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George v Nukufetau [2022] TVHC 15; Civil Case 07 of 2019 (30 May 2022)

IN THE HIGH COURT OF TUVALU 2022

CIVIL CASE NO.07/19

BETWEEN

PENEUETA GEORGE
PLAINTIFF

AND

KAUPULE NUKUFETAU
DEFENDANT

Before Hon Judge Sir John Muria
Hearing 23^rd May 2022

Ms F T Nelu for Plaintiff
Mr V M Liai for Defendant

J U D G E M E N T

Muria J: The defendant’s application to set aside the default judgment entered against it on 9^th March 2022 was fixed for 23^rd May 2022 for hearing. It was originally fixed for 16^th May 2022 but it was adjourned to the 23^rd May 2022 despite the objection by Ms Nelu of Counsel for the plaintiff. The matter was adjourned in Court in the presence of both Counsel.

2. When the application was called on 23^rd May 2022, only Counsel for the defendant was present. There was no explanation given to the Court for the absence of Counsel for the plaintiff or the plaintiff himself. The Court felt that it was not appropriate to further adjourn the hearing of the application by reason of the absence of the plaintiff and/or his Counsel, although the Court has discretion to adjourn the hearing. The principle being that where both parties are present in Court when the adjourned date has been fixed, any adjournment by the Court, whether on its own motion or on application by a party, must be based on sufficient cause shown. In this case, the adjourned hearing date was known to both Counsel for the parties, only Counsel for the defendant/applicant was present, no explanation (written or oral) for the absence of the plaintiff’s Counsel was received by the Court, and as such the Court decided to proceed with the applicant’s application.
   
3. At the hearing of the application, the Court noted that the written submissions from both Counsel have already been filed and are already before the Court. Although at the hearing, only Counsel for the defendant was present, she opted to simply rely on her written submission and so made no oral submissions. There would, therefore, be no prejudice to either of the parties in this case for the Court to proceed with the hearing and determine the application by the defendant for setting aside of the default judgment in this case.
   

The principles applied in setting aside

4. Before I proceed to consider the grounds raised in support of the defendant’s application, I feel that I should briefly set out the principles to be applied in an application of this nature. At the forefront is the principle that the power of the Court to set aside default judgment is discretionary which must be exercised judiciously and for a cogent reason. In exercising its discretion, the Court takes to heart the salient principle that unless and until the merit of the case between the parties is determined, the Court retains the discretion to revoke the expression of its coercive power where that has been obtained only by a failure to comply with the ruled of procedure: Evans –v- Bartlam [1937] AC 473.
   
5. The discretionary power of the Court to set aside judgment in default of appearance is set out in Order 13 Rule 8 of the High Court (Civil Procedure) Rules 1964. It provides as follows:
   

“ Rule 8 Where Judgment is entered pursuant to any of the preceding Rules of this Order, it shall be lawful for the Court to set aside or vary such judgment upon such terms as may be just”.

6. Similarly, Order 29 Rule 12 also gives the Court discretionary power to set aside judgment in default of pleading.
   
7. This Court has already reiterated the considerations which the Court will bear in mind when exercising its discretion whether to set aside a default judgment or not. In Lamese –v- Kaupule O Nanumaga [2008] TVHC 12; Civil Case 03 of 2006 (28^th May 2008) the Court, dealing with Order 13 Rule 8, stated as follows:
   

“Order 13 Rule 8 of the Civil Procedure Rules, 1964, allows the court to set aside or vary any judgment in default of appearance on such terms as the court considers just.

In exercising such discretion, the court will consider the reasons for the failure, whether there was any delay in seeking to set the judgment aside and, if so, the length and reason for the delay and whether the defendants have a defence on the merits. The last ground is an overriding consideration, and if an arguable defence is shown, the judgment should be set aside whatever the result of the other enquiries.

Any possible prejudice to the plaintiff should also considered”.

8. Lamese demonstrates the factors that impact upon the exercise of the Court’s discretion in a settling aside application. These factors are:
   
   1. whether the defendant has a defence on the merits;
   2. whether the failure on the part of the defendant was excusable;
   3. whether there was a delay in seeking to set aside the judgment in default;
   4. whether there would be any prejudice on the plaintiff if the judgment is set aside.
      
9. In the light of the above principles, I shall now consider the grounds relied upon by the defendant in its application to set aside the default judgment.
   

Grounds of application

10. The first ground relied upon by the defendant is that the plaintiff’s claim is statute barred and as such, the defendant has a defence on the merits or as submitted, “a substantial defence” to the plaintiff’s claim. The defence is based on section 112 of the Falekaupule Act which provides that an action against the Kaupule must be brought within 12 months of the act complained of was done.
    
