Oceania Island Ltd v Poy Loy Pty Ltd ACN 100903553 [2020] SBHC 2; HCSI-CC 148 of 2017 (13 January 2020)

HIGH COURT OF SOLOMON ISLANDS

Case name:	Oceania Island Ltd v Poy Loy Proprietary ACN 100903553
Citation:
Date of decision:	13 January 2020
Parties:	Oceania Island Limited v Poy Loy Proprietary Limited ACN 10090353, Poy Loy Proprietary Limited ACN 100903553 AND Oceania Islands Limited AND Jason Evlogosis
Date of hearing:	11 October 2020
Court file number(s):	148 of 2017
Jurisdiction:	Civil
Place of delivery:
Judge(s):	Faukona PJ
On appeal from:
Order:	Application by the applicant are dismissed accordingly Costs payable to the counterclaimant together with certification of Queen’s Counsel The Registrar of High Court to set a new date for enforcement hearing
Representation:
Catchwords:
Words and phrases:
Legislation cited:	Civil Procedure Rules, R 5.3 and 5.14
Cases cited:	Price Waterhouse v Reef Pacific Trading Ltd [1996] SBCA 5 Laperouse Restarant Company Ltd v Attorney General [2017] SBHC 22

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 148 of 2017

OCEANIA ISLAND LIMITED
Claimant

V

POY LOY PROPRIETARY LIMITED ACN 100903553
Defendant

And by Counter-claim

POY LOY LIMITED ACN 100903553
Counter-Claimant

AND:

OCEANIA ISLAND LIMITED
First Defendant by Counter Claim

AND:

JASON EVLOGOSIS
Second Defendants by Counter Claim

Date of Hearing: 11 October 2019
Date of Ruling: 13 January 2020

Mr. B Etomea for the Claimant and Defendants First and Second by Counter
Claimant
Mr. J Sullivan for the Defendant (Enforcement Creditors)

RULING ON APPLICATION TO SET ASIDE DEFAULT JUDGMENT ON COUNTERCLAIM AND STAY ITS ENFORCEMENT

Faukona, PJ
Brief History:

1. A claim against property the ship “Cape Feron” was filed on 19^th April 2017. By order of 7^th June 2017 leave was granted to substitute Poy Loy Pty Ltd in place of the Defendant, “The ship”.
2. On 15^th June 2017, a defence was filed together with a counterclaim. As it was well verified in the counterclaim, the second Defendant was the Sole Director of the first Defendant by counterclaim.
3. Because there was no defence filed by the First and Second Defendants to the counterclaim, a default judgment on the counterclaim was made by the court on 8^th September 2017, perfected on 11^th September 2017.
4. Beside default judgment had been obtained, the counterclaimant also obtained orders for summary judgment on 23^rd February 2018 which was perfected on 27^th February 2018.
5. About 29 days later an order for enforcement of hearing was granted on 20^th March 2019, and was perfected on 25^th March 2019.
6. It was at that very stage, the amended application for leave to apply out of time, and to set aside orders made was filed on 6^th August 2019.
7. It is quite obvious that the amended application for leave is to set aside the orders in the default judgment of the counterclaim, was filed late by one year and six months.
8. With no doubt, when applying for leave to extend time the applicant must convince the court on the balance of probability of his reasons for the delay. He must show some good or acceptable reasons why time should be extended, and some merit in the propose application. In this case to set aside the default judgment that is a defence on the merit, see R 9.54. The case of Price Waterhouse v Reef Pacific Trading Ltd (1) establish by setting out the principles applying to this type of application.

Deregistration of the Defendant

9. The only ground stated in the relief is that Poy Loy Ltd was deregistered in Australia on 19^th December 2018. Therefore cannot enforce the order made in the default judgment. In fact the applicant’s treatment and opinion in regards to the order is as dead.
10. The Counsel for the Applicants has indeed being misguided though have knowledge that Poy Loy Ltd was re-registered on 30^th September 2019. The proper application of law is that after 30^th September 2019, Poy Loy Ltd is capable of enforcing the court orders. The effect of such reinstatement as expressly stated is that Poy Loy is taken to have continued in existence as if it had not been deregistered. That is similar to situation in this jurisdiction, see Laperouse Restaurant Co. V AG^[1]
11. The Counsel for the claimant has misconceived the law, in fact is ignorant of it, hence attempted to argue which he should not have done at all. He should read the new Companies Act and the Regulations attached to it.

