Australia and New Zealand Banking Group Ltd v Takisi [2012] SBHC 25; HCSI-CC 83 of 2009 (23 March 2012)

HIGH COURT OF SOLOMON ISLANDS
(Mwanesalua J)

Civil Case No. 83 of 2009

BETWEEN :

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Claimant

AND:

LEONARD TAKISI
First Defendant

AND:

UPU TAKISI
Second Defendant

Date of Hearing : 14 December 2011
Date of Ruling : 23 March 2012

C Hapa for Applicants/Defendants
A Radcliffe for Respondent/Claimant

RULING

1. This is an Application filed on 6 November 2011 by the First and Second Defendants ("the Defendants") for the following orders:
   
   • (a) That the default judgment entered against the Defendants on 4 August 2009 be set aside for the following reasons:
     
     • (i) The Defendants were never served with the claim filed on 13 March 2009 and subsequent court papers filed including the application for judgment and the supporting sworn statements of messrs Lui Saelea and John Kingsley and consequently the default judgment against them has been irregularly entered; and/or
       
     • (ii) The Claimants latest offer of 19 February 2010 and accepted by the Applicants clearly rendered the default judgment entered on 4 August 2009 unenforceable because the new terms agreed by the parties on 19 February 2010 have the effect in law of superseding the terms of previous offer of 14 November 2007 which the Claimant relied upon to obtain the default judgment;
       
   • (b) Costs in the Cause.
     
2. The Defendants' case is that they have not been served by the Claimant with the claim, nor had they been told about it by the Claimant, its servants and agents. That the fourth loan offer which they had accepted on 19 February 2010 has the effect in law of superseding the earlier offer of 14 November 2007 upon which the present proceedings was based upon. In the circumstances, the Defendants contend that the default judgment against them was irregularly entered and should therefore be set aside by the court.
   
3. The case for the Claimant is that the Defendants have been duly served with the claim and response forms by the Claimant on 24 March 2009.
   
4. The Defendants rely upon the following authorities to set aside the default judgment entered against them:
   

Irregular Judgment v. Regular Judgment

4.1 The case of Anlaby v. Praetorius [1888] 20 QB 764 provided the basis for distinguishing an irregular obtained judgment from a regularly obtained judgment. At page 769, Fry LJ said:

"There is a strong distinction between setting aside judgment for irregularity, in which case the court has no discretion to refuse to set aside, and setting it aside where the judgment, though regular, has been obtained through some slip or error on the part of the defendant, in which case the court has a discretion to impose terms as a condition of granting the defendant relief".

4.2 In Solomon Islands, in Ross Mining (SI) Ltd and others v. Slater and Gordon (A Firm) and others (Unreported, HCSI, Civil Case No. 230 of 1998, 23/03/2001 at page 6 confirms this position. Muria CJ held:

"A judgment which is obtained regularly must be distinguished from a judgment which is irregularly obtained. Although the court ought not lay down rigid rules which will deprive it of jurisdiction to set aside a default judgment, it will take into consideration as well the fact that such a judgment is regular from which the plaintiff derives certain rights. As such it is a firm rule of practice that for such a judgment to be set aside, there must be affidavit of merits, that is to say, an affidavit setting out the facts which disclose a prima facie defence. On the other hand, where judgment is irregularly obtained, the defendant is entitled, as of right, to have it set aside ex debito justitiae. Once the irregularity is established, the court has no discretion to refuse to set it aside.

4.3 The case of Robert Goh (trading as Goh and Partners v. LCL Enterprises Limited (Unreported, HCSI, Civil Case No. 138 of 2005, 9/10/1995) at pages 3.4 further reinforces this position. Sam Awich J held:

"The practice of the court is that:

(a) it must set aside judgment irregularly obtained or entered; and
(b) it may set aside judgment regularly obtained if it was the result of in inadvertence on the part of the defendant to enter appearance or file defence in time, and the defendant has good defence on merit, provided that he has not unreasonably delayed in bringing the application to set aside".

4.4 Where a judgment has been obtained irregularly, the court has no discretion to refuse to set it aside, except as to the issue of costs. The case of Anlaby v. Praetorius [1888] 20 QB 764 again is clear authority for this. Continuing on the previous quote at page 769, Fry L J said:

"But although the court is bound to set aside a judgment for irregularity ex debito justitiae, it always exercised a discretion as to costs, and has imposed terms as condition of the exercise of that discretion......."

Instances of Irregularities.

4.5 In the case of Robert Goh (Trading as Goh and Partners) v. LCL Enterprises Limited (unreported, HSCSI, Civil Case No. 138 of 1995, 9/10/1995) at page 4, provided an useful guide as to the instances of irregularities. Sam Awich Held:

Instances of irregularities are when:

1. the issuing of the writ of summons was irregular;
2. service of the writ was irregular;
3. time required for defendant to enter appearance or file defence has not expired; and
4. judgment is entered for more than amount claimed and due.
   
5. The Defendants in this case contend that the default judgment entered against them on 4 August 2009, was irregularly obtained, and thus must be set aside.
   
6. In this case the Claimant is represented by a legal practitioner, but I note that the sworn statements of Messrs Lui Saelea and John Kingsley have not been filed with compliance certificate by Legal Practitioner as required by Rule 14.28 of the Solomon Islands Courts (Civil Procedure) Rules. Further, there was no leave of the court in the absence of a compliance certificate to use such sworn statements in this proceeding. The sworn states are therefore inadmissible and the evidence which they contain cannot be used in this proceeding.
   
7. The oral evidence of Mr. John Kingsley clearly shows that he did not serve the claim and response documents on the Defendants. Further, he clarified that he did not see Mr. Lui Saelea serve the claim and the response forms on the Defendants. The Claimant did call Mr. Lui Saelea to testify in court for purpose of this application. There is no evidence that the Claimant served the Defendants with the claim and response forms in this claim. It is clear that the claim and the response forms have not been served on the Defendants as required under Rule 6.4 of the Solomon Islands Courts (Civil Procedure) Rules 2007. In the circumstances, the default judgment entered against the Defendants' in this proceeding was irregularly entered. That is sufficient to dispose of the Defendants' application. The default judgment entered against the Defendants is accordingly set aside.
   

Order:

1. The default judgment entered against the Defendants on 4 August 2009 is set aside.

2. Parties to pay their own costs of this application.

THE COURT