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Pacific Queen Shipping Company v Aram [1999] SBHC 127; HC-CAC 139 of 1999 (2 November 1999)

HIGH COURT OF SOLOMON ISLANDS

Civil Appeal Case No. 139 of 1999

PACIFIC QUEEN SHIPPING COMPANY

-v-

TAMUERA ARAM

High Court of Solomon Islands
(KABUI, J)

Hearing: 1^st November, 1999 at Gizo
Judgment: 2^nd November 1999 at Gizo

P. Tegavota for the Appellant/Defendant
S. Watt for the Respondent/Plaintiff

JUDGMENT

(F.O. Kabui, J): This is an appeal by Pacific Queen Shipping Company (the Appellant/Defendant) against the whole of the decision by the Gizo Magistrate Court made on 29^th March, 1999. This appeal is brought under the provisions of Order 60 of the High Court (Civil Procedure Rules) 1964 (the High Court Rules). The decision of the Gizo Magistrate Court made on 29^th March, 1999 is at pages 22-23 of the Appeal Record. The effect of that decision is that the application to set aside the earlier decision of the same Gizo Magistrate Court dated 20^th August, 1998 was refused. The application to set aside the decision of the Gizo Magistrate Court on 20^th August, 1998 was filed under Order 28, rule 5 of the Magistrates Courts (Civil Procedure) Rules, 1969 (the Magistrates Courts Rules) (See Magistrates Courts Act, Cap. 20). Rule 5 above states

“Any judgment obtained against any party in the absence of that party may, on sufficient cause being shown, be set aside by the court upon such terms as to costs or otherwise as it may think fit.”

Grounds of Appeal

The grounds of appeal are set out on pages 24-25 of the Appeal Record. They are as follows:-

1. (a) By failing to properly consider the appellant’s application before it in terms of Order 28 Rule 5 of the Magistrates Court (Civil Procedure) Rules;
   
   • (b) By taking into account time factor within which to file application for setting aside default judgment and in doing so had taken into consideration irrelevant matter in the exercise of its discretion under the said Civil Procedure Rules;
     
   • (c) By wrongly relying on Order 38 Rule 7 of the High Court (Civil Procedure) Rules as a relevant provision applicable in application to set aside default judgment before a Magistrates Court;
     
   • (d) By failing to properly exercise its discretion under Order 28 Rule 5 of the Magistrates Court (Civil Procedure) Rules and had the Court done so, it would have uphold the appellant’s application before it.
     
2. The Magistrate also further erred in law by ruling that the application to set aside default judgment of a Magistrates Court had to be filed within 21 days as required under Order 38 Rule 7 of the High Court (Civil Procedure) rules.
   

The Facts

In a Statement of Claim dated 7^th May, 1998, Mr. Tamuera Aram, (the Respondent/ Plaintiff) claimed against the Appellant/Defendant the sums of $560 being a claim for a refund of the cost of air fares from Gizo to Honiara and $1, 392.00 being the costs or value of the Respondent/Plaintiff’s Eskie which was lost on the M.V. Iu Mi Nao, a vessel owned and operated by the Appellant/Defendant. The Respondent/Plaintiff alleged that the loss of his Eskie was due to the Appellant/Defendant’s negligence both statutory and at common law. The Respondent/Plaintiff also claimed interest under the Law Reform (Miscellaneous Provisions) Act 1934 of the United Kingdom. This case was numbered Civil Case No. 24 of 1998. The first date of hearing for this case was 2th July, 1998. Mr Watt, Counsel for the Respondent/Plaintiff, attended the hearing and sought an adjournment. The Court granted the adjournment sought. The adjournment was for seven weeks. It meant the next hearing dated was 20^th August, 1998. This adjournment was necessary because Mr. Tegavota, Counsel for the Defendant, had requested it through Mr. Watt on 1^st July, 1998 by way of a telephone call from Honiara. The reason given by Mr. Tegavota was that a key witness was overseas, receiving medical attention. Mr. Watt informed Mr. Tegavota of the adjournment by letter dated 2^nd July, 1998. Mr. Tegavota did not respond either by letter or telephone call. Mr. Watt therefore believed that Mr. Tegavota had accepted the arrangement with the Court. The Notice of Hearing in the Gizo Magistrate Court on 20^th August, 1998 was not dated it would seem. However, a fax date on a copy of it was 11^th August, 1998 and was returned to the Court Clerk that same date at 1.30 pm. The Notice of Hearing was indeed served on the Appellant/Defendant by Police Constable No. 159 at 2.40 pm on 29^th July, 1998. Mr. Tegavota received it on that same day it was served upon his client, the Appellant/Defendant. There was therefore proof of service of the Notice of Hearing on the Appellant/ Defendant.

