[*140] 1985 September 30.

 

(KALLIS, D.J.)

IN THE DISTRICT COURT OF NICOSIA

Akinita Anthoupolis Ltd.,

Plaintiffs,

v.

Georghios Matsis,

Defendant.

(Action No. 3941/76).

Judgments - Judgment obtained by default of appearance at the hearing - Setting aside such a judgment - Principles applicable - The affidavit in support of application should disclose “merits” - What is meant by merits - Approach of the Court - Review of authorities - Delay in applying - Effect.

Chr. Triantafyllides, for the Plaintiffs.

N. Papamiltiades, for the Defendant.

JUDGMENT

The following judgment was delivered by:

KALLIS, D.J.: This is an application to set aside a judgment given by default of appearance at the trial. The facts that led to the default judgment are as follows:

By means of an action filed on 10.9.76, the plaintiffs claimed £3,536.527 mils, being balance due under a contract of sale of a house and also claimed an order for the sale by auction of the house subject-matter of the contract of sale. [*141]

Following the close of the pleadings, the action was fixed for mention on 8.10.77 when counsel for the defendant stated that he could not find his client and the case was refixed for mention on 29.10.77. On this date counsel for the defendant informed the Court that he addressed two letters to defendant - one dated 19.9.77 and one dated 24.10.77 - to come and see him, but he failed to do so and he applied for leave to withdraw. Thereupon, leave was granted to him to withdraw and the case was fixed for proof on 19.11.77 when, after hearing evidence, the Court gave judgment as per claim with £100. - costs.

The grounds upon which the setting aside of the default judgment are sought, appear in an affidavit sworn by the defendant and are the following:

(a) That he was informed by his counsel on 24.10.84 that the trial Court gave judgment on 19.11.77 in his absence and that of his counsel;

(b) That he was surprised with the conduct of his then counsel because he believed all along that the judgment was given after a trial proper and/or inquiry and/or examination in the presence of his counsel and in his own absence in view of his frequent and continuous absences abroad during the period in question;

(c)That he only owes the amount of £765.- to the plaintiffs; and that the reason for non-payment of this debt and/or the judgment debt is due to [*142] the persistent refusal of the plaintiffs to supply him and/or exhibit to him a title-deed of the house possessed by him in spite of the fact that he had informed them that he was prepared to pay in full his debt after the deposit by them of the title-deed with the appropriate organs to enable him to have it mortgaged as security in order to borrow the amount he needed but they failed to do so;

(d) That the amounts claimed and/or the judgment debt do not correspond to the truth and/or the contract and/or they are distorted:

(e) That he orally stated to the plaintiffs and/or to their agents that his application for the grant of a loan of £4,000.- was on 23.10.1984 approved by the Lakatamia Co-operative Credit Society upon the furnishing of mortgaged security but plaintiffs refused and/or neglected to mortgage his house as security;

(f)The plaintiffs have initiated the process of sale by public auction of the house in which he has been residing with his family since 1971 and whose value has greatly increased.

The plaintiffs opposed the application and in an affidavit sworn by one of their employees they alleged:

(1) That defendant is estopped from proceeding with his application because with full knowledge of the judgment against him he took various steps [*143] in that he filed an application under Law 24/1979 which was dismissed on 23.6.1979, and made various payments to the plaintiffs towards the judgment debt and embarked into negotiations with them for the payment of his debt having given many promises;

(2) That following the judgment plaintiffs sent to defendant a number of letters calling upon him to pay his debt but he failed to do so; and at various dates he paid a total of £2,730.- towards his indebtedness and the costs;

(3) That due to the refusal of the defendant to satisfy the judgment debt in spite of the lapse of more than six years the plaintiffs renewed the judgment by order of the Court dated 31.8.1984 and by letter dated 21.9.74 called upon the defendant to pay the judgment debt by 29.9.84 and warned him that if he fails to do so they would proceed to sell his house by public auction;

(4) That defendant has no chance of success in this action, and he makes no such allegation in his affidavit, and gives no justification for his failure to appear at the hearing and no explanation for his long delay in applying to have the judgment set aside though he knew about it for many years.

In a letter dated 19.11.77 attached to the affidavit in support of the opposition, defendant was informed of the judgment against him and its provision about the sale of the house by public auction and was called upon to [*144] communicate with the plaintiffs within six days. In another letter dated 3.2.78, it was stated that defendant did not keep his promises to pay though he was afforded all facilities; and in a letter dated 1.8.78 he was informed that the sale of the house would J take place on 28.8.78. The letters of 7.1.80, 12.6.80, 27.6.80, 30.6.82, 12.1.83 were to the same effect. They were calling upon the defendant to pay his judgment debt and warning him of the consequences. It was only after he received the letter of 19.10.84 that the sale of the house would take place on 4.11.84 that he initiated the proceedings for the setting aside of the default judgment.

