Fiji National Provident Fund v Datt [1988] FJLawRp 14; [1988] 34 FLR 67 (22 July 1988)

[1988] 34 FLR 67

HIGH COURT OF FIJI

Civil Jurisdiction

FIJI NATIONAL PROVIDENT FUND

v

SHRI DATT

Fatiaki J.

22 July 1988

Practice and Procedure – Judgment in default of appearance – setting aside – “tests” to be applied – defendant estoppel from setting up, he was not an “employer” – meaning of “issue estoppel”.

R. Chandra for the Plaintiff
S. Parshotam for the Defendant

Shri Datt (defendant) applied to set aside a judgment entered by Fiji National Provident Fund (plaintiff) against him in default of appearance.

The plaintiff had by Writ of Summons dated 26 August 1987 sued the defendant for arrears of contributions and surcharges under the provisions of the Fiji National Provident Fund Act (Cap. 219) (the Act). Judgment was entered on 23 September 1987 for $19,379.87 and $65 costs. Some three months later and after the initiation of bankruptcy proceedings the defendant moved to set aside the judgment. As a reason for his delay, defendant referred to having instructed Solicitors to defend the action.

The learned trial Judge considered that in the exercise of a discretion to set aside or vary the judgment recognized tests were-

(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.

He made observations on the claims of the parties. The plaintiff's statement of claim lacked particularly as to the number and names of employees for whom non payment of contributions had been alleged. The claim for arrears and surcharges had been outside the period provided in s.56 of the Act nor had the plaintiff's capacity been averred in the Statement of Claim.

The defendant had denied any liability or demand having been made or that he had ever traded as Datts Furniture and Joinery at Lautoka, though he was employed as a Manager of that firm. The Court noted the definition of "employer" in s.2 of the Act. The status of Manager was one but an inconclusive factor as to whether the defendant could be regarded as an, employer. The defendant had been sued as "Shri Datt...... trading as Datts Furniture and Joinery". The Registration of Employer form as required by Regulation 4(1) of the Regulations passed under the Act purported to register Date's Furniture & Joinery as an employer of 3 persons. The Court discussed the contents of the form. The defendant claimed his father had been the sole owner of the firm. The form began-

Full name and address of Employer/owner....... Secretary Managing Director.

The defendant had not denied his signature on the form or that he had completed in his own handwriting. He did not explain how he was designated as a "partner" in the business. The learned Judge examined the plaintiff's claim of estoppel. This depend on an array of previous proceedings in which he had been successfully sued or convicted, being described in identical terms as in the present Writ of Summons.

There had been no appeal in any of these matters. The time therefor had expired. The learned Judge referred to Amalgamated Property Co. v. Texas Bank (1982) 1 QB 84 at p.122 and the description there of estoppel particularly the phrase" ....... when parties to a transaction proceed on the basis of an underlying assumption......". The parties in the instant case had done this.

Held: "In the absence of" clear fresh and uncontrovertible evidence to the contrary it would be unfair to allow the defendant to go back on that assumption which had "held sway" between them for 12 years.

When the defendant had been convicted of the offence of failing to pay contributions to the plaintiff board it was a fundamental ingredient that had to be established beyond reasonable doubt that the defendant was an employer, liable to make such contributions. That very issue was challenged in the instant case. It had been established in the earlier cases.

See also R v. Hagan (1974) 1 QB 399 as to estoppel applied to criminal proceedings.

To allow the defendant to impeach that which he had neglected and could no longer impeach would be to overlook issue estoppel.

Application refused.

Defendant to pay costs

Cases referred to:

Amalgamated Property Co. v. Texas Bank (1982) 1 QB 84

R. v. Hogan (1974) 1 QB 399.

FATIAKI, J.:

Decision

The defendant by a motion dated the 14th March 1988 seeks to set aside a judgment regularly entered in default of appearance by the plaintiff body.

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 have been or can he elevated to the states of a rule of law or condition precedent to the exercise of the courts 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.

In this latter regard in my view it is proper for the court to consider any delay on the defendant's part in seeking to set aside the default judgment and how far the plaintiff has gone in the execution of its summary judgment and whether or not the same has been stayed.

