Ernster v Denarau Corporation Ltd [2016] FJHC 55; Civil Action 45.2011 (5 February 2016)

IN THE HIGH COURT OF FIJI
(WESTERN DIVISION) AT LAUTOKA
Civil Action No. 45 of 2011

BETWEEN :

RICHARD ERNSTER
of 5 Coleman Street, Mascot, New South Wales, Australia, 2020, company director.
1st Plaintiff

OLIVER SLOBODETSKY
of 5 Coleman Street, Mascot, New South Wales, Australia, 2020, company director.
2nd Plaintiff

AND :

DENARAU CORPORATION LIMITED
a limited liability company having its registered office at Lot 8, Industrial Area, Denarau Island, and having a postal address of P.O Box PD 86, Port Denarau Marina, Denarau Island.
Defendant

Counsel : MK Sahu Khan & Company for the Plaintiffs
Lateef & Lateef for the Defendant

RULING

1. Before me is a Summons filed by the defendant seeking an Order that the Court declare that the only issue for determination between the parties is whether or not the short-term letting of Lot 8, The Cove, is allowed on residential precincts on Denarau Island. Accordingly, the defendant seeks an Order under Order 33 Rules 3 and 4 of the High Court Rules 1988 and also pursuant to the inherent jurisdiction of this Court to Order that this sole issue be tried first by the court. What the application seeks essentially is a split trial.
   
2. Order 33 Rule 3 of the High Court Rules 1988 states as follows:
   

Time, etc. of trial of questions or issues (O.33, r.3)

3. The Court may order any question or issue arising in a cause or matter, whether of fact or law or partly of fact and party of law, and whether raised by the pleadings or otherwise, to be tried before, at or after the trial of the cause or matter, and may give directions as to the manner in which the question or issue shall be stated.

3. Order 33 Rule 4 (2) provides:
   

Determining the place and mode of trial (O.33, r.4)

4.-(2) In any such action different questions or issues may be ordered to be tried at different places or by different modes of trial and one or more questions or issues may be ordered to be tried before the others.

4. Order 33 Rule 5 states as follows:
   

Split trial: offer on liability (O.33, r.5)

5.-(1) This rule applies where an order is made under rule 4(2) for the issue of liability to be tried before any issue or question concerning the amount of damages to be awarded if liability is established.

(2) After the making of an order to which paragraph (1) applies, any party against whom a finding of liability is sought may (without prejudice to his defence) make a written offer to the other party to accept liability up to a specified proportion.

(3) Any offer made under the preceding paragraph maybe brought to the attention of the Judge after the issue of liability has been decided, but not before.

5. The general rule is that all questions of law and fact in any given case must be tried together at the trial.
   
6. However, Order 33 Rules 4 and 5 give the High Court Rules a judicial discretion to direct a split trial in “exceptional and extraordinary cases” or where the Judge has serious reason to believe that the trial of the issue will put an end to the action.
   
7. In Bidesi v Public Trustee of Fiji [1975] FJCA 6; [1975] 21 FLR 65 (25 July 1975), the Fiji Court of Appeal said:
   

An order for the trial of some issues before others should, however, only be made in "exceptional and extraordinary cases" or where the Judge has serious reason to believe that the trial of the issue will put an end to the action - per Jessel M.R. in Piercy v. Young [1880] UKLawRpCh 32; 15 Ch. D 475 at 480.

8. In Bidesi v Public Trustee of Fiji (supra), the Fiji Court of Appeal commented on the judge at first instance order in favour of a split trial thus:
   

