Summary judgment dismissed because defendants showed merits and disputed facts require a trial.

[*530] 1982 July 1

(N. NICOLAOU, AG.D.J.)

IN THE DISTRICT COURT OP NICOSIA

P.K. Orinos Ltd., c .

Plaintiffs,

V.

TI - KMC Ltd.,

Defendants.

(Action No. 5907/81).

Civil Procedure - Practice - Summary judgment - Application for, and opposition - Procedural formalities - Conditions precedent for employment of the summary process - Affidavit in support of application - By whom to made - Requirements of affidavit - Defendants’ affidavit - Unconditional or conditional leave to defend - When to be given - Defendants have shown merits and that there are disputes as to facts which ought to be tried - Application for summary judgment dismissed - Civil Procedure Rules Order 1 8.

Ph. Valiant is for L. Papaphilippou, for Applicants-Plaintiffs.

C. Myrianthis with S. Triftarides, for Respondents-Defendants.

RULING

The following ruling was delivered by:-

N.- NICOLAOU. AG.D.J.: By the present application[*531] the plaintiff's-applicants pray for summary-judgment against the defendants pursuant to the provisions of 0.18 rr. 1, 2 and 3 and 0.48 r.2 of the Civil Procedure Rules.

The plaintiffs’ claim as framed in the specially indorsed writ of summons is as follows:-

The plaintiffs allege that at different dates over a long period sold and delivered to the defendants a quantity of goods as referred to in para. 1 of the statement of claim the balance of which is worth £7,854. 595 mils.

The defendants paid at times the total sum of £2,032.275 mils on account thus leaving a balance of £5,822.320 mils still due and unpaid.

In addition plaintiffs claim legal interest and the costs of the action.

In due course that is to say on December 22, 1981, the defendants entered an appearance through their advocates and subsequently on January 5, 1981, the present application was filed.

Plaintiffs' said application is supported by an affidavit dated January 1, 1982 sworn on behalf of the plaintiffs by a certain Costas Philippou of Nicosia being one of the Directors of the plaintiff company who, inter alia, states that he has personal knowledge of the facts of the case, all facts pleaded in the statement of claim are correct and that the defendants according to his belief have no defence in the present case.[*532]

In the meantime the defendants on February 18, 1982, filed their opposition through their above mentioned advocates basing same on 0,18 rr. 1, 2 & 3 and 0.48 r.2 of the Civil Procedure Rules.

Their said opposition was supported by a long affidavit dated February 18, 1982, sworn on behalf of the defendants by a certain Nicos Georghiades, of Nicosia, being" an employee of the defendants and particularly being the person in charge of the accounts department of the defendant company and duly authorised to make the said affidavit on behalf of the defendants having also personal knowledge of all material' facts of the present case.

It is the allegation of the defendants, inter alia, as they appear from the said affidavit of Nicos Georghiades that they are not at all indebted to the plaintiffs but on the contrary the plaintiffs owe to them the sum of £1,816.245 mils due to the overpayment by mistake of the said sum over and above all sums owed at various times to the plaintiffs which they have paid in full.

It is the allegation of the defendants that at various dates mentioned in the said long affidavit filed in support of their opposition they had fully paid off the value of all goods sold and delivered to them through the means of various-invoices mentioned in the affidavit of the said Nicos Georghiades and as a consequence they owe nothing to the plaintiffs. [*533].

It is their further allegation that they do not recognize and/or accept the validity of any other invoices or any other sum except the total sum of £9,688.755 mils which they admit with their said affidavit, but which sum in any event has been paid off. The total number of invoices on the strength of which the plaintiffs base their • claim is 182 whereas the defendants recognize and/or accept 36 of them and they further deny any liability, whatsoever with regard to the rest of the invoices mentioned on the writ of summons as same were not delivered to them and/or same were never accepted by them through their authorised persons mentioned in param, 3 of their affidavit.

The defendants further allege that they are entitled to claim for plaintiffs a 10% discount on the value of sales made to them at all material times.

The plaintiffs after they were served with the aboveopposition and affidavit dated February 18, 1982, they filed on May 5, 1982, a supplementary affidavit by a certain Michael Karis in his capacity as the person in charge of the plaintiffs' sales department through the means of which they in effect denied all facts and allegations mentioned in the said affidavit sworn by the said Nicos Georghiades.

Further in pursuance of 0.39 r.l they gave notice to the defendants that they intended to cross-examine the affiant Nicos Georghiades on the date of the hearing of the : present application which eventually took place on June 11+, 1982. [*534]

The said Nicos Georghiades in effect during his cross-examination repeated all allegations and all facts which are mentioned in the affidavit he has sworn on behalf of the defendants on February 18, 1982.

