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Autoworld Trading (Fiji) Ltd v Sagoa [2012] FJMC 366; Civil Case 30.2012 (14 October 2012)

IN THE FIRST CLASS MAGISTRATES COURT AT NASINU
CIVIL JURISDICTION

Civil Case No. 30/2012

BETWEEN:

AUTOWORLD TRADING (FIJI) LIMITED a limited liability company having its registered office at 21 Vira East Vatuwanqa , Fiji.
Plaintiff

AND:

SESELEKA IMO SAGOA of Lot 69,Damu Road ,Nepani , Nasinu, Fiji.
Defendant

Mr. Reddy J (Reddy & Nandan Chambers) for the Plaintiff

Ms.Mataiciwa. for the Defendant

Ruling on setting aside default Judgment

[1] This is an application by the Plaintiff for setting aside Default Judgment entered by this Court against him on the 16th day of October 2012. The Motion is supported by the Affidavit of the Plaintiff Revindra Lal.

[2] The plaintiff has preyed since all pleadings in the mater had been finalized and a hearing date had to be fixed for the matter to be heard on merits rather than being knocked out on technicalities. Further submitted that the Plaintiff had a genuine claim against the Defendant and also had a meritorious defence against the Defendant’s Counter Claim and this matter should have been heard on merits.

[3] The defendant filed affidavit in opposition to setting aside application. Then, on the 6th August 2013 both counsels made their oral submissions before this court, tendered written submissions respectively.

[4] The sole issue before this court is whether

a) That the default judgment entered the 16th October 2012 is be set aside or not? And

b) If “yes” what are the remedies available for the defendant?

[5] This application was supported by The Plaintiff an affidavit. The Plaintiff filed affidavit in response and objected to the defendant’s application. I have carefully considered both affidavits and pertinent documents to this application.

[6] Magistrates Court Rules Order XXX Further provides Setting aside of judgment made in absence of party. Order 30 Rule 5 says;

“ Any judgment obtained against any party in the absence of such party may, on sufficient cause shown, be set aside by the court, upon such terms as may seem fit.”

[7]To apply the above mentioned rule it is necessary to have an interpretation of the same. I found above section is bit uncertain since it s not defining that limits of the same as whether all the default judgments would be set aside on sufficient cause shown or a limited range of judgments may be set aside after sufficient cause shown? It is the opinions of this court that default judgments must be issued only at the situations where one party has not shown any interest on the matter at all or failed to appear before the court to present their case at the hearing date. If it is just a calling date for mention or filing affidavit of summons etc, it is too harsh and unfair to issue default judgments in fever of the party whom appearing before the court. But it must be noted that there should be a proper rule in this regards.

[8] The court must see the direct consequent of non appearance before issue default judgments .if it is only pretrial date of filing statement of defence or PTC or counter response and the plaintiff is not appearing then the court must not come for a conclusion that plaintiff’s case is a baseless or incorrect when comparing with the respondent. Still the respondent has to prove his case by way of ex parte trial or formal proof. Especially if the subject amount of the case is high the court must act judicially and must ascertain the real entitlement of party whom is appearing before the court. Even at the absence of one party It is duty of the Court to maintain the claims with in realistic level since the utmost aspect of this system of court is to find what is just and reasonable for the parties in issue.

[9] The correct test to be adopted by the court on granting default judgment must be ascertaining direct consequence of absence of the party with the final judgment and not to consider and rely on the fact of absence. If one party failed to filed their statement of defence the court must not grant default judgment but grant date for formal proof of or ex parte proceeding to be carried out. According to the maxim of audi altera patetum even at this formal proof day the default party may come to court and contest the claims against them by cross examination the other party before the court since it is the duty of court to hear both party.

[10] In Watt v Barnett [1878] UKLawRpKQB 28; 3 QBD 363; Evans v Bartlam [1937] AC 473, at 489 per Lord Wright.

“The Court might also have regard to the applicant’s explanation why he neglected to appear after being served, although as a rule his fault (if any) in that respect can be sufficiently punished by the terms as to costs or otherwise which the Court in its discretion is empowered by the rule to impose. The appellant here has an explanation, the truth of which is indeed denied by the respondent, but at this stage I see no reason why he should be disbelieved on what appears to me to be a mere conflict on affidavits.”

