Johnson v. Tagco Ltd (CC269/07 2007 J NO. 13)  SLHC 36 (17 October 2007);
CC269/07 2007 J NO. 13
IN THE HIGH COURT OF SIERRA LEONE
CHARLES JOHNSON - PLAINTIFF/ RESPONDENT
VS. TAJCO LIMITED - DEFENDANT/ APPLICANT
SULAIMAN KABBA KOROMA - For the Plaintiff/ Respondent
ABDUL FRANKLIN SERRY- KAMAL - For the Defendant /Applicant
RULING DELIVERED THIS 17th DAY OF OCTOBER 2007. D.B.EDWARDS. J. By Notice of Motion dated 28th of June, 2007 made under action intituled CC269/07 J NO 13, the Defendant in this action attempted to apply to this Honourable Court for the following orders:
1. That the Judgment in Default of Defence dated 15th May 2007 and all subsequent proceedings thereto be set aside for irregularity on the grounds that:
a) The claim was for an unliquidated demand but that Judgment in Default of Defence was entered for a liquidated sum; and that
b) No stamp duty was paid on the Judgment entered; that notwithstanding, a writ of fieri facias was issued against the defendant.
2. Alternatively, that the Judgment in default of Defence dated 15th May, 2007 and all subsequent proceedings thereto be set aside and the defendant be granted leave to defend the action on the grounds that he has a valid defence and counter claim to the action on the merits.
3. Stay of Execution of the above Judgment pending the hearing and determination of this application.
In support of this Application was the Affidavit of Abdul Franklin Serry Kamal sworn to on the 28th day of June 2007 together with the exhibits referred to therein. He relied on the entire affidavit. The plaintiff opposed the Application on matters of law but filed an Affidavit in Opposition.
The salient facts of this matter are that the plaintiff was an employee of the defendant Company Tajco Limited from August 1993 until his termination in the year 2007. At the time of his termination he received a salary of Le390, 000.00 per month. The termination of the plaintiff was done verbally. When he was terminated, he demanded from the defendant, the sum of Lel7,976,300.00 as redundancy and end of service benefits, calculated and ascertained by the Labour Office.The defendant failed, refused or neglected to pay same, whereof, the plaintiff sued the defendant on the 27th of March 2007 for the said money as end of service benefits and redundancy compensation. The defendant entered an Appearance on the 18th of April 2007; this nonetheless, he failed to deliver a defence within the 10days limit thereafter prescribed by the rules of Court as embodied in the High Court Rules. On the 15th of May 2007, the plaintiff in view of this failure by the defendant, purported to enter a Judgment in default of Defence dated the 15th of May 2007. The plaintiff then proceeded to issue execution of the said Judgment on the defendant on the 23rd of May 2007. Later, however, on the 29th of May 2007, the defendant after being aware of the Judgment in Default of Defence dated 15th May 2007 filed a defence and counter claim and on the 1st of June 2007 filed a motion to set aside the Judgment aside. The motion was initially struck out as the parties and their solicitors were absent on the date set for the hearing. The defendant had to file a fresh motion on the 28th of June 2007 and it is through this motion that the defendant /applicant has sought to set aside the Judgment of 15th May 2007 on the two grounds heretofore hitherto aforementioned .
The contentions of the defendant's Solicitor and counsel as gleaned from his motion, affidavit in support and arguments were that firstly, that the claim of the defendant was for wrongful dismissal and consequently the court was under obligation to decide
whether the action was wrongful or lawful and consequently this was a matter for which the plaintiff's solicitor ought to have entered an Interlocutory Judgment. Mr. Franklin Serry Kamal, counsel for the defendant argued that the judgment entered on the 15th of May 2007 was for a liquidated claim when the demand itself was an unliquidated demand, the action being for wrongful dismissal. He further submitted that that it was wrong to execute on a Judgment which on the face of it purports to be an Interlocutory Judgment before damages are assessed.
The counsel for the defendant further submitted that the Judgment was irregular in that it was unstamped as evinced by exhibit AFSK 4. He referred the Court to Section 12 of the Stamp Duties Act Cap 274 of the Laws of Sierra Leone 1960 and urged that the Judgment in Default of Defence dated 15th May 2007 be set aside for this irregularity. As his 3rd contention, Mr. Kamal submitted that he had a valid defence and a counter claim to the action as shown by exhibit ASFK3 in which the defendant has given particulars of negligence and counterclaimed against the plaintiff for the loss caused to the Defendant Company plus Le 30,000,000.00 as special damages.
