Tarawa Shipyard Co Ltd v Itaaka [2025] KIHC 91; Case 08636 of 2025 (15 December 2025)

IN THE HIGH COURT OF KIRIBATI

Civil Jurisdiction – Miscellaneous Application
HELD AT BETIO

Case No: 2025-08636 HC/MA/ST
Arising from Case No: 2025-08602 HC/CV/ST

Between:

TARAWA SHIPYARD COMPANY LIMITED Applicant

And

NIITI ITAAKA & TAMANA ITAAKA Respondents
(trading as SLIM PRICE)

Counsel: Mrs Kiata K Ariera for the Applicant

Ms. Meleane Itibita (on behalf of Elsie Karakaua) for the 2nd Respondents

RULING

1. Introduction

1. This ruling arises from the Notice of Motion dated 8 December 2025 filed by Tarawa Shipyard Company Limited seeking revocation of paragraph 1(ii) of the Interim Order made on 28 November 2025 against Mr Antonio Ero Cruz Jr, an employee of the company.
2. The application further seeks orders permitting Mr Cruz to depart Kiribati or, alternatively, requiring the Respondents to renew his work visa and ensure payment of his entitlements.

2. Facts

3. Mr Antonio Ero Cruz Jr is employed by the Defendant company as a welder. His contract ends on 22 December 2025 and his work permit also expires on 22 December 2025.
4. By Interim Order dated 28 November 2025, Mr Cruz was restrained from leaving Kiribati.
5. In his affidavit sworn 5 December 2025, Mr Cruz deposed that he is a mere employee, uninvolved in management decisions, and that the order causes him hardship as his salary and entitlements cease when his permit expires.
6. An affidavit sworn by Mr Tebwaaki Tanging on 27 November 2025 confirms that Mr Cruz is only an employee of Tarawa Shipyard Company Limited and not an officer or manager.
7. Counsel for the Applicant submitted that service of the writ was defective under Order 9 rule 8(2), as it was not served on the secretary or corresponding officer of the company.
8. Counsel for the Respondents, by letter dated 14 December 2025, sought adjournment of the hearing to 17 December 2025 to obtain instructions, citing difficulties in communication while on Rabi Island.

3. Issue

9. The central issue for determination is whether Mr Cruz, a mere employee, can be held accountable for the liabilities of his employer company, the Tarawa Shipyard Co Ltd.
   

4. The Law

10. Separate legal personality: The principle established in Salomon v A Salomon & Co Ltd [1897] AC 22 (HL) is that a company is a separate legal person, distinct from its shareholders, directors, and employees. Liability attaches to the company itself, not to ordinary employees.
11. Employees vs. officers: In Lee v Lee’s Air Farming Ltd [1960] 3 All ER 420 (PC), the Privy Council confirmed that even where a governing director is also an employee, the company remains distinct. This reinforces that ordinary employees, such as welders, are further removed from corporate liability.
12. Immigration Act 2019: Sections 7(2) and 13 regulate the right of individuals to remain in Kiribati. These provisions impose obligations on the individual to depart upon expiry of a permit, but do not convert employees into representatives of their employer.
13. Procedural rules: Order 9 rule 8(2) requires service on the secretary or corresponding officer of a company. Service on a clerical staff or employee is irregular and cannot ground liability against that employee.
14. Natural justice: The principle of fairness requires that only proper parties be bound by orders, and that affected persons be heard before coercive orders are imposed.

