Devon Hayles dba Midtown Mall v Osias Joseph dba Platinum Fitness and as Fit X Gym

JurisdictionTurks and Caicos Islands
JudgeMr Justice Adderley,Madam Justice Cornelius-Thorne, JA,Mr Justice Hylton
Judgment Date29 February 2024
Neutral CitationTC 2024 CA 1
Docket NumberCL-AP 9/23
CourtCourt of Appeal (Turks and Caicos)
Between:
Devon Hayles dba Midtown Mall
Appellant
and
Osias Joseph dba Platinum Fitness and as Fit X Gym
Respondent
Before:

The Honourable Mr Justice Adderley, President (Ag.)

The Honourable Madam Justice Cornelius-Thorne, JA

The Honourable Mr Justice Hylton KC, JA

CL-AP 9/23

IN THE COURT OF APPEAL

PROVIDENCIALES (CIVIL DIVISION)

Default Judgment — Failure to file a defence — Refusal to set aside default judgment — Test for setting aside default judgment — Whether the default judgment should have been set aside based on the judge's findings on sharp practice and abuse of process — Irregularity of default judgment — Whether the default judgment was irregular based on the statement of claim; damages; pre-judgment interest and costs awards; or the draft counterclaim and defence.

Cases considered:

B & J Equipment Rental Limited v Joseph Nanco [2013] JMCA Civ 2; Evans v Bartlam [1937] AC 473; Ramkissoon v Olds Discount Co (TCC) Ltd (1961) 4 WIR 73.

Appearances:

George Missick for the Appellant

Chloe McMillan for the Respondent

1

This is an appeal against a judge's refusal to set aside a default judgment. The background is as follows.

Background
2

By a lease dated 17 th June 2021, the Respondent leased commercial premises to the Appellant for a term commencing on 3 rd January 2021 and expiring on 31 st December 2021, at a rent of US$4,000.00 per month. The lease provided that if the Appellant continued in possession after its expiry with the consent of the Respondent, the occupation would be under a monthly tenancy on the same terms.

3

The lease also included a covenant by the Appellant to maintain the leased premises in good repair.

4

The Appellant remained in possession of the leased premises after the lease expired, without the Respondent's consent, and eventually vacated the premises on or about 18 th March 2022.

5

On 18 th May 2022 the Respondent issued a specially endorsed writ claiming:

  • a. Mesne profits in the amount of US$12,000.00 for the months of January, February and March 2022;

  • b. Reimbursement of US$320.00 for bank charges the Respondent incurred as a result of rental cheques that were dishonoured when presented for payment;

  • c. “ Special damages for repairs” in the amount of US$16,525.00;

  • d. Interest on the sums claimed; and

  • e. “ Costs in the claim”.

6

The writ was served on the Appellant on 8 th November 2022 and on 29 th November 2022 he filed an acknowledgment of service indicating an intention to defend the claim. On 13 th December 2022, no defence having been filed, the Respondent's attorney wrote a letter to the Appellant's attorney which stated in relevant part:

“We are aware that under s.66 of the Legal Profession Ordinance code of conduct that (sic) it is our duty to notify you of any intention to seek judgment in default. Please treat this letter as our formal notification to you that it is our intention to seek default judgment against your client if we are not in receipt of the defence by 4:00 pm on the 15 th December, 2022.”

7

Not having received a response or a defence, on 19 th December 2022 the Respondent's attorney filed a request for judgment in default to be entered.

8

The Appellant's attorney told the court that the letter did not come to his attention until 19 th December 2022, and he replied by email on the following day in the following terms:

“Thank you for your letter and indulgence as you would have seen from the history between the parties that our client does advance not only a defence but a counterclaim to your client's claim. We had been engaged in several matters that made it difficult for counsel to take instructions and complete the defence. We have now done that and intend to file the defence today and serve you with an electronic copy until such time as we have sealed copies.”

9

The Respondent's attorney responded on the same day:

“Pursuant to the letter of the 13 th December 2022, we applied for judgment in default promptly following your failure to acknowledge or respond to our correspondence.

Moreover we were not in receipt of your defence by the specified date nor of any request for an extension of time.”

10

On the following day (20 th December 2022), the Registrar entered a default judgment in the sum of US$28,845.00 (i.e., the total of the sums set out in paragraph 5 above), with interest at 3% from the issue of the writ to the date of judgment, and at the judgment rate thereafter, and costs to be taxed.