With respect, I have considerable doubts as to whether such an order should have been made in the present case. Whatever was to be said of the defences of estoppel, acquiescence and laches, and whatever evidence might have been directed to them, it seems to me that in the forefront of this case there was the question of testator's understanding of the contents of the will. That was raised by appellants in the original pleadings when revocation of the grant of probate in common form was sought. Respondent raised it in his pleadings seeking a grant of probate in solemn form on which it was accepted that the burden of proof fell upon him. As it appears to me, the pith and substance of the action and counter-claim was testator's knowledge and approval of the contents of the will. While in some circumstances defences of estoppel, acquiescence and laches might themselves, collectively or individually, have been rocks upon which appellants' case could founder, an order for the trial of those issues before the issue of knowledge and approval of the will, does not seem to have been likely to accomplish any real purpose when order itself contemplated that the evidence given and tendered upon trial of the substantive defences was to be treated as evidence given and tendered in respect of the other issue. As it happened, however, the trial took substantially the same form as it would have taken had the order not been made. The parties adduced evidence on all the issues and counsel addressed the Court at length upon them all. In particular, the issue of testator's knowledge of the contents of the will was canvassed in the evidence and the submissions made upon it. Although he dealt first in his judgment with defences of estoppel, acquiescence and laches the learned trial Judge considered the other issue and reviewed the evidence upon it at considerable length.

9. Madam Justice Phillips in Buanasolo & Anor v Khan Civil Action No. HBC 355/2001, summarises the general approach of the courts whenever asked to exercise the Order 33 Rule 3 discretion:
   

.......the question I have been asked to determine is not one to which recourse to the Order 33 jurisdiction can properly apply in the circumstances of this case. It is apparent from the pleadings and the respective submissions of counsel that many relevant facts are clearly in dispute. In addition, the averments contained in paragraphs 14 and 15 of the statement of claim cannot be determined in isolation to other allegations raised in the plaintiffs claim, in particular those relating to fraud. The courts have warned against the lack of wisdom, save in very exceptional cases, of adopting this procedure of preliminary points of law, on the grounds that the shortest cut so attempted inevitably turns out to be the longest way round, and that it is highly undesirable that the court should be constrained to tie itself in so many knots.[2] This is the case at hand.

10. In Naqa v FEA, Civil Action No. HBC 0237.2002, Mr. Justice Winter said:

In Ashmore v Corporation of London (No.1) [1992] 2 ALL E.R. 486 the court observed that the control of proceedings is always a matter for the trial judge and the parties are not entitled as of right to have their case tried to a conclusion in any particular way they deem fit.

The rule of law defines that courts exist for the finalizing of disputes between litigants and that in reaching that goal justice must be served. Litigants are not entitled to the uncontrolled use of a judge's time. Order 33 Rule 3 and 4 allow the court to isolate any particular issues or questions for separate trial thus eliminating or reducing the delay and expense in determining an entire matter where a preliminary decision might be decisive of the litigation.

If I am satisfied that such an order would have the beneficial effect of expediting the hearing and eliminating the need for expensive trial preparation resulting in substantial saving on costs then it would be sensible for me to grant the order.

I accept the plaintiffs argument that the defendant's positive defence and counterclaim are so closely linked with the plaintiffs allegations of satisfaction and accord that to severe those parts of the trial would unnecessarily create an evidential artificiality. In both proposed hearings Evidence clearly relevant to both matters would have to be discounted in respect of the one issue being determined. However, consideration of the evidence at one trial on both claim and counterclaim will ultimately mean less cost as succinct, contextual counterclaim evidence might be given.

Further, I am of the view that a ruling on the plaintiff's case alone in these proceedings will not be decisive of the litigation. If I rule for the plaintiffs in this action having severed the positive defence and counterclaim part two of the proceedings will remain. The defendants could quite rightly demand a hearing on their positive defence and counterclaim before appeal or application for stay. Conversely if I find against the plaintiffs after severance the part two 'proceedings' would still be the subject of litigation in the related proceedings. The only course certain to be decisive of the litigation is a complete hearing of this entire cause at one trial. I estimate such a hearing will take at least three weeks.

11. There is in fact a policy which militates against split trials. In Attorney-General of Fiji v Pacoil Fiji Ltd [2000] FJCA 3; ABU0014U.99S (7 January 2000), the Fiji Court of Appeal said at the outset:
    

This case affords another example of the disadvantages of split trials. Almost invariably they end up taking far more time and involving greater expense than if all issues had been determined at a single hearing. We cannot emphasise too strongly that only in the most exceptional cases will separate trials on liability amages be warr warranted.

