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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION
Civil Action No. HBC 13 of 2016
BETWEEN: JADURAM INDUSTRIES LIMITED
APPLICANT/PLAINTIFF
AND: NAWI ISLAND LIMITED
RESPONDENT/DEFENDANT
BEFORE: Hon. Acting Chief Justice Kamal Kumar
COUNSEL: Ms L. Prasad for Applicant/Plaintiff
Mr D. Sharma for Respondent/Defendant
DATE OF HEARING: 15 March 2019
DATE OF RULING: 11 June 2020
RULING
(Application To Set Aside Judgment)
1.0 Introduction
1.1 On 4 January 2019, the Applicant (Plaintiff) filed an Application by Summons seeking following Orders:-
“A. That the Plaintiff be granted an extension of time to set aside the Judgment in Default dated 26th September 2018 (Judgment).
B. That the said Judgment be set aside.
C. That the Plaintiff’s Statement of Claim be re-instated.
D. That there be a stay of execution of the decision of the Judgment pending the determination of this application.”
(“the Application”)
1.2 On 15 January 2019, being returnable date of the Application, parties were directed to file Affidavits and the Application was adjourned to 8 February 2019, to fix hearing date.
1.3 On 8 February 2019, time for filing of Affidavits in Reply by Applicant was extended to 11 February 2019, and the Application was adjourned to 12 February 2019, to fix hearing date.
1.4 On 12 February 2019, the Application was adjourned to 15 March 2019, for hearing.
1.5 Following Affidavits were filed on behalf of the parties:-
For Applicant/Plaintiff
(a) Affidavit of Shalendra Jaduram sworn on 3 January 2019, and filed on 9 January 2019 (“Jaduram’s 1st Affidavit”);
(b) Affidavit in Reply of Shalendra Jaduram sworn on 11 January 2019, and filed on 12 February 2019 (“Jaduram’s 2nd Affidavit”).
For Respondent/Defendant
Affidavit of Michael Way Gann sworn on 20 January 2019, and filed on 1 February 2019 (“Gann’s Affidavit”).
1.6 Applicant made Oral Submissions whilst Respondent handed in written Submissions and made oral submissions.
2.0 Application to Set-Aside Judgment
2.1 In this proceedings judgment was entered against the Applicant on 26 September 2018, in the following circumstances:-
(i) This proceeding was listed for trial on 14 August 2017 to 17 August 2017;
(ii) When trial date was set both parties Counsel were present in Court and agreed for this matter to be heard on 14 to 17 August 2017;
(iii) When this matter was called on 14 August 2017, Respondent appeared by its Counsel and witness.
(iv) Her Ladyship Justice Wati struck out Applicant’s claim and heard evidence from Respondent on its counterclaim.
(v) Her Ladyship Justice Wati after considering the evidence led by the Respondent and the pleadings filed stated as follows:-
“73. In the final analysis, I find that the plaintiff has breached the contract between the parties for which it is liable to pay the defendant a sum of $467,915.94 inclusive of special damages and interest.
2.2 Order 35 Rules 1(2) and 2 of the High Court Rules 1988 (“HCR”) provide as follows:-
“1.-(1) .....
(2) If, when the trial of an action is called on, one party does not appear; the judge may proceed with the trial of the action or any counterclaim in the absence of that party.
2.-(1) Any judgment, order or verdict obtained where one party does not appear at the trial maybe set aside by the Court, on the application of that party, on such terms as it thinks just.
(2) An application under this rule must be made within 7 days after the trial.”
2.3 Respondent submitted that Applicant is making an Application to set aside Judgment in Default when Judgment was not entered under Order 13 of HCR but when the matter was set down for trial.
2.4 Order 13 of HCR permits obtaining Judgment by Default for failure to give notice of intention to defend.
2.5 Judgment under order 35 Rule 1(2) is entered where one party defaults in appearing at the trial.
2.6 In this instance, even though Applicant stated “Judgment in Default” at paragraph A of the Application date of judgment is stated correctly to be 26 September 2018.
As such Respondent was fully aware that Application relates to Judgment entered on 26 September 2018, and failure by Applicant to correctly describe the Order and Rule in no way prejudice the Respondent.
