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Kento Fiji Ltd v Naobeka Investment Ltd [2014] FJHC 92; HBC100.2012 (25 February 2014)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION
AT LAUTOKA


CIVL JURISDICTION


Civil Action No. HBC 100 of 2012


BETWEEN:


KENTO FIJI LTD
a limited liability company having its registeredoffice at P.O. Box 124, Nadi.
Plaintiff


AND:


NAOBEKA INVESTMENT LIMITED
a limited liability company having its registered office at P.O.Box 1719, Nadi
1st Defendant


AND:


ITAUKEI LAND TRUST BOARD
formerly known as NATIVE LAND TRUST BOARD a statutory body registered under the provisions of Native Land Trust Act with head office at Suva, Fiji
2nd Defendant


AND


REGISTRAR OF TITLES
of Suvavou House, Suva
3rd Defendant


Before : Acting Master M H Mohamed Ajmeer
Counsel : Mr. Sosefo Sikuri Inoke for the Plaintiff
Mr. Vuataki for the 1st Defendant
Mr. Nayare for the 2nd Defendant
Mrs Lee for the 3rd Defendant


Date of Hearing : 20 January 2014
Date of Ruling : 25 February 2014


RULING
[ON SUMMONS SEEKING LEAVE TO AMEND]


Introduction


[1] This is an application filed by the 1st Defendant on 18 October 2013 seeking leave to amend its summons dated 27 June 2013 and filed on 28 June 2013 ("the application"). The application is supported by an affidavit of Joeli Vatunitu sworn on 17 October 2013. The application is made pursuant to O. 20, r.7 of the High Court Rules 1988 (HCR) and inherent jurisdiction of the court on the grounds that the amendments sought by the 1st Defendant are necessary to enable the court to adequately address the issues complained of by the 1st Defendant based on the true state of facts on which the 1st Defendant intends to rely and pursuant to O.3 r.4 of HCR and inherent jurisdiction of the court on the grounds that the 1st Defendant seeks an urgent determination of its application herein and the interest of justice.


[2] The application seeks the following orders:


  1. The 1st Defendant be granted leave to amend its Summons dated 27 June 2013 and filed 28 June 2013;
  2. There be abridgement of time of service of this application;
  3. Costs of this application be in the cause; and
  4. Such other or further orders as this court deems appropriate.

[3] The 1st Defendant's application seeking leave to amend is opposed by the Plaintiff. The Plaintiff filed an affidavit of Michael Clowes, a director of Kent (Fiji) Limited (the Plaintiff) in opposition sworn on 2nd December 2013 and filed on 13 December 2013. The Plaintiff objects to the 1st Defendant's summons and this application on the ground that they are frivolous, vexatious, abuses of process and doomed to fail in light of Master Rajasinghe's ruling.


[4] Previously, on 28 June 2013 the 1st Defendant filed a summons pursuant to O. 18 r.18 (1) (a), O.33 r.3, 4(2), 5 and 7 and O.3 r.4 of the HCR, supported with an affidavit of Iliaseri Varo to strike out the Plaintiff's action and claim against the Defendants on the ground that it discloses no reasonable cause of action. The summons filed by the 1st Defendant sought the following orders:


1. THAT the Plaintiff's action and claim against the Defendants be struck out and dismissed on the following grounds that:-


  1. It disclosed no reasonable cause of action;
  2. It is scandalous, frivolous or vexatious;
  1. It is an abuse of the process of this Honourable Court

2. Alternatively,


a) that there be a trial of a preliminary point that the sublease alleged by the Plaintiff was not executed by it and 1st Defendant had rescinded its offer, but if executed by it, the alleged sublease ceased to have effect by virtue of clause 5(a) of the Third Schedule of the alleged sublease and the Plaintiff is not entitled to any reliefs;


b) that the determination of the preliminary point be dealt with on the affidavit material filed by the Plaintiff in his application for injunction orders and so much of the evidence in the affidavits filed by the Defendants filed in opposition which have not been disputed by the Plaintiff.


c) Alternatively, this Honourable Court give directions for the reception of further evidence confined to the issue of the execution and the ceasing to take effect of the alleged sublease.


