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Kotua v Tiarite Kwong (trading as Taotin Trading) [2025] KICA 13; Civil Appeal 2025-02364 (12 August 2025)

IN THE KIRIBATI COURT OF APPEAL
HELD AT BETIO TARAWA
REPUBLIC OF KIRIBATI

CIVIL APPEAL 2025-02364

BETWEEN

MWAMWA KOTUA
Appellant

AND

TIARITE KWONG TRADING AS TAOTIN TRADING
Respondent

Before: Nelson, JA
Khan, JA
Amten, JA

Date of Hearing: l July 2025
Date of Judgement: 12 August 2025

APPEARANCES
Counsel for the Appellant: B Berina
Counsel for the Respondent: T Timeon

JUDGMENT BY THE COURT

INTRODUCTION

1. This appeal was filed by the appellant against the decision of Semilota CJ dated 31 January 2025 in which an application to set aside default judgement was refused.

BACKGROUND

2. The appellant was employed by the respondent as a branch manager in Beru between 2018 and 2019. According to the appellant's version she resigned in January 2020 from her position and returned to Nonouti to look after her sickly mother.

3. On 30 April 2022 the respondent filed a writ of summons against the appellant in which it claimed that the appellant having received a sum of $10,441.77 between the period 2018 to January 2020 on behalf of the respondent failed to deposit it in the respondent's account.

4. The writ of summons was served on the appellant on 12 May 2020 and she failed to file an appearance and her defence. On 7 July 2020 default judgement pursuant to the provisions of O, 13 r.3 of the Western Pacific High Court (Civil Procedure) Rules 1964 (the Rules) was entered against her. It was served on her on 28 September 2020.

5. The default judgement states:

"The defendant, having served on 12th May 2020, not having appeared to the writ of summons herein, it is this day adjudged that the plaintiff recovers against the said defendant the following sum:

• a) AUD 10,441.77;
• b) $2,500.00 for general damages for inconvenience, stress and frustration;
• c) $50.00 Court fee;
• d) $500.00 costs; and
• e) interest of 5% from the date of judgement to the date of payment.

6. Following the default judgment a writ of fieri facias was issued against the appellant on 8 December 2020. Although the default judgment included a sum of $2500 as general damages the respondent did not include that in the form of praecipe of fieri facias. It is stated:

"Seal a writ of fieri facias directed to the Sheriff of the High Court of Kiribati against the defendant upon a judgement dated 7^th day of July 2020 for the following sum:

• a) AUD $10,441.77;
• b) Costs of $ 500.00; and
• c) lnterest of 5% from the of the judgement to the day of payment.

7. The writ of fieri facias was not executed and on 28 August 2023 the respondent filed an application for an order for examination of the appellant. In support of that application an affidavit was filed by Henry Reiher an employee of the respondent in which he deposed that in 2020 default judgement against the appellant was entered and she was served a copy thereof. The default judgement included a sum of $2500 general damages.

8. The application for examination was set down for hearing on 24 March 2025 and was served on the appellant 23 August 2024.

9. On 9 December 2024 the appellant filed an application to set aside the default judgement entered against her on 7 July 2020.

10. In support of her application to set aside the default judgement she deposed in her affidavit that during her employment with the respondent she was audited twice a year and she was cleared and she was surprised to receive the writ of summons; and that she did not do anything about the claim as she had just given birth to her first child and her mother was diabetic and she died in 2021 and she was unemployed; and being resident of Nonouti she was unable to do anything when she first received the writ of summons and that she travelled to Tarawa when she received the application for oral examination.

11. In her application she filed a proposed defense in which she stated that her work was audited and she was cleared and that she resigned voluntarily in January 2020.

12. The Chief Justice in refusing to set aside the default judgement stated that the appellant claimed in her proposed defence that she was audited and cleared which may be her defense but however there was a delay of 4 years which was substantial.

HEARING OF SETTING ASIDE APPLICATION

13. On 2 December 2024 the hearing of the setting aside application took place and the appellant was cross examined by Miss Timeon. Mr Berina informed us that he was asked by Miss Timeon to have the applicant available in court for cross examination. In our understanding that all hearings of setting aside default application by calling witnesses is a very unusual practice as all applications are generally dealt with on the papers, however. there may be extreme cases where the issues are in serious dispute and oral evidence may have to be called to assist the court but generally speaking all applications are dealt with on the papers.

