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Pan Oceanic Bank Ltd v Star Light Ltd [2025] SBHC 47; HCSI-CC 217 of 2024 (6 March 2025)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 217 of 2024

BETWEEN:

PAN OCEANIC BANK LIMITED
Claimant

AND:

STAR LIGHT LIMITED
First Defendant

AND:

PRIMA BILLY SOMEO AND NGU KIE DUNG
Second Defendant

Date of Hearing: 7 February 2025
Date of Ruling: 6 March 2025

Mr McChesney Ale for the Claimant
No Appearance for the Defendant

Pitakaka; PJ

EX-TEMPORE RULING ON APPLICATION FOR DEFAULT JUDGMENT

Introduction and background

1. The Claimant, Pan Oceanic Bank Limited, filed a Claim (Category B) in this proceedings on 5 June 2024. The Claimant seeks the following orders:
   • (1) An order that the First and Second Defendants jointly and severally repay the judgment sum of SBD237,259.85 converted by them forthwith on verdict entered;
   • (2) Interst of 5% on the said judgment sum from date money converted up to date settlement paid in full;
   • (3) An order that the Claimant shall be entitled to deduct or shall be entitled to continue to deduct from the Second Defendants’ business account held in the name of Star Light wholesale & Retail Shop until payment is made in full.
   • (4) Cost of this proceeding on indemnity basis; and
   • (5) Any other orders deem fit by this Honourable Court.
2. The Claim was served on the defendants. The evidence in the sworn statement of Brian Papage filed on 14 August 2024 confirm this fact.
3. The Defendants did not file any defence within the required time under Rule 5.37 of the Solomon Islands Courts (Civil Procedure) Rules 2007.
4. On 16 August 2024, the Claimant applied for default judgment under Rules 9.17.
5. The court must decide whether to grant default judgment based on Rule 9.17.

Issue 1: Whether the Claimant is entitled to default judgment
Rules applicable to Issue 1

6. Rule 9.17 allows the court to enter default judgment if the Defendant fails to file a defence within the required time.
7. Rule 9.22 allows the court to enter judgment in favor of the Claimant without a hearing in category B claim.
8. Rule 9.23 allows a claimant in a Category B proceeding the right to apply for judgment against the defendant if the defendant fails to respond or defend the claim. The judgment can cover the following key components:
   1. The total amount specified in the claim – This represents the principal sum that the claimant is seeking from the defendant as stated in the claim form.
   2. Interest on the claimed amount – The claimant may request interest on the principal amount, calculated from the date of filing, at a rate determined by the court.
   3. Costs incurred in the proceeding – The claimant may also seek reimbursement for legal costs, court fees, and other expenses related to initiating and pursuing the claim.

Components of Default Judgment (Rule 9.24)

9. Under Rule 9.24, if the court determines that the claimant is entitled to judgment due to the defendant’s failure to respond, it may enter a default judgment that includes:
   1. The full amount claimed (Rule 9.24(a)) – The court may grant the claimant the entire sum claimed in the proceeding if no valid defense has been filed by the defendant.
   2. Interest on the amount claimed (Rule 9.24(b)) – The court may award interest on the principal sum from the date the claim was filed. The interest rate and method of calculation will be determined by the court based on applicable legal provisions.
   3. Costs incurred in the proceeding (Rule 9.24(c)) – The court may also order the defendant to pay the costs incurred by the claimant, which may include filing fees, legal representation fees, and any other reasonable expenses.

Requirements for the Sworn Statement (Rule 9.25)

10. When applying for a default judgment, the claimant must submit a sworn statement that provides essential details as required under Rule 9.25. The sworn statement must include the following:
    1. Total amount owing at the time of filing (Rule 9.25(a)) – The claimant must clearly state the principal amount that was due when the claim was initially filed. This amount should not include any deductions for payments made after filing.
    2. Details of any reductions due to payments or credits (Rule 9.25(b)) – If the defendant has made partial payments or received any credit adjustments, the sworn statement must reflect these deductions and provide an updated amount still outstanding.
    3. Calculation of interest (Rule 9.25(c)) – The statement must explain how the interest is calculated, including:
       1. The principal amount on which interest is applied – The specific sum that is subject to interest charges.
       2. The date from which interest starts accruing – The exact date when interest calculation begins, typically from the date of filing unless otherwise specified.
       3. The method used to calculate interest – A clear breakdown of the interest rate applied, whether it is a fixed rate or calculated based on a statutory or contractual formula.
       4. Breakdown of costs claimed (Rule 9.25(d)) – The sworn statement must include a detailed explanation of the costs being claimed, including court fees, legal service fees, and any other relevant expenses.
11. Rule 9.26 – The court may award interest:
    • (a) Based on the rate stated in the claim, up to the judgment date.
    • (b) Determined by the court under Rule 17.65 or as a lump sum instead of that interest.
12. Rule 9.27 – If the claim does not specify the period for interest, it is only recoverable from the date the claim was issued.