2.7 Therefore Application is not a nullity and Court will proceed to deal with it.
2.8 Before proceeding any further it is appropriate to clear the air on following comments made by Her Ladyship Wickramasinghe (as she then was) in Fiji Development Bank v. Crown Cork Fiji Limited & Ors. C.A. No. HBC 96 of 2001 (23 March 2012) quote by Respondent in its Submissions.
“[25] When a case is heard inter partes an aggrieved party must appeal against such judgment as set out in the law. In my mind, same rule applies to cases concluded ex parte. Therefore it is my considered view that the words ‘any’ stipulated in the case does not refer to actions that are heard on the substantive merits, after careful consideration of the evidence by a Court. If a defendant is aggrieved by the decision then in my mind the proper procedure would be to appeal against the decision and set out the errors in the appeal.”
2.9 With all due respect, this Court cannot agree with what was in her Ladyship’s “mind” when she made such comment for the following reasons:-
(i) It is well settled that when judgments are entered ex-parte, the party against whom judgment is entered is to go back to same Court to set aside that judgment;
(ii) The catchwords in Order 35 Rules 1(2) and 2(1) are “where one party does not appear” which appears to have been overlooked by her Ladyship in Crown Cork’s case;
(iii) If judgment is entered against the party who fails to appear at the trial and if defaulting party wishes to have that judgment set aside then, that party must file the Application to set that judgment to the same Court irrespective of the fact that the Judge considered pleadings filed by the defaulting party;
(iv) If the defaulting party files the Application then the Court “may” in exercise of Court’s discretion either set aside the judgment on “such term as it thinks fit” or refuse to do so.
2.10 What is stated at paragraph 2.9 of this Ruling, is fully supported by Order 35/2/2 of Supreme Court Practice 1999 Volume 1 which is in following terms:-
“Effect of Rule - The application should be made, if possible, to the Judge who tried the case (Schafer v. Blyth [1920] 3K.B. 140).
The absent party should apply for a new trial not to the Court of Appeal but the Court which tried the action, and if possible, to the trial Judge himself; from a refusal of such an application an appeal will lie to the Court of Appeal, but the existence of the jurisdiction of the trial Court does not negate the jurisdiction of the Court of Appeal to order a new trial under O.59, rr.10 and 11 (Re Edwards Will Trusts, Edwards v. Edwards [1982] Ch. 30; [1981] 2 All E.R. 941, CA).”
The catchwords in this statement is “Court which tried the action”. This obviously means the action tried by the Court in the absence of a party whether by way of formal proof or otherwise.
2.11 Also if the party who does not appear at trial, should have the right to appeal the judgment, it would make a mockery of Order 35 Rule 2(2) of HCR in that if defaulting party fails to file Application within 7 days then that party can file an appeal to Court of Appeal within 42 days from date of Judgment.
2.12 Hence, where a party does not appear at trial and judgment is entered against that party then he/she must file Application before the same Court to set aside the Judgment.
2.13 This Court has unfettered discretion to set aside judgment entered against a party who does not appear during the trial of any proceedings. Order 35 Rule 2(1) of HCR.
2.14 Under Order 35 Rule 2(2), Application to set aside judgment so entered must be made seven (7) days after trial.
2.15 This Court also has discretion to extend time prescribed by HCR or judgment or order of the Court even if Application for enlargement of time is made after the expiry of seven (7) day period. Order 3 Rule 4: Devi v. Mani & Anor. [2010] C.A. No. HBC 111 of 1998L (17 September 2010) (Application made after 4 years from date of Judgment). Chandra v. Chandra [2009] HPP No. 4119 of 2003 (23 February 2009) (Application made 19 days after Judgment).
