice was issued for the correct amount. (see The Supreme Court Practice 1982- Vol I – Page 157);

(9). That the recovery of the money under the guarantee was limited to the local asset of the guarantor and since he had no asset in Fiji the said Judgment was entered for an amount which was not guaranteed by the guarantor, hence it was an irregular Judgment and ought to be set aside upon no terms or conditions;

(10). That the extent of the liability undertaken by the guarantor will depend upon the terms of the contract of guarantee. It need not be co-extensive with that of the principle debtor but in so far as it exceeds it, it is not a guarantor’s liability;

(11). That in this case, the guarantor’s liability was limited to his local asset, and since he had no asset in Fiji, the said Judgment exceeded his liability and accordingly it was an irregular Judgment. It was for more than he had guaranteed and therefore he is entitled to have it set aside as if right upon no terms.

(12). That the Guarantor is not liable beyond the terms of the contract. The guarantor cannot be made liable beyond the amount prescribed by the guarantee. It is very clear, that here the said Judgment was beyond the terms of the contract that is for an amount that was not guaranteed by the guarantor, hence the Defendant is not liable for that amount. That since the Judgment was wrongly entered, I submit that it be set aside. It was not the Defendant’s liability;

(13). The Plaintiff failed to serve the Judgment onto the Defendant as required hence the said Judgment was unenforceable;

The plaintiff in its submission raise the following:-

(1). That the defendant has not shown a meritorious defence in its affidavit which is a fundamental requirement of setting aside;

(2). That the default judgement entered against the defendant was regular and that the defendant was given ample time to file his defence and had not done so;

(3). That the application to set aside is made two and a half years after the default judgement was entered which shows a lack of interest on the part of the defendant;

(4). That as submitted by counsel for the Applicant/Defendant, the Guarantee was limited to the local assets of the Guarantor. Any Guarantee for that matter is an agreement to answer for the debt of another. It becomes enforceable where there has been a default by the Principal Debtor, that is, Savusavu Harbourside Limited;

(5). As a default has occurred on the part of Savusavu Harbourside Limited, the Guarantee comes into effect immediately thus the Guarantor has to answer for the debt of the Borrower, Savusavu Harbourside Limited;

(6). That the guarantee entitles the Respondent/Plaintiff to sue the Guarantor for the debt secured by it. Furthermore, it is clearly stated in clause 6 of the Deed of Guarantee: “The Guarantor shall be liable to pay the Lender the whole of the Guaranteed Monies....”, therefore; the Guarantor is clearly aware of its obligations as per the Deed of Guarantee;

(7). That the Counsel for the defendant statement that as the defendant has no assets in Fiji and therefore there can be no judgement is not correct in that the defendant is liable under the deed of guarantee. That the reason for the plaintiff is in court is to file bankruptcy orders against the guarantor;

(8). That the only explanation given by the Defendant as relied on by the Defendant’s Affidavit in Support can be summarized as follows:-

(i). That the Applicant/Defendant became sick, suffering from heart problems and had to go New Zealand for medical treatment on several occasions.

(ii). That the no copy of the Judgment was ever served to the Applicant/Defendant and that the said Judgment should have been served to the Applicant/Defendant within 14 days of the Judgment.

(9). That the above reasons are not sufficient excuse and should not

be even considered by the Court;

(10). That the defendant in considering his medical condition should

have briefed some other law firm or counsel to appear on his behalf if he knew that he could not be made it to court as is the usual practice. Instead the defendant took no steps at all but casually treated this case without any urgency or regard to the seriousness of the matter;

(11). That the plaintiff has diligently pursued this action against the

Applicant since 2009 and should not be made prejudiced as a result of the Applicant’s lack of interest and negligence in defending himself;

Analysis

Principles of setting aside default judgment

The principles upon which default judgments are set aside fall into two distinct categories and they are whether the default judgement is regular or irregular. Fry L J in Anlaby -v- Praetorious [1888] UKLawRpKQB 55; (1888) 20 QBD 764 at 769 succinctly drew the distinction as follows:-

“There is a strong distinction between setting aside a default 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 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.”

This principle has been adopted and applied in our Courts on numerous occasions, thus where an irregular default judgment is entered, which irregularity cannot be cured, the Defendant is entitled as of right to have the judgment set aside.

