Royal Crown Enterprises Ltd iro Otintaai International Hotel v Public Utilities Board [2023] KIHC 9; Miscellaneous Application 8 & 9 of 2023 (5 May 2023)

IN THE HIGH COURT OF KIRIBATI

MISCELLANEOUS APPLICATION 8 & 9 OF 2023 arising out of
HIGH COURT CIVIL CASE 77A OF 2016

BETWEEN:
ROYAL CROWN ENTERPRISES LIMITED iro OTINTAAI INTERNATIONAL HOTEL
Applicant

AND:
PUBLIC UTILITIES BOARD
Respondent

Date of Hearing: 3 APRIL 2023
Date of Judgment: 5 MAY 2023

Appearances: Ms. Taaira Timeon for the Applicant
Mr. Reiati Temaua for the Respondent

JUDGMENT

A brief fact of the case;

This is an application to set aside the judgment entered against the applicant on the 9^th of December 2016 and to stay the execution of the subsequent Writ of Fieri Facias dated the 4^th of October 2017. The applicant filed its application to stay the execution of the Writ of Fifae on 20 February 2023. Four days later, on 24 February 2023, it filed its application to set aside the default judgment. Both applications were filed six years after the dates of both Court Orders.

The Law;

Order 13 Rule 8 of the High Court Civil Procedure Rules 1964 states as follows;

“Where judgment is entered pursuant to any of the proceeding rules of this Order, it shall be lawful for the court to set aside or vary such judgment upon such terms as may be just”

Supporting case authorities are listed here;
For the application;
Waysang Kum Kee v Abamakoro Trading Co Ltd [2001] KICA 9
Teretia Terieta V PBA

For the respondent;
Michael Brener v Boyd Johnson and Lilian Johnson T/A Rococo Boutique and Andre Naturel T/A Pacific Transit [1980-1994] Van LR 180

ISSUES;

Following the famous case of Waysang Kum Kee v Abamakoro Trading Co Ltd [2001] KICA 9, the issues are as follows;

1. Whether there is a substantial defence,
2. Whether there is a justifiable excuse for failing to file their appearance and defence on time, and

100. Whether the respondent/plaintiff will suffer irreparable harm if the Default judgment is set aside.
     

ANALYSIS
a) Whether there is a substantial defence;

The applicant relied on two possible grounds of defence as deposed by Mr. Emile Schutz: the Government, through the Secretary to the Cabinet, agreed to take over the company’s debt once the commercial agreement between them was cancelled. This is stated in paragraphs 5 and 6 of his affidavit. The other ground is that the meter readings were too high and unreasonable.

The respondent argued that these defences have no merit. The first relates to the agreement between the applicant and a third party which does not apply to the respondent, the Board. Their claim that the meter readings were high is not genuine. The applicant was charged with a commercial rate for its electricity and water. It is further submitted that the applicant should have complained about this back in 2016, especially when their connections were disconnected because of their unpaid bills. At that time, they acknowledged their outstanding bill and made an agreement with the respondent to reconnect their electricity and water as they would meet their debts. They never complain about the unreasonableness of the readings.

I agree with the respondent on both submissions regarding the two possible grounds. The agreement with a third party, the Government through the Secretary to the Cabinet, is a matter between the applicant and that third party. It has nothing to do with the respondent and cannot be used here as a defence. The second possible defence has no merit as it should have been raised six years ago when the readings were received or when the connections were disconnected, or when the applicant made the agreement with the respondent for their reconnection. There was no evidence that this issue was raised with the respondent six years ago.

b) Whether there is a justifiable excuse for failing to file their appearance and defence on time;

The applicant’s failure to enter their appearance and defence back in 2016 was due to the inaction of their former lawyer. Their lawyer never called them to discuss the case, and they thought the lawyer worked on the case. Paragraph 5 of the affidavit of Mrs. Terenga Schutz stated that she left the summon with their lawyer as soon as she received it, around the same date as stated by Ms. Noa (applicant’s former lawyer) in her affidavit of service, which is the end of October 2016.

The respondent opposed this argument and stated that they should have followed up on their case with their lawyer, not wait for 6 or 7 years to be served with another court document. They have an obligation to go after their case, especially since they were aware that the case against them reached judgment when they were served in May 2019 to attend court to be orally examined about the judgment debt against them and their means of satisfying this judgment debt. At that time (27 May 2019), they did not turn up to the oral examination; service was proved therefore, the court granted an Order Nisi for the oral examination on 13 June 2019. On that date, they did not turn up again but arranged for a lawyer to represent them, and that lawyer also did not turn up as he was on the outer island.

In my other judgment for Aribeta Obetaia T/A KAS Wheels Agent Service v Baranite Kirata, Trustee for Kiribati Protestant Church (MA 19 of 2022 of KHC 27 of 2021), I stated that the lawyer’s mistake or inaction should be treated as a matter only between that party and their lawyer and should not affect the winning party’s right to enjoy the fruit of their judgment. I will reiterate this point as it is not a good excuse to set aside the judgment, especially if the party did nothing to go after their case with their lawyer. In this case at hand, the applicant had slept on their case for almost 6 or 7 years; they did nothing to go after their case until they were served with the Notice of Hearing in 2023 to be orally examined for the judgment debts. They had the chance to follow up on their case with their lawyer from the start in 2016 and in 2019 when they were served with the Order Nisi for the oral examination.

c) Irreparable harm to the plaintiff/respondent:

The respondent submitted that they never slept on their case and were eager to enjoy the fruit of their judgment. When they received the judgment in December 2016, they applied for enforcement. Their first step was applying for the Writ of Fifae issued to them in October 2017. When they realised there was a delay by the Sherriff to execute their Writ of Fifae; they applied for the oral examination of the judgment debtor (applicant in this current application) in May 2019. The procedure was incomplete in 2019 when the judgment debtor and their lawyer did not attend court. In late 2022 the case was called again when the judgment debtor did not turn up. There was no actual counter-argument by the applicant other than their substantial defence, therefore, I accept the respondent’s submission. They have tried to enforce their judgment since they received it at the end of 2016. Nearly seven years have lapsed; they should be allowed to enjoy the fruit of their judgment.

ORDERS;

For all the reasons stated above, the following Orders are made;

- Miscellaneous Application Number 9 of 2023 to set aside the default judgment dated the 9^th of December 2016 against the applicant is dismissed, and
- Miscellaneous Application Number 8 of 2023 to stay the execution of the Writ of Fieri Facias and praecipe dated the 4^th of October 2017 is dismissed,
- Cost to the respondent to be agreed or taxed.

THE HON TETIRO SEMILOTA MAATE MOANIBA
Acting Chief Justice