2.16 The principle and factors in relation to setting aside judgment under Order 35 Rule 2 has been aptly stated in Shocked v. Goldschmidt & Ors. [1998] 1 ALL ER 372 at pages 377 (paragraph j), 378 (paragraph a), 381 (paragraphs e to j) and reproduced in Devi v. Mani (Supra) as follows:-
“[35] I recently stated the law in this area in Wati v Western Division Drainage Board [2009] FJHC 165; HBC332.2001L (18 August 2009):
11. The law has been conveniently set out by Connors J in Rosedale Ltd v Kelly [2004] FJHC 429; HBC0323.1997L (11 June 2004):
“The issues for consideration by the court on an application to set aside the judgment entered after trial are set forth in Shocked and Another v Goldschmidt and Others [1998] 1 All E.R. 372. The leading judgment of the court was given by Leggatt LJ who said at page 377:-
“The cases about setting aside judgments fall into two main categories: (a) those in which judgment is given in default of appearance or pleadings or discovery, and (b) those in which judgment is given after a trial, albeit in the absence of the party who later applies to set aside. Different considerations apply to these two categories because in the second, unless deprived of the opportunity by mistake or accident or without fault on his part, the absent party has deliberately elected not to appear, and an adjudication on the merits has thereupon followed.”
Jenkins LJ in Grimshaw v Dunbar [953] 1 All E.R 350 at 355 said:
“...a party to an action is prima facie entitled to have it heard in his presence. He is entitled to dispute his opponent’s case and cross-examine his opponent’s witnesses, and he is entitled to call his own witnesses and give his own evidence before the court. If by mischance or accident a party is shut out from that right and an order is made in his absence, then common justice demands, so far as it can be given effect to without injustice to other parties, that the litigant who is accidentally absent should be allowed to come to the court and present his case, no doubt on suitable terms as to costs...”
Leggatt LJ in Shocked after considering the authorities then set out at p.381 a series of propositions or “general indications” which are:-
“(1) Where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in the trial, he will normally be bound by the decision.
(2) Where judgment has been given after a trial it is the explanation for the absence of the absent party that is most important: unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing.
(3) Where the setting aside of judgment would entail a complete retrial on matters of fact which have already been investigated by the court the application will not be granted unless there are very strong reasons for doing so.
(4) The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success.
(5) Delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it.
(6) In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion in his favour.
(7) A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences.
(8) There is a public interest in there being an end to litigation and in not having the time of the court occupied by two trials, particularly if neither is short.”
The Lord Justice then said that the predominant consideration is the reason why the party against whom judgment was given absented himself.” (emphasis added)
Reasons for Non-Attendance at Trial
2.17 Reasons for non-attendance at trial is stated at paragraphs 12 to 14 of Jaduram’s 1st Affidavit which are as follows:-
(i) Trial dates being 14 to 17 August 2017, were obtained by Applicant’’s then Solicitors Lomaloma Lawyers;
(ii) Lomaloma Lawyers did not inform Applicant of trial dates;
(iii) On 22 May 2017, about less than three (3) months, Mr Lomaloma wrote to Mr J. Leweniqila Applicant’s representative advising that he is closing down his Firm and Applicant is to pick up its file, pay its overdue costs and engage another firm of Solicitors with no mention of trial dates (Annexure “SJ4” of Jaduram’s 1st Affidavit);
(iv) By said e-mail, Mr Lomaloma also informed Applicant that he left one Nunia in charge of his office but on 1 May 2017, said Nunia left his office without giving any notice.
(v) Applicant only managed to uplift its file on 8 August 2017, after numerous calls and follow-ups and upon payment of Bill of Cost as there was no one in the Office of Lomaloma Lawyers looking after the files;
(vi) Trial was conducted without Applicant’s knowledge.
(vii) On 17 August 2017, Applicant engaged Toganivalu and Valenitabua Lawyers (“TVL”) who filed Notice of Change of Solicitors on the same day.
(viii) When Applicant enquired with “TVL” on 5 February 2018, it was told that:-
- (a) By the time matter was set down for trial Mr Lomaloma began employment in the Republic of Nauru;
- (b) There was some miscommunication between Mr Lomaloma’s Office, the Applicant and TVL’s office;
- (c) There was no proper instruction or handover from Mr Lomaloma until Applicant had enquired on 5 February 2018;
- (d) TVL was informed by Labasa High Court Registry that trial proceeded and this action had been adjourned for Judgment on Notice;
- (e) They will have to wait for Judgment to be pronounced.