Where however the default judgement is regular the Court has a wide discretion and neither Order 13 rule 10, nor Order 19 rule 9, impose any restriction in the manner in which the discretion is to be exercised. When considering an application to set aside a default judgment the Courts will consider whether there is prima facie a defence on merits; the reasons for the default judgment; the promptness with which the application to set aside is made; and whether the setting aside would cause prejudice to the Plaintiff which could not be adequately compensated for by a suitable award of costs; Evans –v- Bartlam (1937) AC 473; Adams –v- Kennick Trading (International) Ltd. & Ors.(1986) 4 NSWLR 503

These primary factors have been cited and applied in many judgements and applications to set aside and I need not refer to them yet.

The first issue to be determined in this application is whether the default judgement was regularly entered. If the default judgement was irregular then the defendant has the right to have the judgement set aside. If the default judgement is regular but that the defendant does have a meritorious defence the Court may exercise its discretion and set aside the default judgement.

What is a regular default judgement? Firstly a default judgement is a judgement obtained without resistance of the pleadings from the defendant and it is obtained in this instance by the failure of the filing of a defence by the defendant. But what makes the default judgement regular or irregular given the non-resistance? A default judgement regularly obtained is said to be one in which, according to the rules, the plaintiff was entitled to enter a judgement by default. In most instances this is obtained by the failure of the defendants to file a defence within the time stipulated by the rules.

In this instance the defendant was served with a statement of claim on the 29 July 2009 and on the 12th August filed an acknowledgement of service of the writ and indicated that he wished to defend the claim. This acknowledgement was filed and issued in Court by his then solicitors Messrs. Kohli & Singh. Under Order 18 rule 2 the defendant having given notice that he intends to defend the matter he must now, unless the Court gives leave otherwise, serve a defence on the plaintiff before the expiration of 14 days after the acknowledging service of the writ.

No defence was filed within the stipulated period and the plaintiff thereafter by summons filed pursuant to Order 14 rule sought an order for summary judgement. This application was supported by the required affidavit as proposed under Order 14 rule 2. Under these rules where a statement of claim has been served on the defendant and the defendant has given notice of intention to defend the action, the plaintiff can on the ground that the defendant does not have a defence to a claim included in the writ except as to the amount of damages claimed, apply to the Court for judgement against the defendant. Such an application must be made by summon supported by an affidavit verifying the facts on which the claim is based and further stating the deponents belief that there is no defence to the claim. This provision however applies to every action begun by writ except in respect of claims for libel, slander, malicious prosecution, false imprisonment and allegations fraud. Further summary judgement under Order 14 does not apply to actions to which Order 86 applies, that is, actions for specific performances under agreements etc.

Any summons under these rules must be served on the defendant not less than ten clear days before the return date. The summon was issued on the 21 August and returnable on the 29 August 2009. For some reason the matter was called on the 26 August and not the 29th however on the 26 August the defendant was represented by Messrs. Kohli & Singh. His Solicitor then sought 21 days to file a reply to the affidavit in support of the summons this was granted and the matter adjourned to 28 September before the Master. On the 28 September when the matter was called his solicitor informed the Court that he has no instructions in regards to the affidavit in reply to the affidavit in support of the application nor does he have any instructions in respect of the summons for summary judgement. However he informed the Court that he still wishes to remain on record, the matter was then adjourned for hearing on the summons on the 2 October 2009 and the defendant’s solicitor was then directed to obtain further instructions or there may be judgement against his client. At this point it should be noted that there was no indication from either the defendant nor his then solicitor that the defendant was suffering from any medical condition such that he was unable to give proper instructions. Perhaps it was at this point as is alluded to in his affidavit in support of the application to set aside that there were negotiations between the parties about settling the matter by payment of the debt this is however unclear. The only issue at this stage appears to me to be that of short service that is, that the matter was called less than the ten clear days stipulated under the rule. However the fact that this was not raised at the time by his solicitor nor is it raised in this application has led me to conclude that this irregularity has not prejudiced the defendant to a great extent and in any event it is curable under Order 2 of the rules.

Default judgement was then granted to the plaintiff on the 2nd October on the hearing of the summons the defendant did not appear to defend the application although his solicitor was present.

Given the above I am therefore of the view that the rules were followed correctly prior to the granting of the application for default judgement in other words it was not granted prematurely. The defendant however submits that the judgement was irregular on several grounds.

Judgement entered for too much therefore it was irregular.

