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Mishra v Prasad's Nationwide Transport Express Courier Ltd [2024] FJCA 145; ABU0054.2022 (26 July 2024)

IN THE COURT OF APPEAL, FIJI
[On Appeal from the High Court]


CIVIL APPEAL NO. ABU0054 OF 2022
[Lautoka Civil Action No: HBC 205 of 2012]


BETWEEN:


1. VIPUL MANOJ DUTT MISHRA
2. RAMESHWAR PRAKASH
both trading as Mishra Prakash & Associates
Appellants


AND:


PRASAD’S NATIONWIDE TRANSPORT EXPRESS
COURIER LIMITED
Respondent


Coram: F Jitoko, P
I Mataitoga, JA
W Morgan, JA


Counsel: Ms A Chand for the Appellant
Ms T. Tuitoga for the Respondent

Date of Hearing : 3 July, 2024
Date of Judgment : 26 July, 2024


JUDGMENT

Jitoko, P
Introduction


[1] This is an appeal from the Ruling of the High Court in Lautoka re-instating the Respondent’s Writ of Summons that the Master had struck out pursuant to Order 25 Rule 9 of the High Court Rules. In his ex Tempore Ruling of 26 February 2015, the Master was satisfied that the Respondent had failed to show cause why the action ought not to be struck out for want of prosecution or an abuse of the process of the Court.

[2] Under O.25 r.9. the Court may, of its own motion and after allowing parties to show cause why it should not strike out an action for delay and/or want of prosecution if no steps is taken to advance the matter after six months.

[3] In response to the Court’s Summons, Shanon Shaneel Prasad, the son of the majority shareholder and Director of the Respondent Company, filed an affidavit “to show cause and reinstate the action.” In effect, the affidavit was in response to the Courts summons, and attempted to explain the reasons for the delay, and the non-appearance of the Respondent and/or its Counsel at various times since the filing of its Writ on 24 September 2012. Whilst the deponent of the affidavit was not an employee of the Respondent Company, he attached an authority from the majority shareholder of the Respondent Company, his father, to swear evidence in its support.

[4] The Master held that the affidavit did not comply with the requirement in that it being a company affidavit, there should have been a resolution of the Board authorising the deponent. There being none, the Master disallowed the affidavit as “defective and a nullity” and concluded, before he ordered the action to be struck out, that:

“_ _ _ the Plaintiff, maintained the action in existence notwithstanding that it had no interest in having it heard.”


[5] The High Court in its Ruling of 10 July 2017, agreed with the Appellant’s submission that the affidavit by Shanon Shaneel Prasad was valid and should have been accepted by the Master, and in any case the Master in exercising his discretion under O.25 r.9, is required to assess the merits of the claim before he struck out the matter. This he failed to do. The Court allowed the appeal and the case was referred back to the Master.

[6] It is necessary, to comprehend fully and contextualise the arguments of the parties, to set out in full the background to the proceedings.

Background


[7] The Appellants, trading as the law firm of Mishra Prakash & Associates, from their Lautoka office at 16 Mana Street were engaged by the Respondent Company to bring proceedings against FAI Insurance (Fiji) Limited (FAI) for breach of a vehicle insurance policy which the Respondent had with FAI. The Court found for the Respondent and FAI to pay the sum of $220,597.00 in damages and interests with $3,000.00 costs. FAI applied and obtained a stay. Stay was granted on the condition that FAI pay the total damages and costs to the Respondent with the undertaking that should the judgment sum be reduced on appeal, the Respondent was to refund FAI the difference.

[8] The total sum of $223,597.00 of damages and costs were paid into the Trust Account of the Appellant. In turn the Appellant paid $190,000.00 from the total to the Respondent on 4 April, 2005. It kept the balance of $33,597.00 in its Trust Account.

[9] It is alleged by the Respondent, that at the time of the payment of the $190,000.00 by the Appellant, the 1st named Appellant, advised the 2 Directors of the Respondent Company, (Vishnu Deo Prasad [deceased] and Vimal Deo Prasad) that the judgment sum was a bit high, and if the Appeal Court were to reduce the award, then the balance of the sum, the $33,597.00 was to take care of the refund sum to the FAI.

