Gay v Resolution Trust Corporation [2010] FJHC 268; HBA01.2009 (26 February 2010)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL APPEAL NO. HBA01 OF 2009
(On appeal from the Master in Action No. 458 of 1993)

BETWEEN:

A MITCHELL GAY
FIRST APPELLANT

AND:

ALLAN C BEALL
SECOND APPELLANT

AND:

RESOLUTION TRUST CORPORATION
FIRST RESPONDENT

AND:

THE CADLE COMPANY
SECOND RESPONDENT

AND:

LEINANI BORTLES and LARRY
LYNEL BORTLES
THIRD RESPONDENTS

Mr S Valenitabua for the Appellants
Mr S Banuve for First and Second Respondents
Ms P Narayan Third Respondents

DECISION

On 31 March 2009 the Master of the High Court made the following orders on the hearing of a Summons for Summary Judgment dated 11 August 2008 in Action No. 458 of 1993:

"Summary Judgment be entered against the First Defendants in terms on the grounds contained in the affidavit of Jeanne Isler sworn and filed in support of this application on the following terms:

(a) Damages in the amount of US$2,878,910.65 and interest at the rate of 7.02% per annum from 4 May 1991 and late charges in the amount of US$742,002.39 and costs; and

(b) Damages in the amount of US$954,375.00 and $18,213.00 representing costs and Attorney’s fees and interest at the rate of 3.41% from 26 August 1992; and

(c) An order that the Plaintiffs retain caveats on the title of the properties of the First Defendants and each of them have sole ownership and control being CT6684 being Lot 1 on DP1277 pending realization of the judgment debt; and

(d) The costs of and incidental to this action on an Attorney-Client basis."

The First Defendants in that Action were named as Leinani Bortles and Larry Lynel Bortles who are now named as Third Respondents in the proceedings presently before the Court.

The Summons for Summary Judgment was in fact dated 13 August 2008 and filed on the same day. It was filed by the legal practitioners acting for the First and Second Plaintiffs and was addressed to the First Defendants at their address in the Philippines. Orders were made to effect service of the Summons on the First Defendants.

The Summons sought an order for summary judgment "against the Defendant on the grounds contained in the affidavit of Jeanne Isler sworn and filed herein in support of this application.

The Amended Statement of Claim dated 12 September 2006 claimed that the First Defendants were liable to the Plaintiffs for judgment debts being monies ordered to be paid to the Plaintiffs by the First Defendants as a result of two final judgments by the United States District Court for the District of Colorado on 3 May 1991 and 25 August 1992.

The First Defendants did not file a Defence to the Amended Statement of Claim, although a Defence had been delivered to the Statement of Claim.

The Plaintiffs’ Affidavit in support deposed to the facts pleaded in the Statement of Claim and to the background facts that lead to the court proceedings in the United States. Significantly the deponent pointed out that the First Defendants had not appealed the final judgments of the District Court.

The proceedings before the Master proceeded in the absence of the First Defendants since service of the documents had been established.

Although not a party to the application, the Master’s Order indicated that Counsel for the Second and Third Defendants (A Mitchell Gay and Alan C Beall being the Appellants in the present proceedings) were present.

By Notice and Grounds of Appeal, the Appellants (being the Second and Third Defendants in the principal action) appealed to this Court against the Master’s Orders.

The present proceedings are concerned with the appeal against the Master’s orders. The Notice of Appeal was filed on 28 April 2009.

At the outset, there are three observations that need to be made in relation to this background material.

First, the Amended Statement of Claim filed on 12 September 2006 added three further Defendants (although a Notice of Discontinuance was subsequently filed in respect of the Fourth Defendant). However the particulars pleaded in the Amended Statement of Claim make no allegations against any of the added Defendants and nor is any relief sought against any of the added Defendants. The Amended Statement of Claim remained in effect a claim against the First Defendants. The reasons for filing the Amended Statement of Claim and for the additional parties being joined are not readily apparent from the Court file.

Secondly, the proceedings before the Master were commenced by a summons for summary judgment. Although not stated, the title suggests that the application was made under Order 14 of the High Court Rules. Order 14 Rule 1 expressly provides conditions precedent for proceeding under Order 14. One of those is that "a Defendant has given notice of intention to defend the action". However the affidavit sworn by Jeanne Isler in support of the application for summary judgment states in clause 14 that as at the date of swearing "no response by way of a Defence to the Amended Statement of Claim has been received from the First Defendants". Although not on the Court file presently before me, and although not referred to in the affidavit in support of summary judgment, it would appear that the application proceeded before the Master on the basis that the First Defendants had filed a Defence to the Statement of Claim and as a result there was an option to file an amended defence under Order 20 Rule 3 (2) of the High Court Rules. It can be assumed that an amended Defence was not filed because the substantive particulars and claim in respect of the First Defendants had not been substantively amended.

