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Airtrade (Vanuatu) Ltd v Deou Motors Ltd [2000] VUSC 10; Civil Case 066 of 1998 (14 March 2000)

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU

Civil Jurisdiction

Civil Case No. 66 of 1998

AIRTRADE (Vanuatu) LIMITED
Plaintiff

AND:

DEOU LI
Defendant

JUDGMENT

NATURE

The plaintiff in this matter, Airtrade (Vanuatu) Limited by Originating Summons dated 17th June 1998 against the defendant, Motors Limited. The Court ourt on the 8th of April 1999 granted the plaintiff the right to enter Judgment.

This basically for non-appearance by the defendant in answer to the Summons even though he filed a notice of appearance. On the 1st July 1999 the Court made order against the defendant to pay VT3,610,236 to the plaintiff with interests accruing from the 17th June 1998. On this Order the defendant then filed a Summons dated the 15th December 1999 to stay the order of 1st July 1999 and then to file a summons to apply to the Court to set aside that order. The Court granted leave to stay the Judgment of 1st July 1999 on the 22nd December 1999. And the Summons to set aside the order of 1st July 1999 was adjourned to 17th February 2000.

The plaintiff also made out an affidavit in support of his application and also Mr. Hakwa the counsel for the defendant.

PROCESS

The process that the Court proceeded on was by way of affidavit and hearing submissions from the counsels.

JURISDICTION

Order 13 rule 29 of the High Court Rules authorise the Court to proceed with the matter if the defendant fail to appear within the prescribed time and also on default of pleading. In this case the defendant has failed to file a defence within 14 days after service on him of the Originating Summons. He only filed a Memorandum of appearance. The Court granted the defendant to enter judgment in default of appearance and adjourned the matter for assessment.

Applicant’s application

The summons of the 2nd December 1999 is amongst other matter sought, applied under Paragraph (d) that the Judgment of 1st July 1999 is stayed or set aside. The Court as stated earlier made an order dated 22nd December 1999 to stay the enforcement of the order pending the hearing of this application.

Submissions

Hakwa in submission, he will dispute paragraph 4, 5, 6(1) and 6(2) (3) (4) on the basis that no evidence in support. Also they further disputed 7(i) and for 7(ii) and 7(iii) as no evidence in support of these paragraphs. And if the Court grant then the opportunity they will put in evidence of which the decision will be in their favour. And the affidavit in support of the application is more then sufficient to say that they had a strong case. The affidavit has shown some merits and their draft defence is also sufficient to say that we would like to contest the matter as it has merit for the Court to consider. In delay, we have responded very quickly. In the event that we are granted the right to defend then we will file our defence. And the case No. 138 of 1987 will support our application, being that there is a merit in our application for the matter to go in for trial. Further we say service effected was not proper.

Hurley

In submission he has set out the case from the beginning as from 24th June 1998 running now to today 15th March 2000, running for about 1 year 9 months. So in actual fact it has now run for a longer period. And submitted that there is already a long delay in the matter and referred the Court to case No. 98 of 1985 that support his application on delay. The defendant was given every opportunity to appear but failed to. We have complied with the rules in obtaining Judgment. The defendant should only be blamed for what has occurred. Even for service we have made proper service pursuant to Section 397 of the Companies Act as the defendant is a company. We had the evidence provided by Adam as explaining what has occurred. And it is quite clear that both the plaintiff and the defendant had common grounds and that was for the defendant to fix the plaintiff’s vehicle. And that was not denied by the defendant that this took place. We say the application should be dismissed.

What I have to say and decide

Order 13 and 29 of the High Court Rules gives power to the Court to set aside its orders. And Order 13 rule 8 where a defendant failed to appear. In our case the defendant failed to appear after July 9 Memorandum of appearance and neither file any defence.

Order 13 and 29 gives wide discretion to the Court to exercise in law whether to set aside a judgment obtained in default. The Court has unfettered jurisdiction to set aside a default judgment. In my view the principal behind this is one of natural justice. That is for justice to take its cause in civil matters the Court is to hear both side. As after all the role of the Court under Article 47 of the Constitution is to resolve dispute according to law. And in law in civil cases both parties are to be heard before judgment is made. Nevertheless, in default judgment parties may only comply with the order given however that is a right for the defaulters to exercise or apply in the normal cause to set aside the order.

The Court may not allow to set aside a default judgment but that would be basically where the defaulter has not establish any merit in the case to warrant another hearing.

