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Chand v AK Narayan and Company [1997] FJLawRp 5; [1997] 43 FLR 33 (31 January 1997)

[1997] 43 FLR 33


HIGH COURT OF FIJI ISLANDS


PARMESH CHAND


v


A K NARAYAN & COMPANY


[HIGH COURT, 1997 (Lyons J) 31 January]


Appellate Jurisdiction


Practice (Civil) - Magistrates’ Courts - failure to serve notice of intention to defend within time - meaning of “hearing day” and “return day” - how discretion to give special leave to defend is to be exercised - Magistrates’ Courts Rules (Cap 14) Order VI Rules 1 to 10.


A Defendant wishing to defend failed to serve its notice of intention to defend within 3 days of the return date. On the return date the Defendant indicated that it wished to Defend but the Magistrate nevertheless entered Judgment in default of defence. Allowing the appeal and remitting the matter to the Magistrates’ Court the High Court HELD: Order VI Rule 9 gives the Court a discretion to allow a defaulting defendant to defend and this discretion must be exercised judicially.

(Lautoka Civ. 11/92)

Luka Brewery v. Grundaman

Mason v. Magridge <160;[1982] 8 TLR 805

R v. House [1936] HCA 40; (1936(1936) 55 CLR 499

Civil Appeal the Magistagistrates&#8217rt.

H.A. Shah for the lantR. i>R. Prakash for the Respondent

<
This isppeal feal from the decision of thof the Ba Magistrates’ Court of the 8th May 1996 wherein default judgment was d agathe Aant (Defendant).

The Respondentndent (Plt (Plaintiff) is a firm of solicitors.tors. On the 13th March 1996 the Respondents issued proceedings out of the Ba Magistrates Court for the sum of $2,805.00 being for the balance of agreed professional fees allegedly owing.

The redate allocated pued pursuant to Order VI r.2 of the Magistrates Court Rules (Cap 14) was listed on the Writ of Summons as the 8th May 1996.

The Applican served on d on the 23rd April 1996.

The Applicant obtaiolicsolicitors and on the 3rd May 1996, a Notice of Intention to defend was filed. This at least from the Court Record, appto haen served on the the 7th May. In any event it was not served within 3 clear days before &#re “the day fixed for hearing” required by O.VI r.6.

On the 8th May 1996, the parties attended through their legal representatives. The Court Record of that day reads:-

#8220;08/05/96

<

Plaintiff - Prakash

Defendant;- b>&#160 Munam

&#/p>;

Prakash :ټ &#1 oention to Defend not snot served.

Munam: #160; &##160& n&##10;&e. F. Serth 3 th 3 clear.

#160;

Prakash:&/u>: #160;  &#160 n&##160 No nce before Core Court aurt as to why. Rule verar.

Munam:& ـ҈< < Clsim infuneeabrceable unde under [1985] 2 Qd R 204. Co for tfor the Appellant readily admitted that he was not as yet able to get a copy of the case so his submissions were a little vague in that respect. Luka7;s confirmed in QueenQueensland the old rule of practice that ahat a sole trader trading as a firm cannot sue (but may be sued) in the firm name. A sole trader must sue his own name trading as X (a firm). (See Mason v. Magrid> [1982] 8 TLR 805 and the Whitk geny re r.1).r.1).

As far as thieaappeal real relates, the application of Luka’s
Another ground argued ey the Applicant as one covered by grounds 2 and 3, can also quickly be disposed of. The Appellant argues that the Learned Magistrate improperly exercised his dtion when, in ordering the default judgment, he failed to a to appreciate the difference between, “return day” and hearing date. To decide this, it is best to set out O. VI Rules 2, 5, 6, 7 and 8 of the Magistrates’ Court Rules.

ign="center">“OR20;ORDER VI - FORM AND COMMENCEMENT OF SUIT

CoCommencement by of summons

1. ;ټ E60; Every suit shal shall ball be commenced by a writ of summons to bued by the magistrate or the clerk of the court. The summonummons may issue without application in writing.

Contenontents ot of summons, Appendix A, F A, Form 2

2. ټ&##60;& T60; The wrie writ shall contain the name, placebode and occupation of the plaintiff and of the defendant, ant, so far as they can be ascertained, and the date (called return day) aace oring:there sere shall hall be enbe endorsed on the writ particulars of the claim signed by the plaintiff or his barrister and solicitor which shall state briefly and clearly the subject matter of the claim and the relief sought.

