ROYAL BANK OF CANADA v BENETTON (St. Lucia) LTD et al

SAINT LUCIA IN THE HIGH COURT OF JUSTICE (CIVIL) A.D. 1996 SUIT NO. 143 of 1995 BETW,t:;::N: ROYAL BANK OF CANADA .?lai nt i ff and

1.BE~ETTON (St. Lucia) LTD.

2.TRACI BETTS ::Jefendants ~ r s . 3 . ~ le mi ng f or Plaint iff Mr . P. Foster for Defendants 1996: July 3; October 2. J U D G MEN T MATTHEW J . (In Chambers) . On ~eb ru a ry 21 , 1995 the Plaintiff filed a wr i t of summons indors ed with s tateme nt o f claim a ski ng for a sum of money i n excess of S400 ,00 0 plus interest and costs being debts owing ~ r"'. L ___ the Plaintiff by the Defendants. The writ of summons was served on the Defendants on March 7 , 1996 and ~h r ee da ys lat er the y fil e d an ent r y of appe arance . ~n 0uly 4, : 9 95 Arthur Isidore swore to an a ff i dav i t ~hat he had s erved the De feYldants wi th t he wri t: ,, ":: '-' '- summons and on 0uly < ~-" I : 9 95 the ? l aint:iff entered judgment ~n default o f defence . J.. f : 9 95 '::.he 8 e fendants ::'001:. out a summons upon an On August applicati on to se t: the judgme nt as i de . ~he s ummons was supported by an af f idavit o f ~ r ac i Be tts and several exhibi ts we r e appended - ,- . .., ~ 8 ~~e arrlaaVlL. ~t paragraph 2 and 3 of the affidavit the deponent all that Plaintiff had sued Benneton (St. Lucia) ted and not Benetton St. Lucia) Ltd, the correct name of t company, and so Judgment entered is erroneous. Quite : ' do not ~ake t s objection seriously which seems to be catching at straws case , tind it was correctly an..;;:wered by paragraph 2 of the affidavit of Stanley Ernest Hulse, Manager t iff, fil on November 6, 1995. )aTagraphs to 16 of Betts' affidavi~ refer co t Is f correspondence between solicitors of the Parties. It is sufficient to state that Plaintiff's icitor gave a lot of accommodation to the Defendants to be tted to file a late fence. The Defendants were request of Pl iff the documentation to be used by latter support of its case. etter of June 9, 1995 the Plaintiff seems to necessary documentation and st that the fence filed and erved not later than June 16, 1995. Defendants did not comply. They seem to as ::::"eason or one the reasons the fact t about t t stry office was on strike but admitted Betts' aff t that the Staff of the Registry returned to work on 3, 1995, t by Y 5, they were still asking :or :urther accommodation to 14, 1995 by which time they would file the defence. dently the Plaintiff was not willing co such accommodation and on July 13, 1995 the judgment in def t of de:ence was filed. I hold that the d~fault judgment was 3ut that does not mean that the Defendants could not to set :he ~udgment aside and they seem to have done that by paragraph 17 f the aff idavi t of Traci 3et ts . One of t:.he exhibits to ffidavit is a draft defence. By paragraph 2 of that defence, the Defendants seem to that the first-named Defendant owes the Plainciff the sums claimed In respect of the claim againsc the second-named Def it is leged that chere was no consideration for the guarancee and ternative, t PIa iff wrongful and t second-nanl'- i Defendanc co sign and execute the DV undue influence and they s the gu&ra~~ee is 1 and way of reply to paragraph 17 of the affidavit on If of 'Jefendants, che aintiff filed two af .... idavi ts two of t managers. John Miller seems to have a s affidavit was filed on November 6, 1995. 2 to 9 ller's af davit answer t parti ars of c appears to be in effecc a conflict between t and affidavit evidence. Paragraph 10 of the affi t states the circumstances outlined the named Defendant has failed to establish a prima facie fence to the action and so the default ludgment should Id and application by the Defendants should be dismissed. tanl Ernest Hulse seems to be the succeeding He so an affidavit filed on November 6, 1995. In 6 of his ffidavit he gives the reasons why the Defendants do not a facie defence to the action on the merits to warrant the setting aside of the default judgment. Again t s is ed on s version of facts. For example, he says twas consideration for the guarancee. The Defendants e t the particulars their defence. In his fidavit ac paragraph (ii) he scates in part: II •••• as the second-named Defendant was not a cohabitee who was induced to sign a guarantee to secure a loan advanced to the second named Defendant's cohabitee". But the contrary is stated t i ars he said at paragraph 6(iii) is on s view at ii and s the matter no and he at v equally di letter ed tts to the Bank does not neces~ fact s were incurred t second- Def ) to 6(x) are dis")ut: e. it is on the basis s ew the facts is that the default judgment icat fendants smiss The Plaintiff's is sed on the fact has been said affidavits on its f are true. have no doubt that two managers are men e d be strange and if a be discarded so easi and a j aff which