Gulson v Smith [1993] FJHC 42; Hbc0279d.91s (5 May 1993)

IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

ACTION NO. 225 OF 1989 AND 279 OF 1991

BETWEEN:

LENNARD ASHWORTH GULSON
of Malololailai Island, Malololailai, Businessman.
Plaintiff

AND:

RICHARD SYDNEY SMITH
of Malololailai Island, Malololailai, Company Director
First Defendant

AND:

REGISTRAR OF TITLES
of Suva
Second Defendant

Miss Gwen Phillips: For the Plaintiff
Dr. M.S. Sahu Khan: For the First Defendant

Date of Hearing: 27th January 1993
Date of Ruling: 5th May 1993

RULING ON APPLICATION FOR LEAVE TO AMEND DEFENCE

In these actions which have been consolidated the Plaintiff issued an Originating Summons on 31st July 1989 in which he seeks the following orders:

(1) That the First Defendant execute a transfer of D.P.6025 being part of Certificate of Title No.17202 to the Plaintiff the said Lennard Ashworth Gulson.

(2) Alternatively the Second Defendant be substituted to execute the transfer of D.P.6025 to the Plaintiff.

(3) Costs.

(4) Such further or other relief.

The Summons is supported by an affidavit sworn on behalf of the Plaintiff by his son Lennard Maurice Ashworth Gulson on 18th July 1989 and then a Statement of Claim dated 23rd January 1990.

An Affidavit in Reply was sworn on behalf of the First Defendant by the Managing Clerk of the solicitors for the First Defendant and a Defence and Counter-Claim was filed by the First Defendant on 4th March 1992.

The Second Defendant has sworn two affidavits as to the facts and has indicated that he will take no part in the action and will abide by any order the Court makes.

The action was fixed for hearing before me on 27th and 28th January 1993 but owing to a part-heard case to which I had given priority it would not have been possible to complete the hearing of the instant case on the days allocated by the Chief Registrar.

On 27th January 1993 the First Defendant applied for leave to amend his Defence by adding two paragraphs to paragraph 14 of the Defence namely proposed paragraphs 14.A and 14.B, the effect of which, if leave were granted, would be to allege that all proceedings between the Plaintiff and the First Defendant were settled by a Deed of Release dated 11th December 1980 in respect of a judgment obtained against the Plaintiff in the High Court of New Hebrides (now Vanuatu) on 23rd September 1980 which was registered in the Supreme Court of New South Wales on 29th September 1980.

The proposed additional paragraph 14.B to the Defence alleges that the claim by the Plaintiff is statute barred by the Limitation Act and it is claimed that the Plaintiff is guilty of laches. No particulars are given.

The Plaintiff's claim as it appears from the pleadings before the Court is that on or about 13th July 1973 at a properly convened meeting of the Board of Directors of Leeward Islands Limited (hereinafter referred to as "the Company) it was resolved inter alia that the Company would transfer to the Plaintiff part of the land comprised in Certificate of title No.17202 consisting of about three acres in area. It is alleged that the First Defendant was at all material times a shareholder and Director of the Company and that the Company was voluntarily wound-up pursuant to a special resolution passed on or about 22nd March 1981 and a Liquidator appointed.

It is then alleged that the then Supreme Court of Fiji at Suva in Civil Action No. 915 of 1981 ordered the Company on 8th February 1985 to transfer the said three acres to the Plaintiff.

On or about 8th February 1985 the Plaintiff lodged and registered a Caveat to protect his interest in the three acres. It is then alleged that on or about 8th March 1985 the Company registered a transfer of the Certificate of Title No.17202 in favour of the First Defendant, which transfer was made subject to the Plaintiff's Caveat.

The Statement of Claim then alleges that pursuant to the original resolution and agreement of the parties of 1973 and the Order of the Supreme Court of 1985, the Plaintiff and the First Defendant further agreed in or about February 1985 to carry out a general survey of Certificate of Title No.17202 to better identify the Plaintiff's three acres.

Following this survey the First Defendant caused to register a deposited plan with the Registrar of Titles which is No.6025 and shows the three acres as Lot 1 thereon.

Paragraph 11 of the Statement of Claim states that at all material times the First Defendant knew of and agreed to the Plaintiff's interest in the three acres and acquired and now holds the same in trust for the Plaintiff.

The Plaintiff alleges that despite requests by him the First Defendant has failed to transfer the three acres to him and refuses to do so.

As a result of this refusal the Plaintiff claims to have suffered damage and loss. He then seeks various relief which, for the purpose of this ruling, it is not necessary to mention.

