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HBC 0341 OF 1997 \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }\pard \qc \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 BETWEEN:}{\lang2057\langfe1033\langnp2057\insrsid9854573\charrsid9854573 \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\b\lang2057\langfe1033\langnp2057\insrsid9854573 \par }\pard \qc \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\b\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 NATIONAL MBF FINANCE (FIJI) LIMITED}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par Plaintiff \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }\pard \qc \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 AND}{\lang2057\langfe1033\langnp2057\insrsid9854573\charrsid9854573 : \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid9854573 \par }\pard \qc \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\b\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 DONALD PICKERING AND EILEEN PICKERING}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par Defendants \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }{\lang2057\langfe1033\langnp2057\insrsid9854573 Counsel}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 :}{\lang2057\langfe1033\langnp2057\insrsid9854573\charrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Ms A.P. Narayan for Plaintiff \par Mr Ratuvili for Defendants \par \par }{\lang2057\langfe1033\langnp2057\insrsid9854573 Hearing}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 :}{\lang2057\langfe1033\langnp2057\insrsid9854573\charrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 8th July 1999 \par \par Decision:}{\lang2057\langfe1033\langnp2057\insrsid9854573\charrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 20th July 1999 \par \par }\pard \qc \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\b\lang2057\langfe1033\langnp2057\insrsid9854573 DECISIO}{\b\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 N}{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par On 15th August 1997 the Plaintiff filed a writ of summons against the Defendants.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The Plaintiff claimed that the Defendants had guaranteed the performance and repayment of two Lease Agreements between the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 and Donald Pickering and Sons Enterprises Limited T/A United Engineers.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The claim was in the amount of $31,549.18 with i nterest at 24% per annum. \par \par Acknowledgment of Service was filed on 3rd September 1997 but no Defence was filed thereafter. \par \par Judgment in Default was entered on 4th August 1998 followed by a writ of fieri facias to enforce judgment, on 25th November 1998. \par \par The Defendants now make an application to set aside the writ of fieri facias and judgment in default.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The Plaintiff opposes both applications. \par \par Counsel were heard on 8th July 1999.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Mr Ratuvili for the Defendants relied on his written submissions.}{ \lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 He submitte d that the Defendants had a good reason for failure to file defence, and that judgment should now be set aside because they had a meritorious defence.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 He relied on the affidavit of Donald Thomas Pickering.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The reason for the delay as deposed by this affidavit, was that there had been an exchange of correspondence between the solicitors for the Plaintiff, and the solicitors for the Defendants had asked for particulars of the lease and guarantee agreement. \par \par At paragraph 10 of the affidavit, Donald Pickering deposes that on 27th February 1998 his solicitors wrote to the solicitors for the Plaintiff requesting until 15th March 1998 to file defence.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 However on 18th January 1999 the Defendants became aware that writ of fieri facias had been issued against them. Th e defendant deposes that the Judgment entered was irregular as there had been no agreement under the guarantee for interest.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 He further deposes that the payments relating to the lease agreement for two vehicles had been regular until KPMG Peat Marwick had taken over the affairs of the company as receivers. \par \par The affidavit further states that the vehicles had been sold at well below market value and that the Defendants had a valid defence and counter-claim against the Plaintiff. \par \par Counsel relied on the affidavit of Taniela Matakibau, Legal Executive to the Plaintiff.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 She also made written and oral submissions.}{ \lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 She argued that the Defendants had failed to show a meritorious defence.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 She submitted that the Lease Agreement account for both vehicles had been in arrears by 9th November 1997 and that several notices annexed to the affidavit of \par Taniela Matakibau, had been sent to the company. \par \par The affidavit of Taniela Matakibau deposes that the Receiver had indicated to the Plaintiff that he did not wish to continue the Lease Agreements in respect of the two vehicles and they were repossessed on or about 3rd September 1996.}{ \lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The affidavit shows that the vehicles were advertised and sold to the highest bidder.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 On the issue of interest, the affidavit shows that the lease agreement between the Company and the Plaintiff was for 2% interest per month, which is 24% per annum. \par \par Ms Narayan submitted that the defence had no merit, and that the applications should be dismissed with costs. \par \par Order 13 Rule 1(1) of the High Court Rules gives the court the discretion \'93on such terms as it thinks just\'94, to set aside judgment in default.