Chow v Hutaiwao [1997] SBHC 53; HC-CC 202 of 1995 (17 October 1997)

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HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 202 of 1995

STEPHEN CHOW

v

EDWARD HUTAIWAO

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Beforeefore: Palmer J

Hearing: 30th Sept & 2nd Oct, 1997

Judgment: 17th Oct, 1997

Counsel: A. Nori for the Applicant;

C. Ashley for the Respondent

PALMER J.:

There are two applications before this Court for its consideration. The first is an application to set aside the orders of this CourtCourt dated 15th October, 1996 for the sale of the Applicants interest in Parcel Number 191-016-47; and the second is a notice of motion filed on 4th November, 1996 for an order for the transfer of the fixed-term estate in the said land to the Plaintiff.

The Plaintiff claims that in or about September 1994, he purchased the said land from the Defendants for the sum of $17,000.00. At the time of purchase however, he claims he was not aware that the land was subject to the following restrictive covenants:

(a) no subdivision, lease, sublease, transfer or charge to be registered without the written consent of the Grantor; and

(b) no transfer, lease or sublease is to be registered within five years from the date of the Grant instrument.

He sought to claim therefore a refund of the purchase price, or in the alternative, an order for specific performance transferring title to him on or after 2nd January, 1997.

On 17th August, 1995, a default judgment was entered into against the Defendant, Edward Hutaiwao, for failing to enter an appearance to the Writ of Summons., On 13th September, 1995, an order for substituted service was obtained in respect of the other defendants. On 3rd October, 1995, a default judgment was also entered against the rest of the defendants for failing to enter appearance.

On 3rd May, 1996, a notice of motion was filed for inter alia, the transfer of the said land to the Plaintiff. Unfortunately, it did not name all the defendants. Only the defendant Edward Hutaiwao was named and accordingly served. By the time that notice of motion came for hearing before this Court on 15th October, 1996, learned Counsel for the Defendants, Mr Ashley, pointed out this discrepancy but also indicated to the Court that a summons to set aside default judgment would be filed on behalf of the defendants. The Court accordingly directed that the notice of motion be re-issued in respect of the other defendants and made returnable for 4th November, 1996.

The notice of motion and summons to set aside default judgment eventually came for hearing on 30th September and 2nd October, 1997. In his submissions in support of the application to set aside, Mr Ashley relied on the affidavit of Reginald Pisu, one of the Defendants in the case, filed on 1st October, 1997. At paragraph 3 of his affidavit, he states:

"In this Present case, the 1st Defendant also entered into a personal agreement with the Plaintiff. In fact that agreement for the sale of parcel number 191-016-47 was done without the consent, knowledge or authority of myself and the 2nd and 3rd Defendants. "

The defence sought to be put forward in essence by those Defendants is that the agreement for the sale of the said land was not made with all the defendants but only the defendant, Edward Hutaiwao. Accordingly they claim the Plaintiff was not entitled to the orders for specific performance sought and that the only orders that should be made is for the refund of the purchase money. Further, it was pointed out by Mr Pisu at paragraph 6 of his affidavit that he only became aware of the purported sale towards the end of 1996 when the matter was brought up for hearing in October 1996.

Order 29 Rule 12 makes provision for the setting aside of default judgments. It reads:

"Any judgment by default, whether under this Order or under any other of these Rules, may be set aside by the Court, upon such terms as to costs or otherwise as such Court may think fit, . . ."

One of the guiding principles which this court should always bear in mind is that unless final judgment had been entered into on the merits of any case, a court must have the power to be able to set aside a judgment entered into in default of any rules of procedure. This was aptly stated by Lord Atkin in Evans v. Bartlam [1937] A.C. at page 480:

"The principle obviously 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."

The first question to consider is whether there had been unreasonable delay in taking action to set aside judgment? Reginald Pisu deposes at paragraph 6 of his affidavit that when he became aware of the purported sale towards October of 1996, he instructed Mr Ashley to act on behalf of the other defendants and to challenge the sale on the grounds that it had been conducted without their consent. To a certain extent this is consistent with what Mr Ashley stated on 15th October, 1996, that his clients denied knowledge of having been served with the documents personally and therefore were not aware of the claim of the Plaintiff.

By the time the notice of motion came for hearing before this court on 4th November, 1996, it was apparent that the other defendants would be disputing the purported sale. The matter was then adjourned generally with liberty to restore.

In March of 1997, a summons to strike off the Writ and Statement of Claim was filed but later withdrawn as misconceived. Subsequently this application was filed in September of 1997. I have perused the file but unable to come to the conclusion that there had been undue delay and that any fresh steps had been taken by the Plaintiff such that he would be prejudiced if an order to set aside is made.

The second question to consider is whether there is some prospect of the defendants being at least partly successful in their defence; that is on the merits. As pointed out earlier, at paragraphs 6 and 7 of his affidavit, Reginald Pisu states that the purported sale had been entered into without the knowledge of the other joint owners of the property. This would have a significant effect on the claim of the Plaintiff if true when the provisions of section 179 of the Land and Titles Act are taken into account. I am satisfied accordingly that the defence of the defendants does have prospects of at least being successful.

In those circumstances, the default judgments dated 3rd October, 1995 and 17th August, 1995 should be set aside.

This in a way disposes of the notice of motion filed on 4th November, 1996 and so would not be necessary to be considered after all. The following orders should now be made.

p style="margin-tgin-top: 1; margin-bottom: 1">ORDERS OF THE COURT:

1. Set aside default judgments dated 3rd Or and 17th August, 1995.

2ong>2. Memorandum of appearance and statement of defence to be filed within 14 days of date of judgment, failing which the plaintiff is entitled to apply for judgment in default and orders of specific performance.

3. Any replies to be made 7 days thereafter.

4. Further directions may be sought after 21 days.

5. Costs in any event to be borne by the defendants.

ter">ALBERT R. PALMER
THE COURT