Now what are the principles governing the setting aside of default judgments? In the case of Kotsapas & Sons v. Titan Construction, 1961 C.L.R. 317, the Court of Appeal relying on Evans v. Bartlam, (1937) A.C. 473, held that “the primary consideration is whether the defendant has merits to which the Court should pay heed”.

In the case of Christoforou v. Kyriakoulli, (1963) 2 C.L.R. 159, the following were stated at pp. 160 - 161:

“The affidavit in support of the application to set aside the defauIt-judgment did not contain statements of fact sufficient to show merit in applicant’s case. General statements such as: I have instructions to defend the above action (para. 2); or, my client has a defence on the merits (para. 5) are not sufficient to constitute a proper case where the Court should exercise its discretionary powers to set aside under rule 14 of Order 26, a default judgment obtained under rule 2 of the same Order”. [*145]

In the most recent case of Phylactou and Others v. Michael (1982) 1 C.L.R. 204 the following were stated at pp. 209 - 210:

“It would be injudicious on the part of the trial Judge to pronounce either on the correctness of the facts propounded before him at the stage of the application to set aside judgment, or their implications on the rights of the parties. This is properly the province of the trial Court. His task is primarily to discern whether sufficient merits are disclosed as to justify the re-opening of the case. The disclosure of such merits being, as counsel agreed, the foremost consideration governing the discretion of the Court on the subject of re-opening a case.

……………………………………………………………………………………..….

In exercising its discretion, the Court must strive to balance two considerations fundamental for the administration of justice: The need to uphold effectively, on the one hand, the right of a party to be heard in his cause, and the need to ensure the expeditious transaction of judicial business, on the other. The speedy determination of judicial causes is not merely a matter of convenience but an all important factor for the effective vindication of the rights of the citizen. This principle is closely associated with another consideration likewise important for the administration of justice, that is, the need to uphold finality of [*146] judgments. If a party is lightly allowed to re- open a case, the imprint of finality attaching to a judgment, with all that goes with it, and the certainty it imports in the management of human affairs, will disapper with grave consequence to the administration of justice. (See, Observations of Megaw L.J. in Lambert v. Mainland Market (1977) 2 ALL E.R. 826, at p. 833 (c-d) ).

The effect of the case law is that the Court must not be astute to unseat a party from his right to be heard to his cause, so long as he discloses merits. But the Court may, nevertheless, decline to re-open the case if his conduct is such as to strike at the root of the administration of justice. Where the conduct of the party applying to set aside judgment is inexcusable, contumelious to the extent of gross disregard for the judicial process or the rights of his adversary, the Court may, in its discretion, refuse to set aside judgment”.

In the case of BartIam (supra), Lord Atkin said the following at p. 479:-

“I agree that both rules, Order XIII, r.10, and Order XXVII, r.15, give a discretionary power to the judge in Chambers to set aside a default judgment. The discretion is in terms unconditional. The Courts, however, have laid down for themselves rules to guide them in the normal exercise of their discretion. [*147] One is that where the judgment was obtained regularly there must be an affidavit of merits, meaning that the applicant must produce to the Court evidence that he has a prima facie defence. It was suggested in argument that there is another rule that the applicant must satisfy the Court that there is a reasonable explanation why judgment was allowed to go by default, such as mistake, accident, fraud or the like. I do not think that any such rule exists, though obviously the reason, if any for allowing judgment and thereafter applying to set it aside is one of the matters to which the Court will have regard in exercising its discretion”.

Finally, Lord Wright laid down these rules at p.489:

“In a case like the present there is a judgment, which though by default, is a regular judgment, and the applicant must show grounds why the discretion to set it aside should be exercised in his favour. The primary consideration is whether he has merits to which the Court should pay heed; if merits are shown the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. This point was emphasized in Watt v Barnett, 3 Q.B.D. 363. Here the appellant shows merits, in that the debt was primarily a gaming debt; he denies that he made any new contract within Hyams v. Stuart King (1908) 2 K.B. 696, an authority which has not yet been considered by this House. [*148] He clearly shows an issue which the Court should try. He has been guilty of no laches in making the application to set aside the default judgment, though as Atwood v. Chichester, 3 Q.B.D. 722 and other cases show, the Court, while considering delay, have been lenient in excluding applicants on that ground. The Court might also have regard to the applicant’s explanation why he neglected to appear after being served, though as a rule his fault (if any) in that respect can be sufficiently punished by the terms as to costs or otherwise which the Court in its discretion is empowered by the rule to impose. The appellant here has an explanation, the truth of which is indeed denied by the respondent, but at this stage I see no reason why he should be disbelieved on what appears to me to be a mere conflict on affidavits”.