[5] Master Thushara Rajasinghe heard the summons filed by the 1st Defendant on 28 June 2013 and delivered his ruling on 16 October 2013 (ruling was pronounced by Justice A. Tuilevuka) dismissing and striking out the summons under O.18 r.18 (1) (a) of the HCR.


[6] Interestingly, it is worthy of note that the 1st Defendant filed the current application to amend only after Master Thushara Rajasinghe's ruling handed down by Justice Tuilevuka on 16 October 2013.


[7] In the current application, the 1st Defendant seeks to amend the summons filed on 28 June 2013 so as to include four new issues as follows:


  1. Whether the first defendants offer of a sublease was executed by the plaintiff (in accordance with the plaintiff's Articles of Association and\or the Companies Act Cap 247). And if not executed, whether the first defendant has rescinded its offer whereby there is no sublease between the first defendant and the plaintiff;
  2. Whether the non-registration of the sublease alleged by the plaintiff renders the said alleged sublease unenforceable and/or void;
  1. Whether the non-compliance of the Foreign Investments Act 1999 by the plaintiff renders the sublease alleged by the plaintiff unenforceable and\or void;
  1. Whether the subsequent written consent of the Itaukei Land Trust Board to the sublease alleged by the plaintiff renders the said alleged sublease null and void by virtue of the iTaukei Land Trust Act CAP 134;
  2. Whether the sublease alleged by the plaintiff ceased to have effect by virtue of clause 5(a) of the Third Schedule of the said alleged sublease (See paragraph 2 of Joeli Vatunitu's affidavit) [my emphasis].

[8] Both the counsels agreed and opted to file their respective written submissions. The 1st Defendant also filed a reply submission. At hearing of the application on 20 January 2014, both counsels made oral submissions as well. Both counsels provided helpful submissions to the Court, bothwritten and oral.


Background


[9] On 9 May 2012 the Plaintiff filed a writ of summons claiming, inter alia, the following relief on the four causes of action framed in the statement of claim:


  1. An injunction restraining the 1st defendant whether by itself or its agents or servants from preventing the Plaintiff's access to the Land Lease known as "Malamala Island in the Tikina of Nadi, Province of Ba containing an area of 2.4260 hectares for a period of 25 years commencing on the 1st day of August 2007" (the sub lease) for the purposes of carrying out day trips under the sublease.
  2. A declaration that any purported cancellation of sub lease is illegal, invalid and void.
  3. A declaration that no notice confirming to or complying with the prescription of section 105 of the Property Law Act has ever been given to the Plaintiff by the 1st Defendant in respect of the sublease.
  4. A declaration that any purported re-entry and recovery of possession by the 1st defendant in the sublease is illegal, invalid and void.
  5. An injunction restraining the 1st and 2nd defendants from dealing with any of the land comprised in the sublease.
  6. An injunction restraining the 3rd defendant from registering any dealing in respect of any of the land comprised and described in the sub lease.
  7. Costs

[10] The brief facts of the case, as I gleamed from the statement of claim, may be stated thus:


  1. The Plaintiff, Kento Fiji Limited (KFL) is a Fiji registered company and is the registered proprietor of Land Lease known as "Malamala Island in the Tikina of Nadi, Province of Ba containing an area of 2.4260 hectares for a period of 25 years commencing on the 1st day of August 2007" (the sub lease with the Plaintiff known as the sub lessee) duly authorised by the 1st and 2nddefendants. The 1st defendant is the sub lessor of the sub lease and the lessee of the head lease.
  2. A head lease exists between the 1st defendant and the 2nd defendant over the same land area as the sub lease but for a long term of 99 years commencing on the 1st day of July 2007 under terms therein. The 2nd defendant is the head lessor of the head lease and is overall in charge of managing the head lease and the sublease.
  3. The Plaintiff says that by notices in writing dated the 1st day of March 2012) and the 29th day of March 2012, the 1st Defendant purported to rescind or cancel the sub lease for the various and multiple reasons that:
    1. The Plaintiff failed to carry out the survey under clause 5a) of the Third Schedule of the sub lease within six (6) months of the sub lease.
    2. The sub lease having been signed by one director under common seal of the Plaintiff was no longer acceptable to the 1st Defendant.
    3. All payments of rentals and obligations by the Plaintiff to the 1st Defendant under the sub lease were a purported "Veilomani" (kind) way of being allowed the benefit of the island till the 1st Defendant served the said notices 4 ½ after enjoying benefits and acting as the 1st Defendant sub lessor under the sub lease and lessee under the head lease.
    4. Purportedly that the Plaintiff did not have proper approval by the Foreign Trade and Investments Board or Investments Fiji as it is now called.