The Affidavit in Reply on behalf of the First Defendant, and his later Statement of Defence, allege that the Agreement made between Leeward Islands Limited and the Plaintiff was obviously not referred to the Learned Judge who made the Order on 8th February 1985, this being Mr. Justice Kermode. The First Defendant claims that the Plaintiff and Leeward Islands Limited through the First Defendant have been negotiating to settle and reach an agreement in respect of the Action No. 915 of 1981 and in December 1984 and January 1985 the Plaintiff and the Company had agreed that the Action No. 915 of 1981 be settled on various terms which were recorded and sent by telex to the Plaintiff in February 1985 and then, confirmed by letter to the Plaintiff's former solicitors. It is alleged that it was agreed that the land would be used for residential purposes and that the Plaintiff's then solicitors acknowledged the Agreement by letter dated 4th January 1985.

The First Defendant then claims that in spite of this Agreement Mr. Justice Kermode was not informed of the Agreement when he made the Order of 8th February 1985 and the Order was secured fraudulently by the Plaintiff.

The First Defendant also claims that in any event the First Defendant became the registered proprietor of the land whereas the Order referred to Leeward Islands Limited which was in liquidation at the material time and the First Defendant was not the liquidator and that although he may have been an officer and shareholder in the Company he was not a party to that action or the Order nor legally was he in control of the Company. The Defendant alleges that once the transfer to him was registered the Registrar of Titles had no authority to lodge the Caveat on behalf of the Plaintiff and that in any event the Supreme Court Order related to a different lot and deposited plan namely Lot 1 on D.P.5633.

The First Defendant alleges that the whole transaction and\or Court Order was tainted with illegality by virtue of the Sub-Division of Lands Act and the Land Sales Tax Act; again no particulars are given.

The Defendant finally alleges that he was not aware of the Order of 8th February 1985 until well after it was made when he allegedly lodged a very strong protest.

When the matter came before me on 27th January counsel for the Defendant informed me that the amendment to the Defence was sought under Order 20, Rule 5 and Rule 6 and Order 28, Rule 2(6) of the High Court Rules. It seems to me however that Order 20, Rule 7 is also relevant to the question before me for that rule states that for the purpose of determining the real question in controversy between the parties to any proceedings, the Court may at any stage of the proceedings permit an amendment to any document. The effect of the various authorities on the subject is that an amendment will be allowed if it can be made without injustice to the other side however late, and however negligent or careless may have been the first omission so long as this will help to determine the real question in issue between the parties.

I shall refer to some of these authorities shortly. They are not disputed by Miss Phillips who appears for the Plaintiff but who submits that in the exercise of my discretion I should not allow the proposed amendments at this stage.

Before going to the authorities however I should record that I was informed by counsel for the Defendant that the reason why an amendment is being sought at such a late stage of the proceedings is that so far his firm had been taking instructions through Messrs S.B. Patel & Co. who are the First Defendant's normal solicitors and that Dr. Sahu Khan is appearing as counsel for the First Defendant although his firm is now on the Court record.

Counsel informed me that he came into possession of a Release signed by the present parties early in January 1993 and shall refer to this document in a moment. I should state here however that during argument counsel for the Plaintiff sought and was granted leave to file an Affidavit in Reply to that sworn by the Defendant for the purpose of the present application and that I delayed my ruling on the Defendant's application pending the filing of a further affidavit by the Plaintiff. Counsel for the Plaintiff however informed me on 29th April that the Plaintiff did not intend to file any further affidavit.

Counsel for the First Defendant has handed me a photocopy of the Release on which the Defendant seeks to rely in support of his application to amend his Defence. Miss Phillips for the Plaintiff submits that it is irrelevant to the present proceedings but concedes that it is a matter of evidence to be given later.

The document is dated the 11th day of December 1980 and purports to be made between Plaintiff of the one part and VALESDIR LIMITED a Company duly incorporated and having its registered office in Vanuatu and RICHARD SIDNEY SMITH of Malololailai Islands Fiji called "the Smith interests" of the other part. It contains a preamble consisting of six paragraphs numbered A to F. Paragraph A recites that Valesdir Limited obtained a verdict and final judgment against Lennard Gulson in the High Court of Vanuatu on 23rd September 1980 for the sum of $A90,000.00 plus interest in the sum of $A18,000.00 plus costs making a total judgment debt of $A134,263.00.

Paragraph B recites that Valesdir obtained a verdict and final judgment against Gulson in the Supreme Court of New South Wales on 29th September 1980 for the sum of $A108,000.00 plus costs as agreed or taxed being the amounts comprised in the Vanuatu judgment.

Paragraph C states that Valesdir commenced bankruptcy proceedings in the Federal Court of Australia General Division in reliance upon the New South Wales judgment.

Paragraph D states that the said Richard Sidney Smith has a claim for costs arising out of the proceedings described in Recital A.

Recital E states that Valesdir has claims for costs against Gulson in respect of the New South Wales judgment and the Bankruptcy Proceedings.

Paragraph F states the parties have agreed to irrevocably settle once and for all debts claims and demands made by and against each other and to mutually release and discharge each other upon and subject to the terms and conditions herein contained.