The defendant counsel’s submissions could be summarised by looking at the effect of clause 15 of the deed of guarantee on the default judgement. Clause 15 states:-

15. “IT IS HEREBY AGREED THAT THE RECOVERY OF ANY AMOUNT DUE AND PAYABLE UNDER THE GUARANTEE SHALL BE LIMITED TO THE LOCAL ASSETS OF GUARANTOR”

The first point submitted is that the summary judgement was irregular in that it was contrary to clause 15 of the Deed of Guarantee which limits the guarantee to his assets in Fiji and that there being no asset in Fiji there could be no judgement whatsoever. In other words it was entered for too much or more than the amount guaranteed. The plaintiff on the other hand submits that notwithstanding clause 15 the plaintiff is still entitled to enforce the guarantee under clause 6 of the deed of guarantee. This clause spells out the liability of the guarantor under the deed although clause 15 appears to limit the amount recoverable and payable under the guarantee.

The defendant counsel submission in my view appears to be consistent with the guarantee but is untenable for the following reasons. In the first instance the phrase “recovery of any amount due and payable under the guarantee” in clause 15 refers to the judgement debt which could be recovered and payable under the guarantee and not the judgement or the amount itself. That is, the judgement debt under the guarantee can be any amount. And further the fact that this is limited to his assets in Fiji by the proviso “shall be limited to the local assets of the guarantor” once again merely limits the enforcement of the judgement debt irrespective of the amount. Therefore the judgement debt can be obtained for any amount but that the recovery or the enforcement of which is limited to his local assets. Whether or not he has any asset in Fiji is immaterial. The plaintiff in any event may choose any of the forms of enforcements available to it under law to recover the debt.

If the default judgement was for a sum more than the sum guaranteed or that stated on the writ the Court could on one of the party’s application have discrepancy corrected but not set aside the judgement. In Muir -v- Jenks (1913) KB 412 the English Court of Appeal ruled that where a plaintiff signs judgement in default of appearance for a sum in excess of that which is due to him, the defendant is entitled to have the judgement set aside, subject to the right of the plaintiff, in a proper case, to apply to have the amount reduced.

Even in cases where the claim was for a unliquidated amount this would not render the judgement irregular (see Subodh Kumar Mishra -v- Car Rentals Civil Appeal No. 35 of 1985) all that was needed would be to substitute “damages to be assessed” as was done in Suresh Charan -v- National Insurance Company Limited Civil Appeal No. ABU0067 of 1998/S.

For the above reasons the default judgement is not irregular in that it is not more than what was promised, the real difficulty is how the deed of guarantee is to be perceived.

Law of Guarantee

The second point submitted is that the guarantor’s liability is secondary and the plaintiff ought to first claim from the Savusavu Harbourside Limited for which the defendant had given the guarantee.

In Halsbury’s Laws of England 4th Edition Vol. 20, p.49, a guarantee is defined as:

“an accessory contract, by which the promisor undertakes to be answerable to the promise for the debt, default or miscarriage of another person, whose primary liability to the promisee must exist or be contemplated.”

While it is true that the deed of guarantee remains secondary or subsidiary to the mortgage contract between the plaintiff and the Savusavu Harbouside Limited the guarantor remains primarily liable to the creditor for the debtor’s obligation. Therefore if Savusavu Habourside Limited had paid for the debt under the mortgage the defendant would have been discharged of his obligation under the guarantee. Where however the Savusavu Habourside Limited did not perform its obligation to pay the debt under the mortgage the defendant is therefore deemed to assume this liability.

Chitty on Contracts (Specific Contracts) 26th Ed. spells out this principle as follows (p.1341):

“ .... Prima facie a surety does not merely undertake to perform if the principal debtor fails to do so; he undertakes to see that the principal debtor will perform. Important results flow from this prima facie rule of construction. In particular it means that a surety is normally liable to the same extent as the principal debtor for damages for breach of the latter’s obligations even though he has not in terms guaranteed the payment of damages.”

A much fuller exposition on the law of guarantee and tracing its history through the ages, is set out in Lord Diplock’s judgment in Lep Air Services v. Rolloswin Ltd. {1973} AC 331, at pp. 346 – 349. Specifically, on the failure to perform, Lord Diplock stated (at p.349):

“The legal consequence of this is that whenever the debtor has failed voluntarily to perform an obligation which is the subject of the guarantee, the creditor can recover from the guarantor as damages for breach of his contract of guarantee whatever sum the creditor could have recovered from the debtor himself as a consequence of the failure. The debtor’s liability to the creditor is also the measure of the guarantor’s.”

