NBF Asset Management Bank v Tora [2016] FJHC 121; HBC023.2001 (26 February 2016)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION
AT LAUTOKA
[CIVIL JURISDICTION]

CIVIL ACTION NO.: HBC 023 OF 2001

BETWEEN :

NBF ASSET MANAGEMENT BANK a body corporate duly constituted under the National Bank of Fiji Restructuring Act, 1996 and having its registered office in
Suva.
Plaintiff

AND:

APISAI TORA of Sabeto Village, Nadi
1st Defendant

AND :

MELANIA TORA of Sabeto Village, Nadi
2nd Defendant

Date of Hearing &
Written Submissions: 5 November 2015, 9 December 2015

Date of Ruling : 26 February 2016

Counsel : Ms. Latianara M. for the Plaintiff
Ms. Tabuakuro L. for the 1st Defendant

Before : Hon. Mr Justice R. S. S. Sapuvida

RULING ON THE SUMMONS FILED BY THE 1st DEFENDANT TO SET ASIDE THE DEFAULT JUDGMENT MADE ON 9th MARCH 2011

1. The plaintiff in this case originally instituted legal actions against the defendants by way of the writ of summons dated 17th January 2001 in the High Court of Fiji, Lautoka in order to recover a sum of $ 2,556,747. 25 (two million five hundred and fifty six thousand and seven hundred and forty seven dollars twenty five cents) from them.
   
2. The hearing of the substantive matter had been scheduled to be taken up on several occasions including some intervals for consideration of a settlement suggested by the 1st defendant["the defendant"] before it was finally set for the trial on 28 February 2011.
   
3. The 2nd defendant during the period in-between has died and the plaintiff did not continue its cause of action against her with substitution or other.
   
4. The defendant in the meantime writes a letter to Mr. Shalend Krishna the then solicitor for the defendants and informs by the said letter dated 25th February 2011, that he shall no longer require Mr. Krishna's representation of him in the listed trial on 28 February 2011, or any time thereafter.
   
5. Accordingly, on the 28th February 2011 Mr. Krishna the solicitor/counsel for defendants (automatically, not the solicitor for 2nd defendant) with the leave of the court withdrew from the proceedings as the solicitor/counsel on record for the defendant as per the precise written instructions given by the defendant to do so.
   
6. The court having granted leave for Mr. Krishna to withdraw, then and there made further orders against the defendant with an unless order of costs of $ 5000.00 to be paid to the plaintiff on or before 7th March 2011 and more fully explained in that, that failure to pay the costs would result in the statement of defense shall be struck out and the judgment shall be entered in favor of the plaintiff for the whole claim against the defendant.
   
7. The defendant having understood and agreed to the default terms of the unless order, placed his signature in the case record for confirmation of his knowledge with regards to the consequences of a default.
   
8. The defendant was found ducked of the costs order when the matter was taken up on 7th March 2011 and was found guilty of dishonoring the then existing unless order.
   
9. The court forthwith executed the guillotine order by entering the judgment in favor of the plaintiff enabling it to recover the aforesaid sum with the added interest totaling to a sum of $ 5,903,284.23 (five million nine hundred and three thousand two hundred and eighty four dollars and twenty three cents).
   
10. It is the impugned judgment against which the defendant is now beseeching before this court to set aside and seeking a proper hearing to the pleadings of both the parties before passing the judgment.
    
11. The defendant in his summons for setting aside application(the present application before me) dated 28 July 2015 mainly pleads among other things, the following:
    
    • (a) An order that the execution of the said order made by this court on the 9th March 2011 be stayed until the determination of the application for setting aside filed by the defendant.
      
    • (b) An order that the order made by the court against the defendant on 9th March 2011 be set aside unconditionally.
      

(c) An order that costs be in the cause.

12. The defendant reads and relies on the affidavit he filed, at the hearing of this application.
    
13. The defendant in his summons so filed states that this application is made pursuant to Order 19 Rule 9 of the Fiji High Court Rules 1988 (HCR) and the inherent jurisdiction of this court.
    
14. The defendant's summons is intensely objected and challenged by the plaintiff on several grounds.
    
15. However, both the parties at the hearing of the summons on 5 November 2015 moved the court preliminarily to determine whether or not the instant application of the defendant can be brought and entertained under Order 19, Rule 9 of the HCR.
    