The Deed then continues in Paragraph 1 that in consideration of the sum of $A135,000.00 paid by Gulson to a firm of solicitors in Sydney at the direction of Valesdir, Valesdir hereby releases and discharges Gulson from the Vanuatu judgment and the New South Wales judgment in respect of all claims, demands, costs and expenses relating thereto.

Paragraph 2 states that "the Smith interests" hereby jointly and severally release and discharge Gulson from all actions, claims, demands, costs and expenses of whatsoever nature and kind and wheresoever and howsoever arising which the Smith interests or any one or more of them has or may hitherto have had against Gulson to the intent that no one or more of the Smith interests shall have any claims or rights of action against Gulson in respect of any matters, actions or omissions arising or done or omitted to be done prior to the execution of the Deed.

By Paragraph 3 Gulson releases and discharges the Smith interests from all actions, claims, demands, costs and expenses which Gulson has or may hitherto have had against any one or more of the Smith interests to the intent that Gulson shall not have any claims or rights of action against the Smith interests of any one or more of them in respect of any matter, actions or omissions arising or done or omitted to be done prior to the execution of the Deed.

Paragraph 4 states the releases and discharges thereinbefore contained may be pleaded in bar in any proceedings wheresoever brought or commenced by Gulson against any one or more of the Smith interests or by any one or more of the Smith interests against Gulson.

Under Paragraph 5 Gulson acknowledges that he is the beneficial owner free from any encumbrance of a yacht named "Victory".

The Release appears to be signed by one L.A. Gulson and R.R. Bruce on behalf of Valesdir Limited and R.S. Smith.

It will be observed that "Sidney" is spelt differently on the Release from the way it is spelt in the instant proceedings but nothing may hinge on this. It will also be observed that on the face of it the Release does not appear to have anything to do with the present application in this Court. It appears to relate essentially to a claim for costs by Richard Sidney Smith against the present Plaintiff arising from a judgment in the High Court of Vanuatu which was subsequently registered in the Supreme Court of New South Wales.

The Company Valesdir is not a party to the proceedings in this Court and I presume that the Defendant proposes to argue that the term "Smith interests" is wide enough to refer to the Defendant in this action.

It would also appear that the yacht "Victory" was an asset of Mr. Gulson on which Valesdir and the "Smith interests" hoped to rely in obtaining satisfaction of their judgment. Whether this yacht has any relevance to the matter before me may be revealed later but I mention it as a further example of the apparent differences between the proceedings in this Court and those in the Court of Vanuatu and New South Wales.

General Principles for Grant of Leave to Amendment

There have been various statements by Courts and Judges of the highest standing on this, from which it is clear that one of the most important principles guiding the Courts is that, generally speaking, all such amendments ought to be made "for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings" (see Jenkins L.J. in G.L. Baker Ltd. v. Medway Building & Suppliers Ltd. [1958] 1 W.L.R. 1216, p.1231; [1958] 3 All E.R. 540, p.546).

One of the most recent statements of the principles to be applied is contained in some remarks of Lord Griffths in Ketteman and Others v. Hensel Properties Ltd. and Others (1987) A.C. 189 at p.220 where his Lordship said:

"But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other."

I have very serious doubts on the material before me as to whether the Release sought to be used by the Defendant was intended to cover the present proceedings. It seems very strange that only shortly before the date of trial this document should make its appearance. There is not a word said about it in either the Defendant's affidavit or his Defence or in any of the correspondence referred to in the pleadings. Likewise there is no mention of it in the Defendant's list of documents which have been discovered. This list is dated the 18th of May 1992 and contains two collections of documents one of which is the Copy Pleadings and the Other "Miscellaneous Letters".

Clearly as of the 18th of May 1992 the Defendant had no intention of relying on the Deed which he now seeks to use; if he did have such intention then it should have been referred to specifically in his list of documents. I also observe that the Statement of Defence is dated 4th March 1992 and it is strange that for almost four years since this action was begun there has been no reference to this Deed by the Defendant.

The question is first whether or not the Release is likely to have any relevance to the matters in dispute in this action and secondly whether if I allow the amendment the Plaintiff could be compensated for by money?

As to the first question, my doubts have been to some extent resolved by Miss. Phillips' concession that the relevance of the Deed is really a matter of evidence later. As to the second question I believe that the Plaintiff can be compensated by an award of costs. The Plaintiff came from California to Fiji for the purpose of the hearing and he accepted an offer from the Defendant to pay one half of his airfare from the 26th to the 28th of January 1993 and reasonable accommodation expenses for this period.

In the circumstances I am prepared to grant the Defendant leave to amend his Defence in the manner proposed on the additional condition that he pay the Plaintiff his costs of the present application. There will be orders accordingly.

JOHN E. BYRNE
J U D G E

HBC0279D.91S