Uluinayau v National Bank of Fiji [1996] FJHC 106; Hbc0175d.94s (12 March 1996)

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

ACTION NO. HBC0175 OF 1994

BETWEEN:

LAISENIA ULUINAYAU and
MEREWAI ULUINAYAU
both of 56 Raisara Road, Suva
Plaintiffs

AND

NATIONAL BANK OF FIJI
a body corporate duly constituted under
the National Bank of Fiji Act Cap. 213
Defendant

Vandhana Narayan for the Plaintiffs
V. Kapadia for the Defendant

Date of Hearing: 4th November 1996
Date of Interlocutory Judgment: 3rd December 1996

INTERLOCUTORY JUDGMENT

The Plaintiffs issued the Writ in this action on the 13th of April 1994 with a general Endorsement of Claim seeking to restrain the Defendant from exercising its powers of sale under its Mortgage with the Plaintiffs in respect of the land comprised in Certificate of Title No. 24452.

On or about the 15th of April 1994, the Defendant was served with an Interim Injunction Order which I made the previous day restraining it from selling the Plaintiffs' property.

The Defendant then applied to set aside my order of the 14th of April 1994 and on the 26th of August 1994 I dissolved the ex-parte order which I had made on 14th April.

Thereafter the Plaintiffs did not take any further action in relation to these proceedings until the 19th of June 1996 when a Notice of Intention to Proceed was filed, almost two years after I had dissolved the Interlocutory Injunction.

The main reason why I dissolved the Injunction was that I found that the Plaintiffs had failed to disclose material facts which are mentioned in my Judgment.

In the penultimate paragraph of my Interlocutory Judgment delivered on 26th August 1994 I stated, "There is nothing in the evidence before me to satisfy me that the Defendant has been guilty of any fraud. Given the fact that the Plaintiffs were unable to honour the promises they had made to the Defendant to pay the money owed on their Mortgage, in my judgment the Defendant at least prima facie was justified in advertising the property for sale and then accepting the tender of the new purchaser."

Counsel for the Plaintiffs had stated during argument on the Defendant's application to dissolve the Injunction that as a result of an administrative mistake by the Defendant the Plaintiffs, a young couple were likely to lose their property.

In the Amended Statement of Claim delivered on the 17th of July 1996 to which I shall refer in more detail, the Plaintiffs now allege fraud by the Defendant and not merely administrative mistake.

The Plaintiffs remained in possession of the property after its sale to a couple named Osea and Naitoko Masinika which resulted in the Masinikas taking eviction proceedings against the Plaintiffs under the provisions of S.169 of the Land Transfer Act Cap. 131. These proceedings were heard by Scott J. who delivered his judgment on the 13th of October 1995 and granted the Masinikas an order for possession forthwith.

On pages 2 and 3 of his four-page judgment Scott J. quoted my remarks in my judgment of the 26th of August 1994 to the effect that the Defendant had not been guilty of any fraud. He then stated that the Defendants had once again averred that the Defendant had acted fraudulently but they had also added an allegation of fraud against the new purchasers of their property.

Scott J. very much doubted these allegations.

The Defendants vacated the property shortly after the delivery of Mr. Justice Scott's judgment.

The first Statement of Claim prepared by the third firm of solicitors the Plaintiffs have engaged in these proceedings is dated 19th of June 1996 and the Amended Statement of Claim which is virtually identical with the first except that it claims interest on money said to be due to the Plaintiffs in an action in the Magistrate's Court in Suva, was delivered on the 17th of July 1996.

In their Statement of Claim the Plaintiffs claim damages for the loss of their freehold property, the return of the sum of $7,800.00 which they say the Defendant has wrongfully retained and the sum of $7,149.16, the amount of their claim in the Magistrate's Court, being the alleged balance of the purchase price paid under the Mortgagee Sale to which the Plaintiffs were entitled.

On the 9th of August 1996 the Defendant delivered its defence to the Plaintiffs' Statement of Claim. Generally speaking it denies the Plaintiffs' allegations.

On the 20th of August 1996 the Defendant issued a Notice of Motion for Security of Costs but on the 23rd of August the Defendant issued a Summons which is now before me seeking an order that this action be struck out for want of prosecution.

The Summons was not supported by any affidavit but the Plaintiffs filed an affidavit in answer to the Summons which gives reasons for their failure to take any steps in relation to the application for a period of almost two years. The Defendant claims that because of the allegations of fraud made by the Plaintiffs it was incumbent on the Plaintiffs to proceed diligently with their action.

The Defendant concedes that the limitation period has not expired but says that the reasons advanced for the Plaintiffs' delay namely unemployment by both Plaintiffs, secondly inability to pay the fees to their then solicitors and thirdly the fact that several other solicitors whom they consulted declined to act for reasons of conflict of interest should not be a valid excuse for the court to allow the Plaintiffs to proceed with their action at this time.

The Defendant claims that the delay is inordinate and inexcusable having regard to the delay after the issue of the Writ which it is said will clearly prejudice the Defendant in the defence of this action.

There is no evidence before me of any prejudice likely to be suffered by the Defendant and indeed counsel for the Defendant frankly and properly conceded that he believed witnesses would be available to give evidence for the Defendant.

Mr. Kapadia submitted that because of the allegations now made by the Plaintiffs, if this action proceeds much discovery will be necessary and he claims that the trial of the action may not take place until approximately November 1997. In my view this is a realistic estimate.

The question still remains whether dismissal of the Plaintiffs' claim which has been issued within the limitation period provided in Section 4(1) of the Limitation Act Cap. 35 is justified. I have come to the conclusion that it is not, despite the reservations I must naturally have at this stage about the allegations of fraud made by the Plaintiffs. However it is possible that they will now be able to lead some evidence of this and in my view they should be given the opportunity.

