McPherse Thompson, Assistant Editor - Business

China Motors, which operated an auto dealership in Montego Bay, St James, and claimed that it was plagued by complaints of defective vehicles sourced in China, has lost its bid to have a default judgment against the company set aside.

The judgment was handed down three years ago in favour of Robert Daley and Thermutis Grant-Cunningham, members of the Fletchers Grove Baptist Church in Montpelier, St James, who had sued China Motors for selling them a vehicle which, they contended, within a day was found to be unfit, unsafe and defective.

In the case, heard by Justice Lennox Campbell on May 30 and October 12 this year, lawyers for Daley and Grant-Cunningham submitted that they entered into an oral agreement on or about July 13, 2006 to buy a 2006 Jinbei panel van from China Motors for $1.125 million.

On October 30, 2008, Daley and Grant-Cunningham started a suit seeking damages for breach of contract, breach of condition or warranty and interest and costs.

They alleged particularly, that within a day or so of taking possession of the vehicle they discovered that it was not reasonably or at all fit for the purpose, but contained "faults and defects, rendering it unfit, unsafe and defective."

In summing up the case, Justice Campbell noted that the purchasers catalogued a list of defects, of which they alleged China Motors was aware. Moreover, the auto dealer had taken possession of the vehicle on several occasions, but failed to repair it. In addition, they contended that China Motors failed to return the purchase monies despite repeated demands.

Just over a year later, on March 29, 2010, Daley and Grant-Cunningham served at China Motors' registered office, a copy of the default judgment along with notice of assessment of damages, and notice of intention to tender statements in evidence.

However, on March 7, this year, China Motors made an application to set aside the default judgment and to be given leave to file and serve a defence.

In support of its application, the auto dealer argued that it did not know about the suit filed against it until its directors were served with an order for oral examination, that is, a summons requiring a representative of the company to attend court on a specific date to answer questions about the company's financial circumstances.

China Motors also contended that the company was never served with the claim form and as such the judgment obtained was irregular and ought to be set aside.

According to the judgment, Ingrid Lee Clarke-Bennett, in an affidavit in support of China Motors' application, stated that the "company has ceased operating at Bogues Industrial Estate since 2007 and cease operating from their Kingston branch at 31 Hagley Park Road sometime in the latter part of 2009."

A good defence

The affidavit further stated that "many of the vehicles gave problems" and despite China Motors' best efforts, they were unable to get compensation or redress from the company from whom the vehicles were purchased. China Motors had to stand the cost of the repairs done to the vehicles, the judgment said. "They were indebted to the landlords at Bogues and had to move out (and) the company was being sued in relation to other vehicles they imported," it added.

China Motors contended that it had a good defence to the claim, in that the purchasers had paid for and accepted the vehicle after it was inspected and had driven it for six months, and were still in possession of the vehicle up to December 2006.

In addition, the company said it was no longer operating and was plagued by complaints of defective vehicles.

In summing up, Justice Campbell noted that at the time of service, China Motors' registered office was Bogue Industrial Estate, Montego Bay PO, St James, and that the post office had issued a registered slip confirming the posting of the court documents.

Notice of address

The judge also noted that a director of China Motors had submitted to the Registrar of Companies, on May 1, 2008, a notice of address which conflicts with the assertion by China Motors that they had ceased operating at Bogues Industrial Estate in September 2007.

Indeed, Justice Campbell said, as late as August 23, 2010, China Motors was still receiving mail at the registered office to which the documents had been posted on November 10, 2008.

"There is no evidence before the court to rebut the deemed service of the documents," Justice Campbell said. He found that the default judgment was not irregularly obtained and therefore would not be set aside.

He went to say that the evidence before the court did not assist China Motors, whose letter of May 2, 2007 he found was an admission of liability to refund the purchase price of the vehicle.

Justice Campbell said China Motors' "affidavits appear to lay the blame for the problems of the vehicles to their source in China, from whom it appears they are unable to secure compensation."

China Motors, he said, "has not put forward a tittle of evidence on which to mount an arguable case. The defence, as I discern, is lacking in ... 'good sense and good logic'. I find that the Registrar had sufficient proof of service, by the production of the registered slip." On those bases Justice Campbell dismissed the application to set aside the default judgment.

mcpherse.thompson@gleanerjm.com