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Westbrook v Hou Ming Huang [2021] WSSC 13 (19 March 2021)

SUPREME COURT OF SAMOA
Westbrook v Huang [2021] WSSC 13


Case name:
Westbrook v Huang


Citation:


Decision date:
19 March 2021


Parties:
GEORGE WESTBROOK, of Fasitoo-tai, Retired (Plaintiff/Judgment Creditor) AND HOU MING HUANG aka MULIAGATELE WILSON FANG of Satapuala, Businessman, Trading as Best Value Supermarkets. (Defendant/Judgment Debtor)


Hearing date(s):



File number(s):
CP25/20, JS No.20/20


Jurisdiction:
Civil


Place of delivery:
Supreme Court of Samoa, Mulinuu


Judge(s):
Justice Nelson


On appeal from:


Order:
- The Applicant has failed to satisfy the Lauano criteria. There exists no substantial defence to the Claim, there has been no reasonable explanation or justification made out for the Judgment Debtors delays and the Judgment Creditor will continue to suffer irreparable harm if the judgment is set aside.

- I have also considered the Constitutional argument advanced and do not see that the Judgment Debtors fair trial rights have been breached. He was duly served with notice of the proceedings and the default judgment was properly entered absent any appearance.

- The Application to set aside the courts judgment of 14 September 2020 is dismissed. The Respondent/Judgment Creditor is entitled to costs. If no agreement can be reached between counsels the matter can be referred back to me.


Representation:
R Drake for plaintiff/judgment creditor
K Koria for defendant/judgment debtor


Catchwords:
- Setting aside judgment – rehearing – Judgment Creditor – Judgment Debtor – breached fair trial rights – default judgment – irregularly obtained judgment – Judgment Summons – Tenancy Agreement – prima facie – non-payment of rent – substantial ground of defence - ex debito justitiae


Words and phrases:
- Setting aside Judgment or Order given in Absence of Defendant – reasonable justification for the delay – Motion to set aside judgment


Legislation cited:
Supreme Court Civil Procedure Rules 1980


Cases cited:
Attorney General v Leapai [2017] WSSC 105
Lauano v Samoa National Provident Fund Board [2009] WSCA 3


Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU


IN THE MATTER:
Of an Application pursuant to Rule 140 of the Supreme Court (Civil Procedure) Rules 1980


BETWEEN:


GEORGE WESTBROOK, of Fasitoo-tai, Retired
Plaintiff/Judgment Creditor
AND:


HOU MING HUANG aka MULIAGATELE WILSON FANG of Satapuala, Businessman, Trading as Best Value Supermarkets.
Defendant/Judgment Debtor


Counsel:
R Drake for plaintiff/judgment creditor
K Koria for defendant/judgment debtor


Decision: 19 March 2021


DECISION OF THE COURT

Background

  1. The Plaintiff/Judgment Creditor (“JC”) owns a house at Satapuala situated on customary land. By Tenancy Agreement dated 18 June 2019 he rented it out to the Defendant/Judgment Debtor (“JD”) for $4,000.00 per month for a period of 6 years with a right of renewal for a further 6 years.
  2. In or about August 2019 a dispute arose between the JC and the owners of the customary land. Without the consent of the JC the JD began paying his rent to the customary land owners. There are proceedings pending in both the Land and Titles Court and the Supreme Court concerning ownership of the premises and the rights accruing to the parties. That dispute does not however prima facie negate the provisions of the aforementioned Tenancy Agreement and there is no evidence the JD claimed at the time that they did.
  3. The JC consequently brought proceedings on or about 04 March 2020 for non-payment of rent. The relevant Statement of Claim was served on the JD on 10 July 2020. The JD refused to sign the affidavit of service but he says in his affidavit filed for the purposes of the present matter that he engaged counsel to represent him at the hearing. For reasons not apparent counsel did not appear and on 14 September 2020 a default judgment was entered against the JD. No affidavit from his then counsel has been filed confirming this or explaining her non-appearance.
  4. Following Judgment Summons proceedings by the JC to enforce his judgment the JD through new counsel filed a Motion to set aside the Judgment on the grounds:
  5. The Application is brought pursuant to rules 140 and 141 of the Supreme Court Civil Procedure Rules 1980 which relevantly provide:

“140. Setting aside Judgment or Order given in Absence of Defendant – (1) Where in any proceedings a defendant, or a defendant to a counter-claim, does not appear at the hearing and a judgment or order is given or made against him in his absence, the judgment or order and any execution thereon may on application be set aside and a new hearing may be granted.

(2) The application may, if the parties are present, be made on the day on which the judgment or order was given or made, and in any other case shall be made on notice.

141. Rehearing – (1) The Court shall in every proceeding have the power to order a rehearing to be had upon such terms as it thinks reasonable, and in the meantime to stay proceedings:

Provided that a rehearing shall not be granted on an application made more than fourteen days after the judgment or order, unless the Court is satisfied that the application could not reasonably be made sooner.

