Jivaratnam v Prasad [2016] FJHC 644; HBC286.2014 (19 July 2016)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 286 of 2014

BETWEEN : ARON ADARSH JIVARATNAM and PREMINA SINGH both of Suva. Both School Teachers.

PLAINTIFFS

AND : GAYA PRASAD aka GAYA PRASAD CHOTU of Brown Street, Suva and or c/- Reddy Nandan Lawyers, Raojibhai Street, Suva and or c/- Pratima Singh, P O Box 3248, Nausori. DEFENDANT

BEFORE : Master Vishwa Datt Sharma

COUNSEL : Mr. Shelvin Singh for the Plaintiff

Mr. Sunil Kumar for the Defendant

Date of Hearing: 13^th April, 2016

Date of Ruling : 19^th July, 2016

RULING

[Motion seeking setting aside of order made on 27^th July, 2015 and Summons seeking further directions pursuant to Order 19 Rule 9 of the High Court Rules, 1988 and Section 168 of the Land Transfer Act Cap 131 and the inherent jurisdiction of the Honourable Court.]

1. INTRODUCTION
   

1. There are two (2) applications before this Court for determination:
   

First Application

2. The Defendant filed a Motion together with an Affidavit in Support on 08^th April, 2016 and sought for the following order:
   
   • (i) That the Order made on 27^th July, 2015 be set aside and or stayed.
     

Second Application

3. The Plaintiff filed a Summons together with an Affidavit in Support on 23^rd September, 2015 and sought for further directions as follows:
   
   • (i) Within 14 days of service of this Order, the Defendant make an application to Fiji Islands Revenue and Customs Authority for a Capital Gains Tax Clearance Certificate as required under the Capital Gains Tax Degree 2001 and provide such clearance to the Plaintiff’s solicitors.
   • (ii) If the Defendant fails to procure a Capital Gains Tax Clearance Certificate, the Chief Registrar do make such application on behalf of the Defendant and provide a copy of the certificate to the Plaintiff’s solicitors.
   • (iii) Within 21 days of service of this Order, the Registrar of Titles cancel duplicate Certificate of Title No. 8413 being Lot 3 on Deposited Plan; No. 1995 and deliver the same o the Plaintiff’s solicitors Messrs Shelvin Singh Lawyers to be held by them in trust pending settlement of the transfer of the said property.
   • (iv) Upon the Instrument of Transfer, the original Capital Gains Tax Clearance Certificate and the duplicate Certificate of Title No. 8413 being issued to the Plaintiff under paragraph 3 of this Order being lodged at the Registrar of Titles office for registration with the Westpac Banking Corporation Limited Mortgage, the full sale proceeds of $360,000 be depo0sited into Court by the Plaintiffs.
   • (v) Any capital gains tax payable to Fiji Islands and Customs Authority be paid by the Chief Registrar of the High Court.
   • (vi) The Plaintiff’s costs of this action be paid out by the Chief Registrar from the funds held by him assessed on a full indemnity basis.
   • (vii) The Defendant be at liberty to make an application to the Chief Registrar to retrieve the net sale proceeds.
     
4. The First application was made pursuant to Order 19 Rule 9 of the High Court Rules, 1988 and the Second application pursuant to Section 168 of the Land Transfer Act Cap 168 and the inherent jurisdiction of the Honourable Court.
   
5. Both applications were heard on affidavit evidence coupled with oral and written submissions accordingly.
   

2. BACKGROUND FACTS
   

The Defendant’s case

6. The Defendant’s contention is as follows:
   
   • (i) That he was never served with the Plaintiff’s Writ of Summons and the Statement of Claim;
   • (ii) That the Defendant only came to know about this case and the Default Judgment entered against him when his son informed him through an e-mail;
   • (iii) That the Plaintiff’s Counsel had served the Summons for further directions through his son after obtaining an ex-parte summons order, then why was he not able to serve the Defendant the Writ of Summons with the Statement of Claim in the same manner?;
   • (iv) That the Defendant has a valid defence and annexes a copy herewith;
   • (v) That the Plaintiff did not pay any deposit under the Sale and Purchase agreement;
   • (vi) That he relies on the affidavits that he had filed and served in this case.
   • (vii) That he is seeking for the Orders made on 27^th July, 2015 be set aside and no further directions be made as per the Plaintiff’s Summons filed on 23^rd September, 2015.
     

