B.W. Holdings Ltd v Service Engineers Ltd [2011] FJHC 182; HBC183.2008 (21 March 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 183 of 2008

BETWEEN:

B.W. HOLDINGS LIMITED a limited liability company having its registered office at Suva.
PLAINTIFF

AND:

SERVICE ENGINEERS LIMITED a company that is based at 50-52 Porana Road, Takapuna, North Shore City, Auckland, New Zealand.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSELS: Diven Prasad Lawyers for the Plaintiff
Howards Lawyers for the Defendant

Date of Hearing: 11th March, 2011
Date of Ruling: 21st March, 2011

RULING

1. INTRODUCTION
   

1. The court issued notices to parties in terms of the Order 25 rule 9 to show cause why the matter could not be struck out due to no step being taken for more than six months.
   

2. FACTS
   

2. The Plaintiff issues a Writ of Summons against the Defendant on 27th May 2008 and also sought an interim injunction against the Defendant, but later it was withdrawn. On 10th July 2008, the Plaintiff was also granted leave to amend its statement of Claim by 7th August 2008. The Defendant was also given 28 days from that day to file their statement of Defence. No amended statement of Claim was filed with in the stipulated time.
   
3. On 2nd October, 2008, without seeking an extension of time to file the amended statement of claim, an amended statement of claim was filed along with an amended writ of summons. On 29th October 2008 the Defendant's solicitors sought further and better particulars from the Plaintiff and also sought to strike out of certain paragraphs from the amended statement of claim.
   
4. After hearing of the summons to strike out paragraphs 6 and 7 of the amended statement of claim the said paragraphs were struck out by consent and by consent an order for cost of $ 200 was also granted to the Defendant on 30th March 2009 and the matter was set on normal cause.
   
5. No action was taken after the 30th March, 2009 and court issued a notice to show cause to parties in pursuant to Order 25 rule 9.
   

100. LAW AND ANALYSIS
     

6. Order 25 rule 9(1) states as follows:
   

"If no step has been taken in any cause or matter for six months then any party on application or the court of its own motion may list the cause or matter for the parties to show cause why it should not be stuck for want of prosecution or an abuse of the court."

7. It is to be noted in this action there was no application from the defendants to strike out the Plaintiff's claim. Both parties did not take any action and nearly after two years of inaction by either of the party, the court gave notice to the parties to show cause, before striking out in pursuant to Order 25 rule 9.
   
8. Most recently, in Abdul Kadeer Kuddus Hussein V Pacific Forum Line IABU 0024/2000- FCA B/v 03/382 the court readopted the principles expounded in Birkett v James (1978) AC 297 (1977) 2 All ER 801 and explained that
   

"The power should be exercises only where the court is satisfied either that the defaults has been intentional and contumelious, eg disobedience to a peremptory order of the court or conduct amounting to than abuse of the process of the court or that there has been inordinate and inexcusable delay on the part of the Plaintiff or his lawyers and that such delay would give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the Defendants either as between themselves and the Plaintiff or between each other or between them and third party."

9. In New Zealand, the same approach was adopted in the leading case of Lovie v. Medical Assurance Society Limited [ 1992] 2 NZLR 244, 248 where Eichelbaum CJ explained that:
   

"The applicant must show that the Plaintiff has been guilty of inordinate delay, that such delay is inexcusable and that it has seriously prejudiced the defendants. Although these considerations are not necessarily exclusive and at the end one must always stand back and have regards to the interests of justice. In the country, ever since NZ Industrial Gases Limited v. Andersons Limited [1970] NZLR 58 it has been accepted that if the application is to be successful the Applicant must commence by proving the three factors listed." (emphasis is added)

10. In New India Assurance Co. Ltd v. Rajesh Kumar Singh (ABU 0031/1996 – FCA B/V 99/946) this court emphasized that while inordinate and inexcusable delay might be established, these factors were not, on their own sufficient to warrant the striking out of the action. What additionally had to be clearly demonstrated (and could not be presumed) was that the Defendant had been or would be materially prejudiced by the delay that had occurred. Although the categories of prejudice are not closed (see, for example, remarks by Lord Denning in Biss v. Lambeth Southwark and Lewisham Health Authority [1978] 2 All ER 125] the principal consideration is whether, in view of the delay, a fair trial can still be held Department of Transport v. Chris Smaller (Transport) Ltd [1989] AC 1197).
    