The plaintiff by its Writ of Summons dated the 26th of August 1987 and personally served on the defendant on the 7th of September 1987 claimed various liquidated amounts for arrears of contributions and surcharges under the provisions of the Fiji National Provident Fund Act Cap. 219, (hereinafter referred to as the FNPF Act.)

Sixteen (16) days later on the 23rd of September 1987 judgment in default was entered in the sum of $19,379.87 together with, $65.00 costs.

Approximately, three (3) months later on the 11th of December 1987 in execution of its summary judgment the plaintiff caused a Bankruptcy Notice to be served on the defendant. This was followed (about 2 months later) by a Bankruptcy Petition served on the 4th of February 1988.

Then three (3) days before the Bankruptcy Petition was listed to be heard the defendant filed an undisclosed affidavit opposing the petition on the 26th of February 1988 and two (2) more weeks were to pass before the defendant applied to set aside the default judgment on which the said Notice and Petition were based. Bankruptcy proceedings have since then been stayed by consent pending the outcome of this present application.

In my view- the defendant’s present application cannot be said to have been brought with any expedition; no less than 6 months has expired since the default judgment was entered and no less than 3 months since the Bankruptcy notice was admittedly served on him.

Nevertheless, the defendant has not approbated the judgment in any way and, although unverified by an affidavit from the solicitors concerned he has deposed, to instructing presumably in time a firm of solicitors to defend the action.

I note that the plaintiff's statement of claim itself lacks particularity as to the number and names of employees for whom non-payment of contributions are alleged and the claim for arrears and surcharges for 1981 prima facie appears to have been brought outside the six (6) years time limit expressly laid down in Section 56(2) of the Fiji National Provident Fund Act Cap. 219. Nor is the plaintiff’s capacity anywhere averred or pleaded in the statement of claim which is itself based generally on the provisions of the Fiji National Provident Fund Act.

I move next to consider whether the defendant has a serious defence to the plaintiffs claim. In this regard the defendant has annexed a proposed "DEFENCE" in the following terms:

"1. That defendant denies owing the plaintiff the sum claimed or any sums whatsoever.

2. The defendant denies that any demand has been made on him by the plaintiff.

3. The defendant further says that he has never traded as "DATTS FURNITURE AND JOINERY" of Lautoka."

From this defence and affidavit in support it is clear that the defendant denies liability for the amount claimed on the basis that he is neither a partner in or owner of nor has he traded as "Dutts Furniture and Joinery". He is however, on his own admission, employed as a Manager of the firm.

The liability to pay contributions to the Fiji National Provident Fund established under the Fiji National Provident Fund Act is that of an “employer” as defined in Section 2 of the Act, which reads, as far as relevant for present purposes:

"employer means-

(a) in respect of an employee (employed in Fiji under a contract of service or apprenticeship or learnership, whether written or oral or whether expressed or implied), the person with whom such employee has entered into a contract of service or apprenticeship or learnership; or

(b) in respect of an employee (being in Fiji is under a contract for the performance of manual labour entered into by him either as an individual or as one of a group of persons), the person with whom such employee has entered into a contract to perform manual labour;

(inclusions in brackets taken from the relevant statutory definition of an employee)."

Clearly, an "employer", is the person with whom the employee has entered into a contract of service or a contract to perform manual labour regardless of whether that person is or is not registered under a business name or is described as a manager or partner of a firm.

The sworn assertion by the defendant that he is "....... only employed as a Manager ......" of the defendant firm is only one inconclusive evidential factor to be considered whether in law he is an "employer" liable to make contributions under Section 13 of the Fiji National Provident Fund Act.

In my view a "Certificate of Registration" issued pursuant to the Registration of Business Names Act Cap. 249 is per se of little or no assistance at all in a resolution of the primary question raised in the defendant's defence and with which this court is concerned, namely, whether the defendant is an 'employer' liable to make contributions under the Fiji National Provident Fund Act.

I note that by Section 10 of the Registration of Business Names Act Cap. 249 the failure by an individual to register a business name does not preclude the institution of civil proceedings against such individual in the name under which he is carrying on business and such unregistered business name shall be a sufficient designation of such individual in a writ.

