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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION
CIVIL ACTION NO: 16 OF 2012
BETWEEN:
SATYA GOUNDER of Siberia, Labasa, Labourer
PLAINTIFF
AND:
RAMES CHANDAR GOUNDER of 16 Mali Place, Suva
DEFENDANT
Appearances: Mr S Prasad of S Prasad Esq, Solicitors for the Plaintiff;
Mr. Sharma of Samusamuvodre & Sharma for the defendant
RULING
Background
1. The plaintiff and the defendant are brothers. On the death of their father Krishna Gounder in 1991, their mother Ramlamma became the administratrix of the estate. They were both beneficiaries of their father's estate.
2. By a deed of trust executed on the 4th August 2000 the defendant became the trustee of their father's estate. He and the plaintiff became beneficiaries of their late father's estate in equal shares. The estate consists of a portion of crown land with an area of 2.5312 Hectares.
3. On the 3rd October 2006 the brothers agree to sell the land for a consideration of $115,000:00. The proceeds were to be divided between the parties with the defendant receiving $90,000:00 and the plaintiff to receive $25,000:00.
4. To date the defendant still owes the plaintiff the sum of $15,000 from the proceeds of the sale. It is the non-payment of this sum which is the basis of the claim.
5. Ainterlocutory judgment for un-liquidated damages was obtained by the plaintiff on the 8 August 2012 with damages to be assessed. Notice of the assessment of damages was then served on the defendant. No effort was made by the defendant to defend the action notwithstanding that the plaintiff had gone to India for open heart surgery in August 2013 and that he was away for several months. The damages was assessed and final judgment granted in October 2014.
6. An application to set aside default judgment under Order 13 rule 10 was filed in June of this year and this is the matter before the Court.
The Application
7. The motion to set aside default judgment was supported by an affidavit which states so far as is relevant the following. Firstly that he acknowledged being served with the writ of summons sometimes in 2012. That he thereafter contacted the plaintiff in the hope that they could settle the matter amicably. He also stated that he contacted the plaintiff's solicitor about the possibility of settling the matter. That he was surprised when served with the order on judgment and now wishes to defend the matter. He was advised that he has a good defence on the merit in that the deed of trust entered into between himself and his late mother and brother was invalid in that the consent of the not obtained prior to its execution.
8. The application is opposed by the plaintiff who states that the defendant's assertion that they were going to settle the matter was false. That the defendant did call the plaintiff but the plaintiff indicated that the only way the matter could be settled is for the defendant to pay the plaintiff what was owed to him from the sale of theland. That no consent of the director of lands was necessary for them to enter into the family deed of trust, and therefore this assertion forming the basis of his defence on the merit is wrong. That he deceitfully made their mother sign a deed of trust whilst she was in Suva in August 2000 making himself the sole trustee of the estate and then making arrangement to sell the property. That the defendant has no defence on the merits and his application ought to be denied.
Determination
9. The law relating to setting aside of default judgments are well settled. If the default judgment was regularly entered then the onus is on the defendant to prove on affidavit evidence that it has a meritorious defence. If however the default judgment was irregularly obtained then the defendant has a right to have the default judgment set aside. This position however is still subject, in my view, on whether there is a defence on the merit for it is possible to regularise the irregularity then obtain default judgment if there was no defence on the merit.
10. This application is better made under Order 19 rule 9 then under Order 13 rule 10 as the default judgment was obtained on default of the defendant filing a defence. Where there has been a default on the pleadings and judgment in default was obtained judgment can still be set aside under Order 19 rule 9.
11. Order 19 refers to default judgments obtained in various classes of claims, from liquidated, un-liquidated, detention of goods, possession of land, mixed claims or other claims. Order 19 rule 9 allows the setting aside of this claims provided there is a defence on the merits. This rule states:-
The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order.
12. Justice Pathik in Bank of Hawaii-v-Reynolds [1997] FJHC 173 stated that:-
"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.
13. The Courts discretion is exercised according to the guidelines set out in the Saudi Eagle case (1986) 2Lloyds Rep. CA. For the Court to set aside a regular judgment:
"it is an (almost) inflexible rule that there must be an affidavit of merits i.e. an affidavit stating facts showing a defence on the merits (Farden -v- Richter[1889] UKLawRpKQB 79; (1889) 23] Q.B.D. 124)" The Supreme Court Practice 1993 Or 13 r. 9 p. 137).
14. The Supreme Court Practice further states that:
"... the major consideration is whether 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, and may therefore be relevant to the credibility of his defence and the way in which the Court should exercise its discretion."
15. On whether or not the defendant has shown through his affidavit a defence on the merits Lord Denning in Burns vKnodel (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 tri-able issue."