In his reply opposing such contentions by the defendant, the plaintiff filed an affidavit in Opposition. On the claim that the judgment entered was for a liquidated claim when the demand itself was an unliquidated demand, the plaintiff's Solicitor submitted that the Judgment was for end of service benefits of an employee which could be and was calculated with certainty as per the conditions of service of employment. This he said was done by the Labour Office. On the claim by the defendant that you ought not to have combined in a Judgment in default of defence a claim for liquidated sum and unliquidated sum, and then execute for what you consider to be the liquidated demand, the plaintiff solicitor stated that this could be done, except that, you could not enforce Judgment for damages which could be done only on an interlocutory application for damages to be assessed. He submitted that assuming that a claim for a liquidated sum and unliquidated sum ought not to have been combined this was just a mere technicality which should not render the judgment irregular. He relied on the case of RUSSEL VS KOMBE (1962) SLLR.
On the submission that there was no stamp duty paid in respect of the said judgment the plaintiff's solicitor submitted that by virtue of Section 15 of the Stamp Duties Act CAP 274 of the Laws of Sierra Leone, the omission or failure to pay a stamp duty cannot defeat any document or instrument which is used in any proceedings but gives the court power to order that the appropriate sum be paid as stamp duty and a penalty imposed. He relied on the case of FAWAZ VS KUDSY 1968/69 ALRSL
Having considered the various factors in this case I should think that it raises quite a number of issues.
Firstly, was the claim as purported by the defendant a claim for an unliquidated demand? If so, or if not, what type of Judgment ought to have been entered in the circumstances. What was the nature of the judgment entered by the plaintiff? Did it fulfill the features of a final judgment or was it an interlocutory judgment? Secondly, What is the effect of the defence after knowledge of the irregularity; could a defendant set aside a Judgment in Default of Defence for irregularity without seeking leave to file the defence out of time?. What is the effect of Stamp Duties on Judgments obtained where this is not paid or paid at an amount less the correct amount? Does it invalidate the judgment? Thirdly, if at all, it is the opinion of this court that the Judgment of 15th May 2007 was regularly obtained does the defence of the defendant constitute a Defence on the merit. Stay of execution was granted pending the hearing and determination of this application.
For reasons of convenience, I think I will deal first with the issue of failure to pay the required stamp duty. On this I wish to observe that our Rules of Court Constitutional instrument No 8 of 2007 do not provide that the entry of Judgment is irregular because of failure to pay stamp duty rather it is the Stamp Duties Act Cap 274 that provides a requirement for the payment of Stamp duties before such judgment could be used in any proceedings, albeit for a special purpose as follows:
Section 14 and 15 of the Stamp Duties Act Gap 274 provides as follows
"14. NO instrument made liable by this ordinance to any stamp duty shall he pleaded or given in evidence in any Court unless the same be duty stamped; Provided that no instrument or document shall in any criminal trial, inquiry or other proceeding be inadmissible in evidence for want of stamp.
15. In any suit or action or other proceeding in any court ,or in judges chambers, upon the production of any instrument as evidence, it shall be the duty of the Master or officer of the court to call the attention of the judge or presiding officer to any Omission or insufficiency in stamp upon such instrument, and the same shall not be received in evidence or otherwise used in such suit, action or proceedings, until the value of the stamp imposed by law thereon together with the penalty of two pounds, shall have been paid;
Provided that any instrument executed out of this colony and which is sufficiently stamped under the provision of this Ordinance , shall be received in evidence and other wise used in any suit, action or proceedings, although such instrument may be unstamped or insufficiently stamped according to the laws in force in the place where such instrument was executed."
The defendant's solicitor has relied on section 12 of this Act but I see no relevance of this particular section to the issue at hand. Section 12 of the Stamps Duties Act is just to the effect that duties payable in money ought to be paid in money and not in stamps and that when such is paid the amount of the money, the date of payment and the number of the receipt given should be entered on the instrument, failing which it is presumed that in fact stamp duty was not paid. I think that it could not be doubted that stamp duty was not paid in respect of the Default Judgment dated 15th May 2007 but the issue here is whether it makes the the Judgment irregular as to warrant it being set aside ex debito Justitiae. To this end the counsel for the plaintiff relies on section 15 of the Stamps Duties Act as detailed above
All in all the stipulations above make no reference to what is called irregularities nullifying the proceedings. On the other hand, in the case of EVANS VS BARTLAM
1937 AC 480 Lord Aitkin stated the principle regarding the setting aside of judgment for irregularity thus
"The principle obviously is that unless and until the court has pronounced a judgment on the merits or by consent . it is to have the power to revoke the expression of its coercive power where that has been obtained by failure to follow any of the rules of procedure"
There are certainly no rules of procedure mentioned in the argument of the defence solicitor that has been breached here except breach of the Stamp Duties Act Cap 274 of the Laws of Sierra Leone 1960 which is not a rule of procedure.
