IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 376 OF 1994

Between:

1. JANARDHAN s/o Korian
2. SHAKUNTALA KUMARI d/o Ram Chandar
Plaintiffs

- and -

PARAS RAM
s/o Bangaru
Defendant

Mr. V. Maharaj for Original Plaintiff/Respondent
Mr. M. Raza for Original Defendant/Applicant

JUDGMENT

This is defendant's motion dated 27 July 1994 to set aside judgment entered against him in Civil Action No. 257/93 on 24 August 1993 and entered and sealed on 23 November 1993 on the grounds set out in his affidavit in support of the motion sworn the said 27 July.

His grounds are that he was never served with the Writ of Summons in that action and hence he could not file any defence. He said that the Bankruptcy Notice came as a "great surprise" to him. He alleges that the Plaintiff owes him $30728.40 for breach of contract and "damages, damages and money due and owing by the Plaintiffs for work done on their premises".

In the course of the hearing of this motion the defendant filed a Statement of Defence on 8 November 1994 after the Court allowed him to file further affidavit so as to enable me to consider the motion in the light of the defence.

In opposing the application the Plaintiff Janardhan for himself and his wife the second defendant has deposed, inter alia, that the writ of summons, interlocutory judgment and Notice of Assessment of Damages were served on the defendant. Even the sealed order of assessment of damages and Bankruptcy Notice were served on him by the same bailiff who served the other papers.

Mr. Raza submitted that the Plaintiff will not suffer any hardship if the judgment was set aside. He relies on what the defendant has deposed to in his affidavits.

Mr. Maharaj submits that this was a regular judgment and that all documents were served on the defendant. He says that the Court has to consider whether there is defence on merits which he has not shown. It is not good enough to merely say that he has a counterclaim.

Mr. Maharaj asks how is it that he received Bankruptcy Notice at his address and not other documents when it was the same bailiff who served all the papers. He says that if the defendant is allowed to defend then he should be ordered to do so on terms in that money should be deposited in Court.

I have considered the defendant's submission and I am not impressed at all with his assertion that he was not served with the relevant documents except the Bankruptcy Notice. Even when Notice of Hearing of Assessment of Damages was served on him by the same bailiff who served all the other papers, the defendants did not take any steps to set aside the judgment. But it appears that when he knew that if he did not take note of Bankruptcy Notice he decided to make this application to avoid a receiving order being made against him.

This was a regular judgment and I so find despite the defendant's assertion that he was not served with documents to enable him to defend the said action.

In the case of a regular judgment, the defendant does not have a right to have it set aside but it is a matter for the exercise of discretion of the Court. This discretion will be exercised according to the guidelines set out in ALPINE BOOK OF TRANSPORT COMPANY INCORPORATED v SAUDI EAGLE SHIPPING COMPANY INCORPORATED (The Saudi Eagle) (1986) 2 Lloyds Rep 2 (CA).

As is quite evident from the facts of this case, bearing in mind my rejection of his grounds regarding service, the defendant was dilatory in his application to set aside the judgment obtained against him.

It has been said that to enable the Court to set aside 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) 23 Q.B.D. 124)" The Supreme Court Practice 1993 Or13 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."

The defendant did eventually file his Statement of Defence before I concluded the hearing of this application. I have considered it. He has raised a number of defences and counterclaims, but it is not for me at this stage to resolve the issues between the parties but merely to satisfy myself that the defendant has shown a bona fide defence involving triable issues. 

The defendant only has 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."

As I said before, the defendant has delayed making the application. On the subject of delay in such cases EVANS v BARTLAM (1937) 2 AER p. 646 at p. 656 states 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 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, 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."

Although the defendant has made out a prima facie case, he has however shown complete disregard towards the proceedings until such time as the service of Bankruptcy Notice.

In the circumstances of this case, bearing in mind the facts of this case and in the exercise of my discretion I consider that I ought to let defendant in to defend and set aside the judgment but on terms under the said Or. 13 r. 10 of the High Court Rules. In a proper case in the exercise of the Court's discretion the defendant can be ordered to deposit the amount owing into Court (VIJAY PRASAD and DAYA RAM CIV APP 61/90 FCA; SUBODH KUMAR MISHRA s/o Ramendra Mishra and CAR RENTALS (PACIFIC) LTD CIV APP 35/85 FCA). The said Order does not lay down any basis upon which the discretion is to be exercised. In GARDNER v JAY (1885) 29 Ch.D. 52 at p.58 BOWEN L.J said on this aspect that:

"... when a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view to indicating the particular grooves in which the discretion should run, for if the Act or the Rules did not fetter the discretion of the Judge why should the Court do so?"

I find that this is a proper case in which terms ought to be imposed particularly because of his failure to offer an explanation capable of being accepted by the Court.

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 default judgment entered against the defendant on 24 August 1993 be set aside conditional upon the defendant paying into Court the sum of $20000.00 (twenty thousand dollars) being a portion of the judgment or giving security for that amount to the satisfaction of the Plaintiffs within 30 days from the date of this judgment. 

In the event that such amount is not so paid or the said security is not given this application to set aside the said judgment shall stand dismissed. I make an order for costs against the defendant in this application and also costs thrown away in obtaining judgment and Assessment of Damages which are to be taxed unless agreed.

D. Pathik
Judge

Suva
17 January, 1995
HBC0376J.94S