(2) The application shall be served on the opposite party not less than three clear days before the day fixed for hearing, and shall state the ground thereof, which shall be verified by affidavit.

(3) The application shall not operate as a stay of proceedings unless the Court so orders.

(4) On receipt of the application the Registrar shall, unless otherwise ordered, retain any money in Court until the application has been heard.

(5) An application for a rehearing may be heard by the Judge who heard the proceedings or, if that Judge is not available, by any other Judge.”

  1. The Applicant also relies on the courts inherent power to set aside its own judgments where the interests of justice so require, a matter discussed by the Supreme Court in Attorney General v Leapai [2017] WSSC 105. Furthermore the Applicant asserts the judgment ought be set aside as it was obtained in breach of his Constitutional right to a fair trial as guaranteed by article 9.
  2. In response the Judgment Creditor says:

Applicable Law

  1. The parties agree that in order to succeed, applications pursuant to rules 140 and 141 of the Supreme Court Civil Procedure Rules must satisfy the criteria approved by the Court of Appeal in Lauano, viz: that there is a substantial ground of defence, that there exists reasonable justification for the delay and that the Plaintiff/Judgment Creditor will not suffer irreparable harm if the judgment is set aside.
  2. It is also important to hear in mind there is a distinction between regularly obtained judgments and irregularly obtained judgments. The former being governed by Lauano the latter by the principles referred to in Leapai where Chief Justice Sapolu stated:

“In both Lauano v Samoa Nal ProviProvident Fund Board [2009] WSCA 3 and Russell v Cox [1983] NZLR 654, the Court was cned what iled a “regularly obtained judgmendgmentRt” as opposed to what is called an & an “irregularly obtained judgment”. The principles which apply to a motion to set aside a regularly obtained judgment are different from the principles which apply to a motion to set aside an irregularly obtained judgment. This distinction needs to be understood because both types of motion to set aside can be brought pursuant to r.140. The distinction almost got blurred and confused in this case because in respect of the first applicant the 1996 judgment is a regularly obtained judgment but in respect of the other applicants the 1996 judgment has the ‘appearance’ of an irregularly obtained judgment.”

  1. The judgment in this matter was regularly obtained in that the JD was properly served and given adequate opportunity to appear. When he failed to do so and the Claim being for a liquidated amount, a valid default judgment was entered in compliance with the relevant Rules. As noted on the court file by Perese, CJ on 14/09/20:

“This matter has been called today in the Civil Mentions list. I have seen the affidavit of Service and ordinary summons in which the date of todays hearing is spelt out on front page. The affidavit of service is executed and it was sworn on 22 July 2020. Today Ms Kruse appears for the Plaintiff in this matter and asks for judgment by default on the count of the defendants failure to appear when summoned to appear. I accordingly grant that application for judgment by default in sum of $26,630.00 which includes $100 summons costs; and solicitors fee of $30.00 on a claim of $26,500.00.”

Analysis

  1. Applying the Lauano criteria firstly that there must be a substantial defence to the Claim: the Judgment Debtor through his counsel now asserts a breach by the JC of the Tenancy Agreement an argument he says he is entitled to pursue as a defence to the Claim. It is noted however that there is no evidence the JD at the material time made claims of breach to the JC or anyone else. The affidavit evidence is that the JD continued to pay his rent unabated and without complaint.
  2. As stated in the case law:

“The onus of establishing a substantial ground of defence is on the defendant. And the ground of defence must be substantial, not trivial shallow or in the language of plaintiffs counsel “shadowy”. The defendant must show a defence of sufficient substance to justify delaying the plaintiff in obtaining the fruits of the judgment: Sandall v Cardna (unreported) 18th May 1987 where Hardie Boys J in the Blenheim High Court put the question thus – “Does the defendant have a defence which ought to be heard?” Not every defence would satisfy such a test, each case must be assessed on its merits” - Samoa National Provident Fund Board v Lauano [2008] WSSC 70 and by the Court of Appeal in Lauano v Samoa National Provident Fund Board [2008] WSCA 3.

The Judgment Debtors assertions at this point in time lack substance.

  1. As to the suggestion that the customary land owners require to be joined as they may have been unjustly enriched, that is a matter between the Judgment Debtor and said landowners. To whom he elected of his own free will to make rental payments in breach of his obligations under the Tenancy Agreement. It has no bearing on defences that may be available to the Judgment Creditors claim.
  2. As to the second limb of the Lauano test that there is reasonable justification for the delay: the Judgment Debtors affidavit states that upon being served with the Claim he “immediately” took steps to engage representation. Which he followed up by phone on a number of occasions. Some three (3) months elapsed and he was surprised by the Judgment Summons Application informing that no-one had appeared at the hearing. Miraculously he was then able to make immediate contact with his counsel.
  3. No affidavit has been tendered by his then counsel verifying these matters. But the Judgment Debtor is a businessman by all accounts a successful one. He was aware of the Claim but took no steps to ascertain the status of the matter despite the looming court date. In the words of Her Honour Malosi, J as noted in Goodall v Vui [2013] WSSC 136:

“As the days weeks and months ticked by it must have become apparent that something was amiss.”