12. The before me concerns a claim by the plaintiffs who allege that the defendant has unlawfullyfully interfered with their (plaintiffs') invitees onto a certain accommodation unit namely Lot 8, The Cove, Denarau Island. The plaintiffs are leasing Lot 8 from Namaka Development Company Limited. They reside and work in Australia but stay at the premises from time to time. They plead that their employees also stay at the premises from time to time.
    
13. The plaintiffs, say that they also "donate" holidays at the said premises to various charities "to be awarded or given away at charitable fund raising events". They assert that they do not receive any money from these charitable arrangement.
    
14. The Cove is an exclusive gated residential community. Its main gate is manned by a well known security firm in Fiji.
    
15. What prompted the plaintiffs to file this claim is the alleged actions of the defendant in causing the security guards on one occasion on 17 March 2011 to refuse the plaintiffs' guests past the main security gate and therefore refusing them access to Lot 8.
    
16. The defendant does not deny this allegation. It pleads in defence that the reason the security refused access to the invitees on the occasion in question was because they (invitees) were there illegally and were making excessive noise and thus interfering with the peaceful enjoyment of the other residents. This was all in breach of The Cove By Laws.
    
17. There was also another incident later in March of 2011 when the plaintiffs' invitees allegedly drove a golf cart onto and along the common property in The Cove in breach of the By-Laws. The plaintiffs refute this allegation and assert that their invitees, in fact, had driven the said golf cart along the road which was allowed under the By-Laws.
    
18. The bottom-line regarding the issues between the parties appears to centre around whether or not the plaintiffs' use of Lot 8 constituted a breach of The Cove By-Laws.
    
19. The defendant's main problem, as it pleads in paragraph 13 of the statement of claim, is that the plaintiffs were putting Lot 8 to a certain use not authorised under the clause 3.1(a) of the Cove By-Laws. The defendant pleads that under the said clause, an owner or occupier must not use or permit the lot to be used other than, as their residence or residential accommodation of their tenants. The invitees do not fit into this category.
    
20. In their reply to the defence, the plaintiffs plead as follows at paragraphs 18 and 19:
    

The plaintiffs reiterate that there is nothing in the said By-laws prohibiting the Plaintiffs from allowing their invitees to stay in their premises. The Plaintiffs say that the said use comes within and is wholly consistent with the definition and/or description of "residential precinct" contained in the Restrictive Covenant recorded against the title of Lot 8.

The plaintiffs further say that the issue of temporary accommodation of guests is wholly irrelevant to the incidents of the alleged noise complaint and the driving of the golf cart, which are the incidents the Defendant previously relied upon to justify its unlawful eviction of the Plaintiff.

21. The defendants submit that the only issue for determination in this matter is whether or not short-term letting of Lot 8, The Cove in a residential precinct is allowed.
    
22. The plaintiffs however, at paragraph 16 of their submissions, submit that this court still has to determine first whether or not the use of the premises by the plaintiffs' guests constitutes a "letting" in the first place.
    
23. In an earlier interlocutory judgement of Madam Justice Wickramasinghe (Ernster v Slobodetsky [2011] FJHC 308; HBC45.2011 (30 May 2011)) in in which she had dealt with an application for an interlocutory injunction, Wickramasighe J had assessed the issues between the parties as follows:
    

[21] I must also place on record that sanctions under the By-Laws could be imposed only after the breach of the By-Laws are properly investigated. The defendant also admits that the parties are in dispute as to: (a) the legal nature of the plaintiffs invitees; (b) the facts surrounding their refusal of entry into The Cove; and (3) interpretation of relevant clauses in the By-Laws. In the circumstances, I am convinced that there is a serious question between the parties to be tried before this court.

24. Using the above as my yardstick, I cannot agree with the defendant's contention that the issue as to the legal nature of the plaintiffs' invitees' presence in Lot 8 will finally determine the issues between the parties.
    
25. Accordingly, I dismiss the defendants application. Costs to the plaintiffs which I summarily assess at $800-00 (eight hundred dollars only) to be settled before the next mention date. This case is adjourned to 18 February 2016 at 10.30 a.m. for mention before me.
    

............................
Anare Tuilevuka
JUDGE

05 February 2016