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High Court of Fiji |
| IN THE HIGH COURT OF FIJI AT LAUTOKA CIVIL JURISDICTION | |
| Civil Action HBC NO. 55 of 2008 | ||
| BETWEEN | : | WESTSIDE MOTORBIKE RENTALS (FIJI) LIMITED, a duly incorporated limited liability company having its registered office at Martintar, Nadi. |
| | | Plaintiff |
| AND | : | MOSESE TOGANIVALU, SURESH, PENI DOLAVALE as Trustees of Namaka Public School of Namaka, Nadi. |
| | | Defendants |
R U L I N G
(i) financial statements including profit/loss, balance sheet, fixed assets, depreciation schedule and income returns for the period ending 31st December 2004 to 31st December 2007 inclusive together with the assessments by the Tax Office for the said years pertaining to the plaintiff is or has at any time been in its possession, custody or power and if it parted with them, when it parted with any of them and what has become of them.
(ii) copies of VAT returns for the period ending 31st December 2004 to 31st December 2007 inclusive together with the relevant assessments by the tax office for the said years pertaining to the Plaintiff is or has at any time been in its possession, custody or power and if it parted with any of them, when it parted with any of them and what has become of them.
(iii) copies of all stock cards, stock records, stock take records for the period ending 31st December, 2005 pertaining to the plaintiff if or has at any time been in its possession, custody of power and if it parted with any of them.
(iv) copies of all receipts for purchase of all items allegedly destroyed in the fire pertaining to the plaintiff is or has at any time been in its possession, custody of power and if it parted with any of them, when it parted with any of them and what has become of them.
3. That as to paragraph 8-14 of the said affidavit I say as follows:
(a) We have written to FIRCA on numerous occasions requesting them for copies of the relevant documents. Copies of the letters are annexed hereto and marked “R – 1 to R-7”. I wrote the letters on instructions of my principle, Mr Sharma. The letters bear my initials “RR” under the signature line.
(b) To date FIRCA has not provided us with the documents.
(c) I had spoken with one Mr Ledua at FIRCA on 30th March, 2011. Mr Ledua had advised that they cannot provide the documents unless there is a Court order directed at FIRCA to provide the documents and if need be they can produce the documents in Court if subpoenaed. He also advised FIRCA Legal Department will reply to our request. A copy of my file note of this conversation is annexed as “R-8”.
(d) Mr Ledua then copied an email to us. A copy of this e-mail is annexed as “R-9”.
(e) Our client is also attempting to obtain the documents from FIRCA itself.
(f) To date our client has managed to collect the following documents.
(a) Notice of Assessment – Income Tax for the year ended 31st December, 2004, 31st December, 2005 31st December, 2006 and 31st December, 2007. Copies are annexed hereto as “R-10 to R-13”
(b) Notice of Assessment – VAT for taxable period:
(i) August 2005, September 2005, October 2005, November 2005 – Copies are annexed hereto and marked “R-14 to R-17”.
(ii) February 2006, April 2006, July 2006 to December 2006 – Copies are annexed hereto and marked “R-18 to R-25”.
(iii) January 2007 to August 2007, October 2007 and November, 2007 – Copies are annexed hereto and marked “R-26 to R-35”.
(a) Notice of Assessment – Income Tax for the year ended 31st December 2004, 31st December 2005, 31st December 2006 and 31st December 2007. Copies are annexed to “Ronnie Affidavit” as “R – 10 to R – 13”.
(b) Notice of Assessment – VAT for Taxable period:
(i) August 2005, September 2005, October 2005, November 2005. Copies are annexed to Ronnie Affidavit as “R-14 to R-17”.
(ii) February 2006, April 2006, July 2006 to December 2006 – Copies are annexed to “Ronnie Affidavit” as “R-18 to R-25”.
(a) Financial Statement including profit/loss, balance sheet, fixed assets, depreciation schedule and income returns for the period ending 31st December, 2004 to 31st December, 2007.
(b) Copies of VAT returns for the period ending 31st December, 2004 to 31st December, 2007.
