| Fiji Islands - Burns Philp (South Sea) Company Ltd v Devi - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
At Labasa
Appellate Jurisdiction
CIVIL APPEAL NO. 0002 OF 1996
BETWEEN:
BURNS PHILP (SOUTH SEA) COMPANY LIMITED
Appellant
AND:
ROSHNI DEVI
by her next friend and father
AMBIKA PRASAD (s/o Bas Deo)
Respondent
Mr. G. Prasad for Appellant
Mr. A. Sen for Respondent
JUDGMENT
In December 1991 the appellant company as part of an effort to boost sales, held a 'Christmas Savings Sale' promotion in which it offered to all its customers, an opportunity to win a return trip for two to Canada plus $500 spending money.
The lucky winner of the 'promotion' was drawn at the appellant company's Home-Centre Store in Suva on Christmas-eve and turned out to be the plaintiff, whose name had been entered in the draw by her father after he had purchased a Hitachi Radio Cassette on the 13th of December 1991 from the Burns Philp's Home-Centre Store at Labasa.
By letter dated the 24th December 1991 on the appellant company's letterhead, the plaintiff was advised of her good fortune in winning the return trip to Canada and the spending money and told:
"Upon presentation of this letter together with your docket number 814960 to our Store Manager Labasa you will receive your
prize."
What transpired after that letter is not entirely clear; suffice it to say that despite approaches by the plaintiff's father and
a letter from the plaintiff's solicitors no "... return air tickets for two to Canada ..." was ever provided by the appellant company up to the date when proceedings were issued out of the Magistrate Court, Labasa by the plaintiff, on the 26th of October 1993.
In her Statement of Claim the plaintiff sets out briefly the circumstances in which she won the prize and her unsuccessful efforts to obtain the return trip
to Canada despite acquiring a Fiji passport and the necessary Canadian visa. The Statement of Claim also itemises various losses and expenses incurred by the plaintiff in obtaining the necessary travel documents and permits and claims
the value of two return air tickets to Canada together with costs of the action.
The plaintiff's Writ was served on the registered office of the appellant company at Rodwell Road, Suva on the 3rd of November 1993 and on 10th of November 1993 the appellant company appeared in the Labasa Magistrate, Court by counsel and was given 14 days to file a defence.
Thereafter the action was adjourned on no less than four (4) occasions over a period of four (4) months to allow the appellant company to file its defence, and on each occasion the appellant company was represented by counsel.
Still no defence was filed and on the 13th of April 1994 the plaintiff formally proved her claim in the absence of counsel for the appellant company, and judgment was entered in her favour
in the sum of $5,869.92 with costs of the action. This was later evidenced by a formal decree of the Labasa Magistrate Court issued on the 28th of April 1994.
Almost a year later on 1st March 1995 the plaintiff took out a Writ of FIFA in an effort to enforce the judgment against the appellant company.
On 5th May 1995 the solicitors acting for the appellant company filed a Motion in the Labasa Magistrate Court seeking various orders including a stay of execution and liberty to defend the plaintiff's claim.
The Motion was supported by two (2) proposed Statements of Defence and two (2) affidavits, one deposed by a Devendra Narayan, Finance Manager of Burns Philp (Fiji) Limited and the other, by Tarun Vikash Anand, Credit Controller of B.P.T. (South Sea) Company Limited. No affidavit was forthcoming from any senior official of the appellant company as one might have expected nor has there been any
attempt to cast any doubt upon the appellant company's congratulatory letter of 24th December 1991.
Be that as it may, in a three (3) page ruling delivered by the trial magistrate on 16th August 1995, the appellant company's Motion was dismissed with costs. The appellant company's solicitors almost immediately gave Notice of Intention to Appeal against the ruling and a fortnight later the Grounds of Appeal were filed. On 25th October 1995 a stay of execution pending appeal was sought and this was granted on 21st December 1995 on condition that the appellant company deposit the judgment sum in court.
Before dealing with the learned trial magistrate's ruling however, it may be observed that no Notice of Intention to Defend was ever filed in the action by the appellant company (See: Order VI r.6 of the Magistrate Court Rules); nor was any application ever made within time by the appellant company, to be let in to defend the action (See: Order VI r.7); nor was a Statement of Defence ever filed by the appellant company despite being given 4 months in which to do so; nor was judgment entered by the plaintiff pursuant to Order VI r.8.
