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Kay v Guitry [2014] FJHC 89; Civil Action 6.2011 (25 February 2014)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

Civil Action No: 6 of 2011

BETWEEN:

RONALD NEAL KAY of 2/53 Baan Dusitia,
Tambon Tub Tai, Soi 112, Hua Hin, Prachuap Khiri Khan 77110 Thailand and of Taveuni Fiji.
PLAINTIFF

AND:

ROBERT WILFRED MAYNARD GUITRY of 651
Overdale Road, RD 3 Putaruru, New Zealand.
1st DEFENDANT

AND:

VALE CADRA NA VULA 2008 a limited
liability company having its registered office at Colonial Plaza, Namaka, Nadi.
2nd DEFENDANT

Appearances: Mr. Kohli for O’Driscoll & Co. for the Plaintiff
No Appearance for the Defendant

RULING

Introduction

This is an application by the Defendants by notice of motion filed on the 20 November 2012 seeking to set aside the default judgement against it obtained on the 18 May and the 15 of August 2011. The application was supported by an affidavit deposed by a Michael Ng sworn on 19 November 2012.

The Background

By writ of summons filed on the 3rd March 2011 the Plaintiff claimed from the Defendants damages for breach of contract arising from the sale of a website and the sale of the Plaintiff’s property at Taveuni.

The service of the writs were acknowledged by the Defendants solicitors Reddy Barristers & Solicitors on the 3rd May for the 2nd Defendant and the 5th May for the 1st Defendant. No defence being filed within the prescribed time for both the Defendants the Plaintiff obtained default judgment against the 2nd Defendant on the 17 May and the 15 August for the 1st Defendant. For over twelve months this matter did not move at all until the Defendants by motion dated 20 November 2012 made an application to set aside the default judgment.

The Application

The grounds upon which the application was made is contained in the affidavit of Michael Ng. Annexed in the said affidavit is an e-mail copy of the affidavit of the 1st Defendant. The application relied on the 1st Defendant’s affidavit. Two points were raised and these were that there was no leave granted to the Plaintiff to issue the writ outside of this jurisdiction and the second and most importantly that the matters raised in this action has already been dealt with in Lautoka High Court Civil Action No. 18 of 2009 and therefore this claim is res judicata. On the first point the Defendant is of the view that without leave the default judgement is irregular. In the Lautoka action the 2nd Defendant in this action is the Plaintiff and the Plaintiff in this action the Defendant. The matters raised there appear to be the same as raised in this action and that is in respect of the breach of contract for the sale of a portion of land in Taveuni described on Certificate of Title No: 11335. Annexed to the affidavit in support is a “proposed statement of defence” which avers that there was judgement obtained against the Plaintiff in the Lautoka matter for breach of contract of the same piece of land the subject of this action.

The Plaintiff’s reply is contained in the affidavit of one Christina Lockington, Legal Secretary who states that she is authorised to make the affidavit on behalf of the Plaintiff. She deposed firstly that leave was obtained to serve the writ out of the jurisdiction and secondly that she is of the view that notwithstanding that there was judgement against the Plaintiff in the Lautoka matter there is nothing stopping the Plaintiff from raising his own claim.

When this application came for hearing in July of last year Counsel for the Plaintiff said in Court that they had discussed having the hearing by submissions. Both had agreed that the Court could rule by referring to their respective submissions. They were then given 28 days to file submissions and the Court indicated that a ruling would be given on notice subject to the receipt of the submissions. To date no submissions have been received from either parties and notwithstanding this sad state of affairs this is the ruling on the material put before the Court.

Determination

The default judgements against the 1st Defendant which is sought to be set aside are:-

1. Judgement in a sum to be assessed against the 1st Defendant for breach of website sale agreement;

2. Damages in the sum of USD$36,000:00;

3. Costs to be assessed; and

4. Interests to be assessed.

The default judgements against the 2nd Defendant to be set aside are:-

1. Damages in the sum of $15,000:00 for wasted legal fees;

2. Damages in the sum of USD$36,000:00 for lost rental income;

3. Special damages in the sum of $20,000:00 for repairs carried out at the 2nd Defendant’s request;

4. General damages to be assessed for breach of contract against the 2nd Defendant in respect of the sale of Certificate of Title No; 11335;

5. Costs to be assessed; and

6. Interest to be assessed.

A short chronology will show that the writ was issued on 3rd March 2011 and an application to serve the 1st Defendant outside the jurisdiction and by registered mail was made on the 3rd March and the order was granted on the 9th March. The document was sent by registered mail to the 1st Defendant on the 26 April 2011 and the affidavit of service filed on the 9 May 2011. The 2nd Defendant was served on the 31 March 2011 and the affidavit of service filed on the 9 May 2011. Therefore in respect of the first point raised by the 1st Defendant regarding the fact that he was not served is incorrect. Service in my view was correctly affected in accordance with the Court Order as shown by the affidavit of service. In fact both the Defendants were properly served. When there was no defence the Plaintiff obtained default judgement against the Defendants. The claims were clearly for breaches of contract arising from the sale of a piece of land situated at Taveuni and for the sale of a web-site. The other claims were for damages for wasted legal fees and loss of rental income and special damages for repairs to a property situated on the land the subject of the breach.