Before proceeding to examine the legal background of an application for summary judgment and an opposition to such a step I would first try from the facts as they appear before me through the means of the above mentioned affidavits and the oral evidence put in after the cross-examination of the affiant Nicos Georghiades to ascertain the allegations of the parties;

(a) It is alleged that plaintiffs’ claim is based on a balance of £5, 822.320 mils due to them by the defendants from the sale and delivery to them various goods at several intervals accompanied by 182 invoices;

(b) On the other hand it is the defendants’ allegation that:-

(i) they owe nothing to plaintiffs as they had fully paid them off;

(ii) the goods sold and delivered to them are of a lesser quantity, the total number of invoices accepted by them being 36 and not 182;

(ill) they claim 10% commission and/or deduction on all purchases whether cash or [*535] by credit made by them from the plains tiffs and not 10% deduction on all cash sales as the plaintiffs allege;

(iv) there is an amount of £1, 816.245 mils due from the plaintiffs to the defendants which sum defendants had by mistake paid to the plaintiffs during their transactions and for'which sum they will raise a counterclaim.

What are the procedural formalities of an application for summary judgment and an opposition to it?

An application for summary judgment must be made on the strength of 0.18 of the Civil Procedure Rules (in England the corresponding rule is r.14).

The scope of the order is to provide the procedure for obtaining summary judgment without proceeding to trial. The usefulness of this procedure, as a means of disposing of cases which are virtually uncontested, has resulted in its extension from time to time to wider classes of cases.

The preliminary requirements and/or conditions precedent for the plaintiff employing the summary process of 0.18 are:-

(a) the writ of summons must be or have been served on the defendant; [*536]

(b) the defendant must have entered an appearance; and

(c) the affidavit in support of the application must comply with certain requirements, i.e. it must verify the facts and it must contain a statement of the deponent's belief that there is no defence to the claim or part thereof in respect of which the application is made. It is further by now well-known that the affidavit of the plaintiff can be made on statements of information and belief.

There is no express provision in the rule as to the time within which the application must be made, except that it can only be made after appearance and must be served on the defendant accompanied by the affidavit in support.

It is a necessary condition for proceeding under 0.18 that the application must be supported by an affidavit

which complies with this rule otherwise the summons may be dismissed. (See Lagos v. Gnunwaldt. (1910) 1 K.B. Zj.1 C.A. and Symon &

Co. v. Palmer's Stores, (1903) Ltd., (1912) 1 K.B. 259).

The affidavit may be made by the plaintiff or by any person duly authorised to make it. If not made by the plaintiff, the affidavit must itself state that the person making it is duly authorised to do so. (See the case of Chirgwin v. Russel, (1910) 27 T.L.R. (C.A.)).[*537]

The affidavit should,

however, be made by some responsible person (see Hallet v. Andrews. (1898) 42 S.J. 68) or some competent person in the employ

of a limited company (see Pathe' Freres Cinema Ltd. v. United Electric Theatres Ltd., (1914) 3 K.B. 1253 (C.A.), and Spyros Stavrinides v. Ceskosloenska Obchondi Banka S.A., (1972) 8 J.S.C. 924)•

The affidavit must fulfil the following two requirements:-

(a) it must verify the facts on which the claim or part of a claim to which the application relates is based; and

(b) it must state the deponent's belief that there is no defence to that claim or part, or no defence on to the amount of any damages claimed.

Any defects or omission in the original affidavit may be cured or supplemented or supplied by an affidavit made subsequently and the Court looks at the matter both on jurisdiction, and on merits ''át thè end of the day on the affidavits which have been filed” (see Les Fils Dreyfus etc. v. Clarke. (1958) I W.L. 300 (C.A.)).

On the other hand, defendants' opposition and affidavit in support thereof must comply with certain requirements (see 0.18 r.3 (a), (b) and (c) of the Civil Procedure Rules).[*538]

The defendants may show cause against the plaintiffs' application:-

1. by a preliminary or technical objection, e.g. that the case is not within this order or that the statement of claim or affidavit in support is defective, such as no due verification of the

claim. No affidavit is required in support of such objection (see the case of Brandley v. Chamberlyn, (1893) 1 Q.B. 439);

2. On the merits, e.g. that he has a good defence to the claim on the merits or that a difficult point of law is involved or. a dispute as to the facts which ought to be tried or a real dispute as to the amount due which requires the taking of an account to determine or any othér circumstances showing reasonable grounds of a bona fide defence.

The defendant's affidavit must condescend upon particulars and should as far as possible deal specifically with the plaintiff's claim and affidavit and state clearly and concisely what the defence is and what facts are relied on as supporting it.

It should also state Whether the defence goes to the whole or part of the claim and in the latter case it should specify the part. (See The Annual Practice, 1967, Vol. I, p.120). [*539]

A mere general denial

that the defendant is indebted will not suffice (see, Wallingford v. Mutual Society, (l880) 4 App. Cases per Lord Blackburn at p.704) unless

the grounds on which the defendant relies as showing that he is not indebted are stated.

If the defence relied on, is fraud, the affidavit should state the particulars of the fraud, A mere vague general allegation of fraud is useless. The obligation on the defendants to show cause by necessary implication, allows the plaintiff to answer the defendants' case, (See, Davis v. Spence. I.C.P.D, p,721, per Bret, I.J.).

