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Imtiaz v Rizvi [2012] FJHC 32; 2012-01-23 (23 January 2012)

IN THE HIGH COURT OF FIJI
IN THE WESTERN DIVISION
AT LAUTOKA

Civil Action No.HBC 194 of 2009L

BETWEEN :

SHEIK SHAFI IMTIAZ
of B-58/3 block E, Satellite Town, Rawalpindi, Pakistan, Businessman and

IMAN TRADING COMPANY LIMITED
a limited liability company having its registered office at Japan.
Plaintiffs

AND:

FURQAN RIZVI trading as AL-RIZVI TRADING
of Malolo, Nadi, Businessman.
1st Defendant

FIJI INDEPENDENT COMMISSION AGAINST CORRUPTION
a statutory body.
2nd Defendant
(the claim against FICAC was struck out on 03 February 2011)

FIJI ISLANDS REVENUE & CUSTOMS AUTHORITY
3rd Defendant

Before : Master Anare Tuilevuka
Appearances : Mr. Roopesh Singh for the Plaintiff/Applicant
1st Defendant in Person

Date of Ruling : 23 January 2012.

RULING

INTRODUCTION

[1]. The plaintiffs seek to set aside a default judgement entered against them on 22 February 2010 for their failure to file and serve a statement of defence against the defendant's counter-claim in the sum of $40,000-00 (fourty thousand dollars) with general damages and costs to be assessed. The defendant has since had a Writ of Fieri Facias sealed at the High Court in Lautoka. On 19 October 2011, the Court Sheriff levied the Writ of Fieri Facias against the plaintiffs stock and trade at 30 Weikamu Subdivision, Nadi.

PLAINTIFFS & DEFENDANT'S RELATIONSHIP

[2]. The plaintiffs and the defendants had a business relationship pursuant to an Exclusive Supply and Distribution Agreement ("The Agreement") dated 7 May 2009. Curiously, the plaintiff's statement of claim makes no reference to this Agreement. The defendant on the other hand refers extensively to the Agreement in his defence and counter-claim. The affidavit of Masukh Lal Raniga filed for and on behalf of the plaintiffs in support of the setting aside application concedes that such an Agreement was in fact entered into between the parties.

[3]. Essentially, the defendants judgement on the counter-claim was based on that Agreement – and while the plaintiff had failed to plead it in their statement of claim – they are seeking to set aside the judgement on the same Agreement.

[4]. According to the defendant, the plaintiffs appointed him to be their exclusive agent for 36 months for the sale and resale of certain products – namely 2nd hand motor parts that the plaintiffs were importing from Japan. The plaintiffs had shipped goods to the defendant to the total value of $71,801.55. The defendant further alleges that he has made some payments to the plaintiffs and the balance remaining is $29,455.38 but which is not due and payable yet.

[5]. The plaintiffs – on the other hand, from their statement of claim and from the affidavit of Raniga, plead that they supplied to the defendant on credit parts to the total value of FJ$384,615.40 (three hundred and eighty four thousand six hundred fifteen dollars and forty cents). The supplies were made between June and July 2009.

[6]. The plaintiffs also say that in September 2009, they advanced the sum of $5,000 to the defendant to be paid back on demand. They say that the defendant has since paid the plaintiffs the sum of $40,000 with a balance of $344,615.40 owing. Notably, there is a vast difference between what the parties say was the total value of the goods/parts supplied by the plaintiffs to the defendant and the balance which the defendant owes to the plaintiffs. The parties are also at variance on their account of why the plaintiffs paid the $5,000-00 (as per paragraph [7] above). According to the defendant, that sum was paid by the plaintiffs to be part of the working capital of a planned joint business venture between the parties which did not eventuate because of an alleged breach of Agreement on the part of the plaintiffs.

COUNTER CLAIM

[7]. The defendant counter-claims that the plaintiffs had breached the exclusivity clause in their Agreement by supplying parts to a third party. Under clause 11.3 of their Agreement, the plaintiffs had agreed that if they breached the agreement without any valid reason, they would accept liability to the defendant in the liquidated sum of $40,000-00. It was on this sum that the defendant had obtained default judgement. I will not discuss any further what the Agreement stipulated. Suffice it to say that at the heart of the dispute between the plaintiffs and the defendant is the Agreement and their different expectations of it.