11. One, admittedly exceptional, example of a fair trial being held notwithstanding an extreme delay of 40 years (Wright v. Commonwealth [2005] VSC 200) was recently referred to by Kirby J in Batistatos v. Roads & Traffic Authority of New South Wales [2006] HCA 27.
    
12. The most recent review of the whole topic by the New Zealand Court of Appeal is Bank of New Zealand v. Savril Contractors Ltd [2004] NZCA 4; [2005] 2 NZLR 475. This case is of particular relevance since it considers developments which have taken place in England and Wales following the introduction of the new Civil Procedure Rules 1998. At paragraph [99] the Court stated:
    

"It is clear that the principles in Birkett v. James apply in New Zealand. The subsequent English authorities will as a consequence be persuasive. We do note, however, that in New Zealand the overriding consideration in strike out application for delay has always been whether justice can be done despite the delay. In this regard, the concern has been to achieve justice between the parties and the administration of justice in a general sense has not figured in the decisions to the same extent as it does in the more recent English decisions of for example Arbuthnot [1997] EWCA Civ 2999; [1998] 1 WLR 1426 and Securum [2001] Ch 291. New Zealand Courts have not been prepared to go as far as those decisions in placing the same significance on the assessment of the delay from the point of litigants generally and the courts. It was stressed by this court in Commerce Commission v. Giltrap City Limited [1997] NZCA 330; (1998) 11 PRNZ 573, at 579 that case management principles should not be allowed to undermine the delivery of justice to the parties. There may be different considerations where an application is based on failure to comply with peremptory orders, commonly called "unless orders" but that is not the case here". (emphasis added)

13. In respect of the last passage in Pratap, Mr Nandan referred to the Fiji Court of Appeal in Singh v Singh [21008 FJCA 27; ABU0044, 2—6S (8 July 2008) where the Court said:
    

There is also developing a new line of authority which is not utterly critical to the decision o 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 judgments 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. The 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 hear within a reasonable time.

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.

14. The matter was listed on 11 March 2011 before the Court pursuant to the Notice issued by the Court in accordance with Order 25 Rule 9 of the High Court Rules.
    
15. The Notice requires the defaulting party to show cause why the action should not be struck out for want of prosecution and an abuse of the process.
    
16. The Plaintiff ought to have filed an Affidavit with evidence to demonstrate to the Court the delay. The Plaintiff despite receiving the Notice dated 11 January 2011 has failed to do so. Neither had there been even an application to do so even as late as on the date on which the matter was mentioned consider striking out.
    
17. In Safari Lodge Fiji Ltd v Rosedale Ltd 2009 FJHC 256 HBC 319. 1999 Master Tuilevuka stated in paragraph 12 as follows:
    

"12. 'Inordinate delay' means a delay which is materially longer than the time usually regarded by the courts and the profession as an acceptable period. Any delay by the solicitor is not excluded and must be borne by the litigant (see Tabeta v Hetherington (1983) The Times, 15th December, 1983, 1983 cited with authority by Udit M in Nilesh Chand v Yakesh Naidu."

18. In the present action, the plaintiff has not only taken any step after 30th March, 2009 but also failed to adduce any evidence for the delay, even after the court have given notice to show cause of the delay. The said notice to show cause was dispatched from the registry on 11th January, 2011. No intention to proceed filed and no affidavit supporting the reasons for delay filed. This amounts not only to delay that is usually regarded by the courts and the profession as an acceptable period but also it shows the lack of interest by the plaintiff to proceed in this action, even after the receipt of the show cause notice in terms of Order 25 rule 9.
    