[10] The legal costs and fees of the Appellant in the amount of $27,404.02 were paid in full after the Appellant threatened to withdraw their future services.

[11] The judgment of the Court of Appeal delivered on 16 April, 2008 did reduce the judgment sum to $178,145.00, a reduction in the amount of $42,452.00 but the $3,000.00 costs remain undisturbed. The Court of Appeal further ordered FAI to pay 50% of the Respondent’s costs of the appeal.

[12] The Appellants and specifically the 1st named Appellant, was instructed by the Respondent to pay the balance of $42,452.00 from the $33,597.00 from the original award of damages, that remained in the Appellants’ Trust Account, supplemented by the 50% costs to the Respondent awarded by the Court of Appeal, against FAI, and any remaining amount was to be paid to the Respondent. There was assurance from the Appellants that the instructions were going to be followed through, and, according to the Respondent, upon confirmation of the instructions being followed by the Appellants, it left the matter rested there.

[13] It came as a complete shock to the Respondent that on 20 September, 2010, FAI solicitors wrote to it demanding the payment of $60,439.67 made up of the $42,452.00 outstanding from as the result of the Court of Appeal decision, plus interest and costs. According to the Respondent, it immediately sent the demand letter to the Appellant and followed it up with phone calls. All efforts to get any response from the Appellants were in vain.

[14] Subsequently, the FAI solicitors served a Winding Up Notice on the Respondents followed by filing a winding up proceedings (HBE 44 of 2010) in the Lautoka High Court, which ultimately forced the Respondent to sell its assets and in the end, paid the sum of $40,000.00 in full and final settlement to FAI.

[15] According to the Respondent all its efforts for the Appellants to provide an account of transactions between them were refused, or ignored. This included the refunding to the Respondent of the $33,597.00 that had remained in the Appellant’s Trust Account.

[16] This provides the backdrop to the Respondent’s Writ of Summon filed by Suresh Maharaj & Associates acting on its behalf in the Lautoka High Court on 24 September, 2012, claiming inter alia, breach of contract, negligence, and breaches of the provisions of Trust Accounts Act, Legal Practitioner Act, and Sale of Goods Act.

The Case Before the Master


[17] After setting out the chronology of events from 10 May 2013 after the Solicitors for the Respondent had filed its affidavit verifying its Lists of Documents, and their being no appearance by the Respondent (as Plaintiff) on 4 separate occasions namely;

the Appellant’s Counsel sought the matter to be struck out. The Master then ordered the matter to be taken off the list.


[18] The proceedings was revived on 8 July 2014, when the Master issued its Notice under O.25 r.9 requesting the Respondent to appear before him on 4 August, 2014, to show cause why the action should not be struck out for want of prosecution. Instead, the Respondent, on 1 August 2014 through Shanon Shavneel Prasad, filed an affidavit on its behalf giving reasons why the case should be reinstated. The affidavit then set out in great details;

[19] As observed above, the Master ruled that the affidavit was defective as it was not in accordance with the requirements of affidavits deposed on behalf of a company. As the result, the Master excluded the affidavit from consideration and decided that the Respondent has failed to show cause why the matter should not be struck out for want of prosecution and also concluded that the long delay showed that the Respondent had no interest in having the matter heard.

The Proceedings in the High Court


[20] The determination by the High Court to allow the Respondent’s appeal, focussed solely on the issue whether the Master was correct in law in disallowing Shanon Shavneel Prasad’s affidavit and whether the Master, had exercised his discretion under Order 25 r.9, correctly when he struck out the case.

[21] After carefully analysing the submission of Counsel on the disallowed affidavit and the exercise of discretion by the Master, the Court concluded as follows:

“29. I agree with the submission of the appellant firstly, in terms of the application of section 40 and Kim Industries Ltd, In re No.1 [2000] FLR 141, and secondly, I think that before the discretion is exercised to strike out a claim after an Order 25 rule 9 show-cause hearing, some assessments of the merit the claim as pleaded must be considered.


