Funasia v Bina 1 [2014] SBHC 134; HCSI-CC 113 of 2011 (10 November 2014)

IN THE HIGH COURT OF SOLOMON ISLANDS

(Faukona PJ)

CIVIL CASE NO. 113 OF 2011

BETWEEN:

AGUSTINE FUNASIA and TIMOTHY UMA
(Representing members of Bona and Fulo Communities in West Kwaio, Malaita Province)
Claimant

AND:

THE TUG BOAT BINA I AND ITS BARGE BINA II
First Defendants

AND:

TAIDO MANAGEMENT RESOURCES
DEVELOPMENT CO. LIMITED
Second Defendants

AND:

SAMLIMSAN (SI) LIMITED
Third Defendant

AND:

SOLOMON ISLANDS RESOURCES COMPNAY
LIMITED
Fourth Defendant

AND:

GOLDEN HARVEST COMPNAY LIMITED
Fifth Defendant

Date of Hearing: 5th October 2014
Date of Ruling: 10th November 2014.

Mr P. Afeau for the Claimants
Mr M. Pitakaka for the Fourth Defendant
No one for First, Second, Third and Fifth Defendant
(Application does not concern them)

RULING ON APPLICATION TO SET ASIDE DEFAULT JUDGMENT

Faukona PJ: An amended claim to invoke the admiralty jurisdiction of the Court under Chapter 15.4 of the Rules was filed on 25th July 2012. By order of Court dated 6th December 2012, all Defendants should file their defence by 1st February 2013. By sworn statement of Mr Fidalou filed on 6th March 2013, deposed that services were effected upon the fourth Defendant on 10th September 2012 but there was no response, so service was effected upon the same on 5th February 2013 at its registered office, Yam and Company, Town Ground, Honiara.

2. On 6th March 2013 the Claimants filed application for default judgment against the fourth Defendant including first and fifth Defendants. On 14th October 2013 a default judgment was perfected by this Court against the fourth Defendant and first and fifth Defendants. On 6th March 2014 the fourth Defendant filed this application to set aside the default judgment of 14th October 2013.

Grounds for the Application:

3. The fourth Defendant who is the Applicant urges the Court to accept his reasons for the application. It has two grounds upon which it relies on. Firstly, it has reasonable cause for not defending the amended claim. Secondly, that it has a meritorious defence to the amended claim. In fact, the two grounds are part of the three grounds emphasised by Rule 9.54.

The Law:

4. Rule 9.52 confer upon a defendant against whom default judgment has been entered to apply to the Court to have the judgment set aside. Rule 9.53 require the applicant to provide and file necessary papers and materials within three (3) months after the judgment was entered. Rule 9.54 confers power and guideline upon the Court in determining the application. The exercise of that power upon such terms as the Court may think fit.

5. In this country, the starting point is as alluded to by the Rules above. Over the years, the Courts have developed guiding principles upon which the Court will consider and ultimately exercise its discretion as demanded in a particular circumstance.

6. The leading case in this jurisdiction is Kayuken Pacific Limited V Harper[1]. His Lordship Ward CJ in discussing the relevant principles and guidelines said at pages 4-5;

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

7. His Lordship then refers to an English case Evans V Bartten[2]. In that case, Lord Atkins at page 650 formulated the classic statement of the basic principle of the procedural law.

"The principle obviously is that, unless 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 a failure to follow any of the rules of procedure."

8. A further exposition was stated by Jenkins CJ in Grimshow V Dunbar[3];

"A party to an action is prima facie entitled to have it heard in his presence. He is entitled to dispute his opponents' case and cross examined his opponents' witnesses, and he is entitled to call his own witnesses and give his own evidence before the Court. If, by some mischance or accident, a party is shut out from the right and an order is made in his absence, the common justice demands, so far as it can be given effect to without injustice to other parties, that a litigant who is accidentally absent should be allowed to come to Court and present his case, no doubt on suitable terms as to costs."

Discretionary Power of the Court.

9. In Rule 9.54 the word, "may" is used to describe the discretionary power of the Court. In the case of Ross Mining (SI) Ltd V Slater and Gordon[4], His Lordship Muria CJ stated on paragraph 2, page 7, that the basic function of the Court is to ensure that the parties have a just outcome to their dispute according to law. In other words the Court must be mindful of the objective of its decision to do justice to the parties according to law and to avoid injustice. Having said that it is with no guess that His Lordship had in mind at that time of reference to proper compliance with the rules and procedures by the parties.

10. In the Kayuken case refer to above, His Lordship stated on page 6 paragraph 4;

"Whilst this Court would not normally interfere with the exercise of discretion except on grounds of law, if it sees that, on the other ground, the decision will result in injustice being done, it has both power and duty to remedy it".

11. Where the Court finds there is a viable defence, triable defence or meritorious defence, it has unfetted discretion to exercise to set aside any default judgment. How that discretion is exercised is bound by no hard and fast rules but in practice a number of considerations have been suggested as basic or which the Court can decide. With guidance from the Kayuken case the grounds refer to are equivalent to grounds expressly stated in R9.54, that there must be reasonable cause for delay, meritorious defence, and no other party be prejudiced by order for a new trial.

