IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION
Civil Action No. HBC 11 of 2014

BETWEEN	: 	MACUATA TIKINA HOLDINGS LIMITED
PLAINTIFF

AND	:	THE ESTATE OF RATU AISEA KATONIVERE a.k.a. RATU AISEA CAVUNAILOA KATONIVERE
1stDEFENDANT

AND	:	ADI SERA KATONIVERE
2nd DEFENDANT

Appearances	:		Toganivalu& Valenitabua for the Plaintiff
Maqbool& Co. for the Defendant

Ruling	:		30 August 2017

RULING
Background
1.	On 7 March 2014, the Plaintiff instituted these proceedings by filing a writ of summons and statement of claim against the Defendants both severally and/or collectively, for, inter alia, special damages in the sum of $129,798.62 for larceny and conversion; general damages to be assessed, interest pursuant to the Law Reform (Miscellaneous Provisions) (Death and Interest) Act; and costs.  Alternatively prayed were claims for: judgment against the Defendants with orders to re-pay to the Plaintiff the sum of $129,798.62 from the 1st Defendant’s Estate funds, or: that the 2nd Defendant as Administratix, be ordered to transfer Crown Lease No. 2957 being Lot 54 Muanikau Subdivision (L.D. No. 4/16/3274) to the Plaintiff.  

2.	On the same day, the Plaintiff also filed an ex-parte notice of motion and affidavit in support, for an injunction restraining the Defendant from transferring, selling, dealing with, or disposing of Crown Lease No. 2957 described as Lot 54 Muanikau Subdivision (L/D No. 4/16/3274). 

3.	The application for injunctive relief was heard and granted ex parte on 14 March 2014, on condition that the Plaintiff pays into Court a security deposit in the sum of $5000.  This order was dissolved on 22 August 2014 in the Court’s decisionon assessment of damages. 

4.	The writ was served on the 2nd Defendant on 10 March 2014, and though on 31 March 2014, the Defendants acknowledged service, by then it was already out of time.  Further, no statement of defence was filed within the time stipulated by the Rules, such that on 13 May 2014, the Plaintiff entered default judgment with damages and costs to be assessed, and filed a summons for assessment of damages.

5.	The summons was heard undefended on 18 August 2014, with judgment delivered in favour of the Plaintiff on 22 August 2014 as follows:

•	Special damages in the sum of $70,295
•	Defendants to pay interest at the rate of 6% per annum on $47,200 up to the date of full settlement of $70,295
•	No order for costs

6.	On 21 November 2016, Maqbool & Company filed a notice of appointment as solicitors for the Defendants.  Two days later, this summons to set aside default judgment was filed.

7.	The Plaintiff did not file an answering affidavit, Mr. Valenitabua saying their arguments would be on the law only.  He sought time to file legal submissions but failed to file any such submissions in the time given.  Thus all that is before the Court is the Defendant’s affidavit in support and written submissions.

The law
8.	The law on setting aside in this jurisdiction is settled.  Where a default judgment has been entered regularly or in compliance with the Rules, the defendant is required to show an affidavit of merits in order to succeed in setting aside the default judgment. (Fiji Sugar Corporation Ltd. v Ismail [1988] FJCA 1; [1988] 34 FLR 75 (8 July 1988).

9.	Where the default judgment has been entered irregularly, the defendant is entitled to have it set aside as of right without condition.  (White v Weston [1968] 2 Q B 647; Anlaby v Praetorious(1888) 20 Q.B.D. 764 at page 769 per Fry L.J.; Fiji Development Bank v Lal HBC 273 of 2012 per Kumar J)

10.	The Court has no discretion to refuse to set aside an irregular judgment. (Anlaby v Praetorious (supra))

11.	Order 13 deals with the consequences of the failure to file a notice of intention to defend, which consequences are similar to those for the failure to file a defence under Order 19.  The failure to file such notice or a defence where the claim is for a liquidated sum only entitles the Plaintiff to, inter alia, enter final judgment against the Defendant for a sum not exceeding the amount claimed in the writ. (Order 13 Rule 1, Order 19 Rule 2). 