In deciding whether there is any merit in the case to warrant the order to be set aside, the affidavit of the defendant and the counsel be considered. It appear from the affidavit of Henry Ouchida, they disputed paragraph 4, 5, 6, and 7 but not 1, 2, and 3. In which they agree that the vehicle was actually put into their garage for repair. Even they admitted that the plaintiff paid VT650,000. They do not deny that the vehicle was repaired and the plaintiff was told to pick up but he did not come to pick up. So what they are saying is basically they did what they were required to do. And denied that they were negligent. Which they said no evidence to support this negligent. Negligence is state in paragraphs 6 and 7 of the Originating Summons.

In view of what the defendant has put forward, they have an arguable case in which they be given a change to prove to the Court that they were not negligence. The case they submitted in support of their application Albert Keith Barlow –v- Dinh Van Than would support their application. And the case of Even –v- Bouthm [1937] All ER 646 which states: "one is that, where the Judgment was obtained regularly, there must be an affidavit of merits, meaning that application must produce to the Court evidence that he has a prima facie defence."

This rule of law applied squarely in this case. That is they have filed an affidavit in support of their application and dispute negligence on their part. This is prima facie defence, that require the matter to go for trial. However, on the alternative Hurley raises fundamental issues of delay by the defendant as there were ample opportunity given to them to defend. Further, if they should engaged a registered lawyer to the case. And support his arguments by referring to case Michael Brenner –v- Boyd Johnson [1985] p. 180. In my view in this case the Court finds no prima facie defence. And went on to accept the rule of law in the case Midlorn Bank –v- Green (No. 3 of 1979) which states "But where or here the failure to set aside is absolutely to the choice there is no reason for Court to exercise its discretion … to oppose the judgment ought to be applicant own informed and deliberate application of the rule."

In my view of this application, in the defendant’s case, the lawyer engaged to take up the matter was not a registered lawyer. Even Hurley also expressed that the defendant should engaged a registered lawyer. And I agree with him. Basically because the defendant is a company and he should be accorded a lawyer to defend him. And this was a negligent act on the part of the organs of the defendant to afford him a qualified lawyer to represent him. And therefore I find that the defendant was not legally represented to defence his interest.

As the power is given to the Court is discretionary that Court on the affidavit of Henry is satisfied that there is a prima facie defence on the ground of negligent that need for the Court to allow the defendant to defend the cause and there the order of the 1st of July 199 is now set aside.

Service

Order 9 of the High Court Rules 1964 authorise service. The defendant is a company and thus Order 9 Rule 8 be the appropriate process to take. Even though the Court has unlimited power to order service in other manner, at least Order 9 Rule 8 gives wide power to the plaintiff in this case as to how to serve a document to the defendant. And provided that service too can be made where a law provides for such service. And therefore s. 397 of the Companies Act provides for service. And that is by leaving such document in the office of the registered company or by sending by post to the address of the company. What the plaintiff did was in accordance with Order 9 of the High Court Rule of 1964 and section 397 of the Companies Act. And therefore it was good service.

In my view where a party is vigorously seeking to defend a cause ordered by default judgment and has shown merit that he must be given an opportunity to defend. Because what he is actually seeking is justice to be done in the cause. And justice in the cause can only be completed where the Court has heard both side of the story.

Costs

Both parties too advanced on costs as put to them by the Court. Counsel for the plaintiff advances that the party wins will be entitled to his costs. Hurley advances that the plaintiff will suffer more then the defendant if cost is not awarded.

On further hearing counsels, cost is discretionary of which the Court can either order costs against the plaintiff or the defendant. Again the Court has an unfettered jurisdiction to order cost. Now in granting the applicant application to set aside the order, cost becomes an issue, that is whether the plaintiff can be properly compensated for costs already incurred in obtaining a judgment. The plaintiff’s counsel advances that the plaintiff has complied with court orders and appear and continue with the matter till judgment was obtain. It was the fault of the defendant not to appear. And cost should be awarded against the defendant for cost he the plaintiff suffered in obtaining judgment. The defendant counsel advances that cost to be cost in the cause and he who the judgment is made in his favour than is entitle to cost.

I have stated earlier that cost is discretion in which the court can award either way. If the defendant is seeking that cost should not made against them than they must show material facts or very good grounds as to why cost can not be awarded against them. To say that cost to be cost in the cause is not a ground or neither a material fact for the court to rely on. In this case the plaintiff has shown that he has come and continue with the matter until judgement was entered in his favour and assessment followed on. And as the order has now been set aside and he must be compensated for cost. And must be compensated by the negligence party for non appearance. Not to allow him cost will mean that the plaintiff will be paying for the cost of the default judgment entered and also will continue to suffer cost again in the trial to come.

In my view to be reasonable to the plaintiff cost as ordered in the proceeding on the default judgement and assessment will not be set aside and becomes cost in the event.

Dated at Port Vila this 14th day of March 2000

Reggett Marum
Judge

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