IN THE MAGISTRATE’S COURT
AT NADI,FIJI
 
CIVIL ACTION N0: 136 of 2011

BETWEEN:

DENARAU RESIDENTIAL ESTATES LIMITED
PLAINTIFF

AND:

MICHAEL CLOWED
DEFENDANT

BEFORE: Resident Magistrate Mr. Thushara Rajasinghe, 

COUNSEL: Messrs Lateef & Lateef Lawyers for the Plaintiff,
Mrs. Vasantika Patel for the Defendant,

Date of the Ruling: 7th of August 2013.

RULING

1.	The Defendant/ Applicant (hereafter refers as Defendant) filed this notice of motion together with an affidavit in support seeking an order that the judgment by default entered on the 14th of June 2011 be set aside and that the defendant be permitted to defend the action. 

2.	The defendant in his affidavit in support stated that he was only made aware of this civil action when he was given a copy of the advertisement from the newspaper by a third party sometimes after the date set to appear in court. He admitted that he was not resided at the address given in the caption of this action and was reading at Lot 6 The Links at Denarau. He further stated that the plaintiff was aware of his place of residence at that time. 

3.	The defendant deposed that the plaintiff does not have the authority to charge interest on overdue arrears and the defendant as owners never agreed to pay interest to the plaintiff. He further stated the unreasonableness of the plaintiff claim. 

4.	The Chief Executive officer of the plaintiff company Mr. Rupeni Fonmanu stated in the plaintiff affidavit in opposition that it was not a duty of the plaintiff to keep the track record of the plaintiff’s movement and tried to serve the writ of summon on the address given to them by the plaintiff. The plaintiff further deposed that clauses 33-1 and 33.2 of the Articles of Association of the plaintiff company allow the plaintiff to charge interest on overdue arrears. The plaintiff stated that they sent a notice outlining the amount payable by the plaintiff and also sent a demand notice prior to institution of this action. 

5.	The defendant in his affidavit in reply only tendered a copy of articles of association and memorandum of association of Cryon Limited as an annexure to it. 

6.	Subsequent to filing of the respective affidavits of the defendant and the plaintiff, the matter was set down for oral submission on the 15th of May 2013. The learned counsel of the plaintiff made her oral submission, however the learned counsel for the defendant informed the court that he relies on the affidavits tendered and does not wish to make any oral submissions. 

7.	Upon considering the respective affidavits and oral submissions of the defendant and the plaintiff, I now proceed to pronounce my ruling as follows. 

8.	Order VI rule 8 of the Magistrates’ court’s rules states that “In the case of liquidated demands only, where any defendant neglects to deliver and serve the notice of defence prescribed by rule 6 within the time limited by the said rule, and is not let in to defend in accordance with the provisions of rule 7, then and in such case the plaintiff may enter final judgment against that defendant”.

9.	I find the default judgment dated 14th of June 2011 was entered pursuant to Order VI rule 8 of the Magistrates’ Court rules as the defendant failed to appear or did not file his notice of defence on that date. 

10.	 Order XXXII rule 11 states that “Any judgment by default may be set aside by the court or a magistrate upon such terms as to costs or otherwise as the court or magistrate may think fit”. In view of order XXII rule 11, it is a discretionary power of the Magistrate to set aside such default judgment. 

11.	Justice O’Regan in Mishra v Car Rentals (Pacific) Ltd [1985] FJCA 11; [1985] 31 FLR 49 (8 November 1985) discussed the legal principles pertaining to the issue of set aside default judgments in the Magistrates’ court where Justice O’regan held that “the question whether or not the judgment was entered irregularly or regularly. And we preface our observations by saying that in the application of similar rules as to that which is here under consideration, both in England and New Zealand, the cases in which a default judgment may be set aside have been grouped accordingly as the judgment was regularly or irregularly obtained. The distinction is clearly stated by Fry L. J. in Anlaby v. Praetorius (1888) 20 Q.B.D. 764 at p. 769 where he said:

"There is a strong distinction between setting aside a judgment for irregularity in which case the Court has no discretion to refuse to set it aside, and setting it aside where the judgment though regular, has been obtained through some slip or error on the part of the defendant in which case the Court has a discretion to impose terms as a condition of granting the defendant relief."

See, to like effect, Craig v. Kanssen (1943) K.B. 256 and the cases discussed therein. 

Accordingly, if the judgment was obtained irregularly, as is contended, the appellant was entitled to have it set aside ex debito justitiae, but, if regularly, the Court was obliged to act within the framework of the empowering provision - in this case - the proviso to O.XXXIV r.3 which confers an unfettered discretion upon the Court".  

12.	Leggatt LJ in Shocked and another v Goldschmidt and others ( 1998) 1 All E.R.372) discussed the legal principle that is required to apply when the judgment was obtained regularly where he held that " 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 the absence of the party who later applies to set aside. Deferent 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 adjudication on the merits has thereupon followed……

Contrasting the cases in the two categories it seems to me that whereas in the first the court is primarily concerned to see whether there is a defence on the merits, in the second the predominant consideration is the reasons why the party against whom judgment was given absented himself". 

