HIGH COURT OF SOLOMON ISLANDS
Faukona, J

Civil Case No. 349 of 2007

LEVERS SOLOMON LIMITED

V

NOLLEN LENI

Date of Hearing: 13 & 17 October 2008
Date of Ruling: 31 October 2008

A. Radclyffe for the Claimant/ Respondent
N. Tongarutu for the Defendant/Applicant

RULING ON APPLICATIONS TO SET ASIDE DEFAULT
JUDGMENT AND ENFORCEMENT ORDER

Faukona, J:

1. This is an application by the Defendant to set aside Default Judgment and Enforcement Order pursuant to Rules 9.52 and 21.8 of the Solomon Islands Courts (Civil Procedure) Rules 2007, respectively. The Applicant relies on four grounds to set aside default judgment, and eight grounds for stay of enforcement order.

2. Background facts:

 On 19 December 2002 the Commissioner of Lands offer a fifty (50) years fix term estate to the Applicant, in lot 1279 of LR83/R, subject to payment of land fees totalled up to $2 607.00. The fees were paid by the Applicant on 2 January 2003.

3. On 26 September 2003 the Applicant commenced occupying the land or started clearing and construction of the building.

4. On 27 June 2006 the Respondent wrote a letter to the Applicant informing him that the land he was occupying was owned by Levers Solomon Limited (LSL) and was a part of FTE Parcel No. 192-004-390. On or about 19 July 2006, the Applicant replied that he did not dispute the claim and refer the letter to Commissioner of Lands for verification, but have not been able to receive any response until after default judgment was obtained against him.

5. A Writ of Statement of Claim was filed on 17 September 2007. The documents were served upon the Applicant on 29 September 2007. No appearance was entered and no defence was filed within the period provided for under the Rules.

6. On 15 October 2007 a Motion for Judgment was filed and listed for hearing on 22 November 2007. On 16 November a Motion for Judgment was served upon the Applicant at the Honiara Hotel.

7. On 22 November 2007 the Motion for Judgment was heard in the absence of the Applicant despite service was effected. On the same date Judgment and order for possession was granted. On 7 May 2008 the High Court Orders signed, sealed and perfected were served personally on the Applicant at his office, in the Ministry of Fisheries and Marine Resources, Kukum, Honiara.

8. On 13 May 2008 enforcement proceedings were filed. On 16 June 2008 Enforcement Orders were made without hearing pursuant to Rule 21.127.

9. On 11 July 2008 the Enforcement Orders were served on the Applicant and also displayed on the concerned land.

10. On 25 July 2008 Application for Stay was filed by the Applicant for return date 21 August 2008. On 1st August 2008 the Applicant filed his first sworn statement in support. Both documents were served on the Counsel for the Respondent on 11 August 2008.

11. On 2 September 2008 the application to set aside was filed. On 3 September 2008, the application and second sworn statement was served on the Counsel for the Respondent. On 8 October 2008 third sworn statement was filed and served on Counsel for the Respondent.

12. After those transactions that the case was finally fixed for hearing.

13. There are two applications filed in this Court. Application for stay was filed on 25 July 2008; and application for set aside was filed on 2 September 2008.

14. I agree with Mr. Radclyffe that the application for stay hangs on the application to set aside. If the application to set aside the default judgment fails, then it must follow that the application to stay must also fail and be dismissed. If the application to set aside default judgment succeeds then the application to stay should be granted on such terms as the Court thinks fit.

15. Therefore it would be more appropriate to deal with the application to set aside. There are two matters the Applicant must address –

(i) has the Applicant reasonable excuse in delay in not filing defence in time.

(ii) has the Applicant a viable defence or reasonable prospect of success. 

16. The test to be applied in this case is a viable defence as stated in Kayuken Pacific Limited v. Harper or as in Djokovic v. Solomon Star Limited and Ofani Eremae, a reasonable prospect of success. The two tests are not contradictory and essentially mean the same. In Rule 9.54 of Solomon Islands Court (Civil Procedure) Rules 2007, the word meritorious defence is used. Again it does not mean differently, all mean the same.

17. Failure to defend the Claim

 For the Court to set aside a default judgment it has to be satisfied that the Applicant has shown with reasonable cause why he failed to defend the claim – Rules 9.52 and 9.54. The default judgment granted on 22 November 2007, by this Court was by way of a motion for judgment pursuant to Order 13 Rule 9 of the Old Rules.

18. On 26 September 2007 the Writ and Statement of Claim were served on the Applicant at the Ministry of National Fisheries and Marine Resources, Kukum, per affidavit of service of Jimmy Natei filed on 27 September 2007. By Rules 5.37, the Applicant should file response and defence within 14 days. He failed to do so. The Respondent therefore came to Court and sought default judgment by way of a motion, and it was granted on 22 November 2007.

