Prasad v NBF Asset Management Bank [2013] FJHC 67; Miscellaneous Action 01.2012 (22 February 2013)

IN THE HIGH COURT of FIJI AT LABASA
CIVIL JURISDICTION

Miscellaneous Action No: 01/12

BETWEEN:

MUNESH PRASAD
businessman of Nacekoro,
Savusavu.
APPLICANT

AND:

NBF ASSET MANAGEMENT BANK
a financial institution now having its office at Level 3, Reserve Bank of Fiji Building, Pratt Street, Suva.
RESPONDENT

Before: Master Robinson
Appearances : Mr Vere for the applicant
: Mr. S Prasad as agent for Jamnadas & Associates for the Respondent.

RULING

Introduction

This is a miscellaneous application by a "Notice of Motion" seeking an order from the High Court for leave to be given to the applicant to institute proceedings against the Respondent pursuant to Section 43 of the Banking Act. Cap. 212. Section 43 of the Banking Act allows an applicant to first seek leave from the High Court or from the controller of a licensed financial institution before it could commence or continue any proceedings or counterclaim against the said licensed financial institution.

Generally speaking under the Banking Act, where a licensed financial institution is unable to meet its obligations or suspending payment or is insolvent, the Reserve Bank may with the consent of the Minister for Finance assume control of or appoint a person (the controller) to assume control of the business of the said licensed financial institution. Once a licensed financial institution is under the controllership of the Reserve Bank or a controller a general moratorium to all actions or claims against the said financial institution applies and can only be instituted with the leave of the controller or the High Court.

The Application

The Applicant's notice of motion was supported by an affidavit and was filed on the 8th of May 2012. The application was opposed. There was some difficulty at the initial stages of the proceedings relating to whether the Applicant can institute any Court proceedings given that he was a bankrupt and that there was a receiving order against him. This was not sorted out until the 15 February 2013. Prior to that the parties had consented to a ruling based on their respective submissions the last of which was received on 21 January and neither submission raised the issue of the correctness of the initiating procedure.
The motion sought an order:-

1. "That leave be granted to the Applicant to file a Writ of Summons in the Labasa High Court against the Respondent and claim damage, loss and other relief pursuant to the requirement of the Banking Act Cap. 212 herein before referred to."

Is the originating procedure correct?

It appears appropriate, before proceeding any further, to determine whether the "Notice of Motion" is a suitable procedure or vehicle by which this type of application should be made. The applicant was informed by the Court when the matter was called last September that one could not use a notice of motion as an originating proceeding in the High Court. No attempt to cure or regularise this defect was made neither was any objection as to the form of the application made by the Respondent. The fact that there was no objection to the form of the application does not in my view put the Court under an obligation to accept it as such.

There are four ways in which a civil proceeding can be instituted in the High Court, they are by writ, originating summons, originating motion or petition. The relevant order under the High Court Rules which directs that this be the means by which a proceeding must be begun is Order 5 rule 1. This Order provides that:-

"Subject to the provision of any Act and of these Rules, civil proceedings in the High Court maybe begun by writ, originating summons, origination motion or petition".

The word may in the provision gave a discretion to a party wishing to institute proceedings to choose from the four available options which originating procedure is more suitable for the cause of action to be litigated. If the wrong option is chosen it is not considered to be fatal to the action and is only considered to be an irregularity. Order 2 of the High Court Rules provides the way by which this irregularity could be corrected. Because of the need to promote and encourage public access to the justice system the Court often applies a very liberal interpretation of Order 2 rule 1. In so doing it attempts to abolish the distinction between non-compliance with procedural rules which renders proceedings a nullity and non-compliance which merely renders proceedings irregular. There are however no powers of the Court to remedy failures of a fundamental kind. (see paragraph 2/1/3 page 10 1999 Supreme Court Practice Vol. 1)

An option to institute proceedings is considered a wrong option when it does not follow the direction given by Order 5 of the High Court Rules about how that particular cause action should be instituted or what is its proper originating procedure or form. It is irregular only. The following directions as to the proper originating procedures for certain causes of action are then given by the Rules.

