Australia and New Zealand Banking Group Ltd v Litidamu [2011] FJMC 25; Civil Action 103 of 2009 (8 March 2011)

IN THE FIRST CLASS MAGISTRATE'S COURT OF FIJI
AT NADI WESTERN DIVISION FIJI ISLANDS

Civil Action No:. 103 of 2009

BETWEEN

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
a banking body duly incorporated under the laws of the State of Victoria, Australia and registered in Fiji as a foreign company.
Plaintiff

AND

RATU JOSESE LITIDAMU of Lot 8, Martintar, Nadi, Businessman and
LAISANI VAKATALE of Lot 19, Savunawai Stage 2, Nadi, Businesswoman

trading as TOWER OF ABUNDANCE

1^st Defdndant

AND

ANTONIO BALE of Kennedy Avenue, Nadi, Legal Practitioner.

2^nd Defendant

RULING
[On setting aside of Default Judgment]

1. The Defendants applied for setting aside of the Default Judgment entered on 22 July 2009. This is the hearing of both applications.

Background:

2. The Plaintiff claimed against the Defendants, inter alia, for the return of $43,000.00 being the money paid by the Plaintiff to the Defendants by mistake on or about 03 April 2009.

3. The 1st Defendants had drawn a cheque for $43,000.00 in favour of the 2nd Defendant. At the time of presentation, there were insufficient funds in the 1st Defendants' account but by mistake, the Plaintiff made payment on the cheque.

4. The 2nd Defendant received the sum of $43,000-00.

5. The Plaintiff commenced proceedings against the Defendants on 05 June 2009.

6. The matter came for the first call on 01 July 2009 and Ms. Volau Puamau entered an appearance on behalf of the Defendants. On this date, she had requested for 14 days time to effect settlement.

7. Ms. Volau's instructions were withdrawn on 10 July 2009 [see annexure A to the affidavit of John Crouch, sworn on 15 January 2010 and filed on 21 January 2010].

8. There was no appearance on behalf of the Defendants on 22 July 2009 and a Default Judgment was entered against the Defendants.

9. Subsequently, the Plaintiff commenced bankruptcy proceedings against the Defendants and obtained Receiving Orders against them as follows:

(a) 1st named 1st Defendant - 09 December 2009.

(b) 2nd named 1st Defendant - 25 November 2009.

(c) 2nd Defendant - 17 November 2009.

Application for setting aside by second Defendant

10. The application for setting aside and stay by the second Defendant was made on 14 October 2009.

11. This application is opposed and an affidavit in opposition to this application was filed on 21 January 2010 [affidavit of Gitesh Nair, sworn on 15 January 2010].

12. The second Defendant does not deny served with the proceedings and acknowledges that he even instructed counsel to appear on his behalf. He does not deny receiving funds in his Trust Account. His only defence is that he is a victim of alleged fraud between his client Laisani Atama and an officer of the Plaintiff Bank. He alleges that there was a secret agreement between them.

The Law

13. The principles on applications for setting aside of default judgment are set out in Wearsmart Textiles Limited v. General Machinery Hire Limited; FCA No. 30/97 which are as follows:

(a) Whether there has been a delay in making the application for setting aside.

(b) If there has been a delay, whether the Defendant has given a satisfactory explanation for his failure to appear.

(c) If the judgment is regular then there must be an affidavit of merits; i.e. an affidavit stating facts showing a defence on the merits.

14. Further, there is no room for speculative defences and potentially credible affidavit evidence must demonstrate a real likelihood that a defendant will succeed. Otherwise if no real prospect is shown, relief should be refused. (Allen v. Taylor [1992] PQLR 255].

Application for setting aside by first named first Defendant

15. The first named first Defendant's application for setting aside Default Judgment was made on 4 December 2009. He has filed this application more than 5 months after Default Judgment had been entered against him.

16. In his affidavit in support of the application, the applicant states that he was not served with the Writ of Summons and was surprised when he was served with the Bankruptcy Order.

17. This application is opposed. The Plaintiff filed two affidavits in respect of this application. One is the Affidavit of John Crouch, sworn on 15 January 2010 and filed on 21 January 2010 and the other one is the Affidavit of Ramanjulu Naicker sworn on 04 February 2010 and filed on 08 February 2010.

18. In Annexure of John Crouch's affidavit is a letter written by Puamau Law. This letter confirms representation for the first named defendant when the matter was first called in Court on 01 July 2009.

19. Further, the bailiff Ramanju Naicker has also given evidence on oath that he has served the applicant. Ramanjalu Naicker has not been subpoenaed by the applicant to challenge his evidence and this evidence has not been rebutted in any way.

20. It appears to me that the claim that the applicant was not served has conveniently emerged only when enforcement proceedings were taken by the Plaintiff. There is proper affidavit of service filed in court hence the applicant cannot claim that he wan not served.

Application for setting aside by second Defendant

21. In this case, the second Defendant was served with the proceedings and knew that he had a claim against him. The claim against him was for a liquidated demand. He knowingly did not enter an appearance and only filed this application for setting aside default judgment 3 months after the judgment had been entered.

22. In his affidavit in support of the application, the applicant states that the only reason he did not enter an appearance was because he was ashamed to appear personally or instruct another solicitor. This has been a very unsatisfactory explanation and I am unable to accept this explanation. The second Defendant as a lawyer should have known the consequences of failing to make an appearance in proceedings in which he was personally involved in.

23. The second Defendant received the $43,000-00 in his Trust Account. Now he blames the second named first Defendant for withdrawing monies from this account. The money claimed has been withdrawn from the second Defendant's account hence he should hold responsibility of it.

24. The second Defendant's defence is that there was a secret arrangement between the second named first Defendant and an officer of the Bank. I note that the second defendant makes this allegation only after the bank initiated proceedings by way of bankruptcy against him.

25. All 3 Defendants are liable to the Bank jointly and severally for repayment of the $43,000-00 that the Plaintiff had mistaken paid out on the first Defendants' cheque in favour of the second Defendant. In the case of ANZ Banking Group Limited v. Tribhuwan Prasad, Suva High Court Civil Action No. 59 of 2005, the Court had refused an application to set aside default judgment on the basis of a 3 months delay by the first Defendant in making the application and unmeritorious defence raised by him.

26. The Defendants had ample opportunity to return the funds to the Plaintiff but failed to do so.

27. In the case of liquidated demands only, where any defendant neglects to deliver and serve the notice of defence prescribed by rule 6 of this Order within the time limited by said rule, and is not let in to defend in accordance with the provisions of rule 7 of this Order, then and in such case the plaintiff may enter final judgment against that defendant [Order VI Rule 8].

28. In the case at hand the Defendants neither filed notice of intention to defend nor statement of defence. The plaintiff's claim is liquidated in the sum of $43,000.00. Therefore I find no irregularity in obtaining the default judgment on 22 July 2009.

29. The Defendants have provided no satisfactory explanation for their failure to appear or the delay in making the application. Further they have failed to show a defence on merits. They have also failed to demonstrate real likelihood that they will succeed.

Order:

30. For the reasons set out above, I dismiss both Defendants' applications with costs which I summarily assess at $500.00.

M H M Ajmeer
Resident Magistrate

Dated at Nadi this 8th March 2011.