Ebanks v Plain

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P. and Georges and Henry, JJ.A.)
• Judgment Date: 07 August 1989
• Court: Court of Appeal (Cayman Islands)
• Date: 07 August 1989

Court of Appeal

(Zacca, P. and Georges and Henry, JJ.A.)

EBANKS

and

PLAIN

P. Polack for the appellant;

T. Shea for the respondent.

Cases cited:

(1) Cayman Islands News Bureau Ltd. v. Cohen, 1988–89 CILR 56, distinguished.

(2) Evans v. Bartlam, [1937] A.C. 473; [1937] 2 All E.R. 646, observations of Lord Russell applied.

Legislation construed:

Grand Court (Civil Procedure) Rules, r.8: The relevant terms of this rule are set out at page 435, lines 8–36.

r.23: The relevant terms of this rule are set out at page 431, line 19 – page 432, line 9.

Rules of the Supreme Court (England) O.19, r.2(1):

‘Where the plaintiff”s claim against a defendant is for a liquidated demand only, then, if the defendant fails to serve a defence on the plaintiff, the plaintiff may, after the expiration of the period fixed by or under these Rules for service of the defence, enter final judgment against the defendant for a sum not exceeding that claimed by the writ in respect of the demand. . . . ’

Civil Procedure-judgments and orders-summary judgment-Grand Court (Civil Procedure) Rules silent on application for judgment in default of defence-by Grand Court Law, s.20 and Grand Court (Civil Procedure) Rules, r.62, English Rules of Supreme Court, O.19, r.2(1) applicable in Cayman Islands

Civil Procedure-judgments and orders-setting aside judgment-default judgment-court may set aside judgment given in default of defence in ignorance of existence of triable issue

Civil Procedure-judgments and orders-consent order-setting aside order-consent no bar to setting aside order if based on inadequate legal advice and given in ignorance of rights

Civil Procedure-writ of summons-indorsement-Grand Court (Civil Procedure) Rules, r.8 does not give plaintiff option to omit full details of claim or remedy from special indorsement, which should contain enough to enable defendant to prepare proper defence

The appellant brought an action against the respondent in the Grand Court to recover payment for work performed and materials supplied.

The respondent, his wife and the former owner of a diving lodge

formed a company for the purpose of running it as a business. The respondent and former owner became directors, and he and his wife were the managers.

The respondent, apparently acting as manager, commissioned the appellant to carry out certain renovations to the property. A dispute arose over the work and the appellant brought proceedings to recover sums which he alleged were due to him under the contract.

The appellant commenced the proceedings by what was headed a ‘Specially Indorsed Writ of Summons’ and in the indorsement referred to an agreement between the parties and claimed payment of a specific sum of money for work performed and materials supplied. The respondent then had difficulty retaining an attorney but succeeded in doing so a few days before the hearing. His request for an adjournment to allow time for the giving of proper instructions was refused and the appellant obtained judgment in default of defence.

On the respondent”s continued failure to discharge the debt, the appellant took out a summons for his committal. At the hearing of the summons the respondent agreed to a consent order committing him to paying the sum due by instalments. He subsequently claimed that he had only agreed to this order for fear of going to prison. He then retained new attorneys and applied by summons for orders, inter alia, to set aside and discharge the judgment in default of defence together with the consequential consent order, and to strike out the appellant”s ‘Specially Indorsed Writ of Summons.’ The proceedings were conducted throughout on the basis that the judgment sought to be set aside was a judgment entered in default of defence.

The court (Collett, C.J.) held, inter alia, that (a) the onus was upon the applicant to show that there was a triable issue, which he had done; (b) O.19, r.2 of the English Rules of the Supreme Court applied and he had jurisdiction to entertain an application to set aside a judgment obtained in default of defence; (c) the lack of preparedness on the part of the respondent and his attorney had resulted in a miscarriage of justice which the court would correct by setting aside both the judgment and the consent order; and (d) given the nature of the real issues between the parties, the indorsement to the writ of summons was so inadequate as not to qualify as a special indorsement within the meaning of the Grand Court (Civil Procedure) Rules, r.8 and constituted an abuse of process. Accordingly, the court gave judgment for the respondent, granting the orders prayed for.

