Home | Databases | WorldLII | Search | Feedback High Court of Fiji

National Bank of Fiji v Bibi [1994] FJHC 15; Hbc0450d.92s (28 January 1994)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 450 OF 1992

Between:

NATIONAL BANK OF FIJI
Plaintiff

- and -

1. HAZRA BIBI
f/n Mohammed Ismail Khan
2. KARIM BUKSH
f/n Madar Buksh
Defendants

Mr. V. Kapadia for Plaintiff
Mr. John Howard for 1st Defendant
Mr. R. Smith for the 2nd Defendant

RULING

In this action judgment in default of appearance was entered against the defendants on the 7th December, 1992 in the sum of $136,827.82 together with interest at the rate of $47.95 per day as from 19th August, 1992 until full settlement and $65 costs.

Summonses to set aside the said judgment were filed by the respective solicitors for the defendants on the 12th July, 1993 (for 1st Defendant - D1) and 28th April, 1993 (for 2nd Defendant - D2). The defendants are mother and son respectively; the affidavits filed by them in support of the application are in identical terms. The D2 has filed a further affidavit in reply to Plaintiff's affidavit.

On the 13th October, 1992 the Plaintiff issued a Writ herein against the defendants alleging that it lent and advanced the defendants the sum of $136,827.82 at the defendants' request full particulars whereof are well-known to them.

The Plaintiff said that it made a demand for the payment of the said sum but the defendants failed and/or neglected to make payment.

On the 7th December, 1992 no notice of intention to defend having been entered by the defendants, judgment was entered against them in the amount stated hereabove together with interest and costs.

The Affidavit of the 2nd defendant (so also that of the 1st defendant) consists of 15 paragraphs.

The defendants' main complaint is that although they instructed the Plaintiff Bank to deduct the sum of $3500 per month from their Joint Account with effect from September, 1984 until the sum of $65,000 owed to the Estate of Madar Buksh is paid off, the Plaintiff continued to deduct the said sum after early 1986 even though the amount owing was paid off. After consultation with the Plaintiff some adjustment was made but then again deduction continued and finally stopped in July 1989.

The defendants therefore allege that this error in deduction on the part of the plaintiff does not reflect the true position of their debt to the plaintiff. However they say that the said judgment ought to be set aside and that they be granted leave to defend this action.

The Plaintiff filed an Affidavit in Reply through its manager lending. It is a very comprehensive reply to each and every paragraph in the Defendant's (D2's) affidavit.

It denies, inter alia, each and every allegation in paragraphs 11, 12, and 13 of the D2's affidavit relating to payment of $3500. It says in short that the Defendant did not at any time complain about the payments as he always communicated with the Bank in writing. Even on 29th November, 1989 when Messrs. Lateef & Lateef wrote on D2's behalf complaining about excess interest charged, he made no complaint about the payment of $3500 per month. Again in 1989 when D2 had several meetings with the Bank and Mr. Nagin, he made no mention of wrong deductions of $3500.00 per month.

The D2 filed an Affidavit in reply to Plaintiff's affidavit in reply to Plaintiff's Affidavit and stated, inter alia:

"2.I deny having arranged or authorised either the re-opening of Account 02-139254-2001-9 after it was closed on 11 December 1987 or any overdraft against it or any deductions from it and repeat that the Plaintiff undertook to correct the situation recorded in the statements by crediting the account at the expense of the estate account."

He repeated that he has a good defence.

The Plaintiff filed an Affidavit in Reply to the Affidavit of the First Defendant (D1). It states that the authority given to the Bank to transfer $3500.00 per month from the joint account to the Estate Account was not limited to $65,000 but it was an authority for payment in reduction of the Estate Account and that the repayment of the Estate loan account was by payments of $3,500.00 per month.

The Plaintiff further says that the D1 was aware of the judgment from December, 1992 and on 27th May, 1993 applied to set aside the Bankruptcy Notice and Petition based on this judgment.

It says that D1 is merely trying to delay the action against her and has not properly explained the delay in filing the present application to set aside the judgment.

I have considered the Affidavits filed herein and the submissions by counsel.

There is no doubt that this was a regular judgment which was obtained in default of appearance. 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 whether the defendant has disclosed a defence on the merits, and this transcends any reasons given by him for 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 M R 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."

Upon a careful reading of the Defendants' affidavits and the Affidavits of the Plaintiffs in Reply I am left with the distinct impression that the defendants have disclosed a defence although not with any great clarity. They do dispute that the Plaintiff had the authority to continue deducting for the period the Plaintiff alleges that it did and its reasons for deducting.

The parties have a number of actions pending between them. In some of them Rulings and Judgments have been given. Their dealings involve a number of accounts; as to how far the claim in this action is tied up with other dealings and accounts it is far from clear.

The affidavits filed in Support of the application and the Replies leave one in a state of confusion; the situation is more like a jigsaw puzzle particularly because of so many actions between them and because of the defendants' involvement with the Estate of Madar Buksh deceased. I see no point in traversing all these matters in this Ruling as they are all contained in the affidavits filed herein.

The defendants have raised a defence albeit late; there are triable issues as can be gleaned from the conflicting affidavits.

It cannot be said that the Defendants' case is so plainly and obviously weak that it is doomed to failure. As was said in WENLOCK v MOLONEY & OTHERS (1965 2 AER 87) the headnote to that case:

"Although the Plaintiff's claim seemed unlikely to succeed, the case was not a plain and obvious one."

I agree with the learned counsel for the defendants that in view of the fact that there is admission of some error in the deductions, the issue between the parties cannot be resolved without a hearing in Court. In such circumstances, LORD WRIGHT in EVANS v BARTLAM 1937 AC 473 AT P.489 said:

"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."

On the question of delay in the application, one cannot use it against the defendants to preclude them from defending. The following observation of LORD WRIGHT in EVANS (supra) at p.489 is pertinent:

"He clearly shows an issue which the court should try. He has been guilty of no laches in making the application to set aside the default judgment, though as Atwood v Chichester (3) and other cases show, the Court, while considering a delay, have been lenient in excluding applicants on that ground."

To set aside a default judgment is discretionary. In exercising this discretionary power I have considered whether the defendants have merits. I find that there are merits as disclosed in the defendants' affidavits; I cannot see how in the circumstances of this case I can let the judgment pass without proper adjudication. Further the defendants' explanations as to how the default occurred has been taken into account and I find those reasons are not unusual.

In these circumstances the principle that is applied in applications of this nature are as stated by ATKINS L.J. in EVANS (supra) at p.650:

"... 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."

After having considered the conflicting affidavits and the principles involved in an application to set aside judgment and in exercise of the court's discretion, I order that the said default judgment against the defendants on the 7th December 1992 be wholly set aside on condition that the defendants pay into Court the sum of $50,000.00 (Fifty Thousand Dollars)within 30 days of the date of this Ruling and at the same time they file a Defence within the said 30 days.

It is further ordered that the Defendants pay the costs of this application in any event to be taxed if not agreed.

D. Pathik
Acting Puisne Judge

Suva
28th January, 1994

HBC0450D.92S