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Where the judgment was regular the application must be supported by an affidavit showing a meritorious defence.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The reasons given for delay in filing a defence, is transcended by the nature of the defence proposed. \par \par In }{\ul\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Alpine Bulk Transport Co. Inc -v- Saudi Eagle Shipping Co. Inc. The Saudi Eagle (1986)}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 2 Lloyd\rquote s Rep 22, the Court of Appeal said that the main consideration in the exercise of the discretion to set aside was to avoid the injustice which may be caused if judgment follows on default.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \'93The 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 common sense, since there is no point in setting aside a judgment if the defendant has no defence, and because if the Defendants can show merits, the cou rt will not prima facie desire to let a judgment pass on which there has been no proper adjudication.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Also, as a matter of common sense the court will take into account the explanation of the Defendants as to how the default occurred\'94 }{\ul\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 (Supreme Court Practice}{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 1995 13/9/14). \par \par The explanation given by the Defendants for the delay in this case is far from satisfactory.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Even after requesting until the 15th of March 1998 to file a defence, they continued to fail to file defence until the 4th of August 1998, when judgment was entered.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The affidavit of Donald Pickering fails to explain this delay. \par \par On the issue of the defence, I find that I am not satisfied that there is a meritorious defence on the material before me. The Guarantee and Indemnity of Lease Agreement between each Defendant and the Plaintiff, are prima facie binding on the Defendants.} {\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The claim that the receiver appointed mismanaged the affairs of the company does not, (and this was conceded by counsel for the Defendants), affect the contractual obligation between the Defendants personally, and the Plaintiff.}{ \lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Nor can I agree, in the absence of evidence of fraud or bad faith or collusion, that the Defendants can now claim that the Plaintiff failed to obtain a proper value for the vehicles.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 This is particularly so in the light of Taniela Matakibau\rquote s assertion that the vehicles were advertised and sold to the highest tenderer. \par \par Nor am I satisfied that the default judgment was irregular in respect of the interest payable.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 The Guarantee signed by each Defendant contains the following clause; \par \par }\pard \ql \li720\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin720\itap0\pararsid9854573 {\b\i\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \'934.}{\b\i\lang2057\langfe1033\langnp2057\insrsid9854573 }{ \b\i\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 We will jointly and severally on written demand indemnify you against all loss or damage you may sustain under the said Lease Agreement whether or not such loss or damage results from the commission of any breach by the Lessee and whether or not you have any legal right to claim against the Lessee for any loss or damage . . . . .\'94}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par Clearly such loss includes the loss on interest due.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Clause 3 of the Agreement provides; \par \par }\pard \ql \li720\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin720\itap0\pararsid9854573 {\b\i\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \'93We further jointly and severally agree that our li ability under this Guarantee and Indemnity shall be a principal debtors and not merely as sureties and shall be a continuing security and shall not in any way be discharged, diminished or affected by . . . . \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\b\i\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }\pard \ql \li720\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin720\itap0\pararsid4802036 {\b\i\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 (v) \tab the impairment of any security taken from the Lessee or the failure to realise or enforce such security\'94.}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par It is clear that the Defendants\rquote purported defence has no prospects of success.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 They further have not provided a satisfactory explanation for the failure to file a defence.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 Nor have they shown the court that the default judgment was irregular.}{\lang2057\langfe1033\langnp2057\insrsid9854573 }{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 As such I dismiss both applications and order that the Defendants pay the Plaintiff costs for this application, to be taxed if not agreed \par \par }\pard \qc \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\b\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 [Nazhat Shameem] Ms \par }{\b\ul\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 JUDGE}{\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par }\pard \ql \li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9854573 {\lang2057\langfe1033\langnp2057\insrsid1254701\charrsid9854573 \par At Suva \par 12th July 1999 \par }}