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Suluka v Fiji Group Welfare [2015] FJHC 196; HBC228.2013 (18 March 2015)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION


Civil Action No. HBC 228 of 2013


BETWEEN :


SEKAIA SULUKA and TEVITA RALULU
(On behalf of themselves and all other persons who are retired Police Officers)
PLAINTIFFS


AND :


FIJI GROUP WELFARE
1ST DEFENDANT


AND :


CHAIRMAN OF GROUP WELFARE SCHEME (Ravi Narayan)
2ND DEFENDANT


AND :


FIJI GROUP WELFARE SCHEME SECRETARY (Rishi Deo)
3RD DEFENDANT


AND :


COMMISSIONER OF POLICE
4TH DEFENDANT


AND :


LIFE INSURANCE CORPORATION OF INDIA
THIRD PARTY


APPEARANCE/REPRESENTATION


Appearances:
Mr. Maisamoa for the Plaintiffs (All plaintiffs present)
Mr. Tuiwaqa for all Defendants
Ms. Maharaj for Third Party


Date of Ruling: 18th March, 2015
Ruling of: Acting Master Vishwa Datt Sharma


RULING


  1. INTRODUCTION
  1. This is a Summons dated 25th August, 2014 filed by the Third Party Counsel pursuant to Order 16 Rule 6 of the High Court Rules 1988 seeking an order to set aside the Defendant's Third Party Notice dated 30th June, 2014 served on the third party, namely, Life Insurance Corporation of India (LICI) for it to be joined as a third party on the grounds that:
    1. The application is misconceived;
    2. That it is frivolous, vexatious; and otherwise
    1. An abuse of court process.
  2. Counsel also seeks for an order for costs of the said notice of this application to be paid by the Defendants to the Third Party on an indemnity basis.
  3. The application was supported with an affidavit sworn by Taina Talakubu.
  4. The application together with the affidavit in support was served onto Fiji Group Welfare Scheme Secretary (First Defendant) on 21st August, 2014.
  5. The First named Defendant filed an affidavit in opposition on 14th November, 2014 to the Third Party application in terms of the directions made by the court.
  6. Both parties to the proceedings filed written submissions in this regard.
  1. THIRD PARTY'S CASE
  1. The application filed by the Third Party on 26th August, 2014 sought for an order to set aside the Defendant's Third Party Notice, dated 30th June, 2014 to join Life Insurance Corporation of India (LICI) as a Third Party to this proceeding. This is the only pending issue that this court is required to hear and determine at this stage of the proceedings and nothing more.
  2. The grounds of objections were that the application is misconceived, frivolous, vexatious and an abuse of court process.
  3. That Order 16 (1) of the High Court Rules requires the Defendant to issue a Third Party Notice immediately after he files his Notice of Intention to Defend and before serving his Statement of Defence.
  4. The chronology of events set out hereunder shows that the Defendant is in breach of the relevant High Court Rules filed its Third Party Notice on 30th June 2014 after they had filed their Statement of Defence on 13th September, 2013.
  5. That the defendant has failed to comply with the format of the notice which should be in Form 9 of the High Court Rules.
  6. That the court needs to look at the pleadings filed herein in order to determine the striking out application. The Counsel apprised court to paragraphs 19, 21 and 23 of the Statement of Claim and paragraphs 12 and 14 of the Statement of Defence respectively.
  7. That there was a Material Non-Disclosure by the First Defendant when a letter was written to the third party stating that the first defendant had ceased business with LICI as of September, 2010 and therefore LICI had no contractual obligations with the Defendants. Thus, the question raised was 'how can the Defendants make an application to join LICI as third Party?'
  8. The Affidavit In Opposition does not reveal any Cause of Action against the Third Party as to the proceedings.
  9. The Third Party Notice is devoid of a statement of claim and therefore no cause of action can be envisaged.
  10. The Counsel submitted that Order 16 Rule (2) of the High Court Rules 1988 requires the applicant to satisfy the court of 4 conditions in its affidavit in support in particular condition (c) and the law on striking out proceedings under Order 18 Rule 18.
  11. That the Defendants' Third Party Notice should be dismissed.
  1. DEFENDANTS' CASE
  1. That the Defendants' claim arises from this application on the basis that the contract was between the Plaintiff's and the Life Insurance Corporation of India (LICI), which the Plaintiff's entered into the contract and or agreed to the policy which had the Life Endowment Cover as one of its benefit.
  2. That in light of the above circumstances, the First Defendant wishes to include LICI as a third party to clarify the following-
  3. That the Defendants further state that there was no contract or agreement made between the Plaintiff's and the Defendant's in respect of the Defendant's paying out of the Life Endowment Cover of $11,600 to the Plaintiff's rather the contract was between the Plaintiff's and Life Insurance Corporation of India (LICI) and the money to be paid to LICI was facilitated by the FPGWS.
  4. That they are aware that the Plaintiffs were issued with a policy certificate by the intended Third Party.
  5. That the second Defendant has indicated to the Plaintiffs that they need to bring in LICI as a party to clarify all these issues but to no avail.
  6. That it is apparent from the pleadings filed that the Plaintiffs do have a reasonable cause of action.
  7. As to frivolous or vexatious claim, the Defendants submitted that at paragraphs 15, 18 and 19 of the Supreme Court Practice 1993, Vol. 1 (White Book) states-

