IN THE HIGH COURT OF FIJI
WESTERN DIVISION
AT LAUTOKA

CIVIL JURISDICTION

CIVIL ACTION NO. HBC 93 of 2014

BETWEEN:

NAZRA BEGUM as Executrix & Trustee of the Estate of Mohammed Sadiq of Lautoka.
PLAINTIFF

AND:

ITAUKEI LAND TRUST BOARD formerly known as Native Land Trust Board, a body corporate having its registered office at 431 Victoria Parade, Suva.
DEFENDANT

(Ms.) Natasha Feroz Khan for the Plaintiff.
Mr. Inoke Buli Lutumailagi for the Defendant.

Date of Hearing: - 15th July 2015 
Date of Ruling : - 30th October 2015 

RULING

(A)	INTRODUCTION
(1)	The matter before me stems from the "Notice of Motion" filed by the Defendant pursuant to Order 19, rule (9) of the High Court Rules 1988 and the inherent jurisdiction of the Court seeking the grant of the following Orders;

[1] THAT there be a stay of execution of the Interlocutory Judgment entered against the Defendant on the 13th day of February, 2015.

[2] THAT the Interlocutory Judgment and Order dated 21st January 2015, so entered in this matter be set aside and the Defendant be given unconditional leave to file its statement of defence out of time and defend the within action.

[3] THAT the costs of the Application be paid by the Plaintiff.

[4] AND OTHER RELIEF as this Honourable Court deems just and expedient to make in the circumstances.

(2)	The "Notice of Motion" is supported by an Affidavit sworn by "Neli Turagabeci", the Legal Assistant, in the employment of the Defendant.

(3)	The application is strongly resisted by the Plaintiff. The Plaintiff filed an Affidavit in Opposition in support of the opposition. Regrettably, the Defendant did not file an Affidavit in reply.

(4)	The Plaintiff and the Defendant were heard on the "Notice of Motion". They made oral submissions to Court. In addition to oral submissions, the Defendant filed a careful and comprehensive written submission for which I am most grateful.

(B)	BACKGROUND

(1)	The Plaintiff is the sole executrix and Trustee of the Estate of "Mohammed Sadiq", who died on 13th October, 2007.

(2)	The Defendant is the custodian of all iTaukei Land.

(3)	To give the whole picture of the action, I can do no better than set out hereunder, the main averments/assertions of the Statement of Claim.

(4)	The Plaintiff in her Statement of Claim pleads inter alia (so far as relevant);

Para 3 THE deceased, had an iTaukei lease which expired on or about, 31st December, 1999, a further grace period of one year was given to him. In the interim he negotiated a new lease from the Defendant and paid the appropriate fee, for the same piece of land.

4 HOWEVER, despite the grace period and acceptance of new lease fee, the Defendant issued the same real estate being Native Lease number 25400, Lot 1 on ND 3296 in the Tikina of Vuda in the Province of Ba having an area of 11 acres 2 roods and 16 perches to a 3rd party.

5. THE Defendant thereafter offered to lease the deceased a piece of real estate in its proposed Waiyavi Subdivision together with $40,000.00 to build a house and back pay of rent that the deceased would have to incur till such time as his new house in the said proposed subdivision would be completed. The said offer was accepted by the deceased.

6. THE deceased on 17th April, 2002 paid new lease application for Lots 1 & 2 on ND 4426 being the Defendant's proposed Waiyavi Subdivision, hereinafter referred to as the said property.

7. THE Defendant collected rent for the years 2002 till 2007 for the said property from the deceased.

8. THE deceased and the Defendant entered into an Agreement to lease on 6th October, 2004 wherein the said property is described as Waiyavi S/D STG 1 Lot 2 in the Tikina of Vitogo in the province of Ba having an area of 1100 square meters. Some conditions of the agreement to lease are:-

i)	the said lease was for a period of 50 years with effect from 1st January, 2002;

ii)	the yearly rental payable on the said lease was $200.00 due payable on the execution of the said lease;

iii)	all development in relation to the land had to have the prior consent of the Defendant in writing;

iv)	within 2 years from 1st January, 2002, the deceased had to erect a building for residential purpose on the land with the prior written consent of the Defendant and in compliance with the provisions of the Public Health Regulations and the Town Planning Regulations;

v)	the Defendant will allow the deceased quite enjoyment of the land provided that the deceased complies with the conditions of the lease;

vi)	the Defendant has the right to terminate the lease with the provisions of iTaukei Land Trust (Lease and Licences) Regulations; and

vii)	the deceased within 3 months of receiving a written notice from the Defendant had to engage the services of a registered surveyor and provide evidence to the Defendant that such a surveyor had been so appointed. The deceased was to also execute a lease in conformity with the agreement to lease. Failure to comply with these conditions would mean that the agreement to lease would cease to have effect.

10. ON 13th September, 2007, the Defendant issued the deceased a re-entry notice. The said notice although dated 13th September, 2007 was posted on 15th October, 2007.