2.18 Respondent at paragraphs 12 to 13 of Gann’s Affidavit responded to paragraph 12 to 17 of Jaduram’s 1st Affidavit in following terms:-
(i) Trial dates were set well in advance and Applicant ought to have found out about the dates;
(ii) Applicant is simply blaming Lomaloma Lawyers;
(iii) Was common knowledge in Labasa that Lomaloma Lawyers were closing down their Office;
(iv) No evidence has been produced as to what steps Applicant took to keep itself updated about the case;
(v) After Applicant collected its file on 8 August 2017, it had ample time to find out about next date of the case.
2.19 It is interesting to note that Shailendra Jaduram in his 2nd Affidavit to some extent contradicted what he said in his 1st Affidavit.
2.20 Towards the end of paragraph 9 of Jaduram’s 2nd Affidavit the deponent states as follows:-
“JIL did look up the court dates on 7th August 2017, after it collected its files from Mr Lomaloma’s office and obtained the trial dates. JIL immediately engaged Toganivalu and Valenitabua Lawyers and informed their Mrs. Nancy Tikoisuva over the phone of the trial dates. However, Toganivalu and Valenitabua Lawyers did not attend the trial nor make any applications after the trial concluded. These issues are the responsibility of the Lawyers.”
2.21 What is said at later part of paragraph 9 of Jaduram’s 2nd Affidavit contradicts what is stated at paragraphs 15 and 16 of Jaduram’s 1st Affidavit.
2.22 Paragraph 9 of Jaduram’s 2nd Affidavit also puts letter dated 7th February 2018, from TVL in question by stating that they only came to know that trial was conducted when they enquired with Court Registry on or about 5 February 2018 (paragraph 17 of Jaduram’s 1st Affidavit refers).
2.23 It is apparent that Applicant is putting the blame on his previous Solicitors for its non-appearance in Court on 14 August 2017 (Trial date).
2.24 Whilst this Court is of the view that Legal Practitioners should keep their clients informed of the progress, parties to proceedings should realize that it is their case and they should not give their case to Lawyers and take the back seat with lazing and lay back attitude. It is in their interest that they keep a close track on the progress of the case through their lawyers.
2.25 This Court is of the view that in this instant, Applicant’s previous Solicitors were to great extent responsible for Applicant’s non-appearance in Court on 14 August 2017.
2.26 Even if TVL became aware of the trial date on or about 7 August 2017, it is doubtful whether they would have been in a position to conduct the trial from 14 to 17 August 2017.
2.27 This Court finds that Applicant’s non-appearance in Court on 14 August 2017, was not deliberate but due to Applicant not being able to obtain file from Lomaloma Lawyers until 7 or 8 August 2017 and it’s Solicitors laxity.
Whether Setting Aside of Judgment Would Entail Re-trial of Facts Investigated
2.28 In this instance Applicant’s claim was struck out and Respondent called only one witness.
2.29 Even though Her Ladyship Justice Wati struck out the Applicant’s Statement of Claim she referred to certain facts pleaded in the Statement of Claim to ensure that justice is done in this case.
2.30 Also Respondent’s evidence was thoroughly analysed and judgment was entered after analyzing the evidence and not just because Applicant did not appear.
2.31 The mere fact that judgment was only entered for the sum of $467,915.94 when Respondent sought judgment for approximately eighteen million dollars as appears from paragraph 57 of the judgment, shows that her Ladyship did analyse the facts and evidence before pronouncing the judgment.
2.32 The fact that Applicant’s Statement of Claim was struck out meant that evidence in respect to facts pleaded in the Statement of Claim was not heard by the Court.
2.33 Applicant’s claim is based on cause of action for misrepresentation and conversion.
2.34 Striking out Applicant’s Statement of Claim meant that the facts and evidence in respect to relief sought by the Applicant could not be considered.
2.35 There is no doubt that if judgment is set aside than there would be retrial on matters of certain facts which have already been investigated by the Court.
2.36 This Court is of the view that matters of facts that have been investigated by the Court only relate to Respondent’s Counterclaim and evidence to prove such facts was not subject to cross-examination.
Real Prospects of Success
2.37 Applicant’s claim is on misrepresentation and conversion.
2.38 During the course of Applicant’s Submission, Applicant’s Counsel informed Court that the machineries subject to Applicant’s claim for conversion had not been used or sold by the Respondent.