not test cross Counsel the De s was te terse ssions to set asi the fault j He re o "the New Civil Court Act "by at: pages 96-97. passage states II .. Where judgment is ar it: s standard ice to file an affidavit stat why j was 1 ... to be entered e.g. stake, delay etc. and that the defendant has a fac fence t:o act or is some t e ~ssue (otherwise it would be a less exeY,c:i,9>? to set the judgment aside) . In Evans v Bartlem defendant had allowed judgment to be entered fault of acknowledgement for what was in effect a gaming debt and then applied to set the udgment aside) { true position and at: the same time formulated the classic statement of basic e of l.aw f that a failure to follow the rules f is not to debar a defendant from seeking judgment on t merits. Counsel submitted that Defendants not be i for a procedural flaw. Learned Counsel for the a iff made 3S her typic documer..ted arguments which were laden with aut t s icat :"n support of the p-oposition that the i)efendants ' to be dismissed. submissions Counsel examined t defences the fendants. In respect of t fence of l. f consi Counsel stated that the i)efendants t there was not consideration for ee Traci Bet s that was submitting that was good cons rat t seems to me that 1 this is s is that are cont views on t matter. respect of defence f undue luence t submissi _n _s that the Defendants cannot allege a lass 2 B re ati ause in order to do so they must show that Traci Betts had ly or usually reposed trust and idence in the ? iff bank. =t must not ten that 4 of defence lS a pleading and t is eXDect that e d to llow UD in support of that pleading. as to whether or not t is proof f manifest age o Traci Betts d upon th~ view of the facts t In connection = say that there has been no t tendered before the Court. n aid of the submission that there was a rebuttal of undue infl uence it is only said that Traci Betts must have received independent advice from accountant. is insufficient to rebut t:.he presumption. The submission on t:.he loss of ~he to resc is not convincing. T must now turn to consider t pr~nciples which Courts _::1 setting aSlde faul t udgments. Parc:graph 13 9 14 f t- ~nited Kingdom Supreme Court Practice _995 is as follows: "DISCRETIONARY POWERS OF THE COURT "I'he screti power to set aside a def t judgment whi ente regularly is unconditional, and court d not 1 rigid rules which deprive it of juri ction. of the discretionary power is to avoid the injustice caused if judgment llows automatical t. primary consideration in exercising the discret the defendant has merits to which t court not as a _ e law but as matter common sense f s there is no point in setting aside a judgment if f has no defence, and because, if the defendant can show merits, the court will not facie desire to let a j pass on which there has been no proper udication. Also as a matter of common sense the court will take account the explanation of the defendant as to how the def t oc The foregoing gene :.ndications of t way in ch the court exercises discret:.ion are derived from the ~udqment of -' ~ the Court of Appeal in The Saudi Eagle 1986 2 LL.R 221i 223. From that case the llowing propositions may derived: (a) It is not sufficie::ct +::'0 she..,; 3. ;:-~crcly "arguable" defence that would justify leave to defend under Order 14; it must both have "a real prospect of success" and "carry some degree of conviction . Thus the court must form a provisional view of the probable outcome of t:.he action. b) If proceedings are deliberately ignored this conduct, although not amounting to an estoppel at law, must considered "in justice" before exercising t court's discretion to set aside". In the Saudi Eagle the Plaintiffs claimed damages _ contract by the Defendants who LGfused to load cert The aintiffs issued with ave a writ for ce 0U~ of urisdiction and served 1'· on the Defendants. No notice :)f ention to defend was given and e j was igned. An order :or assessment of damages was were assessed. Final judgment was given U.S.$49, 00 costs the sum of 3,000 pounds. t was common ground that a deliberate is was t not to fend the aintiffs' claim because the Defendants no assets. ly after final judgment was given Def hat the Plaintiffs had earlier obtained of s matter and were holding a bond. Defendants to set side the judgment and leave to defend t Plaintiffs had sued the wrong Defendants. St on J he he application would be dismissed. The De s appealed. Court of Appeal held that there was no substance t fences that it was the wrong Plaintiff and t wrong contract. They held that on the evidence the Defendants had not had a fence which had any reasonable f success; he conduct of the Defendants in deliberate iding not to notice of intention to defend because it suited their erests not o do so was a matter to be taken into account assessing the ustice of the