  1. A reasonable and prudent businessman would have acted and at least taken more active steps to contact his counsel and ensure his representation. He certainly had no difficulty in that regard once he was served with the Judgment Summons Application. In the circumstances I am not satisfied there was reasonable justification for the delay.
  2. The final limb is that no irreparable harm will be caused if the judgment is set aside. There has in my view already been damage to the JC who has been deprived of the benefit of the monies at issue since September 2020. Setting aside the judgment and proceeding to a rehearing will mean further delays probably substantial given the state of the courts calendar. Resulting in the harm being caused to the JC being compounded. The possibility of the matter progressing to the appeal stage would mean further delays and further damage to the JC who deposes that he is retired and solely dependent on this rental income.
  3. As to the argument that the court has an inherent jurisdiction to set aside its own judgments I agree with the Judgment Debtor. Such a discretion exists and should be exercised where the interests of justice so require. This was what the court did in Leapai where the relevant principles and approach were exhaustively canvassed by Sapolu, CJ.
  4. However unlike here Leapai was a case of an irregularly judgment as against all but one of the Applicants. As noted earlier the principles governing setting aside an irregularly obtained judgment are different. As explained in Leapai:

“From the authorities cited and what has been said, five matters may be now be stated. Firstly, only a person who was a defendant in proceedings may bring a motion under rules 140 and 141 of the Supreme Court (Civil Procedure) Rules 1980 to set aside a default judgment entered against him in those proceedings and to seek a rehearing. Secondly, a motion may be brought under 140 to set aside a regularly obtained judgment or to set aside an irregularly obtained judgment. Thirdly, the principles which apply to a motion to set aside a regularly obtained judgment are different from the principles which apply to a motion to set aside an irregularly obtained judgment. Fourthly, the principles which apply to setting aside a regularly obtained judgment are set out in Lauano v Samtional ProviProvident Fund Board [2009] WSSC 3 citing Russ Cox [1983] NZLR 654 If tdgmen irregularly obtained the defendant will generally be entitled to have have the jthe judgemudgement set aside ex debito justitiae, that is, as a matter of right. Fifthly, an irregularly obtained judgment will not be set aside in its entirety if, in the exercise by the Court of its discretion, the illegality can be severed leaving the rest of the judgment to stand. This will depend on whether the degree of irregularity in the process by which the judgment was obtained or in the resulting judgment was substantial. The overarching consideration is to avoid a miscarriage of justice.”

  1. In respect of both types of judgments the overarching consideration is whether it is just in all the circumstances to grant an application to set aside. As noted by the Supreme Court in Lauano [2008] WSSC 70 and cited in Leapai:

“In New Zealand by the terms of their Rules must be added the further requirement that the judgment can only be set aside “if it appears to the court that there has been or may have been a miscarriage of justice.” This is in line with the over-riding requirement in applications of this nature that the final test should be whether it is just in all the circumstances to grant the application. As noted by the Court in Russell v Cox (a case decided before the miscarriage of justice test was introduced into rules 143 and 469) at 659 – “the several factors mentioned in the judgments discussed should be taken not as rules of law but as no more than tests by which the justice of the case is to be measured........” There is no reason why these principles should not be applied to applications to set aside under rules 140 and 141.”

  1. A final point worth noting is the Judgment Creditors argument that the Application fails to meet the 14-day requirement in the rule 141(1) proviso which states:

“Provided that a rehearing shall not be granted on an application made more than fourteen days after the judgment or order, unless the Court is satisfied that the application could not reasonably be made sooner.”

  1. It is clear the Judgment Debtor did not comply with the 14-day time limit. But the reason why is equally clear. He says he left it all to his then counsel, the failure was all hers not his. While this may be true the point is this was a situation of his own making created by his tardiness. While therefore I am satisfied there was a reason for not filing his Application within the mandated 14 days, it does not absolve him from failing to act prudently and expeditiously in respect of the pending court proceedings.

Ruling

  1. The Applicant has failed to satisfy the Lauano criteria. There exists no substantial defence to the Claim, there has been no reasonable explanation or justification made out for the Judgment Debtors delays and the Judgment Creditor will continue to suffer irreparable harm if the judgment is set aside.
  2. I have also considered the Constitutional argument advanced and do not see that the Judgment Debtors fair trial rights have been breached. He was duly served with notice of the proceedings and the default judgment was properly entered absent any appearance.
  3. The Application to set aside the courts judgment of 14 September 2020 is dismissed. The Respondent/Judgment Creditor is entitled to costs. If no agreement can be reached between counsels the matter can be referred back to me.

JUSTICE NELSON


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