Niutamata v Prakash - Decision [2016] FJHC 520; HBC118.2011 (7 June 2016)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 118 of 2011

BETWEEN : WAME NIUTAMATA as Administrator of the Estate of the late Salanieta Kotomaimoala Leqa of Nausori, School Teacher.

PLAINTIFF

AND : SHALEN PRAKASH of Vuduna Road, Nausori, Mini Van Driver.

1^st DEFENDANT

AND : UMLESH CHAND of Tuirara Subdivision, Makoi, Driver.

2^nd DEFENDANT

AND : THE ATTORNEY GENERAL OF FIJI of Level 7, Suvavou House, Victoria Parade, Suva.

3^rd DEFENDANT

AND : SURESH CHAND of Naselai Bau Road, Nausori.

4^th DEFENDANT

AND : PIONEER CONCRETE a limited liability company having its registered office at Lot 1 Kura Street, Laucala Beach, Industrial.

5^th DEFENDANT

BEFORE : Master Vishwa Datt Sharma

COUNSEL : Ms. Kunatuba for the Plaintiff (No Appearance).

Ms. Ramoce for 2^nd & 3^rd Defendants.

Mr. A. K. Narayan for 4^th & 5^th Defendants.

Date of Hearing: 18^th February, 2015

Date of Ruling: 7^th June, 2016

DECISION
(Summons to set aside Default Judgment pursuant to Order 13
Rules 9, 10, and Order 19 Rule 9 of the High Court Rules, 1988
and the inherent jurisdiction of this Honorable Court)

1. INTRODUCTION
   

1. The 4^th and 5^th Defendants filed Summons together with an Affidavit in Support and sought for the setting aside of the following orders:
   
   1. That the Interlocutory Judgment being Judgment in Default entered herein on 14^th July, 2014 against the 4^th and 5^th Defendants is irregular on the grounds appearing in the Affidavit of Avishesh Ram filed herein;
      
   2. That further proceedings on the Judgment in Default entered herein on 14^th July, 2014 be stayed pending the hearing and determination of this application; and
      
   100. That the 4^th and 5^th Defendants be granted costs on a full solicitor/client indemnity basis.
        
2. The application is made pursuant to the Order 13 Rules 9, 10, and Order 19 Rule 9 of the High Court Rules, 1988 and the inherent jurisdiction of this Honourable court.
   

2. THE 4^TH AND 5^TH DEFENDANTS CASE
   

3. (a) The Defendants contention is that the default Judgment entered against them is irregular and therefore be set aside regardless of them having a Defence on Merits for the following reasons;
   
   • (i) That the Plaintiff has instituted proceedings and obtained default judgment against the wrong entity. The proper registered entity of the 5^th Defendant is ‘Pioneer Concrete Industries Limited” and not “Pioneer Concrete Limited”.
     
   • (ii) That the Plaintiff after filing the Writ of Summons did not take any action thereafter until over 3 years later when default judgment was entered against 1^st,4^th and 5^th Defendants. The Plaintiff failed to file a Notice to Proceed prior to entering default judgment contrary to and in breach of Order 3 Rule 5 of the High Court Rules, 1988.
     
   • (iii) The 4^th and 5^th Defendants have been deprived of a very valuable statutory right and thereby had a default judgment irregularly entered against them.
     
   • (iv) That the Plaintiff had entered default judgment against the 1^st Defendant who died as a result of the accident and no longer exists. Therefore, how can a default judgment be entered against him can be enforced?
     