It is trite law that default judgements obtained irregularly ought to be set aside by right. In the case of a regular judgement however it is an almost inflexible rule that if there is a defence on merits the judgement can be set aside on conditions. Hence an application to set aside must be supported by an affidavit stating a defence on merit or that there is an arguable case of a triable issue; (see paragraph 403 of Halsbury’s Laws of England, Vol. 37)

The Supreme Court Practice 1999 Volume 1 at page 157 states the requirement this way at paragraph 13/9/7:

"Regular Judgment- If the judgement is regular, then it is an (almost) inflexible rule that there must be an affidavit of merits, i.e. an affidavit stating the facts showing a defence on the merits (Farden v. Ritcher [1889] UKLawRpKQB 79; (1889) 23 Q.B.D. 124. "At any rate where such an application is not thus supported, it ought not to be granted except for some very sufficient reason", per Huddlestone, B., ibid. P.129, approving Hopton v. Robertson [1884] W.N. 77, reprinted 23 Q.B.D. 126 n.;and see Richardson v. Howell (1883) 8 T.L.R. 445; and Watt v. Barnett [1878] UKLawRpKQB 21; (1878) 3 Q.B.D. 183 at 363).

For the purpose of setting aside a default judgement, the defendant must show that he has a meritorious defence. For the meaning of this expression see Alpine Bulk Transport Co. Inc. V. Saudi Eagle Shipping Co. Inc., The Saudi Eagle [1986] 2 Lloyd's Rep. 221, CA, and note 13/9/18, "Discretionary powers of the Court", below. On the application to set aside a default judgement the major consideration is whether the defendant has disclosed a defence on the merits, and this transcends any reason 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; (1986) The Times, April 23, CA). The facts that he has told lie in seeking to explain the delay, however, may affect his credibility, and may therefore be relevant to the credibility of his defence and the way in which the court should exercise its discretion (see para. 13/9/18, below).

It is clear that the judgements was obtained regularly in that all the procedural requirement necessary for the granting of a default judgement was met, what is unclear though is whether the default judgement ought to be interlocutory in nature and not final. To determine that depends on whether the damages sought were liquidated or unliquidated. Our rules however do not define what is liquidated or unliquidated. If the amount claimed could be ascertained quickly the claim is said to be liquidated. Obviously a claim for damages for breach of contract is not liquidated because it has to be further proved. There were four final judgements given for damages for amounts which in my view should be interlocutory first and they were; damages for $36,000:0 against the 1st Defendant and damages under items (1), (2) and (3) for the 2nd Defendant. What this means in effect is that all the damages should be assessed even the specific damages claimed for the repairs of the house must first be obtained by sworn evidence. Only then can final judgements be given for the amount claimed, this is so because in the absence of the defendant at the time of assessment to refute the claim the Court would have no option but to accept the sworn evidence provided to support the claim. Therefore all the claims are remain un-liquidated until assessed therefore the judgements given ought to interlocutory in nature.

Order 19 rule 3 provides:-

3. Where the plaintiff's claim against a defendant is for unliquidated damages only, then, if that defendant fails to serve a defence on the plaintiff, the plaintiff may, after the expiration of the period fixed by or under these Rules for service of the defence, enter interlocutory judgment against that defendant for damages to be assessed and costs, and proceed with the action against the other defendants, if any.

Apart from the above and perhaps the most important consideration, is whether the previous action in Lautoka Civil Action No: 18 of 2009 made this action res judicata as claimed by the defendants. The only defence to this state of affairs appears to be the view that notwithstanding the default judgement there is nothing stopping the Plaintiff pursuing its own claim. This response in my view is insufficient to clarify this matter. This issue alone is sufficient for me to set aside the default judgement because it raises serious issues. These issues relates to the very purpose upon which matters or causes of action ought to have determined in Courts within the jurisdiction or domain in which it occurs. Without the defendant informing this Court of the decision previously obtained in the Lautoka Court in an action raising the same issues, two possible and conflicting outcome could arise causing undue embarrassment to the Courts. This is mischievous to say the least. The Plaintiff may argue that there is another defendant in this action and that for this alone the action is different but this does not hide the fact that the cause of action against the 1st Defendant has already been dealt with or is on foot. This also gives rise to the notion that the Plaintiff may not have been completely satisfied with the results obtained in that Court and seeks redress in this Court. This issue should be clarified before we proceed any further with this matter.

Conclusion

In conclusion the Court finds that notwithstanding that the default judgement was obtained regularly in that all the procedural requirements were met sufficient for the Plaintiff to apply for a default judgement the judgement ought to have been interlocutory in the first instance with damages to be assessed. To cure this, a further application for default judgement need to be obtained but this however has been superseded by the need to clarify the issue of res judicata raised by the 1st defendant regarding the claim of breach of contract regarding the sale of CT 11335 at Taveuni. For those reasons the default judgement obtained is wholly set aside with the following conditions, that the Defendants to pay costs summarily assessed as $600:00 to the Plaintiff and that both Defendants to file their defence within 14 days of this ruling.

Orders

1. That the Default judgements obtained against both defendants be wholly set aside on the following conditions:-

(i). That both Defendants file their defence within 14 days from the date of this ruling; and

(ii). That both Defendants pay the Plaintiff costs summarily assessed at $800:00 in total, I.e. $400:00 each.

25 February 2014

H A Robinson
Master, LABASA

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