Ali v National Bank of Fiji [2011] FJHC 768; HBC428.1997 (8 November 2011)

IN THE HIGH COURT OF FIJI ISLANDS
AT SUVA
CIVIL JURISDICTION

Civil Action No: HBC 428 of 1997

BETWEEN:

SULTAN ALI
1st Plaintiff

AND:

GROUP INVESTMENT LIMITED
2nd Plaintiff

AND:

NATIONAL BANK OF FIJI
Defendant

Counsel: No appearance for the Plaintiffs.
Mr. P. Knight for the defendant.

Date of Judgment: 8 November, 2011

INTERLOCUTORY JUDGMENT

[1] This is the defendant's summons to strike out the plaintiff's claim for want of prosecution. In support of the summons, an affidavit was filed by Sara Bulavakarua, the Manager, Asset Management for the defendant.

[2] According to the affidavit, the matter was last called before the Deputy Registrar on 29.07.98, and on that day there was no appearance by the plaintiffs or their solicitors, hence the matter was adjourned sine die. It is further deposed that the plaintiff had failed to take any further steps to prosecute the matter until 25.02.2003.

[3] In response to the defendant's summons, the plaintiff filed an affidavit. The plaintiff's position is that he could not take necessary steps in the case since official receivers did not give their consent. An affidavit sworn on 24.02.2003 by the 1st plaintiff was also attached to the affidavit in response. According to that affidavit, an application for adjudication was presented to the Court by the official receiver. It is further stated that upon receiving order made against the plaintiff, he cannot prosecute the claim as the official receiver refused to give consent as required by the Bankruptcy Act.

[4] By looking at the 1st plaintiff's affidavit, it is clear that his main ground for not prosecuting the matter was the non-availability of the official receiver's consent. In considering the grounds advanced by the plaintiff, it is pertinent to produce the chronology of the events.

• The writ of summons with statement of claim was filed on 08.10.97.
  
• Summons to enter the judgment in default of defence was filed on 13.11.97.
  
• On 1.12.97, the summons to enter judgment in default of defence was heard and the defendant was granted leave to file defence.
  
• The defence was filed on 03.12.97.
  
• Amended writ of summons with an amended statement of claim was filed on 17.03.1998.
  
• The summons for consolidation of civil action HBC 80 of 1996 was filed on 24.03.98.
  
• On 06.05.98, the plaintiff withdrew the summons for consolidation.
  
• On 02.06.98, the plaintiff filed summons for directions on 02.06.98.
  
• The summons for directions was listed for hearing before the Deputy Registrar on 24.06.98 on which day it was adjourned to 15.07.98.
  
• On 15.07.98, when the matter was called before the deputy registrar neither the plaintiff nor his solicitors appeared and the matter was adjourned sine die.
  
• On 25.02.2003, the plaintiff filed notice of intention to proceed.
  
• The defendant filed summons for strike out on 28.07.2010.
  

[5] Annexure 'SA3' in the plaintiff's affidavit is a letter dated 16.06.98, sent by the plaintiff's solicitors to the official receiver seeking the consent of the official receivers to proceed with the action.

[6] More than four years has passed since the date of this letter, but the plaintiff has failed to take any action until the Notice of Intention to proceed was filed in 2003. Even if the plaintiff failed to obtain the consent of the official receivers in 1998, it is not an excuse for them to wait till 2003 to take action in the case. It is noteworthy that the plaintiff has failed to advance any reasonable ground other than the non-availability of the consent of the receivers to justify his delay in prosecuting the action.

Relevant legal principles

[7] Order 25 rule 9 of the High court Rules reads as follows:

i. 9.-(1) 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 struck out for want of prosecution or as an abuse of process of the court.

ii. (2) Upon hearing the application the Court may either dismiss the cause or matter on such terms as may be just or deal with the application as if it were a summons for directions.