(b) The 4th and 5^th Defendants further explain the reasons as to why the Default Judgment was entered against the 4^th and 5^th Defendants;

(i) In summary, the deponent (who is the manager of Pioneer Concrete Industries Limited) was under the mistaken belief that Writ of Summons for the civil action was merely in relation to the on-going traffic case at the Magistrates Court. It appears that the 4^th Defendant was witness in the traffic case and was issued, from time to time, certain court documents compelling his attendance. The deponent is aware that the 4^th Defendant regularly attended Court whenever he was required to do so. Under this mistaken belief it is understandable that the Writ of the civil action was put aside. In fact the Plaintiff’s failure to proceed with the civil action until over 3 years later further compounded the deponents mistaken belief that the Writ served on him was merely for the traffic case. Be that as it may, when the 4^th and 5^th Defendants were finally served with the default judgment over 3 years later, it is during this point in time that the deponent realised something had gone wrong and thereafter very urgent contacted the third party insurer to have the matter resolved and clarified.

This Court could also excuse the deponent into being even further confused when the Plaintiff had instituted proceedings against the wrong entity.

100. The Plaintiff’s Case
     

4. The Plaintiff was served with the Summons to set aside Default Judgment together with an Affidavit in Support and appeared by Counsel on 27^th October, 2014.
   
5. The Plaintiff was granted 21 days to file and serve their Affidavit in Opposition by the 17^th November, 2014 and the 4^th and 5^th Defendants to file and serve their response by 01^st December, 2014.
   
6. The Plaintiff failed to file and serve their response within the allocated time frame granted by the court.
   
7. Hence the hearing of the application was heard in the absence of the Plaintiff/or Counsel.
   

4. Principles on setting aside a default judgment
   

8. Order 13 Rule 10 of the High Court Rule, 1988 states as follows;-

‘Without prejudice to rule 8(3) and (4), the Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order.’

9. Under Or.13 r.10 the Court may set aside or vary ‘any judgment’ unconditionally or on terms.
   
10. The Court has a very wide discretion in an application of this nature but it is also guided by certain well known principles.
    

One of the principles is that:

"Unless and until the court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure". (Per Lord Atkin in Evans v Bartlam [1937] A.C. 473)

11. The basic principles applicable to setting aside judgments in the exercise of Court’s discretion are set out in Halsburys Laws of England Vol 37 4th Ed. para 403, inter alia, thus:
    

"In the case of a regular judgment, it is an almost inflexible rule that the application must be supported by an affidavit of merits stating the facts showing that the defendant has a defence on the merits ... For this purpose it is enough to show that there is an arguable case or a triable issue".

13. It is further stated therein:

"There is no rigid rule requiring the applicant to explain why he allowed judgment to go by default, but nevertheless, at least in the case of a regular judgment, such explanation is obviously desirable to enable the court to exercise its discretion, especially as to any and if so what terms should be imposed".

14. A useful summary of the factors to be taken into consideration in setting aside is to be found under Notes to Or.13 r.9 of The Supreme Court Practice 1995 Vol 1 at 142 which inter alia states as follows:
    

"The purpose of the discretionary power is to avoid the injustice which may be caused if judgment follows automatically on default. The primary consideration in exercising the discretion is whether the defendant has merits to which the court should pay heed, not as a rule of law but as a matter of common sense, since there is no point in setting aside a judgment if the defendant can show merits, the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. Also as a matter of common sense the court will take into account the explanation of the defendant as to how the default occurred." (Underline is mine)

It goes on to further state as follows;-:

"The foregoing general indications of the way in which the court exercises discretion are derived from the judgment of the Court of Appeal in Alpine Bulk Transport Co. Inc. v. Saudi Eagle Shipping Co. Inc., The Saudi Eagle [1986] 2 Lloyd’s Rep. 221, C.A., at p. 223, where the earlier cases are summarised. From that case the following propositions may be derived:

(a) It is not sufficient to show a merely "arguable" defence that would justify leave to defend under Order 14; it must both have "a real prospect of success" and "carry some degree of conviction". Thus the court must form a provisional view of the probable outcome of the action.

(b) If proceedings are deliberately ignored this conduct, although not amounting to an estoppel at law, must be considered "in justice" before exercising the court’s discretion to set aside."