16. The court allowed the former, and directed the parties to file their written submissions simultaneously within 14 days from then and the court to deliver the ruling on 10 December 2015.
    
17. However, it was on the 9th December at 12.30 p.m. when the Registry had received the respective written submissions from both sides to which I had no interval to refer and to settle the ruling and deliver it on the following day as the submissions escorted with case law authorities, attachments and various legal arguments. Under these circumstances having given the due regards to the very exhaustive submissions so filed, I had no option but to vacate the ruling for another date.
    
18. The plaintiff raises the following preliminary objection among other issues it has raised in the affidavit in reply and in the written submissions so tendered:
    

- That the defendant in this matter is wrong at law in using the Rule 19, Order 9, of the HCR to bring the instant application.

19. The Order 19, Rule 9 reads as follows:
    
    • - "The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order". (Emphasis added)
      
20. It is pertinent to look at the Order 19, r.1 to r. 9 of the HCR to ascertain of what the exact nature of the provisions under Order 19 provide for.
    

"ORDER 19"

DEFAULT OF PLEADINGS

- Default in service of statement of claim (O.19, r. 1)

- Default of defence: claim for liquidated demand (O.19, r.2)

- Default of defence: claim for unliquidated damages (O.19, r.3)

- Default of defence: claim for detention of goods (O.19, r.4)

- Default of defence: claim for possession of land (O.19, r.5)

- Default of defence: mixed claims (O.19, r.6)

- Default of defence: other claims (O.19, r.7)

- Default of defence to counter claim (O.19, r.8)

- Setting aside judgment (O.19, r.9)

21. On the above premise, it is crystal clear that the Order 19 of the HCR provides provisions only for setting aside of a judgment entered when there is a default in the pleadings, but it does not provide room for setting aside of a judgment which is entered by a court for non- compliance of an unless order. It deals with only when there are circumstances where there is a default in the service of either the statement of claim on the defendant or where the defendant fails to serve the statement of defence within the period fixed by or under the above rules for service of the defence.

22. On relying upon the above provision, the plaintiff argues that the statement of defense of the defendant was stuck out due to non-compliance of an order [unless order] made by a judge.

23. The default judgment in the instance was not however made under Order 19, Rule 9 of the HCR, the plaintiff further submits.

24. In Ramesh Patel & Anor –v- Rajini Kanth [2014] Fiji High Court Civil Action No. HBC 16 of 2011, Corea J at paragraphs 41,42, 43, and 60, held that:
    

"[41] Undoubtedly the rule gives the discretionary power to the court to set aside or vary the judgment entered. However it can be done pertaining to judgments entered pursuant to Order 19.

[42] Order 19 deals with specific provision pertaining to default of pleadings. It is submitted to court that the said order deals with situations where the defendant has failed to serve a defence. It was also submitted that judgment impugned is not a default judgment.

[43] The scenario in this instance is different. A defence has been filed and served. In this instance the court has struck off the defence for non- compliance of orders made pursuant to summons for directions.

[60] The defendant has filed a summons under Order 19 Rule 9. The plaintiff has strenuously objected to the summons arguing no order has been made under Order 19 for the defendant to make an application under Order 19 Rule 9, for the reason that the court has set out in this judgment, I hold that there is no order made by court pursuant to Order 19, for the defendant to make an application under Order 19 Rule 9. Accordingly the application made pursuant to Order 19 is dismissed.

25. In order to display the exact dimension of the circumstances under which the impugned judgment against which the defendant is now pursuing to have set aside was entered on 28 February 2011, I reprint the verbatim of the transcripts of the proceedings as it reflects the following:

"Appearances:

For the defendant : Anu Patel

For the 1st Defendant: (Shailend Krishna) Appears in person Apisai Tora

(Both counsels vouch for the identity of the 1st Defendant).

TRIAL

THE 1st Defendant appears in person as well. He is shown the letter that he has sent his solicitor Krishna & Co. dated 25/2/2011. He admits having sent that letter to his solicitors. A Photocopy of that letter is obtained and is submitted to Court marked "X" and initialed by the Court and kept in the records. Mr Krishna makes application under Order 67 Rule 6 (2) and moves that the Court direct that Mr Krishna need not make a formal application by Summons, and permit Mr Krishna to withdraw as instructed by his Client.

