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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(1978) 1 CLR 127
1976 November 19
[TRIANTAFYLLIDES, P., STAVRINIDES, MALACHTOS, JJ.]
GEORGHIOS ATHANASSI PAPHITIS,
Appellant-Defendant,
v.
ITALO BONIFACIO,
Respondent-Plaintiff.
(Civil Appeal No. 5576).
Civil Procedure—Appeal—Review of exercise of discretion—Circumstances in which Court of Appeal will interfere—Action—Dismissal for failure to comply with order for security for costs—Reinstatement—Appeal—Affidavit of merits—Whether required—Delay—Judge not shown to have acted wrongly in any way-Appeal dismissed—Rule 14 of Order 26 of the Civil Procedure Rules.
The respondent (plaintiff) filed an action against the appellant (defendant), on January 20, 1973, claiming damages for personal injuries suffered by him in an accident because of the negligence of the appellant. The statement of claim was filed on October 10, 1973 and on that date and, later on, on March 2, 1974, the respondent applied for judgment for failure of the appellant to enter an appearance and file a statement of defence, respectively. On both occasions it was ordered, by consent, that the statement of defence should be filed within fourteen days, but this was not done.
On June 10, 1974, on the application of the appellant, the Court directed that the respondent should furnish security for costs in the sum of C£200, but though it did not prescribe the time for compliance with this order, it stayed the proceedings in the action in the meantime.
Very soon afterwards there followed the events of the summer of J 1974 (the coup d'etat and the Turkish invasion) and as a result counsel for the respondent became a displaced person, because of the occupation of Famagusta by the Turkish military [*128] forces, and had to go to Greece to seek employment there; he thus lost completely contact with the respondent, who was, and is, residing in Italy.
The action was on January 23, 1975 dismissed on the ground that the security for costs had not been furnished and judgment was entered against the respondent; this proceeding took place in the absence of both the respondent and his counsel.
On February 20, 1976, the respondent applied for reinstatement of the action under rule 14 of Order 26 of the Civil Procedure Rules and on April 17, 1976 the Court granted the application and set aside the judgment against the respondent.
The defendant appealed and contended mainly that (a) there was not filed any affidavit, as to the merits of the claim of the respondent containing evidence admissible for the purposes of the application for reinstatement and (b) that there has been undue delay in applying for the reinstatement of the action.
Held, dismissing the appeal, (1) the question of reinstating proceedings is a matter of discretion and the Court of Appeal will only interfere with the discretion of a Judge if it is clearly satisfied that the Judge was wrong, (pp. 131-35 post).
(2) (After dealing with the requirement of an affidavit as to merits—vide pp. 135-38 post). Even if it could be said that this was an instance where an affidavit as to the merits was normally required, and even if we were to assume that in the affidavit filed in support of the application for reinstatement there is not contained any clear and admissible evidence in this respect, we would still be prepared to find, as the trial Judge has found, that this is a proper case for the setting aside of the judgment, which was entered by default, and for the reinstatement of the action, because, inter alia, the merits of the case could be derived from the contents of the statement of claim, in answer to which no statement of defence was filed in spite of the fact that the appellant has undertaken, on two occasions, to do so.
(3) (With regard to the delay in applying for reinstatement). The same reasons which prevented the filing by the respondent [*129] of the security for costs in time, account sufficiently, in our opinion, for any delay that has occurred in this respect.
(4) In the light of all relevant considerations relating to the powers of this Court to interfere with the exercise of the discretion by the trial Judge in deciding to reinstate the action, we are not prepared to allow the appeal, because we have not been satisfied at all that the Judge has acted wrongly in any way.
Appeal dismissed with costs.
Cases referred to:
Kotsapas and Sons Ltd. v. Titan Construction and Engineering Company, 1961 C.L.R. 317, at p. 322;
Evans v. Bartlam [1937] A.C. 473, at pp. 479-481;
Re F (a minor) (wardship: appeal) [1976] 1 All E.R. 417, at pp. 431-433, per Browne, L.J.;
Beck and Others v. Value Capital Ltd and Others (No. 2) [1976] 2 All E.R. 102, at p. 109, per Buckley L.J.;
Christoforou v. Kyriacoulli (1963) 2 C.L.R. 159, at p. 161;
Farden and Another v. Richter [1889] 23 Q.B.D. 124, at p. 129, per Huddleston, B.;
Bracken v. Gilpin, [1921] W.N. 274.
Appeal.
