Orton Architects Ltd v Gokal [2020] FJMC 136; Civil Action 234 of 2018 (14 October 2020)

IN THE MAGISTRATE’S COURT AT SUVA

CIVIL DIVISION

Civil Action No. 234 of 2018

BETWEEN: ORTON ARCHITECTS LIMITED

PLAINTIFF

AND: YOGESH GOKAL

DEFENDANT

For the Plaintiff: Ms. Narayan of Neel Shivam Lawyers

For the Defendant: Mr. Rokodreu of Valenitabua & Associates

RULING ON SETTING AISDE DEFAULT JUDGMENT

Introduction

1. This is the Defendant’s application to set aside a default judgment entered by the Plaintiff on the 19^th June 2019 for failing to file Notice of Intention to Defend and failing to appear in Court on 19^th June 2019.
2. The Application is filed pursuant to Order 32 Rule 7 of the Magistrate’s Court Rules. The motion is supported by the Affidavit of Yogesh Lal, 33 Des Voeux Road, Businessman, the Defendant.

Brief Chronology of proceedings

3. The Plaintiff filed a Writ with a Statement of Claim dated the 15^th of October 2018 2004 seeking judgment in the sum of $15,997.69, amongst other associates relief, for a breach of agreement.
4. The Writ was served by a Jope Tikoisuva for the Plaintiff to the Defendant on 29^th October 2018 at the Chamber of the Defendant’s then solicitors – Messrs Toganivalu and Valenitabua Law.
5. A Notice of Intention to Defend by Toganivalu and Valenitabua Barristers and Solicitors was filed but not prescribed fees not paid on the 30^th October 2018.
6. On 13^th of November 2018, the Plaintiff appeared but not the Defendant as the fees for the Notice of Intention to Defend had not been paid. Matter was adjourned to 20^th February 2019 for service.
   
7. On 20^th February 2019, the Defendant still had not been served and so the Court allowed further time for Plaintiff to clarify why documents could not be personally served to the Defendant.
8. On 25^th February 2019, the Plaintiff filed a Notion of Motion and Affidavit in Support of Jope Tikoisuva for Substituted Service.
9. On 14^th March 2019, the Motion for Substituted Service was granted.
10. On 19^th June 2019, Default Judgment in the sum of $15,997.69, amongst other orders.
11. On 1^st October 2019, the Affidavit Verifying Advertisement was filed confirming substituted service.
12. On 13^th November 2019, the Defendant filed a Notion of Motion and Affidavit in Support of Yogesh Lal for Setting Aside Default Judgment; and a Notice of Change of Solicitors and Notice of Intention to Defend by the Defendant’s new legal representative, Valenitabua & Associates.
13. On 3^rd December 2019, the Plaintiff filed their Responding Affidavit of Jon Orton.
14. The Motion was heard on the 23^rd September 2020.
    

The Defendant/ Applicant’s submissions

15. There is a about a five months interval between the date of the judgment being entered and the current Motion to set aside.
16. The Defendant sets out their reason for the delay in filing a Notice of Intention to Defend and entering an appearance in the affidavit of Yogesh Gokal. They cite the non-compliance with instructions by an associate of his former legal representatives, Toganivalu and Valenitabua to file the said notice and ultimately the non-appearance of counsel on the court date. In addition to this, the Defendant was essentially overseas in the most parts at the outset of the taking of instructions and proceedings.
17. The delay in contesting the default judgment, some 5 months, could be attributed to the Defendant being overseas and also in seeking advice and engaging new counsel, Mr. Valenitabua.
18. The Defendant has also submitted their Proposed Statement of Defence basically denying ever entering into an agreement with the Plaintiff as there is no signed agreement between the parties. This was submitted to demonstrate that they have a meritorious defence.
19. In summary, the Defendant submits that they have explained the reason for not filing a Notice of Intention to Defend and the non-appearance on the court date. They have also explained the delay of 5 months in filing this Motion to set aside the default judgment. They have also submitted that they have a meritorious defence which ought to be tested out at the hearing of this matter.
    

The Plaintiff’s submission

20. The Plaintiff submits that they have been consistently emailing the Defendant about the monies owed but there has been no response. The Plaintiff further suggests that the Defendant was deliberately not responding to their emails. The Plaintiff submits that the Defendant does not have a meritorious defence as there is an existing service contract between the parties for architectural services and that there are copies of correspondences, invoices and report to support the contractual relationship.
    