As such, in view of the letter marked "X" accepted by the Defendant himself and as he has sought the withdrawal of his solicitor and saying that he does not need the service of Krishna & Co. for the 28/2/2011 clearly:

(1) Krishna & Co. and Mr Krishna Shailend is permitted to make application to consider himself having withdrawn and not appearing for the 1st Defendant today and as such under Order 67 Rule 6 (2) Mr Krishna's application to withdraw as at 26/2/2011 is permitted by the direction of this Court. Krishna & Co. as such is absolved of responsibility as of 26/2/2011 from this case and to the 1st Defendant.

(2) Mr Krishna and Mr Patel informs that 2nd Defendant has dies and as such, Krishna & Co. is automatically not the solicitors for the deceased 2nd Defendant. Plaintiff Counsel Mr Patel states that he is not making an application to substitute the 2nd Defendant and willingly to continue against the 1st Defendant.

(3) Mr Krishna is granted leave to withdraw as Counsel for the 1st Defendant as such on his application as above.

(4) Plaintiff and 1st Defendant called upon to commence the trial.

(5) The 1st Defendant appearing in person and given accommodation at the Bar table.

(6) 1st Defendant states now that he is moving for an adjournment to find another counsel.

(7) Mr Patel objects to an adjournment, and submit the authority in Krishna Brothers vs Pagat and Telecommunication Ltd (2005) FJCA 36; ABU0028.2004S (29/7/2005). He also submit order of my Brother Judge, Judge Inoke in Winding Up case No. HBF 15 of 2009L, on 25/9/2009.

He submits that the 1st Defendant is using delaying tactic, and he should not be allowed to abuse the discretion of Court. He has clearly set out in his letter to his solicitor that he does not need his service for the 28/2/2011 as such, either he had decided to represent himself or has already a counsel and lawyer and they are using this as a tactic to delay this case.

This matter was fixed for hearing for the 3rd of June last year. It was adjourned again for the 19/11/2010. Hearing fees were ordered to be paid for the days. When it came on 19/11/2010, the Defendant wanted to mediate on 24/1/2011 the parties agreed for the trial date of 28/2/2011 to stand.

On 2/2/2011 too when the matter came up agreed and trial date of 28/2/2011 confirmed.

Order 35 Rule 3 states; "If the Court thinks it expedient in the interest of justice" adjourn a trial for such time ....... Upon such terms as he thinks fit".

Mr Patel moves to disallow the application for an adjournment.

ORDER

This is a 2001 case. It appears that the 1st Defendant is using "Fabian tactics", to delay this case. It involves a sum of $2.5 million and the motive is obvious. However, at the same time, in the interest of justice and taking into consideration the 1st Defendant's age and his disability physically as he is using a crutch to walk and stand, I shall give him a final opportunity to face the trial in this matter. As such, I order that today's trial shall stand adjourned to the 9th of March 2011 at 10.00 am subject to the following unless order;

(1) The 1st Defendant to pay the costs in a sum of $5000/- to the Plaintiff before the 7th of March 2011, failing which the 1st Defendant's Defence shall stay struck out and judgment shall be entered for the Plaintiff.

(2) The 1st Defendant having paid the said sum of $5000/- to the Plaintiff before the 7 March 2011 to be ready for the trial on the 9th of March 2011 with counsel, failing which the 1st Defendant's defence will stand struck out and Judgment shall be entered for the Plaintiff.

(3) The aforesaid unless order is read out to the 1st Defendant and he is to sign this record in consent at the file cover.

Trial for 9th March 2011 10 am subject to above unless orders explained to 1st Defendant.

1st Defendant signs the back of the front file cover of the record that he understands the order.

The 1st Defendant also sets out in signing "wish to declare any right to appeal."

26. The letter marked "X" and referred to in the unless order above is as follows:
    

Tel : [phone]	P.O. Box 505
Mobile : [phone]	LAUTOKA
	25 February 2011

Messrs Krishna & Company

Barristers & Solicitors

LAUTOKA

Attn: Mr Shalend Krishna

Dear Sir

Re: NATIONAL BANK OF FIJI vs APISAI TORA

LAUTOKA HIGH COURT CIVIL ACTION

Please be advised that I shall no longer require your representation of me in the abovementioned listed matter on Monday 28 February 2011, or any time thereafter.