Time for service of writ5. &160; & ; Every wfit of summons shal shall be serveht clear days before the date of hearing when the defendant resides within the magisterial rial area of the court from which the writ is i and l othses the period shod shall ball be fixe fixed by the court when the writ is issued and shall be endorsed on the writ:

Provided the court ourt may from time to time extend the date of hearing of a writ of summons which has not been served in time.
&#160

Filing of notice of intention to defend

6. &##160; &#16 the the party served rved with the writ of summons deliver to the clerk of the court, and serves on the plaintiff, not less than three days befhe daed foring,tice in writing that he intenintends tods to defe defend thnd the suit, then and in such case the suit shall be entered for hearing on the aforesaid date for hearing. (Amended by rules 21ststugust 1972)

Speciapecial leave to defend where foregoing rule not complied with

7. &##160; < Whyn anendeft can tiver aner and serve thve the notice of defence, as prescribed byed by rule 6, within the time limited by the said rule, the court may, at ime b judgis enteredthe defendant disclosing a de a defencefence on t on the mehe merits, let in the defendant to defend upon such terms as the court may think just. (SubstituteRules 31st Mast March, 1966 and amended by Rules 21st August 1972)

DiDisposal of undefended suit

8. In the case of liquidated demands only, where any defendant neglects to de and serve the notice of defence prescribed by rule 6 within the provisions of rule 7, then then and in such case the plaintiff may enter final judgment against that defendant. (Substituted by Rules 21st August 1972)

The argument is ts t as the 8th of May was the “return day” not the hearing day, then rule 6 has not been infringed upon as that ruleires service 3 clear days before the hearing date.

Counsr the Respondent dent dent argued that here is no substance in the argument as the “return day” in rule 2 can also be the hearing day. He is undoubtedly correct.

I havn ref as authorityority fory for the Appellant’s submission in the case of Asgar Ali & Sm NishaNisha v. Nazmin Nish(Lautoka H.C. Civ. 11/92). In that case the learned Judge does reason that return day and hand hearing day are different but it does ppear to have been the ratio endi of 0;of 0;of that case.e itme it appears either to be obiter or as what can be termed “a throwaway line”. As Mr. Justice Young, as Editor of the Australian Law Journal said in his editorial column in the 1996 edition of the Austraustralian Law Journal at p.522:-

“the value of throwaway lines in a Judgement should not be under-estimated. They are usually the result of serious research by the Judge on a point which when always worked out bs unnecessary for the decision. The fault is, however, that that the learning should be preserved for later consideration .............. a throwaway line is meant to stimulate thought in later cases, to motivate academics to build upon it and to encourage counsel in a later case to develop arguments based on it. Indeed, counsel preparing a case is very unwise to ignore such a line. Counsel must either build on it or debunk it.”

Itfalls to me to develoevelop further the line of thought expressed as a throwaway line by the learned Judge in the above case.

Order 1 Rule 2 refers to the Writ of Summons. It defihe content of the Writ&#160 before#160;it can be isse issued for subsequent service and further action. One of the matters tottended to before issue i theintmenttment ofnt of a date and a place of hearing. This y defi definition must refer to the date of the first available hearing. This is defined,oubt for eaor ease of reference and to avoid confusion“the return day.” The “return day” 221; is a hearing day but it is peculiarly the first available hearing dayis thnt of reference fnce for thor the parties so they may know when they must first come before the Court. Thereafter the court, may, being satisfied that all materials are in order, appoint another hearing date to allow a full airing of evidence. The rules however do not preclude that return day from being hearing dates. If the parties are ready and court time is available, the matter could undoubtedly be heard in full on that day, notwithstanding that it is the return day as expressed in the language of Order VI Rule 2.

Additional st for this this reasoning is found in Rule 5. The procedure is that the Writ, with the return day affixed, is issued for service. Rule 5 required such service to be eight clear days before “the date of hearing”. The reason for this is clearly to allow the defendant to gather his or her forces. The date of hearing in Rule 5 clearly refers to the “return date” in Rule 2. If, as counsel for the Appellant argues, the hearing date is that date affixed by the court subsequent to the “return day”, Rule 5 would be nonsensical.

Similarrder VI Rule 6 we 6 would be rendered nonsensical.

To my it is clear that that “return day” and hearing date are the same but only when“return day” is the first hearing date appointeointed in accordance with Order VI Rule 2. The argument advanced by counsel on this point relative to the exercise of discretion is dismissed.

Counsel for the Appt alnt also urges on the matters pertaining to the Legal Practitioners Act (Cap 254) ader XXXVIIthe Mahe Magistrates’ Court Rules. It is suis submitted that the Respondent in its substantive action had not complied wit statutory requirements of this legislation. I do not propose to go into this argument. It . It begs my interference in what could ultimately be a decision making rule of the Magistrate. I consider the Appellant has much stronger grounds which will determine this argument and which would avoid my ruling on the statutory argument presented. At least Counsel for the Appellant is aware of the provisions of the Legal Practitioners Act as relates tos as it is fros from this Act (and only from this Act) are lawyers able to demand fees and, in strict accordance with its provis

During submissions the argument arose, as foreshadowed by appeal ground 3 as 3 as to whether the Court below has properly exercised its discretion.