16. The question now is has the defendant shown a meritorious defence in his affidavit in support of the application which shows an arguable or tri-able issue. In the defendants affidavit in support he provides the following arguable issues as sufficient to determine that he has a good defence on the merits.
17. The first is contained in paragraphs 11 and 12 which states:-
11: That I verily believe and informed by my solicitors that the plaintiffs claim arises out of the sale of Crown Lease No. 10198 land (sic) known as Labasa and Naiyaca Tiri (part of) containing an area of 4.1975 Hectares.
12: That the defendants claim is based on the sale of the Crown lease Land and the proceeds the defendant is entitled to and therefore this constitutes to dealing of Crown Lease land and therefore the plaintiff was to obtain prior consent from the Director of Lands to institute the proceedings.
18. The defendant in its submission did not elaborate or enlighten us any further as to the relevance of the consent required to be obtained by the plaintiff from the director of lands before instituting these proceedings. This is so because these proceedings relate to the consideration of the sale of land which is no longer in their possession or control and it is the distribution of the consideration between the parties which formed the basis of the claim. Any consent has to be obtained before the sale of the land not when you argue about the distribution of the consideration after the sale. Further I am not satisfied that the institution of the claim by the plaintiff constitutes a dealing of crown lease land. It is clearly not a dealing in the land.
19. The second issue proposed by the defendant as sufficient to disclose an arguable case is contained in paragraphs 13 and 14 of the affidavit. These paragraphs state:-
13. That I verily believe and informed by my solicitors that the plaintiff is relying on the Deed of Trust dated 4th day of August, 2000 and in 2006 claiming the entitlements from the sale of Crown Lease land, however, there was no consent obtain for the said Deed of Trust.
14. That I verily believe and informed by my solicitors that the plaintiff failed to obtain consent on the Deed of Trust and therefore without the consent of the director of Lands, the Deed is unenforceable.
20. What does not appear to make sense is the logic behind the assertions contained in the above paragraphs. The defendant himself benefitted from the deed of trust which he now claims to be invalid. It was the terms of the deed of trust which made him one of the trustee and which enabled him to sell the land. How could he now rely on its validity or otherwise as the basis upon which it could not be enforced. In any event I agree with the plaintiff's submission that the consent of the director lands is not required to enable a family who hold or own crown land to enter into a deed of trust touching on a deceased estate.
21. The only matter in which a deed of trust was questioned regarding the necessary consent was that of Gallagher -v- Newman (2004) FJSC 5 but that matter relates more to the consent of the Minister of Finance under the Exchange Control Act Cap. 211. It was held in the above matter that the Deed of Trust constituted a settlement which required the permission of the Minister but which was capable of validation. It further involved a person who was not a resident of Fiji at the time at which the deed of trust was entered into, that issue does not arise here.
22. The third issue proposed by the defendant as sufficient to determine that he has a defence on merit is contained in paragraph 15. This paragraph states:
15. That I verily believe and informed by my solicitors that I have a arguable defense but I didn't want to proceed in prosecuting my defense as I have advised Mr Prasad that this is a family matter and should be settled. I have also advised Mr Prasad that I have given the f following monies and in kind to the defendants which are as follows:
23. He then list a number of expenses including the sum of $12,000:00 used to cover their mother's funeral expenses and legal fees. His attempts to settle the matter by contacting the plaintiff's solicitor does not give rise to a defence on merit. Although this fact is denied by the plaintiff this paragraph can be seen as an admittance and the delay in filing a defence further makes his position untenable. The plaintiff in its submission states that the defendant in his affidavit falsely asserts that he had spoken to the plaintiff when nothing of that sort was agreed. This assertion itself would bring into question the credibility of the defendant. Credibility plays an important part in the exercise of the Court's discretion in setting aside a default judgment regularly entered.
24. This paragraph relates more to the quantum not on whether the default judgment should be set aside and for that purpose I would allow the application in part notwithstanding the fact that the defendant was served with the notice to assess damages but did not attend Court.
Conclusion
25. The Court is therefore not satisfied that the defendant has a defence on merit as stated in its affidavit in support of the application.
Therefore the default judgment entered into against the defendant on the 2 August 2012 remains.
26. However the judgment sum of $19,360:00 is set aside on the following condition that both parties are to attend before the Master for the purpose of mediation to settle the amount payable to the plaintiff.
27. That the defendant is to further pay the costs of this application which is summarily assessed at $1000:00 to be paid before mediation failing which the judgment order remains.
Orders
H. A. Robinson
MASTER
High Court, Labasa
20thOctober 2015
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