Westmall Ltd v Cul (Fiji) Ltd [2010] FJHC 448; HBC175.2001L (6 October 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 175 of 2001L

BETWEEN:

WESTMALL LIMITED
Plaintiff

AND:

CUL (FIJI) LIMITED
Defendant

INTERLOCUTORY JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr P Dale for the Plaintiff
F Haniff for the Defendant

Solicitors: S B Patel & Co for the Plaintiff
Munro Leys for the Defendant

Date of Hearing: 30 June 2010
Date of Judgment: 6 October 2010

INTRODUCTION

[1] On 27 March 2008, Master Udit dismissed and struck out this action because the Plaintiff failed to comply with his “Unless Order” of 25 September 2007. On 8 December 2008 the Plaintiff’s solicitors filed an application to re-instate the action. This is my judgment after hearing the parties on 30 June 2010.

PRELIMINARY ISSUE

[2] Mr Haniff objected to the application being heard on the basis that the Plaintiff company was in receivership and there appeared to be no consent from the receiver for this application. Mr Dale informed the Court that the receivership has been completed and the land sold with a small credit. It was not the first time the point had been raised and dismissed. In any event, I did not think that the receiver would have refused consent to an application to protect and advance the company’s interests. For these reasons I did not think there was merit in the objection and ordered the hearing to continue

CASE HISTORY

[3] The action commenced in 2001. It took till 2006 to be allocated a trial date on 6 March. This was not so unusual for cases in this Court. The Defendant was not entirely blameless for the delay in my view for the reasons given below. The hearing did not proceed because the Plaintiff was not ready so it was adjourned to a new date in June 2006. The Defendant blames the Plaintiff but I note that counsel did not insist on the hearing proceeding or object to the adjournment to 19 June 2006. The Defendant took advantage of the trial not going ahead on 6 March by having its own application for security for costs heard instead. The trial Judge ordered the Plaintiff to pay security for costs of $15,000 by 8 May 2006 and, in the absence of some persuasive explanation for not paying it, the Plaintiff was debarred from bringing its case. The costs were not paid until 24 May 2006. The delay in payment was explained and the trial Judge accepted it. When the matter was called on 19 June 2006, no one appeared for the Plaintiff. Again, an explanation for the non-appearance was given and accepted. The action was again set down for hearing on 16 October 2006. However, on 16 September 2006, the Plaintiff filed an application to amend its statement of claim. The reason given was that the Defendant disclosed very late documents which made the Plaintiff realise that its claim had to be amended. The Defendant did not object so leave to amend was granted by consent. Further costs were ordered to be paid by the Plaintiff before a hearing date was given. The matter was adjourned to 23 February 2007. The amended statement of claim was filed on 16 October 2006. The Defence was filed on 2 November 2006. Then followed an application by the Plaintiff for further and better discovery and particulars of the Defence filed on 14 February 2007. The application was to be called on 23 February 2007. Further directions were given and the matter called on three more occasions until the Defendant agreed to file a better list of documents by 29 May 2007. The list was filed by the Defendant on 30 May 2007. The matter was called again on 8 June 2007 and further pre-trial directions given. On 31 July 2007, the matter was called before the Master, who also gave further directions and adjourned it to 25 September 2007. On 25 September 2007, only counsel for the Plaintiff appeared before the Master. The Master’s handwritten notes for that date are impossible to read. The matter was called again before the Master on 27 March 2008. This time the same counsel who appeared on 25 September 2007 for the Plaintiff now appeared for the Defendant. No one appeared for the Plaintiff. The Master’s notes for 27 March 2008 too are impossible to read. However, the Order taken out by the Defendant’s solicitors on 2 April 2008 reads:

“IT IS THIS DAY ORDERED that the action herein be wholly dismissed and struck out for failure to comply with the Unless Order of 25 September 2007”

[4] On 31 March 2008, the current solicitors for the Plaintiff wrote to the Registry indicating the Plaintiff’s intention to seek re-instatement, copied to the Defendant’s solicitors. The Plaintiff’s application to re-instate did not get filed until 8 December 2008. It was first called on 21 January 2009 before the Master who gave directions for filing affidavits and set the application down for hearing on 13 May 2009. However, the application did not get heard but got adjourned to further dates between September and December 2009 and in early 2010 because dates did not suit either counsel or the Court, eventually the application came to be heard on30 June 2010.

THE LAW

[5] Recently, in Yang v FDB [2010] FJHC; HBC 407 of 2000L (30 September 2010) a case with uncanny similarity to the present one, I set out the relevant principles as follows:

PRINCIPLES ON SUMMARY DISMISSAL

[21] Both counsel cited several cases: WM Angus (Fiji) Ltd v Karan [2008] FJHC 165; HBC426.1986 (30 July 2008); Madhvi v Public Works Department [2009] FJHC 273; HBC194.2003L (8 December 2009); Jih Tsuan v Malarao [2010] FJHC 30; HBC353.2003L (5 February 2010); Firman v Ellis [1978] 1 QB 886. The latter case dealt with the exercise of discretion to extend the statute of limitations time period and is not of great assistance.