Order 5 rule 2 determines the proceedings which must be begun by writ and they are:-

1. Where a claim is made by the plaintiff for any relief or remedy for any tort, other than trespass to land;

2. Where a claim made by the plaintiff is based on an allegation of fraud;

3. Where a claim is made by the plaintiff for damages for breach of duty (whether the duty exists by virtue of a contract or of a provision made by or under an Act or independently of any contract or any such provision), where the damages claimed consist of or include damages in respect of the death of any person or in respect of personal injuries to any person or in respect of damage to any property; and

4. Where a claim is made by the plaintiff in respect of the infringement of a patent.

In a similar way Order 5 rule 3 determines which cause of action must be begun by originating summons and they are:-

1. Proceedings by which an application is to be made to the High Court or a judge thereof under any Act must be begun by originating summons except where by these Rules or by or under any Act the application in question is expressly required or authorised to be made by some other means.

This rule is specific to applications made under any Act except where these rules or the Act itself says that the application must be begun. This requirement is mandatory. (see paragraph (56) Reserve Bank of Fiji –v- Gallagher (2006) FCA 37 ABU 0030 per Ward JA, Barker JA & Henry JA) Order 7 of the High Court Rules determines the form and contents of the originating summons.

There are also proceedings which can be begun either by writ or by originating summons whichever is appropriate to the plaintiff. These proceedings are:-

1. Those in which the sole or principal question at issue is, or is likely to be, one of the construction of an Act or of any instrument made under an Act, or of any deed, will, contract or other document, or some other question of law, or;

2. Those in which there is unlikely to be any substantial dispute of fact.

An originating summons is a summons by which an action may be commenced otherwise than by writ. (Re Holloway, Ex p.Pallister[1894] UKLawRpKQB 76; , (1894) 2 QB 163 C.A. per Lord Esher, MR at 166). Generally however, in proceedings where the Plaintiff intends to apply for judgment under Order 14 or Order 86 it is more appropriate for it to be begun by writ. It is clear from the above that the majority of the originating proceedings in the High Court are begun by either a writ or originating summons.

Actions which are to be begun by originating motion or petition appears to be restricted in that they can only be used if but only if by these rules or under any Act the proceedings are required or authorised to be so begun. (Order 5 rule 5). The form or issue of originating motion or other motions are determined by Order 8.

The proceeding before this Court is an application for leave under Section 43 of the Banking Act to institute proceedings against the Respondent. It is a proceeding under an Act. Order 5, rule 3 requires that this application should be begun by originating summons if the Act does not state otherwise. The Banking Act does not state how the application for leave should be made so the High Court Rules apply.

Is the non-compliance of the rules by the Applicant an irregularity which could be cured or is the non-compliance fatal and of a fundamental kind. The answer to this question depends on whether the notice of motion filed by the applicant is accepted by the rules as an originating process. It is clear that a notice of motion is not one of the four (4) originating processes in which an action can be begun under the rules as referred to in Order 5 rule 1. If it was an originating process albeit an incorrect one it can be cured by the Court. This is because the Court cannot wholly set aside any proceedings or originating process on the ground that the proceedings were required by the Rules to be begun by an originating process other than the one employed (Order 2 rule 1(3).

Hence using one of the four originating procedure in initiating an action is a fundamental requirement of the rules. Therefore the notice of motion filed by the applicant as the originating procedure is a failure of a fundamental kind and this court does not have the power to cure it. A notice of motion is only appropriate in applications where there is a pending action. It is fundamental in that it goes to the root of the procedure required for an originating process of this kind is to be made and to which Order 5 rule 3 mandates. As far as I am aware all other applications under s43 of the Banking Act that has proceeded in the High has come by way of an originating summons.

Conclusion

The application is therefore struck out with each party to pay its own costs. This does not necessarily mean that the Applicant cannot institute further proceedings in the matter but it must do so in accordance with the rules.
The reason for no costs being awarded in favour of the Respondent is that it had ample time and opportunity to oppose the proceeding in the form it was made and file the necessary application to strike out but did not.

Dated at Labasa this 22 February 2013.

H A Robinson
Master
HIGH COURT LABASA