Ca'bella Pacific Construction (Fiji) Ltd v Yakuve Island Resort Ltd [2008] FJHC 222; HBC415.2005 (12 September 2008)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC 415 OF 2005

BETWEEN:

CA’BELLA PACIFIC CONSTRUCTION (FIJI) LIMITED

LOMAC CONSTRUCTION AND PROJECT SERVICES
LIMITED
Plaintiffs

AND:

YAKUVE ISLAND RESORT LIMITED
Defendant

Mr. W. Clarke for Plaintiffs
Mr. D. Sharma and
Mr. P. Sharma for Defendant

Date of Hearing: 5th September 2008
Date of Judgment: 12th September 2008

DECISION ON AMENDMENT

Application for Amendment:

Three years since the filing of the case, the parties have still not gone past the procedural stage. The present is an application for amendment of the statement of claim. It is the second amendment to claim which is sought. The plaintiffs’ reason for seeking the amendments is that it became aware of certain facts and evidence emerged during the process of discovery thereby requiring amendment. The application is opposed.

Principles of Amendment: Order 20 Rule 5

Order 20 Rule 5 of the High Court Rules gives the court discretion to allow amendment to pleadings at any stage of the proceedings. The purpose of the power to grant leave to amend is to ensure that there is a determination of the real questions of controversy between the parties: Order 20 Rule 7. Litigation should not only be conclusive once commenced but it should deal with the whole contest between the parties, even if it takes some time and some amendment for the crux of the matter to be distilled: Ganga Ram v. Shyam Narayan & Another – ABU 24 of 1975. Courts exist to determine rights of parties not to punish or discipline them for any errors they may have made especially if any prejudice to the other party can be compensated by way of costs.

Basis of Case:

The dispute between the parties arises out of a building agreement entered on 1st December 2003 under which the plaintiff agreed to build a resort for the defendant at Yaukuve Island. The consideration was over nine million dollars. The contract was to be completed by 24th December 2004. In the first amended statement of claim the plaintiff had alleged a number of breaches of the express and implied terms of the contract. It had alleged that the defendant had wrongfully repudiated the contract.

Proposed amended claim:

The proposed second amended statement of claim is annexed to the affidavit of Selai Vonotabua sworn on 1st August 2008. It is a substantial amendment to the previous statement of claim. I note at this stage that there is reference to Appendix 2 at paragraph 11.1(b) of the amended claim but such appendix is not attached. The proposed amendment claim is more detailed. It sets out all the written documents like the mobilization agreement, the Building Contract, general conditions, designs and specifications the plaintiff is relying upon. It refers to particular clauses and the various documents on the basis of which each allegation is made. It has headings for each issue separately. In that way it would assist the court to quickly focus onto those clauses and issues during the trial and when considering the evidence during writing of the judgment.

Grounds for opposition:

Mr. Sharma is opposing leave to amend on a number of grounds. These are:

1. No locus to sue.

First he stated that the contract was with Ca’bella Lomac construction a firm and not the two plaintiffs. He says it was with a joint venture and not with individual companies. During the course of inter changes and the hearing, Mr. Sharma conceded that the issue was debatable. The defendant has a counterclaim and in the event of the defendant succeeding in its counterclaim, then the problem of enforcement would face him if the plaintiffs were just a trade name with no assets. This would be a problem the defendant was creating for itself.

Trade names are often used by persons and companies operating jointly.

I am of the view that this is not a meritorious ground for objection.

2. No new facts:

Mr. Sharma further stated that the affidavit of Ms Vonotabua states that new facts became available after discovery but she does not state what those facts were. He states that the plaintiffs were aware of the deed dated 6th September 2004 and it is only now that it is seeking to have it set aside or being declared unenforceable. Mr. Sharma tried by referring to various annexures to the affidavit of Deborah Young that the plaintiffs’ allegations that the deed of 6th September 2004 was voluntary and not entered into as a result of economic duress. Mr. Sharma was trying to take a pre-emptive strike. While I have sympathy for Mr. Sharma’s arguments, I believe that the submission would be a proper one after all the witnesses have been heard, their credibility assessed and facts found. That is where the prospect of success of the amendment will be decided.

This deed or agreement dated 6th September 2004 was one of the various documents entered into between the parties during the transaction. It appears to be a document about which there is significant controversy and therefore proper that its validity or otherwise and obligations under it be decided during the course of the trial proper.

3) Prejudice:

Mr. Sharma submitted that there are references and representations made by Thiery Morali in the proposed amended claim. He states that Mr. Morali has fallen out with the defendant and is now somewhere in Europe and cannot be traced. Therefore the defendant would not be able to get his evidence. Allegations against Thiery Morali featured even in earlier statement of claim. Even if the action proceeded on the basis of earlier statement of claim, he would still be required to meet some allegations. Mr. Clarke stated that presence of Thiery Morali in Fiji was not necessary. His evidence can be taken by video conferencing. He further referred to affidavit of Romulos Toro who stated that his search on the internet revealed that Mr. Morali was based in Miami Florida and was president of Villazo Vila Hotels.

I was not told when Mr. Morali fell out with the defendant. In any event even if the case proceeded on basis of earlier statement of claim, his presence would still be required.

4) New cause of action:

Mr. Sharma had also argued that there are new grounds of claim and new cause of action and therefore amendment should not be allowed. A new cause of action is not a bar to amendment. In fact Order 20 Rule 5(5) permits an amendment even if the effect is to add or substitute a new cause of action provided it substantially arises from the same facts which in this case are the construction contract and related documents.

The obiter remarks of Cooke J. in Commodore Pty Ltd v. Perpetual Trustees State and Agency Ltd – [1984] NZCA 7; 1984 1 NZLR 324 at 334 to 335 where he expressed reservations to the suggestion that a new cause of action not existing at the date of the writ should not be allowed to be by amendment. He suggested that the "modern practice of the court should be sufficiently adaptable to accommodate the present type of claim without the ritual of another action".

I agree. The current trends clearly favour that dispute between parties should be heard as quickly and as inexpensively as possible.

Conclusion:

Accordingly I allow the amendments. However, this would necessarily mean the defendant having to amend its defence and counterclaim. Judging from the length of the proposed statement of claim, the amended defence is likely to involve substantial amount of work and painstaking search through documents. Therefore the plaintiff has to pay costs which I summarily fix at $2,000.00 to be paid in twenty-one (21) days.

Final Orders:

(1) Leave to amend the statement of claim given

(2) The plaintiff is to file its amended statement of claim including appended 2 in seven (7) days.

(3) Plaintiff is to pay the defendant costs in the sum of $2,000.00 in twenty-one (21) days.

(4) The defendant is to file its defence in twenty-one (21) days.

[Jiten Singh]
JUDGE

At Suva
12th September 2008