19. Master Tuilevuka in Safare Lodge case(supra) sited with authority Fiji Court of Appeal decision in Merit Timber Limited Vs Native Land Trust Board Civil Appeal No 52 of 1993 (page 16)the following passage:
    

"Whilst the last matters were referred by counsel from the bar table, we consider they are inference that may be properly drawn from the pleadings themselves. Similarly when the delay is of the length that occurred in this case, the Court is entitled to conclude that witnesses are likely to have gone away and memories of relevant matters may have faded away or have concluded by subsequent events"

20. According to the abovementioned decision of the Court of Appeal the onus is on the Plaintiff to prove on preponderance of evidence that delay would not result in any prejudice to the Defendant. The Plaintiff has not filed any affidavit evidence even merely to state so, and it is too early in this matter to draw any inference in favour of the Plaintiff on the evidence as Plaintiff has even failed to file the second amended statement of claim in pursuant to the order on 30th March 2009 deleting paragraph 6 and 7 of the amended statement of claim. So, the presumption that was laid down by Court of Appeal in Merit Timber Limited (supra) is not rebutted in this case by the Plaintiff.
    
21. So, it is clear from the above reasoning that the Plaintiff's inordinate delay and lack of interest to prosecute this action has clearly prejudiced the Defendant and this is a fit and proper case to strike out the Plaintiff's claim, with cost.
    

4. COST
   

22. If the Plaintiff proposes to withdraw and discontinue its action, then it is pertinent to note Order 21 rule 3 of the High Court Rules, 1988. The respective rule reads:
    

Discontinuance of action, etc., with leave (0.21, r3)

3.-(1) Except as provided by rule 2, a party may not discontinue an action (whether begun by writ or otherwise) or counterclaim, or withdraw any particular claim made by him therein, without the leave of the Court, and the Court hearing an application for the grant of such leave may order the action or counterclaim to be discontinued, or any particular claim made therein to be struck out, as against any or all the parties against whom it is brought or made on such terms as to costs, the bringing of a subsequent action or otherwise as it thinks just.

23. In South Sea Cruises Ltd v Mody [2010] FJHC 135, the Justice Inoke in interlocutory judgment delivered on 20 April 2010, whilst dismissing and striking out the Plaintiff's Writ filed on 20 October 2008 and the Summons filed on 22 December 2008, awarded the Defendant costs of $10,000.00. At paragraph 18 & 19 of the judgment the Court observed:

[18] Although neither counsel realized the futility of the application, I think it was the mistake attributable to South Sea Cruises and its solicitors that required Mody to defend it and the action so they should pay Mody's costs.

[19] This is one of those cases where indemnity costs are justified. Substantial materials have been filed, the matter had been called on several occasions and there was a day's hearing. I think costs of $10,000 is a fair amount so I order accordingly.

24. The Defendant has not sought a strike out of this action, though nearly two years have lapse from 30th March, 2009 when the court allowed the interim application of the Defendant to strike out the paragraphs 6 and 7 of the Plaintiff's amended statement of claim that was filed in October, 2008. It is to be noted that the said order was made by the consent and an award of the cost of the said application was also made by consent. So now the Defendant cannot seek indemnity cost for that application.

25. Considering the circumstances of the case and since the Defendant is yet to be served with a statement of claim in pursuant to the striking out of paragraphs 6 and 7 of the amended statement of claim filed in October, 2008 I do not think that this case warrants indemnity cost to the Defendant. The Defendant has not filed a statement of Defence and in the circumstances I will assess the cost summarily at $500.

5. CONCLUSION
   

26. The action is struck out and the Defendant is awarded $500 cost.

Dated at Suva this 21st day of March, 2011

Mr. Deepthi Amaratunga
Acting Master of the High Court

Suva