11. THE deceased died on 13th October, 2007.

12. The said purported notice of re-entry alleged as follows:-

i)	he failed to provide a plan of dwelling house in compliance with Town Planning Regulation to the Defendant for approval within two (2) years from 1st January, 2002.

ii)	he failed to lodge his application together with plans of his proposed residence to Lautoka City Council to obtain building permit within 2 years from 1st January, 2002.

iii)	he had failed to build a house on the land within the minimum external floor area of 74.32m² within 2 years from 1st January, 2002 and

iv)	he had failed to engage the services of a surveyor and produce evidence to the Defendant that he had engaged the services of a surveyor and that he had not executed the lease in terms of the Agreement to lease.

16. The Defendant on 9th September, 2009 issued a lease being Native Lease Number 29095 over the entire proposed Waiyavi Subdivision to the Punja Charity Trust. The same being a lease for Religious purposes.

 1st Cause of Action:-

17. The deceased could not have complied with clause 2 (k) of the Agreement to Lease and erected a building for residential purpose in accordance with the provisions of the Public Health Regulations, Town Planning Regulations and with the written approval of the Defendant, for reasons that:-

i)	the Defendant were to have the Scheme Plan for the proposed subdivision approved by the Director of Town and Country Planning;

ii)	the Scheme Plan for the proposed subdivision was not and has never been approved by the Director for Town and Country Planning.

iii)	After the approval of the said Scheme Plan, the Defendant was to send a notice in writing to the Plaintiff requiring him to engage the services of a registered surveyor to carry out the survey of the land and to show evidence of the surveyors engagement;

iv)	the Defendant did not send any such notice to the deceased.

v)	no building approval in accordance with the Public Health Regulation and Town Planning Regulation can be obtained without survey and subdivision first having taken place; and

vi)	No building in the municipality of Lautoka can be erected without a Building permit being obtained from the Lautoka City Council.

19. The Defendants were in breach of its own responsibility and duty under the Agreement to Lease and as such could not rely on clause 2(k) to issue a re-entry notice to the deceased.

20. The Defendant's being in the breach of the Agreement to Lease could not then insist on strict compliance by the deceased.

 2nd Cause of Action:-

22. Prior to the deceased agreeing to take up lease of the said land, the Defendant in order to induce the deceased to agree to forgo any claim he may have had against the Defendant in regard accepting new lease payment and paying a surveyor for subdivision of Native Lease Number 25400, represented to the deceased that they would provide him with an alternate and better lease in its proposed new Waiyavi subdivision.

23. In reliance on the Defendant's said representation, the Plaintiff relinquished his claim against the Defendant and accepted to enter into a lease over a Lot in the proposed Waiyavi Sub-division.

24. In fact the said representation was not true.

25. The said representation was made fraudulently in that the Defendant knew that it was false or made it recklessly not caring whether it was true or false. In that the Defendant did not proceed with the proposed Waiyavi Subdivision and leased the entire Lot to another 3rd Party.

(5)	Wherefore, the Plaintiff prays for the following Orders;

(a)	A declaration that the Defendant could not have issued the deceased with the re-entry notice in the said circumstances.

(b)	Compensation at the current market value of the real estate subject to the Agreement to Lease between the deceased and the Defendant.

(c)	Damages (Special, General, Exemplary and Punitive) together with interest.

(d)	Rental costs incurred by the Plaintiff from 25th January 2002 till the date of judgment.

(e)	Interest on the rental costs.

(f)	$40,000.00 for reinstatement of building costs together with interest from 25th January, 2002.

Alternatively

Current reinstatement value of the deceased's Vuda property

(g)	Such further or other relief as seems just.

(h)	Costs on Solicitor – Client indemnity basis.

(C)	THE STATUS OF THE SUBSTANTIVE MATTER

(1)	The Plaintiff instituted the proceedings against the Defendant on 10th June 2014.

(2)	The pleadings in the action begun by the Writ are closed.

(3)	On 21st August, 2014, the Plaintiff filed Summons for Directions.

(4)	Upon reading the Summons for Directions and upon hearing both Counsel, the Court made Orders in terms of Summons for Directions on 11th September 2014. Accordingly, the Plaintiff filed her Affidavit verifying List of Documents on 11th November 2014. 

On 17th November 2014, the Defendant was granted further 14 days to file its Affidavit verifying List of Documents.

On 02nd December 2014, the Court granted further 14 days for the Defendant to file and serve the Affidavit verifying List of Documents.

Moreover, the Court made an Unless Order requiring the Defendant to file and serve the Affidavit verifying List of Documents.

On 21st January, 2015, the Court struck out the Statement of Defence on the basis that the Defendant failed to file and serve the Affidavit verifying List of Documents.

(5)	On 10th February 2015, the Plaintiff entered Interlocutory Judgment against the Defendant. The Judgment was sealed on 13th February 2015.

(6)	The Defendant filed an application by way Summons for stay of execution on 17th February 2015 and an application by way of Summons for leave to appeal on 06th March 2015. The said applications were dismissed on 06th March 2015 and 23rd March 2015, respectively, since the applications were misconceived. 

(7)	I note without comment that almost 2 months have elapsed since the applications for stay of execution and leave to appeal were struck out. Nearly two months later, the Defendant filed a Notice of Motion to set aside the default Judgment.