(c) Notice of VAT Assessment by Tax Department for the year ended 31st December, 2004;
(d) Notice of VAT Assessment by Tax Department for the months of January to July and for December of 2005 for year ended 31st December, 2005;
(e) Notice of VAT Assessment by Tax Department for the months of January, March, May, June of 2006 for year ended 31st December, 2006;
(f) Notice of VAT Assessment by Tax Department for the months of September, and December of 2007 for the year ended 31st December, 2007;
(g) Copies of stock cards, stock records, stock take records for the period ending 31st December, 2005 pertaining to the Plaintiff.
(h) Copies of all receipts for purchase of all items destroyed in the fire pertaining to the Plaintiff.
(a) The investigation was carried out on my request for the purposes of providing legal advice to the Defendants. This was well after the action was filed. The investigation report is a privileged document.
(b) No witnesses were available to be interviewed having recollection of the fire and none are likely to be found now with the passage of time.
(c) If no file was opened by the Namaka Police Station, no other information can be obtained.
(d) I deny the contents thereof and repeat paragraph 18 of my earlier affidavit.
Failure to comply with requirement for discovery, etc. (O. 24 , r.16)
16.-(1) If any party who is required by any of the foregoing rules, or by any order made thereunder, to make discovery of documents or to produce any documents for the purpose of inspection or any other purpose, fails to comply with any provision of that rule or with that order, as the case may be, then, without prejudice, in the case of a failure to comply with any such provision, to rules 3(2) and 11(1),-
(a) .....
(b) the Court may make such order as it thinks just including, in particular, an order that the action be dismissed or, as the case may be, an order that the defence be struck out and judgment be entered accordingly.
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 the process of the Court.
(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.'
11. In modern civil litigation, discovery is central to the system of fact finding and decision making and parties are encouraged to make available for inspection, all relevant documents, regardless of whether the document(s) support(s) their case or the other party's case.
12. In Davies v Eli Lilly & Co [1987] 1 WLR 428, Sir John Donaldson MR explains the "justice" behind this approach:
In plain language, litigation in this country is conducted "cards face up on the table". Some people from other lands regard this as incomprehensible. "Why", they ask, "should I be expected to provide my opponent with the means of defeating me?'. The answer of course, is that litigation is not a war or even a game. It is designed to do real justice between opposing parties and, if the court does not have all the relevant information, it cannot achieve this object.
13. C Cameron & J Liberman, 'Destruction of Documents Before Proceedings Commence - What is a Court to Do?' [2003] MelbULawRw 12; (2003) 27 Melbourne University Law Review 273, 274 explain the same policy thus:
The primary aim of discovery is to ensure that litigants disclose to each other all relevant, non-privileged documents, whether that disclosure helps or hurts their respective cases, so that they will know the case they have to meet and judges will have the evidence they need to do their job effectively
14. E Bray, The Principles and Practice of Discovery (1885), 1 explained the purpose of discovery thus:
to ascertain facts material to the merits of his case, either because he could not prove them, or in aid of proof and to avoid expense; to deliver him from the necessity of procuring evidence; to supply evidence or to prevent expense and delay in procuring it; to save expense and trouble; to prevent a long enquiry and to determine the action as expeditiously as possible; whether he could prove them aliunde or not; to facilitate proof or save expense.
15. However, to strike out a statement of defence on account of a defendant’s failure to make discoveries is such a drastic step and the power under Order 24 Rule 16(1)(b) is exercised with great caution. In any given case, a defendant's right to defend his case is one not to be quickly or lightly written-off, and even more so, in terms of the right conferred under section 15(2) of the 2013 Constitution of Fiji[2].
16. In Bhawis Pratap v. Christian Mission Fellowship (ABU0093.2005), the Fiji Court of Appeal cautions that the power to strike out a defence for want of compliance with discovery orders should only be exercised in the clearest of cases and that "to deprive a defendant of the right to defend is a serious step, only to be taken in the clearest cases".
17. As to what constitutes the "clearest of cases", the FCA in Native Land Trust Board v Rapchand Holdings Ltd [2006] FJCA 61; ABU0041J.2005 (10 November 2006) is insightful. In that case, the defendant failed repeatedly to comply with certain production and inspection orders . The High Court struck out the defence. The orders in question were non-peremptory orders . The defendant then applied to set aside the order which had struck out its defence. However, that application was dismissed by the High Court because the defendant was laxing even in pursuing that application. The High Court then proceeded to assess damages. The defendant however appealed to the FCA.