Thirdly, it is not apparent on what basis Counsel for the Second and Third Defendants sought to be heard by the Master on an application by the Plaintiffs for summary judgment against the First Defendants.

By Summons filed on 23 August 2009 the Appellants applied for leave to amend the Notice of Appeal. The amended grounds of appeal are set out in a document attached to the Summons. There was no affidavit in support of the application filed.

Although there were other interlocutory applications pending in relation to the appeal proceedings, the parties agreed that the Summons filed on 25 August 2009 applying for an order to amend the Notice of Appeal should be heard first as it would enable the parties to make submissions on two preliminary issues. The first issue was whether the Appellants could bring an appeal against a decision of the Master in respect of interlocutory proceedings to which they were not a party. The second issue was whether the Appellants had failed to comply with the Court of Appeal Rules and whether the Appeal should be deemed to have been abandoned.

In order to determine the first preliminary issue it is appropriate to set out the proposed amended grounds of appeal:

"1. THE Learned Master erred in law and in fact in failing to adjourn this matter for six (6) weeks to allow the 2nd Defendant to be substituted as a party to this proceedings since the 2nd Defendant is now deceased.

2. THAT the Learned Master erred in law and in fact in that he failed to consider the Appellants’ counsel’s representation that more time is needed to obtain proper instructions from the Appellants due to their residence in the United States of America.

3. THE Learned Master erred in law and in fact in failing to take into consideration that the Appellants’ counsel, in carriage of this matter Mr Hamendra Nagin was away overseas and did not return until 16th April 2009.

4. THAT the Learned Master erred in law and in fact in failing to consider counsel’s representation that only on Mr Hamendra Nagin’s return will an Affidavit in Opposition to Summary Judgment be filed by the Appellants.

5. THE Learned Master erred in law and in fact in failing to consider any of the Appellants’ counsel’s valid grounds for asking for a 6 (six) weeks adjournment.

6. THE Learned Master erred in law and in fact in making an Unless Order without considering the Appellants’ position to the effect the entrance of a Summary Judgment against the 3rd Respondent/1st Defendant in the Court below will have on the present Appellants.

7. THE Learned Master erred in law and in fact in entering Judgment based on a U.S. Judgment which had already expired and was unenforceable.

8. THAT the Learned Master erred in law and in fact in entering judgment when it was contrary to the provisions of the Reciprocal Judgments Enforcement Act, Cap. 39 and/or Foreign Judgments (Reciprocal Enforcements) Act, Cap. 40.

9. THE Learned Master erred in law and in fact in entering Judgment in Fiji in a matter when the cause of action arose in United States of America.

10. THE Learned Master erred in law and in fact in entering summary judgment after so may years and when the matter was ready for trial."

In considering these proposed amended grounds of appeal, it is important to note first of all that the amended Statement of Claim does not plead any particulars against the present appellants (as Second and Third Defendants) nor was any relief sought against them.

The first five grounds are concerned with the Master’s refusal to allow the Appellants to become involved in the application. Ground six concerns the Master’s refusal or failure to consider how the appellants will be affected by the entry of judgment against the First Defendants. The remaining grounds relate to the propriety of the Master’s Orders and are grounds that would normally form the basis of an appeal by the First Defendants themselves.

Under Order 59 Rule 8 an appeal shall lie from a final order or judgment of the Master to a single judge of the High Court. The question is who may exercise that right of appeal.

The Second and Third Defendants were not a party to the application although they were named as Defendants on the Amended Statement of Claim. It would appear, for reasons that were not made clear to me, that they were served with a copy of the Summons and the affidavit in support. Be that as it may, they were still not parties to the application and therefore the Defence filed on their behalf on 27 October 2006 was not at risk as a result of the application. They were not in a position where they had to seek leave to defend the action under Order 14 Rule 4 (3).

However it is relevant to ask whether the Second and Third Defendants were in any way affected or aggrieved by the Master’s Orders.

In the amended Statement of Claim, not only are the Plaintiffs claiming amounts by way of judgment debts, they are also seeking orders in relation to property being CT6684 being Lot 1 on DP1277 (the land).

As part of their Defence, the Second and third Defendants have made a counter claim against the Plaintiffs. The particulars are inadequate and disclose no connection between the entities referred to in the counter claim (Fiji Marina Partners and Fiji Pacific Partners) and the First Defendants and the Second and Third Defendant. There is impliedly a claim that the Second and Third Defendants have an equitable interest in the land.

The orders being sought by the Plaintiff in relation to the land did not form part of the judgment obtained in the District Court of Colorado in the United States.

