Sarat Investments Ltd v Kumar [2016] FJMC 214; Civil Case 70.2015 (18 October 2016)

IN THE MAGISTRATE’S COURT

AT NAUSORI

IN THE CENTRAL DIVISION

REPUBLIC OF FIJI ISLANDS

Civil Case No.70 of 2015

Between:

Sarat Investments Limited

Plaintiff

[Respondent in this application]

And:

Mahesh Kumar

Defendant

[Applicant in this application]

Appearances and Representation

For Plaintiff : Mr R. Prakash

For Defendant : Mr A. Liverpool

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RULING – Setting Aside Judgment by Default

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Introduction/Application

On 27^th October 2015, the Defendant through its Solicitors filed a Notice of Motion seeking to set aside the Order (Judgment by Default) of the Court entered on 31^st October 2015.

Brief History of Action

On 17^th September 2015 the Plaintiff filed a writ of summons, seeking the Defendant pay the Plaintiff a sum of $30,900 and damages for breach of contract and general damages not exceeding the jurisdiction of the Court and other related costs.

The writ was served on the Defendant and an affidavit of service was filed in Court. The writ was listed for 21^st October 2015. On 21^st October 2015 the Counsel for the Plaintiff was present and the Defendant and neither his counsel was present. The Plaintiff’s counsel informed the Court that no notice of intention to defend was filed. He sought that the Court grant judgment by default for the sum claimed and sought formal proof for the damages for breach of contract and general damages not exceeding the Courts jurisdiction. The Court granted judgment by default for $30900 and formal proof Para (b) and (c) and costs as per the writ of summons.

The Law

Rule 3 of Order XXXIV of the Magistrates’ Courts’ rules is the relevant provision in this application. It states that:

"if a defendant in any suit makes such default or failure the court, may give judgment by default against such defendant, or make such other order as to the court make seem just".

"Provided that any judgment by default, may be set aside by the court upon such terms as to cost or otherwise as the court may think fit".

The Rule 3 of Order XXXIV confers the discretion to the magistrates’ court both in respect of the giving of a judgment by default or in the making of such other order and discretion in like terms to set aside the judgment by default as per the proviso of the said Rule 3 of Order XXXIV.

The Court is further guided by the decision in Wearsmart Textiles Ltd v. General Machinery Hire Ltd [1998] FJHC 26; Abu0030u.97s (29 May 1998) where the Fiji Court of Appeal has addressed the question of setting aside judgment Fiji Court of t of Appeal in Wearsmart stated that 'The general principles upon which a Court should act on an application to set aside a judgment that has been regularly entered, at out in the White Book, i.k, i.e. The Supreme Court Practice 1997 (Volume 1) at p.143. They are as follows:

"Regular judgment – if the judgment is regular, then it is an (almost) inflexible rule that there must be an affidavit of merits, i.e. an affidavit stating facts showing a defence on the merits (Farden v. Richter [1889] UKLawRpKQB 79; (1889) 23 Q.B.D. 124. At any rate where such an application is not thus supported, it ought not to be granted except for some very sufficient reason," per Huddleston, B., ibid. p.129, approving Hopton v. Robertson (1884) W.N. 77, reprinted 23 Q.B.D. p. 126 n.; and see Richardson v. Howell (1883) 8 T.L.R. 445; and Watt v. Barnett [1878] UKLawRpKQB 21; (1878) 3 Q.B.D. 183, p.363).

For the purpose of setting aside a default judg the defe defendant must show that he has a meritorious defence. For the meaning of this expression see Alpine Bulk Transport Co. Inc. v. Saudi Eagle Shipping Co. Inc., The Saudi Eagle ) 2 Lloyd's Rep. 221, C.A.,C.A., and note 13/9/14. "Discretionary powers of the Court," below.

On the application to set aside a default judgment the major consideration is whether the defendant has disclosed a defence on the merits, and this transcends any reasons given by him for the delay in making the application even if the explanation given by him is false (Vann v. Auford (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, and may therefore be relevant to the credibility of his defence and the way in which the Court should exercise its direction."

A defendant applying to set aside a default judgment must satisfy the following in order to succeed:

a. a meritorious defence which has a real prospect of success and carry some degree of conviction. It must have a realistic as opposed to a fanciful prospect of success. A supporting affidavit disclosing the condescending particulars of a meritorious defence is mandatory: Wearsmart Textile Limited v General Machinery Hire Limited and Anor Civil Appeal No. ABU 0030/1997.

b. some explanation as to why the default judgment was allowed: Evans and Bartlam [1937 2 All ER 646.