19. In an attempt to show reasonable cause why response and defence were not filed within time limit Mrs. Tongarutu raised a number of reasons. Firstly, that the bulk of delay was caused by the Commissioner of Lands which failed to respond to Applicant's letter of 19 July 2006 or even respond to Applicant's three visits he made to the office of the Commissioner of Lands. Due to that delay the Defendant would not be in a position to fully brief a lawyer. He only engaged a lawyer after Mr. Radclyffe telephoned him and advised him to secure one. Secondly, that in the years 2006-2007 the Applicant had been so busy with work and had made numerous official trips overseas. In the month of November itself the Applicant was out overseas for unspecified period of time.

20. It is common knowledge that the Lands Office is one of the Government offices that lacks efficient management and proper administration, and within two weeks to get whatever information the Applicant wanted is quite limited. However, I noted if the process of registration follow up by grant of title was the last bit to complete, then the process is certainly no completed. Why can't the file be located? That file should be filed in a pending tray or Cabinet requiring final transactions. What seems apparent is that the Applicant anticipated getting a title rather than seeking further verification whether the Respondent has a legal title or not. Honourable Magga's letter dated 3 July 2008 paragraph 4 attached as exhibit No. 2 to Applicant's sworn statement filed on 8 October 2008 has some indication.

21. In any event, it could have been the right course if the Applicant engages a lawyer at an early stage, as a priority, to represent him in Court and to get necessary information and file from the Lands Office. In doing so he could have fully instructed his lawyer in this case, rather than fighting for title, to grant him proper footing for a challenge.

22. Whilst I agree as a Minister of the Crown who carries the interest of this nation upon his shoulders, and busy as used to be, with several trips overseas, it would be necessary to specifically alluded dates of those overseas trips, in particular in the month of November 2007. Merely to say he is out of the country in November, without verification is not acceptable. However, I would accept that the Defendant is busy as expected of him to engage in national issues affecting this nation. But to give less priority, or not at all, to this case, which indeed is sensitive and affect the welfare of his family and himself is quite irresponsible. Having said that I accept there are some delay.

23. Has the Applicant viable, meritorious defence or reasonable prospect of success in his propose defence?

 The Respondent's case referring to his Statement of Claim paragraph 2 clearly stated that he is the owner of a registered fix term estate in parcel No. 192-004-390 situated at Lungga (the "Land"). Having being aware that the Applicant had entered the land and constructed his building; he wrote a letter dated 27 June 2006 and directed the Applicant to cease construction work immediately. In the letter he expressed that the property belongs to Levers Solomons Limited (LSL) and is a part of parcel No. 192-004-390. (Exhibit NL1) attached to Applicant's sworn statement filed on 8 October 2008).

24. The Applicant's case began to immerge when he made a reply. (Exh. NL2 attached to his sworn statement filed on 8 October 2008). In his reply he expressed he did not dispute the claimant's claim, nor did he intend to disregard his argument, but he questioned whether the allocation done to him was done erroneously by the Commissioner of Lands.

25. Later in his sworn statement filed on 1 August 2008, paragraph 3 he admitted occupying FTE in parcel No. 192-004-390. Again in paragraph 8 of the draft defence filed on 8 October 2008, he says he does not know and cannot plead to the claim of ownership by the Respondent in the same parcel number.

26. Further in the draft defence Lot No. 1279 of LR 83/R is a remainder created from realignment exercise of Lungga bridge, and that offer for sale of that portion of land was made by the Commissioner of Lands. In purchasing that vacant land the Applicant is a bona fide purchaser having no notice and knowledge of the Respondent's claim of ownership, at the conclusion of the sale.

27. From what the Applicant disclosed in his letter of reply, draft defence and sworn statement, is a clear case of inconsistency. In the case of Kelly v. Ocean Catering Limited ruling on 13 August 2004, Palmer CJ state:

"The Defendant however has been consistent in her instructions to her lawyer from the beginning as to her denial of the Plaintiffs claims. She does not admit that the whole amount is outstanding."

28. In this case the Applicant admitted the Respondent's claim initially and later denied. There is no consistency in his instruction to his lawyers.

29. And then the issue of Townsville Peace Agreement (TPA) which encompasses in the draft defence and also in the written submission by Mrs. Tongarutu, through oral evidence and also in the media. I do not seem to understand why this issue has to be raised in this case. The fact is that, as no one would deny, that it has been agreed that Lungga lands which the Commissioner of Lands hold Perpetual Estate title, will be reverted to customary landowners eventually. This Court was told that the government is working on the process to effect the transfer. Whilst that process by all means is to implement the (TPA), what would then be the case for FTE holders including the Respondent? Will they be still legal owners of their estates? Will their rights be respected?

30. The manner in which the Applicant expressed himself can be assessed as, once the Perpetual Estate title is transferred to the landowners the Guadalcanal people will move into those lands which are yet to be developed, despite the fact that some may have been sold to others and currently holding fixed term estate titles.

31. If that is the sole purpose of having those lands transferred then one would guess that, there is no guarantee that peaceful co-existence of this country will continue. What our leaders and people say now and do by their actions, whether it be in private or public media, will pave a way for the future destiny of this nation.

32. Unless our mindset is changed, there will be no peace, social harmony and respect for one another in terms of our rights, our possessions and our positions in our community.