In this case the defendant is described in the plaintiff's writ of summons as follows:

"SHIRI DATT (f/n Indar Datt) T/A "DATTS FURNITURE & JOINERY" of Lautoka."

The evidence in support of this designation of the defendant is allegedly to be found in the text of a REGISTRATION OF EMPLOYER form which is required to be completed and submitted by every employee pursuant to Regulation 4(l) of the Fiji National Provident Registrations under threat of penalty for failure to do so. (see: Regulation 79(1)(a)).

The form in question purports to register "DATTS' FURNITURE & JOINERY" of P.O. Box 655, Lautoka as an 'employer' of 3 employees. In it it is described as a partnership operating out of business premises at Natabua, Lautoka with a show-room in Yasawa Street, Lautoka and dealing in furniture and joinery.

It is dated the 30th January 1976 and ends with the following signature caption:

"Full name and address of Employer/Owner of Business of Principal Partner; Secretary; Managing Director; signing the form on behalf of the employer:

Name (Print) SHRI DATT s/o INDAR DATT

Home Address Natabua, Lautoka

I hereby certify the above to be true and correct:

Signature (Sgd.)............................. Designation ................... Partner

DATE: 30/1/1976.”

The defendant in an affidavit dated the 12th of May 1988 in “answer” to the above-mentioned form deposed to in paragraph 3 of the affidavit of the plaintiff’s enforcement officer dated the 31st March 1988, merely states:

"2. THAT I deny the contents of paragraph 3 of the said Affidavit and further say that at all material times I was not a partner in the firm of Darts Furniture & Joinery.

3. THAT at all material times my father Indar Datt was the sole owner of Dutts Furniture & Joinery."

There is also annexed to the defendant’s above-mentioned affidavit of Certificate of Registration under the Registration of-Business Names Act Cap. 218 purporting to register “DATTS FURNITURE SHOP of Natabua, Lautoka. Box 328 Lautoka” on the 8th day of August 1972 as a business name.

The certificate is by the terms of Section 15(3) of the Registration of Business Names Act only "..... prima facie evidence of the fact and date of registration and any other particulars therein contained...." such as the existence of a statement applying for registration, and the business name and address.

As such, it is ex facie unrelated to the 'employer': "DATTS FURNITURE & JOINERY of P.O. Box 655, Lautoka" referred to in the earlier mentioned Registration of Employer form, albeit that "Datts Furniture and Natabua, Lautoka" appear to be common elements.

In my view the annexure cannot be said to refer to the business name "DATTS FURNITURE & JOINERY" under which the plaintiff issued its writ against the defendant, nor considering my earlier expressed view about such certificates, does it preclude the defendant from being an "employer" under the Fiji National Provident Fund Act.

It is noteworthy that in the defendant's bare denial of the form he does not deny his signature on it, nor does he deny completing it in his own handwriting nor has he attempted any explanation of how he is designated as a "partner" in the partnership business when there are other non-proprietary titles or designations suggested within the form itself such as ‘secretary’ and ‘managing director’.

If it were a simple matter of preferring one annexure to another I would have little hesitation in preferring that of the plaintiff statutory body's Registration of Employer form but the plaintiff body has also raise 'estoppel' in its affidavit evidence.

This is evidenced by precious proceedings instituted by the plaintiff statutory body against the defendant and in which he was successfully sued or convicted, and in all of which, he is described in identical terms to that in the present Writ of Summons, earlier set out, these were (by date):

(a) On the 26th of June 1979 in Lautoka Magistrate's Court Criminal Case No. 646/79 for failure to pay contributions for the month of January 1979;

(b) On the 9th of April 1980 in Lautoka Magistrate's Court Case No. 303/80 for failure to pay contributions for the month of January 1980 and surcharges;

(c) On the 9th of December 1980 in Lautoka Magistrate's Court Case No. 1095/80 for failure to pay contributions for the month of July 1980;

