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Prakash v Parmar [2001] FJHC 174; HBC350.1996 (15 February 2001)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 350 OF 1996

Between:

RAJESH PRAKASH
(s/o Bhaganti Prakash)
Plaintiff

And

KAMLESH RAMESH PARMAR
(s/o Ramesh Parmar)
1st Defendant

And

D. GOKAL AND COMPANY LIMITED
2nd Defendant

Mr. R. I. Kapadia for Plaintiff
Mr. H. Lateef with Ms Bhawna Narayan for 2nd Defendant

DECISION

By summons dated 16 October 2000 D. Gokal and Company Limited (the 2nd defendant - hereafter referred to as the ‘applicant’) applies for the following Orders: that the judgment entered against the 2nd defendant on the 19th day of November 1999 be set aside; that the execution of the said judgment be stayed and that the 2nd defendant be at liberty to defend the assessment of the quantum of damages claimed by the Plaintiff.

The application is made under Order 35 rule 2 and Order 45 rule 10 of the High Court Rules 1988.

Order 35 r.2 provides:

2 - (1) Any judgment, order or verdict obtained where one party does not appear at the trial may be set aside by the Court, on the application of that party, on such terms as it thinks just.

(2) An application under this rule must be made within 7 days after the trial.

The stay of execution is applied for under Or.45 r.10 which provides as follows:

(10) Without prejudice to Order 47, rule 1, a party against whom a judgment has been given or an order made may apply to the Court for a stay of execution of the judgment or order or other relief on the ground of matters which have occurred since the date of judgment or Order, and the court may by Order grant such relief, and in such terms, as it thinks just.

Background facts

On 5 September 1997 Interlocutory Judgment was entered against the defendants in default of defence with damages to be assessed.

Although served with Notice of Assessment of Damages the applicant failed to appear at the hearing of assessment which took place on 13 May 1999.

Judgment on Assessment of Damages was delivered on 19 November 1999 in favour of the Plaintiff against the Defendants in the sum of $119,724.50 together with costs (inclusive of disbursements) in the sum of $1500.00 making total sum of $121,224.50.

Applicant’s (defendant’s) submission

The applicant admits it was served with the Writ of Summons herein on 24 July 1996 and that it handed the matter to its solicitors Messrs. Sherani & Company who failed to file Defence. There was some confusion as to which insurance company (the New India Assurance Company or the Dominion Insurance Limited) was to indemnify the applicant.

The applicant was served with Interlocutory Judgment on 19 May 1998 and the assessment of damages was heard on 13 May 1999 and a copy judgment was served on it. In this period from May 1998 to November 1999 discussion was still going on between its Solicitors and the two insurance companies.

The applicant further complains that that the quantum of damages assessed is well beyond the range of damages awarded for similar injuries.

In these circumstances it is the learned defence counsel’s submission that there be orders as prayed.

Plaintiff’s submission

In his affidavit in Reply the Plaintiff traced the history of the action in chronological order. The solicitors (Messrs. Sherani & Co) for the defendant (D2) did not respond to Plaintiff’s solicitor’s numerous letters when finally an interlocutory judgment was obtained on 5 September 1997 with damages to be assessed. This judgment was served on the applicant on 19 May 1998. The Deputy Registrar with the defendant’s counsel fixed the date of hearing of damages to 11 March 1999. On that date defendant and its counsel failed to appear and the court adjourned the hearing to 13 May 1999 with Notice of hearing to be served again so that no one has any complaint later on.

When no payment was made under the judgment, Mr. Kapadia, counsel for the Plaintiff, threatened the applicant with winding up proceedings. Whereupon the applicant instituted an action being Civil Action No. 311 of 2000 against the New India Assurance Company Limited for the said judgment sum of $121, 224.50 and also joined the Plaintiff as a party. On 14 September 2000 the case against the Plaintiff was struck out by Scott J with costs against the applicant. That action 311 of 2000 is still pending before the High Court.

Written request for payment was made by Mr. Kapadia and when there was no response he caused a Winding Up Notice dated 13 October 2000 to be served on the Applicant.

Counsel submits that this application is in all the circumstances of this case a further attempt on the part of the applicant to delay payment.

The learned counsel for the Plaintiff submitted that the application is an abuse of the process of the Court. It failed to disclose that several letters were written to its solicitors and they were notified of the winding up Notice intended to be served on the applicant. It also failed to reveal that it launched a Civil Action No. 311 of 2000.

Mr. Kapadia submitted that the applicant had no regard for the Rules of the High Court nor ‘any respect for the justice system’. He said that the applicant had more than ample time to take steps in this matter before the Interlocutory Judgment was obtained. Even between 5 September 1997 to May 1999 it had twenty-one months within which to set aside the judgment if it so wished.

Counsel submitted that the applicant has failed miserably to give a reasonable explanation why it failed to file a Statement of Defence and why it failed to appear at the hearing of assessment of damages. He said that if its solicitors were negligent then they should sue them. They should not hold the plaintiff or the Court responsible for it.

He further submitted that as required by the Rules the application has not been made promptly.

Mr. Kapadia submits that the application should be dismissed.