What I am to make of this is that failure to pay Stamp duty is an administrative deficiency which in no way affects the judgment but rather the use of the Judgment and does not offend against any of the rules of Procedure.
In the case of MANUEL PADILLA VARGAS VS JIM SOO KYUNG CC769/05 Unreported, Adeliza Showers J having a similar question of whether failure to pay stamp duty makes the judgment irregular ex debito justitiae had this to say:
”In the event that the party has failed to pay the relevant stamp duty, the penalty is that the document will not be used in evidence or pleaded in any court until the value of the stamp duty imposed by law thereon together with the penalty of 2 pounds is paid. It certainly does not say the document is nullified or rendered void. It is therefore my view that the judgment cannot be set aside ex debito justitiae on that."
This court shares this view .Learned Counsel for the plaintiff has referred this court to the case of FAWAZ VS KUDSY. I opine that both these cases have stated the correct position of the law and therefore hold that the judgment dated 15th May 2007 despite the failure to pay the 1 % stamp duty as evidenced by lack of any receipt in this regard could
not be set aside for irregularity. The plaintiff is however ordered to pay the relevant stamp duty and penalty imposed by law under the Stamp Duties Act Cap 274.
On the second issue whether the claim as purported by the defendant was for an unliquidated demand, and if so, or if not, what type of judgment ought to have been entered in the circumstances? perhaps it is important that we get a clear view of what constitutes a liquidated and an unliquidated claim .According to the Supreme Court Annual Practice 1999 under the rubric "Debt or liquidated demand' at page 40.
"A liquidated demand is in the nature of a debt, i.e. a specific sum of money due and payable under or by virtue of a contract. Its amount must either be already ascertained or capable of being ascertained as a mere arithmetic. If the ascertainment of a sum of money, even though it be specified or named as a definite figure, requires investigation beyond mere calculation then the sum is not a debt or liquidated demand but constitutes damages."
In the case of KNIGHT VS ABBOT (1883)10 Q.B.D 11 it was held that the words "debt or liquidated demand" do not extend to unliquidated damages, whether in tort or in contract even though the amount of such damages be named as a definite figure.
In the case of SLOF VS PYNE BAILEY CIV.APP.1/73 Unreported at page 164 Livesy Luke JSC quoting with approval the words of Barrowclough CJ. in the New Zealand Case of PATERSON VS WELLINGTON FREE KINDERGATEN ASSOCIATION INC (1966) N.Z.L.R.468 at 471 stated as follows:
"In my opinion there can be no doubt that, in deciding whether a demand is liquidated, important factors are that it be capable of arithmetical calculation and that no investigation of the amount claimed should be necessary other than inquiry as to well established scales of charges etc"
On the above Authorities it is clear that what the plaintiff has sued for was and is in the nature of a specific sum of money payable under his employment contract of service and not for damages for wrongful dismissal as the defendant's solicitor would want this court to believe. The amount was ascertained by the Labour office or at best capable of being ascertained by mere arithmetic and certainly would not require investigation beyond mere established scales of charges dependent on his length of service and last salary in the defendant's company. I would find it strange to believe that end of service benefits based on the terminated employee's years of service as well as his last actual salary received is not a liquidated demand in so much so as I accept damages to be an unliquidated demand. Being a liquidated sum, Final Judgment ought to have been entered for the sum of Lel7,976,300.00. Be that as it may, however, looking at the Judgment in Default of Defence dated 15th May 2007 this court opines that it was ab initio faulty or irregular because our law provides that where there are mixed claims indorsed on the writ, all of which come within rules 2-5 inclusive of Order 22 of the High Court Rules 2007, as for instance, where the writ is indorsed with a claim for a liquidated demand and a claim for unliquidated damages, then final judgment may be entered for the liquidated claim and an interlocutory judgment for the unliquidated claim with damages to be assessed. This was the situation in the current proceedings as the Plaintiff had sued for a specific sum which this court holds to be liquidated and also damages which was an unliquidated demand. In such situations or circumstances, the correct position was to have entered Final judgment separately for the liquidated sum and separately for an Interlocutory Judgment for the unliquidated sum. In the case of PEACHEY PROPERTY CORPORATION VS MORLEY (1967)3 ALL ER PAGE 30 it was held regarding the treating of such mixed claims "Each of the claim on the writ must be treated separately and in isolation of the other so that the plaintiff can enter Judgment separately in respect of each claim'. The plaintiff did not do this but rather combined what he rightly claims to be liquidated with that which is an unliquidated demand. Worse still he proceeded further to execute on the said judgment. It is this irregularity that the defendant has complained of. What most times happen in practice is that the plaintiff would enter one default judgment combing the liquidated and unliquidated claim. This was however not what the plaintiff did as he
combined the liquidated demand with damages, with no words indicating that damages were pending or to be assessed and then proceeded to execute on the liquidated demand. This is certainly wrong .Having said this, does this irregularity entitle the defendant to set aside the judgment ex debito justitae ? I would think not .In the case of RUSSEL VS KOMBE (1962) SLLR at page 19-22 Bankole Jones Ag CJ at page 20 opined
"that the court has discretionary power to prevent technical objections from defeating a plaintiff's claim where a bonafide mistake has been made"
It is the opinion of this court that the objection herein is a mere technical one which does not deny him of the fruits of the judgment.
