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South Pacific Recordings Ltd v Ismail [1994] FJHC 134; Hbc0597j.93s (30 September 1994)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 597 OF 1993

Between:

SOUTH PACIFIC RECORDINGS LTD
Plaintiff

- and -

YUSUF ISMAIL
(s/o Gulam Mohammed Ismail) and
KADMA WATI (d/o Bispath) t/a
NEW VISION ENTERTAINERS
Defendants

Mr. V. Kapadia for the Plaintiff
Mr. R. Chand for the Defendants

JUDGMENT

By Motion dated 30 March 1994 the first and second defendants in this action (hereafter referred to as the 'defendants') seek to invoke the Court's discretion under Order 13 r.10 to set aside judgments entered by the Plaintiff against them on 30 December 1993 and 1st February 1994 respectively (hereafter referred to as the 'judgment') in default of failing to file Notice of Intention to Defend.

The chronology of events is as follows:-

(a) The Writ of Summons dated 5 November 1993 was filed on the same day.

(b) The said Writ was personally served on the defendants on 14 November 1993 and 12 January 1994 respectively.

(c) On 28 December 1993 and 1 January 1994 search was made for entry of Intention to Defend by the defendants.

(d) On 30 December 1993 and 1 February 1994 the Plaintiff entered judgment against the defendants respectively in default of Notice of Intention to Defend for the sum of $18611.82.

(e) On 30 March 1994 the defendants filed a motion to set aside the default judgments together with an affidavit in support.

(f) On 29 August 1994 the Plaintiff filed an Affidavit in Reply opposing the Motion and asking that it be dismissed with costs.

The plaintiff's claim is for $18611.82, being a liquidated sum, "being the amount due and owing by the defendants to the plaintiff for films supplied to the defendants at their request particulars of which are well known to the defendants".

Mr. Chand for the defendants (the applicants) submits that (a) there is an arguable defence, (b) the applicants were unrepresented when they were served with the Writ of Summons and they signed the "Acknowledgment of Service" without taking any further steps in the belief that they will be given a date of hearing and (c) the Statement of Claim in the Writ of Summons lacks particulars with no dates in the claim; the basis on which films were supplied was on a 60 - 40 basis whereas the Plaintiff's Claim is a "straightforward supply". He says that if the applicants are not given the opportunity to defend, the plaintiff will be "unjustly enriched".

Mr. Kapadia for the plaintiff says that (a) this was a regular judgment, (b) Acknowledgment of Service was not served on them, (c) defence must raise defence on merit which they have not done, (d) it denies that supply was on a 60 - 40 basis and there is no mention of this in the defendants' letters annexed to the Plaintiff's affidavit and (e) they had not raised lack of particulars before.

Mr. Kapadia submits that if the defendants wish to defend then they should be ordered to pay money into Court.

As can be seen from the chronology of events outlined hereinbefore, there is no doubt that the defendants were dilatory in their application to set aside the judgment obtained against them. Granted they were unrepresented at the time the Writ of Summons was served on them, but that is no excuse for their inaction in the matter involving a claim for such a large amount. Be that as it may, I have to consider the affidavits filed herein and the submissions made by counsel.

This was a regular judgment which was obtained in default of Notice of Intention to Defend. In the case of a regular judgment:

"it is an (almost) inflexible rule that there must be an affidavit of merit i.e. an affidavit stating facts showing a defence on the merits (FARDEN v. RICHTER [1889] UKLawRpKQB 79; (1889) 23 Q.B.D. 124)" The Supreme Court Practice 1993 Or 13 r.9 p.137).

At any rate where such an application is not thus supported, it ought not to be granted except for some very sufficient reason" (HUDDLESTON, B in FARDEN ibid p. 129).

It is further stated in the Supreme Court Practice (ibid) p. 137-138 that:

"... the major consideration is where the defendant has disclosed a defence on the merits, and this transcends any reasons given by him on the delay in making the application even if the explanation given by him is false (VANN v AWFORD (1986) 83 L.S. Gaz. 1725, THE TIMES, April 23, 1986 C.A.). The fact that he has told lies in seeking to explain the delay, however, may affect his credibility of his defence and the way in which the Court should exercise its discretion."

On the subject of affidavit stating facts showing a Defence on the merits LORD DENNING MR in BURNS v KONDEL (1971) 1 Lloyd's Rep. 554 at p. 555 said:-

"We all know that in the ordinary way the Court does not set aside a judgment in default unless there is an affidavit showing a defence on the merits. That does not mean that the defendant must show a good defence on the merits. He need only show a defence which discloses an arguable or triable issue."

Order 13 of the High Court Rules deals with Failure to Give Notice of Intention to Defend. Rule 1 of that order gives the power to sign judgment where the claim is for a liquidated demand; Rule 10 states:

"Without prejudice to rule 8(3) and (4), the Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order."