(D)	THE DEFENDANT'S NOTICE OF MOTION TO SET ASIDE THE DEFAULT JUDGMENT

(1)	The Defendant's Notice of Motion is supported by an Affidavit sworn by "Neli Turagabeci", the Legal Assistant in the employment of the Defendant, which is substantially as follows (so far as relevant);

Para 7. THAT I am advised by the Board's Legal Officer and verily believe that the averred claim was served on the Board on 25th June, 2014 and the Board had 14 days thereafter until 10th July, 2014 to file an acknowledgement of service and 14 days thereafter until 24th July, 2014 to file a statement of defence. Attached herein and marked as annexure "A" is a true copy of the said summons showing the date of service being 25th June, 2014.

 8. THAT I am advised by the Board's Legal Officer and verily believe that the Board filed its 'acknowledgment of service' on 2nd July, 2014 and its 'statement of defence' on 22nd July, 2014 within the prescribed time. Attached herein and marked as annexure "B" is a true copy of the averred 'acknowledgment of service' and marked as annexure "C" is a true copy of the averred statement of defence.

 9. THAT I am advised by the Board's Legal Officer and verily believe that Orders in terms of the 'Summons for Directions' that was filed on 21st August, 2014 were thereafter granted for the parties to file their respective affidavit verifying list of documents, attend to discovery, and, convene the pre-trial conference.

10. THAT I am advised by the Board's Legal Officer and verily believe that the Board was not able to comply with the averred directions and file its affidavit verifying list of documents within the time thereafter allocated for the following reasons:

a)	the said Legal Officer was temporarily transferred to Suva from 21st October to 12th December, 2014, to relieve the then resigned former Manager Legal.

b)	the said legal officer thereby assumed additional responsibilities without any additional staff or assistance.

c)	The relevant litigation case file was misplaced by the said legal officer in his transition between offices.

d)	The relevant litigation case file was misplaced in a larger case file for another matter when placed in a carton to be forwarded to the Defendant's Head Officer for the said legal officer's attention in compiling documentation as per Court's directions averred to above.

Annexed hereto and marked as exhibit "D" is a true copy of an email confirmation of the said Legal Officer's averred temporary transfer to Suva.

11. THAT I am advised by the Board's Legal Officer and verily believe that pre-emptory Orders for the filing of the Affidavit verifying list of documents were thereafter issued by the Court for the Defendant to file its affidavit verifying list of documents within seven (7) days.

12. THAT I am advised by the Board's Legal Officer and verily believe that the Defendant's failure to abide by the pre-emptory Orders referred to was, in view of the circumstances as outlined in paragraph 10 above, not intentional or contumelious.

13. THAT I am advised by the Board's Legal Officer and verily believe that the Learned Master Jude Nanayakkara struck out the Board's regularly filed defence on 21st day of January, 2015 for failure to comply with the averred pre-emptory Orders.

20. THAT I am advised by the Board's Legal Officer and verily believe that the Board has a meritorious defence in this matter as per exhibit "C" annexed herewith.

21. THAT I am advised by the Board's Legal Officer and verily believe that the Plaintiff is not likely to suffer any serious prejudice as a result of the matters averred to above because the land in question is already leased out to a third party and the Plaintiff's remedy, in this matter, if successful, will be by way of damages.

(2)	The Plaintiff filed an Affidavit in Opposition which is substantially as follows (so far as relevant);

Para 3. In response of paragraphs 7 & 8 of the said Affidavit, I say as follows:-

i)	14 days to file acknowledgement of service from 25th June, 2014 was on 9th July, 2014 and not 10th July, 2014. The acknowledgement of service although filed has never been served and as such my Solicitors on 15th July, 2014 conducted a search of the same at the High Court registry in order to file default judgment only to be informed that the same had been filed on 2nd July, 2014. Copy of search and the note from the High Court Registry is annexed hereto and marked "NB 1" and "NB 2" respectively; and 

ii)	the date for filing the Statement of Defence expired on 23rd July, 2014 and not 24th July, 2014 as deposed in the said Affidavit.

5. I have no knowledge of the contents of paragraph 10 and therefore cannot comment on the same, either them to say that the Defendants have a large litigation team and the fact their file management system is not up to designed standard is not my fault nor should I have to be penalized for the same.

10. That in response to paragraph 19, I say that the delay is of more than 4 months and that although the current application was filed on 18th May, 2015, the same was only served on my Solicitors on 4th June, 2015, the day before its returnable date, which is just another example of delay.

(E)	THE LAW

(1)	Against this factual background, it is necessary to turn to the applicable law and judicial thinking in relation to the principles governing the exercise of the discretion to make the Order the Defendant now seeks;

(2)	Rather than refer in detail to the various authorities, I propose to set out, with important citations, what I take to be the principles of the play.

 An application to set aside a default judgment is not the invocation of an appellate jurisdiction but of a specific rule enabling the court to set aside its own orders in certain circumstances where the action has never been heard on the merits.

 A Defendant against whom judgment in default has been entered may apply for it to be set aside under Order 13, rule 10 or under Order 19, rule 9 of the High Court Rules.

