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BA Provincial Holdings Company Ltd v BA Provincial Council [2006] FJHC 71; HBC237.2006 (8 September 2006)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. 237 OF 2006

NO. 181 OF 2006

BETWEEN

BA PROVINCIAL HOLDINGS COMPANY LIMITED
1st Plaintiff

ISIMELI BOSE, RATU APISAI NAEVO, RATU MELI SAUKURU, RATU VILIAME RATUVOU, LUKE RATUVUKI, ISIKELI MULASE, PAULIASI NAIVALU, SEMI LEIWERE, ASESELA SADOLE collectively known as THE BOARD OF DIRECTORS OF BA PROVINCIAL HOLDINGS COMPANY LIMITED
2nd Plaintiffs

AND

BA PROVINCIAL COUNCIL
1st Defendant

RATU TEVITA MOMOEDONU, RATU WILIAME BOUWALU, PONIPATE LESAVUA, SIVANIOLO WAQA NAULAGO, AISAKE SEMISI SAUKAWA, JOSAIA DRISO, SAIMONI NAIVALU
2nd Defendants

Appearances: Messrs Law Naivalu for the plaintiffs
Messrs Krishna & Co. for the defendants

Hearing: 1 September 2006
Decision: 8 September 2006

JUDGMENT

[1] The summons which is before me asks for the following orders on behalf of the defendants -

(i) an order that the 1st Plaintiff be dismissed and/or struck out and/or ceased to be a party in the current action

(ii) an order that the 2nd named 2nd plaintiff, Ratu Apisai Naevo be ceased to be a party in the current action and/or be dismissed and/or struck out

(iii) an order that the 5th named 2nd plaintiff, Ratu Josaia Daucia be ceased to be a party in the current action and/or be dismissed and/or struck out

(iv) an order that the 6th named 2nd plaintiff, Ratu Tevita Lewaravu be ceased to be a party in the current action and/or be dismissed and/or struck out

(v) an order that the 9th named 2nd plaintiff, Sivaniolo Waqa Naulago be ceased to be a party in the current action and/or be dismissed and/or struck out

(vi) an order that the 11th named 2nd plaintiff, Semi Leiwere be ceased to be a party in the current action and/or be dismissed and/or struck out

(vii) that the expedited originating summons dated 9th August 2006 and amended expedited originating summons dated 16th August 2006 be struck out and/or dismissed for non-compliance and/or breach of the order dated 15th August 2006

(viii) an order that all the affidavits filed by the plaintiffs and/or affidavits filed on behalf of the plaintiffs be struck out and/or dismissed for non-compliance and/or breach of Order 41 of the High Court Rules 1988

(ix) that the expedited originating summons and ex-parte notice of motion both dated 9th August 2006 and amended expedited originating summons dated 16th August 2006 be struck-out and dismissed for duplicity of actions.

An order that the 1st plaintiff be dismissed and/or struck out and/or ceased to be a party in the current action

[2] The defendants question the authority to sue in the 1st plaintiff’s name. They contend that the 1st plaintiff, Ba Provincial Holdings Company Limited (the company) not having authorized the raising of the action, is not properly constituted as the 1st plaintiff and should be struck out as such. The defendants rely on a company resolution dated 18 August 2006, (exhibit D in the affidavit of Ratu Tevita Momoedonu dated 29 August 2006) resolving that the company withdraw as 1st plaintiff having not given instructions to be a party in these proceedings.

[3] In reply the 2nd named plaintiffs rely on a copy of a "Flying Minute resolution" (flying minute) annexed in the affidavit of Ratu Apisai Naevo dated 9 August 2006, which they claim authorizes them to commence proceedings in the name of the company as well.

[4] The evidence before me shows that the flying minute is also signed by Ratu Viliame Ratuvou and Sikeli Mulase who were not directors of the company. Suffice it to say that there has been no proper ratification of the purported resolution.

[5] Mr. Krishna also submitted that the company need not be a party given that the issues in this case are essentially between the 2nd plaintiffs and the 1st and 2nd defendants. He relies on the principles expressed in the case of Vandervell Trustee Ltd –v- White & Others [1970] 3 All ER 16.

[6] I uphold the defendants on both grounds.