PRINCIPLES

[8]. Where a judgement has been obtained irregularly, it should be set aside as of right. Otherwise, if the default judgement was entered regularly, the party in default will only succeed in setting it aside if he or she files an affidavit of merits which discloses a meritorious defence[1]. I am of the view that the default judgement was entered regularly because no defence was filed within the stipulated time and that judgement was entered on the liquidated sum of $40,000-00 (fourty thousand dollars) with damages to be assessed. I am also satisfied that the affidavit filed in support of the application in essence - highlights the different views and expectations that the parties have of the Agreement which, no doubt, is berthed from their different account of events that unfolded. Both the issues of fact and law raised are best postponed to be resolved a trial proper. Therefore, applying the principles, I am of the view that the affidavit filed for and on behalf of the plaintiffs discloses a defence on the merits which carries some degree of conviction.

[9]. I must reiterate here that the plaintiffs had not at all pleaded the Agreement in their Statement of Claim. It was only when the defendant highlighted the Agreement in his defence and upon the entry of the default judgement that the plaintiffs have raised it in their affidavit to set the judgement aside. That gives me the impression that the plaintiffs are shadowy in their whole approach to pleading their case. And seeing that the plaintiffs are both resident outside the jurisdiction, I am inclined to consider putting a condition on the setting aside. Order 13 Rule 10 and Order 19 Rule 9 both confer upon this Court a wide discretion to set aside or vary any judgement entered on account of default of service of notice of intention to defend or statement of defence "on such terms as [the Court] thinks fit". There is accumulated case law authority that this wide discretionary power includes the setting up of conditions for setting aside.

[10]. It has been suggested that the Court may only order the payment into court of the whole or part of any money claimed (or alternatively a Bank guarantee) - as a condition for setting aside, if the defence raised is shadowy and/or to ensure future compliance with the rules by the defendant who has been in breach of the rules[2].

ORDERS

[11]. I hereby set aside the default judgement entered against the plaintiff on 22 February 2010 on the condition that the plaintiffs deposit the sum of $40,000 – 00 (fourty thousand dollars) into court within 21 days of the date of this ruling. The plaintiff's statement of defence to the counter-claim is also to be filed on the same day when the deposit sum is paid in. Costs to the defendant summarily assessed at $1,000-00 (one thousand dollars only). Case adjourned to 21 February 2012 for mention to check on compliance.

................................
Anare Tuilevuka
Master

At Lautoka.
23 January 2012.

^[1] (see Fiji Sugar Corporation Limited v Ismail [1988] FJCA 1; [1988] 34 FLR 75 (8 July 1988), Wearsmart Textiles Ltd v General Machinery Hire Ltd [1998] FJCA 26; Abu0030u.97s (29 May 1998), Alpine Bulk Transport Co. Inc. v Saudi Eagle Shipping Co. Inc., The Saudi Eagle [1986] 2 Lloyd's Rep. 221, Allen v Taylor [1992] P.I.Q.R. 255Suva City Council v Tabu [2004] FJCA 42; ABU0055.2003S (16 July 2004), Covec (Fiji) Ltd v Singh [2008] FJCA 81; ABU0083.2007S (7 November 2008).

^[2] (see O'Hare and Hill: Civil Litigation, 5th edition, 1990, Longmans at page 234; see also MV Yorke Motors v Edwards [1982] 1 WLR 444 HL; the Hong Kong Court of Appeal judgement in L & M Specialist Construction Limited v Wo Hing Construction Company Limited Civil Appeal No. 147 of 2000; Cockle v Joyce [1877] UKLawRpCh 278; (1878) 7 Ch D 56; In re Howell (1891) 2 Ch D 121; Hughes v Justin [1894] UKLawRpKQB 33; (1894) 1 QB 667; Wright v Mills (1889) 60 LT 887; see also Mr. Justice Fernando’s ruling in Singh v Rao [2011] FJHC 666; HBC20.2010 (24 October 2011).