 In situations where the Defendant has failed to file in the first instance, notice of intention to defend, then order 13 procedure is the correct process.

 Order 19 is applicable only where, after notice of intention to defend is filed, no statement of defence had followed.

•	THE PRINCIPLES OF SETTING ASIDE DEFAULT JUDGMENTS

 A default judgment can be obtained regularly or irregularly and both of these forms of judgments can be set aside.

 However, there is a distinction between setting aside a default judgment for irregularity and setting aside a judgment which was in fact regular.

 Fry L J in Alaby –v- Praetorious [1888] 20 QBD 764 at 769 succinctly drew the distinction as follows:-

"There is a strong distinction between setting aside a default judgment for irregularity in which case the court has no discretion to refuse to set it aside, and setting it aside where the judgment though regular has been obtained through some slip or error on the part of the Defendant in which case the court has a discretion to impose terms as a condition of granting the Defendant relief."
 (Emphasis added)

 This principle was adopted and applied by the Fiji Court of Appeal in "Subodh Kumar Mishra v Rent-a-car"(1985) 31 FLR 52. Thus, where an irregular default judgment is entered (for example time for acknowledging service or for serving a defence had not expired by the time the default judgment was entered) which irregularity cannot be cured the Defendant is entitled as of right to have the judgment set aside.

 However, where the default judgment had been entered regularly, the Court has a wide discretion and neither Order 13, rule 10 nor Order 19, rule 9 of the High Court Rules impose any restriction in the manner in which the discretion is to be exercised.

 The rationale for the unconditional discretion that allows the court to intervene is explained by Lord Atkin in "Evans v Bartlam", 1937 DC 473 as follows;

 "The Principle obviously is that unless and until the Court has pronounced a judgement upon the merits or by consent, it is tohave the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure."

 Lord Atkins pronouncement was endorsed and followed by the Fiji Court of Appeal in The Fiji Sugar Corporation v Mohammed Ismail FLRVol 34, p75.

 The Principles applicable for analysis of the merit of an application to set aside a default judgment are well known and settled. The leading authority is Evans –v- Bartlam [1937] 2 All E.R. 646. The following passage from the judgment of Lord Atkin in "Evans vBartlam" is pertinent in the subject of principles on which a court acts where it is sought to set aside a regular Default judgment;
 
"The primary consideration is whether he has merits to which the Court should pay heed; if merits are shown the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication………..The Court might also have regard to the applicant's explanation why he neglected to appear after being served, though as a rule his fault (if any) in that respect can be sufficiently punished by the terms as to costs or otherwise which the Court in its discretion is empowered by the rule to impose."

 The principles of that case have been widely adopted in Fiji, and by the Fiji Court of Appeal in Pankanji Bamola & Anor. –v- Moran Ali Civil Appeal No. 50/90 and Wearsmart Textiles Limited –v- General Machinery Hire &Anor Civil Appeal No. ABU0030/97S.

 In "Pankaj Bamola & Anor v Moran Ali" (supra) the Court of Appeal held;

It is not sufficient to show a merely "arguable" defence that would justify leave to defend under Order 14; it must both have "a real prospect of success" and "carry some degree of conviction." Thus the court must form a provisional view of the probable outcome of the action.

 In Russell v Cox 1983 NZLR 654, McCarthy J held;

"In approaching an application to set aside a judgment which complies with the rule, the Court is not limited in the considerations to which it may have regard, but three have long been considered of dominant importance. They are;

1. That the defendant has a substantial ground of  defence;

 2. That the delay is reasonably explained; 

 3. That the plaintiff will not suffer irreparable injury if the judgment is set aside.

A useful summary of the factors to be taken into consideration is to be found under notes to Or. 13 r9/14 of THE SUPREME COURT PRACTICE 1995 Vol. I at p.142 and which is, inter alia, as follows:-

"The purpose of the discretionary power is to avoid the injustice which may be caused if judgment follows automatically on default. The primary consideration in exercising the discretion is whether the defendant has merits to which the court should pay heed, not as a rule of law but as a matter of common sense, since there is no point in setting aside a judgment if the defendant has no defence, and because, if the defendant can show merits, the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. Also as a matter of common sense the court will take into account the explanation of the defendant as to how the default occurred. 

 Therefore the judicially recognised "Tests" may be conveniently listed as follows;

 (a) Whether the Defendant has a substantial ground of defence to the claim.

 (b) Whether the Defendant has a satisfactory explanation for the default judgment.

 (c) The promptness with which the application is made.

 (d) Whether the setting aside would cause prejudice to the Plaintiff.

 The same legal tests apply under the Magistrate Court rules.

•	THE DEFENCE ON THE MERITS

 The major consideration on an application to set aside a default judgment is whether there is a defence on the merits. The purpose is to avoid injustice. The Defendant is seeking to deprive the claimant of a regular judgment which the claimant has validly obtained in accordance with the rules; this is not something which the court will do lightly.

 In Shocked v Goldsmith(1998) 1 All ER 372 at 379ff Legatt LJ said:

"These cases relating to default judgment are authority for the proposition that when considering whether to set aside a default judgment, the question of whether there is a defence on the merits is the dominant feature to be weighed against the applicant's explanation both for the default and any delays, as well as against prejudice to the other party."

