Brian Wiggan v AJAS Ltd

• Jurisdiction: Jamaica
• Court: Court of Appeal (Jamaica)
• Judge: Brooks JA,Sinclair-Haynes JA,P Williams JA
• Judgment Date: 10 June 2016
• Neutral Citation: JM 2016 CA 57
• Docket Number: CIVIL APPEAL NO 129/2015
• Date: 10 June 2016

Between:

Brian Wiggan

Appellant

and

Ajas Limited

Respondent

[2016] JMCA Civ 32

Before:

The Hon Mr Justice Brooks JA

The Hon Mrs Justice Sinclair-Haynes JA

The Hon Miss Justice Williams JA (AG)

CIVIL APPEAL NO 129/2015

JAMAICA

IN THE COURT OF APPEAL

SUPREME COURT

Written submissions filed by Ms Rachael Dibbs for the appellant

Written submissions filed by Seyon Hanson for the respondent

PROCEDURAL APPEAL

(Considered by the Court on paper pursuant to rule 2.4 of the Court of Appeal Rules 2002)

Brooks JA

1 This is a procedural appeal arising from the decision of Master Carolyn Tie (as she then was) to set aside a judgment in default of defence, which Mr Brian Wiggan had entered against his former employer AJAS Limited (AJAS). Mr Wiggan is aggrieved by Master Tie's ruling. He asserts that she generally failed to properly apply the requirements for the exercise, and particularly failed to appreciate that AJAS' proposed defence has no real prospect of success. Mr Wiggan has asked this court to set aside the decision of the learned Master and to restore the judgment in his favour.

Background

2 Mr Wiggan had sued AJAS to recover monies that he said were due to him as a result of AJAS having made his post redundant. Mr Wiggan asserts that he commenced employment with AJAS in or around January 1972 by way of an oral agreement as a cargo agent. He became a member of the union representing AJAS' employees. In 1977 he entered into a formal contract of employment as a supervisor in the company. He accepted the promotion to his first managerial appointment in 1982. It is his assertion that despite having to relinquish membership in the union, it was orally agreed with AJAS that he would retain the benefits to which unionised staff were entitled.

3 AJAS underwent a change in its ownership and upper level management structure in or about June 2013. Mr Wiggan's employment relationship was terminated by way of redundancy on or about 31 August 2013. The redundancy payments made to him and at least one other management level employee, Mr Paul Collins, were made at the statutory minimum, rather than at the higher rate, which had been contracted for unionised employees.

4 Mr Wiggan disputed the payment. The dispute was not resolved despite attempted reconciliation by the Ministry of Labour. Mr Wiggan therefore filed the claim in the Supreme Court against AJAS, which has spawned this appeal. Citing breach of contract, he claimed that AJAS failed to pay redundancy for the entire period for which he had been employed and failed to pay the full entitlement pursuant to the terms of the oral contract. Mr Wiggan also sought to obtain orders compelling AJAS to fulfil certain other obligations relating to what he said were benefits, to which he was entitled, even after termination of his employment. These included continuing his medical scheme as well as his transportation and travel benefits.

5 AJAS maintained that it was not obliged to pay any rate above the statutory rate for redundancy. It asserted that there was no contract which obliged it to pay an enhanced rate or to accord former management staff benefits to which unionised staff was entitled by virtue of the process of collective bargaining. AJAS seeks to resist the claim on these bases, but failed to file its statement of defence within the stipulated time.

6 A chronology of how the claim proceeded through the Supreme Court will assist the understanding of the analysis.

Chronology of events

• i. Claim Form and Particulars of Claim was filed on 31 December 2014 and served on AJAS on 2 January 2015;

• ii. AJAS filed and served an acknowledgement of service on 12 January 2015 and indicated its intention to file a defence. No defence was filed;

• iii. Mr Wiggan's request for default judgment and a separate application for judgment in default of defence were filed 25 February 2015. His affidavit in support of the latter application was filed 26 February 2015;

• iv. AJAS' application for extension of time to file defence was filed 22 May 2015. It was supported by an affidavit of Mr Barry Byrne, AJAS' managing director;

• V. Another application for court orders for extension of time to file defence was filed on 26 May 2016. It was apparently intended to supersede the earlier application;

• vi. Judgment in default of defence was entered on 26 May 2015;

• vii. An application for court orders was filed on 1 July 2015 to set aside default judgment and to stay the enforcement of the default judgment. It was supported by an affidavit of another director of AJAS, Mr Edward Bond;

• viii. The latter application, as well as an application by AJAS for extension of time in which to file a defence to a claim brought by Mr Collins against it on similar grounds, were heard together by Master Tie;

• ix. On 18 December 2015 the learned Master granted the applications to set aside the default judgment in Mr Wiggan's case and to extend time to file the defence in both cases; leave to appeal was also granted.