The Hearing on 20^th August, 1998

At the hearing of Civil Case No. 24 of 1998, the Appellant/Defendant nor its Counsel Mr. Tegavota was present in the Gizo Magistrate Court. Proof of service having been made, Ms Hamilton, Counsel for the Plaintiff, applied under section 25 (now section 22) of the Magistrates Courts Act (Cap. 20) and Order 28, rule 3 of the Magistrates Court Rules for a summary judgment to be entered against the Appellant/Defendant, and costs under Order 31 of the same Rules . The learned Magistrate having applied Order 28, rule 3 of the Magistrates Court Rules proceeded to hear endence from the Respondent/Plaintiff and his witness in the absence of the Appellant/Defendant. Rule 3 above states:

“If the plaintiff appears and the defendant does not appear when called and has not in writing previously explained to the court good reason for his absence, the court may, upon proof of service of the writ of summons proceed to hear the cause and give judgment upon the evidence adduced by the plaintiff, or may postpone the hearing of the cause and direct notice to be given to the defendant accordingly. ”

Having applied this procedure, the learned Magistrate found in favour of the Respondent/Plaintiff and ordered the Appellant/Defendant to pay to the Plaintiff the sum of $2,121.60 including cost of filing the case.

The Hearing on 25^th March, 1999

The hearing on this date was by way of summons filed by Mr. Tegavota, Counsel for the Defendant dated 9^th March, 1998. I think this is a typing error. The date should have been 9^th March, 1999. The summons asked for the following orders:-

1. That the Judgment in Default of appearance entered against the defendant be set aside on such terms as the court thinks fit;
   
2. That the defendant be allowed to defend this action or to file its defence;
   
3. That the court to grant such other or further orders as it thinks fit.
   

The Appellant/Defendant had earlier filed a statement of Defence on 17^th November 1998 being Exhibit “PT1” at pages 2 – 13 of the Appeal Record. The Defence was a denial of any form of negligence on the part of the Appellant/Defendant. The Appellant/Defendant further alleged that if there was any negligence at all it was due to the conduct of the Respondent/Plaintiff’s agent, Mr. Saru. The Appellant/Defendant also sought to rely on the terms and conditions of the cargo receipt applicable to damage of goods on the M.V. Iu Mi Nao. The learned Magistrate having heard Counsel for both parties, refused the Appellant/Defendant’s application to set aside his decision on 20^th August, 1998.

The Law

This appeal raises two important procedures in civil litigation. The first procedure is that where the Plaintiff has filed a Writ of Summons with a Statement of Claim, or a specially indorsed Writ the Defendant must enter an appearance. If the Defendant fails to do this, the Plaintiff is at liberty to ask for judgment in default of appearance. In the case of High Court civil litigation, this is all set out in Orders 12 and 13 of the High Court Rules. In cases of claims in specially indorsed writs, judgement may be obtained with the leave of the Court. Again in the case of the High Court civil litigation, this is all set out in Order 14 of the High Court Rules. Failure to deliver a defence within time may also entitle the Plaintiff to move the Court for judgement. In the case of High Court Civil litigation, this can be found in Order 29 of the High Court Rules. In the case of the Magistrates Courts, this procedure for summary judgment, in appropriate cases, is set out in section 22 of the Magistrates Courts Act (Cap. 20). Section 22 states:-