 The leading case is Evans v Bartlam [1937] 2 All 646, [1937] AC 473. In this case, the defendant had suffered judgment to be entered against him in default of appearance. The Court of Appeal ([1936] 1 KB 202) allowed an appeal from the judge's order setting aside the judgment. But the House of Lords reversed the decision of the Court of Appeal and restored the Judge's order.

 Lord Wright ([1937] 2 All ER 646 at 656, [1937] AC 473 at 489) expressed the conclusion;

"In a case like the present, there is a judgment, which, though by default, is a regular judgment, and the applicant must show grounds why the discretion to set aside should be exercised in his favour. The primary consideration is whether he has merits to which the court should pay heed; if merits are shown, the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication… The court might also have regard to the applicant's explanation why he neglected to appear after being served, though as a rule his fault (if any) in that respect can be sufficiently punished by the terms, as to costs, or otherwise, which the court, in its discretion, is empowered by the rule to impose."

 In Vann V Awford (1986) 130 SJ 682, the judge declined to set aside a judgment given against the second defendant in default of appearance, and also a judgment given against him when damages were assessed in his absence. The Defendant had lied when he said on oath that he had no knowledge of the proceedings. On appeal Dillon LJ considered that, despite the prejudice to the plaintiffs, as there were ample arguable defences the award should be set aside and there should be a fresh hearing. He added: "Even for lying and attempting to deceive the court, a judgment for £53,000 plus is an excessive penalty if there are arguable defences on the merits."

 This case was followed two weeks later by The Saudi Eagle [1986] 2 Lloyd's Rep 221. After reviewing Evans v Bartlam and Vann v Awford, Sir Roger Ormrod came to the conclusion that the defendants in the case before the court had failed to show that their defence enjoyed a real prospect of success.

 These cases relating to default judgments are authority for the proposition that when considering whether to set aside a default judgment, the question of whether there is a defence on the merits is the dominant feature to be weighed against the applicant's explanation both for the default and for any delay, as well as against prejudice to the other party.

•	THE YARDSTICK THAT HAS TO BE APPLIED IN DETERMINING THE MERITS OF THE DEFENCE

 The Defendant must have a case with a real prospect of success, and it is not enough to show a merely arguable defence. (Alpine Bulk Transport Company v Saudi Eagle Shipping Company, 1986 2 Lloyds Report, P 221).

 It must both have "a real prospect of success" and "carry some decree of conviction". Thus the court must form a provisional view of the probable outcome of the action. Unless potentially credible affidavit evidence demonstrates a real likelihood that a Defendant will succeed on fact, no real prospect of success is shown and relief should be refused. (Wearsmart Textiles Ltd v General Machinery Hire Ltd, (1998) FJCA 26.)

 A person, who holds a regular judgment even a default judgment, has something of value, and in order to avoid injustice he should not be deprived of it without good reason. Something more than merely arguable case is needed to tip the balance of justice to set the judgment aside. (Moore-Bick J in International Finance Corporation, (2001) CLC 1361).

 The real prospect of success means that the prospects must be better than merely arguable. The word "real" directs the court to the need to see whether there is a realistic as opposed to a fanciful prospect of success. It saves expense, achieves expedition, avoids the courts resources being used up in cases where that serves no purpose and is in the interest of justice.

 There is no room for speculative defences and potentially credible affidavit evidence must demonstrate a real likelihood that a defendant will succeed. Otherwise no real prospect of success is shown and relief should be refused (Allen v Taylor) [1992] PLQR 255)

 The test was considered in detail in Swain v Hilman (2001) (1), All E.R. 91 and the court confirmed that;

"The test is the same as the test for summary judgment. The only significant difference is that in a summary judgment application the burden of proof rests on the claimant to show that the defendant has no real prospect of success whereas in an application to set aside a default judgment it is for the defendant to show that his defence has a real prospect of success. 

•	DELAY

 An application to set aside default judgment must be made "promptly" and without "delay".

 In "PankajBamolc and Another v Moran Ali" FCA 50/1999, a party seeking to set aside an Order had delayed for nearly 08 months. The Court took the view that no adequate explanation had been provided for that and concluded that the application should be refused because it had not been made promptly and without delay.

 Promptness will always be a factor of considerable significance and, if there has been a marked failure to make the application promptly, a court may well be justified in refusing relief, Notwithstanding the possibility that the Defendant may well succeed at the trial.

 Whether or not there is a defence on the merits may be, the dominant feature to be considered but that does not mean that it cannot be swamped by other features such as unexplained delay in bringing the application to set aside the judgment.

 Although the fact that damages have been assessed and a final judgment entered does not deprive the court of jurisdiction to set aside a default judgment; it is highly relevant to the exercise of discretion. It is an aspect of, but separate from, the question of delay. The Saudi Eagle case (supra) is clear authority for the proposition that an application to set aside a default judgment can be made notwithstanding that final judgment has been entered. 