Earlier, Lord Reid in the same House of Lords decision in Lep Air Services (supra) had this to say on the guarantor’s obligation (at p.345):

“... He might undertake that the principal debtor will carry out his contract. Then if at any time and for any reason the principal debtor acts or fails to act as required by the contract, he not only breaks his own contract but he also puts the guarantor in breach of his contract of guarantee. Then the creditor can sue the guarantor, not for the unpaid instalment but for damages. His contract being that the principal debtor would carry out the principal contract, the damages payable by the guarantor must then be the loss suffered by the creditor due to the principal debtor having failed to do what the guarantor undertook that he would do”

In Council of the Fiji Institute of Technology v Cara [2003] FJHC 300; HBC0258R.2002S (7 May 2003) the Court refused an application to set aside based on a misunderstanding of the effects of the guarantee where the debtor went overseas without paying the bond. The defendants guaranteed that the bond would be paid if the contracted employee failed to complete the contracted period of employment. The Court held that the guarantors remain primarily liable to the creditor for the debt or for the obligations. For the above reasons this ground of the application to set aside also fails.

Delay and meritorious defence

Notwithstanding the above a default judgement regularly obtained can still be set aside on certain conditions if the defendant can prove that he has a meritorious defence. The applicant however, must first satisfy the Court that his application to set aside was made promptly and without delay. The default judgement was entered on the 2nd October 2009 and this application was made on the 10th August 2012 almost three years later. The defendant submits that he had no knowledge of the default judgement until he was served with a bankruptcy notice. That he later went to New Zealand for medical treatment and was unable to file a defence. The record shows that the defendant had filed an acknowledgement of service of the writ through a firm of solicitors and that the acknowledgement shows that he intended to defend the matter. He thereafter tried to settle the debt and had to fly to England to negotiate payment without success. It would have been prudent for him to file a defence in the meantime but chose not to. His counsel appeared when the summons for summary judgement was first called and obtained further time to file an affidavit in opposition. This too did not happen. Although there is no evidence put before the Court in regards to his medical condition or that he had a coronary by-pass at the time I do not doubt that the defendant may indeed have suffered this condition at the time. But I am of the view that he had ample time to instruct his then solicitor to file a defence. Although he made this application promptly the delay in filing of his defence was in my view was too long for the Court to exercise its discretion; (see NBF Asset Management Bank –v- John Elder & Sainiana Elder (2004) HBC 564/99; Suva City Council –v Meli Tabu (2004) ABU 55/03) This position however may change if the defendant can show that he has a meritorious defence to convince the Court to exercise its discretion grant the application although the delay is not an easy hurdle to overcome.

All that the defendant needs to do is to disclose an arguable or triable issue.
The Court is not required to pronounce a judgement on the merits. In Fiji Forests Industries Ltd. v. Timber Holdings Ltd. & Ors. 1994 HCA 117 of 1994 (Unreported) per Scott J. said at p. 8:

"This of course does not mean that I should attempt to resolve the issue between the parties now, that I should decide whether I think that the proposed defence is likely to be successful. All that I have to decide is whether I am satisfied that the Defendants have put forward a bona fide defence giving rise to triable issues."

A proposed statement of defence filed as "Annexure B" in the affidavit deposed by the defendant in support of the application states briefly that:-

(1). The defendant admits paragraphs 1,2,3,4 of the statement of claim but denies being indebted to the plaintiff for the amount claimed.

(2). That the plaintiff has failed to serve on the defendant a copy of

the judgement as is required under Order 42 rule 8;

(3). That the recovery of any debt due and payable by the defendant is limited to his assets in Fiji;

(4). That the plaintiff in the summons for summary judgement claimed the judgement on special damages but failed to give any particulars;

(5). That the plaintiff has advanced the monies to Savusavu Harbourside Limited on security over CL 13772 and therefore ought to have proceeded with a mortgagee sale to recover its debts;

(6). That the Savusavu Harbourside Limited is owned by three companies and that the plaintiff ought to have proceeded against the said defendant first.