0.18 r.1 of the Civil Procedure Rules reads:-

"(a) Where the defendant appears to a writ of summons specially indorsed under Order 2, rule 6, the plaintiff may on affidavit made by himself, or by any other person who can swear positively to the facts, verifying the cause of action, and the amount claimed (if any), and stating that in his belief there is no defence to the action, apply for judgment for the amount so indorsed, together with interest (if any), or for the recovery of the land (with or withoutrent), or for the delivering up of a specific chattel, as the case may be, and costs. And judgment for the plaintiff may be given thereupon, unless the defendant shall satisfy the Court that he

has a good defence to the action [*540] “on the merits, or disclose such facts as may be deemed sufficiënt to entitle him to defend”.

0.18 r.3 of the Civil Procedure Rules reads:-

“(a) the defendant may show cause against such “application by affidavit, or the Court may “allow the defendant to be examined upon “oath.

“(b) The affidavit shall state whether the “the defence alleged goes to the whole or to “part only, and (if so) to what part of the “plaintiff's claim.

“(c) The Court may, if it thinks fit, order the “ defendant, or in the case of a corporation, “ any officer thereof, to attend and be “examined upon oath, or to produce any leases, deeds, books, or documents, or copies there- “of or extracts therefrom".

Judgment for plaintiff.

The purpose of 0.18 is to enable a plaintiff to obtain summary judgment without trial, if he can prove his claim clearly and if the defendant is unable to set up a bona fide defence or raise an issue against the claim which ought to be tried. (See, Roberts v. Plant,, (1895) 1 Q.B. 597, (C.A.), Robinson and Co. v. Lynes.

(1894) 2 Q.B. 577, Dane v. Mortgage Ins. Corp.,

(1894) 1 Q.B. 54, (C.A.), and Les Fils Dreyfus et Cie Societe Anonyme v. Clarke. (1958)

1 All E.R. P.459). [*540]

When the Court is satisfied not only that there is no defence but no fairly arguable point to be argued on behalf of the defendant it is the duty of the Court to give judgment for the plaintiff, per Jessel M.R. in the AngloItalian Bank v. Wells. 38 L.T. p. 197 C.A.

The mere offer to bring the sum claimed into Court is not sufficient to entitle the defendant to have leave to defend, "He is bound to show that he has some reasonable ground of defence to the action" - Per Brainwell, L.J., in Crump v. Cavendish,

5 Ex. D. p.211, C.A.

Where part of the claim is clearly due by admission or otherwise while a defence is shown as to the residue, the Court should enter judgment for the sum due and give leave to defend on to the residue.

Unconditional leave to defend.

The power to give summarily judgment under 0.18 is intended only to apply to cases where there is no reasonable doubt that a plaintiff is entitled to judgment and where, therefore, it is inexpedient to allow a defendant to defend for mere purpose of delay. (See, Jones v. Stone, (1894) A.C. 122).

As a general principle where a defendant shows that he has a fair case for defence, or reasonable grounds for setting up a defence or even a fair probability that he has a bona fide defence he ought to have leave to defend. (See, Saw v. Hakim,

5 T.L.R. 72, Ironclad etc. Go. v. Garder, [*542] 4 T.L.R. 18, Ward v. Plumbley.

6 T.L.R. 198, Yorkshire Banking Co. v. Beatson.

4 C.P.D. 213, Ray v. Barker, 4 Ex. D. 279).

A defendant ought not to be shut out from defending unless it is very clear indeed that he has no case in the action under discussion, (See, Sheppards v. Wilkinson,

6 T.L.R. 13).

Where there is "a fair probability of a defence" unconditional leave to defend ought to be given. (See, Ward v. Plumbley, (supra)).

Conditional leave to defend.

The condition of payment into Court or giving security is nowdays more often imposed than formerly and not only where the defendant consents but also where there is a good ground in the evidence for believing that the defence set up is a sham defence or the Court is prepared very nearly to give judgment for the plaintiff. (See, Wing v. Thurlow.

(1893) 10 T.L.R, 53, and Kypros s. Kyprianides v. Symeon Ioannou.

(1966) 10 J.S.C. 1084).

Having considered very carefully the contents of the affidavits of both, the plaintiffs and the defendants, and the oral evidence before the Court I am of the opinion that the defendants - respondents have shown merits and that there are disputes as to facts which ought to be tried. I don't feel this is a proper case in which I can exercise my judicial discretion in favour of the applicants. [*543]

In arriving at thè above conclusion I have paid particular regard to the contents of' the affidavits of plaintiffs-applicants and to that of the defendantsrespondents and to the oral evidence of the affiant Nicos Georghiades in the light of the legal aspect of both the application and the opposition as stated above.

For these reasons the application for summary judgment fails and it is, therefore, dismissed accordingly with half of the costs for these proceedings against the applicants to be assessed by the Registrar.

De fend ants-respondents are-hereby allowed to file their defence and counterclaim, if any, within 14 days from today.

Application dismissed. Order for costs as above.