On appeal, the appellant submitted that (i) he had applied under the Grand Court (Civil Procedure) Rules, r.23 for final judgment on a specially indorsed writ and not for judgment in default of defence; (ii) in any case, the Grand Court had no power to set aside a judgment in default of defence; (iii) alternatively, the consent order raised an estoppel against the setting aside of the judgment; and (iv) the writ of summons he had served on the respondent qualified as a specially indorsed writ because under that rule he had the option of either indorsing the writ with the full details of his claim or indorsing it with the relief or remedy which he claimed.

The respondent submitted in reply that (i) since he had established that there was a triable issue between himself and the appellant, namely, whether he had contracted as a director of the company or as an agent, the decision to set the judgment aside should stand as the court had no power under the applicable rules of court to enter judgment in default of defence; (ii) it was only proper that the court should discharge the consent order because he had agreed to it under the threat of imprisonment and in ignorance of the fact that he could have applied to have the default judgment set aside; and (in) the court had properly exercised its discretion to strike out the appellant”s writ of summons as the inadequacy of the indorsement made it an abuse of the process of the court.

Held, giving judgment for the respondent:

(1) There was no provision under the Grand Court (Civil Procedure) Rules for entering judgment in default of defence. Accordingly, by s.20 of the Grand Court Law and r.62(2) of the Grand Court (Civil Procedure) Rules, the English Rules of the Supreme Court, O.19, r.2(1) applied. Under this rule, the Grand Court had the power to enter judgment against the respondent in default of defence. It had nonetheless subsequently correctly exercised its discretion to set aside the judgment for irregularity after finding that a triable issue existed in relation to the respondent”s contractual status, since it was not likely that the court would have given final judgment in default of defence if the respondent had been able to advance this issue. Moreover, the subsequent consent order did not raise an estoppel to preclude the respondent from seeking to have the judgment set aside, since at the time he gave his consent he was not fully legally advised and evidently unaware that he could have applied to have it set aside and in the circumstances it would be an injustice to hold his consent against him. Consequently, the court would uphold the decision of the Grand Court in setting aside both the judgment and the order (page 434, lines 9–16; lines 28–40).

(2) The appellant”s application for summary judgment had been treated throughout the Grand Court proceedings as an application for judgment in default of defence and consequently could not be treated on appeal as an application for final judgment on a specially indorsed writ under the Grand Court (Civil Procedure) Rules, r.23. In any event, in spite of the fact that the original summons had been entitled ‘Specially Indorsed Writ of Summons’ it did not meet the requirements of r.8 because the indorsement lacked sufficient detail to enable the respondent to prepare an intelligible and proper defence. The statement in r.8 that the ‘writ of summons may, at the option of the plaintiff, be specially indorsed with the full details of his claim or of the relief or remedy’ was not one which gave the appellant the option to ignore the specific alternatives cited and he should therefore have given the full details called for. The inadequacy of the special indorsement, however, was not an abuse of the process of the court as the writ could have been amended during the proceedings. Since the writ was in effect one which

was only generally indorsed, the respondent had no obligation to file a defence until a statement of claim was delivered. The court would therefore quash the order to strike out the writ and to have service of it set aside and would instead order that the appellant deliver his statement of claim to the respondent within the statutory time period, subsequent to which the pleadings should proceed in the normal manner (page 432, lines 10–22; page 435, line 30 – page 436, line 12).

25	ZACCA, P., delivering the judgment of the court: On July 1st,
1988 a writ was filed on behalf of the appellant, Kenneth Ebanks,
against the respondent, Ray Plain. The writ was headed
‘Specially Indorsed Writ of Summons.’ In the indorsement, the
appellant claimed from the respondent the sum of $14,914.85 for
30	work performed and materials supplied. Reference was made to
an agreement dated January 21st, 1988. On July 12th, 1988
Messrs. W.S. Walker & Co. entered appearance on behalf of the
respondent, Ray Plain. It appears, however, that on that date the
respondent had not yet been served. He was in effect served on
35	July 14th, 1988.
The respondent is an American citizen. On a visit to the
Cayman Islands, he became interested in diving. Along with his
wife he made several visits to the Islands. They decided that they
would like to work in the diving business. During

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