“(1) Where -

(a) any party appearing or being present in any Magistrate’s Court, upon being required so to do by that Court for the purpose of framing issues, refuses without reasonable excuse to be orally examined by the Court or to produce any document then and there in his possession; or

(b) the defendant, in the opinion of the Court, fails, by himself or by his counsel, solicitor or other representative to disclose any reasonable ground of defence; or

(c ) any party being required by an order made by a Magistrate’s Court under Rules of Court to produce to that Court any document or to attend at any sitting of that Court, fails without reasonable excuse to obey the same,

the Court may pronounce such judgment against him and in such terms as it think fit or make such order and impose such terms as to costs, payment into court, giving of security or otherwise as it thinks fit.

(2) Whenever, in the opinion of any Magistrate’s Court, the issues are sufficiently established for the immediate determination of the cause, the Court may pronounce judgment forthwith in such terms as it shall think fit.”

This section does not however stipulate the procedure for judgments entered in default of appearance or defence. Settlement of issues under Order 17 as read with Order 29 of the Magistrates’ Courts Rules does not seem to make the steps in this procedure any clearer. In other words, there is no formal procedure for formal pleading in the Magistrates Courts. However, Order 30, rule 11 of the Magistrates Courts Rules is a recognition of this procedure. Rule 11 above states:

“Any judgment or order given by default of either party to any suit may be set aside by the court or a Magistrate upon such terms as to costs or otherwise as the court or Magistrate may think fit.”

This rule does enable the Plaintiff to apply for the judgment in default of appearance or pleading to be set aside. There is bound to be a choice between Orders 17 and 29 of the Magistrates Courts Rules and the general rules of practice in the High Court applying Order 4, rule 7 of the Magistrates Counts Rules. Rule 7 states,

“In the event of there being no provision in these Rules to meet any particular circumstance arising in any cause or matter before the court, the court and the parties shall be guided by any relevant provision contained in the High Court (Civil Procedure) Rules, 1964.”

The remedy for the removal of a judgment in default of appearance or defence is an application to the Court to set aside that default judgment. In considering the setting aside of a default judgment, the Court would be exercising its discretion. There is no hard and fast rule in exercising this discretion although the delay in appearing or pleading must be explained and the showing of a prima facie defence. The Court must take into account all the circumstances of the case in order to reach a decision. The second procedure is that if on the date of trial, the Defendant does not appear, the Plaintiff may proceed to prove his or her case in the absence of the Defendant. In the case of High Court civil trial, this is set out in Order 38, rule 5. This rule 5 states -

“If, when a trial is called on, the plaintiff appears, and the defendant does not appear, then the plaintiff may prove his claim, so far as the burden of proof lies upon him.”

The equivalent of this rule in the case of the Magistrates Courts is Order 28, rule 3 above though worded in a slightly different manner.

In principle, rules 5 and 3 above are the same in my view. At page 449, Bernard C. Cairns in Australian Civil Procedure 1980 explains the distinction between these two procedures -

“The distinction between a judgment obtained at the trial if the defendant fails to attend and the judgment entered in default of the filing of an appearance or the delivery of pleadings is that in the former case the plaintiff must prove his case. In the latter case the judgment warranted by the statement of claim is administratively entered for the plaintiff. To discharge the onus of proof to obtain a judgment at the trial in the absence of the defendant the plaintiff must call sufficient evidence to discharge the evidential burden imposed on him by the pleadings. When a defence has not been filed, the allegations in the statement of claim are impliedly admitted. But when a defence has been filed, the matters on which the plaintiff bears a burden of proof are determined from the pleadings, including the defence.”