It has been held that if the judgment is regular, then it is an (almost) inflexible rule and there must be an affidavit of merits, i.e. an affidavit stating facts showing a substantial ground of defence (see Farden v. Richter, (1899) 23 Q.B.D. 124); and that at any rate where such an application is not thus supported, it ought not to be granted except for some very sufficient reason” (Per Huddleston B. at p. 129 of the Fraden case (supra) approving Hopton v. Robertson, (1884) W.N. 77). It has, also, been established that if it is desired to set aside the judgment for irregularity, the irregularity must be specified and the [*149] affidavit in support should also state the circumstances under which the default has arisen and should disclose the nature of the defence (vide Annual Practice 1958, p.615).

Regarding the delay in applying to have the judgment set aside, in the case of Kyriacou v. Georghiadou, (1970) 1 C.L.R. 145, the following were stated at p. 147:

“This Court has stated time and again that for applications of this nature there must be a full justification on the record, in the form of an affidavit, for the delay. In the present case, as already stated, no reason has been given for a delay exceeding three months. Furthermore, as was pointed out to appellant’s counsel in the course of the argument, he failed to set forth fully in his notice of appeal the reasons relied upon for the grounds of appeal stated in the notice, as expressly provided in rule 4 of Order 35. In fact, no reasons at all are given in the notice of appeal. In these circumstances, we are of the view that the appellant has failed to show any cause why the discretion of this Court should be exercised in his favour to have his appeal reinstated.

It is in the public interest that there should be some end to litigation, and the stipulations as to time in procedural matters laid down in the Rules of Court are to be observed unless justice clearly indicates that they should be relaxed: cf. Loizou v. Konteatis (1968) 1 C.L.R. 291, at page 294; [*150] Georghiou v. Republic (Minister of Interior and Another) (1968) 1 C.L.R. 411; and Edwards v. Edwards (1968) 1 W.L.R. 149”.

As it appears from the above narration of the facts, defendant came to know of the existence of the default judgment as early as 1977 and he partly complied with it; and in his affidavit he gives as a ground for such compliance his belief that it was the result of a trial proper. Reading, however, through the lines of his affidavit the main ground in support of the application is the failure of the plaintiffs to furnish him with a title deed of the house so as to enable him to have it mortgaged and obtain a loan of £4,000. - and settle his debt. It would further be stated that in his affidavit the defendant does not show at all that his defence has merits. His only statement was that he owes only £765. - repeating in this respect para.5 of his statement of defence; and yet he paid £2,730. - after judgment. Such mere statement, however, in the absence of any other particulars is not sufficient to show merits.

Though the non-disclosure of any defence in the affidavit of the defendant would have been sufficient to dispose this case against him I would proceed to deal with the grounds in support of the application. Firstly, regarding the ground relating to the failure of the plaintiffs to furnish him with a title-deed I must say that this is not a proper ground on which [*151] to set aside the judgment because it has nothing to do with the dispute between the parties as appearing in the pleadings.

Finally, with regard to the ground relating to the belief of the defendant that the judgment was given after a trial proper, I must say, again, that this is not a proper ground on which to exercise my discretion in favour of setting aside the default judgment; and I would add that whatever might have been his belief the fact remains that he came to know of the existence of the default judgment immediately after it had been entered; and one might have reasonably expected him to inquire from his advocate into the circumstances relating to its issue, the more so because the judgment debt was about 5 times the amount admitted by him in his defence. Instead of embarking into these enquiries he paid various amounts towards the judgment, exceeding by far the amount admitted to be owed by him, and he applied for relief - presumably under legal advice - under Law 24/79; and only moved the Court to have the judgment set aside in the fact of an eminent danger for the sale of his house.

In conclusion, having anxiously considered the matter, I am not prepared to exercise my discretion in favour of the defendant not only because of his failure to show any merits in his defence but also, if I may use with respect the words of Pikis, J. in the Phylactou case (supra) because his conduct is such as to strike at the root of the administration [*152] of justice”, and is “inexcusable, contumelious to the extent of gross disregard for the judicial process or the rights of his adversary”. In the result, the application is dismissed with costs to be assessed by the Registrar.

Application dismissed with costs.