On reading Rule 7 and rule 8 together one is able to get a better understanding of this argument.

Accepting for the of arof argument that the claim is for a liquidated demand, the court has a discretion undle 7 to allow the Defendantndant to defend. Equally, under Rule 8, the Court has the ability, in the exercise of its discretion pursuant to Rule 7, to refuse to allow the defendant in to defend, but instead to allow the Plaintiff to enter judgment.

The matter thus to be o be decided by the court (the first exercise of its discretion) is whether or not to let the Defendant into d.

It is of note that onNohe Notice to the Defendant accompanying the Writ of t of Summons, it reads:-

“OR20;ORDER VI

8. ـ҈< < 㺼If trtyeserved with with the Writ of Summons delivers to the clerk of the court, and serves on the pthe plaintiff, not less than three days bethe dxed faring, a notice in writing that he intends to defend tend the suhe suit, tit, then and in such case the suit shall be entered for hearing on the aforesaid date for hearing.

9. n&##160;;< < Wnyn afendant neglects to s to deliver and serve the notice of defence as prescribed by the last preceding rule, within the time limited by the sale, turt m any time before jud is entered, on an affidavit avit or, ior, if thef the cour court sees fit, on oral evidence disclosing a defence on the merits and satisfactorily explaining his neglect, let in the defendant to defend, upon such terms as the court may think just.

10. &##160; Ie of liquidateidated dema demands only, where any defendant neglects to deliver and serve the notice to defence prescribed by rule 6 of this Order within the time limited by the said rule, and is not let in to defend in accordance with the provisions of rule 9 of this Order, then and in such case the plaintiff may enter final judgment against that defendant.”

This form is mpliance wnce with Form 1 in the subsidiary legislation at page 67.

It appears thus to mt, hat, in exercising its discretion in regard to Rule 7, the Court must have regard to the evidence from the Defendant, arguabl matter how it is taken. In fact this goes without saying as Rule 7 requires “the defe defendant discloses a defence on the merits”. As I see it this in turn requires the Defendant to be heard in such manner as satisfies the court and that due weight must be placed upon the Defendant’s material so advanced.

On the face of thord, trd, the Defendant has not been given the opportunity to advance any material evidence as to merit. If Ms Munam’s utterance that “Claim is unenable under Legal Practitioners Act” is considered as d as evidence, there is no reference in the ruling to that having been considered - if of course it could have been considered in such an unexpanded form.

In;R v. House&#1u> [1936] HCA 40; (1936) 55 CLR 499 at and the High Court of A of Australia (per Dickson J, Evatt J., and McTiernan J, said in rein reviewing the English Authorities as then stood:-

“Itot enough ough that the judges composing the appellatellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge had reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

I hol view, that “#8220;some material consideration” must, by definition of Rule 7, refer to the materiality of the Defend8217;s proposed defence. On the face of the record the Defendant was not given the opportunortunity to present this in any detail by any manner. Consequently, I consider the Learned Magistrate has exercised his discretion against allowing the Defendant entered defend improperly and his ruling pursuant to Rule 8 (based on this impropriety which arose in Rule 7) must be set aside.

Counsel for the Respondent argued that the Learned Magistrate had exercised his discretion properly in that the ingredients to enliven his discretion were all that were required (i.e. the late service of the notice of intention to defend). I do not agree. Rule 7 is there such that if the Defendant has “some merits” in his Defence then at the Court’s discretion, he can proceed. The ground for the exercise of discretion in Rule 7 is set by the non-compliance with Rule 6 but the actual discretion must only be exercised on the Defendant disclosing a defence on the merits. Thus it stands to reason that the Defendant must be given a proper opportunity to disclose a defence on the merits before the discretion is exercised either in the Defendant’s favour or against it. The manner of disclosing this defence must be by the methods prescribed, and thus allowable, in the notes on Form 1.

is is not done then anyn any Judgment following from Rule 8 has been obtained through an improper exercise of the discretion enlivened by the non-compliance and as provided for in Rule 7.

For the above reasons, the appeal is upheld.

The defJudgment of the the 8th May 1996 is set aside.

The mattould be returneturned to the Magistrates’ Court at Ba to be decided upon as the Magistrate sees fit, be it e it by way of letting the Defendant in or takiterial as to merit before deciding on Rule 7. I might add tadd that on reading the Learned Magistrate’s decision on the stay, he has given a very strong indication as to what he would do if given his task. Both parties may well be advised to take advantage of his judicial generosity before deciding what they will ask of his Court.

The Rdent should pay thay the Appellant’s costs summarily assessed at $200.00.

(Appelowed; Judgmentgment set aside; matter remitted to the Magistrates’ Court.)



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