‘...Discretion to set aside a default judgment ‘is in terms unconditional’

[11] The Law of this area enriched by galaxies of decided judgments. In Burns v. Kondel [1971] 1 Lloyds Rep 554 the English Court held that the Defendant does not need to show a good defence on the merits but ... need only show a defence which discloses an arguable or tribal issue. In Evans v. Bartlam [1937] AC 473, at 651 the court expressed that the Applicant must produce to the court ‘evidence that he has a prima facie case’. In Fiji National Provident Fund v Datt [1988] FJHC 4; (1988) 34 FLR 67 (22 July 1988), the court enunciated three "test" to be considered in this regard namely;

(a) whether the defendant has a substantial ground of defence to the action;

(b) whether the defendant has a satisfactory explanation for his failure to enter an appearance to the writ; and

(c) whether the plaintiff will suffer irreparable harm if the judgment is set aside.

[12] Apart from above case law with regard to The basic principles applicable on setting aside judgments in the exercise of a Court's discretion are set out in Halsbury's Laws of England Vol 37, 4th edn para 403, inter alia, thus:

In this case of a regular judgment, it is an almost inflexible rule that the application must be supported by an affidavit of merits stating the facts showing that the defendant has a defence on the merits...For this purpose it is enough to show that there is an arguable case or a triabal issue. There is no rigid rule requiring the applicant to explain why he allowed judgment to go by default, but nevertheless, at least in the case of regular judgment, such explanation is obviously desirable to enable the Court to exercise its discretion, especially as to any and if so what terms should be imposed.

[13] In Evans v Bartlam [ 1937] AC 473; 2 AER 646, at 650 per Lord Atkin

'If there were a rigid rule that no one could have a default judgment set aside who knew at the time and intended that there should be a judgment signed, the [rules] would be deprived of most of their efficacy. The 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 procedures.'

[14] In line with the above legal principles, I now deal with the merits of this application. Both The Plaintiff and Defendant admit and not contesting that 16th October 2012 this matter was called for pre trial conferences and bundle of documents and not for the hearing of the matter. The action was struck out and default judgment entered in fever of the defendant. It is clear on the application of the plaintiff the matter was struck out due to non appearance of the counsels which is indeed out of the control of the plaintiff.

[15] This court is a court of justice and therefore which is more reluctant to find what is justice and not the hard and fast rules which preventing justice.especially when considering the statutory provisions this courts finds that main concern of law is finding out the just and equitable answerers to the matter of the public and therefore this court has been granted wide discretion on setting aside default judgements.

[16]In the case of Pravin Gold Industries Ltd v The New India Assurance Company [2003] FJHC 298; HBC0250d.2002x (4 February 2003) at 3

"A useful summary of the factors to be taken into consideration is to be found... [in] The Supreme Court Practice 1995, Vol 1 at 142 which is as follows:

The purpose of the discretionary power is to avoid the injustice which may be caused if judgment follows automatically on default. The primary consideration in exercising the discretion is whether the defendant has merits to which the Court should pay heed, not as a rule of law but as a matter of commonsense, since there is no point in setting aside a judgment if the defendant can [not] show merits, [but if they are shown] the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. Also as a matter of commonsense the Court will take into account the explanation of the defendant as to how the default occurred. "

[17] Whether the defendant/plaintiff has a satisfactory explanation for his failure to enter an appearance? The defendant appeared and already filed the statement of defence including counter claim. The only mistake of the Plaintiff was nonappearance on a calling date. He said gave instructions to his lawyers and he came to know that there was a default judgement against him on counter claim. I note although the default judgement has been entered the correct step to be adopted by the defendant was making application for formal proof and not an application for default judgement without justifying their claim be for the court since the value involve is high. Therefore, I hold there is satisfactory explanation for his absence.

[18] Whether the plaintiff/defendant will suffer irreparable harm if the judgment is set aside. This court thinks even if the default judgment set aside it want be irreparable damage to the defendant other than the defendant will have the substantial claim of defence will has to be prove on merits. The defendant will be awarded his claims without any delay if he deserved it according to law. As I mentioned above, this action has to be adjudicated on merits for the interest of justice. I therefore disregard the objection on set aside judgement reinstatement procedure and parties to have full trial.

[19] This court does not have doubt about the lost coursed due to the plaintiff's failure or the lack of interest on the matter before the court. Which could be ascertain by cost and the defendant is entitle for reasonable cost.

[20] I therefore make following orders;

1. The Application for judgment by default be set aside is hereby allowed.
2. The judgment by default dated 16th October 2010 is hereby vacated/ quashed.

100. The plaintiff must pay $700 cost to the Defendant's as a compensation for the damage coursed due to non appearance on the date of default judgement.

4. Parties will bear the cost of this application.
5. Parties to take steps accordingly and file their PTC and bundle of documents to proceed for hearing.
   

On 14th October 2012, at Nasinu, Fiji Island

N.Rupasinghe
Resident Magistrate