2.39 However, this cannot be determinative of relief being sought by the Applicant on conversion as evidence may say otherwise.
2.40 This Court finds that Applicant’s claim is not frivolous or vexatious.
Delay
2.41 There is no doubt that there has been inordinate delay in making the application for extension of time and setting aside the judgment for which Applicant will need to provide satisfactory reason.
2.42 Applicant should have filed Application to set aside Court’s order within 7 days from 14 August 2017.
2.43 It may be questioned that her Ladyship having adjourned the case for judgment to be delivered on notice, was there any Order that could have been set aside?
2.44 The answer is in the affirmative in that her Ladyship ordered that Applicant’s Statement of Claim be struck out and matter proceed to trial on Respondent’s Counterclaim.
2.45 Applicant could have moved the Court within 7 days to have the Statement of Claim re-instated and tried by Court. This Applicant failed to do.
Reason for Delay
2.46 TVL in their letter dated 7th February 2018 (Annexure “SJ6” of Jaduram’s 1st Affidavit) stated as follows:-
“Therefore, pending the outcome of the judgment, we would have to wait for the Judge to pronounce her judgment. If the judgment is in our favour then that will be good but if the judgment is not in our favour then we would have to consider whether we have sufficient grounds to appeal the judgment.
We will advise you once we have been notified by the Court.”
2.47 It appears that Applicant relied on the advise given by TVL and waited for Judgment to be delivered by the Trial Judge which was done on 26 September 2018.
2.48 As stated at paragraph 2.45 of this Ruling, TVL should have moved the Court within seven (7) days from 14 August 2017 and not wait for Trial Judge’s judgment.
2.49 Reason for delay from the date judgment was delivered by Trial Judge are stated at paragraphs 21 to 35 of Jaduram’s 1st Affidavit which are as follows:-
(i) On 5 September 2018 (3 weeks prior to delivery of Judgment) Applicant engaged Sherani & Co. on 13 September 2018, Sherani & Co. filed Notice of Change of Solicitors.
(ii) Sherani & Co. enquired with Official Receiver if Winding-Up Order was made against Applicant and on 17 September 2018, Official Receiver sent copy of Winding-Up Order against the Applicant.
(iii) On 20 September 2018, Sherani & Co. wrote to Official Receiver requesting him to make Application to Court for Applicant to proceed with this action.
(iv) By letter dated 28 September 2018, Official Receiver wrote to Sherani & Co. informing them that they will file Application for Applicant to proceed with this action and Sherani & Co. to assist the Official Receiver, which Application was filed on 4 October 2018, by the Official Receiver.
(v) Official Receiver’s Application could not be issued due to the fact that the file was held in Suva.
(vi) From 4 October 2018, Sherani & Co. have been liaising with High Court Suva, with request that file be sent to Labasa High Court Registry.
(vii) On 18 October 2018, Labasa High Court Registry wrote to Sherani & Co. advising that file has been received by Labasa Registry and Official Receiver’s Application was issued and released.
(viii) Order in terms of Official Receiver’s Application was made on 30 November 2018, and sealed on 21 December 2018.
(ix) Application was filed on 19 January 2019.
2.50 This Court fails to understand why Sherani & Co. had to wait for Official Receiver to make an Application for Applicant to proceed with this action.
2.51 This Court makes following finding:-
(i) Applicant’s failure to not to attend Court on 14 August 2017, was not deliberate but because of the action of his previous Solicitor on record;
(ii) Respondent’s evidence in support of its counter-claim will be subject to cross-examination and investigation if judgement is set-aside;
(iii) Applicant’s claim that was struck out is not frivolous or vexatious;
(iv) Delay in filing the Application for Extension of Time and to set aside Judgment is inordinate;
(v) Applicant acted on legal advise given by TVL by not filing Application to set aside Judgment within prescribed time and as such this reason seems reasonable;
(vi) Reason for delay in filing the Application after judgment was pronounced by her Ladyship was that Applicant’s current Solicitors waited for Official Receiver being the liquidator to obtain sanction of the Court to proceed with action and appoint barrister and solicitor pursuant to section 543(1) of the Companies Act 2015.
