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Mishra Prakash & Associates v Credit Corporation (Fiji) Ltd [2005] FJHC 603; HBA0007.2000 (18 August 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
APPELLATE JURISDICTION

ACTION NO. HBA0007 OF 2000

BETWEEN:

MISHRA PRAKASH & ASSOCIATES
APPELLANT

AND:

CREDIT CORPORATION (FIJI) LIMITED
RESPONDENT

Mr Boseiwaqa for the Appellant
No appearance for the Respondent

Date of Hearing: 13 July 2005
Date of Submission: 21 July 2005
Date of Judgment: 18 August 2005

JUDGMENT OF FINNIGAN J

In this claim a firm of solicitors has sued for its fees. A Magistrate gave judgment by default and later set aside his judgment. The solicitors have appealed and seek reinstatement of the default judgment. The appeal is not contested.

There are two distinct issues to be resolved before the Appellants’ relief can be granted. The first is whether the Magistrate should have set aside the default judgment. The second is whether the solicitors rendered a valid bill.

The only argument I heard was in the written and oral submissions of the Appellant. They are of high quality. I have had to take care in evaluating those detailed submissions, the five grounds of the appeal, the legislation particularly Order XXII rule 11, Order XXXIV rule 3 and Order XI rule 8 of the Magistrates Courts rules, and the judgments of the High Court and the Court of Appeal to which I have been referred.

It can be said there are points of fine distinction arising out of the provisions in the Magistrates Courts rules. This is shown by the judgments, particularly Parmesh Chand –v- A.K. Narayan & Company 43 FLR 33 HC, judgment 31 January 1997 and Subodh Kumar Mishra –v- Car Rentals [Pacific] Ltd 31 FLR 49 [CA], judgment 8 November 1985. In the latter judgment particularly there are several dicta of relevance, some from other earlier authorities. I do not believe I will add anything to the jurisprudence by publishing my own analysis of this judgment.

Suffice it to say that upon first reading the record of the Magistrates Court and the ruling of the Magistrate delivered on 22 September 1999 I formed the preliminary opinion that the Magistrate had been right to set his default judgment aside. The careful study I have been required to make of the Magistrates Courts rules simply set the background against which he made his decision. Then, after reading the authorities referred to I was sure he was right.

Both the judgments above referred to other authorities. In the case before me, when the Defendant/Respondent applied to get aside the default judgment, it showed the defence that it intended to raise on the merits. In Parmesh Chand the Magistrate had refused the Defendant a proper opportunity to disclose a defence on the merits before he exercised his discretion to enter judgment by default. This court held on appeal that this was an improper exercise of the discretion given to the Magistrate by Order VI rule 7. The default judgment in that case therefore was set aside. In doing that, this court relied upon a judgment of the High Court of Australia R –v- House (1936) 55 CLR 499, at pp. 504 and 505 and cited a dictum which [in part] is as follows:

“It may not appear how the primary judge had reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the Appellate Court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that are substantial wrong has i n fact occurred”.

The learned Judge (Lyons J) went on to hold that the words “ if he does not take into account some material consideration” must by definition of Order XV rule 7 refer to the materiality of the Defendant’s proposed defence.

In setting aside his default judgment the Magistrate in the case before me was acting in precise accord with the reasoned principles of that judgment. After hearing detailed argument which is recorded in the record he set aside his default judgment. He did the right thing. One of the reasons that he stated was that the Defendant had disclosed a “prima facie” defence. Another was that he was concerned that he had given judgment for interest. It must be remembered that the Plaintiff/Appellant is a firm of solicitors. There are certain requirements about claims for solicitors' fees. The claim before the Magistrate was for a bill of costs dated 5 November 1997, $4,526.00. The particulars of claim than went on:

“3. The Plaintiff further claims interest thereon at the rate of 12 per centum per annum from the 5^th day of November 1997 to the date of Judgment on the ground the Plaintiff has had to pay the say by way of overdraft interest on the amount to its Bank”.

The Statement of Claim then went on to set out 3 claimed remedies which were [in part] as follows:

(a) Judgment for the sum of $4,526.00 ........

(b) Judgment for interest at the rate of 12 per centum per annum from 5^th day of November 1998 till the date of full payment.

(c) Costs .............

The default judgment had been granted in the following terms:

“I award judgment to the Plaintiff in the sum of $4,631.00 plus interest as prayed”.

This concerned the Magistrate. The prayer was different from the claim. The years were different. There was no limit on the amount of the claim. This may have been in excess of jurisdiction. Who was to say when full payment would be made? This issue was raised in the 3^rd case put before me by Counsel Govind Holdings Ltd –v- Kalia Nand Civil Appeal No. HBA0015 of 1998L, judgment March 2000. There the claim was for $15,000.00 plus interest and this Court held that the added interest took the claim out of jurisdiction. The present case is not quite the same, but the default judgment for interest is without limit and thus exceeds the jurisdiction which is $15,000.00.

In S.K. Mishra –v- Car Rentals the Court of Appeal considered the meaning of a “liquated demand”. It referred to 1882 and 1908 authorities. For present purposes a liquidated demand is ascertainable as a mere matter of arithmetic. An unliquidated demand requires investigation beyond mere calculation. The Magistrate was asked to consider whether his default judgment had been for a liquidated sum. He was right to consider he may not have done the right thing when he gave default judgment.

In my opinion this was clearly a case where the Magistrate first tried to do justice according to his jurisdiction by giving default judgment and thereafter for sound principled reason “let the Defendant in”. I am bound to dismiss this appeal against his decision.

I am very grateful to Counsel for informing me about the statutory provisions governing this particular bill of costs and for providing me at the Appellant’s expense with a full copy of the current Law Practitioners Act 1998. There may be interesting points to consider because the bill of costs was rendered on 5 November 1997, the new act commenced on 1 January 1998 and the present action was issued on 30 November 1998. I must leave that now to the Appellant in proving its claim in the Magistrates Court.

With that in mind and noting the Respondent took no steps in the appeal I make no order for costs.

D.D. Finnigan
JUDGE

At Lautoka
18 August 2005.