Sawane v Dausabea [2016] SBHC 6; HCSI-CC 113 of 2015 (26 January 2016)

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 113 of 2015

BETWEEN:

CONSTANCE SAWANE AND GERENA SAWANE
Claimant

AND:

CHARLES DAUSABEA
Defendant

Date of Hearing: 9th December 2015
Date of Ruling: 26th January 2016

Mrs. M. Bird for the Claimant/Respondent
Mr. W. Togamae for the Defendant/Applicant

KENIAPISIA, PJ:

1. I am dealing with an application to set aside default judgment ("judgment"). The defendant filed the said application on 5/8/15. Two months later, the defendant also filed another application to suspend enforcement on 15/10/15. I dealt with the latter application and ordered a stay of enforcement pursuant to Rule.21.10 (a) of the Solomon Islands Courts (Civil Procedure) Rules 2007 ("the Rules"). I made the stay order on 23/11/15, when counsels appeared initially to argue the two applications before me. The hearing then was adjourned by consent.

2. In aiding use of my discretionary power to decide on this application to set aside judgment; I am guided by Rules 9.52 - 9.56. In applying to set aside default judgment, the defendant ought to meet the requirements stipulated in Rule 9.53 (a) – (d). The guidelines to aid the court in deciding whether or not to set aside default judgment are set out in Rule 9.54 (a) – (c) - that there must be a reasonable cause for the delay in filing defence, that the defendant had a meritorious defence and that no substantial prejudice is caused to another party from setting aside judgment, that could not be rectified by costs order.

Reasonable Cause for delay?

3. I start by saying that the application to set aside judgment, met the time frame in Rule 5.3 (b), in that it was filed inside three (3) months of the default judgment entry date. Judgment was entered on 15/6/2015. Application to set aside was filed on 5/8/2015. Defendant therefore need not explain the delay in filing the application to set aside judgment, because there was no delay. But the defendant must still explain why there was a delay in filing a defence to the claim under Rule 9.54 (a).

4. The explanation by the defendant for the delay in defending the claim is contained in the sworn statement (ss) by Charles Dausabea filed 25/11/2015. Dausabea explained that he engaged Lawrence Kwana initially, but Mr. Kwana was busy repatriating his belongings from Auki to Honiara at the material time of first engagement. This was a few days after the 2nd April 2015, when Dausabea received the claim. On learning about this, Mr. Dausabea then went to see Charles Ashley. Charles Ashley assisted Dausabea enabling Dausabea to file a Response on 10/4/2015. Ashley could not act for Mr. Dausabea, because as we know, Ashley is not eligible to practice as a lawyer in the High Court of Solomon Islands for sometimes now.

5. After filing a response, Dausabea then went back to Kwana again, for Kwana to deal with his case, the second time. Then after 10/6/2015, Dausabea was shocked at the entering of judgment against him. It can be inferred from his evidence that he was shocked because he contacted Mr. Kwana to deal with his case the second time, and yet a judgment was obtained against him – meaning Mr. Kwana did not deal with his case. Can this be a reasonable cause for the delay in defending the claim? I must answer in the positive and give my reasons as follows:-

(1). The evidence that Dausabea engaged Kwana to deal with his case is unchallenged. The Court therefore accepts that Dausabea engaged Kwana and Kwana did not deal with his case, resulting in the entry of a default judgment. When clients give instruction to a lawyer, they depend on the lawyer to deal with their case. For one reason or the other, the lawyer might not deal with the case. The reason for Kwana not dealing with Dausabea's case on the second engagement is not deposed to in his ss, except that Kwana did not deal with the defence. After 10th June 2015, Dausabea then engaged Togamae's law firm. Then early August 2015, Togamae applied to set aside judgment on 5/8/15. On the date of entering default judgment (15/6/15) was exactly two (2) months and five (5) days from the time Dausabea filed his response (10/4/15). To the date of applying to set aside judgment (5/8/15) was almost four (4) months. Two (2) months delay or four (4) months delay is not unreasonable, when Dausabea had trusted that Kwana would deal with his case. Even if Dausabea had filed a defence, I do not think a trial of this case would have convened in 2015, in view of the court's lack of judges.

(2.) Dausabea had seen two lawyers to assist him defend his case. Unfortunately lawyer Ashley is not eligible to practice law in the High Court. In between the two lawyers, he had attempted to defend his case by filing a response on 10/4/15, personally, a fact the claimants accede to[1]. As a courtesy, the claimants should have warned the defendant of no defence, since they know the defendant's personal address on the Response form, prior to filing for default judgment. To defend the claim the defendant had seen three lawyers, the last being Togamae. Given that fact, I am satisfied the defendant did not sit on this case to merely buy time. Defendant did all that was necessary including consulting two lawyers and filing a Response personally in his attempts to defend this claim. Unfortunately, one of the two first lawyers is handicapped to represent Dausabea. The other lawyer did not deal with Dausabea's case, for reasons not disclosed to the Court, except to say that the lawyer was busy repatriating from Auki to Honiara initially, on the first engagement. Running between two lawyers, trusting one to deal with the claim in a time frame of two or four months to my mind is a reasonable cause for delay in defending the claim.