The Decision in the court below
11

On 3 rd February 2023 the Appellant filed a summons seeking an order setting aside the default judgment and unconditional leave to defend. He contended that the judgment was irregular in various respects and so should be set aside ex debito justitiae. Alternatively, he argued that the draft defence and counterclaim he exhibited in support of his summons disclosed a good arguable defence, and that the court should set aside the default judgment in the exercise of its discretion.

12

Gruchot J dismissed the summons. He held that the default judgment was not irregular, and that nothing in the proposed defence had a real prospect of success. However, the learned judge also concluded that the conduct of the Respondent's attorney and the circumstances in which the default judgment was entered constituted sharp practice and an abuse of the court process.

The Appeal
13

The Appellant appeals to this court against the decision to dismiss his application. In addition to relying on the same grounds he had argued in the court below, the Appellant also submits that having concluded that the Respondent's attorney used sharp practice in entering the default judgment, the learned judge erred in allowing it to stand.

14

The Appellant's grounds of appeal can be summarised in the following way:

  • a. The finding that there had been sharp practice and an abuse of the court's process should have resulted in the judgment being set aside;

  • b. The statement of claim had included a claim in detinue which was not withdrawn or proven;

  • c. The claim for mesne profits was not a liquidated sum and therefore there should have been an order that damages be assessed and not a judgment for the sum claimed;

  • d. The claim for damages for repairs was not a liquidated sum and therefore there should have been an order that damages be assessed and not a judgment for the sum claimed;

  • e. The judgment should not have included pre-judgment interest as that had not been pleaded;

  • f. The judgment should have included a fixed sum for costs instead of costs to be taxed;

  • g. The judge erred in not taking the proposed counterclaim into account; and

  • h. The judge erred in failing to recognize that the proposed defence had a real prospect of success.

15

I will address each in the same order.

Sharp Practice and Abuse of Process
16

The judge explained his conclusion in this way:

  • (12) Mr Missick took issue that the time period of 2 days afforded to the Defendant to file his defence, in the Plaintiff attorneys' letter of 13 th December 2023 suggesting that it was not a good faith warning as required by Section 66(2) & (3) of the Code of Professional Conduct set out in the Legal Profession Ordinance (Cap. 2.01) (‘the Code’). I would comment that I view the period to be short, too short. There was no urgency in the matter, the claim having not been served for some 5 months from issue. An acknowledgment of service had been filed indicating an intention to defend the claim and I understand that there had been correspondence passing between the attorneys regarding the dispute.

  • (13) The requirement not to proceed without enquiry and warning is not simply a procedural step that has to be followed. The purpose is to give a Defendant who has failed to comply with the prescribed time limits a proper opportunity to remedy his error. I note that no notification was given to Mr. Missick that the request for default application had been sent to the Court. The Code is to be observed in the spirit and not just the letter. The inference I take from this is that the Plaintiff was seeking to gain a tactical advantage which it would not achieve had there been further communication and as such, it is sharp practice and an abuse of the Court process. Had there been any merit in the Defence then I may well have considered adverse costs against the Plaintiff on the set aside of the judgment. To quote Mr Justice Murphy in Bloomin Caribe, ‘Tactics such as these only demean and embarrass the profession and offend the Court. I make it clear that the views I have expressed on the general principles are shared by my brother judges with whom I have discussed’.”

17

The long title of the Legal Profession Ordinance Cap 2.10 (“the LPO”) states that it is:

“An ordinance to make provision with respect to the practice of law in the Turks and Caicos Islands; for the admission of attorneys; for the establishment of a bar council; for the conduct and discipline of persons admitted as attorneys; and for connected purposes.”

18

The LPO's provisions are consistent with that purpose: they address the admission, conduct and discipline of Attorneys-at-Law, and do not purport to, for example, prescribe rules of court.

19

The Schedule to the LPO sets out a Code of Professional Conduct (“the Code”). The legislative scheme is that breaches of the Code should be reported to the Bar Council (section 59 of the Code), which can make a report to the Chief Justice after an inquiry (section 24 of the LPO), who can discipline an attorney after a hearing (section 25 of the LPO).

20

I agree with the judge's observation that The Code is to be observed in the spirit and not just the letter, but there is nothing in the LPO or the Code which suggests that a breach by an attorney would have an adverse effect on his or her client.

21

To address the specific alleged breach in this case, sections 66(2) and (3) of...

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