18. Before the FCA, the defendant explained its failure to comply and argued that:
(i) it's conduct was not contumacious as it had not withheld the documents deliberately[3] and,
(ii) the power to strike out a defence is exercisable only if there was evidence that it deliberately disobeyed discovery orders , or, if a fair trial would not be possible[4].
19. The FCA sympathized with the plaintiff's interest in having his claim resolved quickly as well as the (High) Court’s case- management obligations. It was also critical of the defendant’s delaying tactics. However, the Court took into account that there was a very substantial monetary claim against the defendant and that the High Court had given no written reasons to explain why it struck out the defence. The FCA then warned, as it had done in Bhawis Pratap v. Christian Mission Fellowship (ABU0093.2005), that," to deprive a defendant of the right to defend is a serious step to be taken only in the clearest of cases"[5].
20. The FCA accepted the argument that the High Court judge first ask whether the defendant's conduct "was sufficiently unsatisfactory to warrant it being denied its right to defend itself"[6] before striking out the defence.
21. After reviewing the case, the FCA went on to hold that the defendant's failure in the circumstances of that case were not "sufficiently serious to warrant the order striking out the defence". In coming to that conclusion, the FCA took into account the following:
(i) NLTB's default amounted to just twelve days and three days respectively in relation to the filing of list of documents and pre-trial conference. These were not "sufficiently serious to warrant the order striking out the defence"[7].
(ii) what is required is actual evidence of contumacious conduct or deliberate disobedience of the discovery orders on the part of NLTB. The court should actually have examined the evidence and make a finding of fact of contumacious conduct and/or deliberate disobedience of court orders [8]. Such evidence would have been sufficient to warrant the striking out of its defence.
(iii) delay per se does not necessarily amount to contumacious conduct (see footnote 7).
(iv) but disobedience of an unless order or a peremptory order is sufficient to constitute contumacious conduct[9].
ANALYSIS
22. In my view, Rapchand is authority that a Court may strike out a defence on account of a defendant's failure to comply with a non-peremptory order , if there is evidence of contumacious conduct and/or deliberate disobedience of the non-peremptory orders . The onus to establish contumacious conduct and/or deliberate disobedience of the non-peremptory orders lies with the plaintiff who seeks to strike out the defence. However, where the defendant disobeys a peremptory order or an unless order, that in itself is sufficient evidence of contumacious conduct, enough to justify striking the defence out.
23. The English Court of Appeal in Star News Shops v Stafford Refrigeration Ltd [1998] 4 All E.R. 408 at 415; [1998] 1 W.L.R. 536 at 545, CA:
I am reinforced in this conclusion by considering the approach of the court in cases of failure by a party to comply with the terms of an 'unless' order . In Caribbean General Insurance Ltd v Frizzell Insurance Brokers Ltd [1974] 2 Lloyd's Rep 32 the Master made an unless order against the plaintiffs in respect of specific discovery and allowed 28 days for compliance. Thereafter two judges granted final extensions. The defendants entered judgment in default of compliance with the unless order . At trial the plaintiffs applied to set aside the default judgment. The trial judge set aside the judgment and extended the time for compliance with the original unless order . The Court of Appeal held that the judge was wrong to do so in the exercise of his discretion, failed to ask himself the right question and erred in law. Peremptory orders were made to be obeyed. Final, peremptory or 'unless' orders were only made by a court when the party in default had already failed to comply with the requirement of the rules or an order , the court was satisfied that the time already allowed had been sufficient and the failure of the party to comply with the orders was inexcusable.........
...........................
Accordingly, I have come to the conclusion that although the terms of Ord 24 , r 16(1) gave the judge jurisdiction to make the order that he did, he none the less erred in principle in striking out a defence for breach of a non-peremptory order , that he should have made a final or 'unless' order and that he was plainly wrong in the exercise of his discretion in making such an order .
The only question which remains is whether the judge was under an obligation to make an unless order in the absence of a specific application to do so supported by an affidavit. In my judgment the judge had an inherent power to do so of his own initiative and the absence of an application and affidavit did not preclude him from doing so.