case. The appeal was dismissed. n this case the Defendants have set up defences which show a real prospect of success if the evidence is forthcoming to support the eadings. The affidavits give a different version to that indicated in the pleadings but I am not prepared to accept the version there given as gospel truth without more. The Saudi Eagle has shown that the conduct of Def is a matter to be taken into account. The penultimate of t decision at page 225 is as follows: liThe conduct the defendants in t s respect deliberately deciding not to give noti ce of ent to defend Leca~se it suited the erests of to let t plaintiffs proce against these defendants lS a matter to taken into ccount in assessing the justice of case. While it does rot amount to an estoppel in law, Court can and must consider it. II Paragraph 13/9/14 of the ted Kingdom Supreme Court Practice records the case of Allen v Taylor [1992 P.I.Q.R. 255 t Court of Appeal held a udge had ed f 00 little weight to an assertion a defendant on ts and too to conduct. It appears that h te a to considered. the present case there can be any ion f t conduct of the Defendants. ir behaviour was that the Defendants in the Saudi Eagle case. writ of summons was served on them on March 7, 1995. They filed an entry of appearance three days later. By letter of March 27, 1995 their icitors were asking of the aintiff's solicitors documentation f the aintiff's claim. se were suppli on June 9, 1995. Besides, there were earl tters on May 11 and May 30 ch indicated a desire to set up a defence. Their f request was consent to file and serve defence by y 14, 1995 on edingiay ': f:::i.ult judgmer:t ,,'as filed. As I said earlier I am of the provisional view that the Defendants a real prospect of success this suit ~f the dence is forthcoming at a proper trial. so of the view that the conduct of the Defendants in not filing the defence time was not deliberate. I think the defence has merits to which Court must heed and it would be an ustice not to low De s to have a proper adjudication on the merits. ~ the exercise of my discretion I set as the fault iled by .. e Plaintiff on July 13 f 1995. I grant leave to Defendants to file and serve their cefence on Pl iff o days ialling which judgment and costs to t entered in favour of aintiff. order the Defendants to pay to Pla iff costs any event o agreed or taxed occasioned t set t aside of fault judgment. A. N. J. MATTHEW sne

SAINT LUCIA IN THE HIGH COURT OF JUSTICE (CIVIL) A.D. 1996 SUIT NO. 143 of 1995 BETW,t:;::N: ROYAL BANK OF CANADA and

1.BE~ETTON (St. Lucia) LTD.

2.TRACI BETTS ~ r s . 3 . ~ le mi ng f or Plaint iff Mr . P. Foster for Defendants 1996: July 3; October 2. J U D G MEN T MATTHEW J . (In Chambers) . .?la i nt i ff ::Jefendants On ~eb r u a ry 21 , 1995 the Plaintiff filed a wr i t of summons indors ed with s tateme nt o f claim a ski ng for a sum of money i n excess of S400 ,00 0 plus interest and costs being debts owing ~ r”‘. L ___ the Plaintiff by the Defendants. The writ of summons was served on the Defendants on March 7 , 1996 and ~h r ee d ays lat er they fil ed an e nt r y of appe arance . ~ n 0uly 4, 9 95 Arthur Isidore swore to an a ff i dav i t ~hat he had s erved the De feYldants wi th t he wri t: ,, “:: ‘-‘ ‘- summons and on 0uly 1 < ~-” I : 995 the ? l aint:iff entered judgment ~n default o f defence . On August 1 J.. f : 995 ‘::.he 8 e fendants ::’001:. out a summons upon an applicati on to se t: the judgment as i de . ~he s ummons was supported by an af f idavit o f ~ r ac i Be tts and several exhibi ts we r e appended – ,- . .., . ~ 8 ~~e arrlaaVlL. ~t paragraph 2 and 3 of the affidavit the deponent all that Plaintiff had sued Benneton (St. Lucia) ted and not Benetton St. Lucia) Ltd, the correct name of t company, and so Judgment entered is erroneous. Quite : ‘ do not ~ake t s objection seriously which seems to be catching at straws case , tind it was correctly an..;;:wered by paragraph 2 of the affidavit of Stanley Ernest Hulse, Manager t iff, fil on November 6, 1995. )aTagraphs 5 to 16 of Betts’ affidavi~ refer co t Is f correspondence between solicitors of the Parties. It is sufficient to state that Plaintiff’s icitor gave a lot of accommodation to the Defendants to be tted to file a late fence. The Defendants were request of Pl iff the documentation to be used by latter support of its case. etter of June 9, 1995 the Plaintiff seems to necessary documentation and st that the fence filed and erved not later than June 16, 1995. Defendants did not comply. They seem to as ::::”eason or one the reasons the fact t about t t stry office was on strike but admitted Betts’ aff t that the Staff of the Registry returned to work on 3, 1995, t by Y 5, 1995 they were still asking :or :urther accommodation to 14, 1995 by which time they would file the defence. dently the