12.	In the case of a writ endorsed with a claim for unliquidated damages only, the failure to file a notice of intention to defend or a statement of defence allows the Plaintiff, after the prescribed time, to enter interlocutory judgment against the Defendant for damages to be assessed, and costs.  (Order 13 Rule 2, Order 19 Rule 3)

13.	The failure of a defendant to file a notice of intention to defend or a statement of defence in a writ endorsed with two or more of the claims mentioned in Order 13 rr 1-4, or Order 19 rr 2-5 entitles the Plaintiff, after the prescribed time, to enter judgment in any such claim as he would be entitled to under the Rules.

14.	In cases such as this, where the writ is endorsed with a claim not of the kind in Order 13 rr 1-4, or Order 19 rr 2-5, the failure of a defendant to file a notice of intention to defend or statement of defence allows the Plaintiff to continue with the action as if the defendant had filed such notice, subsequent to the filing of an affidavit proving service of the writ on the said defendant.  

15.	On the other hand, a failure in such claims to file a defence within the period fixed by the Rules entitles the Plaintiff to apply to the Court for judgment.  An application for leave to enter judgment in this way must be made by summons (under Order 13 Rule 6 (3); or by summons or motion (under Order 19 Rule 7 (3), and served on the defendant against whom it is sought to enter judgment.  

16.	Both Order 13 Rule 10 and Order 19 Rule 9 give the Court an unfettered discretionary power to set aside or vary any judgment entered on account of the failure of the defendant to file a notice of intention to defend, or a defence within the prescribed time.  

17.	In Evans v. Bartlam (1937) 2 All E.R. p. 646 at p.650, Lord Atkins stated that though the Rules do not state any conditions on the Court’s power to set aside, the courts have set out for themselves guidelines on how their discretion is to be exercised.  One of these is the requirement for an affidavit of merits where the judgment was obtained regularly.  An affidavit of merits means that the applicant must adduce evidence that he has a prima facie defence.  The Court also stated that there is no rule requiring the applicant to furnish a reasonable explanation for allowing judgment to go by default, though the reason was one of the matters the court would consider in the exercise of its discretion.  Lord Atkins then said of the rationale: 

[T]he principle obviously is that, unless and until the court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has been obtained only by a failure to follow any of the rules of procedure.

18.	A draft defence is not necessary.  What is required, however, is an affidavit of merits. 

19.	An affidavit of merits means “an affidavit stating facts showing defence on the merits.” (Wearsmart Textiles Ltd v General Machinery Hire Ltd [1998] FJCA 26; Abu0030u.97s (29 May 1998) per Tikaram P, Casey and Dillon JJA)

20.	The Supreme Court Practice 1997 Vol 1 at p. 160 states:

The foregoing general indications of the way in which the court exercises discretion are derived from the judgment of the Court of Appeal in Alpine Bulk Transport Co. Inc. v. Saudi Eagle Shipping Co. Inc., The Saudi Eagle [1986] 2 Lloyd’s Rep. 221 at 223, CA, where the earlier cases are summarised.  From that case the following propositions may be derived:

(a)	It is not sufficient to show a merely “arguable” defence that would justify leave to defend under O.14; it must both have “a real prospect of success” and “carry some degree of conviction”.  Thus the court must form a provisional view of the probable outcome of the action.  

(b)	If proceedings are deliberately ignored this conduct, although not amounting to an estoppel at law, must be considered “in justice” before exercising the court’s discretion to set aside. 

21.	The principles in Saudi Eaglewere cited by the Court of Appeal in Wearsmartin its consideration of the requirements of an affidavit of merits.  The Court stated:

Notwithstanding the Court of Appeal’s later decision in Allen v. Taylor [1992] P.I.O.R. 255 which purports to dilute the principles emerging from Saudi Eagle, we subscribe to the White Book’s preferred view that ‘unless potentially credible affidavit evidence demonstrates a real likelihood that a defendant will succeed in fact no “real prospect of success” is shown and relief should be refused.  

22.	In Suva City Council v Tabu [2004] FJCA 42; ABU0055.2003S (16 July 2004) the Court of Appeal (per Eichelbaum, Penlington and Scott JJA) approved the test laid down in Wearsmart“in 1988 and which has stood since then.” 

Analysis
23.	The issue for the Court’s determination is whether the default judgment entered by the Plaintiff on 13 May 2014 should be set aside.  The material before the Court for its consideration comprise of the Applicant/Defendant’s affidavit in support and written submissions.  The Plaintiff/Respondent has neither filed an answering affidavit nor legal submissions as it undertook to do.  