Contested default judgment

12. This is another misconceived area of the procedural law by the Claimant or his Solicitor. Where no response or defence was filed and served within the required period according to the rules, the Claimant on the counterclaim can file an application for default judgment as against the Defendant, in this case the Defendants in the counterclaim, the current Applicants.
13. The rules clearly states that the application for default judgment not necessary be served unless where the court directs.
14. In this case it had been served on the Counsels. In response they attended and contested the application for default judgment on 8^th September 2017. See the orders endorsed on 11^th September 2017.
15. The orders clearly stated that Counsels for the first and second Defendants attended and made submissions. The court eventually made its determination by granting the default judgment against the Defendants (1) and (2).
16. In an application for default judgment there is no need for written submissions. Of course if the application was served the Defendant can file and serve a response supported by a sworn statement. However, it does not matter if the Defendant response with a sworn statement or not, the court can hear such application.
17. In this case the court heard the application in the presence of Counsels representing the defendants. Consequently the court made its ruling granting default judgment against the two Defendants in the counterclaim.

Actions of Former Lawyers

18. The applicants rely on the actions of their former lawyers as not in their best interest. However, Mr Evlogosis admits personal knowledge of the default judgment at least from 18^th March 2018, and he knew that he had to apply to set it aside. He failed to do it by instructing his lawyers. Instead he blamed them for failure to file a defence to the counterclaim, without giving the Solicitor a right to respond in respect of his impugned conduct.

Reasons for the Delay

19. The Defendant rely on the sworn statement of Mr Evlogosis filed on 22^nd May 2019, that he was threatened by criminal elements in Honiara ordered by Mr Zhao, which affected his health. However, does not show that ill-health nor in any way had contribution for the delay since 8^th August 2017 when the default judgment was contested. And on 23^rd February 2018 when the summary judgment in which the default judgment was set off against the judgment on the claim also contested. It is unbelievable to note that he was also aware of the default judgment by email from Mr Taupongi on 19^th March 2018.
20. He states that he did have to leave for medical reasons on 18^th March 2019, after being in Solomon Islands for 5 months, which time he has two little to get a new lawyer, although Mr Pitakaka remained on record until 20^th March 2019.

Draft Defence

21. One of the requirements in the Price Waterhouse case is some merit in the proposed application, in order to set aside the default judgment, i.e. a defence on the merits.
22. I have the privilege to read the draft defence in full, including a draft defence to counter-claim. I noted the facts pleaded are non-compliant with the pleadings in particular Rules 5.3 and 5.14. While it refers to paragraphs in the counterclaim it does not address, therefore would be impossible to plead to. In fact they consist of admissions of the facts pleaded in the counterclaim, therefore taken as seen to agree with the counterclaim.
23. Indeed the draft defence is a repetition of the claim of which summary judgment had been given and there was no appeal. That decision should be final and is now res judicata to re-litigate. The draft defence raises new matters, should have been raised in the claim. It now appears a new claim is brought subject to enshun estopple preventing raising of new matters.
24. A very significant aspect is the failure by the applicants to appeal the dismissal. The legal rational is that they have no claim on foot. Their claim had already been summarily dismissed. Their position is clear; they have no standing to invoke the power of this court through this application.
25. This application and the draft defence attached have no legal basis at all to support. They are merely documents suspended on thin air.
26. In deed there is no viable defence at all disclose by the draft defence considering the facts pleaded and the circumstances of the status of the Applicants.
27. The current Applicants rely on being 15 months late but in fact they were 18 months late. That lateness can be prescribed as undue delay, and the reasons disclose by attempting to indicate the delay is not serious on the balance. That argument must be brushed aside and rejected.
28. I must therefore dismiss the application on its entirety. Clearly the applications do not meet neither of the Price Waterhouse requirements.

Orders:

1. Application by the applicant are dismissed accordingly.
2. Costs payable to the counterclaimant together with certification of Queen’s Counsel.
3. The Registrar of High Court to set a new date for enforcement hearing.

THE COURT
JUSTICE R FAUKONA
PUISNE JUDGE

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^[1] [2017] SBHC 22 (29)-(-48).