Fareast Enterprises (SI) Ltd v Tsuki [2001] SBHC 60; HC-CC 042 of 2001 (28 August 2001)

HIGH RT OF SOLOMON ISLANDS

Civil Case No. 042 of 2001

FT ENTERPRISES (SI) LTD

v

lass=lass="MsoNormal" align="center" style="text-align: center; margin-top: 1; margin-bottom: 1"> MARTIN TSUKI

High Court of Solomon Islands

Before: Frank O. Kabui, J

Civil Case No: 042 of 2001

Hearing: 24^th August 2001

Ruling: 28^th August 2001

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Mrs. M. Samuel for the Plaintiff

Mr. C. Ashley for Defendant

RULING

(, J.): By Notice of Motion , the Plaintiff seeks the following orders-

1. &nnbsp;;&nspp;nbsp;nbsp; Thp; That the Judgment in Default of Compliance dated 1^st August, 2001 to be set aside upon the grounds set forth in the Affidavit in Support by Peter Zheng.

2. & p; &nsp; &nsp; That the timuireq to file Rile Reply to Defence and Defence to Counter claim under the Order by Consent dated 9^th

3. &nbbsp;& &bsp;&bsp;&nbp; That the tiff lo allowed toed to file their Reply to Defence and Defence to Counter-claim upon the Court’s order to set aside.

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1. &nbssp;&nnbsp;&nsp;&nsp;&nbp; The Piffs and Stnd Statementement of Claim is struck out; and

2. &nnsp;&&nsp;;&nspp;&nssp;&nsp; &nbsp /span>The Defendafendant be entitled to judgment on the Counter Claim filed on thep;30

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3.  p;&nssp;  p; &nbp; &nbp; ;&nbpp;That the Plai Plaintiff to pay the Defendant costs of proceedings to be taxed if not agreed. 1">

The default judgment and its terms were the result of non-compliance by t by the plaintiff with the terms of a consent order agreed by the parties and endorsed by this Court on 9^th July 2001. The terms of the consent orders are these-

1. &bsp; &nbap;The proceeds of the sthe sale as ordered by the Court on 21^st March 2001 be paid into a IBD Account in the name of the parties solicitors ; and

2. &nnbsp; &nsp; &nbap;Thle unthes laintiff tiff within 14 days file its Reply to Defence and Defence to Counter-Claim, that is Writ and ment aim will ruck and

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lass=lass="MsoNormal" style="text-indent: -36.0pt; margin-left: 72.0pt; margin-top: 1; margin-bottom: 1"> 3.  p; &nbp;&nbp; That osts of thl applicatiocation be in the cause.

The effect of the judgment in default is that the Plaintiffs action was struck out and the Defence succeeded against the Plaintiff on his counter-claim.

The Facts

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By Writ Summons filed on 21^st March 2001, the Plaintiff tiff claimed certain orders against the Defendant. By Order obtained ex parte on that same day, the Defendant was restrained from shipping or removing two containers of timber which timber was the property of the Plaintiff. By that same Order, the Plaintiff was allowed to take possession of the said two containers and was at liberty to export or sell them. However, the proceeds of such sale was ordered to be deposited in the bank in the Solicitor's name. A Memorandum of Appearance was entered on behalf of the Defendant on 2^nd May 2001. Defence and a Counter claim were filed on 4^th May 2001. A and A Legal Services became the Defendant’s new Solicitor on 7^th June 2001. A fresh Memorandum was entered on 23^rd May 2001. A fresh Defence and counter-claim were also filed on 30^th May 2001. By Summons filed on 20^th June 2001, the Defendant sought Orders to effect the transfer of proceeds of sale of timber as ordered by the Court on 21^st March 2001 to an interest bearing deposit account in the names of the parties’ Solicitors. The Defendant also asked the Court to order an account within 7 days of monies received from the sale of 11 containers to date and that unless he Plaintiff filed its reply to Defence and a Defence to counter-claim within 7 days, the Plaintiffs Writ of Summons and Statement of Claim be struck out. At the hearing of the Summons on 5^th July 2001, Counsel for both parties agreed that there should be a consent order on the matters raised in the Defendant’ Summons The consent order was drawn up and signed on 9^th July 2001 by Counsel for both parties.

lass="Mso="MsoNormal" style="margin-top: 1; margin-bottom: 1"> The Plaintiff's Case

The Plaintiffs applicais supported by affidavit evidence filed by Mr. Zheng on 7^th August 2001. The Plaintiff s application is premised upon Order 29, rule 12 of the High Court (Civil Procedure) Rules 1964 (the High Court Rules) supported by Order 64, rule 10 of the High Court Rules. The combined effect of these Orders and rules is that a default judgment can be set aside if the application to do so is made within 6 weeks or within extended time whichever is the case. Counsel for the Plaintiff, Mrs. Samuel, based her case on this premise and urged me to grant the orders sought in the Notice of Motion on that basis.