5. Deliberation

15. The Court accepts the affidavits of Mr Cruz and Mr Tebwaaki Tanging confirming that Mr Cruz is only an employee.
16. The doctrine in Salomon v A Salomon & Co Ltd [1897] AC 22 (HL) established beyond doubt that once a company is incorporated, it becomes a separate legal person distinct from those who own, manage, or work for it. The House of Lords held that creditors of the company could not pursue Mr Salomon personally for the company’s debts, even though he was its sole shareholder and managing director. The company’s liabilities were its own, not his.
17. Applied to the present case, this principle is even more compelling. Mr Antonio Ero Cruz Jr is not a shareholder, director, or officer of Tarawa Shipyard Company Limited. He is a welder employed under a fixed-term contract. If even Mr Salomon, who was the company’s sole owner and controller, was shielded from personal liability, then it follows a fortiori that Mr Cruz, a mere employee with no managerial authority, cannot be held accountable for the company’s liabilities. To restrain him personally in litigation directed against the company is to disregard the corporate veil and undermine the very foundation of company law.
18. The affidavits of Mr Cruz and Mr Tebwaaki Tanging confirm his status as an employee only. The Interim Order of 28 November 2025 treated him as if he were an officer in charge, conflating his personal immigration status with the company’s corporate obligations. This is precisely the mischief that Salomon guards against: the improper imposition of corporate liability on individuals who are legally distinct from the company.
19. Applying Salomon v Salomon, Tarawa Shipyard Company Limited is the proper defendant in the main suit; Mr Cruz, as a welder, is legally distinct and cannot be held accountable for the company’s liabilities.
20. Further, Lee v Lee’s Air Farming Ltd illustrates that even directors who are employees remain separate from the company. In that case, the Privy Council recognised that Mr Lee could simultaneously be the controlling director and an employee, because the company was a distinct legal person capable of contracting with him. By stronger reasoning, Mr Cruz, a welder with no managerial authority, is even less capable of binding the company or being held accountable for its liabilities.
21. Any allegations of damage allegedly to have been caused by Mr Cruz are matters for determination in the substantive proceedings against Tarawa Shipyard Company Limited, which is the proper party to the main suit; unless Mr Cruz is expressly named as a party, such allegations cannot justify personal restraint against him.
22. The Interim Order of 28 November 2025 was made ex parte, without affording Mr Cruz an opportunity to be heard. Counsel for the Respondents sought an adjournment of Mr Cruz’s application to vary the order, expressly to obtain instructions from their clients to oppose it. That request underscores the need for fairness: interlocutory applications should not be determined without giving both sides a proper opportunity to be heard and to clarify their positions. However, having weigh the submission of counsel for the Applicant, and the request for an adjournment, the Court was bound to proceed to hear and determine the application nonetheless.
23. The reason is that Mr Cruz, being a mere employee of the Applicant company, was restrained in proceedings directed against the company itself. This is absurd and repugnant to any rule of law. Unless there is evidence that Mr Cruz has a role in the operations of the company, which the Court has found none, he cannot be implicated in the company’s liabilities or restrained in its stead.
24. This irregularity is compounded by defective service of the writ, contrary to Order 9 rule 8(2), and by the urgency of Mr Cruz’s visa expiry on 22 December 2025, which makes the hardship manifest: cessation of salary, unlawful stay, and separation from his family.
25. The Court therefore affirms that a mere employee cannot be held accountable for his employer’s liabilities, and the Interim Order is accordingly varied to quash only the restraint against Mr Cruz. The remainder of the Order shall stand.

6. Conclusion

26. The balance of justice requires that the order against Mr Cruz be varied. The hardship is manifest: cessation of salary, unlawful stay, and separation from his family.
27. The Court therefore orders as follows:
    1. Paragraph 1(ii) of the Interim Order dated 28 November 2025 restraining Mr Antonio Ero Cruz Jr from leaving Kiribati is revoked forthwith.
    2. Mr Cruz shall be at liberty to depart Kiribati prior to the expiry of his work permit on 22 December 2025.
    100. The remainder of the Interim Order against Mr Wilbert Ryan Dela Pena shall stand.
    4. Costs are reserved to be determined in the substantive proceedings.
    5. Liberty to apply is granted.
28. For avoidance of doubt, the Court declares that a mere employee cannot be held accountable for the liabilities of his employer company.

Dated this 15^th day of December 2025

HON. AOMORO T. AMTEN
Judge of the High Court