'By these words are meant cases which are obviously frivolous or vexatious or obviously unsustainable per Lindley LJ in Attorney General of Duchy of Lancaster v. L. & N.W. Ry [1892] UKLawRpCh 134; [1892] 3 Ch. 274, 277. The Pleadings must be so clearly frivolous that to put it forward would be an abuse of the court (per Juene P. in Young v. Halloway [1894] UKLawRpPro 42; [1895] P. 87, p.90..."


  1. The Defendants referred to the Oxford Advance Learners Dictionary 7th Ed. and further defined the meaning of the words frivolous to mean having no useful or serious purpose and vexatious to mean upsetting or annoying.
  2. That the intended Third Party LICI must establish that the claim lacks merit (i.e has no useful purpose) and is only to upset or annoy the applicant's.
  3. That since the basic facts on which the Plaintiffs claim is based on issues that are relevant for determination by the Court the Defendants claim cannot be said to be frivolous and vexatious.
  4. The Defendants submitted that for the aforesaid grounds the Third Party Notice not to be set aside but the Intended Third Party's claim be dismissed with costs on an indemnity basis.
  1. THE LAW

ORDER 16 RULE 1


THIRD PARTY AND SIMILAR PROCEEDINGS


1. (1) Where in any action a defendant who has given notice of intention to defend –


(a) claims against a person not already a party to the action any contribution or indemnity; or


(b) claims against such a person any relief or remedy relating to or connected with the original subject-matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or


(c) requires that any question or issue relating to or connected with the original subject-matter of the action should be determined not only as between the plaintiff and the defendant but also as between either or both of them and a person not already a party to the action;


then, subject to paragraph (2), the defendant may issue a notice in Form No. 9 in Appendix A, (in this Order referred to as a third party notice), containing a statement of the nature of the claim made against him and, as the case may be, either of the nature and grounds of the claim made by him or of the question or issue required to be determined.


(2) A defendant to an action may not issue a third party notice without the leave of the Court unless the action was begun by writ and he issues the notice before serving his defence on the plaintiff.


(3) Where a third party notice is served on the person against whom it is issued, he shall as from the time of service be a party to the action (in this Order referred to as a third party) with the same rights in respect of his defence against any claim made against him in the notice and otherwise as if he had been duly sued in the ordinary way by the defendant by whom the notice is issued. (underline is mine for emphasis)


Setting aside third party proceedings (O.16, r.6)


16. (6) Proceedings on a third party notice may, at any stage of the proceedings, be set aside by the Court.


ORDER 18 RULE 18


Striking out pleadings and endorsements (O.18, r.18)


18. (1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement of any writ in the action, or anything in any pleading or in the endorsement, on the ground that-


(a) it discloses no reasonable cause of action or defence, as the case may be; or

(b) it is scandalous, frivolous or vexatious; or

(c) it may prejudice, embarrass or delay the fair trial of the action; or

(d) it is otherwise an abuse of the 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.


  1. ANALYSIS and DETERMINATION
  1. It should be borne in mind that the present application and or the proceedings filed seeking an order for setting aside of the Third Party Notice is only between the Defendants and the Third Party, Life Insurance Corporation of India.
  2. The Plaintiffs filed a Wirt of Summons coupled with a Statement of Claim on 01st August, 2013 against the four (4) Defendants.
  3. At this point in time, the Plaintiffs did not include Life Insurance Corporation of India (LICI) as a third party to the proceedings.
  4. On 16th June, 2014, the Defendants filed an Ex-Parte Motion seeking leave to issue third party notice to Life Insurance Corporation of India (LICI) and this court accordingly granted the leave on 25th June, 2014.
  5. Subsequently, the Counsel representing the Intended Third Party filed a Summons seeking an order to set aside the court order for leave granted on 25th June, 2014. This is the only issue that this court is required to determine. It is also appropriate and essential that I make reference to the Intended Third Party's written submissions and deal with the additional Issues raised by the Counsel therein which are as follows-

She stated that no explanation or particulars have been given nor it appears, any particulars have been sought by the Defendants on what basis the Plaintiffs are entitled to seek $8,000,000.