[11] The 1st Defendant in its statement of defence filed on 23 May 2012 asserted, inter alia, that:


  1. The said document had not been properly executed by the Plaintiff and 1st defendant had withdrawn its offer;
  2. Alternatively, the said document if properly executed had ceased to exist by terms of clause 5(a) of the Third Schedule of the Agreement by Plaintiff not engaging a surveyor and providing sufficient evidence thereof within six months of such engagement;
  1. Alternatively, if the sublease agreed had continued to exist it had been properly rescinded by 1st defendant on 1st March 2012 or alternatively, re-entered on 16th May, 2012 and such sublease was not registered with 3rd defendant;

Application for Amendment- Parties' contentions


[12] Counsels for the Plaintiff and the 1st Defendant provided helpful submissions, both oral and written and case law authorities on the amendment application.


Plaintiff's submissions


[13] The Plaintiff says, these are not "preliminary" as such. These are real live issues raised by the 1st Defendant in its Defence and in the pleadings. They appear in the very first three paragraphs, 1(a), (b) and (c) [vide paragraph 10 above], and in other parts of its Defence. Indeed, all other issues raised in this application are raised by the 1st Defendant and are the very issues to be determined at the trial. This is clear from the Master's conclusions in his Ruling at paragraphs 43 to 47. The Master's Ruling, disposes of this application and the whole of the 1st Defendant's Summons filed on 28 June 2013.


1st Defendant's submissions


[14] The 1st Defendant say, the amendment sought are necessary, the amendments sought show some prospect of success and the Plaintiff will not be prejudiced by the amendments. They submit, the amendments to the summons are necessary to ensure that the Court will adequately address the legal issues that are apparent from the undisputed facts before the Court.


The Law on Leave to Amend certain other document


[15] O. 20, r.7 of the HCR deals with amendment of certain documents. The rule provides that:


"Amendment of certain other documents (o.20, r.7)


7. – (1) For the purpose of determining the real question in controversy between the parties to any proceedings, or of correcting any defect or error in any proceedings, the Court may at any stage of the proceedings and either of its own motion or on the application of any party to the proceedings order any document in the proceedings to be amended on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct) [Emphasis added].


(2) This rule shall not have effect in relation to a judgment or order."


[16] In Fiji Electricity Authority v Suva City Council (2000)1 FLR 114 HBC 901/84S 5 August 1994 Pathik, J held that:


"'At any stage of the proceedings' would cover before judgment. Here, 'hearing' is complete and defendant discovered key issue upon reading plaintiff's written submissions. Amendment to identify who pays for the costs of relocation of electrical power posts when street are widened is allowed 'for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings (Emphasis added)."


Analysis and decision


[17] Initially, the 1st Defendant seeks to amend its summons filed on 28 June 2013. In that summons the 1st Defendant sought to strike out and dismiss the Plaintiff's claim on the basis that the claim discloses no reasonable cause of action or alternatively, sought orders that the determination of the preliminary point be dealt with on the affidavit material filed by the Plaintiff in his application for injunction orders and so much of the evidence in the affidavits filed by the Defendants in opposition which have not been disputed by the Plaintiff or alternatively, the Court give directions for the reception of further evidence confined to the issue of the execution and the ceasing to take effect of the alleged sublease.


[18] Master Thushara Rajasinghe heard the 1st Defendant's summons filed on 28 June 2013 and made his ruling on 16 October 2013 dismissing the summons stating that the Plaintiff has disclosed a reasonable cause of action and that the facts pleaded raise legal question of importance and the factual issues arise from the pleadings need to be determined by a judge in a proper hearing (Emphasis added).


