Chandra v Rokoqica [2001] FJLawRp 20; [2001] 1 FLR 94 (28 February 2001)

SHARAT CHANDRA as administrator of the estate of Elveen Chandra Rupan & SHARAT CHANDRA v AKUILA ROKOQICA, CONSORT SHIPPING & QLD. INSURANCE CO. LTD.

High Court Civil Jurisdiction

28 February, 2001

HBC 45/00B

Setting aside and stay of default judgment - reasons for Decision – whether D3 insurance company should be joined – Principles on setting aside default judgment – Motor Vehicles (Third Party Insurance) Act Cap 177

D1 and D2 applied to set aside default judgment entered against them, and to stay execution. D3 applied to be discharged from the proceedings on the ground that there was no nexus between the Plaintiff and the accident to implicate it, except for an insurance policy. D1 and D2 said they had to locate an insurance policy of indemnity, which took time. The Court noted a 4½ month delay in complying with the rules of the High Court. However, in the interests of justice and in the exercise of the Court's discretion, setting aside allowed on the basis that a defence required to be disclosed would transcend any reason given for delay, even if the Defendants state there is no collusion.

Held – On a regular judgment, where the nature of the defence required to be disclosed in accordance with principles has been disclosed this would transcend any reason given for 4.5 months of delay in complying with the High Court Rules in filing a defence.

Application to set aside judgment by default against First and Second Defendants allowed. All Defendants to file Statement of Defence within 21 days, but application to discharge Third Defendant is refused, with liberty to make further application but not before defence is filed. Matter to take its normal course.

Cases referred to in Decision

Burns v Kandel (1971) 1 Lloyd's Rep. 554
Farden v Richter [1889] UKLawRpKQB 79; (1889) 23 QBD 124
Fiji Sugar Corporation Limited v Mohammed Ismail [1998] ABU 28/97
Vann v Awford (1986) 83 L.S. Gaz. 1725, The Times, April 23, 1986 C.A. October 1998

Amrit Sen for the Plaintiff
Adrian Ram for the Defendants

[Note: this case was subsequently settled and the matter struck out on 26 November 2001.]

28 February, 2001

DECISION

Pathik, J

I gave oral decision on 23 February 2001 herein and stated that I will give my reasons in writing in due course and leave it on the file which I now do.

By motion dated 18 January 2001 the first and Second Defendants (hereafter referred to as "D1" and "D2") have applied for the following orders upon the grounds set out in the affidavit of Mohammed Aruf in support:

1. That execution on the judgment by Defendant entered herein be stayed pending the hearing of this application

2. That the judgment by default entered on 19th September 2000 against the 1st and 2nd Defendants be set aside.

3. That the 1st and 2nd Defendants be granted leave to file a defence herein.

4. Costs of application be costs in the cause.

The second application herein is by the Third Defendant (hereafter referred to as "D3") which party by motion dated 6 February 2001 applies for an order that it be discharged from these proceedings upon the grounds set out in the affidavit in support of clerk to Gibson & Company, Solicitors of Labasa.

It was agreed by counsel that both the applications be heard together.

Background facts

The background facts very briefly are that after service of the Writ of Summons herein on D1 and D2, they did not take the appropriate step of filing. Acknowledgment of Service. Whereupon on 19 September 2000 the Plaintiffs went ahead and obtained Default Judgment against them. On the other hand D3 filed Acknowledgment of Service.

The D1 and D2 say that by the time they attempted to file Acknowledgment of Service judgment had already been entered against them. The present application comes before the Court over five months after service of Writ of Summons. The reasons for delay are set out at length in the affidavit in support, suffice it to say that D2 tried to locate the insurance policy which D3 could not trace and expected D2 to locate it. This took time. D1 and D2 say that they have a good defence and a draft copy whereof is an annexure to the said affidavit. They say that delay in filing acknowledgment is not their fault in the circumstances as outlined to Court through their counsel.

