Digicel Tonga Ltd v Leha'uli [2011] TOSC 9; AM 31 of 2011 (16 December 2011)

IN THE SUPREME COURT OF TONGA
APPELLATE JURISDICTION
NUKU'ALOFA REGISTRY

AM 31 of 2011
[MC CV 271 of 2009]

BETWEEN:

DIGICEL TONGA LTD
Appellant

AND:

1. 'AHOAFA LEHA'ULI
2. SEINI KAVA
Respondents

Mrs. D. Stephenson for the Appellant
O. Pouono for the Respondents

JUDGMENT

1. Two different documents entitled "Agreed Facts" are on the file. Unfortunately, several of the documents referred to in the "Agreed Facts" are not before me, including an English translation of the summons in the Magistrates' Court which commenced the present proceedings.
   
2. In summary, the Respondents commenced proceedings against the Appellant in March 2009 (CV 91/09). They alleged breach of contract. In April 2009 the action was discontinued following settlement but in August 2009 fresh proceedings (CV 271/09) were commenced by the Respondent's next of kin complaining of the same matters which had been advanced in CV 91/09.
   
3. A Statement of Defence was apparently filed by the Appellant on 24 August 2009. According to a ruling delivered by the Magistrate in October 2009 the Defence claimed that there was no privity of contract between the parties, that the Plaintiffs had no locus standi and that they were estopped from bringing the action.
   
4. In his ruling the Magistrate allowed the Respondents to be substituted for the next of kin and allowed the Appellant to file an amended Defence.
   
5. It appears that the Magistrate's ruling was unsuccessfully appealed by the Appellant but I was not provided with any of the documents relating to that appeal and the appeal reference was not provided.
   
6. On 11 November 2009 the Amended Defence was filed: it also included a Counterclaim.
   
7. On 2 May 2011 the Appellant filed an application for judgment in default of defence to the counterclaim. It was supported by an affidavit of even date.
   
8. An affidavit in answer was filed on 4 May 2011. The Respondents' case was, first, that the correct practice in the Magistrates' Court was not to append a counterclaim to a statement of defence but to commence separate proceedings for that claim. It was accepted that no defence had been filed to the counterclaim but it was argued that the practice of applying for (and being awarded) judgment in default of defence was unique to the Supreme Court: in the Magistrates' Court formal proof was required.
   
9. On 10 August 2011 the Magistrates' Court upheld the Respondents' submissions. The Appellant now appeals against that ruling.
   
10. As will be seen from comparison of the Magistrates' Courts (Civil) Rules 2007 and the Supreme Court Rules 2007 the requirements of the two courts for the filing of pleadings are quite different. In the Supreme Court proceedings are commenced by writ and statement of claim ( RSC 0.6) and a party wishing to defend or counterclaim must file a statement of defence (0.8 r.3) and /or a counterclaim (0.8. r.4). Where no defence is filed then the plaintiff is entitled to judgment in default (0.14). A counterclaim is regarded as an independent action (Amon v Bobbett [1889] UKLawRpKQB 35; 22 Q.B.D 543, 548) and therefore a party wishing to defend a counterclaim must file a defence to the counterclaim (0.8 r 4(2)). In Magistrates' Courts, by contrast, the only pleadings which must be filed are the Summons (Rule 5).
    
11. In the Magistrates' Court the only provision for further pleadings is contained in Rule 9 which is subject to Section 66 of the Magistrates' Courts Act (Cap 11). This means that a Magistrate is free to hear a case, when appropriate, without any written statement of defence before him, whether to a claim, or to a counterclaim. While it has been found, as a matter of convenience, desirable for both parties to give written particulars of their case, unless so ordered by Rule 9 such written particulars (whether entitled "Defence" or not) are not compulsory.
    
12. A special provision relating to claims for damages should also be noted. Under Rule 7 (2) (b)if the defendant, though duly served, fails to appear then:
    

"If the plaintiffs claim is for an unliquidated amount or for any reason the amount needs to be proved, the court may accept affidavit evidence instead of requiring oral testimony".

This Rule is complementary to section 65 of the Act.

13. In the present case the counterclaim was for "breach of contract in the sum of $5000". The breach was said to be the commencement of proceedings CV 271/09 in breach of clause 1.6 of the terms of settlement of action CV 91/09 which breach was said to be "injurious to the name, image and reputation" of the Defendant.
    
14. There is a clear distinction between liquidated and unliquidated damages. The former is in the nature of a debt or, in other words, a specific sum of money which can be calculated with mathematical precision to be due. Unliquidated damages must however be assessed by the court. The mere naming of a definite figure does not convert an unliquidated demand into a liquidated claim (Knight v Abbott (1883) 10 QBD II).
    
15. In the Supreme Court failure to file a defence will entitle the Plaintiff to enter judgment for the sum claimed in the case of a liquidated sum. (0.14r3(1). Where, however, the claim is for unliquidated damages, judgment can only be entered with damages to be assessed (014 r 3(2)).
    
16. Whether in the Supreme Court or in the Magistrates' Court an unanswered counterclaim in the form lodged by the Appellant in this case would not lead to judgment for the sum claimed since it is clear that notwithstanding the inclusion of the figure "$5000" the claim is for unliquidated damages requiring a hearing to take place.
    
17. In paragraph 2 of her grounds of appeal filed on 18 August 2011 counsel for the appellant relied on Section 59 (3) for the proposition that the rules of procedure in civil cases shall be the same as those in the Supreme Court. With respect, counsel appears to have overlooked the amendment of section 59 (3) by section 17 of the Magistrates' Courts (Amendment) Act 10/2006. Even had this amendment not been made, for the reasons given I am of the view that the Supreme Court Rules would not have assisted the Appellant.
    
18. As there is no specific requirement for additional pleadings beyond the summons in the Magistrates' Courts Rules 2007, there is no fixed rule for the filing of a counterclaim. Rule 3 (2) of the Rules gives a wide discretion to the Chief Magistrate and a Magistrate. There is much to be said for the general principle that all disputes between the parties relating to one subject-matter should be dealt with at the same time (Byrne v Brown (1889) QBD 657, 666-7). Whether commenced separately as a claim or added to a defence as a counterclaim the issues raised by the Defendant should be dealt with at the same time as the claim. I do not read the Magistrate's 10 August 2011 ruling as saying anything to the contrary. In any event, the decisive question in this appeal is not whether a counterclaim should be separately commenced but whether in the absence of a filed defence to the counterclaim as filed, the Appellant was entitled to Judgment in the amount claimed. For the reasons already given, I hold that the question must be answered in the negative.
    
19. The appeal is dismissed.
    

Chief Justice

Dated: 16 December 2011.