24. The Singaporean Court of Appeal in Mitora Pte Ltd v Argritrade International (Pte) Ltd [2013] 3 SLR 1179 cautions that a routine use of unless orders would be the forensic equivalent of using a sledgehammer to crack a walnut. That is a warning that Courts should be wary of granting unless orders in light of the drastic consequences of the slightest non-compliance.
25. In Syed Mohamed Abdul Muthaliff v Arjan Bhisham Chotrani [1999] 1 SLR (R) 361., the Singaporean Court of Appeal opined that, when dealing with the consequences of non-compliance of an unless order , the Court is not concerned with why the unless order was made, but rather, why it was not complied with.
26. Tan Boon Heng, Case Note - Mitora: The Mantra of " Unless Orders "? (2014) 26 SAcLJ at page 295 cites case law in Singapore which endorse the view that the enforcement of an unless order would be harsh and unjust where the consequences or the penalty for non-compliance is grossly disproportionate to the default in question.
The decision in Teeni Enterprise had created a renewed awareness that the courts must balance the importance of compliance with Court Orders with the need to ensure that a party would not be summarily deprived of its legal rights without any hearing of the merits especially when the non-compliance or breach was not so serious or aggravating as to warrant such a serious consequence. The Court in Teeni Enterprise agreed with the party who breached the unless order that it was a draconian punishment to allow the massive counterclaim of over $1.2 million and that the dismissal of the whole of the plaintiff's claim was disproportionate, taking into account the relatively trivial breach by the plaintiff which did not occasion any real prejudice to the defendant.
27. The English Court of Appeal shares the same view in Marcan Shipping (London) Ltd v Kefalas [2007] EWCA Civ 463; [2007] 1 WLR 1864 where, at [36] Moore-Bick LJ said:
[B]efore making conditional orders, particularly orders for the striking out of statements of case or the dismissal of claims or counterclaims, the judge should consider carefully whether the sanction being imposed is appropriate in all the circumstances of the case. Of course, it is impossible to foresee the nature and effect of every possible breach and the party in default can always apply for relief, but a conditional order striking out a statement of case or dismissing the claim or counterclaim is one of the most powerful weapons in the court's case management armoury and should not be deployed unless its consequences can be justified. I find it difficult to imagine circumstances in which such an order could properly be made for what were described in Keen Phillips v Field as "good housekeeping purposes".
28. Browne-Wilkinson VC in In re Jokai Tea Holdings [1992] 1 WLR 1196 at 1203B said:
In my judgment, in cases in which the court has to decide what are the consequences of a failure to comply with an "unless” order, the relevant question is whether such failure is intentional and contumelious. The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded. But if a party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed.
29. Parker LJ opined at 1206 that:
I have used the expression "so heinous" because it appears to me that there must be degrees of appropriate consequences even where the conduct of someone who has failed to comply with a penal order can properly be described as contumacious or contumelious or in deliberate disregard of the order, just as there are degrees of appropriate punishments for contempt of court by breach of an undertaking or injunction. Albeit deliberate, one deliberate breach may in the circumstances warrant no more than a fine, whilst another may in the circumstances warrant imprisonment.
CONCLUSION
30. In this case, there was no unless or peremptory order given. In terms of the authorities cited above, the onus would then be upon the plaintiff to establish contumacious conduct and/or deliberate disobedience of the non-peremptory orders on the part of the defendants. No such clear evidence has been placed before me.
31. In any event, I am of the view that the plaintiff’s application under Order 24 Rule 16 is rather premature. General discovery can only be ordered against a party who has indicated that he has relevant documents in his possession and yet refuses or neglects to discover them to the other party.
32. However, where, as in this case, a defendant has indicated that he has no documents to discover, it would be most inappropriate for the plaintiff to apply to this Court to strike out the defence on account of the defendant’s non-compliance with general discovery orders. If the plaintiff is adamant that the defendants have documents in their possession (or within their power to produce) which they are “hiding”, the plaintiff should first apply for specific discoveries. Alternatively, or in addition, the plaintiff could apply for interrogatories.
33. Accordingly, I dismiss the application. Costs in the cause. Case adjourned to Thursday 08 September 2016 for mention at 10.30 a.m.
CONCLUSIONS
......................................
Anare Tuilevuka
JUDGE
29 September 2016.
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