  1. I understand the Learned Master had taken account of the five consecutive non-appearance of the appellant as I have noted above. That was a total period of 6 months on non-appearances. I think a heavy costs order in favour of the defendant/respondent would have addressed that.”
[22] Grounds of Appeal

The Appellants are praying that their appeal be allowed and the Master’s Ruling be reinstated. They set out four (4) grounds of appeal as follows:


“1. The Learned Judge of the High Court erred in fact and/or in law in holding that the Respondent had shown good Grounds for Appeal when:-


  1. there was no explanation given for the non-appearance by the Respondent which was part of the reasons for striking out decision made by the Master.
  2. when there was no evidence in opposition filed to show the status of the Respondent and whether it had filed its returns and/or whether it had been struck out and/or whether it could litigate as a party;
  1. The Learned Judge erred in fact and/or in law in:
    1. not taking into account the quotes from decisions relied on by the Master on page 11 of his Judgment and the reasoning contained therein and in not giving reasons as to why the Master was wrong in respect of the same;
    2. not taking into account and/or not giving sufficient emphasis to the fact that there had been several defaults and lack of appearances by the Respondent and that the Master was exercising his discretion in respect of the same.
    1. in failing to take into account the principle that a Judge cannot whilst sitting in appellate mode substitute his own decision in place of a Lower Court and failed to apply the principle that an appellate Court can only review the exercise of the discretion by the lower Court and a beneficial interpretation must be taken of the lower Court decision if that is open to the Court.
  2. The Learned Judge erred in fact and/or in law in not considering and/or giving reasons as to how the Respondent had jurisdiction to file an application to re-instate or litigate in circumstances in particular where the Respondent had not filed annual returns for several years and when there was a letter by Registrar of Companies dated 12th day August, 2014 in evidence before the Court confirming that the Annual Returns had not been lodged from the year 2006 by the Respondent.
  3. The Learned Judge erred in law in relying on the case of Kim Industries Ltd. In Re (No.1) [2000] FLR 41: [2000] 1 141 (7 July 2000) which was a case dealing with winding up petition rather than a reinstatement which was the position in the present case and in:-
    1. allowing the evidence of Mr Shanon Shaneel Prasad when he was not a director of the Respondent and when Annual Returns had not been filed for many years which gives details of current directors in the statement of claim;
    2. in allowing hearsay evidence from Shanon Shaneel Prasad;
    1. when there was no evidence (or admissible evidence) deposing as to facts which showed any significant merit in the claim;
    1. in not taking into account that this was a show cause application under Order 25 Rule 9 of the High Court Rules and the onus of proof was on the Respondent to show cause and meet the points raised by the Appellants.”

Consideration


The exercise of the Court’s Powers to Strike Out for Want of Prosecution


[23] Order 25 rule 9 of the High Court Rules bestows upon the Court the powers, to strike out any cause or matter if no action has been taken to advance it after six(6) months.

[24] It states:

“9 - (1) If no step has been taken in an cause or matter for six months then any party on application or the Court of its own motion may list the cause or matte for the parties to show cause why it should not be struck out for want of prosecution.

(2) Upon hearing the application the Court may either dismiss the cause or matter on such terms as may be just or deal with the application as if it were a summons for directions.”


[25] There are a number of decisions both in our own jurisdiction and elsewhere, that have dealt with our Order 25 r.9 or its equivalent, both in the application by any party to the proceedings, or by the Court acting on its own motion. Guiding principles that have emerged may be conveniently summarised as follows:
  1. The court’s exercise of power to act on its own motion is rarely invoked and ought to be left as the last resort: Sunmukh Investments Ltd v. Nadi Bay Beach Corporation [2007] HBC 132/91S; Trade Air Engineering (West) Ltd. & Others v Laisa Taga & Others [2007] ABU 62/06;
  2. Delay of itself without it being shown that the delay was inexcusable and seriously prejudicial to the defendants, was insufficient to warrant the striking out of the action: Thomas (Fiji) Limited (In Receivership) & Others v. Bank of Hawaii [2006] ABU 52/06;
  3. Mere failure to comply with Order 25 does not amount to contumacious conduct, unless it is flagrant and persistent disregard of the Rules, and knowing the consequences of such a conduct: NLTB v Rapchand Holdings Ltd [2006] ABU 41/05.

[26] The leading case law dealing with the Court’s inherent power to strike out an action for want of prosecution is the House of Lords decision in Birkett v. James [1985] 3All ER 801, where the Court set down the following conditions before the discretionary power is exercised:
  1. There has been inordinate and inexcusable delay, and
  2. such delay has given rise to a substantial risk that it is not possible to have a fair trial of the issues or is likely to have caused prejudice to the defendants.