24.	I consider the failure of the Plaintiff to file a reply to the application to set aside as an admission by it of the allegations in the affidavit in the support.  In Fiji Public Service Association v BureitaNabong and Others Civil Action No. HBC 50 of 2016, this Court stated at [24]:

It is now well settled that in evaluating affidavit evidence, the failure to contradict an issue, or reply specifically to a material allegation, is treated as an acceptance or admission of the said issue or allegation.  Said Blackburn J in Dawkins v Prince Edward of Saxe Weimar [1875]-76] 1 QBD 499 at 501, of the failure of the plaintiff there to reply to the defendants’ affidavits:

Upon that I can come to no conclusion, except that the defendants’ affidavits are strictly true, and are admitted to be strictly true.

25.	In Prakash v Chandra Civil Appeal No. ABU 0037/1985, the Court had this to say about the failure of the appellant to reply to a matter deposed to by the respondent in her affidavit:

Of course he did not have to respond. In our view, however, the course events had taken and the consequences if he did not respond, rendered it a matter of prudence that he should reply - if indeed he had a reply.  And in the circumstances of the case, in the absence of a reply, we hold the inference inescapable that what the respondent has said to be true.

26.	InNaqarase v Public Trustee[1994] 40 FLR 215, Pathik J observed:

No Reply to the First Defendant's Affidavits in support of the Summons has been filed despite a Court order to do so. Hence the contents of the affidavits have gone unchallenged. 

27.	In this case, the 2nd Defendant who has sworn the affidavit in support of the setting aside application, deposes, inter alia, that:

•	the Defendants had instructed a counsel (not the present one) to obtain further and better particulars, and file a statement of defence, but that was not done;
•	the 1st Defendant had not done anything amiss as alleged in the claim; i.e. had not unjustly enriched himself, or converted funds belonging to the Plaintiff;
•	any claim by the Plaintiff is barred by the limitation act;
•	there was no resolution of the Plaintiff Company to issue these proceedings against the Defendants;
•	the Plaintiff has made a duplicate claim in its statement of claim;
•	the claim inter alia deals with a Crown Lease and the Plaintiff has issued these proceedings without the consent of the Director of Lands;
•	Plaintiff could not have obtained any default judgment under the Rules without leave of the Court since the claim is a mixed claim;
•	the default judgment is irregular and must be set aside;
•	that the 1st Defendant is capable of paying the judgment sum and if required, is prepared to pay this into Court;
•	she was not served with a sealed copy of the default judgment
•	this application was made expeditiously after she became aware of the judgment;
•	a copy of her proposed Defence is annexed;
•	grave injustice would be caused if the Plaintiff is able to enforce the judgment
•	the default judgment entered against the Defendants be set aside.

28.	To these allegations, the Plaintiff has not responded, with the result that the Plaintiff is deemed to have admitted the Defendant’s deposition.  

29.	In any event, the claimsfor an order for the Defendant to pay to the Plaintiff the sum of $129,798.62 from the 1st Defendant’s Estate funds; or, that the 2nd Defendant as Administratix be ordered to transfer Crown Lease No. 2957 being Lot 54 Muanikau Subdivision (L.D. No. 4/16/3274) to the Plaintiff, fall outside claims under Order 13 rr 1-4 and Order 19 rr 2-5, such that the failure of the Defendant to acknowledge service and/or file a defence within the time stipulated by the Rules,entitled the Plaintiff to apply to the Court for judgment and not, as it did in this case, enter default judgment.  For this reason, I consider the default judgment irregular and therefore ought to be set aside as of right, without condition.  (White v Weston; Anlaby v Praetorious; Fiji Development Bank v Lal(supra))

30.	By reason therefore of the application being unopposed, and for irregularity, I would grant order in terms of the Defendant/Applicants’ summons.

31.	The orders of the Court therefore are:

1.	The default judgment entered against the Defendants on 13th May 2014 is hereby set aside.
2.	The Defendants are to file and serve a statement of defence within 14 days from the date of this judgment. 
3.	The Plaintiff to file a reply, if any,within 14 days thereafter. 
4.	No order as to costs.
5.	This case is adjourned to 14 September at 9am for mention.  

Delivered at Labasa this 30th day of August 2017

S.F. Bull
Acting Master