Naco v Colonial Mutual Life Assurance Society Ltd [2004] FJHC 357; HBC0413.2003 (11 March 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0413 OF 2003

BETWEEN:

TIMOCI NACO
of 8 Nababa Place, of Suva, Fiji, Businessman
First Plaintiff

AND:

MOSESE MASIREWA
of 8 Nababa Place, Namadi Heights, Suva, Fiji, Salesman and
ANA MASIREWA
of Nauru, School Teacher
Second Plaintiffs

AND:

COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED
(incorporated in Fiji with its office at 3 Central Street, Suva, Fiji)
First Defendant

AND:

KRISHNA SAMI GOUNDER
(f/n Subhu Gounder) of 27 Namuka
Street, Samabula, Suva, Bank Officer
Second Defendant

1st Plaintiff - In Person
2nd Plaintiff - Non appearance
Mr. J. Savou - for 1st Defendant
Mr. R.K. Naidu - for 2nd Defendant

EX TEMPORE JUDGMENT

Introduction

The background of this matter is well known to the Court. The first and second plaintiffs have variously taken out five sets of proceedings seeking forms of similar relief based on the one simple set of facts.

The second plaintiff and his wife Ana Masirewa (hereafter called the “in laws”) were the registered proprietors of Crown Lease No. 2721. The first plaintiff is related to the second plaintiffs by marriage.

The first plaintiff (hereafter called “Mr. Naco”) convinced the “in laws” to put up their property as security for loans advanced to him by the first defendant bank.

Mr. Naco did not repay the loan and it went into default. The “in laws” were unable or unwilling to pay the loan. The bank as mortgagee sought to realise its security by way of mortgagee sale.

The second defendant (hereafter called “the purchaser”) successfully negotiated for the purchase of CL 2721. The bank in exercise of its powers of sale sold the property to the purchaser. He was a bona fide purchaser in good faith. He now owns and occupies the home.

Applications before the Court

There are four applications before the Court.

The first in time is Mr. Naco’s application to strike out the bank’s defence was filed on the 16th of January 2004.

The second application by the bank dated the 26th of February 2004 is for the action to be struck out.

The third application by the “purchaser” applies for the claim to be stayed against his interests.

The fourth application made on the morning of hearing was by Mr. Nagin to withdraw as Counsel for the 1st and 2nd plaintiffs. Leave was granted. I asked if there were any applications consequent on that grant of leave. None were made. There was no appearance by the second plaintiff. They have been served. They knew of this morning's proceedings either by Counsel or their brother-in-law Mr. Naco the first plaintiff who appeared in person.

I will deal with these applications in this order.

Application No. 1
First plaintiff to strike out first defendant’s defence.

Mr. Naco has applied to dismiss and/or strike out with costs the bank’s defence on the classic grounds that:

(a) it discloses no reasonable defence
(b) it is scandalous, frivolous and vexatious
(c) it may prejudice, embarrass or delay the fair trial of the action
(d) is otherwise an abuse of the process of the Court
(e) there would be an inordinate delay in prosecuting the action.

The notice was supported by an earlier affidavit dated the 10th of November 2003 and supplemented by submissions. The first plaintiff was unrepresented but he is no stranger to the Court and is a vigorous litigant. Despite raising and then supporting five classic grounds for the striking out of the defence he primarily rests his argument on one major plank. He submits that the bank should have obtained the consent of the Director of Lands before it embarked on the course of conducting a mortgagee sale or at least have obtained consent to sell the subject land to the purchaser before the transfer was executed. He relies on several decisions which he says support his case. He specifies no supporting detail from these cases but effectively submits that the case precedent is so strong that any defence is unsustainable.

He has wrongly interpreted the cases mentioned in his submission. He has a confused understanding of the applicable principles governing the need to obtain the consent of the Director of Lands.

In terms of Section 13 (Crown Lands Act Cap. 132) while it is unlawful for a lessee to alienate or deal with this type of land without the written consent of the Director of Lands, it is not wrong to enter a contract conditional on that consent. The effect of this section has been settled by numerous judgments of this Court, the Fiji Court of Appeal and the Privy Council. I refer to the decision of Waiqele Sawmills Limited v Colonial Mutual Life Assurance Limited High Court of Fiji Labasa Civil Action No. 0042/1999 a decision of the Chief Justice where at page 4 commenting on similar circumstances he says:

“...section 13 of the Crown Lands Act does not render illegal or null and void the making of the indenture between the parties, rather, this section targets “(a) dealing effected without (the Director of Lands) consent”. In other words this was not a case of “once illegal, always illegal” rather it is the case of an initial conditional occupation being retrospectively rendered legal by the subsequent grant of the Director of Lands consent.”