[27] Further, the Court added that the Court has a general inherent power to strike out an action in cases of a deliberate failure to comply with a peremptory order of the Court.

[28] Lord Diplock said, at p.804:

“ _ _ _ _ delay will give rise to a substantial risk that is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.”


Grounds of Appeal


[29] The 4 grounds of appeal with their sub-headings are loosely drafted and untidy collection of overlapping issues the Appellants had put together, under the umbrella of the general submission that the High Court had “erred in fact and/or in law.”

[30] For clarity, we will address the common grounds of appeal together as follows:
  1. Ground 1

Ground 1(a) with Ground (2) (b)

  1. Ground 2

Ground 2(a) and (c)

  1. Ground 3

Ground 3 with Ground 1(b)

  1. Ground 4

[31] Ground 1 of the Appeal

The Appellant contends that the High Court had not given any reason why it held that “the Respondent had shown good grounds of appeal” when:


(i) it had not rendered any explanation for its non-appearance for over 6 months; and
(ii) that it had not given sufficient weight to the five(5) consecutive failures of the Respondent to appear before the Master.

[32] This Court does not agree with the Appellant’s argument that the High Court had not given any reason as to why it allowed the appeal and had not put “sufficient emphasis” of the Respondent’s five(5) non-appearance. It is important to note that the Court, in the process of arriving at its decision, had first raised and discussed the Master’s analysis of the issue of the validity of Shanon Shavneel Prasad’s affidavit, which encapsulated the detailed submission by the Appellant, it then referred briefly to the Respondent’s submissions and its analysis before it made its decision. Whilst it may be said that the Court had treated rather briskly, by making a short mention only, the five(5) consecutive non-appearances of the Respondent, it was not excluded all together from its final consideration.

This ground has no merit


[33] Ground 2 of the Appeal

This ground is premised on the decision of the Master in the exercise of his discretion and the appellate Court’s grounds, if any, to interfere with it.


[34] The Appellant argued that under the Birkett v. James (supra) principle the appeal court may only review the exercise of the lower court’s discretion, but not substitute its own decision in its place.

[35] The Bickett principle is not absolute, Court notes. There are exceptions where the appellate court will intervene and reverse the decision as stated by Lord Diplock at page 804:

“Where leave is granted an appellate court ought not to substitute its own “discretion” for that of the judge merely because its members would themselves have regarded the balance as tipped against the way in which he had decided the matter. They should regard their function as primarily a reviewing function and should reverse his decision only in cases either (1) where they are satisfied that the judge has erred in principle by giving weight to something which he ought not to have taken into account or by failing to give weight to something which he ought to take into account _ _ _.”


[36] In this case, the Master had emphasised the dilatory conduct of the proceedings by the Respondent and/or its solicitors stating at paragraph (14):

“Between 04th June 2013 and 8 July 2014, the proceedings remained stationary. No steps were taken by the Plaintiff to advance proceedings to trial. Moreover, on 23rd October 2013, the case was taken off the list due to fourth consecutive non-appearance. The matter went to sleep for 13 months. The action lay in abeyance until the registry on 8th July 2014 issued a notice pursuant to Order 25 rule 9 _ _ _”


[37] The Master then proceeded to expound the law as laid down in Birkett v. James (supra) and adopted in Fiji in Abdul Kadear Kuddus Hussein v. Pacific Forum Lines ABU0024/2000; Pratap v. Christian Mission Fellowship (2006) FJCA 41, that all expressed the view that an action may be struck out if the court is satisfied that there has been an inordinate delay and inexcusable delay on the part of the plaintiff or his lawyers and that such delay would give rise to a substantial risk that it would not be possible to have a fair trial of the issues in the action or cause prejudice to the defendant.

[38] It was after a deliberate and careful analysis of the facts of the case, taking into account the interruption to the proceedings, caused by the untimely death of the Respondent’s solicitor and Counsel, that the Master concluded that the Respondent had failed to convince the court that it was serious in its intention to prosecute the case.

[39] Given all of these consideration, Counsel for the Appellant submitted that the Master had correctly given due weight to relevant matters that the Courts should or ought to have taken into account and that the High Court had erred and was wrong in substituting its own discretion for that of the Master’s.