Instead the learned trial magistrate quite properly required the plaintiff to formally prove her claim by calling evidence, and judgment
was entered on the learned trial magistrate being satisfied that the plaintiff had done so. [See: The judgment of the Fiji Court of Appeal in Subodh Kumar Mishra v. Car Rentals (Pacific) Ltd. (1985) 31 F.L.R. 49.]
In these circumstances Order XXX r.5, Order XXXII r.11 and even Order XXXIV r.3 of the Magistrate Court Rules, gives the learned trial magistrate a discretion to set aside the judgment upon 'sufficient cause (being) shown', and upon such terms as to the court may seem fit. (cf: Order 13 r.10 and Order 19 r.9 of the High Court Rules)
The learned trial magistrate in his ruling of the 16th August 1995 correctly sets out the principles that guide the exercise of the court's unfettered discretion when he wrote:
"In an application for getting a default judgment set aside there are several considerations that engage the attention of the
court viz. whether the defendant-applicant can give a satisfactory explanation for his absence from court, whether he has a valid
defence and whether any prejudice would be caused to the plaintiff respondent."
The learned trial magistrate then proceeded to deal with each point in turn and finally dismissed the appellant company's application
which he described as having 'no merit whatsoever'.
Learned counsel for the appellant company in arguing the appeal handed in a comprehensive fourteen (14) page written submission in which not a single reference was made to anything which was written by the learned trial magistrate in
the above-mentioned ruling.
Indeed the submission appears to have misconceived the nature of the appeal or this court's appellate powers in dealing with it in
so far as the submission ends with the following paragraph:
"We respectfully submit that this Honourable Court exercise its discretion in favour of the appellant and set aside the default
judgment in this matter in terms of the application of 11 May 1995."
I say at once that this Court in this appeal has no such 'discretion' in the matter nor is the appellant's application of 11th May 1995 before this Court for determination. This is not an application for the exercise of a concurrent discretion vested in this Court (cf: bail applications) but an appeal against the exercise of a judicial discretion vested in the trial magistrate.
In such an event Lord Wright said in Charles Osenton and Co. v. Johnston (1942) A.C. 130 at p.148:
"... (the) court starts with the presumption that the judge has rightly exercised his discretion. It must be satisfied that
the exercise was wrong ... The appellate court must not reverse the judge's decision on a mere 'measuring cast' or on a bare balance
..."
In similar vein Griffiths L.J. said in Eagil Trust v. Pigott-Brown (1985) 3 ALL E.R. 119 at p.121:
"... I should like to make one or two general observations observations about the Court's approach to appeals of this nature
from the exercise of a judge's discretion.
The House of Lords has in a series of recent decisions reminded this court that its function is to review the exercise of the judge's
discretion and not to entertain an appeal from it in the sense of being invited to substitute its own discretion for that of the
judge ...
Obviously, where the court is developing a new discretionary jurisdiction ... there will inevitably in the early days be a number
of appeals to this court so that clear guidance can be given as to the principles on which a judge at first instance should exercise
his discretion. But, once those principles have been clearly settled, there is a heavy burden on an appellant to demonstrate to this
court that the judge has either failed to apply well-settled principles or, alternatively, that his discretion can be attacked on
what are colloquially known as 'Wednesday' grounds (see Associated Provincial Picture Houses Ltd. v. Wednesbury Corp [1947] EWCA Civ 1; [1947] 1 ALL ER 680, [1948] 1 KB 223).
Sometimes it is also said that the judge's discretion can be attacked if it is clearly wholly wrongly exercised. But, in my view,
the greatest caution should be adopted in that approach because it comes perilously close to a means of substituting this court's
discretion for that of the High Court judge; and that is not permissible."
In this instance the principles that guide a court in the exercise of its discretion to set aside default judgment "... have been clearly settled ..." by numerous decisions of the courts both locally and overseas. To cite but one example, McCarthy J. thirty (30) years ago in Paterson v. Wellington Kindergarten Inc. (1966) N.Z.L.R. 975 said at p.983:
"In approaching an application to set aside a judgment ... the Court is not limited in the considerations to which it may have
regard, but three have long been considered of dominant importance. This was accepted by the Chief Justice in the court below and
by all counsel in this Court. 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.