Again at page 5 paragraphs 2 and 3 the learned Chief Justice comments:

“Thus, it may be stated that Section 13 of the Crown Lands Act is confined in its application to a ‘protected lease’ which bears on its face the statutory formulation: ‘This lease is a protected lease under the provisions of the Crown Lands Act’ [see Damodar Reddy v Ragwa Nand applied in Ganpati v Somasundaram (1976) 22 F.L.R. 194].

Furthermore, the execution by the parties without more, of an agreement for sale and purchase of a ‘protected lease’ made subject to the consent of the Director of Lands, is not in and of itself a prohibited ‘dealing in land’ [see Harnam Singh and Anor v Bawa Singh (1958/59) 6 F.L.R. 31].”

Least I do him any discourtesy whatsoever I should also mention that in his submission Mr. Naco complains that the bank’s bare denials are not proper pleadings and therefore not a reasonable defence and so frivolous and vexatious. It may cause embarrassment or delay to the fair trial of the action, he says.

In many cases a bare denial will not be a proper pleading. But in these circumstances this plaintiff has participated in or known about four earlier actions concerning the same set of facts, issues and similar prayers for relief.

I detect in the drafters sparse pleadings and defence a certain terse response to yet another claim by this litigant or his relatives over the same subject matter. A more measured response by the bank was called for but not strictly required. The plaintiffs well know the matrix of facts at play in these proceedings and the first bank’s position concerning those circumstances. If they had any genuine doubt or required further information a “request for or further better particulars” would have been the more appropriate course to adopt.

At the conclusion of lengthy submissions Mr. Naco was referred back to the five grounds in his application and invited to advance each one. He could not. He went on further and conceded he had no case to argue on each ground. In other words he conceded his application was groundless.

I find this application by the plaintiff completely lacked any merit whatsoever. It was misguided in that even after earlier Judicial consideration this litigant fails to appreciate the basic concepts at play. It was misleading in the sense of this litigant being economical with the truth of the entire circumstances surrounding his claim and the other litigation. It was unnecessary because steps to require further particulars from the bank were not sought. It was frivolous in that none of the grounds advanced could ultimately be supported. I dismiss the application with costs that I fix at $650.00.

Second Application: The first defendant to strike out the statement of claim

In an amended application the bank applies to strike out the action brought against it on the grounds that:

(a) it discloses no reasonable cause of action against the first defendant
(b) it is scandalous, frivolous or vexatious
(c) it is otherwise an abuse of the process of the Court and/or
(d) it is res judicata.

This motion was supported by 2 affidavits and supplemented by full and helpful submissions filed in advance of the hearing. The applicant sets out the background to the matter including a brief description of the numerous proceedings against the first defendant brought by the plaintiff.

Its primary argument is that the present proceedings are substantially the same as those contained in 340/2000, 115/2003 and 63/1999. It submits that as the plaintiffs have failed to successfully prosecute those claims that this action is an abuse of the Court’s processes. It further strongly argues that the plaintiff has misunderstood the law about s.13 and so his claim is baseless.

The Respondent's Position

The first plaintiff respondent had a limited response. He clung to the wreckage of his s.13 argument. He blamed his poor argument on the bad advice and action of counsel he instructed. The one useful thing he did was concede that this litigation duplicates the same facts and in some circumstances effectively the same relief as sought in other proceedings.

The Law

The Fiji Court of Appeal in its decision of NATIONAL MBF Finance (Fiji) Limited v Nemani Buli (CA No. ABU0057.1998) gives good guidance on the principles for striking out. There Lordships said at page 2:

“the law with regard to striking out pleadings is not in dispute. Apart from truly exceptional cases the approach to such application is to assume that the factual basis on which the allegations contained in the pleadings are raised will be proved. If a legal issue can be raised on the facts as pleaded than the Courts will not strike out a pleading and will certainly not do so on a contention that the facts cannot be proved unless the situation is so strong that judicial notice can be taken of the falsity of the factual contention................”

No Reasonable Cause of Action

It is undisputed that Mr. Naco got a loan on the back of his relatives security. It is undisputed that he defaulted in that loan and his relatives were unable to meet their guarantee to the bank. It is undisputed that the bank in those circumstances had a right to exercise its powers of sale under the mortgage. It is undisputed that the contract for sale of the protected lease was conditional on the Director of Lands approval. It is judicially decided and undisputed that the second defendant is a bona fide purchaser for good value and now the registered proprietor of the property acquired under the mortgagee sale.

I must take the pleadings as being capable of proof. However even if I do I can see no prospect of success for these plaintiffs. I accept the bank’s contention that the plaintiffs claim is baseless. The contract was conditional on approval (see above). There is no reasonable cause of action.