Appeal by defendant against the order of the District Court of Larnaca (Pikis, Ag. P.D.C.) dated the 17th April, 1976, (Action No. 61/73) by virtue of which the judgment entered in the said action against the plaintiff was set aside on certain terms.
N. Zomenis, for the appellant.
M. Vassiliou, for the respondent.
Cur. adv. vult.
The judgment of the Court was delivered by:
TRIANTAFYLLIDES P.: In this case the appellant, who is the defendant in civil action No. 61/73 in the District Court of Larnaca, has appealed against an order made by that court, on April 17, 1976, by means of which the judgment entered in the said action against the respondent, who is the plaintiff therein, was set aside on certain terms. [*130]
The history of the matter is as follows:-
The action was filed on January 20, 1973; the respondent was claiming damages for personal injuries suffered by him in an accident, on December 30, 1972, because of, allegedly, the negligence of the appellant.
The statement of claim was filed on October 10, 1973. On that date and, later on, on March 2, 1974, counsel for the respondent applied for judgment for failure to enter an appearance and file a statement of defence, respectively, and on both occasions it was ordered, by consent, that the statement of defence should be filed within fourteen days, but this was not done.
Then, on an application on behalf of the appellant that the respondent should furnish security for the costs of the action, an order to that effect was made on June 10, 1974, the security having been fixed at C£200; no time was laid down for compliance with this order, but, in the meantime, the proceedings in the action were stayed.
Very soon afterwards there occurred the tragic, for our country, events of the summer of 1974 (the coup d'etat and the Turkish invasion) with the result that counsel for the respondent became a displaced person because of the occupation of Famagusta by the Turkish military forces, and he had to go to Greece to seek employment there; in such circumstances he lost completely contact with his client, the respondent, who was, and is, residing abroad, in Italy.
Eventually, the action was dismissed on January 23, 1975, on the ground that the security for costs had not been furnished and, so, judgment was entered in it against the respondent; this proceeding took place in the absence of both the respondent and his counsel.
On February 20, 1976, an application for reinstatement of the action was made, under rule 14 of Order 26 of our Civil Procedure Rules, which corresponds to the old rule 15 of Order 27 of the Rules of the Supreme Court in England; rule 14, above, reads as follows:-
" 14. Any judgment by default, whether under this Order or under any other of these rules, may in a proper case be set aside by the Court upon such terms as to costs or otherwise as the Court may think fit."
The question of reinstating proceedings under the said rule was dealt with by this Court in Kotsapas and Sons Ltd. v. Titan Construction and Engineering Company, 1961 C.L.R. 317, where, also, the extent of the powers of an appellate court to interfere with the exercise of the relevant discretion of a trial court in such a matter was considered; Josephides J. stated the following (at p. 322):-
" To sum up, the question of setting aside a judgment is a matter of discretion, and the appellants must satisfy the onus of showing that the Judge was wrong in the exercise of that discretion; and, unless this Court is satisfied that the discretion has been wrongly exercised and should have been exercised in the contrary way, the Judge's order should be affirmed.
According to Lord Wright, the primary consideration is whether the defendant has merits to which the Court should pay heed."
As it appears from the report in the Kotsapas case, reference was made therein, regarding the power to review on appeal the exercise of judicial discretion, to the leading case in England of Evans v. Bartlam, [1937] A.C. 473; and that case was, recently, followed in, inter alia, Re F (a minor) (wardship: appeal), [1976] 1 All E.R. 417, where Browne L.J. stated (at pp. 431-433):-
" This case raises the problem of the powers and duties of an appellate Court when it is asked to review a decision made by the Court below in the exercise of a discretion, and in particular its powers and duties when the Court below has heard and seen witnesses.
The general principle (apart from the complication where the Court below has heard oral evidence) is clear. In Evans v. Bartlam Lord Wright, after distinguishing Donald Campbell & Co. Ltd. v. Pollak, said:
'But there is in that case no reference to or discussion of the duty or power of the Court of Appeal to review the general discretion of a Judge in interlocutory matters, the extent of which has been illustrated by numerous cases before and since Pollak's case. It is clear that the Court of Appeal should not interfere with the discretion of a Judge acting within his jurisdiction unless the Court is clearly satisfied that he was wrong. But the Court is not entitled simply to say that, if the Judge had jurisdiction, and had all the facts before him, the Court of Appeal cannot review his order, unless he is shown to have applied a wrong principle. The Court must, if necessary, examine anew the relevant facts and circumstances, in order to exercise by way of review a discretion which may reverse or vary the order.'
He quoted Bowen L.J.: 'That discretion, like other judicial discretions, must be exercised according to common sense and according to justice, and if there is a miscarriage in the exercise of it it will be reviewed......'