14. What happens after a setting aside application is filed by the defendant is that the respondent is usually asked as to whether it is opposed, and if it is opposed then time should be given for affidavit to be filed in response but in this matter no affidavits were filed on behalf of the respondent and yet the appellant suggested to her that she was terminated from her employment because of this case when her proposed defence clearly stated that she voluntarily resigned from her employment in January 2020.

GROUNDS OF APPEAL

15. In the grounds of appeal advanced by Mr Berina he submits that the learned Chief Justice erred in law in the exercise of her discretion in placing undue weight on the length of the delay and also erred in rejecting the explanation for the delay; and in rejecting the applicant's reasons for being on an outer island.

16. Both counsels relied on the case of Waysang Kum Kee v Abamakoro Trading Limited^[1] where it is stated as [12] and [13] as follows:

[12] Rule 12 of the High Court (Civil Procedure) Rules 1964 provides that any judgment by default may be set aside by the Court, upon such terms as to costs or otherwise as the Court may think fit. As it does not set out the grounds upon which the discretion is to be excercised, the common law approach is to be adopted.

[13] The Court has unfettered discretion to set aside a judgment obtained in accordance with the Rules. In determining the essential question whether there may have been a miscarriage of justice, and where the overall justice lies, three considerations have long been considered of dominant importance: whether the defendant has a substantial ground of defence to the plaintiff's claim, whether the defendent's failure to take any steps, or to appear at the hearing, was excusable, and whether the plaintiff will suffer irreparable harm if the judgment is set aside: Alpine Bulk Transport Company Inc v Saudi Eagle Shipping Company Inc. The Saudi Eagle [1986] 2 Lloyd's Rep. 221, 223 (CA), Paterson v Wellington Free Kindergarten Assn Inc [1966] NZLR 975, 983 (CA) The onus of establishing a substantial ground of defence is on the defendant. The defendant must show a defence of sufficient substance to justify delaying the plaintiff in obtaining the fruits of the judgment.

17. We understand that the Chief Justice had accepted the appellant's work was audited and she was cleared and she found that the delay in making the application was substantial and therefore the respondent should be entitled to enjoy the fruits of its judgement.

18. The judgement was entered on 7 July 2020 pursuant to O13, r.3 which reads:

Liquidated Demand Endorsed
r.3 Where the writ of summons is endorsed for a liquidated demand, whether specially or otherwise the defendant fails, or the defendants, if more than one, fail to appear thereto, the plaintiff may, subject as provided by Rule 11 of this Order, enter final judgement for the sum not exceeding the sum endorsed on the writ, together with interest at the rate specified (if any), or (if no rate be specified) at the rate of five percent per annum, to the date of judgement and costs in accordance with Form 1 in Appendix F.

19. As mentioned earlier the default judgment^[2] was entered on 7 July for the sum of:

a) AUD 10,441.77;
b) $ 2,500.00 for general damages for inconvenience, stress and frustration;
c) $ 50.00 court fee;
d) $ 500.00 costs; and
e) interest at the rate of 5% from the date of judgment to the date of payment.

20. The default judgement in our view should have been entered pursuant to the provision of Order 13. r.7 which states:

7. Where the Writ is indorsed with a claim for pecuniary damages only or for detention of goods with or without a claim for pecuniary damages, and is further indorsed for liquidated demand, whether specially or otherwise, and any defendant fails·to appear to the writ, the plaintiff may enter final judgment for the debt or liquidated demand, interest and costs against the defendant or defendants failing to appear, and the interlocutory judgement for the value of goods and the damages, or the damages only as the case may be, and proceed as mentioned in such of the preceding Rules of this Order as may be applicable.

21. When the respondent applied for the of writ of fieri facias in the form of praecipe^[3] the sum $2500 was deleted and obviously the respondent realized that the default judgment was entered for an excessive amount and it should have filed application to correct it:

In George Motundreas and Compa S.A (Plaintiffs) v Navimpex Centrala Navala^[4] it was stated by Lord Ackner that:

"... Lord Justice Buckley in the course of his judgment said:-

• "it is the duty of the creditor if he obtains the wrong judgment to have it set right" (415). "if the plaintiff in the absence of the defendant, proceeding properly under the Rules, signs judgment for a sum in excess of debt which is due to him, the defendant is entitled to have that judgment set aside, unless the party who holds the judgment applies as he may to reduce to proper amount. If the application to amend be duly made, is may be right not to set the judgment aside, but to reduce it to the proper sum; but unless the party who holds the judgment elects to have it put right, then upon the authority of Hughes v. Justin it seems to me the defendant is entitled to say, "This is a wrong judgment, set it aside" . (417) " (Emphasis added)

22. In our view the appellant would have been entitled to have the default judgement set aside on the basis of the principles stated in George Moundreas.