The Plaintiffs’ Case

7. The Plaintiff’s case is as follows:
   
   • (i) That the leave was sought from the Court to serve the Writ of Summons and the Statement of Claim by substituted service on the address provided by the Defendant and his driving licence has been annexed to show that this was the address for which leave was granted to them to serve the Defendant;
   • (ii) That Reddy Nandan Lawyers refused to accept service of the Writ of Summons;
   • (iii) That the Postal address was disclosed to the Plaintiffs by the Defendant himself on the address he gave to the Registrar of Titles for receiving Notices in respect of the Caveat lodged by his son;
   • (iv) That the US Embassy address provided is a forged document;
   • (v) That there was no breach of Contract by the Plaintiffs; the Defendant obviously has higher offers for the property which is why he does not want to sell the property to the Plaintiffs.
   • (vi) The Plaintiffs also relies on the affidavit evidence filed herein and seeks that order of 27^th July, 2015 not to be set aside and orders be made in terms of his Summons for further directions filed on 23^rd September, 2015.
     

100. 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. Under Or. 19 r.9 the Court may, on such terms as it thinks just, set aside or vary, any judgment entered in pursuance of this Order.
    
11. The difference between the two provisions of the High Court Rules are;
    

Order 13 Rule 10 deals with the Failure to give Notice of Intention to Defend; and

Order 19 Rule 9 deals with Default of Pleadings.

12. 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)

13. 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"

14. 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".

15. 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."

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."

16. Also on the subject of setting aside default judg in Davies v Pagett (1986) 10 FCR0 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".

17. In Eni K. Ameeran Bibi &ibi & Ors (HBC 3/98S, 27 Marc3), 03), His Lordship Justice Gates set out the principles applicable to settside defaudgmeut <160;, referring to Burns v. Kondel [1971] 1 Lloyds Rep 554; anBartl> [1937] AC 473&#160i>VanAwford (1986) LS Gaz 172z 1725 1725; The Times LR (23 April 1ril 1986); and Fiji National Provident Fund v Datt [1988] FJHC 4; (1988) 34 FLR 67 (22 July 1988). S8). So, too, His Lordship Justice Pathik in South Pacific Recordings Ltd v. Ismail [1994] FJHC 134; Hbc0597j.93s 30 September 1994 1994) and also in Pravin Gold Gold Industries Ltd v. The New India Assurance Company Ltd ef="http://www.paclii.olii.org/fj/cases/FJHC/2003/298.html?stem=&synonyms=&query=setting%20aside%20default%20judgmeitle= Case">[2003] FJH] FJHC 298; HBC0250d.2002s (4 February 2003), referring to b>Pankaola & Amp; Anor v. Moran Ali (FCA 59/90), amoothers.hers. In Kaur v. Sii>&# [2008] FJHC 158; ApCase 2008 (5 August 2008) the authoritiesities were also explored.
    
18. In Wart Textiles Ltd v. d v. General Machinery Hire Ltd [1998] FJHC 26; Abu0030u.97s (29 May 1998) the Court of Appeal similarly addr addressed the question of setting aside judgment, by reference to the authorities including Farden v. Richter [1889] UKLawRpKQB 79; (1889) 23 QBD 124; [1884] WN 77, repd 23 QBD 126n; Rdson v. Howell [1878] UKLawRpKQB 21; (1878) 3 QBD 183Alpine Bulk Transportsport Co Inc v. Saudi Eagle Shipping Co Inc, The Saudi Eagle ] 2 Lloyd’s R7;s Rep 331 (CA); and Vann v. Awford&#1i>(1986) 83 LS Gaz 1725; The Times LR (23 April 1986).
    
19. The principles therein distilled and a number of other authorities 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’: Burns v. Kondel [1971] 1 s Rep 554.
    • Applicant must produce to the court ‘evidence that he has a prima facie case’: [1937] AC 473, at 651:

‘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.

CONSIDERATION OF THE APPLICATION

20. Following are the issues that this Court needs to deliberate upon in order to determine the two (2) impending applications before this Court on Motion to Set Aside the Order of 27^th July, 2015 (Default Judgment) and Summons seeking further directions dated 23^rd September, 2015 -
    
    • (i) Whether the Defendant was appropriately served with the Plaintiff’s Writ of Summons and the Statement of Claim?
    • (ii) Whether the Default Judgment entered against the Defendant is regular or irregular in terms of the set law? And
    • (iii) Whether the Defendant has disclosed any meritorious Defence in this case?
    • (iv) Whether this Court should grant the Plaintiff’s Summons seeking for further directions so that the property transfer can be effected?
      
21. The Plaintiffs commenced proceedings by way of a Writ of Summons and Statement of Claim against the Defendant on 13^th October, 2014.
    
22. Subsequently, the Plaintiffs sought for leave to serve the Writ of Summons and all other Court Documents on the Defendant by substitute service and that the Writ of Summons and all other Court Documents be deemed to have been served on the Defendant by;
    
    • (a) Sending the documents by way of pre-paid normal mail to c/- Pratima Devi, P. O. Box 3498, Nausori;
    • (b) Sending the documents to the Defendant by way of pre-paid normal mail to 1104 E, Leland Road, Apt 215, Pittsburg, CA 94565-5384; and
    • (c) Advertising a Notice of the proceedings once in the Fiji Times newspaper.
      
