R & R Engineering Ltd v The Ship Sri Ganga I and the Ship Sri Ganga II [2003] SBCA 13; CA-CAC 007 of 2003 (4 September 2003)

IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION: Appeal from Judgment of the High Court of Solomon Islands (Palmer, J)

COURT FILE NUMBER: Civil Appeal No 7of 2003 (On Appeal from High Court Civil Case No 43 of 1997)

PARTIES:

R AND R ENGINEERING LIMITED
(Appellant)

-V-

THE SHIPS SRI GANGA I AND I
(Respondent)

DATE OF HEARING: 29^th August 2003
DATE OF JUDGMENT: 4^th September 2003

THE COURT: Lord Slynn of Hadley P, McPherson JA, & Ward JA

ADVOCATES:

Appellant: Mr John Sullivan
Respondent: Mr Andrew Radclyffe

KEY WORDS: Application to strike out – principles to be applied – whether necessary tests were satisfied – litigation must be pursued diligently.

EX TEMPORE/RESERVED: RESERVED
ALLOWED/DISMISSED: Dismissed
PAGES: 1-7

JUDGMENT

By writ issued on 20 February 1997 the Plaintiff claimed against the Defendants SBD235,866.88 as moneys due and owing for the construction of two ships Sri Ganga I, a tug, and Sri Ganga II, a barge, and for services provided in connection therewith together with interest. The agreement to build the two ships was in writing and dated 2 March 1995. The Plaintiff’s claim is based on a number of invoices for goods and services supplied dated between 10^th April 1996 and 31^st December 1996 which include in addition to moneys due under the agreement other monies for certain additional work and equipment supplied at the request of the Defendants.

The Defendants in their defence dated 6 June 1997 admit ordering some extra work which they say was paid for. They deny ordering the rest and they deny that any moneys are due to the Plaintiff. The Defendants contend that the Plaintiff is liable for loss of income suffered by the Defendants from the date when the vessels should have been completed, 4^th September 1995, until they were completed in May 1996. They counter-claim for this in the sum of SBD1,620,000.00 less liquidated damages agreed in the contract plus certain other sums for the Plaintiff’s use of the barge and for liquidated damages. The Defendants also contend that they are not liable for plumbing charges in the sum of SBD$60,000 charged by the Plaintiff. The plaintiff denies liabilities under the counter-claim.

By application dated 8^th April 2003 the Defendants’ solicitor applied for the Plaintiff’s claim to be struck out for want of prosecution. He contended that after the Plaintiff filed its affidavit of document on 15^th March 1999 it took no steps in the proceedings to have the case set down for trial. After notice of a change of advocates filed on 22^nd May 2002, the Plaintiff on 26 March 2003 filed a notice of intention to proceed.

Palmer, J on 9^th May 2003 ordered that the Plaintiff’s claim for want of prosecution should be struck out and that certain moneys held by agreement in a trust account be released to the Defendants or their solicitors.

The learned Judge directed himself that the principles to be followed were set out in Birkett –v- James [1977] 3WLR 38 at pp46-7 by Lord Diplock as applied in Solomon Islands Tang –v- Lo (No.1) 1982 SILR 41 at p47. Lord Diplock said–

“The power should be exercised only where the Court is satisfied either–

(1) that the default has been intentional and contumelious, e.g. disobedience to a peremptory order of the court or conduct amounting to an abuse of process of the court; or

(2) (a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and

(b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.”

The learned Judge was satisfied that there had been in this case such inordinate and inexcusable delay and that “a delay of four years undoubtedly will not only be detrimental to the ability of the potential witnesses of the parties to recall past events, memories do fade over a period of the time (a lapse of four years is quite significant) but that it must give rise to a real likelihood of serious prejudice to the parties, more so for the Defendants. The risk that it will not be possible after more than four years delay to have a fair trial is greatly enhanced in this case”.