The ground succeeds.


[40] Ground 3 of the Appeal

The Appellant under this ground, submitted that the Court should have taken cognizance of the information that the Respondent had not filed its Annual Returns, as a company, for eight(8) years. This was confirmed by the Appellant’s agents search at the Company’s office, and the Registrar of Companies letter of 12 August also confirmed that the Respondent company had not filed its Annual Returns since 2006. The Registrar of Companies added however that “I cannot confirm that it has been struck off because there is nothing in the file to support this.”


[41] In our view, the fact that the Respondent Company had not filed its Annual Returns and especially knowing that the Registrar of Companies confirmed that it has not been struck off the register, does not invalidate the legal status of the Respondent to bring and continue this proceedings.

This ground is without merit.


[42] Ground 4 of the Appeal

This ground challenges the decision of the High Court to overrule the decision of the Master by it agreeing that the affidavit deposed by Shanon Shaneel Prasad was valid and citing Kim Industries Limited, In Re (No.1) as authority.


[43] The Appellant Counsel argued that section 40 of the old Companies Act applied as the matter was heard and dealt with by the Master on 26 February 2015 before 26 May 2015 when the new Companies Act came into force.

[44] The prevailing law on the affidavit in support on behalf of a company is set out in this Court’s decision R.B. Patel Group Ltd. v. Central Board of Health & Others (ABU0032 of 2022; HBC 231 of 2020). In brief, the combined effects of sections 53 and 54 of the new 2015 Act, no longer requires authentication by the company director, secretary or authorised officer of a document or proceeding. Section 40 of the old Act on which this case was argued before the Master stipulates as follows:

“40. A document or proceedings requiring authentication by a company, may be signed by a director, secretary or other authorised officer of the company and need not be under its common seal.”


[45] Counsel for the Appellant referred to Patrick Paul v. Director of Lands & Others; CBV0018/2019 as authority for the proposition where a third party deposes an affidavit on behalf of a party to the proceedings, he/she must be authorised in writing by the party to depose the affidavit, and furthermore to also depose why its director, or authorised officer, in the case of a company, cannot depose the affidavit.

[46] In this instance, the Respondent’s Counsel argued that the Respondent is a private family company and there was only one surviving Director, Vimal Deo Prasad, who had properly authorised, Shanon Sharneel Prasad his son, through a Letter of Authority and Indemnity dated 30 June, 2014, to depose the affidavit on behalf of the Respondent company.

For the reasons at paragraph [52] to [55] below, this ground succeeds.


[47] In our view, as an aside, it was perfectly within the powers of the Master, as the High Court had suggested, for him to direct the Respondent to rectify the perceived anomaly and adjourn the matter to another day. This was within the powers of the Master to exercise under Order 25 rule 9.

[48] There was a further option to the Master if he had wished to avail himself of it, that we suggest, is provided under Order 25 rule 9(2):

“(2) Upon hearing the application the Court may either dismiss the cause or matter on such terms as maybe just, or deal with the application as if it were a summons for directions.” (emphasis is mine).


[49] Should the Master have considered reverting to rule 9(2), then we believe, the entire options that are available under the Summons of Directions (Order 25) are open to him, including, in particular, Order 25 rule 6(1) and (2) that state:

“Duty to give all information to hearing

6 – (1) Subject to paragraph (2) no affidavit shall be used on the hearing of the Summons for directions except by leave or direction of the Court, but subject to paragraph (4), it shall be the duty of the parties to the action and their adviser to give all such information and produce all such documents on any hearing of the summons as the Court may reasonably require for the purpose of enabling it properly to be dealt with by the summons. . . .

(2) No leave shall be required by virtue of paragraph (1) for the use of an affidavit by any party on the hearing of the summons for directions in connection with any application thereat for any order if, under any of these rules, an application for such an order is required to be supported by an affidavit.”


[50] Any summons to show cause under Order 25 rule 9 and which may be struck out for inadmissible evidence by affidavit, may, we are suggesting, be saved by the court using the provision of rule9(2) together with rule 6(1) and (2).