33. Our foreign friends who are here, whom we host for many different reasons, will one day leave this country. As Solomon Islanders we will still be here as long as the sun does not set, or until the last breath leaves our mortal body.

34. Let me remind parties, for every problem in this whole entire world there is always a solution to it readily available. Not necessary, and always be, in the Courts forum, but amicable solution gives satisfaction and joy that will last. Remember we live to enjoy the resources that do not belong to us, but were given to us as temporary custodians. One day when we will leave, these materialistic value and beauty of this world, will remain as they are. Remember we are born naked and to dust we will return naked.

35. Returning to the tests. Has the Applicant established that he has viable, meritorious or reasonable prospect of successful defence. The Applicant relies on the fact that he was given an offer and that he had paid the required amount and that should be a conclusive agreement. He claimed he was a bona fide purchaser, and Mr. Nesa had instructed him to occupy the land.

36. There is no doubt on the face of those materials provided (Exhibit NL1) confirm to any ordinary person to believe he is a bona fide purchaser. The question whether the contract was concluded under good faith, or by virtue of some irregular circumstances, that has to be answered by the Commissioner of Lands or any officer from that department. But as it appears to be, on the face of those materials, there seemed to be triable issue disclosed. In Kayuken v. Harper, Ward CJ stated on page 5 paragraph 4:

"…It is not necessary for the Court to consider at this stage whether the defence would be successful but simply whether a trial issue is disclosed. If there is not the exercise would be pointless."

37. Mr. Radclyffe submitted that this case should be done away with now. The Defendant still has the privilege to sue the Commissioner of Lands. I do not think that is the best option in this case. The problem anticipated to emanate is the enforcement of the default judgment orders and the enforcement orders. In particular order for possession which may mean the Applicant and his family will have to be evicted immediately. No doubt that will have an adverse effect and will prejudice the Applicant and his family.

38. The Respondent on the other hand, will for certain have no repercussion effect at all, or prejudiced, as in deed he has not accrued any personal loss except for the trespass and damages which he claim.

39. In Kayuken Case Ward CJ stated on page 6 paragraph 1-

"Whilst this Court would not normally interfere with the exercise of discretion except on grounds of law, if it sees that, on the other ground, the decision will result in injustice being done, it has both power and duty to remedy it."

40. And in the case of Kama v National Fisheries Development Limited, page 4 paragraph 2, Muria CJ said:

"One of the fundamental reasons for the existence of the discretionary power of the Court to stay execution of a judgment is to ensure that the parties have a just outcome to their dispute according to law and procedural rules, such as O.45 r.44 are in an aid to the attainment of the just solution of the dispute. Order 45 r.44 empowers the Court to stay execution of a judgment, if it appear just and reasonable, that is, the attainment of justice when resolving the dispute between the parties to a litigation."

41. Taking those two cases into account will it render a just outcome to the dispute if the following issues are not addressed?

1.	Is the Commissioner of Lands aware of the pre-existence of parcel No. 191-004-390 when making an offer to the Defendant and accepting and receipting the amount requested, thus render a contract conclusive?

2.	After the realignment exercise how much of the land on the northern side of the bridge is vacant.

3.	If the land claim by Defendant is vacant because of the realignment exercise and become remainder, which implies acquisition and sub-division, then out of which land was acquired or sub-divided.

4.	Who authorises the Defendant to enter and occupy the land, is it Mr. Nesa or other Commissioner of Lands or any officer from the Lands Department?

5.	Whether the offer made and subsequently accepted, was it made by mistake or by undue influence which may tantamount to irregularity?

42. Those questions require answers from the Commissioner of Lands. Without them this case will not be properly determined on its merit, and justice will never be seen done. The only means that those questions be answered is by way of trial proper and would be just and right that Commissioner of Lands be joint as a party.

43. Having said that I find there is some delay by the Applicant, but not really to the extent that delay alone could be considered in isolation from his propose defence. More importantly are the issues surrounding the grant of the offer and a subsequent contract that follow. That contract gives the Applicant some legal footing to claim as a bona fine purchaser, therefore enable him to acquire equitable interest. There are a lot of questions to be answered. The list of issues framed as questions above are not exhaustive. And those issues are triable ones which could be best left for trial proper to consider, and would be just and right that the Commissioner of Lands be joint as a party. In so saying I find the Applicant do have a defence.

44. Considering the criterion summarised by Ward CJ in Kayuken case and in exercising my discretion, I therefore allow applications to set aside, follow from that, application to stay, be allowed.

45. Orders of the Court

(i) Application to set aside default judgment dated 22 November 2007 be allowed. Follow from that application to stay must also succeed. That enforcement orders be stayed until trial of the matter.

(ii)	That the Commissioner of Lands be joinder as a party to the proceedings.

(iii)	$7,000-00 deposited by Applicant to secure his attendance be refunded forthwith.

(iv) Respondent to file amended statement of claim and serve within 14 days.

(v) Applicant to file and serve defence 14 days after.

[vi] Parties to meet their own costs.

THE COURT