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Commissioner of Inland Revenue v Fa [2001] FJHC 225; HBC0461J.1999S (23 August 2001)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0461 OF 1999

BETWEEN:

COMMISSIONER OF INLAND REVENUE
Plaintiff

AND:

ISIRELI FA
Defendant

Miss B. Malimali for the Plaintiff
Miss S. Singh for the Defendant

Dates of Hearing: 25th October, 14th November 2000

Date of Judgment: 23rd August 2001

JUDGMENT

On the 30th of September 1999 the Plaintiff issued a Writ against the Defendant claiming the sum of $68,983.71 for arrears of Income Tax and Late Payment Penalty thereon for the income years 1992, 1994, 1995 and 1996 amounting to $34,898.86; $24,905.34 for arrears of Tax Upon Employees’ Emoluments and Late Payment Penalty thereon for the years 1993, 1994, 1995, 1996, 1997 and from January to September 1998. Finally the Plaintiff claimed from the Defendant the sum of $9,159.51 being the arrears of Value Added Tax and Late Payment Penalty thereon for the taxable period October 1996, January 1997 and April 1997.

The Defendant filed an Acknowledgement of Service on the 3rd of November 1999 but did not deliver a Defence within the time prescribed by the rules of this Court.

On the 7th of February 2000 the Plaintiff entered judgment in default of Defence against the Defendant in the sum of $34,898.86, the amount allegedly due for income tax by the Defendant.

On the 10th of May 2000 the Plaintiff issued a Notice of Motion which is now before me seeking an order that the Plaintiff be allowed to amend the amount of his judgment to the sum of $68,963.71, the claim in the first part of his Statement of Claim.

The Motion was supported by an affidavit of Semesa Baravilala a Clerical Officer employed by the Plaintiff who stated that he was in-charge of income tax matters in the Plaintiff’s Legal Section. He deposes that he was instructed by his Legal Officer to enter judgment against the Plaintiff in the sum of $68,963.71 but in error, entered the wrong sum of $34,898.86. He states that his error was due to an accidental slip or omission.

The Plaintiff seeks the amendment under Order 20 Rule 10 of the High Court Rules, commonly known as the “slip” rule.

Rule 10 reads as follows:

“Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omissions, may at any time be corrected by the court on motion or summons without an appeal.”

As in practically all cases similar to this before the Courts relief is sought by the Plaintiff, if I may so describe it on, the ground that it was all an unfortunate mistake. The question I have to decide is whether I consider that to be so and, if I do, whether I should grant the amendment sought. The case has some curious features. After judgment was entered for $34,898.86, on the 15th of March 2000 the Defendant wrote a “without prejudice” letter to the Defendant stating that he was considering setting aside the default judgment, but at the same time was prepared to discuss Terms of Settlement with the Plaintiff.

On the 31st of March 2000 the Plaintiff wrote to the Defendant informing him that the judgment sum of $34,968.86 should be settled within 12 months, that being a policy of the Plaintiff.

The Plaintiff then accepted an offer made subsequently by the Defendant to pay $2,000.00 per month and the full amount at the end of 12 months.

By the 6th of April 2000 the Plaintiff had evidently changed his mind on the Terms of Settlement because he wrote to the Defendant in these terms:

“I have considered your proposal and write to advise that we will accept liquidation of your debt as follows:

- $5,000 to be paid immediately;

- $3,000 per month beginning 1st May 2000; and

- full settlement by 1st January 2001

I hope that you will adhere to the above terms.

Yours faithfully”

The new terms offered by the Plaintiff were not acceptable to the Defendant who wrote to the Plaintiff on the 1st of May 2000 asking him to allow the Defendant to settle on the earlier terms.

Presumably the Defendant’s last offer was not acceptable to the Plaintiff who apparently then discovered the mistake he had made in entering judgment for $34,898.86.

The Defendant submits that Order 20 Rule 10 does not apply in this case. He says the rule only applies to cases where there is a mistake or an error arising from an accidental slip or omission by officers of the Court and that the Court had the power to vary its own orders which are drawn up mechanically in the registry or in the office of the Court.

I do not accept the first part of this submission because there is nothing in the words of Rule 10 confining its operation to officers of the Court, although in practice the mistake or slip which the Court has to consider will usually have been made by its officers.

The Defendant’s submission ignores the fact that apart from the rule, the Court has an inherent power to vary its own orders so as to carry out its own meaning and to make its meaning plain. Thynne v. Thynne (1955) P.272; Lawrie v. Lees (1881) 7 App. Cas. 19 at pp.34-5 (Lord Penzance).

In Hatton v. Harris [1892] UKLawRpAC 30; (1892) AC 547 Lord Watson said at p.560:

“When an error of that kind has been committed, it is always within the competency of the Court, if nothing has intervened which would render it inexpedient or inequitable to do so, to correct the record in order to bring it into harmony with the order which the judge obviously meant to pronounce. The correction ought to be made upon motion to that effect, and is not matter either for appeal or for rehearing.”

That statement was mentioned with approval by Diplock L.J. in Moore v. Buchanan (1967) 3 ALL ER 273 at 276.

The question I must now answer is whether I consider something has intervened which would render it inexpedient or inequitable to allow the Motion. The Defendant says something has intervened, namely that the Plaintiff took no effective steps to correct the judgment until the 10th of May 2000, a period of 3 months from the 7th of February to the 10th of May.

The Defendant also says that he relied upon representations made by the Plaintiff regarding settlement and consequently did not apply to set aside the judgment in default obtained by the Plaintiff.

I regret I cannot accept this submission in its entirety. It must have been obvious to the Defendant reading the Statement of Claim that judgement had been entered for the wrong amount as $34,898.86 referred only to the Plaintiff’s claim for income tax. I therefore consider it would be unfair to the Plaintiff not to allow it to enter judgment for the lesser amount of $34,898.86 which, I am satisfied, the Defendant admitted owing. Equally however I consider it would be unfair to the Defendant not to allow him to defend this claim for the balance of the claim by the Plaintiff, namely $34,064.85 which he claims he disputes.

I therefore order that the default judgment for $34,898.86 should not be set aside but that the Defendant be given leave to defend as to the balance allegedly owing to the Plaintiff, namely $34,064.85.

I direct that a Defence be delivered within 14 days of the date of this judgment and thereafter pleadings take their normal course. Costs will be in the cause.

JOHN E. BYRNE
JUDGE