The Receptionist, the Generic Email and the Default Judgment
Adomabo Farms Ltd, whose registered office is in Tamale, has a sales branch in Accra with a signboard and three staff. Nkrumah sues the company in the High Court, Accra, for GHS 420,000 unpaid invoices, interest and costs. The process server goes to the Accra branch, hands the writ to a receptionist who says she is not authorised to accept service, and notes her name. The same day, Nkrumah's lawyer emails scanned copies of the writ and statement of claim to [email protected]. No appearance is filed. Fourteen days after the branch service, Nkrumah's lawyer applies for and obtains default judgment for the full amount. Two months later the company applies to set aside the judgment. Its managing director says he was in China, the email went into a spam folder, and the invoices were fabricated by a former accountant who is facing criminal charges. The company has not exhibited a draft defence but says it will file one. The case is before you as the judge.
1. Was service valid? What is the status of the default judgment?
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Service on a company under C.I. 47 and the Companies Act, 2019 (Act 992) must be effected at the registered office, or by delivery to a director, secretary or principal officer, or in a manner the court directs. A receptionist at a sales branch is not a principal officer, and the branch is not the registered office. Handing the writ to her was therefore not valid service. The email to a generic address was also not valid service: electronic service requires the court's permission or the company's consent, and the rules on substituted service must be followed.
Because there was no valid service, the default judgment is irregular. An irregular judgment is set aside as of right, or ex debito justitiae; the defendant does not have to show a defence on the merits, although the court may impose costs. The judgment and any execution founded on it should be set aside. The plaintiff should have effected service at the Tamale registered office, served a director, or applied for an order for substituted service. The court should give directions for proper service and may order the plaintiff to pay the costs thrown away.
2. If service had been valid, what must the company establish to set aside a regular default judgment, and how should the court exercise its discretion?
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A regular default judgment is set aside on such terms as the court thinks just, but the applicant must satisfy three broad requirements. First, it must explain the failure to appear: mistake, accident, illness, absence abroad or other sufficient cause. Second, it must act promptly after learning of the judgment. Third, it must show a defence on the merits with some prospect of success, normally by a draft defence or an affidavit setting out the facts, not a bare denial.
Here the managing director's absence in China and the spam folder are weak explanations unless corroborated. The stronger point is the allegation that the invoices were fabricated by a former accountant now facing criminal charges. Fraud is a serious allegation, and if it is supported by the criminal proceedings, it discloses a triable issue. The absence of a draft defence is a gap, but the court can adjourn for one rather than refuse the application outright.
The court balances the prejudice to the plaintiff from delay against the defendant's right to be heard. It may set aside the judgment conditionally, for example on payment of the judgment sum into court or on payment of costs. Given the fraud allegation, an unconditional setting aside with costs is likely, but it should not be used to delay the plaintiff indefinitely.
3. Could Nkrumah have proceeded by summary judgment, and how does that differ from default judgment?
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Summary judgment under Order 14 is available where the defendant has been served and has appeared, but the plaintiff believes the defendant has no defence. The plaintiff must verify the claim and state that belief. The defendant must then show a bona fide triable issue or a reasonable prospect of success; otherwise the court may enter judgment, or give leave to defend unconditionally or on conditions.
Default judgment is different. It is available where the defendant fails to appear or fails to defend within the time allowed. It does not require the plaintiff to persuade the court that there is no defence; the sanction is procedural. It is also more readily set aside.
Here, because there was no valid service, default judgment should not have been entered at all, and summary judgment would also have failed for want of valid service. If service had been proper and the company had appeared, summary judgment would probably have been met by the fraud allegation and leave to defend would have been granted. The fraud issue is exactly the kind of triable issue that makes summary judgment unsuitable. The plaintiff's better course was proper service, followed by default judgment if no appearance was entered, or summary judgment if the defence was a sham.