[8] There are two distinct circumstances in which an action may be dismissed for want of prosecution, namely:

i. When a party has been guilty of intentional and contumelious default, and;

ii. Where there has been inordinate and inexcusable delay in the prosecution of the action.

[9] The word 'inordinate' is defined in the Supreme Court Practice as follows;

'Inordinate' means materially longer than the time usually regarded by the profession and courts as an acceptable period.'

[10] In Department of Transport v. Chris Smaller (Transport) Ltd [1989] 1 All.E.R.897 it was held that;

'Inexcusable delay by the plaintiff in prosecuting an action after the limitation period has expired is not a ground for striking out the action for want of prosecution unless the defendant has suffered prejudice from the delay or a fair trial of the issue is impossible.'

[11] The factors to be considered in deciding the likelihood of causing prejudice to the defendant in an application of this nature are elucidated in National Insurance Guarantee Corp. Ltd v. Robert Bradford & Co. Ltd (1970) 114 S.J.436, C.A as follows:

'The effect of the lapse of time on the memory of witnesses or, in the course of such time of their death or disappearance are the most usual factors. Their importance depends upon the circumstances, the issues and the other evidence that can be given. Thus the lapse of time may be very prejudicial if the circumstances of an accident or oral contracts or representations are in issue, but is of much less importance in a heavy, well documented commercial action.'

[12] In Allen v. Sir Alfred McAlpine & sons [1968] 1 All.E.R.543 at 547 Lord Denning commented on the issue of delay and its effects on the action as follows;

'When the delay is prolonged an inexcusable, and is such as to do grave injustice to one side or the other, or to both, the court may in its discretion dismiss the action straight away, leaving the plaintiff to his remedy against his own solicitor who has brought him to this plight.' (Emphasis added)

[13] In the above case Salmon L.J. commented as follows:

A defendant may apply to have an action dismissed for want of prosecution either (a) because of the plaintiff's failure to comply with the Rules of the Supreme Court or (b) under the court's inherent jurisdiction. In my view it matters not whether the application comes under limb (a) or (b), the same principles apply. They are as follows:

i. That there has been inordinate delay. It would be highly undesirable and indeed impossible to attempt to lay down a tarrif-so many years or more on one side of the line and a lesser period on the other. What is or is not inordinate delay must depend on the facts of each particular case. These very infinitely from case to case, but it should not be too difficult to recognise inordinate delay when it occurs.

ii. That this inordinate delay is inexcusable. As a rule, until a credible excuse is made out, the natural inference would be that it is inexcusable.

iii. That the defendants are likely to be seriously prejudiced by the delay. This may be prejudice at the trial of issues between themselves and the plaintiff, or between each other, or between themselves and the 3rd parties. In addition to any inference that may properly be drawn from the delay itself, prejudice can sometimes be directly proved. As a rule, the longer the delay, the greater the likelihood of serious prejudice at the trial.

If the defendant establishes the three factors to which I have referred, the court, in exercising its discretion, must take into consideration the position of the plaintiff himself and strike a balance. If he is personally to blame for the delay, no difficult arises. There can be no injustices in his bearing the consequences of his own fault ......

[14] In the present case, Court has to consider whether there has been inordinate and inexcusable delay on the part of the plaintiff.

[15] Although there is a delay on the part of the plaintiff in prosecuting the action, court must not strike out the same, unless it is apparent that the delay is inordinate and it would cause serious prejudice to the defendant.

[16] Also, it is the plaintiff's duty and the responsibility to take necessary steps without undue delay and move his case expeditiously and diligently. Merely because an action has been instituted by the plaintiff, that does not mean that the plaintiff has an unqualified right to make the defendant to view future with some trepidation.

[17] In the present case the delay was four years and ten months, which is not excusable in the absence of any reasonable explanation by the plaintiff. The plaintiff has failed to take any step to prosecute the matter since 16.07.2009.

