Kumar v Habib Bank Ltd [2011] FJHC 200; HBC248.2009 (1 April 2011)

IN THE HIGH COURT OF FIJI ISLANDS
AT SUVA
CIVIL JURISDICTION

Civil Action No: HBC 248 of 2009

BETWEEN:

RAKESH KUMAR
1st Plaintiff

REEN KUMARI RAM
2ND Plaintiff

AND:

HABIB BANK LIMITED
Defendant

Counsel: Mr. Sahu Khan for the Plaintiffs.
Ms B Narayan for the Defendant.

Date of judgment: 1st April, 2011.

JUDGMENT

[1] The plaintiff commenced this action by Writ of Summons on 11.08.2009 seeking following relief:

1. That the defendant does sell the property which plaintiffs said above. it is crown lease number 470582 under the agreement between plaintiff's lawyers and defendant's lawyers.
   
2. Damages and costs.
   

[2] The defendant by its summons dated 15.10.2009, moves for an order that the plaintiff's writ of summons and statement of claim be struck out on the basis that it was vexatious, frivolous and also it does not disclose a cause of action.

Background to the facts:

[3] In the year 2003, the 1st named plaintiff instituted proceedings against the defendant at the High Court Lautoka in relation to the crown lease 470582. The 1st plaintiff sought certain declarations against the defendant over the said property and also sought to restrain the defendant from exercising its powers of the mortgage sale over the said property.

[4] The said action was tried in the High Court and on 1.11.2006, the judgment was delivered dismissing the 1st plaintiff's claim with costs of $ 800.00, and also a judgment was entered on the defendant's counter claim in the amount of $20776.01 and interest in the sum of $41799.94.

[5] The 1st plaintiff appealed against the High court judgment. The Court of Appeal, having accepted the mortgagee's right to recover the debt, dismissed the 1st plaintiff's appeal and allowed the defendant to proceed with the sale of the said property.

[6] In the statement of claim, the plaintiffs allege that after the Court of Appeal judgment, there was an agreement between the plaintiffs' solicitors and the defendant's solicitors to allow the 1st plaintiff to buy the said property for the highest tender that would be received by the defendant, when the tenders were called. It is further alleged that despite such an agreement, the defendant advertised the said property on 16th day of May 2009, in Fiji Times for sale by way of mortgage sale.

[7] However, at the hearing, it was admitted by the plaintiffs' counsel that the said property has already been sold by the defendant. Therefore, the plaintiffs restricted their claim only to damages.

[8] In the statement of claim, it is further stated, that the defendant bank was of full knowledge of the fact that the 1st plaintiff was holding property for himself and his wife, the second plaintiff on 50-50 basis.

[9] In support of the defendant's summons, an affidavit was filed by the defendant's solicitor.

[10] In the affidavit, the defendant's solicitor states that there was no such agreement entered between the defendant's solicitors and the plaintiff's solicitors, and the 1st plaintiff has no right to place tenders over the mortgaged property, but could only redeem the mortgage by paying the amount due. It is further stated that the plaintiffs are acting in bad faith in instituting this action and also the 1st plaintiff has not paid the judgment amount of $207,763.01 plus $ 41799.94 to the defendant.

[11] Furthermore, the defendant contended that it would be an abuse of process for the plaintiffs to bring a second action for the same cause of action.

[12] The defendant further states that, had the 1st plaintiff wanted to redeem the mortgage or place the tender on the property, they could have done so without waiting until the defendant replied.

[13] Relevant legal principles: Provisions relating to striking out of proceedings are contained in Order 18 rule 18 of the High Court Rules.

[14] Order 18 rule 18 of the High Court Rules reads:

The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that-

1. It discloses no reasonable cause of action or defence, as the case may be; or
   
2. It is scandalous, frivolous or vexatious; or
   

100. It may prejudice, embarrass or delay the fair trial of the action; or
     

4. It is otherwise an abuse of process of the court;
   

And may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

(2). No evidence shall be admissible on an application under paragraph (1)(a).