11. I set out sections 112 of the Act which states as follows:
    

112. Limitation of action against Kaupule

If an action is commenced against a Kaupule –

1. for anything done in performance or intended performance of its statutory functions or those of the Falekaupule or in exercise or intended exercise of any lawful power; or
   
2. in respect of any alleged neglect or default in the performance of such functions or exercise of such power,
   

the action must be commenced within 12 months of the act, neglect or default complained of or, if the damage or injury is continuing within 12 months after it ceases”.

12. It is not disputed that the plaintiff was formally, terminated from his employment in or about 23^rd October 2017. The payment of his salary had actually been withheld much earlier than October 2017. The Writ of Summons was issued, against the defendant on 16^th September 2019. On this basis, the defendant submitted that it has a substantial defence as the action is statute barred under section 112 of the Act and the judgment in default ought to be set aside.
    
13. The plaintiff’s written submission filed by Counsel in Court did not address section 112 of the Act. Counsel for the plaintiff simply argued that the defendant has never filed any defence to enable it to argue that it has a substantial defence. The argument being that without filing a defence, little weight should be given to the defendant’s claim that it has a substantial defence.
    
14. It is true that as a matter of good practice the defendant should, when applying to set aside judgment in default, file a draft defence. This is because the evidential burden is on the defendant to show that it has a good defence to the plaintiff’s claim. However, the failure by the defendant to file a draft defence does not preclude the Court from considering that it has a good defence if it raises the claim of a good defence and there are materials, including affidavit placed before which show that the defendant has an arguable defence to the plaintiff’s claim.
    
15. In the defendant’s notice of Motion filed on 25^th March 2022, the defence that the plaintiff’s claim is statute barred was raised as the first ground in support of its application. Two affidavits are relied upon in support of the defendant’s application, one sworn to on 25^th March 2022 by Filioma Teafiula who was the Pule Kaupule of Nukufetau at the time of the plaintiff’s termination and the other was from Pakasoa Laulenese who was the Acting Secretary for the Kaupule of Nukufetau at the time of the plaintiff’s termination and now the Assistant Secretary for the Kaupule Nukufetau sworn to on 13^th May 2022. Both affidavits lend support to the defendant’s application in this case.
    
16. On the evidence before the Court, it is clearly established that the plaintiff was terminate from his employment with the defendant on 23^rd October 2017 as stated in the affidavit of Pakasoa Laulenese. The evidence also shows that the Writ of Summons, commencing the action against the defendant was filed by the plaintiff and issued out of the High Court on 16^th September 2019. Subject to any evidence to the contrary, that must clearly be outside the statutory time limit fixed by section 112 of the Falekaupule Act.
    
17. I find that the defendant has shown that it has a substantial defence to the plaintiff’s claim in the present action. This is sufficient to set aside the judgment in default entered against the defendant on 9^th March 2022.
    
18. I need briefly deal with the other two grounds since they are raised and Counsel had made submissions on them. On the question of delay in applying to set aside the default judgment, the defendant took 16 days before making the application. The reasons given for the delay are actually not the reasons for the delay in bringing this application, rather they are reasons for not taking any steps which lead to the default judgment being entered against the defendant. They are immaterial here. What the defendant should do is to explain the reason for not taking any action since 9^th March 2022 to set aside the default judgment. This is perhaps the reason why the plaintiff argued that the defendant has sat on its right for more than two weeks before making the application.
    
19. The question in my view here is whether the delay of 16 days in making the application to set aside the default judgment is unreasonable or not. Despite the delay of 16 days, I feel that in the circumstances of Tuvalu, where parties involved in a case such as this are not all in Funafuti but are also in the outer islands, and distance and communication may affect the speed in which actions are taken in cases before the Court, delays are inevitable. I do not think that a delay of 16 days can be regarded as unreasonable and as such I do not find that the defendant has sat on its rights in bringing this application.
    
20. With regard to prejudice, the defendant says that the plaintiff would not be prejudiced if the judgment is set aside, as the defendant is willing to pay $24,833.80 to the plaintiff. However, the plaintiff says that the amount offered is much less than the amount stated in the default judgment. First, the plaintiff did not argue that he would be prejudiced if the default judgment is set aside. Secondly, it must be noted that the inevitable result of every setting aside default judgment is the loss of judgment to the plaintiff. That cannot be a prejudice to the plaintiff. Here, there is no prejudice demonstrated, either to the plaintiff or defendant.
    
21. The Court notes that the defendant claims in defence that the plaintiff’s action is statute barred under section 112 of the Falekaupule Act. However, the defendant is willing to pay (offer) $24,833.80 to the plaintiff as his salary following his termination of his employment, in the event that the default judgment is set aside. That is a matter for the parties to deal with. It has no hearing on the question of whether the default judgment should be set aside.
    
22. In this case, as I have already indicated above, the defendant has established that it has meritorious defence to the plaintiff’s claim. Consequently, the judgment in default cannot stand and must be set aside.
    
23. The defendant is given 14 days to file its defence and served on the plaintiff.
    
24. Costs in the cause.
    

Dated on the 30^th day of May 2022.

Sir John Muria
Judge