The Defendant’s Case

class="Mso="MsoNormal" style="margin-top: 1; margin-bottom: 1"> The Defendant’s case is that the Plaintiff was aware that the consent order was a “guillotine order” or an “unless order” and therefore non-compliance was fatal to the Plaintiffs action. That is to say, non-compliance by the Plaintiff would result in the Plaintiffs action being struck out. This is the position taken by Counsel for the Defendant, Mr. Ashley.

ass="Mso="MsoNormal" style="margin-top: 1; margin-bottom: 1"> The Consent Orspan>

In my view, the Consent Order speaks for itself. Paragraph 2 of the order says that failure by the Plaintiff to comply will result in the Plaintiffs action being struck out. That is exactly what happened. The Plaintiff having failed to comply, its action was struck out on 1^st August 2001. The consent order was an agreement between Counsel for both parties sanctioned by the Court. It can be changed by mutual consent. The plaintiff did not raise the matter of alteration of the consent order with the Defendant. There is no evidence that this was done. Consent Orders can be set aside but in a different way. The case of Wilding v Sanderson [1897] UKLawRpCh 120; [1897] 2 Ch 534 illustrates this point. In that case, the Plaintiff took out a Summons to set aside a judgment expressed to have been made by consent by the parties and sanctioned by the trial judge. The consent order was later sought to be set aside on the grounds that the consent of the parties was given by mistake and that the consent order did not represent the true intention of the parties. In setting aside the consent judgment, Byrne, J in his judgment at pages 543-544 said,

“A consent judgment or order is meant to be the formal result and expression of an agreement already arrived at between the parties to proceedings embodied in an order of the Court. The fact of its being so expressed puts the parties in a different position from the position of those who have simply entered into an ordinary agreement. It is of course, enforceable while it stands , and a party affected by it cannot, if he conceives he is entitled to relief from its operation, simply wait until it is sought to be enforced against him., and than raised by way of defence the matters in respect of which he desires to be relieved. He must, when once it has been completed, obey it, unless and until he can get it set aside in proceedings duly constituted for the purpose. In my opinion there was no agreement in the present case between the parties prior the judgment being pass and entered, their minds never having been ad idem in respect of the subject- matter with which they were dealing. It also appear to me that the divergence of their minds was in respect of an essential or fundamental point. If there was no agreement there was no consent upon which the judgment could be founded. And just as a consent order may be set aside upon any of the grounds upon which an agreement can be set aside, so it appears to me to follow that such an agreement, and, consequently, no true consent to the order made. There was, it is true, an agreement that the judgment should be drawn up in the words actually used; but that agreement was in fact only part of and founded upon a supposed prior agreement come to by the pa. When it is once e ascertained that there was no actual agreement arrived at before the judgment was completed, and that the consent upon which the it purports to be founded never existed, the actual judgment pronounced does not , I think, in itself constitute or represent an agreement, but stands as a judgment of the Court made in pursuance of a supposed agreement or consent which both parties believed to exist, but which is not in fact exist. I conceive that this is the true principle upon which the present case ought to be decided , and that the judgment ought to be set aside upon the grounds that there never was an agreement or consent between the parties”…

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This judgment was affirmed on appeal by Lindley L.J., Lopes L.J. and Chitty L.J. comprising the Court of Appeal. Clearly, a consent order or judgment can be set aside but not under the procedure in Order 29, rule 12 or Order 64, rule 10 of the High Court Rules. The use of the term "default judgment" may have been misleading in this case.

p class="Mso="MsoNormal" style="margin-top: 1; margin-bottom: 1"> The Consent Odated 9^th July 2001 was an agreement between then the parties intended to be obeyed them. The Consent Order could have been varied by mutual consent of the parties at any time before the 14 days period lapsed. It was open to taintiffs Solicitor to consult the Defendant's Solicitor with the view to extending thng the 14 days period in view of the difficulty faced by the Plaintiff in obtaining relevant information from overseas. Such a step would have required good communication between the Plaintiff and its Solicitor and the Defendant's Solicitor. This unfortunately was not the case here., The Consent Order therefore stood until paragraph 2 lapsed on 24^th July 2001. I do not accept the argument by the Counsel for the Plaintiff that notice of application for a default order to be entered against the Plaintiff should have been served upon the Plaintiff so that the Plaintiff could explain its position on the matter. The Consent Order was the Plaintiffs agreement with the Defendant. There was no need for the Defendant to tell the Plaintiff about it. It could however have been done as a matter of good practice but its omission would be no excuse for a complaint by the Plaintiff. The Court cannot bust a consent order mutually reached by the parties simply on the ground that the Defendant stood by that Consent Order and the Plaintiff did not to its own detriment. It is unfortunate that the Plaintiff had failed to seek a variation of the consent to avoid losing its case on technical ground. I do not think I can grant the orders sought in the Plaintiffs Notice of Motion.

class="Mso="MsoNormal" style="margin-top: 1; margin-bottom: 1"> The Plaintiff'lication is dismissed with costs.

Judge