[22] In WM Angus (Fiji) Ltd v Karan [2008] FJHC 165; HBC426.1986 (30 July 2008) Scutt J found that there was no application or order striking out the matter so Her Ladyship held that it was unnecessary for the plaintiff to file an application for re-instatement. The action remained extant.

[23] In Madhvi v Public Works Department [2009] FJHC 273; HBC194.2003L (8 December 2009) I dismissed an application to re-instate a matter that had been struck out by the Master because of:

... the intentional and contumelious behaviour of the Plaintiff in not complying with the Master’s court order. The delay is inordinate, over 6 years, and explanation given by the Plaintiffs solicitors’ litigation clerk is mischievous. The delay is inexcusable. The application is therefore dismissed according to the principles in Pratap v Christian Mission Fellowship and Abdul Kadeer Kuddus Hussein v. Pacific Forum Line.

[24] Jih Tsuan v Malarao [2010] FJHC 30; HBC353.2003L (5 February 2010) was my decision on an application for dismissal for want of prosecution under O 25 r 9. I think some of the comments made in it are worth repeating because they seem to be one of the bases on which the Master made his order in this case:

[11] In respect of the last passage in Pratap ([2006] FJCA 41; ABU0093J.2005 (14 July 2006)), Mr Nandan referred me to the Fiji Court of Appeal[2] (decision) in Singh v Singh [2008] FJCA 27; ABU0044.2006S (8 July 2008) where the Court said:

27. There is also developing a new line of authority which is not utterly critical to the decision of the learned Judge in this case. Nevertheless, it would be inappropriate to fail to refer to this development. The proposition is that regard should also be had to the impact of a case on the resources of the court. Those resources are not infinite and for every case which takes up time, another case is potentially delayed. If the case which takes up time and delays another case is, on any view, an utter waste of time and resources and stands in the way of other more deserving cases being heard at an earlier time, then that is a factor which the courts cannot ignore. Indeed, the learned Judge in this case at paragraph 20 of his judgment sets this out with admirable clarity:

There has been a sea change in the approach to delay in most if not all common law jurisdictions. Further, a new and important factor has entered the equation. That factor is the use of the court's time and resources. The more time that is spent upon actions which are pursued sporadically, the less time and resources there are for genuine litigants who pursue their cases with reasonable diligence and expedition, and want their cases to be heard within a reasonable time.

[12] I would also like to reproduce their Lordships’ observations in Singh, as a timely reminder, where they said:

A pattern becomes immediately obvious from this chronology. It is to be seen that in the first 3 months after the happening of the event which gave rise to this litigation that there is a flurry of litigious action. That represents a model of the expedition that is expected of litigants and legal practitioners who conduct litigation before the courts of Fiji.

[25] The Court of Appeal in Pratap stated the principles to be applied in summary dismissal cases as follows:

[20] In Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62, 91 Dixon J said:

"A case must be very clear indeed to justify the summary intervention of the court ... once it appears that there is a real question to be determined whether of fact or of law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process".

[21] More recently, in Agar v. Hyde [2001] HCA 41; (2000) 201 CLR 552 at 575 the High Court of Australia observed that:

"It is of course well accepted that a court ... should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way and after taking advantage of the usual interlocutory processes."

[26] I should also refer to Trade Air Engineering (West) Ltd v Taga [2007] FJCA 9; ABU0062J.2006 (9 March 2007) where the Court of Appeal said in respect of the High Court’s power to summarily dismiss a case under O 25 r 9:

16] In our view the only fresh power given to the High Court under Order 25 rule 9 is the power to strike out or to give directions of its own motion. While this power may very valuably be employed to agitate sluggish litigation it does not in our opinion confer any additional or wider jurisdiction on the Court to dismiss or strike out on grounds which differ from those already established by past authority.

IS THIS A CLEAR CASE FOR SUMMARY DISMISSAL?

[27] I note from the court file that Mr Nacolawa had appeared either in person or by other counsel on all other mention dates except for the 15 October 2008. His absence has been explained as a genuine mistake. I accept the explanation. It was not deliberate.

[28] The Defendants were not entirely free of blame. As is the usual case, the parties counsel struggled with the Pre-trial steps, particularly with the PTC Minutes. It is not the sole responsibility of the solicitor or counsel for the Plaintiff but of all of them. Order 34 r 2 makes that clear. To do otherwise would leave the PTC process open to abuse. They are reminded of the comments of the Court of Appeal in Pratap v Christian Mission Fellowship [2006] FJCA 41; ABU0093J.2005 (14 July 2006):

9] We pause here to observe (not for the first time) that the practice of exchanging so called "minutes of a pre-trial conference" when no conference had in fact taken place and therefore no minutes had actually been taken is not compliance with the mandatory requirements of RHC O 34 rule 2. It is a practice which should be discontinued.