 In Alpine Bulk Transport Co. Inc v Saudi Eagle Shipping Co. Inc (The Saudi Eagle) [1986] 2 Lloyd's Rep the defendants, believing that they had no assets, deliberately allowed an interlocutory judgment for damages to be assessed to be entered against them by default, and only after damages had been assessed and final judgment entered, realising that they had given security, applied initially to the judge and then on appeal to the Court of Appeal, unsuccessfully at both hearings, to set aside the judgment and for leave to defend. The application was refused on the merits; but it was not suggested that the judge would not have had jurisdiction to set aside the judgment had it been appropriate to do so. Therefore, it cannot be said that a judgment (by default) for damages to be assessed is spent once damages are assessed; it remains the source of the plaintiff's right to damages. Nor can it be said that in such a case the interlocutory judgment is overtaken or superseded by the final judgment for a liquidated sum; it would be more accurate to say that it is completed and made effective by the assessment.

 It cannot be safely assumed in every case that any prejudice to the plaintiff can be met by putting the defendant on terms to pay the costs thrown away by the assessment hearing. There can be no rigid rule either way; it depends on the facts of the particular case.

•	PROCEDURE

 An application to set aside a default judgment which has not been entered wrongly must be supported by evidence. Commonly, a draft defence is attached to the affidavit in support of the application.

 A draft defence is not necessary, what is required is the affidavit of merits. (The Fiji Sugar Corporation Ltd. v Mohammed Civil Appeal No. 28/87.)

 If the Defendant does not have an affidavit of merits, no setting aside order sought to be granted except for some very sufficient reason. (Wearsmart Textiles Ltd v General Machinery Hire Ltd, (1998) FJCA 26.)

In Wearsmart Textiles Ltd v General Machinery Hire Ltd [1998] FJCA 26; Abu0030u.97s (29 May 1998) the Fiji Court of Appeal cited the following passage from the Supreme Court Practice 1997 (Volume 1) at p.143.

"Regular judgment – if the judgment is regular, then it is an 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) 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 Huddleston, B., ibid. p.129, approving Hopton v. Robertson [1884] W.N. 77, reprinted 23 Q.B.D. p. 126 n.; and see Richardson v. Howell (1883) 8 T.L.R. 445; and Watt v Barnett (1878) 3 Q.B.D. 183, p.363).
 (my emphasis)

"it is an (almost) inflexible rule that there must be an affidavit of merit i.e. and affidavit stating facts showing a defence on the merits (FARDEN v RICHTER (1989) 23 Q.B.D. 124)" The Supreme Court Practice 1993 Or 13 r.9 p.137).

"At any rate where such an application is not thus supported, it ought not to be granted except for some very sufficient reason" HUDDLESTON, B in FARDEN ibid p.129).

•	SETTING ASIDE ON CONDITIONS

 In the exercise of Court's discretion, the court may attach conditions to an order to set aside judgment. In some cases the defaulting defendant will be ordered to pay the claimant's costs thrown away. In appropriate cases, the court may also require the defendant to pay money into court to await the final disposal of the claim. Such a condition is commonly imposed where,

 1. The defendant has satisfied the court that it has a defence with a real prospect of success. 

 2. The Defendant has an explanation why he neglected to appear after being served.

 3. The truth of which is indeed denied by the Plaintiff.

 4. The court seeks no reason why the Defendant should be disbelieved in what appears to be a mere conflict on affidavits.

 The conditions imposed on setting aside a default judgment are not intended to punish the defendant but to ensure that justice is achieved between the parties (VIJAY PRASAD v DAYA RAM CIV APP 61/90 FCA; SUBODH KUMAR MISHRA s/o Ramendra Mishra v CAR RENTALS (PACIFIC) LTD CIV APP 35/85 FCA). The said judgments do not lay down any basis upon which the discretion is to be exercised.

 In GARDNER v JAY (1885) 29 Ch.D 52 at p.58 BOWEN L.J. said on this aspect that:

"… 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 to indicating the particular grooves in which the discretion should run, for if the Actor the Rules did not fetter the discretion of the Judge why should the Court do so?"

(F)	ANALYSIS

(1)	I now proceed to examine the substance of the application bearing all those legal principles in my mind.

(2)	At the beginning of the hearing of the matter, the Counsel for the Plaintiff raised a preliminary point with regard to the Affidavit in Support filed by the Defendant. The Counsel submits that the Notice of Motion to set aside the Default Judgment is supported by an Affidavit of a Litigation Assistant in the employment of the Defendant. The crux of her submission is that the Defendant's notice of Motion to set aside the default Judgment is a contested hearing and therefore it is not appropriate for a litigation Assistant to depose on behalf of the Defendant.

In this regard, I cannot help but recall the sentiments expressed in the following judicial decision.