Plaintiff was not willing co such accommodation and on July 13, 1995 the judgment in def t of de:ence was filed. I hold that the d~fault judgment was 3ut that does not mean that the Defendants could not to set :he ~udgment aside and they seem to have done that by paragraph 17 f the aff idavi t of Traci 3et ts . One of t:.he exhibits to s ffidavit is a draft defence. By paragraph 2 of that defence, the Defendants seem to that the first-named Defendant owes the Plainciff the sums claimed In respect of the claim againsc the second-named Def it is leged that chere was no consideration for the guarancee and ternative, t PIa iff wrongful and t second-nanl’- i Defendanc co sign and execute the DV undue influence and they s the gu&ra~~ee is 1 and way of reply to paragraph 17 of the affidavit on If of ‘Jefendants, che aintiff filed two af …. idavi ts two of t managers. John Miller seems to have a s affidavit was filed on November 6, 1995. 2 to 9 ller’s af davit answer t parti ars of c appears to be in effecc a conflict between t and affidavit evidence. Paragraph 10 of the affi t states the circumstances outlined the named Defendant has failed to establish a prima facie fence to the action and so the default ludgment should Id and application by the Defendants should be dismissed. tanl Ernest Hulse seems to be the succeeding He so an affidavit filed on November 6, 1995. In 6 of his ffidavit he gives the reasons why the Defendants do not a facie defence to the action on the merits to warrant the setting aside of the default judgment. Again t s is ed on s version of facts. For example, he says twas consideration for the guarancee. The Defendants e t the particulars their defence. In his fidavit ac paragraph (ii) he scates in part: II •••• as the second-named Defendant was not a cohabitee who was induced to sign a guarantee to secure a loan advanced to the second named Defendant’s cohabitee”. But the contrary is stated t i ars he said at paragraph 6(iii) is on s view at ii and s the matter no and he at v equally di letter ed 4 92 tts to the Bank does not neces~ fact s were incurred t second- Def ) to 6(x) are dis”)ut: e. it is on the basis s ew the facts is that the default judgment icat fendants smiss The Plaintiff’s is sed on the fact has been said affidavits on its f are true. have no doubt that two managers are men e d be strange and if a be discarded so easi and a j aff which not test cross Counsel the De s was te terse ssions to set asi the fault j He re o “the New Civil Court Act “by at: pages 96-97. passage states II .. Where judgment is ar it: s standard ice to file an affidavit stat why j was .1.. to be entered e.g. stake, delay etc. and that the defendant has a fac fence t:o act or is some t e ~ssue (otherwise it would be a less exeY,c:i,9>? to set the judgment aside) . In Evans v Bartlem defendant had allowed judgment to be entered fault of acknowledgement for what was in effect a gaming debt and then applied to set the udgment aside) { a true position and at: the same time formulated the classic statement of basic e of l.aw f that a failure to follow the rules f is not to debar a defendant from seeking judgment on t merits. Counsel submitted that Defendants not be i for a procedural flaw. Learned Counsel for the a iff made 3S her typic documer..ted arguments which were laden with aut t s :”n support of the p-oposition that the i)efendants ‘ to be dismissed. submissions Counsel examined t defences icat the fendants. In respect of t fence of l. f consi Counsel stated that the i)efendants t there was not consideration for ee Traci Bet s that was submitting that was good cons rat t seems to me that 1 this is s is that are cont views on t matter. respect of defence f undue luence t submissi _n _s that the Defendants cannot allege a lass 2 B re ati ause in order to do so they must show that Traci Betts had ly or usually reposed trust and idence in the ? iff bank. =t must not ten that 4 of defence lS a pleading and t is eXDect that e d to llow UD in support of that pleading. as to whether or not t is proof f manifest age o Traci Betts d upon th~ view of the facts t In connection = say that there has been no t tendered before the Court. n aid of the submission that there was a rebuttal of undue infl uence it is only said that Traci Betts must have received independent advice from accountant. is insufficient to rebut t:.he presumption. The submission on t:.he loss of ~he to resc is not convincing. T must now turn to consider t pr~nciples which Courts _::1 setting aSlde faul t udgments. Parc:graph 13 9 14 f t- ~nited Kingdom Supreme Court Practice _995 is as follows: “DISCRETIONARY POWERS OF THE COURT “I’he screti power to set aside a def t judgment whi ente regularly is unconditional, and court d not 1 rigid rules which deprive it of juri ction. of the discretionary power is to avoid