Under Order 22 rule 11 of the High court Rules 2007 which provides;
"That the court may on such terms at it thinks just set aside or vary any judgment entered in pursuance of this Order"
this court has a discretion not only to set aside a Judgment in default of Defence but also to vary a judgment in default of defence but this would only be on the assumption that the judgment was regularly obtained which was clearly the case in this matter as the the plaintiff complied with the rules leading to the entering of Judgment in default of defence except that the Judgment it self there was a mistake in the way it was laid out.
The defendant has not stated categorically which Order and /or rule he is relying on for the making of this application contesting the irregularity and in the absence of this I would take cognizance of the fact that irregularities relating to any proceedings or any document, judgment orders and dispute as to jurisdiction could only be contested under
a) Order !2 rule 15 of the High Court Rules C I NO 8 of 2007 which in the current circumstances is not applicable as the defendant since entering appearance has also filed a defence.
b) Order 2 rule 2(1) which is most applicable in the current situation,
c) Order 22 Rule 11 which in the current situation may be inapplicable as the defendant has stated that the judgment is irregular and not praying for the courts discretion.
This being the case it behoves this court to consider Order 2 rule2 under which by the wording of the application it is presumed to have been made and under which this court is disposed of considering the application to set aside the default judgment of 15th May on the grounds of irregularity Order 2 rule 2 of the High Court Rules 2007 provides:
(l)"An application to set aside for irregularity, any proceedings or any document, judgment or order therein shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity.
(2.) An application under this rule may be made by summons or motion and the grounds of objection shall be stated in the summons or notice of motion"
This being the stipulations binding this application it would seem to me from Order 2 rule 2 (1) that it would be impossible to set aside a judgment in default of defence for irregularity after taking a fresh step after the purported irregularity. The fact of the matter here is that the plaintiff had entered Judgment on the 15th May 2007 after the defendant had failed refused or neglected to file a defence and instead of contesting the irregularity by Motion with supporting affidavit and a proposed defence he simply filed a defence and thereafter contested the irregularity . To my mind this filing of Defence is a fresh step which waives the irregularity. In FRY VS MOORE (1889) 23 QBD.395,CA it was held that steps taken with knowledge of the irregularity, either with a view to defending the case on the merits will waive irregularities in the institution or service of proceedings, since they would only be taken on the basis that the proceedings were valid.
In the case of REIN VS STAIEN (1892) 66LT 469 CAVE J at page 471 noted that
" In order to establish a waiver you must show that the party has taken some step which is only necessary or only useful if the objection has been actually waived or has never been entertained"
So when the defendant's Solicitor had knowledge of what purports to be an irregularity it was his duty to apply immediately to set it aside but to wait and file a defence without moving to set the judgment aside for the purported irregularity is to waive the irregularity with a view to defending the action on the merits or to obtain an advantage of defending the action on the merits and such fresh process could only be taken on the basis that there was no irregularities in the first place or it is simply waived .
A Defendant who applies to set aside an irregular Judgment and yet had filed a defence before moving the court may thus be too late to rely on Order 2 rule 2 (1) and to have the judgment set aside as a matter of right on the ground of irregularity as the defence is a fresh step . In stead he may have to seek the discretion of the court under Order 22 Rule 11 of the High Court Rules which is what he did by in the alternative treating the Judgment to be a regular Judgment.