The three leading cases on this subject are Allen v. Sir Alfred McAlpine & Sons Ltd and Another (1967) 2 Q.B. 229, Birkett v. James (1978) A.C. 297 and Department of Transport v. Chris Smaller (Transport) Ltd (1989) 1 ALL E.R. 897, a decision of the House of Lords. Birkett v. James is now regarded as an authority for the proposition that the Courts will usually not entertain any application to strike out while the limitation period is still running, unless there are exceptional circumstances. The rationale behind this is that if the limitation period is still running, the Plaintiff can simply file another action if the current one is struck out and the Defendant will therefore only be faced with more inconvenience and expenses. In Birkett v. James Lord Diplock who was also a member with Lord Salmon of the Court of Appeal in Allen v. Sir McAlpine & Sons Ltd and Another said at page 320 of the House of Lords report:

"Upon issuing his new writ the plaintiff would have the benefit of additional time for repeating such procedural steps as he had already completed before the action was dismissed. This can only aggravate; it can never mitigate the prejudice to the defendant from delay."

He expanded this statement on page 321 when he said:

"Where all that the plaintiff has done has been to let the previous action go to sleep, the court in my opinion would have no power to prevent him starting a fresh action within the limitation period and proceeding with it with all proper diligence notwithstanding that his previous action had been dismissed for want of prosecution.

If this be so, it follows that to dismiss an action for want of prosecution before the limitation period has expired does not, save in the exceptional kind of case to which I have referred, benefit the defendant or improve his chances of obtaining a fair trial; it has the opposite tendency."

And finally at page 322 he said this:

"For my part, for reasons that I have already stated, I am of opinion that the fact that the limitation period has not yet expired must always be a matter of great weight in determining whether to exercise the discretion to dismiss an action for want of prosecution where no question of contumelious default on the part of the plaintiff is involved; and in cases where it is likely that if the action were dismissed the plaintiff would avail himself of his legal right to issue a fresh writ the non-expiry of the limitation period is generally a conclusive reason for not dismissing the action that is already pending."

At page 328 Lord Salmon said:

"I am not saying that it is impossible for an action to be properly dismissed for want of prosecution before the expiration of the limitation period but this can happen only in the most rare and exceptional circumstances - none of which exist in the present case."

Finally in the same case Lord Edmund-Davies said at page 334:

"Such being the law as I understand it, I respectfully concur with my noble and learned friend, Lord Diplock, that, where there appears any likelihood that a plaintiff will issue a second writ, the case must be quite exceptional (and difficult to imagine) where the court should within the limitation period dismiss an action simply for want of prosecution."

Counsel for the Defendant submits that I should regard Birkett v. James as a case based on the English practice where costs generally may be recovered on a standard scale in which the successful party is likely to receive about two-thirds of his legal costs from his opponent. In Fiji I am informed and have no reason to doubt that a successful party is likely to recover only five percent of his legal costs from his opponent. However that may be, in my opinion it does not affect in any way the principles stated in Birkett v. James which have been followed consistently in Fiji and elsewhere ever since the decision was given.

As to contumelious conduct in Allen v. Sir Alfred McAlpine and Sons Ltd the Court of Appeal stated this included "disobedience to a peremptory of the court".

In Odgers on High Court Pleading and Practice 23rd Edition 1991 at page 302, a very respected authority, the author defines contumelious conduct as "disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court".

In my judgment the Plaintiffs cannot be said to have been guilty of any contumelious conduct. They have not disregarded any peremptory order of the Court, the reason for their delay being due to their unfortunate financial position and consequent inability to engage a solicitor.

This leaves the question of whether there has been inordinate and inexcusable delay which will cause serious prejudice to the Defendant and give rise to a substantial risk that it will not be possible to have a fair trial of the issues. I have already said that there is no evidence from the Defendant as to how, if at all, it will be prejudiced if this action proceeds and of course, there is counsel's concession that the Defendant expects to have witnesses available.

Finally it is submitted by the Plaintiffs that by filing a defence, the Defendant has led the Plaintiffs to believe that it accepted the delay and was prepared to go ahead with the case. It is said that the Defendant is therefore estopped from bringing this application. I have some doubt about this submission but find it unnecessary to give any decision on it in view of my clear conclusion that this action should not be struck out for the reasons I have given. Summarised they are:

(1) The limitation period is still running, and if the action is struck out, the Plaintiffs can file another action.

(2) There has been no contumelious conduct or abuse of process by the Plaintiffs.

(3) There has not been inexcusable delay; the delay has been satisfactorily explained.

(4) The Defendant has suffered no prejudice, and has filed no evidence.

For these reasons the Defendant's Summons of 23rd August 1996 is dismissed. Costs will be in the cause.

JOHN E. BYRNE
JUDGE

Legislation:

Limitation Act Cap. 35.

Cases referred to in judgment:

Allen v. Sir Alfred McAlpine & Sons Ltd and Another (1967) 2 Q.B. 229
Birkett v. James (1978) A.C. 297
Department of Transport v. Chris Smaller (Transport) Ltd (1989) 1 ALL E.R. 897

The following additional cases were mentioned in argument:

McKanna v. Aspect Homes Pty Ltd [1983] FCA 345; [1983] 72 FLR 476
Vidler v. Merit Engineering Pty. Ltd. - unreported judgment of Miles C.J. - Supreme Court of Australian Capital Territory Report 3rd April 1987

HBC0175D.94S