the injustice caused if judgment llows automatical t. primary consideration in exercising the discret the defendant has merits to which t court not as a _ e law but as matter common sense f s there is no point in setting aside a judgment if f has no defence, and because, if the defendant can show merits, the court will not facie desire to let a j pass on which there has been no proper udication. Also as a matter of common sense the court will take account the explanation of the defendant as to how the def t oc The foregoing gene :.ndications of t way in ch the court exercises discret:.ion are derived from the ~udqment of -‘ ~ the Court of Appeal in The Saudi Eagle 1986 2 LL.R 221i 223. From that case the llowing propositions may derived: (a) It is not sufficie::ct +::’0 she..,; 3. ;:-~crcly “arguable” defence that would justify leave to defend under Order 14; it must both have “a real prospect of success” and “carry some degree of conviction . Thus the court must form a provisional view of the probable outcome of t:.he action. b) If proceedings are deliberately ignored this conduct, although not amounting to an estoppel at law, must considered “in justice” before exercising t court’s discretion to set aside”. In the Saudi Eagle the Plaintiffs claimed damages _ contract by the Defendants who LGfused to load cert The aintiffs issued with ave a writ for ce 0U~ of urisdiction and served 1’· on the Defendants. No notice :)f ention to defend was given and e j was igned. An order :or assessment of damages was were assessed. Final judgment was given U.S.$49, 00 costs the sum of 3,000 pounds. t was common ground that a deliberate is was t not to fend the aintiffs’ claim because the Defendants no assets. ly after final judgment was given Def hat the Plaintiffs had earlier obtained of s matter and were holding a bond. Defendants to set side the judgment and leave to defend t Plaintiffs had sued the wrong Defendants. St on J he he application would be dismissed. The De s appealed. Court of Appeal held that there was no substance t fences that it was the wrong Plaintiff and t wrong contract. They held that on the evidence the Defendants had not had a fence which had any reasonable f success; he conduct of the Defendants in deliberate iding not to notice of intention to defend because it suited their erests not o do so was a matter to be taken into account assessing the ustice of the case. The appeal was dismissed. n this case the Defendants have set up defences which show a real prospect of success if the evidence is forthcoming to support the eadings. The affidavits give a different version to that indicated in the pleadings but I am not prepared to accept the version there given as gospel truth without more. The Saudi Eagle has shown that the conduct of Def is a matter to be taken into account. The penultimate of t decision at page 225 is as follows: liThe conduct the defendants in t s respect deliberately deciding not to give noti ce of ent to defend Leca~se it suited the erests of to let t plaintiffs proce against these defendants lS a matter to taken into ccount in assessing the justice of case. While it does rot amount to an estoppel in law, Court can and must consider it. II Paragraph 13/9/14 of the ted Kingdom Supreme Court Practice records the case of Allen v Taylor [1992 P.I.Q.R. 255 t Court of Appeal held a udge had ed f 00 little weight to an assertion a defendant on ts and too to conduct. considered. It appears that h te a to the present case there can be any ion f t conduct of the Defendants. ir behaviour was 1 that the Defendants in the Saudi Eagle case. writ of summons was served on them on March 7, 1995. They filed an entry of appearance three days later. By letter of March 27, 1995 their icitors were asking of the aintiff’s solicitors documentation f the aintiff’s claim. se were suppli on June 9, 1995. Besides, there were earl tters on May 11 and May 30 ch indicated a desire to set up a defence. Their f request was consent to file and serve defence by y 14, 1995 on edingiay ‘: f:::i.ult judgmer:t ,,’as filed. As I said earlier I am of the provisional view that the Defendants a real prospect of success this suit ~f the dence is forthcoming at a proper trial. I am so of the view that the conduct of the Defendants in not filing the defence time was not deliberate. I think the defence has merits to which Court must heed and it would be an ustice not to low De s to have a proper adjudication on the merits. ~ the exercise of my discretion I set as the fault iled by .. e Plaintiff on July 13 f 1995. I grant leave to Defendants to file and serve their cefence on Pl iff o days ialling which judgment and costs to t 1 entered in favour of aintiff. order the Defendants to pay to Pla iff costs any event o agreed or taxed occasioned t set t aside of fault judgment. A. N. J. MATTHEW sne