(i) some explanation for the delay in making an application to set aside: Pankanj Bamola & Anor v Moran Ali Court of Appeal Civil Appeal No. 50/90.

(ii) that the Plaintiff will not be prejudiced that may be caused to the Plaintiff as a consequence of setting aside the defjudgment Shir>Shiri Dutt v FNPF [1988] 34 FLR67.”

This Court has also considered the law which has been conveniently set out by Connors Rosedale Ltd v Kelly [2004] FJHC 429; HBC0323.1997L (11 June 2004):

"The issues for consideration by the court on an application to set aside the judgment entered after trial are set forth in Shocked and Another v Goldschmidt and Others [1998] 1 All E.R. 372. The leading judgment of the court was given by Leggatt LJ who said at page 377: -

"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 in the absence of the party who later applies to set aside. Different 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 an adjudication on the merits has thereupon followed."

Jenkins LJ in Grimshaw v Dunbar [1953] 1 All E.R 350 at 355 said:

"...a party to an action is prima facie entitled to have it heard in his presence. He is entitled to dispute his opponent’s case and cross-examine his opponent’s witnesses, and he is entitled to call his own witnesses and give his own evidence before the court. If by mischance or accident a party is shut out from that right and an order is made in his absence, then common justice demands, so far as it can be given effect to without injustice to other parties, that the litigant who is accidentally absent should be allowed to come to the court and present his case, no doubt on suitable terms as to costs..."

Leggatt LJ in Shocked after considering the authorities then set out at p. 381 a series of propositions or "general indications" which are: -

"(1) Where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in the trial, he will normally be bound by the decision.

(2) Where judgment has been given after a trial it is the explanation for the absence of the absent party that is most important: unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing.

(3) Where the setting aside of judgment would entail a complete retrial on matters of fact which have already been investigated by the court the application will not be granted unless there are very strong reasons for doing so.

(4) The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success.

(5) Delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it.

(6) In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion in his favour.

(7) A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences.

(8) There is a public interest in there being an end to litigation and in not having the time of the court occupied by two trials, particularly if neither is short."

The Lord Justice then said that the predominant consideration is the reason why the party against whom judgment was given absented himself.

"It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case" – Rich J in Cameron v Cole [1944] HCA 5; 68 C.L.R. 571 at 589.

Most recently, the issue has been considered by the Supreme Court of New South Wales Court of Appeal in Murphy v Doman (as representative of the estate of Simpson (dec’d)) – unreported [2003] NSWCA 249 – 11 September 2003 where at paragraph 48 Handley JA said: -

"Taylor v Taylor [1979] HCA 38; [1979] 143 CLR 1 and Allesch v Maunz [2000] HCA 40; [2000] 203 CLR 172 are decisions to the same effect. They establish that where judgment had been given in the absence of a litigant who has been denied a hearing through no fault of his own and where his absence has been adequately explained, that litigant has a prima facie right to have that judgment set aside to permit a re-hearing on the merits."

Analysis

The Court has noted the law on setting aside.

From the affidavit filed by Ms Pillai of the applicant this Court notes that she took all reasonable steps to fulfil her role and appear in Court on the given date. While she was required to instruct another solicitor if she knew that she could be caught up in Nasinu she thought that her case will be called later in Nausori. The Court notes that she later appeared in Nausori Court at 10.15 am and she was advised of the Courts position. She then proceeded to have the judgement by default set aside.

From the affidavit filed of Ms Pillai this Court notes that the Defendant has proposed a defence. This Court notes that it might be a reasonable defence. The Court notes that the Defendant in this case who might have a defence should not be punished for the lateness of the Counsel to Court.

For the foregoing reasons this Court will set aside the Judgement by Default and the formal proof date.

Orders

1. Judgement by default set aside and formal proof of clauses (b) and (c) of the writ of summons.
2. The Applicant/Defendant to pay the Respondent/Plaintiff $250.00 costs for this application which is summarily assessed.
3. The Defendant is given 7 days from date of this Ruling to file Statement of Defence and then immediately serve the Plaintiff’s Firm.
4. The Plaintiff is given 14 days from the date of receipt of the defence to reply thereafter.
   

Chaitanya Lakshman
Resident Magistrate
18^th October 2016