Consideration of the issues

In this matter the application is the setting aside of the judgment on the assessment of damages and not Interlocutory Judgment by default for the reasons advanced by the applicant.

The application is made under Or.35 r.2 and Or.45 r.10.

This was a regular judgment with proper notice of hearing having been given to the applicant. But it chose not to attend the hearing. A regular judgment obtained by default in this manner should only be set aside where a substantial ground of defence is established by affidavit. It was so held in Trengrove and Others v Inangahua Hospital Board (1956 N.Z.L.R. 587 Supreme Court). There is also a discretion in the Court where the judgment or order is regular and the defendant must as a rule show by affidavit that he has a defence to the action on the merits (19 Halsbury’s Laws of England 2nd Ed. 264). Apart from stating that the amount assessed is excessive there is no substantial or meritorious defence disclosed. If anything, it is a case where the applicant should have appealed against the judgment. The reason given is, in my view, no reason at all to set aside the judgment.

Under both Or.35 and Or.45 there is discretion vested in the Court. On the exercise of discretion the following statements of Lord Wright in Evans v Bartlam ([1937] 2 All E.R. 646 H.L.) (Quoting the words of Bowen L.J. in Gardner v Joy [1885] UKLawRpCh 60; (1885) 29 Ch.D. 50 at 58) are apt:

". . . 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 of 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?"

Lord Wright further quoted the following passage from Kay L.J. in Jenkins v Bushby [1891] 1 Ch.484 at 495:

". . the Court cannot be bound by a previous decision, to exercise its discretion in a particular way, because that would be in effect putting an end to the discretion."

The Court has to see what the justice of the case requires in the particular circumstances and facts of this case. The Court has to see that justice is applied to both parties; should the plaintiff be deprived of his judgment which was obtained regularly or should the applicant/defendant be refused the opportunity to put its case and have the matter heard by way of hearing again. No possible defence has been put forward and therefore would any useful purpose be served in setting aside. On the other hand the Court has to consider how it came about that the applicant found itself saddled with a judgment about which enough has been stated hereabove.

On the facts of this case, as outlined hereabove, it is my firm view that neither Or.35 r.2 nor Or.45 r.10 have any application. No doubt the applicant failed to appear on assessment. The reasons given for not complying with the Rules on their part leaves much to be desired. The explanation is not acceptable at all. This is a case of sheer disregard of the Rules of the Court and when the judgment goes against the applicant it takes its own time in coming to Court with the present application well outside the time limit allowed by Or.35 (2) i.e. 7 days. For its dilatory and irresponsible attitude towards the case, the company cannot now turn around and blame insurance companies and its former lawyers for the difficult situation in which the company finds itself in circumstances such as this. If everyone did what the applicant is now doing there will be no end to setting aside of judgments. In fact this is a frivolous application devoid of all merits and should be dismissed out of hand on the facts.

In the outcome, in completely disregarding the Rules of the Court and making the application after such a long delay which has not been satisfactorily explained particularly after notice of hearing was given and evidence properly adduced, bars the applicant and cause the Court to refuse to exercise its discretion in the matter by granting the application. The circumstances upon which this Summons is based are not, in my view, special circumstances. In talking of delay I am not oblivious of the principle that ‘mere delay is not insuperable objection if a good defence on the merits is shown’ (Hovell v Ngakapa Vol.13 NZLR 1895 298 at 300 S.C.), or that delay alone is not sufficient to deprive the defendant of his right to have the action tried on the merits (Atwood v Chichester [1878] UKLawRpKQB 4; 3 Q.B.D. 722).

In regard to the setting aside of judgment the situation as in the present case arose in The Union Bank of Australia (Limited) and Another v Chesney (NZLR Vol. 3, 1885) where Williams J set out very succinctly matters to be considered in a setting aside application. There it was held that ‘the Court will not set aside or vary the judgment on the ground that the plaintiff had important private business to attend to which prevented his appearance at the trial’. In the present case the affidavit does not show such a state of things as to induce this Court to grant an indulgence to the applicant to the prejudice of the right which the plaintiff has acquired. The default here is not excusable.

I would conclude with the headnote (in part) to the Court of Appeal case of Russell v Cox [1983] NZLR 654 which I consider apt and I have considered the principles stated there in the present application:

The discretion given to the Court or a Judge by R 265 of the Code of Civil Procedure to set aside a judgment that has been obtained by default is unrestricted, apart from the time limit stated in the Rule within which the application must be brought. The test against which an application should be considered is whether it is just in all the circumstances to set aside the judgment. Considerations such as whether the defendant’s failure to appear was excusable, whether the defendant had a substantial ground of defence, whether the plaintiff would suffer irreparable injury if the judgment was set aside, should be treated as tests by which the justice of the case is to be measured. Such considerations should not be treated as rules of law. Here the High Court Judge was entitled to find that the defendant’s default in not appearing to contest the case was inexcusable.

For these reasons the Orders sought in the Summons are refused. I fix costs in the sum of $150.00 in favour of the Plaintiff.

D. Pathik
Puisne Judge

At Suva
15 February 2001