[51] In this case, however, it is very clear from the Master’s Ruling, that the dilatory conduct of the proceedings by the Respondent and its lawyers that had brought long inordinate and inexcusable delay in the prosecution of the case, and resulted in the writ being struck out.

Respondent’s Submissions


[52] The Respondent, firstly addressed the issue of the admissibility of Shanon Shavneel Prasad’s affidavit and referred to Rawlinson Jenkins Limited v. Hansons (Fiji) Limited (CA NO. HBC 7 of 2013) as authority of anyone other than a director or secretary of a company can still depose an affidavit on behalf of the company. In that case, an accountant of the company was authorised by the director and the affidavit was allowed by the Court.

[53] However, it should be noted that the then applicable section 40 of the Act defined the class of persons who can depose, as limited to “a director, secretary, or other authorised officer of the company . . . .” (emphasis added).

[54] In Rawlinson case (supra) it was the accountant of the company, and in the R.B. Patel Ltd (supra), the affidavit was deposed by the Company’s Chief Executive Officer, In Kim’s case (supra) it was a divisional manager of the company.

[55] In this case, the affidavit, was deposed by a person who, whilst was the son of the director, was not an “officer” or employee of the company, but instead employed by Fiji Airways Limited, and therefore fell outside of the requirement of section 40.

[56] The Respondent’s Counsel also referred to the Court of Appeal’s decision in Pratap v. Christian Mission Fellowship [2006] FJCA 41 in which the courts reinstated a matter after it was lying dormant for 5 years, and in NLTB v. Rapchand Holdings Ltd (supra) the Court of Appeal also set aside the striking out of the defence after deciding, in the particular facts of the case that the defendant should be allowed to contest its liability.

[57] The gist of the Respondent’s arguments is that the end result of the strike out, for whatever reasons, would deprive the Respondent the right to pursue its claim against the Appellant. The total disregard of the affidavit which attempted to explain the delay in the prosecution of the case, and the non-exercise of the discretion by the Master to give leave to amend the affidavit has prevented the Respondent from pursuing the action against the Appellant.

[58] We are of the view that before the Master had struck out the action in his Ruling of 26 February, 2015, he had delved into and discussed almost all the relevant issues raised in Shanon Shelvin Prasad’s affidavit, including especially the reasons for the delay. In the end, this Court believes that even if the affidavit was allowed the Master would still have reached the same decision based solely on the issue of delay.

Conclusion


[59] As a general statement the law recognises a litigants right to pursue or defend a cause or matter. It is the reason why the discretionary powers vested in the court to strike out for want of prosecution under Order 25 rule 9 of the High Court Rules, are to be used sparingly and only in the clearest of cases and, to be left as a last resort. Delay of itself is not enough; it must be inexcusable and amounts to contumacious conduct, having regards to all the circumstances of the case.

[60] In this case, the Respondent had been given opportunities and more than enough time to re-organise itself after the death of one of the directors, and the Court had given time, following the death of the Respondent’s solicitor and Counsel, for the law to take its course on the transfer of the case to another firm of solicitors. The Respondent dawdled.

[61] In the final, notwithstanding what merit the case may have, this Court agrees with the Master’s finding that the delay was inordinate and inexcusable on the part of the Respondent or its lawyers and such a delay may give rise to substantial risk that it is not possible to have a fair trial of the issues or likely to cause or have caused prejudice to the Appellants as between the parties or a third party.

[62] The Master, this Court concludes, in striking out the Respondent’s action in the exercise of his powers under Order 25 rule 9, had properly exercised his discretion and that the High Court was wrong in overruling it.

Mataitoga, RJA


[63] I have reviewed the draft judgment. I concur with the reasons proposed by Jitoko P and the conclusion.

Morgan, JA


[64] I have read the judgment of Jitoko P and concur with the reasoning and conclusion of the Judgment.

[65] The appeal succeeds and this Court orders as follows:


Orders:


(1) That the appeal is allowed.
(2) The Master’s Ruling to strike out the Respondent’s action is reinstated.
(3) Costs of $2,500.00 to the Appellant to be paid within 21 days of this judgment

Hon. Justice Filimone Jitoko
PRESIDENT, COURT OF APPEAL


Hon. Justice Isikeli Mataitoga
JUSTICE OF APPEAL


Hon. Justice Walton Morgan
JUSTICE OF APPEAL


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