[19] The 1st Defendant did not prefer an appeal against Master Rajasinghe's ruling. Instead, they had filed the current application to amend their summons which was determined and disposed of by Master Rajasinghe.


[20] Pursuant to O.20, r. 7 (1) of the HCR, A document, other than a pleading, filed in any proceeding may be amended by the Court on application or ex mero mortu (its own motion) at any stage of the proceedings for the purpose of determining the real question in controversy between the parties or of correcting any defect or error. No doubt, the Court has discretion to amend any document filed in any action for these purposes.


[21] Learned Counsel for the Plaintiff argued that the 1st Defendant is trying to revive its summons filed on 28 June 2013 wherein Master Rajasinghe made a finding and dealt with the summons wholly. On the other hand 1st Defendant's counsel counter argued that the 1st Defendant is not trying to revive its summons filed on 28 June 2013, but only seek to amend it, for the Master's Ruling did not deal with the 1st Defendant's preliminary issue application. In the circumstance, he argued, it cannot be assumed that the Master had disposed of such issues in his Ruling of 16 October 2013.


[22] I must therefore decide firstly whether the Master Rajasinghe disposed of the 1st Defendant's summons filed on 28 June 2013 completely including the preliminary issue application which was made alternatively or only disposed of the striking out application filed under O. 18, r. 18 (1) (a) of the HCR. If I find that Master Rajasinghe has dealt with the summons wholly, the current application to amend must necessarily fail, for 'at any stage of the proceedings contemplated in O. 20, r.7 does not mean after judgment or order. If I find that Master Rajasinghe only dealt with the 1st Defendant's striking out application and not the alternative preliminary issue application then I must decide on whether or not to allow 1st Defendant's present amendment application exercising my discretion.


[23] One can decide by plain reading of Master Rajasinghe's Ruling dated 16 October 2013 whether he dealt with only the striking out application or he disposed of the whole summons filed by the 1st Defendant filed June 2013 including alternate preliminary issue application.


[24] Master Rajasinghe in his introductory part clearly states the nature of the 1st Defendant's summons inclusive of alternative preliminary issue application [paragraph 1 of his Ruling]. In conclusion Master Rajasinghe says under paragraph 43 as follows:


"In view of these findings, I find that in order to determine the validity of the sublease between the plaintiff and the first defendant the court is mainly required the terms of the agreement between the parties to enter into this sublease, the time of the application for consent was lodged, whether the first and the second defendants invited and encouraged the plaintiff to enter into this sublease and whether the plaintiff have completed his part under the sublease."


[25] On that basis, Master Rajasinghe found that the plaintiff has disclosed a reasonable cause of action. He further found the facts as pleaded raise legal question of importance and the factual issues arise from the pleadings need to be determined by a judge (Emphasis added) [vide paragraph 47 of the Master Rajasinghe's Ruling]. This Ruling clearly shows that Master Rajasinghe has considered and disposed of the summons filed by the 1st Defendant on 28 June 2013 wholly. If he had considered only the striking out application, he would not have said that legal question of importance and the factual issues arising from the pleadings need to be determined by a judge. This statement of Master Rajasinghe clearly indicates that he had considered the preliminary issue application which was sought alternatively by the 1st Defendant in its summons filed on 28 June 2013. Therefore, I am of opinion that Master Rajasinghe has disposed of the 1st Defendant's summons filed on 28 June 2013 wholly and completely by his Ruling delivered on 16 October 2013.


[26] I can say this for another reason as well. There appears the hearing before Master Rajasinghe had been limited to striking out application. The 1st Defendant agreed to that cause of action. Under paragraph 2 of the Ruling it is stated that all the parties to this proceedings agreed initially to limit the hearing of this summons on the issue of that the plaintiff discloses no reasonable cause of pursuant to O.18,r.18 (1) (a) of the High Court Rule. Obviously, the 1st Defendant had agreed to limit the hearing on their striking out application without reserving the right to pursue their alternative preliminary issue application. The 1st Defendant did not insist hearing on their preliminary issue application. By doing so, the 1st Defendant had waived their right to hearing on their alternative application.