23. Above-mentioned leave sought was accordingly granted on 26^th February, 2015.
    
24. An affidavit of service to this effect was deposed by Romil Prakash on
    
25. 01^st June, 2015 and filed into court on the same date.
    
26. The file records do not divulge any pleadings or documents filed by the Defendant in opposition to the Plaintiff’s Writ of Summons and the Statement of Claim.
    
27. The Plaintiff then proceeded to file an Ex-Parte Notice of Motion together with an Affidavit in Support and sought for an order for Judgment by Default since the failure or default on the part of the Defendant to serve any acknowledgment of service.
    
28. The application was acceded to and granted the Orders for default Judgment as sought for.
    
29. The Plaintiff hereafter on 23^rd September, 2015 filed a Summons seeking for further directions and 05^th November, 2015 was assigned as the returnable date of the Summons.
    
30. On the returnable date, one Pratima Devi appeared on behalf of the Defendant and informed Court that the Defendant was in America. The matter was adjourned and the Defendant instructed the Counsel to represent him.
    
31. It will be noted here that Pratima Devi who made an appearance here on the Plaintiff’s Summons, is the same person to whom the initial Writ of Summons and the Statement of Claim was served by pre-post normal mail.
    
32. I have taken into account the explanation of the Defendant as how come the default judgment was entered against him. This is contained in the Defendant’s affidavit in support filed on 08^th April, 2016.
    
33. I do not find any counter evidence from the Defendant to hold that the Defendant was not served with the Writ of Summons and the Statement of Claim. Further, it was a three (3) way service for which leave was sought to ensure that the service will be effected as per paragraph 19 hereinabove.
    
34. Further, there is no evidence to doubt the affidavit of service deposed and filed by Romil Prakash.
    
35. The Orders made on 27^th July, 2015 in terms of a Default Judgment has been entered regularly.
    
36. In the circumstances, I am satisfied that the Defendant was duly served with the Writ of Summons and the Statement of Claim.
    
37. Accordingly, the Defendant’s application seeking an order to set aside the Orders of 27^th July, 2015 is hereby dismissed for the aforesaid rational.
    
38. I have also perused the Defence filed by the Defendant within his Affidavit in Support filed on 08^th April, 2016. It is noted that the Defendant contradicts his own statement within the pleadings at Paragraph 1 and 3 A and C accordingly.
    

Reference is made to 2^nd line of paragraph 1. It states.....”But the Plaintiff did tender the deposit at the time of signing of the Sale and Purchase Agreement....”

Reference is made too paragraph 3 A- ‘without paying a single cent...’ and

At 3C- ‘The plaintiff was aware that he has not paid for the property...’

I am aware of the fact that the Defence filed herein must be read in its entirety to ascertain what the Defence is.

It is for the Defendant to ensure that a correct pleading or a Defence is filed without any discrepancy or ambiguity.

Further, the Defendant’s contention is that the Sale and Purchase Agreement is null and void since no deposit was paid by the Plaintiff at the time of the execution of the Agreement. Therefore, the Defendant says that the Plaintiff is in breach of the Sale and Purchase Agreement.

I have made reference to the first page of the Sale and Purchase Agreement, under Principal Terms sub headed- payment of balance at annexure ‘A’ within the Affidavit of Aron Jivaratnam which states as follows-

‘The sum of $360,000 shall be paid within 60 days of this Agreement (‘the date of Settlement’) subject to the terms of this agreement’.

Therefore, it can be concluded that the settlement would have been concluded within 60 days of the Agreement which would have been the date of settlement.

It is obvious now that the settlement is yet to be effected because the Defendant has failed to carry out the requirements which are now being sought for by the Plaintiff in terms of his Summons for further directions dated 23^rd September, 2015.

39. I find there is no merit in the Defence annexed and filed by the Defendant.
    
40. For the reasons stated hereinabove, I hold that there is a valid Judgment entered against the Defendant on his failure to oppose the substantive Writ of Summons and the Statement of Claim.
    
41. Therefore, I will accede to the Plaintiff’s Summons filed on 23^rd September, 2015, granting further directions as sought for in prayers 1 to 7 inclusive to allow for the property transfer to be effected.
    
42. These are the Final Orders:
    

ORDERS

(i) The Defendant’s application seeking an order to set aside the Orders of 27^th July, 2015 is hereby dismissed.

(ii) The Plaintiff’s Summons filed 23^rd September, 2015, seeking further directions is hereby granted in terms of prayers Nos. 1 to 7 inclusive.

(iii) The Defendant must comply with all the directions therein within the next 21 days to allow for the property transfer to be effected without any hindrance and obstruction.

(iv) I order costs against the Defendant summarily assessed at $750 and to be paid within 21 days.

Dated at Suva this 19^th Day of July, 2016

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

Master of High Court, Suva

Distribution

1. Shelvin Singh Lawyers, Suva
2. Sunil Kumar Esq., Nausori