Prejudice
2.52 It seems that Respondent borrowed monies from Fiji Development Bank to pay deposit to Applicant. Respondent has not stated as to how will it be prejudiced if judgment is set-aside.
2.53 No evidence has been provided by Respondent as to whether they have attempted to enforce the judgment or filed Proof of Debt with Official Receiver.
2.54 Also, Respondent has appealed the Judgment of her Ladyship to Court of Appeal.
Public Interest
2.55 Public interest demands that there be an end to litigation.
2.56 Public interest also demands that a party be given an opportunity to be heard if non-appearance on his/her part was not deliberate.
Interest of Justice
2.57 In Fiji Revenue and Customs Services v. New India Assurance Limited [2019] CBV 20 of 2018 (15 November 2019) it was stated as follows:-
“47. Having considered all the factors this Court is of the view that interest of justice dictates that Leave be granted to the Applicant to serve the Petition and Affidavit Verifying Petition filed on 16 November 2018, out of prescribed time.”
2.58 This Court is of the view that interest of justice dictates that Applicant be given a chance to be heard on its claim and chance to challenge the evidence produced by the Respondent.
2.59 Before I conclude, I need to address two matters raised by Counsel for the parties.
Section 15 of Constitution of Republic of Fiji (“the Constitution”)
2.60 Counsel for the Applicant submitted that under section 15 of the Constitution, he has a right to be heard.
2.61 No evidence has been led to show that Applicant had been deprived of that right by any person or government authority.
2.62 In fact, Applicant was given a trial date which was taken by its legal representative and it is the Applicant who did not appear on the trial date whether by its representative or Solicitors.
2.63 It appears that Counsel for the Applicant threw section 15 of the Constitution to Court without much thought or consideration of how the Court system works and rules of the Court.
Functus Officio
2.64 Respondent by its Counsel submitted that since her Ladyship heard evidence from Respondent on its counterclaim and analysed that evidence prior to giving judgment then the Court is functus officio and Applicant should have appealed the judgment to Court of Appeal and relied on Singh v. Lata [2015] Civil Action No. HBC 162 of 2004 (8 June 2015) (Kotigalage J).
2.65 To hold that where an action is heard under Order 35 Rule 1(2) of HCR and judgment is pronounced the Court which pronounced judgment becomes functus officio make provision of Order 35 Rule 1(2) and Rule 2 absolutely meaningless.
2.66 Catchwords in Order 35 Rule 1(2) are “one party does not appear, the judge may proceed with the trial of the action or any counterclaim”.
2.67 Only way the Judge can proceed to trial in the absence of a party is to call upon the party present to prove his/her claim or counterclaim to Court.
2.68 Therefore, irrespective of whether Judge enters judgment by formal proof or otherwise, the Judge has the discretion to set aside the judgment on terms he/she think fit under Order 35 Rule 2 of HCR.
3.0 Conclusion
3.1 In view of what is stated at paragraphs 2.8 to 2.68 of this Ruling and in consideration of the Affidavit evidence and submissions from both parties this Court is of the view that interest of justice demands that time for filing Application to set aside be extended and Judgment be set aside with conditions.
3.2 As for costs for the Application, Court takes note that parties filed Affidavits and made comprehensive Submissions.
4.0 Orders
I make following Orders:-
(i) Time for Filing of Application to set aside Order made on 14 August 2017, and Judgment delivered on 26 September 2018, be extended;
(ii) Order made on 14 August 2017, and Judgment delivered on 26 September 2018, in this action be set aside on the condition that Applicant (Plaintiff) do pay the Respondent (Defendant) $5,000.00 costs awarded to Respondent (Defendant) by her Ladyship Justice Wati in her Judgment delivered on 26 September 2018, within twenty-one (21) days from date of this Ruling;
(iii) Applicant (Plaintiff) do pay Respondent (Defendant) cost of the Application to Extend time and set aside judgment assessed in the sum of $1,500.00 within twenty-one (21) days from date of this Ruling.
(iv) This action be listed before the Master to fix trial date.
K. Kumar
ACTING CHIEF JUSTICE
At Labasa
11 June 2020
Sherani & Co. for the Applicant/Plaintiff
R.Patel Lawyers for the Respondent/Defendant
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