Another view of this court taken in the current proceedings is that the defendant is seeking to set aside a judgment in default of defence when strictly speaking there is no defence or proposed defence before this court, let alone a defence going to the merits. This is so because the defendant is seeking to set aside a judgment in default of defence for irregularity without seeking leave to file his defence out of time . This in itself as an irregularity which I dare say is enough to prevent the defendant from setting aside the Judgment ex debito justitiae.
Order 21 Rule 2 (1) of the High Court Rules 2007 provides:
"Subject to sub rule (2). a defendant who appears in an action shall unless the court gives leave to the contrary , serve a defence on every other party to the action who
way he affected thereby before the expiration of 10 days after the time limited for appearance or after the statement of claim is served on him which ever is the later"
Order 21(2) provides
"a defendant who appears in an action shall unless the court gives leave to the contrary , serve a defence". The effect of this expression is that a defendant must seek leave of the court to file the defence out of time and the court can grant leave to file out of time
The defendant in this matter entered appearance on the 18th of April 2007 and consequently was obligated under the rules to file his defence 10 days thereafter , which he failed to do, in consequence of which Judgment was entered on the 15th of May 2007 almost a month later. Without seeking the leave of court under this rule and under Order 3 rule 5 which deals with extension of time to file his defence out of time, the defendants solicitor filed a defence out of time on the 29th of May 2007 and contested the judgment for irregularity. The procedure adopted here with all due respect to learned counsel for the defence was wrong and the defence filed ought to be struck out. For reason as outlined on this point the Judgment in Default of Defence cannot be set aside for irregularity. Be that as it may, as if he knew it or with a view to proceeding ex abundante cautela the defendant's solicitor applied in the alternative for the Judgment to be treated as a regular Judgment and claims that he has a valid defence to the action. It thus behoves the court to consider whether the defence inspite of all what has been said regarding the time of its filing does constitute a very good defence on the merits
In the case of the regular judgment the right to set aside is solely a matter of discretion of the Judge, as the judgment was regular in the first place, in which case it should stand but for an affidavit on the merits showing a meritorious defence. In the case of ALPINE BULK TRANSPORT CO INC VS SAUDI EAGLE SHIPPPING CO INC the Saudi Eagle 1986 2LLOYDS REPORT PAGE 221, CA a meritorious defence is defined as a defence which has "a real prospect of success" and "carry some degree of conviction" and for which the court must be able to form a provisional view of the probable outcome of the action. I have perused the defence and counter claim of the defendant.. I think a
very important issue in this matter is whether the plaintiff was terminated simplieiter or dismissed. From the claim in this action it appears to me the plaintiff is not contesting any issue regarding his termination except that he is due benefits which have not been paid. The defendant on the other hand has failed refused or neglected to contest this termination which took place in January 2007. The defendant admits that the plaintiff was terminated but assumes that this is an action for wrongful dismissal which was certainly not the case. He has given particulars of negligence and counterclaimed against the plaintiff for the loss caused to the Defendant Company plus Le 30,000,000.00 as special damages. These are claims which should and must have been notified to the plaintiff before termination as reasons for his termination but never done. As things are the only view this court is able to form on the state of the pleadings is that the defendant company decided to stop the employee from continuing his employment in which case he is due terminal benefits. It is the right of an employer to terminate his employee without stating reasons ADDISON VS GRAMAPHONE RECORDS and if there is reason as this defendant would want us to believe for the termination one would expect that at least up to the matter being brought to Court this court would have been made to see cogent documentary proof about the claims he is now making. This is clearly absent. This court is of the opine that the defendant only exercised his right to terminate the plaintiff for which the usual terminal/ end of service benefits should be paid The defendant has also not stated any reason for the delay in this action. I am therefore of the view that this case has no real prospect of successor and fail to carry a degree of conviction .I therefore exercise my discretion against setting aside of the judgment dated 15 may 2007.
Against this background this court orders as follows:
i) Plaintiff to pay the stamp duty imposed on the Judgment and penalty for failing to pay the stamp duty.
ii) That the Judgment in default of defence dated 15th May 2007 is varied to include damages to be assessed instead of just damages.
iii) Application to set aside Judgment in Default of defence dated 15th May 2007 is
iv) That the cost of this application against the defendant is assessed at Le 1,500,000.00
Hon Justice Desmond B Edwards J