It would follow, however, that the Second and Third Defendants, as a result of the allegations, yet to be established, in the counter claim, are to some extent affected and aggrieved by the Master’s Orders. Having been served with a copy of the summons and the affidavit in support, the Second and Third Defendants sought to be heard. It is my opinion that they had sufficient interest in the relief sought against the First Defendants in so far as the land was concerned to be heard as to how any order for summary judgment in relation to the land might affect their claim of an equitable interest.

As a result I am satisfied that they have sufficient standing to appeal the Orders of the Master on grounds one to six in the amended grounds of appeal.

However I do not consider that they have any standing to pursue grounds seven to nine. Those grounds are related solely to the monetary awards made by the District Court of Colorado. There was no reference to any land in those two judgments. Grounds seven to nine are matters for the First Defendants alone. The Second and Third Defendants did not raise in their Defence any issues arising under those grounds.

The second question is whether the appellants have complied with the Rules that are applicable for appealing the Master’s Orders. The relevant rules are set out in Order 59 Part II of the High Court Rules and state:

"9. An appeal from an order or judgment of the Master shall be filed and served within the following period:-

(a) 21 days from the date of the delivery of an order or judgment; or

(b) ....

It was accepted by the parties that the Master’s decision was a final judgment. It is clear that a judgment or order may be final even though it is made on an interlocutory application such as an application under Order 14 for summary judgment (AG v. Great Eastern Railway Co. [1880] UKHL 2; (1880) 5 App. Cas. 473 HL).

Rule 10 states:

"10. (1) An application to enlarge the time period for filing and serving notice of appeal or cross-appeal may be made to the Master before the expiration of that period and to a single judge after the expiration of that period.

(2) An application under paragraph (1) shall be made by way of an inter partes summons supported by affidavit.

Rule 17 states:

"17. (1) The appellant shall, upon serving the notice of appeal on the party or parties to the appeal, file an affidavit of service within 7 days of such service.

(2) The appellant shall, within 21 days of the filing of notice of appeal, file and serve a summons returnable before a Judge for directions and a date for the hearing of the appeal.

(3) If this rule is not complied with, the appeal is deemed to have been abandoned."

In these proceedings, the Master’s Orders were made on 31 March 2009 and sealed by the Chief Registrar on 3 April 2009.

The affidavit of service sworn by Esita Vocea on 1 May 2009 deposes that the Notice and Grounds of Appeal was served on the Plaintiffs on 29 April 2009. The Notice had been filed in the Court on 28 April 2009.

It was served (and for that matter filed) more than 21 days after the delivery of the summary judgment. It was therefore out of time. There was no material before me to suggest that the appellants had applied for an enlargement of the time by either of the means for which provision is made in Rule 10.

The affidavit of service of the Notice was filed on 1 May 2009 and was therefore within the time limit prescribed by Rule 17 (1).

Under Rule 17 (2) the appellants were required to file and serve a summons for directions within 21 days of filing the Notice of Appeal. Since the Notice of Appeal was filed on 28 April 2009, the Summons for directions was required to be filed by 19 May 2009. It was accepted by the parties that the summons for directions was not filed until 11 June 2009.

Counsel for the appellants sought to give an explanation from the bar table concerning the closure of the registry following the events of early April 2009. However there was no affidavit material before me setting out any relevant facts as to how and when this affected the appellants and any attempts made to file such a summons between 1 May 2009 when the affidavit of service was accepted for filing and 11 June 2009 when the summons was filed.

The Rules in Part II of Order 59 have imposed a strict timetable for the filing and serving of documents at the Registry and on the Respondents. The purpose of the Rules was obviously to avoid delay at the interlocutory stage of civil proceedings and to make such appeals more efficient. The provision in Rule 17 (3) that failure to follow Rules 17 (1) and 17 (2) leads to an automatic abandonment of the appeal is intended to operate as a deterrence in respect of delay (see Ports Authority of Fiji –v- G. T Marketing Limited unreported Civil Appeal (Shameem JA) No. 4 of 2001 delivered 22 February 2001).

As a result I find that the appeal is deemed to have been abandoned under Rule 17 (3) as a result of non-compliance with Rule 17 (2). I also find that the Notice of Appeal was not filed within the time prescribed by Rule 9 and that no application was made under Rule 10. There was no explanation provided for non-compliance with those Rules.

Therefore I order:

(1) The summons applying for an order for Leave to amend the grounds of appeal is dismissed.

(2) The appeal notice filed on 28 April 2009 is deemed to have been abandoned.

(3) The appellants are to pay to the First and Second Respondents the sum of $300 and to the Third Respondents the sum of $300 (total $600.00).

W D Calanchini
JUDGE

26 February 2010
At Suva