Multi Chattering Shipping Services Ltd v Fair Trade Company Ltd [2014] SBHC 113; HCSI-CC 445 of 2013 (13 October 2014)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Faukona, J)

CIVIL CASE NO. 445 OF 2013

BETWEEN:

MULTI CHATTERING SHIPPING SERVICES LIMITED
Claimant

AND:

FAIR TRADE COMPNAY LIMITED
First Defendant

AND:

ATTORNEY-GENERAL (Representing the Registrar of Title and Commissioner of Lands).
Second Defendant

Date of Hearing: 19th September 2014
Date of Ruling: 13th October 2014.

Mr W. Togamae for the Claimant
Mr W. Rano for the First Defendant
Mr S. Banuve for the Second Defendant

RULING ON APPLICATION TO SET ASIDE DEFAULT JUDGMENT

Faukona J: An amended application was filed by the first Defendant on 5th May 2014 to set aside a default judgment perfected by this Court on 1st May 2014 after an inter-parte hearing. Bundled with the application is a draft defence filed on the same date.

2. Rule 9.52 provides legal privilege for the first Defendant to file application to have the judgment set aside. Rule 9.53 require the applicant (first Defendant) to file necessary documents within three months. Rule 9.54 and 9.55 set out the powers of the Court to exercise and order directions necessary for proper progress of the proceeding.

The Law
3. The court may set aside a default judgment having satisfied the test under R9.54. In the case of Kayuken Pacific Ltd V Harper[1] His Lordship Ward CJ stated at page 4 paragraph 6, set out the applicable principle,

"In all cases where judgment has been entered following a failure to comply with the rules of procedure, it has long been held it should not necessarily debar a defendant from seeking judgment on merits."

4. His Lordship then refer to the case of Evans V Bartlam[2] where Lord Atkins at page 650 formulated the classic statement of the basic principle of procedural law.

"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 been obtained only by failure to follow any of the rules of procedure."

5. Having satisfied of the tests in R9.54 the court has discretion to set aside any default judgment. How that discretion is exercised is bound by no hard and fast Rules however, Rule 9.54 set out basis on which the court can decide.

6. The question why the first Defendant failed to defend the claim in time and the reasons for failure or for delay had been raised in the hearing on 11th April 2014 of which a judicial determination had been delivered on 1st May 2014. That hearing was an inter-parte. Therefore, it is not necessary and is irrelevant to adjudicate on the same again.

7. Mr Togamae in defending the default judgment raises points that premise on the overriding objective of the Rules, which are significant to minimize delay and expenses. He further submits that a proper application should be filed after judgment in default so that issues including reasons for delay, meritorious of the matter are argued. The core issue now seem to confine to default, which had already been argued, hence the principal of issue estopple applies.

8. Technically Mr Togamae's point may raise some consideration. However, the flaw in that submission is that meritorious defence and substantial prejudice emphasized by Rule 9.54 (b) and (c) were not considered in the application for default judgment proceeding. Therefore, the principal of estopple in Dika V Somana,[3] that judicial determination directly involving an issue of fact or of law is once for all, so that it cannot afterwards be raised between the same parties or their privies. The law as it applies does not fit in well and apply in this case. It is a misconception of that law and its jurisdiction and circumstances it may apply. Further, facts in the form of documentation were not made available to the Court on 11th April 2014, see paragraphs 9 -10 of the ruling. In this proceeding the documentations are now being exhibited in the sworn statement of Mr Amoi filed on 6th August, 2014.

9. Hence, the issue before this Court is whether the first Defendant has a meritorious defence and whether by setting aside causes substantial prejudice to another party. It has nothing to do with failure to defend or delay in filing this proceeding. The filing was done within the bound of Rules as expressly uphold.

10. I have read the application, the draft defence and the sworn statement by Mr Amoi. To enable me assess the merit of the first Defendant's defence, I have taken steps necessary, as I think proper, at least measure against the merit of the claim. Having done so I am able to conclude that the first Defendant has a meritorious defence. Two agreements signed by the Claimant's representative and Mr Amoi personally were not formally tendered to Court hearing of the application for default judgment. In this hearing the two documents are part of evidence and exhibited by the sworn statement of Mr Amoi filed on 6th August 2014.

11. Quite apart from that, there is other documentary evidence as receipts and copies of bank cheques. That should imply some kind of performance or part thereof by a party of the financial liabilities obligated as agreed upon. Further, such written agreements plead real evidence, which require rebuttal by way of evidence. The only means to do so is to allow parties to litigate their case and have a judicial determination at the end of the day.

12. In any event, though the Rules speak of meritorious defence, different to the words used "as at least partly successful in defence" as stated in Chow V Hutaiwao,[4] they are not different in meaning, in fact both refer to merits.

13. In retrospect setting aside the default judgment will not prejudice any other party. This case concerns financial dealings with the major players they are the Claimants and the first Defendant. The Attorney General which is the second Defendant appeared at the hearing as courtesy and submitted nothing. There being no other party that this court is aware of who is likely to be prejudiced by setting aside of the default judgment.

14. In the circumstances as I have alluded above, it is only proper to set aside the default judgment granted by this court on 1st May 2014.

Orders:

1. Order setting aside default judgment dated 1st May 2014.

2. Order Defence to be filed within 14 days of date of this Ruling.

3. Further directions are sought thereafter.

4. Cost is borne by the Claimant, payable to the second Defendant.

The Court.

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^[1] (1987) SBHC 10; (1987) SILR 54 (25 February 1987).
^[2] (1937) 2 All E>R 646
^[3] SBCA 7.
^[4] (1997) SBHC 53; HC-CC 202 of 1995 (17 October 1997).