So much then for the law.
I turn next to consider the grounds of appeal of which the second and most important ground reads:
"That the exercise of the discretion by the Learned Magistrate cannot be supported having regard to the evidence by way of Affidavits
of Devendra Narayan (f/n Hardip Narayan) and Tarun Vikash Anand (f/n Vijay Nand) both sworn on 5th May 1995 and filed herein and
the submissions (no details recorded) made on 20 July 1995 at the hearing in support of the application."
Without necessarily agreeing with the conclusions of the learned trial magistrate on the lateness of the appellant company's application
or the prejudice likely to be caused to the respondent, I propose to examine his decision on the question whether or not the defendant
has a '... substantial ground of defence'.
In this regard the learned trial magistrate correctly summarises the gist of the appellant company's defence in his ruling of 16th August 1995 where he wrote:
"As regards the requirement of a valid defence the affidavit states that B.P. Fiji had been incorporated as a limited liability
company under the provisions of the Companies Act of Fiji on 12th May 1992 and that on 1st July 1992 the defendant had changed its name to B.P.T. (South Seas) Company Limited and
further that the core business of the defendant is the retail of Toyota make motor vehicles where as the core business of B.P. Fiji
is the retail of homeware goods. The defendant-applicants contention in giving these details is that the plaintiff had taken legal
action and obtained judgment against the wrong party."
(See: the appellant company's proposed Statement of Defence and counsel's summary at para. E(4) of his written submissions.)
In essence the appellant company's defence is that it is not liable because since the incident in December 1991 and before the issuance of the plaintiff's Writ it had changed its name and reorganised its activities so that it now only sells motor vehicles.
In rejecting the appellant company's proposed defence the learned trial magistrate said:
"... the letter informing the plaintiff Roshni Devi of her being a winner with Burns Philp Home Centre bears the letter head
Burns Philp (South Seas) Company Limited. Hence I fail to see the plaintiff suing the wrong party. The plaintiff has acted in accordance
with the information provided on the letter head, and in my view the defendant-applicant is estopped from stating a different thing
now. In the circumstances I don't see that the defendant has any valid defence."
In addition the following further observations may be added to the learned trial magistrate's finding regarding the appellant company's
four (4) paragraph proposed Statement of Defence:
-As to averment 1(b): concerning the change in the appellant company's name, Section 22(4) of the Companies Act 1983 provides (inter alia):
"A change of name by a company ... shall not affect any ... obligations of the company or render defective any legal proceedings
... against the company, and any legal proceedings that might have been ... commenced against it by its former name may be continued
or commenced against it by its new name."
-As to averment 1(c), learned counsel for the appellant company quite properly conceded at the hearing of the appeal, that the averment was incorrect
as the incident complained of by the plaintiff i.e. the appellant company's failure to provide the promised return tickets to Canada, did take place between the plaintiff and the appellant company insofar as the plaintiff's claim is traceable to the appellant company's
unconditional letter of 24th December 1991 which clearly predates any change of name by the appellant company, and moreso, where it is common ground that the appellant company
paid the cash component of the 'prize' (i.e. $500) to the plaintiff before she issued the Writ;
and finally
-As to averment 1(d) that "the proper party is Burns Philp (Fiji) Limited ...", it is extremely difficult to fathom how a limited liability company that had not been incorporated or come into existence at the time
of an incident could be liable in any way, shape or form for such pre-incorporation incident other than by agreement or contract.
Needless to say no such agreement or contract was referred to or annexed to the affidavits filed in the Magistrate Court, but, in any event, such a contract could not possibly affect the plaintiff's claim against the appellant company which has never
directly denied offering the prize or acknowledging that the plaintiff was the winner of it.
In the light of the foregoing and after carefully considering the oral and written submissions of counsel for the appellant company,
I am not at all satisfied that the learned trial magistrate erred in the exercise of his discretion.
The appeal is accordingly dismissed with costs to the respondent to be taxed if not agreed.
D.V. Fatiaki
JUDGE
At Suva,
5th July, 1996.
Hba0002j.96b
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