I sincerely thank you for your kind service rendered me to date, hope in our hitherto continued good relations, and respectfully remain,

Yours faithfully

Apisai Tora

27. It is therefore need not say that the defendant was well aware of the fact that the matter was fixed for trial and that he should have been ready on 28th February 2011 for the same.
    
28. However, having known the former, well in advance the upcoming trial date (28 February 2011) the defendant volunteered himself on 25 February 2011 not to get the legal assistance from his counsel by sending the letter "X".
    
29. It is then the bona fide of the defendant with regard to the case in point becomes dubious.
    
30. The reason for my dictum above is because the defendant in his "affidavit in support" dated 19 July 2015 filed in support of the instance, clearly states at paragraphs 7,8,9 and 10 that:
    

"7. THAT Mr. Shalend Krishna sought leave of the Court to withdraw as my lawyer on the 28th of February 2011 which was granted by the Court. I was without any legal representation from the 28th of February 2011 as Mr Krishna withdrew as my lawyer on the hearing date.

8. THAT further to this, I was penalized for the adjournment of the hearing on the 28th of February 2011 by the Court and cost of $5000.00 was issued against me and payable to the Plaintiff before the 7th of March 2011, failing which my Statement of Defence would be struck out and judgment entered for the Plaintiff.

9. THAT the unless order was given for 7 days and the hearing date fixed on the 9th of March 2011, I was not able to secure $5000.00 to pay the Plaintiff or had sufficient time to pay a lawyer to appear on my behalf, I appeared in person on the 9th of March 2011 but the Court refused to accept any explanation from me and proceeded to enter default judgment against me.

10. THAT the delay was not intentional or an insolent act on my part as my solicitor withdrew on the day of the hearing and I was denied sufficient time to engage another solicitor to represent me competently on the 9th of March 2011 as such I appeared in person on the above date." (Italic & bold added)

31. The above statements of the defendant deposed in his affidavit categorically contradict with the facts reflect from the case record and with his own letter "X", because it was he who removed the solicitor on record from the proceedings but not the solicitor who withdrew on the day of the trial in open court.
    
32. Therefore, at the first place it is certain that the judgment entered on 09 March 2011 against the defendant shall not fall within the ambit of a default judgment entered in pursuance of the provisions of Order 19 of the HCR and that the summons filed by the defendant in the instance under Order 19 rule 9 is wrong at law.
    
33. Be that as it may, I would now for the purpose of a comprehensive discussion and to patrol through the every nook & corner of the issue in the instance application filed by the defendant, like to look at the other arguments advanced by the defendant by his written submissions filed in support of his plea, though the matter at issue before me is limited to the preliminary objection.
    
34. The defendant points out and say that in ANZ Banking Group Ltd vs Frederick William Caine [2006] FJHC 42, the court noted the following:
    

"A default judgment can be entered at two different stages of a civil action. The first is under O.13, when a Defendant fails to "give a notice of intention to defend" and the second is under O.19, for "default of pleadings". However, under both the Orders, the basic principles for setting aside default judgments, if any entered, remains the same."

35. However the default judgment that has been entered against the defendant was not entered under any one of the above premises. The defendant admits that apart from O.13 and O.19 of the HCR, a default judgment can also be entered against a party when the court administers its inherent jurisdiction in the management of cases and imposes an unless-order.
    
36. The issue in the instance arose when the default judgment was entered for non-compliance of the unless order which was sealed by the court by exhausting its inherent jurisdiction against the defendant. Therefore, the defendant cannot bring this application under O.19, r.19 of the HCR.
    
37. The defendant further argues that a default judgment entered by the Court in exercising the default terms dictated on a party in executing an unless-order can still be vacated by the same Court. The defendant has submitted the following case law authorities in support of this argument: –
    
    • - Australia and New Zealand Banking Group Ltd v Caine [2006] FJHC 42; HBC0500R.2004S (3 February 2006),
      
    • - Samat v Qelelai [2012] FJHC 844; HBC201.2002L (30 January 2012),
      
    • - Wati v Chand [2014] FJHC 748; HBC334.2011 (17 October 2014).
      
38. In Australia and New Zealand Banking Group Ltd v Caine (supra), the defendant had not filed his defence. Hence the court entered a default judgment. It is not the case of the defendant of the instance, because in this case the defendant had filed his defence, the case went on for years on various applications budded by the defendant himself suggesting settlements with the plaintiff. Therefore, the essence on which the default judgment was set aside in the above is totally different to that of the defendant's case in the instance.
    