Chronology of events

The learned Master's ruling

7 In considering the application to set aside the default judgment, the learned Master considered the provisions of Civil Procedure Rule ( CPR) 13.3(1) and 13.3(2) in arriving at her decision. In assessing whether AJAS had a “reasonable prospect of success”, Master Tie relied on the well-known and oft-cited authority of Swain v Hillman and another [2001] 1 All ER 91. She further observed that since the authorities established that there must be a real prospect of success, as opposed to an arguable case, the court was also required to consider and analyse the merits of the proposed defence using the guidelines outlined by McDonald-Bishop J (Ag) (as she then was) in Marcia Jarrett v South East Regional Health Authority and others (Claim no 2006HCV00816) , judgment delivered 3 November 2006. In the end, she found that the merit of the proposed defence must be of paramount consideration.

8 Master Tie found that the delay in filing the defence was ‘not inordinate’ and the explanation proffered for the delay was ‘palatable’. She considered AJAS' explanation for the delay as being attributed to the process of having to gather information dating as far back as 1977 which is the commencement date of Mr Wiggan's contract of employment.

9 In relation to the prospect of success, having examined the various affidavits in support, she formed the view that ‘there are triable issues which ought to be ventilated’ and that the ‘issue of credibility is a live one which clearly is the purview of a trial judge’. In light of this, she granted the application to set aside the default judgment and gave AJAS 14 days to file and serve its defence.

The grounds of appeal

10 Mr Wiggan filed the following grounds of appeal:

• ‘a) The learned Master erred as a matter of fact and law in coming to her decision to set aside Judgment in favour of [Mr Wiggan], by failing to utilize the criteria set out by CPR 13.3 to guide her decision making.

• b) …

  The master failed to appreciate that [AJAS] is relying on its contract of sale to abrogate the entitlements of [Mr Wiggan] — who was not privy to the contract, which is not a defence with a real prospect of success, there is no privity of contract with [Mr Wiggan] and the contract of sale of shares of [AJAS].

• c) The learned Master failed to appreciate that a good explanation for a delay in filing a defence was not the same as applying to set aside the judgment as soon as reasonably practicable after finding out that judgment had been entered.

• d) The learned master erred as a matter of fact and/or law in failing to appreciate the criteria contained in the Rule 10.5 (supra) that the draft defence must have a real prospect of success were the matter to go to trial but also that the draft defence must contain reasons for resisting allegations…and that the draft defence …did not comply with CPR Rule 10.5(5)…

• e) The learned Master failed to apply the overriding objective in interpreting parts 10 and 13 in setting aside the Judgment.

• f) The Master erred as a matter of law in finding that [AJAS] had a good reason for failing to file its defence within the time prescribed by the Rules and ought to be relieved from sanctions, in doing so the Master failed to appreciate that [Mr Wiggan's] claim was no surprise to [AJAS], as [Mr Wiggan] had engaged [AJAS] and its legal representative in conciliatory discussions facilitated by the Ministry of Labour as permitted by law prior to filing his claim.

• g) The learner [sic] Master erred by failing to appreciate that judicial notice can be made of Ministry of Labour discussions.

• h) The Master erred by failing to find no defence was provided for the breach of contract claim, having accepted that there was an offer from [AJAS] to be made redundant, and acceptance by [Mr Wiggan], based on the consideration provided by the Human Resource Manager of [AJAS] (admitted by [AJAS] at paragraph 17 and 22), and [Mr Wiggan's] own knowledge of his contract of employment.

• i) The [M]aster failed to find that there was no defence presented in the draft defence with a real prospect of successfully defending the claim that [Mr Wiggan] would have detrimentally relied on the communication of the HR Manager of his enhanced redundancy figures.

• j) The [M]aster erred in setting aside Judgment in favour of [Mr Wiggan] by failing to apply the criteria in Rule 13.3 which is cumulative, as [AJAS] failed to provide a defence with a real prospect of success, and no good reason for the delay in filing a defence.

• …

The law

11 Rule 13.3 of the CPR requires a party who is applying to set aside a default judgment, to show that it has a real prospect of successfully defending the claim. Rule 13.3 states:

• ‘(1) The court may set aside or vary a judgement entered...