The Analysis

21. From the records this was a regularly entered default judgment. The Writ was dully served through substituted service, there was no appearance for the Defendant nor was a Notice of Intention to Defend filed. The Plaintiff therefore sought for default judgment and it was entered accordingly.
22. The principles regarding the setting aside of a default judgment have been discussed fully in the case of Keshwa Nand & Sashi Mohini Nand –v- Davendra Narayan Chand Civil Action HBC 223 of 2007L (unreported) where Justice Scutt stated as follows: -

“The general principles upon which a Court should act on an application to set aside a judgment that has been regularly entered are set out in the White Book, 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 QBD 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. Farden v. Richter, at 129 approving Hopton v. Robertson [1884] WN 77, reprinted 23 QBD 126n; and see Richardson v. Howell (1883) 8 TLR 445; and Watt v. Barnett [1878] UKLawRpKQB 21; (1878) 3 QBD 183, at 363

For the purpose of setting aside a default judgment, the 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 [1986] 2 Lloyd’s Rep 221, CA ...’ Wearsmart Textiles Limited v. General Machinery Hire Limited [1998] FJCA 26; Abu0030u.97s (29 May 1998), at 8-9

‘On the application to set aside a default judgment the major consideration was 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. Awford (1986) 834 LS Gaz 1725; The Times, 23 April 1986 (CA) 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 discretion ...’: Wearsmart Textiles Limited v. General Machinery Hire Limited [1998] FJCA 26; Abu0030u.97s (29 May 1998), at 8”

23. The relief that is sought by the Defendant is a discretionary relief and the common law In Fiji has developed as to how that discretion is exercised. Justice Scutt has also explored this in the above case as follows: -
    

“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 a case, none [has] been or can be elevated to the status of a rule of law or condition precedent to the exercise of the court’s 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: Fiji National Provident Fund v Datt [1988] FJHC 4; (1988) 34 FLR 67 (22 July 1988), at 3”

Courts’ Findings

24. Applying the above authorities to the present case, I find that the Defendant has established that they have a meritorious defence to the action. Putting aside documents and correspondences between the parties that may give rise to a business relationship between the parties, the significant point in the proposed defence is that the purported service agreement between the parties is unsigned.
    
25. As to the second limb of the three tier test, the Defendant has explained the failure to enter an appearance. The Defendant being overseas had advised his former counsel to file a Notice of Intention to Defend and to appear in court back in November 2018. On record, there is a copy of the Notice of Intention to Defence dated 30^th October 2018 filed by the former counsel but the fees were not paid. Proper follow up with this and the overall duty of attending to the client’s instructions in appearing appears to be apparent on record. After default was discovered, the Defendant engaged new counsel. They have since taken immediate steps to set aside the default judgment.
26. For the third limb – whether the Plaintiff will suffer irreparable harm if the default judgment is set aside – I find that the Plaintiff will not suffer irreparable harm if the judgment is set aside. This however does not resolve the essential argument that there are sums due and owing and this can only be resolved at the final hearing of this matter.
27. That being the case I hereby set aside the default judgment entered by the Plaintiff on the 19^th June 2019 and I give leave to the Defendant to defend this claim.
28. The Defendant is given 14 days to file and serve their Statement of Defence, the Plaintiff is given 14 days thereafter to file and serve any reply.

29. The matter will thereafter take its own course.

30. In deciding on costs, a significant factor that must be considered is the close to one year delay in having this motion to set aside, heard. In all the circumstances I rule that it is appropriate for both parties to bear their own costs incurred so far.
31. As for the current application, I hold the Defendant ultimately responsible for not entering any appearance or defence regardless of their previous counsel’s conduct as that counsel was retained by the Defendant and presumably acting on their instructions.
32. I therefore order costs for this application against the Defendant, which I summarily assess at $200.

33. The Court therefore orders: -

1. The default judgment entered on the 19^th June 2019 in favour of the Plaintiff is hereby set aside
2. The Defendant is given 14 days to file and serve their Statement of Defence
3. The Plaintiff is at liberty to file and serve any reply within 14 days of being served with the Statement of Defence
4. I award costs of this application against the Defendant, summarily assessed at $200
5. Thereafter this action will takes its normal course
   

34. 28 days to appeal

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J Daurewa

Resident Magistrate

14^th October 2020