15. Also on the subject of setting aside default judgment, in Davies v Pagett (1986) 10 FCR 226 at 232 a Full Court of the Federal Court of Australia said;-
    

"The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. Any limitation upon that opportunity will generally be justified only by the necessity to avoid prejudice to the interests of some other party, occasioned by misconduct, in the case, of the party upon whom the limitation is sought to be imposed. The temptation to impose a limitation through motives of professional discipline or general deterrence is readily understandable; but, in our opinion it is an erroneous exercise of the relevant discretion to yield to that temptation. The problem of delays in the courts, egregious as it is, must be dealt with in other ways; for example, by disciplinary actions against offending practitioners and by a comprehensive system of directions, hearings or other pre-trial procedures which enable the court to supervise progress – and, more pertinently non-progress – in all actions".

(Underline is mine)

16. In Eni KhaAmeeran Bibi &ibi & Ors (HBC 3/98S, 27 March , 03), His Lordship Justice Gates set out the principles apble to setting aside default judg#ent , referring to Burns v. Kondel 0;E> [1937] AC ] AC 473; Vann v. Aw/ird (1986) z 1725;1725; The; The Times LR (23 April 1986); and Fiji Nal Provident Funt Fund v Datt [1988] FJHC 4; (1988) 34 FLR 67 (267 (22 July 1988). So, too, His Lordship Je Pathik inSouth Paci Pacific Recordings Ltdsmail& [1994] FJHC 134; Hbj.93sSeptember 1994) a94) and also in Pravin Gold Indd Industries Ltd v. The New India Assurance Company Ltd [2003] FJHC 2JHC 298; HBC0250d.2002s (4 February 2003), referring to Pani>Pankaj B & Amp; Anor v. Moran Ali (FCA 59/90), amongsers.hers. In Kaur v. Singh/b>&# [2008] FJHC 158; Appeae 61 08 (5 August 2008 2008) the authorities were also explored.ored.
    
17. In Wearsmart Textiles Ltd v. General Machinery Hire Ltd [19JHC 2; Abu0030u.97s (27s (29 May 1998) the Court of Appeal similarly addressed the question oion of setting aside judgment, by reference to the authorities including Farden v. Richter (1889) 23 24; Hopton v. Robertso0;; [1884] WN 77, reprinted 23 QBD 126n; Richardson v. Howell&( 8 TLR 445; 0;Watt rnett [1878] UKLawRpKQB 21; (1878) 3 QBD 183; [1886] 2 Lloyd&;s R7;s Rep 331 (CA); and&#b>Vann v. Awford (1986) 83az 1725; T25; The Times LR (23 April 1986).
    
    
18. The prin principles therein distilled a number of other authorities which provide:

• Defendant does not need to show a good defence on the merits – ‘ ... need only show a defence which discloses an arguable or triable issue’: Bu. Kondel [1971] 1 Ll 1 Lloyds Re.

• Applicant must produce to the court ‘evidence that he hprimae case’:: Evans v. Ba [1937] AC 473, at 651;-

• 226; ‘The defendant’s application is brought pursuant to Order 13 Rule 10 which confers on the court a discretion to set aside or vary any default judgment on such terms as it thinks just. The discretion is prescribed in wide terms limited only by the justice of the case and although various "rules" or "tests" have been formulated as prudent considerations in the determination of the justice of a case, none [has] been or can be elevated to the status of a rule of law or condition precedent to the exercise of the court’s unfettered discretion. These judicially recognised "tests" may be conveniently listed as follows:

(a) Whether the defendant has a substantial ground of defence to the action;

(b) Whether the defendant has a satisfactory explanation for his failure to enter an appearance to the writ; and

(c) Whether the plaintiff will suffer irreparable harm if the judgment is set aside.

5. Analysis and Determination
   

19. The issues for this court to determine are as follows-
    
    • (i) Whether the Default Judgment was entered “regularly” or “irregularly’ against the 4^th and 5^th Defendants?
      
