Fiji Development Bank v Cama [2001] FJLawRp 22; [2001] 1 FLR 106 (7 March 2001)

FIJI DEVELOPMENT BANK v ISIRELI CAMA

High Court Civil Jurisdiction

6 June, 2000, 7 March, 2001

HBC 0260/99S

Setting aside – judgment by default – administrator of estate – whether Defendant had fully administered the estate and effects of the deceased, leaving no further assets, or whether the Defendant had wasted assets of the deceased – whether Statement of Defence an arguable defence - defect in sealing judgment against administrator discussed - ignorance of the law no defence – presumption of devastavit not rebutted here – Succession Probate and Administration Act ss11, 20 & 21

The Defendant was sued as administrator of the estate of his late brother, which late brother owed the Plaintiff bank a loan secured under bill of sale. A repossession notice was served on the Defendant. He did not deny receiving it. Failing action from the Defendant, the Plaintiff issued a Writ of Summons against the Defendant as administrator of the deceased's estate for the outstanding debt. The Defendant had transferred the residential property to his name within 2 months of being granted letters of administration. Records obtained from the Road Transport Department showed two of the four deceased's taxis were transferred to him. The Defendant failed to explain how he had administered the estate, but alleged there were no other assets of the estate. The Defendant alleged he did not know he had to enter acknowledgement of service or intention to defend to continue to defend, and that he suffered impecuniosity. He sought by summons to set aside the judgment, stay execution of a writ of fifa and for leave to file a defence. The Court remarked that the Defendant had been extremely tardy in the application. The Court rejected an argument of ignorance of the law given the clear warning on the Writ. Although the Judgment by default as sealed was not in the ordinary or accepted form for a judgment against an executor or administrator and could be considered irregularly entered, the Defendant did not take issue.

Held – where a Defendant did not deny receiving a repossession notice, and where documentary exhibits and the Defendant's own affidavit raised a rebuttable presumption in law that the Defendant had wasted the deceased's assets by transferring to himself, a proposed Statement of Defence denying any knowledge of the status or operation of the deceased's loan account with the Plaintiff bank, or being served with any demand or repossession notices relative to such account raises no an arguable defence to the Plaintiff's claim.

Application to set aside dismissed with costs.

[Note: On 25 October, 2001, the action was discontinued.]

Cases referred to in Judgment
Batchelar v Evans (1939) 3 All ER 606
FNPF v Shiri Datt (1988) 34 FLR 67
Leonard v Simpson (1835) 42 RR 576
Marsden v Regan (1954) 1 WLR 423 at 429
Rock v Leighton [1795] EngR 2985; (1700) 1 Salk 310

Devanesh Sharma for the Plaintiff
Robinson Prasad for the Defendant

7 March, 2001

JUDGMENT

Fatiaki, J

This is an application to set aside a default judgment entered against the Defendant administrator on 25th June 1999.

The background to the the case is that Neori Toni (the deceased) prior to his death on 27th February 1998 had operated a taxi busiwith a number of taxis which he had purchased from loan monies advanced by the Plaintiff baff bank and secured by Bills of Sale.

The details of the loao account are unclear but, for present purposes, suffice it to say that at the date of the deceased's death a substantial sum in excess of $61,000 remained owing on the account and a demand notice and seizure or repossession notice dated 28th July 1998 (i.e. some 5 months after the date of death) were issued by the Plaintiff bank in exercise of its rights under the Bills of Sale. Both notices appear on their face to have been personally acknowledged by the Defendant who has not expressly denied receiving them in his affidavit in reply.

Be that as it may a fortnight before the notices were issued, the Defendant (who is a brother of the deceased) obtained the grant of Letters of Administration 'well and faithfully to admer' the estate of the deceased. In this regard Section 11 o 11 of the Succession Probate and Administration Act (Cap.60) provides (so far as relevant) that:

'The real as well as the personal estate of every deceased person shall be assets in the hands of the ... administrator, for the payment of all duties and fees and of the debts of the deceased in the ordinary course of administration.'