Abuse of Process

In Reid v New Zealand Trotting Conference [1984] 1 NZLR 8 at page 9 Richardson J explained the abuse of process principles as follows:

Misuse of the judicial process tends to produce unfairness and to undermine confidence in the administration of justice. In a number of cases in recent years this Court has had occasion to consider the inherent jurisdiction of the High Court, and on appeal this Court, to take such steps as are considered necessary in a particular case to protect the processes of the court from abuse. (See particularly Moevao v Department of Labour [1980] 1 NZLR 464 and Taylor v Attorney-General [1975] 2 NZLR 675). In exercising that jurisdiction the court is protecting its ability to function as a court of law in the future as in the case before it. The public interest in the due administration of justice necessarily extends to ensuring that the courts’ processes are fairly used and that they do not lend themselves to oppression and injustice. The justification for the extreme step of staying a prosecution or striking out a statement of claim is that the court is obliged to do so in order to prevent the abuse of its processes.

The question here is whether it is an abuse of process to bring a succession of proceedings thinly disguised as different but in substantially similar terms when prior proceedings have been struck out or dismissed or are pending?

Further is it vexatious and frivolous to bring and sustain multiple pleadings where one will do?

Finally are some of these issues res judicata?

The Courts exist to resolve disputes in a just manner, filing new proceedings and asking the Courts again to resolve a dispute that is already under adjudication or has already been held to be no longer capable of being decided. (In the absence of very special circumstances) must be an abuse of the processes of the Court. Nothing put forward on behalf of the plaintiffs has convinced me in any way that special circumstances exist here. In my view allowing such proceedings to continue would not only be unfair to the defendants but would also bring the administration of justice into disrepute.

The rule of law requires the existence of Courts for the determination of disputes and that litigants have a right to use the Court for this purpose. Courts must also, however, be alert to their processes being used in a way that results in oppression or injustice that would bring the administration of justice into disrepute. This is because “the Courts Authority – possessed of neither the purse nor the sword – ultimately rests on sustained public confidence in its moral sanction.” (Justice Felix Frankfurter in Baker v Carr [1962] USSC 42; 369 US 186, 267 (1962) (Savil Contractors & Others v B.N.Z. & Others CA 108/02 and 12/03 unreported NZCA 23/24 Sept. 2003).

Concerning the issue of whether these proceedings are vexatious and frivolous with respect I adopt the reasoning of the Learned New Zealand High Court Judge Justice Tompkins in the Bank of New Zealand v Radical Operation Limited & Another [1990] 5 NZCOC 96-364 at page 225:

It is vexatious and an abuse of the process of the court where there are two proceedings that are identical, or sufficiently similar and where the remedies sought in each are equally effective. As Jessel MR put it in McHenry v Lewis [1882] UKLawRpCh 260; (1882) 22 Ch D 397 at p 400, “It is prima facie vexatious to bring two actions where one will do”. In Slough Estate Ltd v Slough Borough Council & Anor [1967] 2 ALL ER 270 Ungoed-Thomas J said at p 276:

”What is required in respect of the procedure is not that there should be precise identity but there should be such identity as does not give an advantage of substance to the procedure sought to be stayed over the procedure before the other forum, or as Lord Esher put it (in re Christiansborg [1885] UKLawRpPro 36; (1885) 10 PD 141, 148) that the Tribunal should give – and I quote his words – ‘the same chance’.”

The plaintiffs want the house back. The proceedings filed by them to achieve that objective have been sufficiently similar and the remedies requested of equal effect to gain that goal. It is a goal that has already been denied them. They have not appealed that decision. Rather in one form or another they have brought additional proceedings.

Indeed in Civil Action No. 377 of 2000 an almost identical prayer of relief is sought. The issue presently before the Court in this file is almost completely identical with the remedy sought in Civil Action No. 155 of 2003. A ruling is yet to be delivered on that matter. The same facts form the background to CA 273/2003. This was struck out. These proceedings are again of striking similarity to those before Scott J in 63 of 1999. This action is still alive.

There is nothing to stop any citizen bringing multiple proceedings one after the other. That right however is subject to the Court’s discretional oversight to ensure its processes are not being abused. I find these proceedings vexatious and an abuse of process of the Court. Mr. Naco or his in-laws have not pursued appeal on other proceedings that were struck out. They have instituted a series of similar actions with similar ultimate goals. They have not finished prosecuting similar claims in related proceedings yet to be pursued.

Result

Accordingly I grant the first defendants application. I accept the second defendant's application to join the first defendant's proceedings. The effect of his application for stay is in effect met by that decision to join the first plaintiff's application.

I dismiss the first plaintiff’s application. Costs against the 1st plaintiff to the first defendant $650.00 and to the second $250.00. The reduced award to reflect a ‘coat-tailing’ by the second defendant.

I strike out the first and second plaintiffs writ of summons dated the 6th of October 2003. I permanently stay this proceeding. I order costs against the first plaintiff in the sum of $650.00 to each defendant and against the second plaintiff the sum of $250.00 to each defendant.

[ Gerard Winter ]
Judge

At Suva
11th March, 2004