Meritorious Defence:

12. It has to be noted that different cases have different description of the standard of defence. In Kayuken case it was referred to as prima facie defence and triable issue. In Djokovic V Solomon Star Limited and Ofani Eremae[5] it referred to as reasonable prospect of success. In Yam and Company V China[6] the Court prefers the test as meritorious defence and arguable defence. In any event there shouldn't be any vast drift in meaning, should there be, it may not be fatal to the applicant's case. There is no contradictory at all but simply and essentially mean the same. Amidst any controversy, if there is, His Lordship Palmer J (as he was) in Aerolift International Ltd V Mahoe Heli-Lift[7] drew a fine line by stating;

"The leading case in this jurisdiction is Kayuken Pacific Limited V Harper, in which some guidelines were laid down by his Lordship Ward CJ. Of prime importance is that there must be an affidavit of merit showing that the defendant has a prime facie defence. This does not mean that the Court should consider at this stage. "Whether the defence would be successful but simply whether a triable issue is disclosed. If the Court finds a viable defence then it should go on to consider its unfettered discretion whether to set aside default judgment or not."

13. To support its application filed on 6th March 2014 the Defendant had filed a sworn statement deposed by one Lai Tzy Kong filed on the same date. I have read the application, the draft defence and the sworn statement. I think it is prudent in order to obtain a final analysis of a meritorious defence, it is necessary to measure it up to the strength of the amended claim.

14. I noted on paragraph 10 of the amended claim, which pointed out that after loading of round logs, the fourth Defendant carried on back-loading of sawn timbers for Honiara. It was then that the barge was washed ashore and sank on the reefs. That piece of evidence was denied by the fourth Defendant on paragraphs 6 (c), (d), (e), (f), (g) and said that the back loading of timbers was done by the landowners from the Claimants' communities. Such back loading was not authorized by the fourth Defendant. It was an arrangement they made with the master of the first Defendant. See also Exh LTK 2 a letter by Bona landowners explaining what had actually happened on 20th February 2011 when the barge was sunk.

15. On the issue of negligence the principle in the famous case of Donoghue V Stevenson[8] sets out the basis for the modern law. In summary, a person owes a duty to a neighbour, and neighbour is define by those who contemplates will suffer the consequence of one's actions. In this case the Claimants alleged negligence act against the fourth Defendant's captain and crews on boat M.V Bina 1 for not properly securing the barge from being washed ashore.

16. Paragraph 5 (a) of the draft defence implicated that the fourth Defendant did charter the first Defendant owned by the fifth Defendant to load round logs from a log pond at Giutalau, Western Kwaio, Malaita Province. Common understanding is that whoever owns a boat employed masters, bosuns and crews to sail it. Where one does not own a boat, it is nonsense and mischief to employ seamen. It is an issue require evidence and determination whether the fourth Defendant has any relationship with the master and crews of the barge. As it appears the allegation seemed to direct to them jointly.

17. On the issue of negligence the fourth Defendant on paragraph 6 (k) put the Claimants on notice that the amended claim fails to particularise the alleged negligence. I have read paragraph 9 of the amended claim I noted the truth. The claim for negligence is so brief, it merely alleged that the barge was washed ashore owing to the negligence of the fourth Defendant and the Captain and the crew. I agree with Mr Pitakaka where negligent is pleaded there ought to be sufficient particularisation of the alleged negligence, for instance elements etc. There was nothing done.

18. In assessing the prospect of the defence, collaborated by the application, draft defence, and the sworn statement of Mr. Lai Tzy Kong, I am able to analyse that fourth Defendant has a meritorious defence, which entitled it to dispute his opponent and have his argument adjudged on merits.

Reasons for failure to file defence:

19. The first reason highlighted by the sworn statement of Mr Tzy, is that as a General Manager of the fourth Defendant, he did not recall being served with the amended claim. In rebutting that evidence, Mr Fidalou filed a sworn statement on 6th June 2013, and stated he had effected service upon the fourth Defendant by delivering and leaving a copy at Mr Tzy and Mr Tong's residence at Panatina Ridge, Tanakake road, East Honiara. Definitely, that is a debateable point. The second service cannot be accepted but barred by Rule 5.45 (a) which states that if a claim is not served within three (3) months of the date endorsed by the registrar then it expires, however, can be renewed by way of application to the Registrar. Failure by the Claimant will render the claim ceases. In this case, the amended claim was filed on 25th July 2012. It was served on 5th February 2013, more than six months later. The second service cannot be accepted as effective and relied on. It reverts back to the first service then whether it was validly effected under the Rules or not. If it was, then it was assumable being served

20. The second ground for delay is that the applicant encountered difficulties in keeping track of its documents, including Court documents. This occurred when they moved office from Panatina Ridge to Ranadi. One logical answer that I would give is that the blame is on him and no one else. It should suffer the consequence of its own inadvertency. In the circumstances is unreasonable.

21. The third reason for delay relies on, is communication breakdown. Any mischief that was brought upon the applicant without him foresee the consequence, that can attract consideration. But if the delay is caused by his own act, there is no good excuse. Relaying on such reason cannot be accepted.

22. In my respectable view the reasons given for the delay are insufficient and do not form reasonable ground to consider. The applicant's delay was not caused by any honest inadvertence but by an act, which is not envisaged by Rule 9.54 (a).

23. Though there was unreasonable and inadvertence delays the nature and the merit of defence are quite overwhelming, and outweighs the unsatisfactory delays. Hence, require the original claim to go to trial-see Yam and Company V China Limited[9].

Orders:

1. The default judgment made against the fourth Defendant on 14th October 2013 is hereby set aside.

2. Costs to be borne by the Applicant on standard basis.

The Court.

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^[1] (1987) SILR 54
^[2] (1937) 2 All E.R 644
^[3] (1953) IAll E.R 350 at 355.
^[4] (2001) SBHC .......; HCSI-CC 230 of 1998 (23 March 2001)
^[5] HC-SI CC No. 478 of 2006.
^[6] (2010) HC-SI CC No. 54 of 1995.
^[7] (1996) HC-SI CC No. 387 of 1995.
^[8] (1932) A.C 562.
^[9] (2010) SBHC 23; HCSI. CC 54 of 2010 (10 June 2010).