The learned Judge rejected a suggestion that the fault in respect of several months of the delay had to be laid only at the door of Defendants’ solicitors because of a misunderstanding between them and their clients. He found that the explanation for the delay on the part of the Plaintiff in taking further action in the case was unsatisfactory and inexcusable and that “cause for the delay must be with both the Plaintiff and its Counsel.”

The first question is thus whether on the material before him the Judge’s action in striking out the claim “involved an error in principle in the exercise of judicial discretion which is the function of the appellant court to correct” (Birkett –v-. James at p49).

The Judge cannot be criticized for following the test indicated by Lord Diplock. He was also entitled to have regard to the fact that in this particular dispute “it is evident from the pleadings that much of the evidence relied on by the parties will be dependent on the ability of their witnesses’ recall of past events, transactions and dealings, including requests for work, by whom, when, how and what”. When asked for further particulars of whether requests for additional work were verbal or in writing and to give particulars the reply was that the requests were oral and that particulars would be given when Mrs Radford, a Director of the Plaintiff company returned to Honiara. The documents before this Court do not show that these particulars were given, and neither counsel was able to tell us that they were, but if they were not it is now six years later when recollection would be even more difficult.

It is said that the principal issue on the appeal is whether the serious risk of prejudice can be accepted without any evidence to that effect being adduced or whether such risk must be established by evidence. It will often be possible to say by affidavit that a witness has died or that his memory has deteriorated or that witnesses can actually say “I cannot remember”. This is desirable if the evidence is available but in the view of this Court it is open to a Judge even in the absence of affidavit evidence to say that having regard to all the circumstances, he considers that the unjustified and ordinate delay are very likely to make a fair trial impossible or to cause prejudice to the defence. As Ward CJ put it in South Pacific Marketing (NZ) Limited -v- Maile [1987] SILR SI at p.87 –

“Delay always carries the risk of prejudice – witnesses die or disappear and memories will fade making it more difficult or even impossible for a Court to reach a fair conclusion”.

In that case is true that learned Chief Justice was having regard to evidence or the possibility of evidence being obtained but we do not read his judgment at page 86 as indicating a rule that a risk of prejudice cannot be established in the absence of evidence to that effect. The Court hearing a strike out application, whether under the inherent jurisdiction or under rule 38 can take an overall view of the case both in considering the period of delay and the risk of prejudice.

This is a case where the period of limitation has expired so that no new action can be started. It is also a case where there is no independent abuse of process as there was in Grovit -v- Doctor [1997] UKHL 13; [1997] 1 WLR 640. It seems to this Court that the Judge was entitled to ask simply whether there has been such an inordinate and inexcusable delay as led to a substantial risk of prejudice or that a fair trial was not possible.

In this case there is in the view of the Court room for debate as to whether the necessary tests were satisfied i.e. was the period so long and the risk sufficiently substantial as to justify striking out the claim. This is, however, a matter for the first instance Judge to decide and the Court should not interfere on appeal unless satisfied that he has misdirected himself in law or reached a decision which cannot be justified. The Court after careful consideration has concluded that this is not such a case. If the case is looked at on the material before him there was material, even if not in the form of affidavit evidence, upon which the Judge could conclude that the delay was so inordinate and inexcusable as to lead to such a risk.

The appellant, however, says that the Court should consider two affidavits which were not before the Judge which seek to explain some of the delay. The Court has had regard to those affidavits. There were obviously problems of communication between the appellants and their lawyers and time was lost following a dispute on fees and an attempt to find other lawyers to act on behalf of the appellant. Parties and their solicitors must however realize that litigation must be pursued diligently and timeously. The Court having considered those affidavits does not consider that they detract from the overall conclusion of the Judge.

The appeal is therefore dismissed with costs. The Judge’s order stands and the claim is struck out. There was no application to strike out the counter-claim and the Defendants will no doubt have to consider what they will do about that.

President, SI Court of Appeal
Judge of Appeal
Judge of Appeal