Subsequentlyetter dateddated 25th January 1999 (i.e. almost a year after the date of death) the Plaintiff bank wrote to the Defendant requesting payment of the monthly instnt on the deceased's loan account or 'a firm arrangement onnt on how you intend to service the debt'. Nothing appears to have eventuated and on 31st March 1999 a similar letter was sent by the Plaintiff bank's solicitors requesting 'immediate arrangements for the payment of the (the deceased) debt failing which, we are to proceed with legal action against you for the recovery of the same'. The Defendant however denies ever receiving both letters which were addressed to his place of employment, or being aware of their existence, yet, they both imply that the Defendant was aware that the deceased's account with the bank remained operational in spite of his death.

Finally on 25th May 1999 a Writ of Summons was issued against the Defendant as administrator of the deceased's estate, claiming the sum of $65,931.76 being the outstanding debt then owing on the deceased's loan account Writ was personally servederved on the Defendant on 8th June 1999 and on 25th June in default of any acknowledgement, judgment was entered against the Defendant.

I digress to out that that the default judgment as sealed was not in the ordinary or accepted form for a judgment against an executor or administrator and might on that score be considered irregular albeit no issue has been raised ised in that regard. [see the form of judgment in Batchelar v Evans (1939) 3 All ER 606 at 607].

On 14th October 1999 a Writ of Fifa was issued in execution of the default judgment and on 12th November 1999 (i.e. 6 months after judgment had been sealed) the Defendant's solicitors isshe present Summons seeking a stay of execution, the settingtting aside of the default judgment, and leave to file a Statement of Defence. There can be no doubt that the Defendant has been exceedingly tardy in this application which appears to have been prompted by the Fifa.

Therebefore the Court turt three (3) affidavits for consideration:

(1) The Defendant's primary affidavit in support of the Summons dated 10th November 1999.

(2) The affidavit of the Plaintiff bank's Managgal dated 15th 15th February 2000 in opposition; and

(3) The Defendant's affidavit in reply dated 13th March 2000;
The principles that guide a court in the exercise of its unfettered discretion oion on an application such as the present is clearly set out in the following passages in FNPF v Shiri Datt (1988) 34 F.L.R. 67, 69 which reads:

'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 the case, none have been or can be elevated to the status 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.'

As to (a) above the Defendant deposed in his primary affidavit at para 6:
'I did not enter an acknowledgement of service and my intention to contest the claim herein because I did not know that I had to do this in order to defend the claim. Further I was in financial difficulty (and) I verily believed that I would be served with another Summons wherein I would be notified of the date when to attend Court.'

In short, the Defendant pleads ignorance and impecuniosity, but given the very clear wording and warnings on the face of the Writ of Summons, ignorance of the law is no excuse. Furthermore given the Defendant's professional occupation, taxi business, and the fact that he had previously consulted solicitors in order to obtain the Letters of Administration to which he would have been required to enter into a bond 'penalty equal to the gross amount under which the property of the deceased is sworn' (See Sections 20 and 21 of the Probate Succession and Administration Act), his claims to ignorance and impecuniosity are, in my considered view, extremely doubtful.

As for the value and assets of the deceased's estate the Defendant deposed in para 14 of his primary affidavit:

'That at the time the Letters of Administration were granted in this matter, the gross value of the estate of the deceased amounted to $100,000 and the said estate included the deceased's residential property comprised in Native Lease No. 21648 situated at Lot 35 Naveiwakau Subdivision, Valelevu Nasinu and 4 taxis ...'

Additionally, in the Oath of Administrator filed in support of the grant of administration, the Defendant deposed 'that the net value of the deceased's estate at the date of his death amounts to $65,000.00'.

As for (b) above, the Defendant deposes to having 'a valid defence' which 'raises triable issues and issues of law which requires a determination by the Court'. There is also annexed to the affidavit a Proposed Statement of Defence in which the Defendant denies any knowledge of the status or operation of the deceased's loan account with the Plaintiff bank or being served with any demand or repossession notices relative to such account and para 11 avers:

'The Defendant has fully administered all the Estate and effects of the said Neori Toni, deceased, which had ever come into his hands to be administered, and this Defendant had not at the commencement of this action nor has he since had nor has he now any such estate or effects.'