In Charles Ostenton & Co. v. Johnston Viscount Simon L.C. said:
'The law as to the reversal by a Court of Appeal of an order made by the Judge below in the exercise of his discretion is well-established, and any difficulty that arises is due only to the application of well-settled principles in an individual case. The appellate tribunal is not at liberty merely to substitute its own exercise of discretion for the discretion already exercised by the Judge. In other words, appellate authorities ought not to reverse the order merely because they would themselves have exercised the original discretion, had it attached to them, in a different way. If, however, the appellate tribunal reaches the clear conclusion that there has been a wrongful exercise of discretion, in that no weight, or no sufficient weight, has been given to relevant considerations such as those urged before us by the appellant, then the reversal of the order on appeal may be justified."
He then quoted the statements of Lord Wright and Bowen L.J. which I have already quoted, and concluded: 'In all the circumstances, I reach the conclusion that.......... the making of (the order) was not a legitimate exercise of discretion, which of course would not be disturbed on appeal, but was a wrongful exercise of the discretion which it is the duty of this House to correct.'
Viscount Maugham said that there were 'sufficient grounds............for thinking that due weight was not given by the learned Judge' to one relevant factor, and that 'his discretion was exercised without giving sufficient consideration (to this factor) and that the present order may result in injustice being done'. Lord Wright also said that he was satisfied that the Judge had not given 'due weight' to a relevant factor, and pointed out that to say that the appellate Court must be 'clearly satisfied' that the discretion had been wrongly exercised really added nothing to saying that it must be 'satisfied'. In Ward v. James Lord Denning M.R., in a judgment with which the four other members of this Court agreed, said:
'REVIEWING DISCRETION. This brings me to the question: in what circumstances will the Court of Appeal interfere with the discretion of the Judge? At one time it was said that it would interfere only if he had gone wrong in principle; but since Evans v. Bartlam, that idea has been exploded. The true proposition was stated by LORD WRIGHT in Charles Osenton & Co. v. Johnston. This Court can, and will, interfere if it is satisfied that the Judge was wrong. Thus it will interfere if it can see that the Judge has given no weight (or no sufficient weight) to those considerations which ought to have weighed with him. A good example is Charles Osenton & Co. v. Johnston itself, where TUCKER, J., in his discretion ordered trial by an official referee, and the House of Lords reversed the order because he had not given due weight to the fact that the professional reputation of surveyors was at stake. Conversely it will interfere if it can see that he has been influenced by other considerations which ought not to have weighed with him, or not weighed so much with him, as in Hennell v. Ranaboldo. It sometimes happens that the Judge has given reasons which enable this Court to know the considerations which have weighed with him; but even if he has given no reasons, the Court may infer from the way he has decided, that the Judge must have gone wrong in one respect or the other, and will thereupon reverse his decision; see Grimshaw v. Dunbar,.
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............Stamp L.J. has already quoted from the judgment of Davies L.J. in that case (with which the other two members of the Court agreed), and I will not repeat it except to emphasise this passage:
'In my considered opinion the law now is that if an appellate Court is satisfied that the decision of the Court below is wrong it is its duty to say so and to act accordingly. This applies whether the appeal is an interlocutory or a final appeal, whether it is an appeal from justices to a Chancery Judge or from justices to a Divisional Court of the Divorce Division. Every Court has a duty to do its best to arrive at a proper and just decision. And if an appellate Court is satisfied that the decision of the Court below is improper, unjust or wrong, then the decision must be set aside. I am quite unable to subscribe to the view that a decision must be treated as sacrosanct because it was made in the exercise of 'discretion': so to do might well perpetuate injustice.' "
A more recent case is that of Beck and others v. Value Capital Ltd. and others (No. 2), [1976] 2 All E.R. 102, where Buckley L.J. said (at p. 109):-
" Where a trial Judge is not shown to have erred in principle, his exercise of a discretionary power should not be interfered with unless the appellate Court is of opinion that his conclusion is one that involves injustice, or, to use the language of Lord Wright, the appellate Court is clearly satisfied that the Judge of first instance was wrong."
The first issue which was raised, and has been pressed considerably by counsel for the appellant, in an effort to persuade us to reverse the decision of the trial Court to reinstate the action, was that there was not filed any affidavit, as to the merits of the claim of the respondent containing evidence admissible for the purposes of the application for reinstatement.
