Patel v King Holdings Ltd [2013] KIHC 33; Civil Case 167.2012 (17 October 2013)

IN THE HIGH COURT OF KIRIBATI 2013

CIVIL CASE NO. 167 OF 2012

BETWEEN

VINOD PATEL
PLAINTIFF

AND

KING HOLDINGS LTD
DEFENDANT

Before: Hon Chief Justice Sir John Muria

17 October 2013

Ms Botika Maitinnara for Plaintiff/Respondent
Ms Batitea Tekanito (not present) for Defendant/Applicant

JUDGMENT

Muria CJ: This is an application by the defendant to set aside the judgment entered against it on 8 February 2013 in default of defence.

The plaintiff's claim is based on contract whereby the plaintiff ordered goods from the plaintiff to the value of FJ$35,721.41 in March 2011. The defendant took delivery of the goods and paid for them. In January 2012 the defendant again ordered goods from the plaintiff to the value of FJ$21,047.10. The defendant have not yet paid for the goods under the second order in the sum of FJ$21,047.10 and the plaintiff claims that sum in this action.

It appears from correspondence between the parties that the defendant agree it ordered goods from the plaintiff and that it agreed to pay for some only of the goods received. This was due to the defendant's concern that some of the goods received from the plaintiff were "not fit for the purpose" for which they were ordered. The plaintiff was given notice of rejection of the goods concerned. The goods concerned were cement for construction and plastering. See Letter dated 22 November 2012 from the defendant's lawyer to the lawyers for the plaintiff.

On 18 January 2012, the plaintiff's lawyer replied to the letter from the defendant's lawyer. The letter insisted that defence be filed or default judgment be entered against the defendant. No defence was filed and so default judgment was entered on 8 February 2012.

The Court has discretion to set aside default judgment. The underlying principle is that:

"..... unless and until the Court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure".

That general principle was stated in Evans –v- Bartlam [1937] AC 473 and adopted in Teretia Korieta –v- BPA (29 October 2012) High Court of Kiribati Civil Case No. 8 of 2011. Thus if there is good reason to do so, the Court can exercise its discretion to set aside the default judgment entered against the defendant in this case.

The Courts in this jurisdiction, have set out the guiding principles to assist them in the exercise of their discretion. Those guiding principles are set out in Waysang Kum Kee –v- Abamakoro Trading Ltd (15 April 2001) Court of Appeal of Kiribati Civ. App. No. 6 of 2000. These are:

(1) Whether the defendant's failure to take any steps or to appear at the hearing was excusable;

(2) Whether the plaintiff will suffer irreparable harm if the judgment is set aside.

Those guiding principles were applied in Teretia Korieta –v- BPA case.

Applying the above principles to the present case, there is sufficiently strong argument for the Court to exercise its discretion to set aside the default judgment in this case based on the first of the three considerations. There is evidence to show that the defendant was not satisfied with the quality of the goods ordered and delivered. A notice of rejection was communicated to the plaintiff that the goods were "not fit for the purpose" for which they were ordered.

That is a classical defence to a claim such as this. A Draft Defence to this effect has also been filed. I am satisfied that the defendant has raised a substantial ground of defence to the plaintiff's claim in this case.

As to the delay in filing the defence, I feel the fact that as the defendant has shown substantial ground of defence and having given notice of it to the plaintiff, the effect of the delay in filing the defence is minimal. This is not a case where the defendant has taken no steps following the receipt of goods which were of objectionable quality.

Further in my view, there would be no prejudice to the plaintiff in this case if the default judgment is set aside. The defendant has not rejected all the goods ordered from the plaintiff. In fact the defendant has agreed to pay for some but not all of the goods. The plaintiff still has the benefit of being paid for those goods not rejected.

In the exercise of the Court's discretion in this case, I feel it would be proper to order the default judgment entered against the defendant on 8 February 2013 be set aside.

ORDER: (1) Default judgment entered against the defendant on 8 February 2013 is set aside and the defendant allowed to defend the action;

(2) Each party to bear its own costs.

Dated the day of November 2013

SIR JOHN MURIA
Chief Justice