At page 450, the author continues,

“If a judgment or verdict is given against a party at a trial in his absence he may apply for it to be set aside. The court has the same discretion to set aside that judgment or verdict as it does a judgment signed in default of appearance or pleading.”

In this case, the learned Magistrate applied the procedure at trial stage.

This Appeal

In this case, Mr. Tegavota was served with the Notice of Hearing on 29 July, 1998 about 24 days in advance of the date of hearing.

In his affidavit dated 17^th November, 1998, at page 15 of the Appeal Record, Mr. Tegavota deposed that he rang the Secretary in Mr. Watt’s office at Gizo and enquired about the hearing date of Civil case No. 24 of 1998. He deposed that the Secretary promised to call him back after she had checked the hearing date but she never did. He deposed that he made this telephone call between 20-24 August, 1998. He further deposed that he heard no confirmation of the hearing date nor did he receive any Notice of Hearing for 20^th September, 1998. Delcy Benjamine who was the Secretary in Mr. Watt’s Office in Gizo denied that she had spoken to Mr. Tegavota between 20-24 August, 1998. Mr. Watt in his affidavit dated 8^th April, 1999 deposed that he was in Honiara on 20^th August, 1998. He deposed that Civil Case No. 24 of 1998 was dealt with in the Gizo Magistrate Court by Ms Lenore Hamilton on his instructions. In my view, it does not make sense for Mr. Tegavota to make enquiries about the hearing date of Civil Case No. 24 of 1998 when he knew as far back as 29^th July, 1998 that the hearing date was to be 20^th August, 1998 at 9 am in the Gizo Magistrate Court. The fact that his witness was still overseas was all the more reason why he should have attended Court at Gizo to seek a further adjournment. Paragraphs 4 and 5 of his affidavit were no excuse for being absent in Court on 20^th August, 1998 without explanation. It is possible that Mr. Tegavota was confused about the hearing date or that he had forgotten about it altogether. The Court cannot wait upon lawyers who are not serious about their cases in Court. Mr. Tegavota argues that the learned Magistrate did not consider “sufficient cause” in terms of Order 28, rule 5 above. He says “sufficient cause” means “good reasons or grounds”. He refers to paragraphs 4 and 5 of his affidavit at page 15 of the Appeal Record to support his case. I do not accept paragraphs 4 and 5 of his affidavit as constituting “sufficient cause” in his application to set aside the decision of 20^th August, 1998. I think otherwise. The next point he makes is that there was a good defence before the leaned Magistrate dated 17^th November, 1998 which the learned Magistrate should have considered. The fact is that that defence was dated 82 days after the learned Magistrate made his decision on 20^th August, 1998. In the normal course of events, a prima facie defence is, as a matter of practice, demonstrated by the Defendant at the time the application to set aside the default judgment is being heard by the Court. The facts constituting the defence would be in affidavit form filed with the application. In this case, both the defence and the application were out of time. The application to set aside was dated 9^th March, 1998. This is again a typing error. I think it should have been dated 9^th March, 1999 to make sense because the decision being attacked was made on 20^th August, 1998. Again, the application was dated well over 3 months after the defence was dated. The total period of delay was about 6 months. Mr. Tegavota argues that the learned Magistrate paid too much attention to Order 4, rule 7 of the Magistrates Courts Rule as read with Order 38, rule 7 of the High Court Rules. Rule 7 of Order 38 above states,

“Any verdict or judgment obtained where one party does not appear at the trial may be set aside by the Court upon such terms as may seem fit, upon an application made within twenty-one days after the trial.”

