Dateline Bookshop (Tonga) Ltd v Westpac Bank of Tonga [2013] TOCA 3; AC 19 of 2012 (17 April 2013)

IN THE COURT OF APPEAL OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

AC 19 of 2012
[CR 199/2010]

BETWEEN:

1. DATELINE BOOKSHOP (TONGA) LIMITED
2. SOAPE TU'IONO
- Appellants

AND :

WESTPAC BANK OF TONGA
- Respondent

Coram : Salmon J
Handley J
Blanchard J

Counsel : Mr. T. Fakahua for the Appellants
Ms. L. Tonga for the Respondent

Date of hearing : 12 April 2013
Date of judgment : 17 April 2013

JUDGMENT OF THE COURT

[1] The Court has before it an appeal, without leave, from the decision of the Lord Chief Justice on 2 November 2012 which effectively dismissed an application by the present appellants filed on 16 May 2012 to set aside the default judgment for TOP$51,431.38 and interest entered against them by the Lord Chief Justice on 5 April 2011.

[2] The bank's statement of claim filed on 22 September 2010 sought judgment for the debt due under a term loan of TOP$30,000 from the first appellant as guarantor, and the second appellant as principal debtor. According to the certificate of service it was served on the second appellant on 21 December 2010.

[3] The appellants did not file a defence and on 16 March 2011 the bank made an ex parte application under the Rules for the entry of default judgment against the defendants for the amount claimed, interest and costs. On 5 April 2011 the Lord Chief Justice entered default judgment.

[4] On 16 May 2012, as mentioned above, the defendants applied to have the default judgment set aside, and at the same time filed their defence.

[5] The defence admitted the bank's claim in substance but alleged that the relevant loan was for TOP$20,000, not TOP$30,000, and pleaded the 5 year limitation period under s16(1) of the Supreme Court Act. It alleged that the last payment to the bank was made on 28 March 2003 outside the 5 years before the action was commenced.

[6] The defence alleged that the company's premises had been destroyed in the riots on 16 November 2006 and that this was beyond the control of the company but, as the Lord Chief Justice pointed out, this was not a defence, and it was not relied on before us.

[7] The second defendant's affidavit in support of the application sworn 16 May 2012 contained his denial of receiving the writ, statement of claim and directions notice as claimed in the certificate of service on the file.

[8] The second defendant annexed to his affidavit a copy of his letter to the Registrar of the Supreme Court of 29 December 2011 (said in his affidavit to be dated 12 December 2011) referring to his receipt of a copy of the default judgment "I just received...on 8 December 2011." He did not then deny receiving the writ and statement of claim.

[9] The defendants' application was heard in the absence of their counsel. In his decision of 9 July, the Lord Chief Justice rejected the claim by the second defendant that he had not been served with the writ and statement of claim. He said that since there was nothing more than a denial of receipt "I see no reason to reject the certificate of service filed by the Bank's solicitor on 10 January 2011 stating that service was effected on 21 December 2010."

[10] The certificate of service stated that the writ and statement of claim were served on the second defendant, who was known to the process server, at Nukuhetulu which was where the second defendant lived.

[11] The second defendant did not support his claim that he did not receive the documents by an alibi nor did he claim that he did not know the process server. There was also his admission by silence in his letter to the Registrar. In these circumstances the Lord Chief Justice was entitled to reject the second defendant's denial and hold that there was no triable issue on this question.

[12] The bank statements annexed to the affidavit of James Taumoepeau of 16 March 2011 filed in support of the bank's application for default judgment, included page 5 which recorded a payment of TOP$200 to the Bank on 7 November 2005 within the 5 years. This payment, which defeated the limitation defence, was not challenged in the affidavit of the second defendant or otherwise. Again there was no triable issue.

[13] Mr. Taumoepeau's affidavit of 16 March 2011 failed to annex pages 2-4 inclusive of the bank statements relating to the Term Loan. The omission was unfortunate but immaterial because the pages showing the payment on 7 November 2005 and the balance claimed were annexed.

[14] The Lord Chief Justice concluded his reasons of 9 July 2012 by saying: "The only question which concerns me" was that the statement of claim alleged a loan of TOP$30,000, but the Statement of Defence claimed that it was for TOP$20,000, and this was consistent with Annexure A to the affidavit of James Taumoepeau of 16 March 2011 filed in support of the application for default judgment.

[15] He gave leave for the filing of a supplementary affidavit within 14 days, and adjourned the matter for further hearing.

[16] A further affidavit by Mr. James Taumoepeau was filed on 20 July 2012. The deponent said that the bank granted two facilities to the first defendant on 22 October 2002, an Overdraft Facility for TOP$20,000 and a Term Loan Facility for TOP$30,000. A copy of the wrong loan agreement had been annexed to his earlier affidavit and a copy of the correct agreement for the Term Loan Facility was annexed.

[17] Counsel filed further written submissions. In his supplementary decision on 2 November 2012 the Lord Chief Justice found that the wrong agreement had been attached to the first affidavit, that the error had been corrected, and that a payment had been made on 7 November 2005 within the 5 years and he directed summary judgment for the Bank for the amount claimed.

[18] This was clearly a slip because the default judgment remained in force, but the intention of the Lord Chief Justice was clear, and he could have corrected his order at any time under the Court's inherent jurisdiction or under the Supreme Court Rules Order 28 rule 5.

[19] The defendants' appeal from the decisions of 5 July and 2 November 2012 fails and must be dismissed with costs, but the Court, of its own motion, will exercise the inherent jurisdiction to correct the order of 2 November 2012 by substituting an order that the application to set aside the default judgment is dismissed: Thynne v Thynne [1955] P 272, 313-4.

[20] The orders of the Court are:

(1) Appeal dismissed with costs;
(2) The order of the Supreme Court of 2 November 2012 is rectified under the Court's inherent jurisdiction by substituting an order that the application of 16 May 2012 to set aside the default judgment of 5 April 2011 is dismissed.

........................................................
Salmon J

........................................................
Handley J

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Blanchard J