    • (ii) Whether the Default Judgment entered against the 4^th and 5^th Defendants be set aside?
      
20. It is appropriate to consider the distinction between setting aside a regular and an irregular default judgment.
    

Where a default judgment is obtained irregularly, the applicant is entitled to have it set aside as of right. The court in this circumstance has no discretionary powers to refuse or deny setting aside the irregularly obtained default judgment.

Whereas, if a default judgment is entered regularly, then the defendant does not have a right to have that set aside but is a matter with the Court to exercise its discretion. Order 19, Rule 9 of the High Court Rules, 1988 states:

“...the court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this order.”

21. The Counsel representing the 4^th and 5^th Defendants submitted that the default judgment was entered irregularly and therefore should be set aside as of right. He further stated that regardless of whether a default judgment is entered regularly or irregularly, the onus remains with the applicant throughout.
    

The Counsel representing the 4^th and 5^th Defendants further submitted that if the Court in the unlikely event hold that the Default Judgment was entered regularly, then they would then rely on the principles established in Evans v Bartlam (Supra) together with the evidence provided in the Written submissions furnished to Court in order to satisfy this court that the Default Judgment ought to be set aside.

This court has taken note of the fact that the Counsel representing the 4^th and 5^th Defendants in this case has argued his case in terms of setting aside the Default Judgment whether it was entered regularly or irregularly.

22. The substantive action in this case was instituted by the Estate of the late Salanieta Kotomaimoala Leqa (“the deceased”) and on behalf of the deceased’s children as beneficiaries under the Compensation to Relatives Act.
    
23. The cause of action is based on an accident that occurred on 24^th November, 2008 between the vehicle the deceased was a passenger in and two other vehicles.
    
    24. The Plaintiff alleges negligence against the owners and drivers of the other two vehicles.
        
    25. The Writ of Summons and Statement of Claim were filed on 29^th April, 2011.
        
    26. 4^th and 5^th Defendants along with the 1^st Defendant s were served with the Writ of Summons and the Statement of Claim on 11^th May and 20^th May 2011.
        
    27. The 2^nd and 3^rd Defendants had filed a Statement of Defence on 27^th May, 2011.
        
    28. 4^th and 5^th Defendants did not file any acknowledgement of service or any defence to the Plaintiff’s claim.
        
    29. Accordingly, the Plaintiff thereafter proceeded to enter Default Judgment against the 1^st, 4^th and 5^th Defendants on 11^th July, 2014, after a lapse of 3 years.
        
    30. Upon a careful perusal of the court file, I find that after the 2^nd and 3^rd Defendants have filed their Defence on 27th May, 2011, the next cause of action was for the Plaintiff to file and serve a Reply to their Defence, which was not done for the reasons best known to the Plaintiff.
        
    31. Instead, the Plaintiff proceeded with the filing of the Summons for Directions on 20^th February, 2012. In the absence of the Plaintiff and the Defendants, the court granted the orders in terms of the summons for directions on 08^th March, 2012 and that the matter to take its normal cause.
        
    32. It is significant to note that after filing the Writ of Summons and the Statement of Claim, the Plaintiff did not take any further steps thereafter until over 3 years later when he entered the default judgment against the 1^st, 4^th and 5^th Defendants respectively.
        
    33. The Plaintiff in fact was required to file and serve a ‘Notice of Intention to Proceed’ prior to entering a default judgment contrary to, and in breach of, the High Court Rules 1988. Order 3 Rule 5 provides as follows-
        

Notice of intention to proceed after year's delay (O.3, r.5)

‘5. Where a year or more has elapsed since the last proceeding in a cause or matter, the party who desires to proceed must give to every other party not less than one month's notice of his intention to proceed’.

In the case of Deighton v Cookie [1911] UKLawRpKQB 182; [1912] 1 KB 206 at 209, Honourable Justice Williams said-

‘The reason of this rule is this, that while the matter is still in controversy, the party should, after so long a lapse as four terms without any proceedings, have notice’.