Mr. Tegavota argues that rule 7 of Order 4 of the Magistrates Courts Rules is not mandatory and the learned Magistrate was not bound to follow it. He says, the learned Magistrates should have looked elsewhere in the High Court Rules for guidance. He refers to Order 14, rule 5 of the High Court Rules as being applicable. In my view, Order 14, rule 5 of the High Court Rules do not apply to applications to set aside a judgment of this sort in this case. In my view, the Appellant/Defendant failed to comply with the mandatory requirement of 21 days in Order 38, rule 7 above. What the Appellant/Defendant should have done was to apply for enlargement of time under Order 64, rule 5 of the High Court Rules, with the support of the Court of Appeal decision in Reef Trading Limited v Island Enterprises Limited (Civil Appeal No. 1 of 1992) as applied by Muria CJ, in Selwyn Dika & others v David Lenga Somana (Civil Case No. 242 of 1996). This, the Defendant did not do, and so, 21 days time-limit in Order 38, rule 7 above was correctly applied by the learned Magistrate in this case. Mr. Tegavota’s last point of argument is that the evidence produced by the Plaintiff and his witness during the trial in the absence of the Defendant was insufficient to support the Plaintiff’s claim. He points out that this point is not included in the grounds of appeal but asks me to allow it under Order 60, rules 17 and 18 of the High Court Rules. In my view the relevant rules are rules 4, 5 and 6 of Order 60 above. Mr. Watt does not object to this point being raised. I accept Mr. Watt’s contention that the learned Magistrate decided the case on the balance of probability rather than beyond reasonable doubt. At page 448, Bernard C. Cairns in Australian Civil Procedure, 1980 says,

“Provision exists for the plaintiff to proceed with the trial if the defendant does not appear when the case is called on for hearing. On the defendant’s failure to appear the plaintiff may proceed to prove his claim so far as the burden is on him. If the plaintiff is entitled to judgment on the pleading then he need discharge no further onus. When the plaintiff seeks judgment in the absence of the defendant, he has to prove his case if it is not admitted on the pleadings or by the operation of the rules for implied admissions. The onus to be discharged by the plaintiff in these circumstances is fixed by the pleadings.”

In my view, the Respondent/Plaintiff had discharged the onus of proof fixed by the pleadings at the date of the hearing. In conclusion, I am of the view that the learned Magistrate was correct in applying Order 4, rule 7 of the Magistrates Courts Rules as read with Order 38, rule 7 of the High Court Rules in so far as a time-limit of 21 days was concerned. This conveniently disposes of grounds of appeal 1 (c) and 2 in the Notice of Appeal. Grounds of appeal 1(a) (b) and (d) in the Notice of Appeal dwell on the question of discretion of the learned Magistrate in refusing the Appellant/Defendant/’s application to set aside the learned Magistrate’s decision of 20^th August, 1998. The fact is that Mr. Tegavota did not enter appearance nor defence though this is not a requirement under the Magistrates Courts Rules. Mr. Tegavota could have done it if he so minded. Failing this, he should have attended the court hearing on 20^th August, 1998 to settle the issues under Order 17 or state his position under Order 29 of the Magistrates Courts Rules. He did neither of this to the detriment of his client. As I have said, I do not accept the reasons in paragraphs 4 and 5 in Mr. Tegavota’s affidavit as an explanation for his inability to attend the trial on 20^th August, 1998. I do accept that there is a defence to the Plaintiff’s claim. However, considerations such as this and others are relevant only if the Appellant/Defendant had acted within 21 days under Order 38, rule 7 of the High Court Rules or as extended under Order 64, rule 5 of the High Court Rules. This is not the case. The question of the exercise of discretion by the learned Magistrate becomes totally irrelevant in this case. The Appellant/Defendant should not have raised it in this case. The reason being that compliance with Order 38, rule 7 of the High Court Rules above is a pre-requisite for applying for an Order to set aside a judgment obtained in the absence of the Defendant under Order 28, rule 3 of the Magistrates Courts Rules. Rule 7 under Order 38 of the High Court Rules is specific and mandatory. This being the case, Grounds 1(a) (b) and (d) of the appeal are also dismissed. The Appeal is therefore dismissed with costs. The relief prayed for by the Appellant/Defendant in the Notice of Appeal is also refused.

F.O. Kabui
Judge