[18] Gates J as he then was in Arvind Harakh v. Fiji Public Service Association (2000) FLR 50 stated as follows:

A substantial risk of prejudice will occur to the defendant in resisting the plaintiff's claim caused by a 3 year delay when the plaintiff did nothing after pleading closed. There is a substantial risk that the court will not be able to do justice at the trial. The matter cannot be cured simply by the making of an 'unless order' and ordering costs. The unexplained delay of 3 years here to be unsatisfactory and a matter against which the HC at Lautoka must set its heart thus, action struck out for want of prosecution.

[19] In Dee Timber Ltd & Another v. ANZ Banking Group & another [1999] HBC167/99, it was stated:

Where the plaintiff's failure to take steps to proceed to trial, to file an affidavit in response to the present application, or to appear in response to the deputy registrar's order, are sufficient grounds for a finding that the conduct of the plaintiff has been intentional. The delay was inordinate and inexcusable and that such delay has caused to prejudice to the defendant in his duties as the receiver, thus application granted.

[20] In the present case, the plaintiff's conduct when considered, clearly suggests that the case has not been prosecuted diligently and expeditiously, and further, the grounds advanced by the plaintiff are far from satisfactory and hence cannot be accepted.

[21] Moreover, when the delay is both inordinate and inexcusable, it poses a substantial risk that a fair trial would not be possible hence, the prejudice that would be caused to the defendant due to the delay on the part of the plaintiff is quite substantial.

[22] Since this action commenced almost 14 years ago, the defendant may find difficulty to trace and summon his witnesses. Even if the witnesses are summoned, still there is a strong possibility that their memory would have been faded with the passage of time, and therefore, the chances of having a fair trial are very remote.

[23] I am also mindful of the time and resources including financial, which would have been expended by the defendant for last fourteen years and therefore it is my view that the defendant should not be allowed to be suffered any further at the hands of the plaintiff.

[24] The defendant further submitted that there was no merit in the plaintiff's claim against the defendant. It could be observed, that the plaintiff's claim is in relation to a request by the 2nd plaintiff for an overdraft facility which was never approved by the defendant. The defendant in its statement of defence stated that the overdraft facility of $ 1.7 million, which was sought by the 2nd plaintiff was not approved by the defendant. The defendant only disbursed $ 500,000.00 to the 2nd plaintiff. The plaintiffs stated that the defendant failed or neglected to provide the agreed total loan.

[25] However, it appears that there was no absolute guarantee given by the defendant bank to the plaintiff that the plaintiff's loan requirement of $ 1.7 million would be met by the defendant.

[26] Further, the defendant being a bank would have various internal administrative procedures to follow before any overdraft facility would be approved to the second plaintiff. The plaintiff would also have been required to satisfy certain requirements without which the defendant could not approve any overdraft facility.

[27] Merely because the plaintiff had entered into an agreement with a third party on the expectation that his entire loan requirement would be granted by the defendant and if the loan was not subsequently approved by the defendant does not in my view arise a cause of action for the plaintiff against the defendant. Furthermore, the plaintiff in his statement of claim states that the 1st plaintiff as accountant for the 2nd plaintiff had written to the defendant seeking an overdraft. But it is never stated that the defendant had agreed to issue an overdraft to the plaintiff which shows that the plaintiffs' cause of action against the defendant is based on an agreement which was never in existence.

[28] The plaintiff should have got the loan approval first and then proceeded with his investments. The statement of claim when perused clearly shows that the plaintiff had proceeded with his real estate business on the expectation that he would be granted an overdraft for $ 1.7 million by the defendant but later found that it was not approved by the defendant.

[29] In the circumstances, it is apparent that the plaintiffs do not have a meritorious claim against the defendant, which will further strengthen the defendant's application to strike out the plaintiffs' action.

[30] Upon consideration of the above, I allow the defendants application and accordingly the plaintiff's action is struck out.

[31] Cost is assessed summarily in the sum of $ 500.00.

Pradeep Hettiarachchi
JUDGE

At Suva
8 November, 2011