[7] In regard the submission that the action has been instituted without proper authority, I adopt the principle applied in Danish Mercantile Co. Ltd & Others –v- Beaumont and Another [1951] 1 All ER 925 at 930 where Jenkins L. J. expressed the principle to the applied as follows:

"I think the true position is simply that a solicitor who starts proceedings in the name of a company without verifying whether he has proper authority to do so, or under an erroneous assumption as to the authority, does so at his own peril, and, so long as the matter rests there, the action is not properly constituted. In that sense it is a nullity and can be stayed at any time, providing the aggrieved defendant does not unduly delay his application, but it is open at any time to any purported plaintiff to ratify the act of the solicitor who started the action, to adopt the proceedings, and to say: "I approve of all that has been done in the past and I instruct you to continue the action." When that has been done, then, in accordance with the ordinary law of principal and agent and the ordinary doctrine of ratification the defect in the proceedings as originally constituted is cured, and it is no longer open to the defendant to object on the ground that the proceedings thus ratified and adopted were in the first instance brought without proper authority."

[8] In this case the affidavit evidence of both sides has led me to conclude that counsel for the plaintiffs, Mr. Naivalu, has both failed to verify whether he had proper authority to start these proceedings in the name of the company and is under an erroneous assumption as to the purported authority. The flying minute purporting to constitute authority is endorsed by two persons who are not and were not directors. Moreover he has not disclosed evidence of ratification.

[9] On the "parties" issue I adopt the principles Mr. Krishna referred me to in the Vandervell case as expressed by His Lordship Lord Morris of Bourth-Y-Gest at page 19:

"the only question is whether their presence before the Court is ‘necessary’ – i.e. necessary to ensure that all matters in dispute in the cause or matter may be effectively and completely determined and adjudicated upon";

and by His Lordship Lord Diplock on page 31, that:

"......... a party to an action must be a person who claims in that action some relief against another party to the action or against whom some relief is claimed by another party to the action".

[10] There is no relief being sought by the company in these proceedings and having considered the respective submissions I have concluded that it is also not necessary for the company to be a plaintiff.

[11] The company is struck out as 1st plaintiff.

An order that the 2nd named 2nd plaintiff, Ratu Apisai Naevo be ceased to be a party in the current action and/or be dismissed and/or struck out

[12] There is dispute about whether the birth certificate relied on by the defendants is in fact that of Ratu Apisai Naevo. The birth certificate contains the details of one Avisai Dere. Mr. Naivalu submitted that his instructions were that the birth certificate is not that of Ratu Apisai Naevo. There being a dispute about Ratu Naevo’s age and whether the birth certificate relates to him is an evidenciary matter that requires further evidence and as such I decline this relief.

Orders that Ratu Josaia Daucia, Ratu Tevita Lewaravu, Sivaniolo Waqa Naulago and Semi Leiwere be struck out as plaintiffs

[13] Mr. Naivalu has conceded that he failed to obtain instructions from Ratu Lewaravu, Mr. Naulago and Mr. Leiwere. Ratu Daucia is deceased. They have already been struck out as plaintiffs. Mr. Naivalu has accepted that he is liable to pay costs for improperly instituting proceedings on their behalf without their consent. I find the estimated costs payable submitted by Mr. Krishna to be excessive and fix costs payable to Ratu Lewaravu, Mr. Naulago and Mr. Leiwere in the sum of $250.00 each. These costs are to be paid by Mr. Naivalu within 7 days. The costs ordered are in respect of these proceedings only.

[14] There is a further issue. It transpired in the course of the hearing that Mr. Isimeli Bose, Ratu Viliame Ratuvou and Isikeli Mulase who are all named as the Board of Directors of the company are not directors of the company and never have been. Their names are also struck out as 2nd plaintiffs. Mr. Naivalu conceded at the hearing that Mr. Bose has never been a Director of the company. He stated that Mr. Bose was included as a 2nd plaintiff in his capacity as Chief Executive Officer of the company. If Mr. Bose has never been a director of the company, Mr. Naivalu has incorrectly described and included him as a plaintiff in a purported capacity of director of the company. Mr. Bose cannot sue as a director in these proceedings if he has never been one. Earlier proceedings involving the same parties and the same dispute, namely civil action 225/06, brought by Mr. Bose as the dismissed CEO separately from the other plaintiffs who were also parties, have been terminated. In the earlier case, I had concluded, on an ex-parte application argued by Mr. Naivalu that Mr. Bose had a cause of action and there were serious issues to be tried in respect of the cause of action pleaded. Mr. Naivalu’s carelessness, bordering on incompetence, in instituting these proceedings on behalf also of Mr. Bose in a capacity Mr. Bose is not entitled to sue, potentially deprives his client a cause of action, as the pleadings in this case stand. Mr. Naivalu rested on his admission that Mr. Bose has never been a director of the company and made no attempt to correct the error made.