A reference to the merits, as being a primary consideration, was made by Josephides J. in the Kotsapas case, supra, and it appears that, usually, an affidavit in this connection is required; actually, it has been described that this requirement is almost an inflexible rule in cases where the setting aside of a judgment is sought by a defendant; in other words, it seems that the merits are a basic consideration whenever a defendant seeks an opportunity to defend after judgment has been given against him by default in an action; and, in this respect, Vassiliades J., as he then was, said in Christoforou v. Kyriacoulli, (1963) 2 C.L.R. 159 (at p. 161):-
" The plaintiff, by taking the proper steps under the Rules, has satisfied the Court, not only of defendant's default, but also of the merits of his claim to the extent of being entitled to judgment. Having obtained such judgment, the plaintiff is entitled to retain it unless the defendant can show (in addition to explaining his default) that there is merit in his case sufficient to justify re-opening of the litigation."
It appears, however, that even in cases where the defendant is seeking an opportunity to defend the action after judgment has been given against him by default, a Court may, in an exceptional case, dispense with an affidavit on the merits. In the Evans case, supra, the following were stated by Lord Atkin (at pp. 479-481):-
" 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. 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. If there were a rigid rule that no one could have a default judgment set aside who knew at the time and intended that there should be a judgment signed, the two rules would be deprived of most of their efficacy. The principle obviously is that unless and until the Court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure.
But in any case in my opinion the Court does not, and I doubt whether it can, lay down rigid rules which deprive it of jurisdiction. Even the first rule as to affidavit of merits could, in no doubt rare but appropriate cases, be departed from. The supposed second rule does not in my opinion exist. But while the Judge has such a discretion as I have mentioned I conceive it to be a mistake to hold, as Greer L.J. seems to do, that the jurisdiction of the Court of Appeal on appeal from such an order is limited so that, as the Lord Justice said, the Court of Appeal 'have no power to interfere with his exercise of discretion unless we think that he acted upon some wrong principle of law.' Appellate jurisdiction is always statutory: there is in the statute no restriction upon the jurisdiction of the Court of Appeal: and while the appellate Court in the exercise of its appellate power is no doubt entirely justified in saying that normally it will not interfere with the exercise of the Judge's discretion except on grounds of law, yet if it sees that on other grounds the decision will result in injustice being done it has both the power and the duty to remedy it."
Also, in Farden and Another v. Richter, [1889] 23 Q.B.D. 124, the following were said, in this respect, by Huddleston B. (at p. 129):-
" The application to set it aside must be taken to have been met on the threshold by the objection that the defendant had not made any affidavit suggesting that he had a defence on the merits. During the argument I was inclined to doubt whether such an affidavit could be always necessary. But in Smith v. Dobbins (1) the present Master of the Rolls appears to have stated that it was 'an inflexible rule' that a regular judgment properly signed could not be set aside without such an affidavit, and there are statements in the manuals of practice to much the same effect. The expression is perhaps strong, but, where there is no such affidavit, it is only natural that the Court should suspect that the object of the applicant is to set up some mere technical case. At any rate, when such an application is not thus supported, it ought not to be granted except for some very sufficient reason."
In Bracken v. Gilpin, [1921] W.N. 274, where judgment was entered against a defendant for failure to appear at the hearing, it was held that, in the particular circumstances, no affidavit as to the merits was required at all, even though it might have been requested, if deemed necessary, by the Judge before reinstating the action.
In the present case, even if it could be said that this was an instance where an affidavit as to the merits was normally required, and even if we were to assume that in the affidavit filed in support of the application for reinstatement there is not contained any clear and admissible evidence in this respect, we would still be prepared to find, as the learned trial Judge has found, that this is a proper case for the setting aside of the judgment, which was entered by default, and for the reinstatement of the action, because, inter alia, it should not be lost sight of that the merits of the case could be derived from the contents of the statement of claim, in answer to which no statement of defence was filed in spite of the fact that the appellant has undertaken, on two occasions, to do so.
Another point which was raised is that there has been undue delay in applying for the reinstatement of the action:
The same reasons which prevented the filing by the respondent of the security for costs in time, and which led to the action being dismissed in the absence of both the respondent and his counsel, and without their knowledge, account sufficiently, in our opinion, for any delay that has occurred in this respect.
In the light of all relevant considerations relating to the powers of this Court to interfere with the exercise of the discretion by the trial Judge in deciding to reinstate the action, we are not prepared to allow the appeal, because we have not been satisfied at all that the Judge has acted wrongly in any way; the further progress of the case is now in the hands of the trial Court.
In the result this appeal is dismissed with costs.
Appeal dismissed with costs.