13.	In view of these judicial precedence, I find that the test of set aside default judgment consists with two main elements. First is to determine whether the judgment was obtained regularly or not. If it was an irregularly obtained judgment, it should be set aside ex debito justitiae . The second element constitutes with two limbs. They are that judgment is given in default of appearance or pleadings or discovery and those in which judgment is given after a trial. In respect of the first limb the court is required to primarily consider whether the defence has a meritorious defence to defend the claim against them. 

14.	 Justice O'Regan observed the irregularity of entering a judgment by default in Mishra v Car Rentals (Pacific) Ltd (supra) where his lordship held that " In the case of liquidated demands only, where any defendant neglects to deliver and serve the notice of defence prescribed by rule  8  within the time limited by the said rule, and is not let in to defend in accordance with the provisions of rule 7, then and in such case the plaintiff may enter a final judgment against the defendant."

Clearly in such a case if the judgment was entered in respect of an unliquidated demand it would have been given irregularly and could be set aside ex debito justitiae". 

15.	Once again I am assisted by the observation of Justice O'Regan in Mishra v Car Rentals (Pacific) Ltd (supra) , where he discussed the definition of liquidated claim and held that " In Knight  v . Abbott (1882) 10 Q.B.  11  it was held that:"A liquidated demand is in the nature of a debt i.e. a specific sum of money due and payable under a contract. Its amount must be ascertained or ascertainable as mere matter of arithmetic. And to like effect is a dictum in Workman Clark & Co. Limited v . Lloyd Brazileno (1908)  1  K.B. 968 (C.A.): "A claim is unliquidated, where even though specified or named as a definite figure, its ascertainment requires investigation beyond mere calculation."

16.	The claim of the plaintiff in this instance case is to recover the arrears of rates on the property situated within the municipality of Denarau Corporation Limited. The amount claim is ascertainable and does not need an investigation. Hence I am satisfied the claim is liquidated claim. 

17.	I find the writ of summon was served on the defendant by way of newspaper advertisement as he was not available and could not be located to serve personally at the address given to the plaintiff. The Defendant himself admitted in his affidavit in support that he was not at the said address during the relevant time and was residing at another address. I am satisfied that the defendant was effectively and properly served with the writ of summon pursuant to the order VII rule 5 (c ) of the Magistrates Court rules. 

18.	Having considered these reasons set out above, I find that this judgment dated 14th of June 2011 was not obtained irregularly and hold that it was obtained in line with Order VI rule 8 of the Magistrates Court rules. 

19.	I now turn to the first limb of the second element of the test that the court is required to primarily consider whether the defence has a meritorious defence to defend the claim against them. 

20.	The scope of the test to ascertain the meritorious defence was extensively discussed in Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co Inc (1986) 2 Lloyd's Report 221,) where Sir Roger Ormrod held that " it is important in our judgment to be clear what the "primary consideration" really means. In the course of his argument Mr. Clarke Q.C. used the phrase " an arguable case" and it, or an equivalent, occurs in some of the reported cases ( e.g. Burns v Kendel (1971) 1 Lloyd's rep 554 and Vann v Awford). This phrase is commonly used in relation to R.S.C. O 14 to indicate the standard to be met by a defendant who is seeking leave to defend. If it is used in the same sense in relation to setting aside a default judgment, it does not accord, in our judgment with the standard indicated by each of their lordships in Evans v Bartlam. All of them clearly contemplated that a defendant who is asking the court to exercise its discretion in his favor should show that he has a defence which has real prospect of success. Indeed it would be surprising if the standard required for obtaining leave to defend ( which has only to displace the plaintiff's assertion that there is no defence) were the same as that required to displace a regular judgment of the court and with it the right required by the plaintiff. In our opinion therefore, to arrive at a reasoned assessment of the justice of the case, the court must form a provisional view of the probable outcome if the judgment were to be set aside and the defence developed. The "arguable defence" must carry some degree of conviction" 

21.	The defendant mainly contended that the plaintiff is not authorized to charge interest on overdue arrears. However, the plaintiff in his affidavit in opposition denied the contention and provided a copy of the provision in its articles of association that empowered the plaintiff to claim interest on overdue arrears as annexure to the affidavit. The defendant in his affidavit in reply merely tendered a copy of articles of association and a memorandum of association of Cryon Limited but did not specifically stated these documents are relevant and applicable to the plaintiff company. In addition to that, the defendant did not specifically deny the principle amount claim apart from the interest. 

22.	The defendant's other main contention is that he was not properly served with the breakdown of the amount claim. The plaintiff denied the said contention and stated that he was properly served with notice of arrears amount with a letter of demand. 

23.	In view of these findings set out above, I am of the view that the defendant failed to satisfy the court that he has a arguable defence with the prospect of success. I accordingly hold that the defendant fails to satisfy the court that he has a meritorious defence with the prospect of success if the judgment was set aside and allowed to defend himself. 

24.	Moving on to my conclusion, I refuse to set aside the judgment dated 14th of June 2011 and dismiss the notice of motion filed by the Defendant. The cost of this application will be determined summarily at the presence of the parties. 

25.	Seven days to file notice of intention to appeal. 

On this 7th of August 2013.

R.D.R.Thushara Rajasinghe
Resident Magistrate, Nadi.