(ii) At page 4 paragraph 4 - 'The Third Party Notice does not conform to the format; it is difficult to envisage the cause of action against the Third Party.'
  1. Therefore, this court has a total of three (3) Issues to determine which can be summarized as follows-
  2. The two (2) issues at paragraph 34 (a) and (b) above can be consolidated and determined as one (1) Issue and the issue at (c) above whether there is any cause of action or not can be determined as the second issue accordingly.
  3. The provisions of the Law in terms of Order 16 Rule 6 of the High Court Rules 1988 states as follows-

'Proceedings on a third party notice may, at any stage of the proceedings, be set aside by the Court.'


  1. The Law in terms of Order 18 Rule 18 (1) of the High Court Rules provides for as follows-

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


(a) it discloses no reasonable cause of action or defence, as the case may be; or

(b) it is scandalous, frivolous or vexatious; or

(c) it may prejudice, embarrass or delay the fair trial of the action; or

(d) it is otherwise an abuse of the 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.


  1. Reference is made to the case of Attorney General v Shiu Prasad Halka (1972) 18 FLR 210 at page 215 Marsack J.A. said:

'Following the decisions cited in the judgments of the Vice President and of the Judge of the court below, I think it is definitely established that the jurisdiction to strike out proceedings under Order 18 Rule 18(1) should be sparingly exercised, and only in exceptional cases. It should not be so exercised where legal questions of importance and difficulty are raised.'


  1. Reference is also made to Lindley M.R. in Hubbuck and Sons Ltd v Wilkinson, Heywood and Clark Limited [1898] UKLawRpKQB 176; (1899) 1 QB 86 at page 90,91 said:

'The application is made under Order XXV, Rule 4 Order XXV. Abolished demurrers and substituted a more summary process for getting rid of pleadings which show no reasonable cause of action or defence. Two courses are open to a Defendant who wishes to raise the question whether, assuming a statement of claim to be proved, it entitles the Plaintiff to relief. One method is to raise the question of law as directed by Order XXV., Rule 2, the other is to apply to strike out the statement of claim under Order XXV, Rule 4. The first method is appropriate to cases requiring argument and careful consideration. The Second and more summary procedure is only appropriate to cases which are plain and obvious, so that any Master or Judge can say at once that the Statement of Claim as it stands is insufficient, even if proved, to entitle the Plaintiff to what he asks. The use of the expression 'reasonable cause of action' in rule 4 shows that the summary procedure there introduced is only intended to be had recourse to in plain and obvious cases....'.


  1. The Law on striking out was also discussed by Hon. Justice Amaratunga in the case of Fiji Development Bank v Ledua [2011] FJHC 662, and the principle for striking out was also enunciated. He said

'that a defendant to an action may not issue a third party notice without the leave of the court unless the action was begun by writ and he or she issues the notice before serving his or her defence on the Plaintiff. He further added, 'the jurisdiction to strike out proceedings under Order 18 Rule 18 is guardedly exercised in exceptional cases only where, on the pleaded facts, the Plaintiff could not succeed as a matter of law. It is not exercised where the legal questions of importance are raised and where the cause of action must be so clearly untenable that they cannot possibly succeed......'


  1. The Summons filed by the Intended Third Party opposes the Defendants application and further states that the Defendants claim is-
  2. The Intended Third Party submitted that Order 16 (1) of the High Court Rules requires the Defendant to issue a Third Party Notice immediately after he files his Notice of Intention to Defend and before serving his statement of Defence. The Third Party Notice was filed on 30th June, 2014 after they had filed their Statement of Defence on 13th September, 2014.
  3. Upon the perusal of the court file, I find that the Defendants did not file any Notice of Intention to Defend this action but filed their Statement of Defence on 13th September, 2013 and subsequently filed a Third Party Notice on 30th June, 2014, nine months after obtaining court's leave to issue Third Party Notice.

I reiterate paragraph 40 herein above; 'that a defendant to an action may not issue a third party notice without the leave of the court... unless the action was begun by writ and issued the notice before serving his defence on the Plaintiff.


In the present case leave to issue third party notice was obtained after service of the defendants defence onto the Plaintiff. Although the action was commenced by a Writ of Summons, the Defendant was supposed to issue the notice first and then serve his defence.


  1. This in itself shows that the Defendants are in breach of the relevant High Court Rules as discussed hereinabove.

Does this procedural breach have a serious effect or impact on the Defendants? Is this breach sufficient to set aside the Third Party Notice? Can the breach be cured in law?


My answers to the above questions are that the breach may not have been intentional and can be explained in law. Not only that but it was this court which had earlier on granted the Third Party Notice to issue on 30th June, 2014 when the court was aware that the Defendants have filed and served their statement of Defence on 13th September, 2013. The Defendant was equally responsible and failed to inform court that a statement of Defence has already been served when he came with an Ex-Parte motion seeking an order for Third Party Notice to be issued, unless he was ignorant of the procedure and the law.