Application of the applicable rules to Issue 1

13. The Claimant filed a sworn statement by Brian Papage on 6/12/24. This statement confirms that the Defendant were properly served.
14. The Defendants did not respond or file any defence. This satisfies the requirements of Rule 9.17.
15. Vikum Walagedara filed a sworn statement on 16/08/24, supporting the Application for Default Judgment. He confirms that the Claimant is claiming SBD237, 259.85 from the Defendants. He explains the calculation of the interest rates claimed and presents an itemized bill of costs from the Claimant’s solicitor, Messrs. Rano & Company, covering court fees, legal service fees, and disbursements. His statement satisfies the requirements of Rules 9.23, 9.24, 9.25, 9.26, and 9.27.

Conclusion on Issue 1

16. The Claimant has met the requirements under Rule 9.17, 9.22, 9.23,9.24, 9.25, 9.26 and 9.27
17. The court grants default judgment in the terms of the reliefs sought in the claim.

Issue 2: Whether the Court should exercise discretion to grant default judgment
Rules applicable to Issue 2

18. Granting default judgment is discretionary. The court must consider whether judgment without a trial is just and proper.
19. Rule 9.22 as read with Rule 9.23, 9.24, 9.25, 9.26 and 9.27 allows the court to grant default judgment in Category B if the Defendant does not defend the claim.
20. The Court already finds that the Claimants has met the requirements of those Rules in Issue 1 above.

Application of applicable rules to Issue 2

21. The Defendant did not respond or file defence to the claim.
22. The nature of the claim is a money claim (Category B).
23. The Claimant has satisfied all procedural requirements under Rules 9.17, 9.22, 9.23, 9.24, 9.25, 9.26 and 9.27 as the court finds in issue 1above.
24. There is no legal or jurisdictional issue preventing the court from granting judgment.

Applicable Case Authorities

25. In Lethy & Siako v Luluku & Others^[1], the court denied default judgment due to jurisdictional issues that fundamentally affected the claim. This case highlights that courts should not grant default judgment if jurisdiction is in question.
26. In QQQ Holdings Ltd v Honiara City Council^[2], the court rejected default judgment because the claim sought declaratory relief, which required substantive legal arguments. This case emphasizes that courts should not grant default judgment when complex legal issues require full consideration at trial.
27. After considering these cases, the court finds that the present claim does not raise jurisdictional issues or require substantive legal arguments. The claim falls under Category B as a money claim, which Rules 9.22, 9.23, 9.24, and 9.25 explicitly allow in default judgment applications.

Finding/Conclusion on Issue 2

28. The court finds that Rule 9.22, 9.23, 9.24 and 9.25 applies in this case because of the money claim (Category B).
29. The Defendants failed to file any defence or dispute the claim.
30. The Claimant provided evidence as to service of the claim on the Defendants. The claimant also provided evidence as to the requirement of Rule.9.24 and 9.25 in support of the application of default judgment.
31. The court is satisfied that the claim meets the criteria for default judgment under those rules.

Cost on Indemnity basis

32. The court reserved its ruling on indemnity costs when granting the default judgment at the hearing.
33. After reviewing the case circumstances under Rules 9.23(c) and 9.24(d) and considering its findings, the court determines that the Defendants were served with the claim but deliberately failed to respond or file a defense. Their inaction forced the Claimant to seek a default judgment. Additionally, the Claimant specifically requested indemnity costs in the claim. Given these circumstances, the court exercises its discretion to award indemnity costs against the Defendants.
34. The court grants default judgment in the terms of the reliefs sought in the claim.

Orders

35. The court makes the following orders:
    1. The Claimant is granted default judgment in the terms of the relief sought in the claim.
    2. The First and Second Defendants shall jointly and severally repay the judgment sum of SBD237,259.85 converted by them forthwith on verdict being entered;
    3. Interest shall be 5% on the said judgment sum from date money converted up to date settlement paid in full;
    4. The Claimant shall be entitled to deduct or shall be entitled to continue to deduct from the Second Defendants’ business account held in the name of Star Light wholesale & Retail Shop until payment is made in full.
    5. Cost of this proceeding shall be on indemnity basis to be paid by the Defendants the Claimant.

Dated this 7^th of February, 2025.
By the Court
Hon. Justice Michael Collin Pitakaka
Puisne Judge of the High Court

[1] [1998] SBHC 13; HC-CC 104 of 1996 (23 February 1998), Awich J
[2] [2003] SBHC 18; HC-CC 039 of 2003 (1 May 2003)