34. Bearing in mind the above Rule, reference is also made to the case of Paviter’s Departmental Store v Lodhias Limited (1978) 24 FLR 70 wherein a default judgment was entered in the absence of the requisite notice after a lapse as that which is present in the current action before this court.
    

It was held in this case ‘that where judgement in default was entered after more than 6 months after the last proceedings in the action, and no notice was given to the Defendant, the party entering the default judgment would be required to comply the one month notice pursuant to Order 3 Rule 5’.

35. No notice of Intention to Proceed was filed and served by the Plaintiff on the 4^th and 5^th Defendants as per the requirement of Order 3 Rule 5. Instead, in the present case, the Plaintiff filed a default judgment after a lapse of over 3 years.
    
36. Further, the Counsel representing the 4^th and 5^th Defendants brought to the court’s attention the fact and submitted that the ‘Plaintiff had instituted this proceedings (and therefore obtained default judgment) against the wrong entity. The proper registered entity of the 5^th Defendant is ‘Pioneer Concrete Industries Limited’ and not ‘Pioneer Concrete Limited’ as erroneously endorsed on the Writ of Summons and other documents including the Default Judgment.
    

The contention of the Counsel is that the Plaintiff cannot proceed with enforcing the default judgment and assessment of damages against an entity that does not exist. To support this contention, the Counsel referred court to the affidavit of Avishesh Ram filed on 01^st October, 2014. Particular reference is made to paragraph 5 and Annexure ‘AR 2’ of the affidavit and further confirmed by other evidence such as ‘AR 11’ also paragraph 23 and annexure ‘AR 11’ for corroborative evidence in support of these submissions.

The Counsel also referred this court to other actions brought against Pioneer Industries Limited which confirms the right or correct entity. Special reference was made to the case of Ashok Kumar v Sanjay Kumar & Pioneer Concrete Industries Limited Suva High Court Civil Action No. 96 of 2014. The inference that can be clearly drawn is that Pioneer Concrete Industries Limited would not have settled the Civil Action No. 96 of 2014 if the wrong entity was endorsed.

I have physically cross checked abovementioned File reference HBC 96 of 2014. The 5^th Defendant therein is named as ‘Pioneer Concrete Industries Limited’ and not just Pioneer Concrete, as named in the within action herein. This matter did not proceed to trial but was settled instead.

37. In conclusion, it is appropriate that I should adopt the following passage from Davies v Pagett [1986] 10 FLR 226.
    

‘The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. Any limitation upon that opportunity will generally be justified only by necessity to avoid prejudice to the interests of some other party, occasioned by misconduct, in this case, of the party upon whom the limitation is sought to be imposed.’

38. Taking into consideration the submissions of the 4^th and 5^th Defendants, and bearing in mind the guiding principles on the subject of setting aside of a default judgment, I find that the Default Judgment was entered Irregularly and should be set aside as of right accordingly.
    
39. For these reasons I make the following orders:
    

ORDERS

(a) That the Interlocutory Judgment being Judgment in Default entered herein on 14^th July, 2014 against the 4^th and 5^th Defendants is irregular and is hereby set aside as of right.

(b) That the 4^th and 5^th Defendants are to file and serve their Defence within time frame.

(c) The Plaintiff is at liberty to file and serve any reply within 14 days thereafter.

(d) That I impose an unless order in place and will activate the same upon non compliance by either party to this proceedings of the court’s directions made in terms of orders (b) and (c) hereinabove.

(e) That each party to bear their own costs.

Dated at Suva this 7^th Day of June, 2016

...........................................
MR VISHWA DATT SHARMA

Master of High Court, Suva

cc. Ms. Kunatuba, Law Solutions, Suva
Ms. Ramoce of AG’s Chambers, Suva
Mr. A.K.Narayan, A K Lawyers, Ba
City Agents: O’Driscoll & Co, Solicitors, Suva