(3). This rule shall, so far as applicable, apply to an originating summons and a petition as if the summons or petition, as the case may be, where a pleading

[15] In the statement of claim the plaintiffs referred to several letters exchanged between the plaintiffs' solicitors and the defendant's solicitors.

[16] Copies of all those letters were tendered to the court by the defendant's solicitor with his affidavit in support. The annexure marked as SL 8 is a letter sent by the plaintiffs' solicitors to the defendant's solicitor. It does not disclose at all that the defendant had agreed to sell the property to the 1st plaintiff. Further, the letters sent by the 1st plaintiff's solicitors to the defendant's solicitors appears to this court as an attempt to create a cause of action against the defendant in order to re-litigate the same dispute in a different way. Furthermore, the 1st plaintiff has failed to produce any documentary evidence to establish the existence of such a contract.

[17] By letter dated 23rd May 2007, the defendants demanded the 1st plaintiff to pay the costs ordered by the High Court and the Court of Appeal.

[18] The letter dated 24.11.2008, annexed and marked as SL 9, clearly demonstrates the defendant's position with regard to the alleged offer by the 1st plaintiff. By that letter the plaintiffs were informed in no uncertain terms that the defendant did not intend to accept any offer from the plaintiff.

[19] By letter dated 9th June 2009 marked as SL 11, the defendant's solicitors very clearly informed the 1st plaintiff that there was no agreement as such between the 1st plaintiff's solicitors and the defendant's solicitors.

[20] The plaintiffs, in their affidavit in response, state that they have factual and legal basis for this action and it can be determined only after the hearing of all the relevant evidence at the trial. However, the 1st plaintiff has not stated clearly what the factual and legal basis is.

[21] Although the plaintiffs have claimed damages from the defendant, it is obvious that there exists no cause of action against the defendant. The plaintiffs, in their statement of claim, have failed to show any reasonable cause of action against the defendant.

[22] The factors to be considered when considering an application of this nature is highlighted in Hubbuck v. Wilkinson [1889]1 QB 86 as follows:

'Only in plain and obvious cases that recourse should be had to the summary process under O. 18 R.18(1)'

[23] As to how abuse of process is to be determined in a situation such as the present while assessing the efficacy of the plaintiff's cause of action, the following authorities are pertinent:

[24] In Stephenson v.Garrett [1898] 1 Q.B.677 it was held:

'It is an abuse of process of law for a suitor to litigate again over an identical question which has already been decided against him even though the matter is not strictly res judicata.

Domer v.Gulf Oil (Great Britain) (1975) 119 S.J.392 'Where proceedings which were viable when instituted have by reason of subsequent events become inescapably doomed to failure, they may be dismissed as being an abuse of the process of the court.'

Steamship Mutual Association Ltd v. Trollope and Colls (city) Ltd (1986) 33 Build.L.R. 77,C.A.

'The issue of a writ making a claim which is groundless and unfounded in the sense that the plaintiff does not know of any facts to support it is an abuse of process of the Court and will be struck out.'

[25] In the light of above authorities, I shall consider the present case.

[26] In the present case, the defendant's rights under the mortgage have been adjudicated twice by the High Court and the Court of Appeal in favour of the defendant.

Has the plaintiff shown a cause of action?

[27] It must be emphasised that a mere statement of claim is not automatically indicative of a cause of action. The reasonable cause of action means a cause of action with some chance of success. The plaintiff must show some real prospect of his statement of claim. He cannot succeed by showing some whimsical claims on the statement of claim. If the statement of claim fails to address the legal foundation of claim and fails to state what and how the defendant is liable it shall be struck out.

[28] Here is a case where the High Court as well as the Court of Appeal has decided in favour of the defendant. The defendant had been entangled in litigation for well over 3 years and therefore, the defendant couldn't have had any obligation whatsoever to wait till the 1st plaintiff place his tender. Therefore, it is highly implausible, that the defendant's solicitors would have agreed to sell the property to the 1st plaintiff when the defendant is at liberty to exercise its rights under the mortgage to recover its debts which was long overdue.

[29] Therefore, the statement of claim does not disclose a reasonable cause of action and further, it will also not be possible to cure it even by an amendment.