The statement of claim consists of only four paragraphs, therefore by admitting the facts in the claim the defendant has agreed to it and offers no resistance. If he has admitted the claim then there is no defence and the Court could not go any further than that. The rest of the paragraphs of proposed defence thereafter does not have any merit because it addresses issues relevant only to the setting aside application. In other words the materials offered or the defence falls far short of establishing a defence sufficient to satisfy setting aside default judgement; (see Mohammed Shameem & Mohhamad Saiyeed –v- Toyota Tsusho (ss) Ltd (2004) ABU 42/03)

A further matter raised by the defendant in his application is that he did not receive a copy of the judgement and he believes that he should have been given a copy fourteen days after judgement was given. This is a requirement under Order 42 rule 8, this rule states that:-

A party entering judgement must serve a copy of the sealed judgement on every other party not later than 14 days after entry of the judgement.

The defendant submits that failure to comply with the said rule makes the judgement unenforceable but provides no authority to support this proposition. This rule was inserted on the 13 September 2005 by Legal Notice 47/05 and is not present in the Supreme Court Practice or the 1999 version of the White Book. The need to serve every other party to the proceedings or those affected by a judgement with a copy of the judgement is necessary for obvious reasons. The defendant in this matter ought to be served so that he should be aware of the effect of the judgement and to do what is required of him. The rule states that a party entering judgement must serve a copy of the sealed judgement to every other party within 14 days. There was no submission or explanation by the plaintiff about this issue except a denial in its affidavit in reply. In some jurisdictions the party obtaining judgements is required to immediately serve not only to every other party to the proceedings but also to those affected by it. The rule does not state the implications of non-compliance. Order 2 rule 1 however states that where at any proceedings or at any stage of or in connection of any proceedings there has been a failure to comply with the requirements of these Rules whether in respect of time (or place, manner, form, or content, etc) the failure shall be treated as an irregularity and shall not nullify the proceedings.

Order 19 rule 9 however provides the Court with a wide discretion for not only can it set aside a default judgement but it can also vary any judgement entered. Paragraph 19/9/1 of the Supreme Court Practice 1999 version at page 368 state that:-

The wording of this rule is wide enough to authorise the Court, in its discretion, to set aside one part of the default judgement and to grant a general stay of execution on another part (National Westminster Bank plc v.Humphrey (1984) 128 S.J. 81,CA.)

Given the wide discretion under Order 19 rule 9 it appears that other forms of relief may be available in an application to set aside made in pursuance of this order particularly where there is no defence and where there are other avenues for the recovery of the debt is available. This is particularly so in matters such as this. The Savusavu Harbourside Limited or the primary debtor as the proprietor of the mortgaged land is a company consisting of three shareholders namely Kilowen (Fiji) Limited) 51% shares, Fiji Investment Corporation an arm of the government with 33% shares and Kontiki Growth Fund 16% shares as stated in the defendant's affidavit in support sworn on the 7 August 2012. The defendant has 100% shareholding interest in the first named company and the suggestion that the land be sold to pay the debt may be more practical given the lands prime location in the foreshore of Savusavu and the limitation in the deed of guarantee. Added to this is the defendants age, medical condition and the advantage to be gained by a bankruptcy proceedings and the effect that may have on him. There are no application for any other orders before the Court and the Court is only required in this instance to deal with the application to set aside.

Conclusion

The application to set aside is therefore refused in that the summary judgement was not irregular. That the reasons given of the defendant's long delay in filing a statement of defence was insufficient to set aside the summary judgement. That the defendant has no defence on the merit in that the proposed defence was an admission and offered no resistance to the claim. That the judgement was not more than the guarantee only that the execution or the recovery thereof was limited to the defendant's asset in Fiji if any. That although it is true that the defendant was not served within the time stipulated under Order 42 rule 8 this non- compliance did not make the judgement unenforceable but would give the Court the power to exercise its discretion under Order 19 rule 9. In this aspect only the Court will order the plaintiff to reseal the order of summary judgement and serve the defendant or his solicitor within 14 days from today. It follows therefore that any execution of the summary judgement shall be stayed until proper service of the summary judgement on the defendant.

Orders.

1. The application to set aside is denied;

2. That the plaintiff to reseal and to serve the summary judgement granted on the 2 October 2009 to the defendant within 14 days of this order;

3. That any execution of the summary judgement be stayed until proper service of the summary judgement .

4. That each party to pay its own costs.

Dated the 15 August 2013

H ROBINSON
Master, LABASA.