39. What mainly focused on among other things in the case of Samat v Qelelai (supra) was that whether the parties were present when the Master of the High Court made the unless order on 14 November 2008 which was later executed by the Master for non-compliance by the plaintiff by sticking out the plaintiff's case. In the above case none of the parties were present when the Master made the unless order against the plaintiff. Furthermore, certain minutes with regard to the previous directions of the court on which the unless order was later made were not filed of record. The circumstances of the Samat case are drastically different to the case of the defendant here.
    
40. The other case authority cited by the defendant in support of the defendant's summons is Wati v Chand (supra) wherein the Master Thushara Rajasinghe (as he then was)set aside an unless order and the order of striking out of the action which had been earlier passed against the plaintiff for non-service of the amended statement of claim. Later on it was lifted by the Master having found that the counsel for the plaintiff was not in a position to properly serve his amended statement of claim within the time allowed by the unless order due to the pending application of leave to appeal out of time. The counsel was legally bound by another pending decision with regard to an application for leave to appeal out of time in order to finalize the required amended statement of claim.
    
41. Therefore, it is need not say that none of those case law authorities cited above by the defendant in this case supports the arguments advanced by the defendant to move the summons for setting aside the default judgment in his favor.
    
42. Furthermore, it was revealed from the submissions of both the parties that the defendant had already made five attempts to invoke the jurisdiction of the Fiji Court of Appeal (FCA) in pursuance of the same application which were finally refused or rejected or struck out by the FCA for the reasons very well known to the defendant according to the "AT 3", "AT 4, "AT 5, and "AT 6" submitted by the defendant himself along with his affidavit in support.
    
43. It is therefore, interesting to observe the chronology of events took place in the FCA as it confirmed by the following paragraphs of the defendant's affidavit as follows:
    

"12. That I was able to engage Messr Koyas who filed an appeal against the Default Judgment on the 20th of April 2011. Annexed and marked as "AT 3" is the initial Grounds of Appeal against the Default Judgment filed on my behalf.

14. That my lawyers made a second attempt and filed a second appeal on the 19th of May 2011. The security of costs was fixed for $1000.00 to be paid within 28 days which unknown to me was unpaid as such my second appeal was also dismissed.

15. That a third appeal was filed on the 26th of June 2012 however since the appeal was now out of time, it was an application for leave to appeal out of time.

17. That there was a fourth application made again by my lawyers to reinstate the application for leave to appeal out of time on the 11th of April 2014 and this was dismissed on the 22nd of October 2014 by the Court of Appeal for non-appearance of my lawyers. Annexed and marked as "AT 5" is a copy of the Order dated 22nd of October 2014.

18. That my lawyers again filled a fifth application for leave to appeal out of time however this was unsuccessful and our summons was dismissed by the Court of Appeal. Annexed and marked as "AT 6" is a copy of the Order dated the 16th of June 2015 by Judge Calanchini."

44. In explaining the reason for the delay in bringing up the present application for setting aside, the defendant states that he has exhausted the appeal process on the advice of his lawyers and that that has caused considerable delay in filing the present application again before this court to set aside the default judgment.

45. The FCA has already made several orders on the same issue and on the same application filed by the defendant which is now before me again.

46. It is therefore, the whole attempt of the defendant in the present application before this court is absolutely an abuse of process of this court.

47. However, in responding to the issue raised by the plaintiff and as both the parties agreed upon to receive an order as to whether or not the defendant can bring this application pursuant to Order 19, rue 9, I now confirm and hold with the plaintiff's argument that the defendant cannot bring this application under Order 19, rule 9, for the foregoing reasons I have discussed in this order.

48. Hence, I strike out and dismiss the summons for setting aside application dated 28 July 2015 filed by the defendant with costs to be paid to the plaintiff by the defendant.

49. The final orders of the court:

(1) The summons for setting aside application dated 28 July 2015 filed by the defendant is struck out and dismissed with costs.

(2) The defendant shall pay costs to the plaintiff.

(3) Costs to be assessed.

R.S.S.Sapuvida
[Judge]
High Court of Fiji

On this 26th day of February 2016
At Lautoka.