On the second application on behalf of D3, Mr. Adrian Ram submits that the Statement of Claim does not disclose any cause of action against D3 nor is there any nexus between the Plaintiff and the accident that has allegedly occurred to implicate D3 except that there is a insurance policy of indemnity and D3 are the insurers for D2. There is no need to join them as a party for they will have to abide by the judgment which will be given in this case.

The learned counsel for the defence submitted that there be a hearing on merits. It is also to be noted that no assessment of damages has taken place. The Plaintiffs will not be prejudiced if the first application is granted.

Mr. Sen for the Plaintiffs submitted that the fact the two Defendants were endeavouring to locate the policy in collaboration with D3 is not a good enough reason for not complying with the Rules for a search at the Land Transport Authority would have revealed everything as to ownership of vehicle in question etc. Counsel says that the Defence is frivolous. The D1 was charged and convicted and is now saying that there was no collision. They took time to apply; it certainly prejudices the Plaintiffs. On the second application the learned counsel in effect is saying that the application has no merit. He says that the provisions of Motor Vehicles (Third Party (Insurance) Act Cap. 177 allows D3 to be joined. This will enable judgment to be satisfied otherwise there will be considerable delay if one had to chase after the insurance company if for some reason it decides not to pay.

Mr. Sen says that both the application should be dismissed with costs.

Consideration of the applications

As for the first application to set aside, there is no doubt that there has been a delay of about four and a half months in not complying with the Rules of the High Court on the part of D1 and D2 after service of Writ of Summons herein on them. The reason which has been advanced for the delay is far from satisfactory for they ought to have known better instead of going off at a tangent they should have moved according to the Rules.

Be that as it may, in the light of all the submissions made by counsel and bearing in mind the principles involved in any consideration of an application of this nature, I consider that in the interests of justice in the exercise of my discretion I ought to grant the application to set aside the judgment herein against D1 and D2.

In doing so, I have not lost sight of the fact that it is a regular judgment and in that case in setting aside 'there must be an affidavit of merit i.e. an affidavit stating facts showing a defence on the merits' [Farden v Richter [1889] UKLawRpKQB 79; (1889) 23 QBD 124] but where "such an application is not then supported, it ought not to be granted except for some very sufficient reasons" (Huddleston B in Farden ibid p.129). (The Supreme Court Practice 1993 Or.13 r.9 p.137).

The following passage also, on this aspect from the Supreme Court Practice (ibid) p.137-138 is apt:

"... the major consideration is where the Defendant has disclosed a defence on the merits, and this transcends any reasons given by him on the delay in making the application even if the explanation given by him is false (VANN v AWFORD (1986) 83 L.S. Gaz. 1725, THE TIMES, APRIL 23, 1986 C.A.). The fact that he has told lies in seeking to explain the delay, however, may affect his credibility of his defence and the way in which the Court should exercise its discretion."

The nature of defence required to be disclosed in accordance with the principles has been disclosed and this would 'transcend' any reason given for delay and even if the Defendants now state that there was no 'collision'. For as Lord Denning MR in Burns v Kandel (1971) 1 Lloyd's Rep. 554 at p.555 has said that it is not 'that the Defendant must show a good defence on the merits. He need only show a defence which discloses an arguable and triable issues'. A prima facie defence on affidavit is required. (The Fiji Sugar Corporation Limited and Mohammed Ismail Civ. App. No. 28/87 FCA at p9).

For these reasons I set aside the judgment by default against the 1st and 2nd Defendants. It is ordered that defence be filed within 21 days. The application to discharge the 3rd Defendant is refused. Leave is granted to D3 to file Statement of Defence within 21 days. Liberty is reserved to the Third Defendant to make a further application to discharge but not before Defence is filed. Costs to the Plaintiffs in the sum of $150.00 to be paid within 7 days by the 1st and 2nd Defendants. The matter to take its normal course hereafter.

Application allowed.

Marie Chan