[29] Further, the Plaintiffs complained that the FDB had not disclosed the records of repayments of the loans. The bank’s affidavit in reply avoided the issue altogether and instead said that because the Plaintiffs had not paid the costs ordered by the Master, they are not entitled to be heard or any further orders of the Court. It is true that an order had been made and prima facie it should be complied with first. But that is not entirely a hard and fast rule. It does not apply where the order is defective: Singh v Kiran [2002] FJCA 80; ABU0018U.2001S (29November 20002)

[30] I do not think the Plaintiffs claim is a frivolous one with no hope of success. As was said in Pratap, at the end one must always stand back and have regards to the interests of justice. I think the Plaintiffs should be allowed to contest their claim.

[31] Further, I have grave doubts as to the justification and validity of the terms of the order in this case. I think the award of costs of $1,200 was excessive for attendance at a Pre-trial conference which would not have taken half a day. It may be true that counsel had to come all the way from Suva but that did not necessarily mean that he was entitled to solicitor-client costs or the costs of travel. Secondly, the Master did not give the Plaintiffs an opportunity to explain why they did not pay the costs as ordered. There may be good and compelling reasons for not doing so. They should be afforded due process. Thirdly, the second order for costs does not appear to be based on principle. It seems arbitrary and excessive too. Fourthly, the order made the Plaintiffs’ solicitor solely responsible for the PTC Minutes when under the Rules all the parties’ solicitors are equally responsible. Fifthly, the direction for the Registrar not to accept any further applications is in breach of due process, in my view. A litigant must be able to challenge an order made against him summarily and in his absence.

[32] Finally, it is clear that in making guillotine orders, the Master must take sufficient care to ensure that the terms of the order are not arbitrary and does not deny the affected party due process before the order becomes effective.

WHAT ARE THE PERTINENT CONSIDERATIONS?

Delay by the Plaintiff?

[6] I think any delay caused by the Plaintiff up to the time when the amended statement of claim was filed (16 October 2006) should be ignored. The Defendant was quite happy to just move along at the pace dictated by the Plaintiff. Further, part of the delay was caused by the Defendant’s defective discovery. The Pre-trial conference minutes, as in many other cases, dogged the parties as well. It is not the sole responsibility of the Plaintiff to comply with the Court Rules in this regard as made clear from the rules and the above judgments. This is clearly not a case of intentional or contumelious or inordinate delay in prosecuting the case.

[7] Further, I do not think the Plaintiff left it too late to file this application. The application was foreshadowed to the Defendant’s solicitors only four days after the order was made. It is common knowledge that the Judges of this Court worked under considerable strain and with limited resources at the time and still do so today. I do not think the application would have been heard that much sooner.

“Unless Order” not clear

[8] More importantly, I have no way of ascertaining for sure what the Master ordered on 25 September 2007 or for that matter the reasons for the striking out of the action on 27 March 2008 other than for non-compliance with the 25 September 2007 order. That order was not taken out but I accept what Mr Dale wrote in his submissions for the Plaintiff that the Master’s orders on 25 September 2007 were: “If the Plaintiff does not proceed with this action by 31 January 2008, it is struck out”.

[9] I see two problems with this order. First, its terms are not very clear. What did the Master mean by “does not proceed with this action”? Second, when the matter was next called on 27 March 2008 there was no evidence before him to show that the Plaintiff had not proceeded with the action by 31 January 2008, whatever that meant. I do not accept non appearance by counsel as evidence that the Plaintiff had not proceeded with its case. The explanation given was that the local counsel instructed to appear did not honour her promise to appear. I do not think the Plaintiff’s solicitors should be expected to do more than that. I accept the explanation as reasonable.

Counsel appearing in conflict

[10] The matter is further compounded by what is a very unfortunate situation in which the same counsel appeared on both critical occasions but for the opposing party on each of those occasions. I do not think it was deliberate. Counsel often appear in this Court on instructions handed over their shoulders by solicitors clerks when matters are called and this was probably what happened here so I do not criticise counsel. But it does not look right and I think I should take this into account in deciding whether to re-instate the matter or not.