(d)On the 27th of February 1984 in the Suva Supreme Court Action No. 201 of 1984 and in subsequent enforcement proceedings taken by way of Bankruptcy Nos. 76 of 1984; 334 of 1984;

(e) On the 1st of May 1984 in Lautoka Magistrate's Court Criminal Case No. 388/84 for failing to produce documents for the years 1981 to 1983 (inclusive);

(f) On the 23rd of July 1984 in Lautoka Magistrate's Court Criminal Case No. 754/84 for failing to produce documents for the years 1981 to 1983 (inclusive); and

(g) Further Bankruptcy Action nos. 619 of 1986 and 625 of 1986 taken in respect of the final judgment earlier obtained by the plaintiff in Civil Action No. 201 of 1984 (d) above.

Faced with this seemingly overwhelming array of previous proceedings, the defendant merely denies being a partner and asserts he was wrongfully sued. There is no suggestion that he has appealed against any or all of the above-mentioned convictions or judgments, the time for the doing of which has long now expired.

Counsel for the defendant at the hearing of the application however submitted that "estoppel" was not a cause of action, and to use the often quoted expression, was a "shield and not a sword" and ought not to be used so as to deprive the defendant of the opportunity to fully argue his defence.

But Lord Denning M. R. in Amalgamated Property Co. v. Texas Bank (1982) 1 QB 84 at p.122 had this to say about estoppel:

"The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with cases. That is why I have not gone through them all in this judgment. It has evolved during the last 150 years in a sequence of separate developments: proprietary estoppel, estoppel by registration of fact, estoppel by acquiescence, and promissory estoppel. At the same time it has been sought to be limited by a series of maxims: estoppel is only a rule of evidence, estoppel cannot give rise to a cause of action, estoppel cannot do away with the need for consideration, and so forth. All these can now be seen to merge into one general principle shorn of limitations. When the parties to a transaction proceed on the basis of an underlying assumption-either of fact or of law-whether due to misrepresentation or mistake makes no difference-on which they have conducted the dealings between them-neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek t go back on it, the courts will give the other such remedy as the equity of the case demands."

So too, in this case it is clear that since the submission of the Employer Registration form in 1976 and right throughout the court proceedings from 1979 to 1986 the plaintiff board and the defendant have proceeded on the underlying legal assumption that the defendant was an "employer" for the purposes of the Fiji National Provident Fund Act Cap. 219.

As such in the absence of clear, fresh and uncontravertible evidence or new argument or legal authority, to the contrary it would, in my view, be unfair to allow the defendant to go back on that assumption which has held sway between them for the past 12 years.

Furthermore, such a submission overlooks the fact that on more than one occasion and certainly in respect of all the occasions when the defendant was convicted on the offence of Failing to Pay Contributions to the plaintiff board it was fundamental issue and ingredient that had to be established beyond reasonable doubt by the plaintiff board that the defendant was an "employer" liable to make such contributions as were alleged in the charges.

This is the very issue which the defendant’s proposed defence seeks to now challenge and I am more than satisfied that there is no merit at all in it and furthermore the defence as proposed raises only one legal issue which has already been decided more than once against the defendant in previous proceedings between him and. the plaintiff board.

Lawson. J. in R. v. Hagan (1974) 1 QB 399 in holding that issue estoppel applied in criminal proceedings described the doctrine as follows at p. 401 D:

"Issue estoppel can be said to exist when there is a judicial establishment of a proposition of law or fact between parties to earlier litigation and when the same question arises in later litigation between the same parties. In the later litigation the established proposition is treated as conclusive betweens those same parties. It can also be described as a situation when, between the same parties to current litigation there has been an issue or issues distinctly raised and found in earlier litigation between the same parties."

In the circumstances to permit the defendant to now impeach, by an exercise of the court's discretion, that which he has neglected and can no longer lawfully impeach, would be to overlook the applicability of issue estoppel to the present case and undermine the need for some finality in litigation.

In my view it would be an unfair and unjust exercise of the court's discretion to set aside the default judgment regularly entered by the plaintiff on the basis of the defendant’s proposed unmeritorious defence and I therefore refuse the defendant’s application with costs to the plaintiff board.

Application refused.