Cowrie Furniture Industry Ltd v Attorney General [2015] SBHC 12; HCSI-CC 94 of 2013 (2 April 2015)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Faukona PJ)

CIVIL CASE NO. 94 OF 2013

BETWEEN:

COWRIE FURNITURE INDUSTRY LIMITED (REG. NO. 20118645)
1st Claimant

AND:

T – MARS DEVELOPMENT COMPANY LTD (REG. NO. 1000411)
2nd Claimant

AND:

ATTORNEY-GENERAL
(Representing the Ministry of Health and Medical Services)
Defendant

Date of Hearing: 18th March 2015
Date of Ruling: 2nd April 2015

Mr G Suri for the Claimants
Mr S Hanu for the Defendant

RULING ON APPLICATION TO SET ASIDE
DEFAULT JUDGMENT.

FAUKONA J: This application is to set aside default judgment granted by this court on 3rd June 2014, and was filed by the Defendant on 4th September, 2014. The Default Judgment was granted by this Court after full litigated process which was contested by the Defendant. The Defendant now comes back to Court to have that default judgment set aside.

2. By letter of 7th June 2013, the Counsel for the Defendant advanced his intentions to be known by the Claimants that he would object or oppose the application for default judgment. In support of his intention, was an outline of written submissions which he tendered a copy to Court on 5th May 2014.

3 The current structure of the Counsel's submissions is almost the same as his written submissions tendered to Court at the hearing of the application for default judgment. The three major issues submitted in the last occasion are re-raised in these proceedings. The issues are: reasonable cause of delay, meritorious defence and no substantial prejudice to the Claimants.

4 One difference in the structure of Defendant's submissions is the inclusion of certain case authorities. The first authority is Chi v Guo[1]. That case focusses on the point that the application of the Rule is to be judged in a common sense fashion by asking what might be a reasonable person do in the situation. If the Defendant has acted as a reasonable person do, then that conduct should be regarded as within the boundary of the notion of "reasonable cause". In translating the principle into the Defendant's case, it supports the fact that upon being served with the claim, the Defendant had checked the records in the Ministry of Health and Medical Services, Lands Department and Ministry of Finance and found no material evidence available in relation to the sale. In the absence of no record, the Defendant then searched for the actual people who had direct knowledge when and how the Defendant has possessed the lands. The Defendant then found Mr Silas Checkana and Mr Josiah Riogano who were then brought to Honiara. Finally, the instructions were provided to the Attorney-General's Office on 6th June 2013. By then it was little more than two months. The delay for filing defence in time, has entitled the Claimant to file an application for default judgment on 1st May, 2013.

5 The other two cases the Counsel refer to as Kayuken Pacific Ltd –v- Harper[2] and Fielder Industries (SI) Ltd –v- Solvent Trading Company Ltd[3]. Both cases deal with the issue of an application to set aside. There must be an affidavit of merit showing that the defence has a prima facie defence to the action, and this is not a time to consider whether a defence is successful, but whether there is triable issue disclosed by the facts stated in the Defendant's sworn statement.

6 So, what is a triable issue, and whether they were disclosed in the sworn statements filed by the Defendant? The Defendant relies on the sworn statement of four deposers, Dr Lester Ross, Mr Chekana, Mr Riogana and Mr Harata. The significant of those sworn statements can be amalgamated together that the Ministry of Health had purchased the two properties with a consideration of $300,000.00 fostered by a verbal agreement with Mr Narrain, the owner of the first Claimant.

7. There is no fossil evidence remain of the said agreement in terms of correspondences, memorandums, payment requisition forms, payment vouchers, receipt etc. There was also no receipt on record from Mr Narrain who received the money. And since Mr Narrain died ten years before, of course a spouse or child of the deceased normally be granted letters of administration to administer the deceased's estate. In such proceedings, undoubtedly the purchase transaction would be definitely emerged. Clearly and definitely nothing was said by Mr Narrain about the purchase transaction to his wife or daughter who survived him at the time of his deceased. I am in fact repeating myself of what I had attempted to do in written ruling on 3rd June, 2014.

8. It would now appear that I am deciding on the same issues the second time. Really, this is unusual and the Court should not be forced or invited to make a ruling twice on the same issues. In doing so, naturally the Court has ventured into entertaining a case, which could have been estopped.

9. Mr Suri submitted that since the application for default judgment was contested, this Court now becomes functus officio. Rule 9.52 though provide for an application to have default judgment set aside, does not assist the defendant in a circumstance where the default judgment application was contested. It only applies in uncontested applications.

10. The case of Patrick Defence Logistics –v- Iro[4] exerted a number of issues discussed. One major one which perhaps has direct link to this case is the meaning of functus officio. To determine whether a Court in functus officio depend on the decision of the Court at the end of the day. If it is intended to be a final determination then the determinant authority becomes functus officio. Next, the effect it will have on the right of the parties. On paragraph 7 page 4 of the judgment, the Court stated:

"Whether a default judgment be a final judgment or not, the test is that the finality of an order or judgment depended on the effect of the order and whether it disposes off the rights of the parties".

11. The above case quote was from the test alluded in Rogers –v- Atrinchan[5] which the Court stated;

"It means to me that the real test for determining this question ought to be this: Does the judgment or order as made, finally dispose of the rights of the parties? If it does, then I think it ought to be treated as a final order; but if it does not, it is then, in my opinion, an interlocutory order..."

12. In my humble view, I thought I have dealt with all the issues previously, including the issue of non-payment of stamp duty which were raised in the draft defence and draft counter-claim. Another issue which have been dealt with is adverse possession which also been raised in the draft defence and draft counter-claim. The only issue left is for parties to file valuation reports for assessment of appropriate rentals. This will definitely cater and include refurbishment expenses and improvements carried out by the Defendant on the properties as stated in paragraph 5 in the statement of case supporting the counter-claim. In addition, the meritorious defence the Defendant relies on has been determined and of course has no prospect to provide an arguable case.

13. At the end of the day, the Court's ruling in the contested application for default judgment, found the defendant liable and should pay both Claimants rental arrears due to them, up until that date of that judgment. It is a final judgment and there is nothing more to be done. I take cognisance of Kabui J's ruling in the case of Chan Wing Ltd –v- Wing Sun Company[6] cited in Patrick Defence Logistics case, where His Lordship (as he was then) stated:

"There is no doubt, in my view that the judgment in default of appearance in this case, was a final judgment in the sum of $24,500 was a debt or a liquidated demand."

14. In that case, it was final judgment because the liquidated amount of $24,500 had been awarded. A similar notion can be applied in this case, where liability had been awarded. And the only issue left is assessment of rental monies.

15. In the light of the foregoing, I have decided to dismiss this application to "set aside".

Orders:

1. Application to set aside default judgment dismissed.
   
2. Assessment of rental monies be computed from 23rd June 2006 to 23rd June 2011 for first Claimant and from 23rd June 2011 to the date of this ruling for second Claimant.
   
3. Cost of this application be paid to the Claimants.
   

THE COURT.

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^[1] (2012) SBCA 11; CA –CAC 30 of 2011 (26 March 2012, para. 22)
^[2] (1987) SBHC 10 (1987) 54 LR 54 (25 February 1987)
^[3] (1994) SBHC 25; HC CC 153 of 1993 (19 August 1994)
^[4] (2008) SBHC60, HC94 – IAC78 & 79 if 2007 (27 August 2008)
^[5] (1903) 1 KB 548.
^[6] (1999) SBHC 17