FURTHER SUBMISSIONS

23. After the hearing of the appeal, we invited the parties to make further submissions as to whether or not the: "the claim in the matter qualified as a 'liquidated demand'·under Order 13 of the High Court (Civil Procedure Rules) 1964 for which a default judgement had been granted".

24. Miss Timeon in her additional written submissions submitted that the civil procedure rule was silent on the definition of what is meant by "liquidated demand" and she relied on Fiji Court of Appeal case of Subodh Kumar Mishra v Car Rentals (Pacific) Ltd^[5] where it is stated at pages 4 and 5 as follows:

" In Knight v Abbott (1882) 10 QB 11 it was held:

• "A liquidated demand is in the nature of a debt i.e. a specific sum of money due and payable under a contract. Its amount must be ascertained or ascertainable as a matter of arithmetic."

And to like effect is the dictum in Workman Clark and Co. Limited v Lloyd Brazileno (1908) 1 KD 968 (C.A.):

• "A claim is unliquidated, where even though specified or named as a definite figure, its ascertainment requires investigation beyond mere calculation."

25. Mr Berina submits that the sum of $10,477.77 was not a "liquidate demand" and he submitted that in accordance with the principle in the case of Subodh Kamar Mishra it was an unliquidated demand and its ascertainment required investigation beyond mere calculation.

26. In Independent State of Papua New Guinea v Petroleum Resources Gobe Ltd^[6] the Supreme Court of Papua New Guinea referred to the case of Balakau v Amet [2013] PGNC 107, N5313 (Kandakasi J) and stated at [18] that:

8 There are numerous authorities in our jurisdiction which helpfully define what is a liquidated claim. The 1982 Annual Practice, par 6/2/4a, provides the following definition of liquidated demand, which has been used for many years:

• "A liquidated demand is in the nature of a debt, i.e. a specific sum of money due and payable under or by virtue of a contract. Each amount must either be already ascertained or as a mere matter of arithmetic. If the ascertainment of a sum of money, even though it be specified or named as a definite figure, requires·investigation beyond mere calculation, then the sum is not a 'debt or liquidated demand' but constitutes 'damages'."

WHETHER THE JUDGEMENT WAS REGULAR OR IRREGULAR

27. In Subodh Kumar Mishra v Car Rentals (Pacific) Ltd it is stated at pages·5 and 6 as follows:

"We now tend to consider the question whether or not the judgement was entered irregularly or regularly. And we preface our observations by saying that in the application of similar rules as to that which is here under consideration,·both in England and New Zealand, the cases in which a default judgement may be set aside have been grouped accordingly as the judgement was regularly or irregularly obtained. The distinction is clearly stated by Fry L.J. in Anlaby v Praetorius [1888] UKLawRpKQB 55; (1888) 20 Q.B D. 764 at p.769 where he said:

• "There is a strong distinction between setting aside judgement for irregularity in which case the Court has no discretion to refuse to set it aside, and setting it aside where judgement though regular, as been obtained through some slip or error on the part of the defendant in which case the Court has a discretion to impose terms as a condition of granting the defendant relief."

28. The default judgment was not for a liquidated amount. Order 13 rule 3 has no application. The judgment is irregular, we have no discretion in the matter, we set it aside in its entirety.

29. The matter is remitted to the High Court for it to make further orders as to pleadings.

30. We order the respondent shall pay the appellant's costs to be taxed if not agreed.

DATED this 12th day of August 2025

^[1] [2001] KICA 9; Civil Appeal 06 of 2000 (5 April 2001)
^[2] Page 40 of the Booklet
^[3] Page 44 of the Booklet
^[4] [1983] EWCAV JO317-5
^[5] Fiji Court of Appeal Civil Appeal No 35 of 1985
^[6] [2024] PGSC 6; SC2534 (29 February 2024)