 In "Rupeni Silimuana Momoivalu v Telecom Fiji Ltd", Civil Action No:- HBC 527 of 1997, the court held;

"The habit of supporting or opposing applications to decide the rights of parties based on the information and belief of law clerks is an embarrassment to the clerk, her firm and the court file. Justice Madraiwiwi (as he then was) had this say about the practice of using law clerks in this way:

"It is being made to clear to counsel that affidavits by law clerks were not being entertained other than in non contentious matters such as service of documents where not disputed. The most appropriate person to have sworn the affidavit in these proceedings was Mr.Joji Boseiwaqa who appeared on instructions from the plaintiff at the relevant time. The court respectfully endorses the general thrust of dicta by Lyons J in Michael Harvey v Michael Kelly & Ray McGill, Civil Action No. HBC 323 of 1977 about the propriety of law clerks deposing affidavits".
 (Emphasis Added)

It is worth remarking that the Plaintiff offered response to this Affidavit by the Litigation Assistant

 I am at a substantial loss to understand why the Plaintiff chose to offer response to the affidavit of the Litigation Assistant.

Consequently, I leave open the issue of the admissibility of the Affidavit of the Legal Assistant.

(3)	Leave all that aside and let me proceed to the substance of the application to set aside the default judgment.

In its Affidavit in Support of the Notice of Motion, the litigation Assistant in the employment of the Defendant, "Neli Turagabeci", deposed that the Defendant possesses a perfectly good defence.

The Counsel for the Defendant in both his oral as well as written submissions contended that the Defendant has a prima facie defence and should be allowed to come in and defend the action.

The Plaintiff's Counsel submitted that there is no ground to set aside the judgment which had been regularly obtained. Further, the Counsel argued that the Defendant has not established an "arguable defence" and the application to set aside was not made promptly.

Be that as it may, the real issue and the only issue which this Court has to consider at the outset is whether the default judgment was regularly entered. Thus, where an irregular default judgment is entered (for example time for acknowledging service or for serving a defence had not expired by the time the Default Judgment was entered) which irregularity cannot be cured the Defendant is entitled as of right to have the judgment set aside.
However, where the Default Judgment had been entered regularly, the Court has a wide discretion and neither Order 13, rule (10) nor Order 19, rule (9) of the High Court Rules impose any restriction in the manner in which the discretion is to be exercised.

(4)	What concerns me is whether the Default Judgment has been entered regularly and in compliance with the High Court Rules.

I will now proceed to consider whether the Default Judgment is regular or irregular.

The Default Judgment reads as follows;

_____________________________________________________________________

INTERLOCUTORY JUDGMENT
_____________________________________________________________________

NO STATEMENT OF DEFENCE TO THE PLAINTIFF'S WRIT OF SUMMONS AND STATEMENT OF CLAIM having been filed by the Defendant herein. IT IS this day adjudged that judgment be entered against the Defendant as pleaded and claimed by the Plaintiff for general damages, special damages, interest, compensation and costs to be assessed against the Defendant on a Solicitor-client indemnity basis:-

Sealed this 13th day of February, 2015.

 BY THE COURT

 (signed)
 for DEPUTY REGISTRAR

 (Emphasis Added)

In the Statement of Claim, the Plaintiff prays for the following Orders;

(a)	A declaration that the Defendant could not have issued the deceased with the re-entry notice in the said circumstances.

(b)	Compensation at the current market value of the real estate subject to the Agreement to Lease between the deceased and the Defendant.

(c)	Damages (Special, General, Exemplary and Punitive) together with interest.

(d)	Rental costs incurred by the Plaintiff from 25th January 2002 till the date of judgment.

(e)	Interest on the rental costs.

(f)	$40,000.00 for reinstatement of building costs together with interest from 25th January, 2002.

Alternatively

Current reinstatement value of the deceased's Vuda property

(g)	Such further or other relief as seems just.

(h)	Costs on Solicitor – Client indemnity basis.

What does the default judgment represent? It is interlocutory in nature as to the liability. But I ask myself, is the default judgment entered in accordance with the High Court Rules, 1988?

Addressing myself to the question "whether the default judgment has been entered regularly and in compliance with the High Court Rules?" I would answer that, upon the face of it, it is "not".

The paragraph (a) in the prayer, in essence is a declaratory relief. It is a relief of a description not mentioned in Order 19, rule (2) to (5). The paragraphs (b), (c), (d), (e) and (f) are unliquidated demands.

Therefore, both the claim and relief is a mixed one as such the default judgment should have been entered under the separate rules as follows;

•	Paragraph (a) in the prayer Under Order 19, rule (7). The core [Declaratory relief] element of this rule is that for entering default judgment under this rule, leave of the Court is required. An application under the rule must be made by Summons.

•	Paragraphs (b), (c), (d), (e) Under Order 19, rule (3) and (f) in the prayer [unliquidated demands]

 For the sake of completeness, Order 19, rule (3) is reproduced below.

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.

For the sake of completeness, Order (19), rule (7) is reproduced below.

Default of defence: other claims (O.19, r.7)

7.-(1) Where the Plaintiff makes against a defendant or defendants a claim of a description not mentioned in rules 2 to 5, then if the defendant or all the defendants (where there is more than one) fails or fail 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, apply to the Court for judgment, and on the hearing of the application the Court shall give such judgment as the Plaintiff appears entitled to on his statement of claim.