I have carefully considered Mr. Chand's submission and I find that the defendants have shown defence on merits and not merely raised triable issues on the affidavit filed by them. The defendant's only have to "establish a prima facie defence" and that a "draft defence is not necessary, what is required is the affidavit disclosing a prima facie defence" (THE FIJI SUGAR CORPORATION LIMITED and MOHAMMED ISMAIL Civ. App. No. 28/87 F.C.A. at p.9 Cyclostyled judgment). The following passage from the judgment of LORD ATKIN in EVANS BARTLAM (1937) 2 AER p.646 at p.650 is pertinent on the subject of the principle on which a Court acts where it is sought to set aside a judgment arising out of a failure to comply with the rules:-

"I agree that both R.S.C. Ord. 13, r. 10, and R.S.C., Ord. 27, r. 15, gives a discretionary power to the judge in chambers to set aside a default judgment. The discretion is in terms unconditional. The courts, however, have laid down for themselves rules to guide them in the normal exercise of their discretion. One is that, where the judgment was obtained regularly, there must be an affidavit of merits, meaning that the applicant must produce to the court evidence that he has a prima facie defence. It was suggested in argument that there is another rule, that the applicant must satisfy the court that there is a reasonable explanation why judgment was allowed to go by default, such as mistake, accident, fraud or the like. I do not think that any such rule exists, though obviously the reason, if any, for allowing judgment and thereafter applying to set it aside is one of the matters to which the court will have regard in exercising its discretion.

If there were a rigid rule that no one could have a default judgment set aside who knew at the time and intended that there should be a judgment signed, the two rules would be deprived of most of their efficacy. The principle obviously is that, unless and until the court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has been obtained only by a failure to follow any of the rules of procedure."

I hold that the defendants have made out a prima facie case. The claim in the Writ of Summons is headed Statement of Claim. This claim is definitely lacking in particulars; among other things, there are no dates to indicate the period for which the claim is and how it is made up. Now that the defendants have raised the matter of particulars they are entitled to it being supplied although they had not asked for it before. They have also denied the claim stating that the supply of films was on a 60 - 40 although they have not referred to this aspect in their letters annexed to the Plaintiff's affidavit. Even in these circumstances there is nothing to prevent the exercise of the discretion of the Court in dealing with the matter and impose conditions. Each case must depend on its own facts (VIJAY PRASAD and DAYA RAM CIV. APP. NO. 61/90 F.C.A. cyclostyled judgment at p.7).

The defendants have delayed making the application. The Acknowledgment of Service was filed on 22 November 1993 and Bankruptcy Notice was served on them on 3 March 1994 and it was not until 30 March 1994 that the present motion was filed which is a delay of just over four months. In EVANS (supra) LORD WRIGHT at p.489 on the aspect of 'delay' stated that the "Court, while considering delay, have been lenient in excluding applicants on that ground" and further said as follows:-

"The primary consideration is whether he has merits to which the Court should pay heed; if merits are shown the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. This point was emphasized in Watt v. Barnett [1878] UKLawRpKQB 28; 3 Q.B.D. 363 .... ............................................. He has been guilty of no laches in making the application to set aside the default judgment, though as Atwood v. Chichester, [1878] UKLawRpKQB 4; 3 Q.B.D. 722 and other cases show, the Court, while considering delay, have been lenient in excluding applicants on that ground. The Court might also have regard to the applicant's explanation why he neglected to appear after being served, though as a rule his fault (if any) in that respect can be sufficiently punished by the terms as to costs or otherwise which the Court in its discretion is empowered by the rule to impose. The appellant here has an explanation, the truth of which is indeed denied by the respondent, but at this stage I see no reason why he should be disbelieved on what appears to me to be a mere conflict on affidavits."

In the circumstances of this case, I consider that the defendants ought to be let in to defend, and that the judgment entered in default of filing Notice of Intention to Defend on 30 December 1993 and 1 February 1994 respectively ought to be set aside.

In the outcome, bearing in mind the guiding principles in a case of this nature and in the exercise of the Court's discretion, I order that the said default judgment entered against the first and second defendants on 30 December 1993 and 1 February 1994 respectively be set aside on condition that that the defendants pay into Court the sum of $11160.00 on or before 28th October 1994. In the event that such amount is not so paid the said judgments to stand. It is also ordered that the defendants file and serve a Statement of Defence within 14 days of the date hereof and thereafter the action to take its normal course. The defendants are to pay the Plaintiffs costs of this application in any event which costs are to be taxed if not agreed.

D. Pathik
Judge

At Suva
30 September, 1994

HBC0597J.93S