  1. It is also important to make reference to paragraphs 15, 16, 17, 18, 19 and 20 of the Plaintiffs Statement of Claim which mentions the Term Life Cover and the Term Life Endowment of all police officers dealing with the insurance company.

Cause of Action


  1. The Counsel for the Intended Third Party (LICI) raised the issue that the Plaintiffs writ claims damages against the Defendants for breach of contract in the sum of $8,000,000 but there is no explanation or particulars furnished, nor it appears that any particulars have been sought by the Defendants on what basis the Plaintiffs are entitled to seek $8,000,000. The Counsel further submitted that there is no cause of action envisaged against the Third Party (LICI) and there was no material disclosure of the letter dated 7th March, 2011 stating that the Defendant had ceased business with LICI as of September 2010.
  2. In order to answer the above; the pleadings in respect of the original proceedings coupled with the Third Party Notice is incomplete as of yet. The law provides for parties to make formal applications and seek an order for further and better particulars and for disclosures as may be required by to the satisfaction of any parties to this proceeding.

I find that there exists a cause of action in the claim that ought to be answered or defended at a full hearing.


Mischievous, frivolous, vexatious and an abuse of court process


  1. The Counsel also raised the question of law in terms of Clause 3 of the Issued policy which is governed by the Insurance Act 1998 and elaborated on the status of the Policy(s). She said that the policies have now lapsed and there is no surrender value attached due to nonpayment of the premium for three (3) years consecutive after the inception of the policy. That based on non remittance of the premium by the insured (through the first defendant) along with the written notice issued by third party and acknowledged by first defendant advising third party that they have ceased business with the third party that the third party notice issued by the first defendant is mischievous and an abuse of court process and therefore the third party notice issued by the defendants should be struck out.
  2. The written submissions filed by the Defendant on setting aside third party at paragraph 2.5 states that the Defendants claim arise out of the contract that existed between the Plaintiff and LICI. Further at paragraph 2.7 the Defendants are seeking answers and clarifications to various questions (i) to (ix) inclusive from the LICI. In order to ascertain the answers and clarifications from LICI, the third party (LICI) should be joined in as a party to the proceedings.
  3. It can be ascertained from the affidavit of Taina Talakubu filed herein that the Fiji Group Welfare Scheme [First Defendant] liaised with third party for issuance of certain policies to its members. The third party issued insurance policies to the members of the Fiji Group Welfare Scheme [First Defendant] and a total of 2724 policies were issued to its members of the First Defendant. Subsequently, the third party did not receive any premium deductions for over a period of 3 months as of 09th November, 2010. This prompted the third party to write a letter to the first defendant which stated that due to nonpayment of the premium, the policies have been lapsed.

The application was made Ex-Parte by the First Defendant in terms of Order 16 Rule 2(1) of the High Court Rules 1988, which states-


'Application for leave to issue a third party notice maybe made ex parte but the Court may direct a summons for leave to be issued.'


Further, Order 16 Rule (1) (2) states-


'Where a third party notice is served on the person against whom it is issued, he shall as from the time of service be a party to the action (in this Order referred to as a third party) with the same rights in respect of his defence against any claim made against him in the notice and otherwise as if he had been duly sued in the ordinary way by the defendant by whom the notice is issued.


The third party had full acknowledgement of service of the Third Party Notice, filed an acknowledgement and appeared by counsel before the court on 25th July, 2014.
In the circumstances, I find that the third party notice issued by the first defendant is not mischievous frivolous, vexatious and an abuse of court process.


  1. The present application before this court is an interlocutory application which is being heard as summary proceedings. I find that there are some triable issues that need to be attended to, clarified and answered in order to arrive at a just and fair decision. This can only be done by making procedural directions and allowing the parties to the proceedings to adhere and comply with these directions as required in law and consequently remit the case for a full hearing and determination before a High Court Judge accordingly.
  2. For the aforesaid reasons, I proceed to make the following orders-

ORDERS


  1. That the Summons to Set Aside the Third Party Notice is hereby struck out.
  2. That the Life Insurance Corporation of India (LICI) to be joined as a Third Party to this proceedings.
  3. That the Third Party (LICI) is at liberty to file and serve their Defence within 14 days.
  4. Costs to be in the Cause.
  5. Case adjourned to 08th April, 2015 at 9.00 am for mention and for further directions accordingly.

Dated at Suva this 18th Day of March, 2015


.............................................
VISHWA DATT SHARMA
Acting Master of the High Court
Suva


cc: Mr. Maisamoa for the Plaintiffs
Mr. Tuiwaqa for the Defendants
Ms. Maharaj for the Intended Third Party

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