(2) Where the Plaintiff makes such a claim as is mentioned in paragraph (1) against more than one defendant, then, if one of the defendants makes default as mentioned in that paragraph, the plaintiff may-
 
(a)	If his claim against the defendant in default is severable from his claim against the other defendants, apply under that paragraph for judgment against that defendant, and proceed with the action against the other defendants; or

(b)	Set down the action on motion for judgment against the defendant in default at the time when the action is set down for trial, or is set down on motion for judgment, against the other defendants.

 (3) An application under paragraph (1) must be by summons or motion.

It is clear beyond question that in the instant case, the Default judgment has been entered under Order 19, rule (3) and not under the separate rules as per the relief sought in the Statement of Claim.

As already mentioned, both the claim and the declaratory relief is a mixed one, as such the default judgment cannot have been entered under Order 19, rule (3) of the High Court Rules. To be more precise, Order 19, rule (3) provides no basis for the default judgment as per the declaratory relief sought in the Statement of Claim.

For the reason which I have endeavored to explain, I venture to say beyond a per-adventure that the default judgment is irregular and not entered in compliance with the High Court Rules. If judgment was to be entered, it should have been entered under the separate rules, as I have said earlier, since both the claim and relief sought in the Statement of Claim is a mixed one.

In the result, the Defendant is entitled to have the judgment set aside "ex debito justice".

In "In re Pritchard, decd (193) Ch 502, UpJohn L.J. said that the phrase "ex debito justice" means as a matter of right.

The Defendant who is the subject of the default judgment is entitled to have it set aside as of right on the basis that the defect is so fundamental (see; White v Western (1968) 2 Q.B. 647).

This may involve some unfairness to the Plaintiff. That is regrettable. But the unfairness to the Defendant is much greater if the judgment is not set aside. The crucial point is that this Court has arrived at a just result. 

I could see nothing to change my opinion even on the basis of exhaustive work contained in "A Practical Approach to Civil Procedure", by Stuart Sime", Thirteenth Edition.

(5) It is clear beyond question that the irregularities were more than de minimis and were not clerical errors. It will be ridiculous for me to penalise the Defendant for the irregularities which are more than de minimis and not just clerical errors. I cannot simply uphold the Default Judgment. 

 The Court of Appeal in White v Western [1968] 2 Q.B. 647 held:

"That where there is an irregularity in the entry of default judgment the party against whom judgment is obtained is entitled to have the judgment set aside and the court should impose no terms whatever on him, not even contingent term such as that the costs should be costs in the cause."

I have heard no word said on behalf of the Defendant in relation to the irregularity in the entry of the default judgment. Nevertheless, this Court is of the view that the Court is bound to look into the "regularity in the entry" of the Default Judgment to ensure that Court operates in a fair and just manner.

In applications such as this, the technicalities are strictly construed because of the drastic consequences that follow for one of the parties upon the relief sought not being granted. At this point I cannot resist in saying that it behoved the Plaintiff and her Counsel to have exercised more diligence in this regard.

In the Court's view, the mistake in the entry of the Default judgment is fundamental, which cannot be rectified simply by the use of the Court's discretion.

I remind Practitioners that the rules are there to be obeyed. In the context of the present case, I am mindful of the rule of law enunciated in the following decisions;

In Ventakamma v Ferrier Watson CIV. APP. CBV0002/92 – Judgment delivered 24th November 1995) said:-

"We now stress, however, that the rules are there to be obeyed. In future Practitioners must understand that they are on notice that non-compliance may well be fatal to an appeal."
 (Emphasis Added)

 In Ratnam vs Cumarasamy and Another: [1964] 3 All E.R. at page 935;

 Lord Guest in giving the opinion of the Board to the Head of Malaysia said, inter alia:

"The rules of court must, prima facie, be obeyed, and, in order to justify a court in extending the time during which some step in procedure requires to be taken, there must be some material on which the court can exercise its discretion. If the law were otherwise, a party in breach would have an unqualified right to an extension of time which would defeat the purpose of the rules which is to provide a time table for the conduct of litigation. The only material before the Court of Appeal was the affidavit of the appellant. The grounds there stated were that he did not instruct his solicitor until a day before the record of appeal was due to be lodged, and that his reason for this delay was that he hoped for a compromise. Their lordships are satisfied that the Court of Appeal were entitled to take the view that this did not constitute material on which they could exercise their discretion in favour of the appellant. In these circumstances, their Lordships find it impossible to say that the discretion of the Court of Appeal was exercised on any wrong principle."
 (Emphasis Added)
  
In view of the approach, I have adopted, I do not think that there is any need for me to express my views on the strength of the Defence.

(G) CONCLUSION

Having found that the judgment was irregularly entered and not in compliance of the High Court Rules and in view of the authorities to which I have referred, there is no alternate but to set aside the Default Judgment entered on 13th February 2015.

 I cannot see any other just way to finish the matter than to follow the law.

(H) FINAL ORDERS

(1) The default judgment entered against the Defendant dated 13thFebruary 2015 is set aside.

(2) The Defendant is at liberty to defend the claim unconditionally.

(3) The Defendant is ordered to file its Statement of Defence within 14 days from the date hereof.

(4) I make no Order for costs.

Jude Nanayakkara
Acting Master of the High Court

At Lautoka
30th October 2015