[30] Litigants should be mindful that the court system can be used only for the purpose of obtaining justice. If the plaintiffs claim is not bona fide and is instituted as a means of vexation and oppression or for an improper purpose, it is the duty of court to prevent the improper use of its machinery. In the present case it is plain and obvious that the plaintiff's claim is not bona fide and it is instituted solely for the purpose of harassing the defendant.

[31] In Halsbury's Laws of England Vol. 37 page 322 the abuse of process is described as follows;

An abuse of process of the court arises where its process is used, not in good faith and for proper purposes, but as a means of vexation or oppression or for ulterior purposes, or, more simply, where the process is misused. In such a case, even if the pleading or indorsement does not offend any of the other specified grounds for striking out, the facts may show it constitutes an abuse of the process of the court, and on this ground the court may be justified in striking out the whole pleading or indorsement or any offending part of it. Even where a party strictly complies with the literal terms of the rules of court, yet if he acts with an ulterior motive to the prejudice of the opposite party, he may be guilty of an abuse of process, and where subsequent events render what was originally a maintainable action one which becomes inevitably doomed to failure, the action may be dismissed as an abuse of the process of the court.

[32] The term 'abuse of process' is encapsulated in the following extract from Walton v. Gardiner (1993) 177 CLR 378 as follows:

'Abuse of process includes instituting or maintaining proceedings that will clearly fail, proceedings unjustifiably oppressive or vexatious in relation to the defendant, and generally any process that gives rise to unfairness.'

[33] The letters exchanged between the plaintiff's solicitors and the defendant's solicitors are not indicative of an existence of any such agreement as alleged by the plaintiff. Furthermore, the plaintiff has failed to show any document, which supports the fact that there was an agreement between the plaintiff and the defendant to allow the plaintiff to buy the said property when the tenders are called.

[34] It is plain and obvious that the plaintiff does not have any arguable issue but he attempts to fabricate an arguable issue. Although the plaintiff submits, that he has an issue which could not be determined by way of an affidavit, it appears to this court that the plaintiff has made an unsuccessful attempt to fabricate an issue in order to overcome the Order 18 of the High Court Rules. Therefore, the institution of this action by the plaintiff without a reasonable cause of action is unjustifiably oppressive and vexatious in relation to the defendant and it would certainly give rise to unfairness.

[35] The other important issue to be determined here is the inclusion of the 1st plaintiff's wife as the 2nd plaintiff to this case. Although the first plaintiff has added his wife as the second plaintiff to this case, the 1st plaintiff has failed to give any valid reason as to why the 2nd plaintiff has been included in the plaint. In the statement of claim it is stated that the 1st plaintiff was holding the property for himself and the 2nd plaintiff on 50-50 basis, but It is noteworthy that the 1st plaintiff had never raised the issue of the 2nd plaintiff's rights either in Civil Action No. 305 of 2003, or, in Civil Appeal No. 05 of 2003.

[36] Therefore, the reasons advanced by the 1st plaintiff to justify the inclusion of the 2nd plaintiff to the case, are far from satisfactory and cannot be accepted and I conclude that, the 2nd plaintiff has no reason to be added as a party to this case. In other word the second plaintiff has no locus standi in this matter.

[37] When the plaintiff's statement of claim is considered in toto, it appears to this court that it discloses no cause of action against the defendant. More importantly, the allegations levelled against the plaintiff are hypothetical in character. The plaintiff's contention that the defendant cannot breach the agreement that was reached between the plaintiff's solicitors and the defendant's solicitors is baseless and unfounded; hence, unsustainable. In addition to that it is an attempt to undermine the judgments which were granted in favour of the defendant by the High Court and the Court of Appeal. Therefore, it would be and unfair and unjust exercise of the court's discretion to allow the plaintiffs to proceed with this action, which is frivolous and vexatious.

[38] In light of aforementioned authorities and submissions made by the counsel, and having regard to the facts of the case, I am of the view that the plaintiffs cannot maintain this action against the defendant.

[39] Therefore, I strike out the plaintiffs' Writ of summons and the statement of claim. Cost shall be taxed on indemnity basis.

Pradeep Hettiarachchi
JUDGE