That the expedited originating summons dated 9th August 2006 and amended expedited originating summons dated 16th August 2006 be struck out and/or dismissed for non-compliance and/or breach of the order dated 15th August 2006

[15] Mr. Naivalu conceded that he breached my orders of 15 August 2006. Not only did he fail to serve the defendants as I had specifically ordered, he failed to apply for leave as ordered and filed instead the amended expedited originating summons dated 16 August 2006. I have granted leave notwithstanding counsels non-compliance. The prejudicial impact, if any, of the non-compliance can be remedied by an appropriate order for costs at the conclusion of this case.

An order that all the affidavits filed by the plaintiffs and/or affidavits filed on behalf of the plaintiffs be struck out and/or dismissed for non-compliance and/or breach of order 41 of the High Court Rules 1988

[16] Mr. Naivalu has acknowledged failure to comply with Order 41 Rules 9 (2) and 11 (1) of the High Court Rules. All the affidavits filed by the plaintiffs are defective. However again I do not believe that the defendants have been unduly prejudiced. I have granted leave to the 2nd plaintiffs to use the affidavits in the form filed despite the failure by counsel to comply with the mandatory rules relied on by Mr. Krishna. Leave was sought, on my suggestion in the course of the hearing that the defects were capable of being cured. I caution Mr. Naivalu that any further non-compliance may prove fatal. The delay and wastage of resources caused by the continuing series of errors on his part is unsatisfactory and inconvenient for all concerned including the Court. His misguided submission that I ought to give priority to this case notwithstanding that the continuing delay is caused by his failure to comply with the High Court Rules and orders, because in effect that the case concerned a company and parties who are indigenous Fijians is both discourteous to those involved in the dispute and contrary to Constitutional provisions he is bound to uphold and which he said he had not considered.

[17] Notwithstanding and largely to avoid further delay leave is granted to use the defective affidavits in these proceedings pursuant to O. 41r. 10 (1). What weight I give to the affidavits filed by Mr. Bose is a matter to be determined at a later date.

That the expedited originating summons and ex-parte notice of motion both dated 9th August 2006 and amended expedited originating summons dated 16th August 2006 be struck-out and dismissed for duplicity of actions

[18] Mr. Naivalu submitted that there is no duplicity between the earlier proceedings in civil action no. 225 of 2006 and this case. I note that the notice of discontinuance issued in respect of civil action no. 225 of 2006 was filed simultaneously with these proceedings. I am satisfied that the 2nd plaintiffs filed the notice in compliance with Order 21 rule 2 (5) of the High Court Rules. New proceedings after a discontinuance are allowed on the same cause of action. The discontinuance terminated the earlier action but preserved the 2nd plaintiffs right to commence another action based on the same complaint.

[19] However in the earlier action I heard the plaintiffs application for injunctive relief, albeit ex-parte and gave judgment declining injunctive relief before the notice of discontinuance was filed. That creates an estoppel as to new and similar applications for virtually the same relief. My earlier judgment was based on the pleadings and my assessment of uncontested facts. Mr. Naivalu maintains that the injunctive relief sought in these proceedings are different. That is not so.

[20] He submitted that the parties in both actions are different. Again that is not so. The parties are the same, the only difference being that the names of the directors whose appointments as such came to an end on 31 July 2006 are specifically named in this action. In the earlier case they were collectively the 2nd plaintiff described as the Board of Directors. In the earlier case, Mr. Bose sued as 3rd plaintiff in his capacity as the dismissed Chief Executive Officer. In this case, Mr. Bose was included as 2nd plaintiff in a purported capacity of director.

[21] Mr. Naivalu submitted that the injunctive reliefs sought are different. That is clearly not the case. For his benefit, a comparison of the injunctive relief sought in the pending motion herein and those which I dealt with in the earlier case are set out hereunder.

A] Civil Action No. 237 of 2006 [Notice of Motion – 9th August]

iii] An injunction that the defendants be restrained from performing any duties for and on behalf of the 1st plaintiff company forthwith.