This is furtonfirmed ined in para 16 of the Defendant's primary affidavit where he deposed:

'To the best of my knowledge and belief I have fully administered all the Estate and effects of the sed, which had ever come inme into my hands to be administered, and the estate does not have any assets left to be administered.'

The primary affidavit however does not provide any details (which would presumably be within the personal knowledge of the Defendant as administrator) of how? or when? 'the deceased's residential property ... and 4 taxis' were disposed of or distributed but, it is clear from the annexed title document that, the 'deceased's residential property' was eventually transferred to the Defendant beneficially on 13th September 1999 (i.e. 2 months after the Plaintiff bank's Writ was served on him).

Furthermore Department of Road Transport records indicates that two (2) vehicles with registration Nos: CV 749 and BJ 354 which were previously owned by the deceased were transferred to the Defendant in February and March 1999 respectively. The Defendant however, strongly disputes the ownership of these vehicles in his affidavit in reply, but still, no mention is made as to what became of the '4 taxi's' which the Defendant accepts formed part of the deceased's estate which in the Defendant's own words has been 'fully administered'.

Based on the above, counsel for the Plaintiff bank forcefully argues that 'the Defendant has benefited greatly from the estate in getting all the estate assets in his (personal) name' and all this, counsel stresses, occurred after the Defendant had received the Plaintiff bank's demand and repossession notices.

In so far as the Defendant pleads that he has fully administered the deceased's estate ('plene administravit') the law is clearly set out in Vo.17 of Halsbury's Laws of England (4th edn) at para 1580 which reads:

'A person sued as personal representative may in general plead in answer to an action brought against him in his representative capacity any defence which would have been open to the deceased. He may further rely upon the defences ... (2) that he has fully administered (plene administravit) or fully administered with the exception of certain assets (plene administravit praeter); (3) the existence of debts of a higher nature and no assets ultra; (4) the right to set off a debt; and (5) the expiry of the appropriate period of limitation.

If the defence of plene administravit ... is pleaded the burden of proving assets rests upon the Plaintiff, and the personal representative is only answerable to the amount of assets proved.'

Of particular relevance however to the present case is para 1584 which provides:

'If the personal representative allows judgment to go against him by default, ... he admits the claim and that he has sufficient assets to satisfy the claim.'

This latter legal principle is of ancient pedigree as was said by Tindal Ch.J. in Leonard v Simpson (1835) 42 RR 576, speaking of the effect of a default judgment being entered against an executor, at p.579:

'The judgment by default ... is conclusive upon the Defendant, that he has assets to satisfy the judgment. This is so thoroughly settled in the case of Rock v Leighton [1795] EngR 2985; (1700) 1 Salk 310 and in other cases which had preceded it, that it was admitted to be the law by the Defendant's counsel.

The fact therefo conclusiveusively established against the Defendant, that he has assets of the testator in his hands: and the only question which remains is, what evidence is necessary to show that he has wasted those assets ('devistavit').

In reason and good sense, very little evidence ought to be necessary for that purpose. It is his duty when called upon by notice, or by a writ of execution, either to satisfy the debt of the testator, or to shew the assets to the sheriff that he may make the debt out of them; and accordingly, very slender evidence has at all times been held to be sufficient to prove the devastavit.'

In the present case given the documentary annexures and the averments in the proposed Statement of Defence reinforced by the Defendant's sworn deposition that no assets of the deceased's estate remains, there arises a rebuttable presumption in law that he has committed 'devastavit' (per Evershed M.R. in Marsden v Regan (1954) 1 WLR 423 at 429).

In this latter regard Halsburys (op.cit) at para. 1591 states:

'On an admission of assets an immediate personal judgment may be made against the representative, whether the claim is by a creditor ... and even though the creditor sues on behalf of himself and all other creditors, for insofar as the representative has no assets to meet the claim a rebuttable presumption that he has committed a devistavit arises.'

For the foregoing reasons I am not satisfied that the Defendant has an arguable defence to the Plaintiff's claim and the application is accordingly dismissed with costs which are summarily fixed at $250.00.

Application to set aside judgment refused.

Marie Chan