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Automart Ltd v Khan [2005] FJHC 669; HBC0309.2004L (14 March 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0309 OF 2004L

BETWEEN:

AUTOMART LIMITED
Plaintiff

AND:

MOHAMMED JANIF KHAN
1st Defendant

AND:

PINE LANDOWNERS COMPANY LIMITED
2nd Defendant

Counsel for the Plaintiff: Mr. F. Khan with Ms. N. Khan
Counsel for the Defendants: Mr. T. Vakalalabure

Date of Hearing & Ruling: 14 March 2005

EXTEMPORE RULING

The defendants by Summons filed on the 23^rd November 2004 seek to set aside the default judgments entered on the 5^th and 9^th November 2004 on the basis that the judgment entered by default is irregular and further that the defendants have a defence on the merits. In support of the Summons, the defendants rely upon an affidavit of the 1^st defendant, Mohammed Janif Khan, sworn on the 17^th November 2004 and an affidavit of Thomas Naua sworn on the 17^th November 2004.

The application is opposed.

The plaintiff relies upon an affidavit of Hasmukh Patel sworn on the 14^th March 2005. The plaintiff in this matter issued a writ of summons on the 8^th October 2004 wherein damages was sought as a result, an alleged motor vehicle accident which occurred on the 24^th September 2003.

The service of the writ of summons was effected on the 1^st defendant on the 22^nd October 2004 and the 2^nd defendant on the 20^th October 2004.

The default judgment was entered against the 1^st defendant on the 9^th November 2004 and against the 2^nd defendant on the 5^th November 2004, both dates being very shortly after the expiration of 14 days from the date of service of the writ of summons. As is indicated earlier, the summons to set aside the default judgment was filed on the 22^nd November 2004.

The principles relevant to the setting aside of the default judgment have been considered by this court on numerous occasions. I have been referred by the defendant to the decision of Mr. Justice Fatiaki, as he then was, on the 22^nd July 1988 in Fiji National Provident Fund v Shiri Dutt where His Lordship sets forth:

“The issue is to be considered by the court in the exercise of a discretion to set aside a judgment.”

Those tests are there set out as being:

(a) whether the defendant has a substantial ground of defence to the action;

(b) whether the defendant has a satisfactory explanation for his failure to enter an appearance to the writ; and

(c) whether the plaintiff will suffer irreparable harm if the judgment is set aside.

Hardie-Boys J. said in Russell v Cox [1983] NZLA 654 at 659:

“The court has a discretion that has been whether it is just in all circumstances to set the judgment aside and if so, where the term should be imposed. The justice of the case is generally to be measured against 3 factors although they are not exclusive and the relative weight to be given to each will vary according to the circumstances. These factors are: whether the delay has been reasonably explained, secondly substantial ground of defence has been disclosed and thirdly, the plaintiff will suffer irreparable injury if the judgment is set aside.”

The defendants refer the court to Evans v Bartlam [1937] 2 All ER 646 at 651 where Lord Atkins stated that the applicant:

“Must produce to the court evidence he has a prima facie defence.”

It is submitted on behalf of the defendant/applicant that not only should the default judgment be set aside on the basis detailed but further they should be set aside as it is irregular, in that the plaintiff has and had at all relevant times no locus standi to bring the action before the court in that it was not the owner of the subject vehicle.

In support of this argument, the defendants rely upon the provisions of section 20 of the Sale of Goods Act and the provisions of section 51(c) of the Land Transport Act.

The plaintiff, it is acknowledged was not the registered owner of the vehicle at the relevant time.

The defendants further submit that a defence on the merits is disclosed in the affidavit in support of the summons and that such a defence includes the locus standi issue detailed above together with the issues raised by the 1^st defendant of him suffering a sneezing attack immediately prior to the accident.

Counsel for the Plaintiff submits that the defence of the sneezing attack is a recent invention and that it was not previously raised and that prior to the writ of summons being issued, the issue between the parties concerned only the knock for knock arrangement between insurers in this country.

Lord Denning MR in Burns vs Kondel [1971] 1 Lloyd’s Rep. 554 at 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.”

Whether or not the judgment was regularly entered is not something I need determine to determine this application. The test as expressed by Lord Denning, is in my opinion met by the several defences that are raised in the course of this application. All of which in my opinion go towards disclosing and arguable or triable issue between the parties. It is not necessary for the court to consider the ultimate outcome of those issues but merely to consider whether or not they are sufficient to create an arguable or triable issue.

The other matters for the consideration of the court in the exercise of the discretion to set aside the judgment or whether there is a satisfactory explanation for the failure to enter an appearance to the writ which might otherwise be expressed as a satisfactory explanation for delay. The delay in this matter is not extensive and in my opinion, there is nothing to preclude the exercise of the discretion which would arise under that head of consideration.

The last item for consideration is whether the plaintiff will suffer irreparable harm if the judgment be set aside. The plaintiff has not put anything before the court to indicate that it will suffer any harm if the judgment be set aside and in that regard, I note that the judgment was entered in November 2004 and this application is being dealt with in March 2005.

It is relevant for the court to consider the terms upon which the judgment is to be set aside. Those conditions would normally include an order for costs in favour of the plaintiff and a strict timetable for the filing of any notice of grounds of defence or statement of defence.

As the issues for consideration in the exercise of the discretion are indeed well known, I think any order for costs must be significantly ameliorated in circumstances where an application such as this is required to be litigated.

The Orders of the Court therefore will be:

1. The default judgments dated the 5^th and 9^th November 2004 be set aside;

2. The defendants to file and serve a statement of defence within 14 days;

3. The defendants are to pay the plaintiff’s costs assessed in the sum of Two Hundred Dollars ($200.00).
   

JOHN CONNORS

JUDGE

At Lautoka

14 March 2005