[27] The 1st Defendant had made two inconsistent applications in its summons filed on 28 June 2013. One is striking out application. The other is preliminary issue application (alternative application). The 1st Defendant chose and agreed to proceed with the striking out application. The principle of estoppel will apply in the circumstance.


[28] The principle that a person may not approbate and reprobate expresses two propositions:


(1) that the person estion, han, having a choice between two courses of conduct, is to be treated as having made an election from which he cannot resile; and

(2) that he not be regarded, ied, in general at any rate, as having so elected unless he has taken a benefit under or arising out of the course of conduct which s firrsuedwith which his subsequent conduct is inis inconsiconsistentstent


Thus a claimant, having two inconsistent claims, who elects to abandon one and pursue the other may not, in general, afterwards choose to return to the former claim and sue on it; but this rule of election does not apply where the two claims are not inconsistent and the circumstances do not show an intention to abandon one of them. The common law principle which puts a person to his election between alternative inconsistent courses of conduct has no connection with the equitable doctrine of election and relates mainly, though not exclusively, to alternative remedies in a court of justice. It is subject, in civil proceedings to which the Civil Procedure Rules ('the CPR') apply, to the overriding objective of dealing with cases justly (Emphasis added) [see Halbury 16 (2) at 962].


[29] In this case the 1st Defendant made two applications in the summons filed on 28 June 2013 and opted to hearing on the striking out application without reserving its right to pursue its other alternative application. The 1st Defendant, having two inconsistent claims (applications), elected to abandon one and pursued the other may not afterwards choose to return to the former claim (preliminary issue application) and sue on it. If the 1st Defendant had intended to pursue its preliminary issue application, it should have reserved its right to pursue that application later when agreeing to limit the hearing before Master Rajasinghe. The 1st Defendant, having a choice between two courses of conduct, now is to be treated as having made an election from which it cannot resile.


[30] The current application to amend is made by the 1st Defendant with the view to pursue its preliminary issue application made alternatively in the summons filed on 28 June 2013 two days after Master Rajasinghe's Ruling. With the agreement of all parties Master Rajasinghe had dealt with the 1st Defendant's summons filed on 28 June 2013 wholly. The 1st Defendant cannot have a second bite on the same cherry.


[31] Now it is apparent, as a result of my finding that the current application by the 1st Defendant to amend its summons filed on 28 June 2013 has been made after that summons was dealt with. It would be imprudent to make an application to a summons that has already been dealt with. "At any stage of the proceedings" as envisaged under O.20, r.7 does not mean "at any stage of the proceedings after judgment. I am fortified with the case authority of Fiji Electricity Authority v Suva City Council (supra) where Pathik, J held that at any stage of the proceedings' would cover before judgment.


[32] The 1st Defendant summons (Seeking Leave to Amend the summons filed on 28 June 2013) has been filed after the summons sought to be amended was dealt with. Hence it is bound to fail.


[33] For all these reasons, I struck out and dismissed the summons (Seeking Leave to Amend) filed by the 1st Defendant on 18 October 2013.


Cost


[34] Learned counsel for the Plaintiff submitted that the costs of this application, the previous one the substantive application should be on an indemnity basis for the very reason that it is a hopeless application which the 1st Defendant ought to have known. He further submitted that the 1st Defendant is driven by greed and bad faith. These facts and circumstances support an award for costs on an indemnity basis as opposed to party-party costs.


[35] Is there any ground for me to make order for costs on indemnity basis? An award of indemnity costs is traditionally granted when there is Court's serious displeasure at the way in which the losing party has behaved or when there is abuse of process on the part of the losing party. In this case I do not discern any serious displeasure at the way in which the 1st Defendant behaved or its case has been conducted or abuse of process on its part. I find it difficult see any clearly defensible reason in this case to make an award of indemnity costs. I believe the 1st Defendant had commenced these proceedings on a mistaken basis. In the circumstance an award of standard costs is ordinarily sufficient sanction. I therefore taking all into account summarily asses the costs at $1,000.00.


Order


The summons (Seeking Leave to Amend) filed on 18 October 2013 is struck out and dismissed with the summarily assessed cost of $1,000.00.


...................................
M H Mohamed Ajmeer
Acting Master of the High Court
At Lautoka


25/02/2014

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