Meritorious Defence – Is there one?

6. Meritorious defence has been defined in Case law to mean: Whether a triable issue is disclosed?[2]; Whether there is a triable defence[3] or Whether an arguable defence[4] is shown? I had considered the draft defence and counter claim at Exhibit CD – 12 of the ss by Charles Dausabea filed 23/11/2015. I can say that triable defence, or arguable defence or triable issue (s) are disclosed in the draft defence and counter claim. If I can briefly state what they are:-

(1). The defendant is raising the arguable defence of his equitable interest in the disputed property relating to his payment of $18, 000.00 (a deposit payment), the defendant made under a tender awarded to him by court order of 23/2/2007. The tender was actually awarded to a company owned by the defendant namely Eastern Marketing and Distributors Limited (EMDL). And the defendant through his purportedly owned company has paid the $18,000.00 and the claimants' deceased father gave the keys to the disputed property to the defendant. This is the arguable defence, or the triable issue or the triable defence, which has been disclosed at this stage. The allegations on tender award to the defendant's company (EMDL); the allegations on the defendant's company paying the initial deposit of $18,000.00; the allegations on the keys to the disputed property been given to the defendant and the defendant had moved on to the property and made improvements to the property, all raised reasonably arguable defences. I am therefore satisfied that the defendant has a meritorious defence that must go to proper testing at trial.

(2). Other issues like fraud and the implications to pull in new parties are made by the defendant in the counter claim. These will be matters to deal with at trial when pleadings and evidence are prepared. For purpose of determining meritorious defence, I did not consider these.

Prejudice to another party from setting aside judgment?

7. When I consider all the materials before me; I am also satisfied, that there will be no prejudice from setting aside the judgment. If there is prejudice, it can be taken care of by award of costs. Let me explain what I mean:

(1). The claimants have title to the disputed property. I mean the claimants have been given letters of Administration in respect of the disputed property which has title in the name of the Claimant's deceased father[5]. Nothing will affect that status quo and the claimants' interests remain unaffected, at setting aside the judgment. It will remain so until trial.

(2). Similarly, the defendant too will not be affected by setting a side judgment. The defendant is on the property. Security of the property is taken care of. If the defendant is making money from being on the property, then all incomes must be paid into a joint trust account. Parties to consider this and take appropriate actions.

(3). The disputed property is a plot of land. The disappearance of the property is unlikely to happen. The land will be there till conclusion of this case. I hereby order that the land is not transferred to a third party till conclusion of this case.

(4). The only prejudice, I can see is the cost that the claimants had incurred in applications for default judgment and enforcement. These were costs that the claimants had incurred due to failure by the defendant to file a defence. These prejudicial costs could be rectified by awarding costs to the claimants. I order accordingly that the defendant pay for costs of application for default judgment and application for enforcement to the claimants in the sum of $4,000.00[6]. These costs must be paid before trial. If I am sitting at trial, I will make sure this happens before trial.

8. Counsel for the claimants, had raised lengthy submission on the conduct of the defendant in not paying off fully on the tender price awarded to the defendant's company. Unfortunately, these submissions fall outside the guidelines, I referred at the beginning on determination of application to set aside in Rule 9.54 (a) – (c). These and many more are issues that must go to testing at trial.

9. Similarly, the issues raised against the Bank must go to trial. The issues raised by the defendant's company must go to trial. These two entities must be made a party to this proceeding, under Rules 3.5 and 3.6. By pulling these entities in; it will enable the Court to make a decision fairly and effectively on all issues related to this disputed property. We want to avoid a situation where the Court concludes this case and new apparent claims still keep coming in. That will not be a fair and effective way to adjudicate disputes relating to this same property. Furthermore, I am also satisfied that the defendant's company is affected by this proceeding on the basis of the tender awarded to it, in respect of this disputed property in 2007. I therefore order a joinder to this case of these two entities, plus any consequential amendments. I make this order as part of the application to set aside pursuant to Rule 9.55, particularly Rule 9.55 (d). These orders are necessary for the proper progress of this proceeding.

THE COURT

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JOHN A. KENIAPISIA
PUISNE JUDGE

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^[1] Paragraph 2 of ss by Constance Sawane.
^[2] Kayuken –v- Harper (1987) SILR 54.
^[3] Dora –v- Walalau (2010), Unreported, Civil Appeal Case No. 5 of 2010.
^[4] Same Dora case, in foot note 3.
^[5] See ss by Constance Sawane filed 27/10/15 and 29/5/15
^[6] See Schedule 3, Part 3 of the Rules – Scale No. 6 - Costs for Interlocutory applications in High Court proceedings.