Prejudice to the Defendant

[11] I do not accept the Defendant’s argument that it will be prejudiced because its witnesses no longer work for the company. The Plaintiff’s affidavit material shows that the witnesses are contactable. Secondly, their personal attendance is not absolutely necessary. A statement from them could be obtained and tendered under the provisions of the Civil Evidence Act 2002. Thirdly, I do not think these witnesses’ evidence is critical to the Defence. The deciding issue is whether the Minister’s consent was obtained before the parties entered into a lease of the land in breach of s 6 of the Land Sales Act [Cap 137]. The documentary evidence rather than the oral evidence would, in the ordinary case, be decisive. Discovery is now complete and there is no suggestion by the Defendant that all of its documents have been destroyed or otherwise not now available. I do not think the Defendant will suffer any specific prejudice.

Prejudice to the Plaintiff

[12] On the other hand, I think the Plaintiff has a reasonably arguable case and will be prejudiced if it is not allowed to present its case: see MTQ Holdings Pty Ltd v Lynch & Ors [2007] WASC 49 (19 March 2007) at paragraph 56. The documents strongly suggest that the parties signed a memorandum of agreement with a Deed of Lease attached in May 1997. The lease was to be for 10 years from 1 March 1998 or from the month after the consent of the Minister for Lands was obtained. In November 1997, the Minister gave his consent to the agreement. Building commenced in December 1997. The parties sought and obtained an extension of the Minister’s consent in June 1998. The Defendant took possession in July 1998 and paid rent till April 2001. I think it is reasonably arguable that on these facts, the parties entered into a valid and binding lease which the Defendant unlawfully terminated before the term of the lease expired. The unpaid rent for the remaining term of the lease is nearly $2.0m which is a substantial amount.

Blaming lawyers

[13] Counsel for the Defendant argued that it was the fault of the Plaintiff’s lawyers that the Plaintiff’s case got struck out so the Plaintiff should look to them instead for compensation. Mr Haniff cited Hytec Information Systems Ltd v Coventry City Council [1996] EWCA Civ 1099; [1997] 1 WLR 1666 and MTQ Holdings Pty Ltd v Lynch & Ors [2007] WASC 49 (19 March 2007) as authorities for the proposition that a litigant will not avoid the laxity of his solicitors.

[14] Firstly, for the reasons given above, I do not think there was any laxity on the part of the solicitors or that all blame should be laid completely at the feet of the Plaintiff’s two firms of solicitors. Secondly, the circumstances in England and Australia are different from those in Fiji. Most solicitors cannot afford professional indemnity insurance cover. Thirdly, the ultimate objective is to do justice. That is clear from those cases counsel cited – see MTQ Holdings Pty Ltd:

49 In Hytec Information Systems Ltd v Coventry City Council (supra), having considered a number of authorities, including Re Jokai Tea Holdings Ltd (supra) and Caribbean General Insurance Ltd v Frizzell Insurance Brokers Ltd (supra), Ward LJ (with whom Auld LJ and Lord Woolf MR agreed) concluded (at 1675) that where there has been non-compliance with a peremptory order "a sufficient exoneration will almost inevitably require that [the defaulting party] satisfies the court that something beyond his control has caused his failure to comply with the order."

50 Of course, on an application of this nature the exercise of the discretion must in the end depend upon all the circumstances of the case, without being limited by conditions or guidelines articulated in other cases, and there must always remain sufficient flexibility to make reasonable allowance for human error. And whilst it is important that "legal business be conducted efficiently": Bomanite Pty Ltd v Slatex Corporation Australia Pty Ltd [1991] FCA 536; (1991) 32 FCR 379 at 387, that is not an end in itself. The ultimate objective must be to do justice: State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 at 155.

Function of the Court

[15] Finally, I wish to refer to a passage from the judgment of Lord Bowen in Cropper v Smith [1884] UKLawRpCh 91; [1883] 26 Ch D 700, 710-11 quoted by Mr Dale to Mr Justice Finnigan who heard the Plaintiff's application for leave to amend its statement of claim and which has been adopted in this Court in Telecom Fiji Ltd v Bebe [2003] FJHC 243; HBC0034.2002 (20 June 2003). Although the dicta was cited in an application for leave to amend, I think the same principle applies in this case because of the claim that the Plaintiff's solicitors made errors:

It is a well established principle that the object of the Court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights .........I know of no kind of error or mistake which, if not fraudulent or intended to over-reach, the Court ought not to correct. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace..... It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected if it can be done without injustice, as anything else in the case is a matter of right.

CONCLUSION

[16] Taking all these matters into account, I think justice in this case requires the Plaintiff's case to be re-instated. With respect, I think several mistakes have been made. They should be corrected.

COSTS

[17] Because of the view that I have taken as to the reasons why this action should not have been struck out I think the costs of this application should follow the outcome of the trial.

ORDERS

[18] The Orders are as follows:

1. The Master's Order of 27 March 2008 is vacated.
   
2. This action is re-instated.
   
3. The action is adjourned to the Master for Pr-trial directions and to take its normal course.
   
4. The costs of this application are to be costs in the cause.
   

Sosefo Inoke
Judge